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Greencoat Capital reveal novel £120m low carbon greenhouse project in the UK

Greencoat Capital LLP, the UK’s largest investor in renewable energy, has announced a £120 million (≈ EUR 134.7 million) project to construct two of the UK’s largest greenhouses at two farmland sites near Norwich and Bury St Edmunds. In a world-first, the advanced greenhouses will be warmed by residual heat from nearby water recycling centres owned by Anglian Water.

Greencoat Capital LLP has announced a £120 million (≈ EUR  134.7 million) project to construct two of the UK’s largest greenhouses at two farmland sites near Norwich and Bury St Edmunds. In a world-first, the advanced greenhouses will be warmed by residual heat from nearby water recycling centres owned by Anglian Water (graphic courtesy Greencoat).

Decarbonisation of the heating and agriculture sectors has so far been disappointingly slow despite their enormous carbon output. These pioneering greenhouses make a significant step towards solving both problems at scale, reducing the carbon footprint of food produce by 75 percent compared to European equivalents and increasing UK food security.

We’re very pleased to have achieved another innovative first in the UK renewable energy sector. Technology and cross-sector co-operation are continuing to unlock some amazing possibilities in energy and agriculture. We see considerable opportunity to invest in renewable heat in the UK, providing pensions investors with the predictable returns they require to pay beneficiaries, meanwhile reducing our carbon emissions as an economy, said James Samworth, Partner at Greencoat Capital.

12 percent of UK’s tomato production

The greenhouses, among the largest ever constructed in the UK with each covering more than 13 hectares (ha), will provide ideal growing conditions for a range of plants and vegetables requiring a high-heat, and relatively low-light environments such as tomatoes, cucumbers, and peppers.

Standing around 7 m tall the large glass structures allow crops to grow vertically along guidewires and do not require any soil, instead of being grown hydroponically from nutrient-rich water solutions. Once in full production, they will be capable of growing more than 20 tonnes of tomatoes every day – 12 percent of the tomatoes grown in the UK and will create 360 permanent new jobs.

Closed-loop heat pumps will be used to transfer the heat from the water recycling centres to the greenhouses and will have the additional benefit of cooling the facility’s treated water outflow before it is returned to the environment.

It has been great to be involved in such an innovative project, helping to solve a number of challenges for Anglian. Removing excess heat from the river systems is a priority for DEFRA and ourselves, and it is fantastic to be able to put that heat energy to good use, said Dr Lu Gilfoyle, Head of Environmental Quality at Anglian Water.

Electricity for the greenhouse’s heat pumps will be provided by a gas-fired combined heat and power (CHP) plant, with waste heat from the CHP providing further warmth for the greenhouses. The CHP plant’s carbon emissions will be transferred into the greenhouses, raising the carbon dioxide (CO2) levels and further accelerating the growth of the plants, and capturing the majority of the carbon.

Pension investment

The construction phase of the project will begin immediately, with completion expected in autumn 2020. Commercial-scale growers from the UK and the Netherlands have already committed to leasing the space.

The capital for the project comes from a number of public and private pension funds in the UK, reflecting the growing trend of pensions managers seeking robust uncorrelated returns through direct investment into renewable infrastructure. Greencoat Capital now manages almost GBP2 billion (≈ EUR 2.24 billion) of private market pension fund capital through its various renewable infrastructure funds.

We are delighted to be partnering with Greencoat Capital on this project, particularly as we are making best efforts to invest in the low carbon economy while still delivering the strong risk-adjusted cashflows our investors are after. This marks a step-change in the decarbonisation of agri-business and heating, and we are proud to be supporting UK infrastructure with the assets we manage, said Duncan Hale, Portfolio Manager at Willis Towers Watson.

The greenhouse project is expected to generate predictable cash flows with consumer price index (CPI) inflation protection at attractive risk-adjusted returns for the pension scheme investors, whilst supporting the economy, local communities, environmental goals, and food security.

Delivering a world-first low carbon greenhouse system is hugely exciting for the small team who took this from conception, design, and planning, to contracting and now, construction. The environmental, social and political benefits of these systems are significant, and we look forward to further disrupting the traditional carbon-heavy models of agriculture, said Andy Allen, Director at Oasthouse Ventures.

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