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Gloucestershire Business News

EXCLUSIVE: Ecotricity on verge of producing world's first 'vegan gas'

Triumphed as a green energy breakthrough to remove the need for Brits to rip out their gas boilers while forking out for comparatively costly air and ground-source heating technology, a pioneering technology to produce "vegan gas" will be on stream for UK homes in the next six months.

Despite reports that the sustainable power scheme – the brainchild of Stroud-based Green Britain Group (GBG) boss and Ecotricity owner Dale Vince – has suffered R&D indigestion and accounted for a £12m loss on the latest balance sheet from GBG, sources have indicated to Punchline-Gloucester.com that the world-first gas mill will be operating later this year.

The news comes after the Telegraph newspaper headlined that the energy producer has "scrapped" its first planned biomethane plant in its report on GBG's latest financial results for the year ended April 30, 2024.

The full accounts detail how the "asset's carrying amount was written down to its estimated scrap value, reflecting its recoverable amount based on current market conditions" – but Punchline understands that there is no intention to abandon the project.

GBG's latest figures  come within accounts which show the group sustained a £7m loss in the year to April after the previous year's profits of nearly £50m.

The latest annual report, published on January 23, reveal how gross profit for the year stood at £95m, down from £144.1m on the previous year. This drop was largely attributed to revenue decreasing by 15.4% on energy bills (in turn, a figure reflecting lower "albeit still elevated" wholesale prices) and Ecotricity accordingly recorded a profit of £5.1m for the year, against the previous year's £44.7m.

But a £12m writedown was also noted for Ecotricity's first biomethane plant, near Reading.

At a cost of around £11m and creating 30 jobs, Ecotricity set up the green gas mill to pioneer the system in 2022, but Mr Vince's move – which included a Save Our Boilers! campaign in partnership with an unlikely ally in the form of the Daily Express – triggered criticism from all sides of the energy debate: businesses working to provide heat and airsource technology who fear that a system, whereby end users can retain their existing gas boilers and simply switch to gas from grass, would inevitably kill demand for their heating solutions.

At the time, Mr Vince said: "We estimate that if we grow grass on all the marginal land in Britain, we'll be able to make enough green gas to supply the entire country."

Estimates from initial output at the pioneering plant, which features giant biodigesters fed from a mix of grass and herbs grown on 3,000 acres of nearby farmland, would generate output to power 4,000 homes.

In an explainer for the system, Ecotricity said: "When grass grows it absorbs Co2. We make methane with that grass and when that's burned, it releases the CO2, back into the atmosphere. So green gas is carbon neutral over a very short timeframe - just a few months from absorption to release."

The financial report added: "During the year, the group continued to invest in its generation portfolio, with ongoing solar project sites expected to come into service in the coming financial years.

"Progress has also been made to develop vegan green gas, a facility is under development and is expected to provide up to a further 11MW. It will produce biomethane via anaerobic digestion, using grass from the local area as the primary feedstock."

The report went on: "The project is currently in a pre-construction phase, is due for completion in 2026 and will contribute to our gas derogation spend. This development has benefited from learnings from a newly constructed green gas mill that was impaired by £12.2m due to issues identified with its design, which rendered the asset unable to operate as intended.

"As a result, the asset's carrying amount was written down to its estimated scrap value, reflecting its recoverable amount based on current market conditions. The impairment has been recorded in the financial statements to account for the reduction in value, with management continuing to monitor any changes that might impact the asset's valuation. Management is exploring all avenues to mitigate the financial impact of this."

● The Group also stated it was nearing completion of a 10MW battery storage project on one of its existing windmill sites: "This project is an exciting step for the Group to help drive the energy transition and is key to developing our 'Smart Grid' proposition. The battery is expected to come into service in financial year 2025."

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