After overcoming initial scepticism, a £10m anaerobic digestion plant is providing both eco-friendly power for local homes and a guaranteed source of income for nearby farmers
When Charlesfield Farms wanted to diversify its business, the estate decided to join the green revolution. The result was a new £10 million anaerobic digestion (AD) plant that produces eco-friendly methane gas from locally grown feedstock, then feeds it directly into the nearby energy grid.
Running since 2015, the plant in St Boswells in the Borders now generates enough energy to supply up to 4,000 homes, reducing reliance on non-renewable natural gas. The AD site has proved such a success that more local farmers are now queuing up to join.
But co-owner Trevor Jackson said that although the eco-energy scheme was now running smoothly, it had to overcome some initial hesitation.
He explained: “There was certainly an element of scepticism around it – I don’t think people believed that a £10m investment in the Borders would happen, but it did.
“The plant is now settling down to a steady state, give or take a few kit issues, but we’re getting there. It’s had its challenges, but then again, it’s a complex system. And when you’re dealing with the gas grid, there are a whole other set of hurdles outwith your control too.
“But the main thing is that we currently have about 15 or 16 farmers farming about 2,200 acres to feed the plant.”
The plant – only the second of its kind in Scotland – was opened in 2015, with funding from Iona Capital, an investor in renewable energy projects.
One initial hurdle was getting buy-in from local farmers willing to commit arable land to grow feedstock for the plant. But helped by CKD Galbraith, a 10-year contract was developed that gave farmers payment based on the cost of production, plus a margin of ￡150 per acre.
This now offers security for both sides, with the plant enjoying guaranteed supply, and the farmer knowing what price he will get for his harvested crop and budgeting accordingly.
Trevor, whose family has been farming at Charlesfield for four generations, said: “People worked out that they could do it at little risk to themselves and would get an enhanced profit. So it took a bit of hard work, but once they realised the benefits, they settled down and accepted it.”
Charlesfield now takes possession of the standing crop in early summer, with control over cutting and transport to the plant for storing in silos until needed.
The plant uses natural fermentation to break down plant and animal materials using micro-organisms in an airtight tank. The resulting methane-rich gas can then be used to generate heat and power or injected into the supply grid.
It cuts the amount of greenhouse gases that would be released into the atmosphere if the materials were left to decompose in landfill.
And one of the leftovers from the process – a digestate high in nutrients – is also returned to the farmers for use as an organic fertiliser.
Trevor said: “At the end of the day, I had to take all the risk. But we managed to structure an agreement that suited the farmers’ contract farming arrangement, so they could keep their subsidy, couldn’t be accused of being slipper farmers, and got a decent fixed management payment out of it.
“They also realised that the digestate from the plant would go back on the land, enhance the soil condition and sequester a bit of carbon.
“So now they’re all quite happy with how it’s turned out – in fact, we have people who effectively would like to join the queue if we ever get round to expanding.”
Such a set-up is now benefiting the local economy too, as Trevor explained: “Because the plant purchases feedstock, it benefits the farmers. Plus there’s all the people involved with contracting and maintenance – and we use quite a lot of local maintenance folk.
“Running the farming operation plus the plant has actually created more jobs than we expected and we’ve taken on the equivalent of five to six full-time staff. We reckon it puts about ￡1.5m back into the local economy every year.”
So what advice would he give to anyone wanting to follow in Charlesfield’s footsteps?
“I think it’s difficult with the current tariffs and subsidy regime to justify doing it on a crop basis unless you have a very high energy usage,” Trevor said.
“We’ve gone in at about 900m3 of biogas per hour, which translates as just over 400m3 of methane going into the gas grid every hour – that’s an industrial scale plant.
“So I would say scale the project to your energy use, with a little bit on top for selling – that’s where you get the biggest benefit.”
He added: “It is a complex project. But if you’re buying in crops and have both certainty of supply and costings going the other way, you should be able to make a business case for it.
“And if you can do all that without subsidy – great.”
Trevor Jackson, Charlesfield Farm
This blog was originally published in our Spring 2017 edition of our Land Business magazine.