UK AD & Biogas 2016: Day Two green seminar 7 July

UK AD & BIOGAS
TRADESHOW
6-7 JULY 2016
NEC BIRMINGHAM

FINANCE – WHAT FINANCE
OPTIONS EXIST FOR NEW AD
DEVELOPERS, AND HOW CAN
EXISTING PLANTS RE-FINANCE
CHAIR: RUTH MURRAY, PARTNER HEAD OF ENERGY AND WASTE,
ASHFORDS LLP
HITEN SONPAL, HEAD OF SPECIALIST SECTORS, LOMBARD GREEN ENERGY
ANNE LALEMAN, DIRECTOR, ALPHA-FINANCIALS ENVIRONMENTAL
RICHARD BARKER, ADVISER AND INVESTMENT COMMITTEE MEMBER,
IONA CAPITAL
FOLLOWED BY OPEN DISCUSSION
PHIL KENT, DIRECTOR, GRAVIS CAPITAL PARTNERS

ASHFORDS LLP Legal advisers to the Energy and Waste Sector
Session Chair – Green Seminar Day 2
Ruth Murray
Partner, Head of
Energy and Waste
Ruth is a Projects lawyer and leads
teams delivering a range of energy
projects including AD, solar and
biomass. The team has advised on
the successful financial close of
numerous AD projects with a capex
value in excess of £100million.
r.murray@ashfords.co.uk
+44 (0)1392 333857
Finance - what finance options
exist for new AD developers,
and how can existing plants
re-finance?

ASHFORDS LLP Legal advisers to the Energy and Waste Sector
Property risks
Grid connection
Third party rights
Feedstock
Technical due diligence
Financial model assumptionsTechnology Risk
Planning Risk
Offtake solution
Operator
Insurance
Bankability

Hiten Sonpal
Head of Specialist Sectors
Renewables | Manufacturing | Agriculture | Commercial Transportation
Lombard, Green Energy Finance

Lombard Green Energy Finance Team
Who are we?

Lombard’s take on Renewables
Dedicated Green Energy Finance Team
Supporting UK SME’s & Mid Corporates in reducing energy costs
Over 1,700 green energy deals transacted in the last 24 months
2015 funding – £102M (2014 – £88M)
Total lending in sector of £0.5bn
Technologies supported for funding
– Wind turbines (on shore)
– Anaerobic digestion
– Combined heat and power
– Air source/ground source heat pumps
– LED
– Biomass
– Solar PV – roof/ground mounted
Lombard is committed to supporting the green energy market and is looking to
continue growing our lending in this sector to support the Corporate and SME markets
Security may be required. Product fees may apply

Lending policies
Serviceability will need to be demonstrated from existing activities
Lombard will include 50% of projected FIT/RHI/ROC for all technologies
Funding can be provided in to an SPV with a cross company guarantee of a trading
business which demonstrates serviceability
All associated assets would need to be verified internally by Lombard’s asset
management division
Lombard do not usually require land or building security
Solar PV Biomass
boilers and
CHP
Air Source
Heat Pump
Wind Anerobic
Digestion
LED
Lighting
Term
7 Years
Term
7 years
Term
7 years
Term
7 Years
Term
7 Years
Term
3 Years
Deposit
10% + VAT
Deposit
10% + VAT
Deposit
10% + VAT
Deposit
10% + VAT
Deposit
10% + VAT
Deposit
10% + VAT

Refinance of green energy technologies
For projects originally funded out of cash flow cash could be released to fund other
renewable projects or be reinvested in to the core business
For projects funded from VC or expensive asset finance this could be replaced with
cheaper Lombard funding
For projects funded against land and building security this security could be released
to be used for expansion or working capital etc.
Benefits to the customer

Refinance of green energy technologies
No construction risk and early ‘teething’ issues avoided
Actual track record of performance as opposed to projections
Funding assets that are likely to be attracting a higher level of Government incentive
(FIT/RHI) than a new project
Benefit to Lombard
Raise up to the lower of NBV or original invoice price less appropriate depreciation
Max term to match that of a new project
Terms

For more information
Hiten Sonpal
Head of Specialist Sectors - Lombard
Renewables | Manufacturing | Agriculture | Commercial Transportation
Mobile: 07795801414
Email: hiten.sonpal@lombard.co.uk

Alpha-Financials
Environmental
Where Environment and Finance Meet
ADBA July 2016 - stand H601www.af-enviro.com

Alpha-Financials Environmental
IRR
Inflation Rate

IRR
Inflation Rate Too low

IRR
Inflation Rate Too low + 1.13 %

IRR
Taxation

IRR
Taxation Too high

IRR
Taxation Too high + 0.14 %

IRR
RHI error

IRR
RHI error Parasitic incl.

