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Earth Capital has launched a new UK-based bioenergy generation company

© Shutterstock / Pixel-ShotWood pellets, a type of bioenergy.

Earth Capital forms a new company out of four of its portfolio companies, Sustainable Energy Holdings Limited, looking to accelerate impact through bioenergy generation. It will support net zero targets and showcase the role of agriculture in the transition.

Earth Capital merges four portfolio companies to build a UK biogenergy group.

Net zero targets to be supported through the transition of agriculture to a net zero future.

Questions remain about the carbon neutrality of burning wood pellets.

Growth equity impact investor Earth Capital has announced the launch of its new company, Sustainable Energy Holdings Limited (“SEHL”), out of a merger of four of its portfolio companies, all low-carbon bioenergy generation assets: Eccleshall Biomass, Limelight Energy, Black Dog Biogas and Bright Light Energy Ltd.

These UK-based biomass-fuelled renewable energy plants will now benefit from a single dedicated management team which will focus on operational performance, and a consolidation of financial and commercial functions. Together, these facilities will generate 3.89 MW of base load renewable energy, enough to power 9,000 homes and its been estimated will avoid the emission of 5,000 tonnes of carbon dioxide.

Avent Bezuidenhoudt, Head of Investment and Director of ECL, said: “The establishment of this platform demonstrates how growth equity can find and finance appealing renewable energy solutions while also delivering a range of benefits to local and national stakeholders.”

It is understood that the company is exploring the development of briquettes to be burnt in its plants’ logs, following UK government restrictions around the burning of wood. Not only is this expected to enhance SEHL’s turnover but, done thoughtfully, could avoid the reputational issues experienced by Drax when business and energy secretary Kwasi Kwarteng questioned the sustainability of imported pellets to burn in its biomass generators.

ECL claims proprietary sustainability assessment

Earth Capital uses its own sustainability measurement methodology. It measures sustainable impact through its proprietary Earth Dividend portfolio management tool, which provides an annual measure of an investee company’s contribution to Sustainable Development.

The Earth Dividend approach was developed by ECL’s in-house sustainability specialists following a detailed benchmark of international best practice approaches to the assessment, reporting and assurance of impact and ESG issues.

In the medium term, SEHL is expected to improve performance via additions to the platform’s asset base through a buy-and-build strategy, which will include the acquisition and development of new plants and the improvement of existing assets.

A pipeline of possible opportunities to expand the portfolio through the addition of high-potential assets within the UK’s biomass and waste sectors has been identified and will create a scalable bioenergy company in the UK, with the potential for future deployment elsewhere.

The new group will continue to benefit from ECL’s experience in strategic development, operational efficiency, and transaction support. According to ECL, with higher energy prices and a stronger focus on domestically produced, renewable, baseload energy; bioenergy output is expected to become increasingly important in a volatile energy market dominated by wind and solar energy.

Earth Capital Limited is the sustainable investment manager co-founded by Gordon Power and Stephen Lansdown, co-founder of Hargreaves Lansdown. ECL invests across UK and Europe in cleantech companies that address the challenges of climate change across the energy, food, and water sectors.

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