Pioneering advanced UK biofuel producer enters administration

Plans for the UK promotion of cutting-edge development biofuels were dealt a blow this week with news that Go Green Fuels, operator of a pioneering waste-to-synthetic gas demonstration facility, has entered administration, according to documents seen by Energy Census.

The announcement appointing administrators appeared in the UK’s official record, The Gazette, on December 17, while the facility was also listed as offered for sale via private auction.

Go Green Fuels Ltd built and ran the demonstration plant located in Swindon, about 80 miles west of London, that set out to produce synthetic natural gas from household and residual waste, but the project’s costs appear to have spiralled.

The loss of the facility, which was constructed in March 2017, is a blow to the UK’s plans to boost alternative fuels following a reimagining of the key Renewable Transport Fuel Obligation legislation earlier this year.

Initially envisioned as a £23-million ($29 million), five-year proof of concept project, challenges around installing the technology and ensuring it worked along with recruiting and training staff brought delays and saw costs balloon to around £30 million, and then up to £35 million.

A presentation at a conference earlier this year highlighted some of the challenges that the facility had encountered, with delays to the key plasma arc furnace technology flagged as having a knock-on effect for mechanical completion.

Alongside that, the presentation acknowledged that securing funds for a project overspend was proving challenging and warned that problems were expected during commissioning.

Revamp

From April this year, the UK government ushered in a fresh mandate for biofuels, increasing the existing plan to blend 4.75% biofuel in transport fuels by 2018 to 12.4% by 2032, including a sub-target to source 2.8 percentage points from development biofuels.

From 2019, biofuels should meet 8.5% of the UK’s transport fuel – an increase of 1.25% versus 2018 – and within that requirement, 0.1% of the total fuel supply should be met by development fuels, equating to a maximum of around 52,000 mt in terms of physical fuel supply.

Instead of blending biofuels into mineral diesel, retailers can meet their blending obligation by buying certificates (RTFCs) from biofuel producers that prove the biofuel went into the fuel pool.

The price of certificates is capped at 30 pence per litre for non-developmental fuels but can be as high as 80 pence per litre for developmental fuels such as hydrogen and biogas.

The Go Green Fuels facility was the only scheme that was expected to deliver development fuels into the UK market within the first year of the new scheme’s requirement, with market sources seeing little in the way of other projects likely to deliver development fuels soon.

For sale

Both the UK’s Department for Transport and the Environment Agency were involved in securing an £11 million government grant to help get the project up and running, but other investors appear to have balked at stumping up further cash.

The facility is described as having the capacity to convert 10,000 mt of household waste per year and turn it into 22 GWh of “grid quality bio-substitute natural gas”, according to a company instructed by the joint administrators to sell it.

Amongst the assets up for sale are a gasifier, a plasma arc furnace, gas cleaning equipment and catalytic methanation unit, with the appointed sellers also highlighting a £29 million investment in the facility to date.

The sale details note that methane produced from the plant “will qualify for valuable development renewable transport fuel certificates”.

The project is a joint effort between Advanced Plasma Power, Cadent and Progressive Energy, and had secured offtake agreements with companies like Ceres Energy and Air Liquide. 

Advanced Plasma Power, Cadent and Progressive Energy were approached by Energy Census, along with the Department for Transport, but none had responded at time of publication.