IRR
RHI error Parasitic incl. - 3.75 %

IRR
District Heating

IRR
District Heating Not included

IRR
District Heating Not included + 3.54 %

Financing and Refinancing Environment
ADBA Show 7th July 2016
Generating absolute returns from BioEnergy Infrastructure

One page ... only … on Iona Capital
• Founded in 2011 by an experienced team of renewable energy,
waste industry and private equity specialists.
• Focus on Bioenergy sector in lower risk ‘Infrastructure’ projects
with unleveraged project returns of circa 13-15% p.a.
• Currently manages c. £200m under management, with funds
coming from Local Authority Pension Funds
• Has invested in 14 AD projects – both food waste and farm AD,
from 250kW to >3MW equivalent including 4 gas to grid.
• Also invested in Advantage Biogas, O&M provider to the AD
industry and 4 other biomass opportunities

… OK … I lied …. there’s two pages

A bit of context ... still a young industry

With patchy, but improving performance

Funders segmentation view
Food waste AD
Farm AD
Small scale Large scale
Owner operator Professionally managed
• Project finance/ new
build
• Refinancing
• Non-recourse
• Recourse
• Full finance
• Partial finance (e.g.
equipment lease)
• ESCO models

Entering an interesting phase
• Limited new builds given incentive economics
• Food waste AD consolidation phase
• Questions over sustainable operational performance and
food waste availability
• Focus on realistic asset pricing – given gate fee impacts
• Probably a protracted period
• Farm AD beginning refi phase
• EIS/VCT
• Post project completion and timing of re-finance
• Asset value and loan to value

Funders like ‘good’ counterparties
• Strong business model which is difficult to
’break’ …feedstock supply, quality of earnings
etc..
• Proven reputation/ operational track record
• Experience and capability
• … and security …

Funding available/ funder types
• Private equity (e.g Iona)
• Mezzanine debt
• Bank loans (and evolving market with a
focus on refinancing)
• Equipment finance
• ESCO
• Combination of the above …

Conclusion
• This is a tricky sector for funders … compared to
others
• Focus on what ‘good’ is and means
• Its all about track record, performance and a
robust operational model
• IRRs, NPVs, DCRs, LTVs and other TLAs reign
• Be realistic about your plant, its performance
and hence how much funding will be given, in
what form(s) and at what time

37
Gravis Capital Partners LLP
ADBA – AD Financing
July 2016

38
Summary – Opportunities and Threats for AD financing
New AD development Re-financing existing AD
Opportunities
Threats
 RHI / tariff guarantees;
 Direct supply of electricity and /
or heat;
 Alternative digestate uses?
 Capital seeking homes;
 Existing accreditations are of
value;
 Portfolio deals;
 Fall in electricity export
subsidies;
 Food waste availability;
 Sustainability criteria;
 EIS money no longer available;
 Electricity price decreases;
 Pricing / leverage expectations;
 Operational track record;
 Contract structures and
counterparties;

39
New AD Development
Opportunities exist subject to the outcome of the RHI consultation, feedstock
strategies and / or accessing additional sources of revenue
 RHI tariff guarantees are key to providing certainty in a post-consultation world (e.g. risks of
closure of the non-domestic scheme);
 Highly competitive feedstock markets, in particular food waste in certain geographies.
Drives ‘captive’ feedstock strategies;
 Access to direct line electricity / heat offtakes allows retail (rather than wholesale) pricing;
 Possible longer term opportunities in alternative uses of digestate (e.g. fertiliser products);
 Other uses of bi-products of AD process (e.g. CO2 as part of G2G AD)
Primarily equity finance with some ‘higher risk’ debt available at a premium margin.
Lack of traditional PF lower cost debt due to scale and risk profile

40
Refinancing existing AD
‘Optimising the capital structure in recognition of the particular circumstances of an
asset or group of assets’
Certainty of
underlying
asset cash
flows (capex /
opex /
revenues)
High cost
Optimising value
through reduced
costs and
flexibility
Optimising value
through
certainty driving
capital cost /
structure
Low cost
 Firm contracts;
 Portfolios;
 Operational data;
 Effective management;
 Competitive advantages;
Availability and type of refinance capital will depend on asset class and scale.

