Imperative Energy Ltd (IEL)
Imperative Energy is a leading supplier of bioenergy solutions (heat, steam and power) to clients in the commercial, public and industrial sectors through purposely built biomass plant at the client`s site. We offer a full turnkey service to our clients covering feasibility, design, fuel supply (wood chip, wood pellets etc), equipment supply, finance, installation, operation and maintenance.
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This company also provides solutions for other industrial applications.
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A leading provider of biomass heat and power solutions has moved to the North West after completing its latest round of fundraising with investment from The North West Fund for Energy and Environmental (“NWF4EE”) and the Environmental Infrastructure Development Company (“EIDC”).
Imperative Energy (“the Company”), which was founded in 2007 in Co Kildare, Ireland, is a leading supplier of bioenergy solutions (heat, steam and power) to the industrial, commercial and public sectors across the UK and Ireland. The business will move the headquarters of its operations to an existing site at Sandbach, Cheshire, following the investment.
NWF4EE will take a minority stake in Imperative Energy in order to support its ongoing growth and development. EIDC, experts in the sector, are investing alongside the NWF4EE and will play a key role in supporting the team in the delivery and financing of projects.
The Company is targeting significant growth on the back of the Renewable Heat Incentive and the Renewable Obligation Act. It expects to deploy over £200m in building biomass heat and CHP plants throughout the region over the coming few years. This expansion will see it recruit up to 30 new staff in the coming years and it has immediately announced the opening of three new vacancies in its sales and servicing departments.
The NWF4EE is managed by CT Investment Partners and is part of the £185m North West Fund, which is provided jointly by the European Investment Bank (EIB) and European Regional Development Agency. CT Investment Partners also advises the Carbon Trust on its venture capital activities and is one of the most experienced investors in this space.
Adam Workman, partner at CT Investment Partners and fund manager of NWF4EE, said: “Despite the difficult economic conditions and delays to the implementation of the Renewable Heat Initiative, Imperative has grown into a top quality provider of bioenergy solutions and one that can really capitalise on the growing market for alternative energy solutions.
“By investing alongside the existing and incoming management teams, we have real confidence in what the business can achieve and look forward to supporting them in fulfilling their ambitions. The move to the North West is a real coup for the clean technology sector and is tribute to its growing prominence as a key economic driver in the region.”
Joe O’Carroll, managing director at Imperative Energy, said: “The funding and support of the NWF4EE will enable the executive team to drive forward our business which has great potential to grow over the next decade.
“With rising fuel costs and demand for clean technology, Imperative Energy is perfectly placed to take advantage of the opportunities that a growing alternative energy market presents, and we are delighted to be doing this out of the North West. Having such knowledgeable investors on board is key to growing a renewable energy business in the continuing difficult banking environment. EIDC’s track record in project finance, coupled with CT Investment Partners’ obvious sector experience and broad network will be a key differentiator for Imperative Energy.”
Ed Simpson, investment director, from CT Investment Partners and Peter Bachmann, partner, from EIDC have been appointed to the board of the company with immediate effect.
The industrialised world is in the early stages of a revolution which will see it switch from fossil fuels to renewable sources of energy over the next 50 years. The scale and scope of the transition will be enormous.
The need for change is driven by:
- Global Energy Demand, which is expected to double between 2005 and 2050 and will require new sources of fuel to meet the demand
- Fossil Fuel Prices, which in spite of recent price falls, are expected to continue a sharp upward trend over the next 10 years and will remain highly volatile in the short term
- Security of Supply, given that the EU and the US are over-dependent on imported oil and gas from Russia and the Middle East and are highly vulnerable to volatility in prices and the prevailing geo-political situation
- Climate Change, which demands huge reductions in the level of carbon emissions by governments worldwide in order to stem rising global temperatures
In short, the switch to renewable sources of energy is both a regulatory and an economic imperative.
Bioenergy is the oldest source of renewable energy known to mankind. There is a range of options in terms of biomass fuel type, including:
- Wood chip
- Wood pellets
- Wood shavings/residues
- Energy crops (e.g. miscanthus, willow)
- Empty fruit bunches (EFB), e.g. shell fibre from oil palm production
- Refuse-derived fuel (RFD) from municipal, industrial or agricultural waste
The energy contained within this organic material is released through a conversion process such as combustion, pyrolysis or gasification.
Biomass has a number of critical features as a source of energy:
- it is carbon neutral, in that the carbon produced by combustion is naturally balanced out by the carbon captured during photosynthesis thereby creating a closed carbon cycle
- it is completely sustainable, in that fresh fuel supply can be generated quickly from local agricultural/forestry activity
- it is flexible, in that it can be used as a fuel for heat, power and transport purposes
- it is reliable, it that it can be stored and used on demand unlike wind
Its disadvantage compared to wind, wave and solar energy, is that it has a finite capacity. As such, it will be utilised as part of the overall renewable energy mix for applications where it best fits, and the key for users will be access to a guaranteed supply of fuel in sufficient volumes and at predictable prices over the long-term.
Primary energy consumption in Ireland in 2007 was 16.1Mtoe , over 90% of which consisted of imported oil, gas and coal. Renewable energy represented 2.9% of Ireland’s total primary energy in 2007. As illustrated in the chart below, biomass contributed over 50% of the renewable energy element.
Renewable energy supply (RES) can be broken down into three distinct segments based on the three core applications - Heat (RES-H), Electricity (RES-E) and Transport (RES-T).
