21 Aug 2018
How six farmers collaborated to build an AD plant
Sponsored by Shawbrook BankCollaboration can spread risk and costs, widen skills available and open up the opportunity for a bigger plant.
In 2013, six Isle of Wight farmers and the island’s main grain merchant started building an AD plant capable of processing 60,000 tonnes of maize, wholecrop rye and grass into biomethane and providing 5,000 homes with gas in winter.
The project began a couple of years before, when Isle of Wight Grain proposed the idea to its membership of about 55 farmers.
Six came forward, all with different enterprises, including arable, beef, sheep and dairy, but all with a cropping element.
James Attrill, a land agent and partner at BCM, was one of those farmers. He farms arable and grass on about 142 hectares (350 acres).
Mr Attrill says: “At the time we were faced with getting pretty much zero return for growing break crops, and being an island, transport and shipping made it worse.
“We wanted to put some stability into our break crops and create a profitable market for them. AD was attractive for this reason, plus digestatewould be cheaper than bagged fertiliser.”
The group created Wight Farm Energy, a limited liability partnership. They modelled different AD plants, visited a large number around the country and decided on a large plant able to lock into the Renewable Heat Incentive.
As partners, they committed to growing feedstock for the plant and divided this based on equity share, but remained flexible if someone could not provide the full amount.
Strength
They took out a loan and found the bank liked the strength of having seven partners, including six owned farms, says Mr Attrill.
The plant started operating in 2014 and ran successfully for several years. But partners’ aspirations changed, so it was decided to sell Gore Cross Anaerobic Digestion Plant to a London investment firm last year.
Partners who are still involved now have feedstock and digestate contracts, says Mr Attrill, so the plant has still served its purpose of securing the market for crops and cheap fertiliser. Mr Attrill says: “It was a fantastic project; exciting, challenging and we learned a lot. It was a huge success.”
Benefits of collaboration
- If someone is worried or feeling overwhelmed, there are other partners to fall back on
- Learning from others and taking on a big project will sharpen your business skills
- It spreads financial risk and risk of making bad decisions, as there are more people to consult
Collaborating: what to think about
MR Attrill advises:
- Choose your partners wisely and think about how many are feasible
- Create a structure for communication
- Consider employing an independent person to act as chairperson
- Underpin your partnership with a good agreement; make sure you really understand the detail and implications; test it and get advice on it
- Decide how feedstock commitments will be divided and managed
- Employ a manager to look after the plant on a daily basis
How to work together
MR Attrill says: “You always need one or two people to drive things forward and there were a couple of the partners who really gripped it.”
Working together brought more skills to the table too, says Mr Attrill, and allowed each partner to be responsible for one part of the project.
For example, one farmer worked as a contractor spreading waste, so he knew about waste licences, while another was involved in haulage, so could advise on feed transport.
He says: “It was also massively important to try and get the decision-making process right; it was one of the biggest challenges.”
They decided that three partners would drive the project forward and report back to the rest of the group. During construction, they held weekly meetings with everyone, and afterwards reverted back to once a month. But there was always a lot of communication, whether by email, text or phone, Mr Attrill says.
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