41
Contact information
Philip Kent
Philip.kent@gcpuk.com
020 7850 4773
Gravis Capital Partners LLP
53/54 Grosvenor Street
London W1K 3HU
www.gcpuk.com

Questions and comments from the floor

COST COMPETITIVENESS –
IMPROVING OUTPUTS AND
REDUCING COSTS
CHAIR: OLLIE MORE, MARKET ANALYST, ADBA
JAMES LLOYD, CHIEF EXECUTIVE OFFICER, BIOWATT
WILLIAM HELLER, CHEIF EXECUTIVE, ORGANIC WASTE LOGISTICS

Can we reach £100/ MWhe by
2020?
£0
£50
£100
£150
£200
£250
£300
2006
(smaller scale AD)
2016 2016-2020
reduction required
2020
LEVELISEDCOST£/MWHE(FOODWASTEAD>500KWE)
COST COMPETITIVENESS TASK FORCE

Yes, if:
1. Government action on waste/
feedstock
2. Policy certainty and ambition
3. Investment in research and innovation
4. Recognition of and training on
digestate
5. Public and business knowledge of AD

But,
• DECC propose setting the AD ‘cost’ at £49/
MWhe (no tariff required)
• DECC propose to pay Hinkley Point C £100/
MWhe
• New gas commissioning in 2019 is estimated
to cost £85/ MWhe
SO AD THE CHEAPEST FORM OF
ELECTRICITY? OF COURSE NOT.

James Lloyd, chief executive officer, Biowatt

UK AD & BIOGAS 2016 Conference
Prepared by William Heller, Chief Executive
Organic Waste Logistics
6-7 July 2016
Improving Outputs & Reducing Costs

organicwastelogistics.com
It’s all about capacity utilisation!
5
Anaerobic Digestion Marginal Economics (£ per MWH)
Revenues
135
Digestate Disposal
(£10/T)
20
Operating Cost
(Incremental)
20-35
Marginal
Contribution
96
Export
Tariff
FIT 86.8
81
48.5
£38-45/T
of input
(Add further £10
if no digestate
cost)

organicwastelogistics.com
5
Significant room to improve!
Capacity Utilisation %
(Jan–Mar 2016)
Anaerobic Digestion Plants*
+250KW < 1MW
Anaerobic Digestion Plants**
+1MW
42
30
28
90+% <67% 67-89%
14
42
44
90+% <67% 67-89%
* 80 Plants ** 43 Plants

Contact
William Heller Chief Executive
M +44(0)7734 130 133
E wheller@OWL-team.com
W www.organicwastelogistics.com

OPERATIONAL PERFORMANCE
– WHY ISN’T MY PLANT
RUNNING AT 100%
CHAIR: ALEXANDER HENDERSON, ORA
DR EMMA BRODRICK, SYSTEMS APPLICATION MANAGER, IMSPEX
DIAGNOSTICS
TONY CLUTTEN, PROCESS SALES MANAGER, HUBER TECHNOLOGY
PHIL HOBBS, DIRECTOR, NEW GENERATION BIOGAS
NORBERT ROSSOW, EPRV/FARMGAS COMMUNITY PARTNERS LTD
DR MELANIE HECHT, BIOGAS PROCESS MANAGER, SCHAUMANN
BIOENERGY

AD PROJECTS – DISPELLING THE
MYTHS SURROUNDING LOCAL AD
DEVELOPMENTS
CHAIR: JOHN QUINTON-BARBER, MANAGING DIRECTOR,
SOCIAL COMMUNICATIONS
MANDY STOKER, DIRECTOR, E4 ENVIRONMENT
PETER ELMS, DIRECTOR, ALPACA COMMUNICATIONS

Chair: John Quinton-Barber, Managing Director, Social
Communications

Dispelling the myths
surrounding local AD
developments
Mandy Stoker
Director – E4Environment Ltd.