Renewables represented 3.4% of thermal energy use in Ireland in 2007, with a target of 5% by 2010 and 12% by 2020. Renewable thermal energy production is dominated by biomass within the Industrial sector, representing 152ktoe of the overall 185ktoe used in 2007 as outlined in the following chart.
Renewables contributed 9.4% of electricity supply in 2007, with a target of 15% by 2010 and 40% by 2020. The biggest contributor to renewable electricity in 2007 was wind at 6.7%. Biomass accounted for just 0.46% (primarily landfill gas). The Government announced a range of measures in early 2008 to help meet the national target of renewable electricity by extending the renewable energy feed-in tariff (REFIT) scheme to include Biomass CHP as well as Anaerobic CHP, Offshore Wind and Ocean Energy. Under the scheme, electricity generated from Biomass CHP will receive a guaranteed 12c/kWh when sold to the national grid.
There was a significant increase in the share of transport energy from renewables in 2007, albeit from a low base. In absolute terms, RES-T increased from 1ktoe in 2005 to 21ktoe in 2007, representing 0.5% of total transport energy use, with a target of 3% by 2010.
Planning Permission Exemption
In 2008 the Irish Government introduced a Statutory Instrument to exempt certain renewable energy projects from the need to secure planning permission. This removes a significant bottleneck in project development and reduces the normal project timeline by between 3 and 6 months. Combined Heat and Power Plants of less than 500 square metres in size are covered by this legislation.
It is estimated that a total of 272ktoe of renewable heat energy will be required in 2010 to meet the Government’s targeted growth in the three years 2008-2010. The Government has committed to a range of actions to help boost the sector including a programme for public buildings to be converted to bioenergy heating and the use of biomass CHP in future major public site developments.
The UK Government’s Department of Energy and Climate Change (DECC) was established in October 2008 and tasked with overseeing a range of ambitious targets for the transition to renewable energy across Britain.
The UK’s overall target is for renewables to contribute to 15% of final energy demand by 2020, from a present level of 2%. The target is further broken down as follows:
- 32% renewable electricity (5% at present)
- 14% renewable heat (0.6% at present)
- 10% transport (2% at present)
Based on current understanding of relative costs and constraints, the key growth areas in the UK’s renewable energy strategy are expected to be wind (on- and off-shore) and biomass. The following sections will cover the market for Heat and Electricity as the two primary applications for biomass.
The DECC has identified renewable heat as a particular priority. Heat accounts for over 40% of the UK’s primary energy consumption, yet less than 1% of the heat market is currently sourced from renewable fuels. A study commissioned by the Government and conducted by Ernst & Young in 2007 concluded that biomass has the greatest market and technical potential for renewable heat delivery within the UK (close to 40TWh, both at 11% and 14% renewable heat targets).
The E&Y study estimates the market potential for biomass heat for Commercial and Industrial purposes alone to be between 10TWh and 17.5TWh (1TWh = 1,000,000MWh), which is equivalent to between 1.5% and 2.4% of the current UK total heat requirement.
On the back of this study, the DECC has consulted on a range of regulatory measures to help achieve the target of 14% renewable heat by 2020, and has committed to introducing a range of measures in Spring/Summer 2009 covering RHI (renewable heat incentive) and/or RHO (renewable heat obligation).
The current preference appears to be for RHI measures, which would give support to generators of renewable heat at a set price of per MWh thereby providing a predictable income stream which would be paid for by a levy on fossil fuel heat generators.
In terms of renewable electricity, the UK Government operates a scheme called Renewable Obligation Certificates (ROCs) which is the main policy instrument used to encourage generation from renewable sources through statutory requirements on electricity suppliers.
In essence, ROCs provide a financial incentive above electricity commodity prices for developing renewable generation. In fulfilment of their obligation, each electricity supplier has to either surrender ROCs or pay a buy-out fee for the total shortfall between renewable energy supplied and the minimum requirement of renewable energy. The buy-out price for 2008/09 is £35.76/MWh with the total sum of buy-out payments in any year being paid back to electricity suppliers in proportion to how many ROCs they have presented in the compliance period. The traded value of ROCs is based on buyers’ and sellers’ views on the value of the buy-out fund in any year. From the 1 April 2009, ROCs will be banded according to the type of renewable energy with positive discrimination towards efficient use of indigenous resources such as biomass.
Imperative Energy Ltd (IEL) offers two primary product/service packages:
Energy Supply Contract (ESCO): a long-term energy supply contract under which IEL covers design, fuel supply, equipment supply, finance, installation, operation and maintenance, and the client is invoiced for metered energy use on a monthly basis at a pre-agreed index-linked price. The ESCO model is an ideal low risk option for clients as IEL bears all of the capital cost and operational responsibility for the biomass system (including fuel delivery, ash removal and boiler maintenance).
System Supply & Install (Equipment / Fuel Only): clients can choose to cover the capital cost of the biomass system themselves, in which case IEL completes a straightforward Supply & Install. This offer can be linked to a long-term service/maintenance and fuel supply contract of wood chip or wood pellets from IEL.
IEL supplies a complete range of leading biomass boiler products, ranging from 30kW to 6MW for typical commercial/public sector clients, and anything up to 25MW and more in the industrial sector for applications covering Heat, Steam and Combined Heat and Power (CHP).
In all cases, IEL will conduct a Feasibility Study to analyse the client’s energy requirements and then design an installation that meets the majority of those requirements through biomass as efficiently and effectively as possible.
We provide a complete Operations & Maintenance Service with guaranteed SLAs. We stock a supply of key spare parts within the country to ensure rapid response and resolution times to technical faults. A standby oil or gas boiler is also maintained to meet peak demands and to provide backup.