Who are we?
• Environmental Consultancy since 2000
• Specialise in Planning and permitting of renewable energies
• Implementing certified systems such as EMS, ISO14001
• Worked on:
• Over 40 AD sites
• Roof and ground mounted solar PV installations
• EIA & planning on over 100 onshore and offshore wind
farms & single turbine installations

This Presentation Covers
Reality of the
planning
system
Myth busting

Planning Application Process
Pre-application Consultation
• Environment Agency and Local Planning Authority
Data Collection
• FRA, LVA, Ecology, Transport, Noise, Odour . . .
Submission to Local Planning Authority
for Validation (2 Months)
Legal Determination Period (2-3 Months)
Approval Conditions

• Do not assume that the planning process will be completed in this time
frame, it usually doesn’t.
• Main things that cause delays:
– The validation process
– The consultation phase
– Subjective issues
– Anti campaigners who will work tirelessly to discredit the
project
MYTH No.1 The planning process takes 13 weeks

MYTH No. 2 It’s a level playing field for applicant and
consultees
There is a process within the planning system that allows anyone that wishes to
express an opinion or ask for more information can do so. This is right and fair.
• There are statutory consultees - The reality is some of the statutory consultees do
not respond in the time allowed so extra time can be allocated.
• Then letters are sent out to notify the local public - The public’s opinion is often
accepted after the deadline and right up to the committee meeting.

• What you see: nothing except a beautiful piece of engineering that can
tick an awful lot of box’s
• What others see: a blight on the landscape, increased transport, the
immoral use of crops as fuel not food, odours, devaluation of properties,
bio aerosols and disease………………………………………..
MYTH No. 3 That everyone clearly sees all the
benefits of the development

Councillors have been known to refuse applications on non-
material planning grounds, so decisions can, and are overturned
by appeal to the planning inspectorate.
MYTH No. 4 That a “No” decision means “No”

Thank you
Mandy Stoker
Director - E4Environment Ltd
Email:
ajs@e4environment.co.uk
Phone: 01743 34 34 03
Address: Hilley Farm, Pentre,
Nesscliffe, Shropshire,
SY4 1BP

Peter Elms, Director, Alpaca Communications

AD PROJECTS – HOW TO SUBMIT A
SUCCESSFUL AD BUSINESS PLAN
CHAIR: DR STEPHEN WISE, ASSOCIATE DIRECTOR, AMEC
FOSTER WHEELER
BRIAN FARRELL, PARTNER, ENERGY AND WASTE, ASHFORDS
AMAYA-ARIAS GARCIA, TECHNICAL DIRECTOR, GOALS PROJECT
MANAGER & ENGINEERING SUPPORT

Chair: Dr Stephen Wise, Associate Director, Amec
Foster Wheeler

Brian Farrell, Partner, Energy and Waste, Ashfords

Amaya-Arias Garcia, Technical Director, Goals Project
Manager & Engineering Support

TRAINING – RAISING
COMPETENCE ACROSS THE AD
SUPPLY CHAIN
CHAIR: DR JANE GILBERT, DIRECTOR, CARBON CLARITY
MARK HYDE, COMMERCIAL DIRECTOR, WAMITAB
TINA BENFIELD, SENIOR TECHNICAL ADVISOR, CIWM
DAN PURVIS, HEAD OF OPERATIONS, FUTURE BIOGAS

Chair: Dr Jane Gilbert, Director, Carbon Clarity

WAMITAB: Building and
maintaining competence in AD
Mark Hyde, Commercial Director

Who are WAMITAB?
Charitable Trust
Awarding Organisation
Industry Training and Advisory Board
PARTNERSHIPS
APPROVED
NETWORK OF
PROVIDERS
EMPLOYER
CENTRES

Skills development in Anaerobic
Digestion
• Qualification: A title or attribute gained in education,
through examination or by certification
Vs.
• Training: the action of teaching a person or animal a
particular skill or type of behaviour.

CIWM/WAMITAB Operator
Competence Scheme
Risk Tiers
Primary
Qualifications
Continuing
Competence

Risk Tiers for Anaerobic Digestion
• Anaerobic Digestion falls under MEDIUM RISK
• Risk Tier table based on relative risk taking account of type
of activity and type of waste stream ‘handled’
• Agreed with Environmental Regulators, and amended as
required.
• Qualifications made of 4, 6 or 12 units.

The New ‘Risk Tier’ Table (Medium)
Anaerobic Digestion

WAMITAB Anaerobic Digestion
Qualifications Exist
• WAMITAB Level 4 Medium Risk Operator Competence for
Anaerobic Digestion (601/8515/6) (MROC5)
• WAMITAB Level 4 Medium Risk Operator Competence for
Storage of Digestate (601/8537/5) (MROC6)
• WAMITAB Level 4 Certificate in Waste and Resource
Management (601/2388/6) (VRQ, Unit 6b)

How are these qualifications
assessed?
• Open entry.
• Suitable for technically competent managers, consultants,
site managers and site supervisors.
• Once registered with centre, assessors will visit the site.
• Assessed ‘on the job’.
• Portfolio of evidence.

Alternative: Level 4 Certificate in
Waste and Resource Management
• Moves away from observation. Knowledge based
• Assessment: assignments
• Mandatory Units: 5
• Optional Unit (1 specifically for AD):
 Managing biological treatment processes (unit 6b)
• Could be seen as more suited for ‘new entrants to the
sector’ (academia)

but….
NO formal requirement for Operatives or Supervisors to be
qualified, regardless of risk or type and size of
facility….Qualification does exist
WAMITAB Level 2 Diploma for Anaerobic Digestion Operative

Developing the AD
Skills Escalator
SITE…. Employability
Pre-employment
Level 1 Award in Waste
and Recycling
Level 1 Award in Reuse &
Refurbishment
Operator Level 2 Diploma in….
Supervisor Level 3 Diploma in….
Manager
WAMITAB Medium Risk
Continuing Competence
Gap Exists
AD Entry
Level?
Knowledge?

Ambition is to move from a linear economy ….
Future skills needs….

Training – raising competence across
AD
Tina Benfield
Technical Manager - CIWM

AD Matrix
Repository for information - live document
Helps to focus needs – wider than direct AD Operations
(whole supply chain)
Encourages upskilling/ awareness but development and
delivery determined by market forces.

General AD
Awareness
H&S
Detailed AD process
/ operation
Technical
Competence
Plant and
equipment
Environmental
Monitoring
Gas Management BioChemistry
Digestate
Management
PAS 110 /ADQP Management
Negociation /
communication
Permitting Duty of Care
Economics of
Operation
Ongoing Update/
development
Other comments
Procurement include
understanding
outputsplus
awareness of other
technologies
(see General AD
Awareness tab for
more details)
not specific to AD
other than for
contractual
purposes
X X X X X X X
Awareness
depending on plans
for output use
not specific for AD 
Awareness of
requirements for
tender spec and
evaluation purposes
only
(see tab for more
details)

awareness
(see tab for
more details)


(relevant to
initial training
requirments)
Sales 
appreciation of
process, how
different feedstock
(quantities, waste
streams and form)
affect process and
outputs.
(see General AD
Awareness tab for
more details)
not specific to AD
unless site based
X X X X X X X
Awareness if plant is
certified
Awareness of permit
requirements
(see tab for more
details)
X X

(relevant to
initial training
requirments)
Regulators
plus
awareness of other
technologies
(see General AD
Awareness tab for
more details)
normal
awareness when
visiting sites
(including
confinded space
awareness)
level of detail will
depend on role
Awareness of
requirements
CIWM/ WAMITAB
able to provide
awareness training
on request -
(England and
Wales)(via Alan
Owers)
X
understand
requirements for
odour, noise,
bioaerosol
monitoring plus
interpretation of
results etc
X X 
Awareness for
Animal Health, EA,
SEPA, NIEA

(see tab for more
details)

(see tab for more
detai l s)
X
 (process best
practice, H&S,
regulations,
quality
protocols)
Elected Members
of Local Councils
plus
awareness of other
technologies
(see General AD
Awareness tab for
more details)
Not specific to AD X X X
Awareness of level of
control through
permitting
Awareness of
opportunities X X X X X X X X

(relevant to
initial training
requirments)
Planning Officers plus
awareness of other
technologies
(see General AD
Awareness tab for
more details)
normal
awareness when
visiting sites.
X X X
Awareness of level of
control through
permitting
Awareness of
opportunities X X X X  X X X

(relevant to
initial training
requirments)
WDA / WCA
include
implications of
collection systems
on AD and vice
versa.
(see General AD
Awareness tab for
more details)
Not specific to AD X X X X X X X X not specific for AD not specific for AD X

(see tab for more
details)
X

(relevant to
initial training
requirments)
Operator –
operative level
some
ancillary staff may
need awareness
other = detailed
knowledge/ skills
(see General AD
Awareness tab for
more details)
 (including
confined space
training, ATEX,
(see Health and
Safety tab for more
details)

? Will depend on
company structure
See Technical
Competence Tab
for details and
contacts
safe maintenance
of equipment
understand
requirements for
odour, noise, bio
aerosol monitoring,
monitoring of process
plus interpretation of
results etc
day to day
operational
knowledge subject
to expert advise
some
knowledge relating to
process control and
feedstock

 plus
limitations of use
of non PAS 110
digestate
may need
supervisory skills ?

(see tab for more
details)

(see tab for more
details)
X
(process
best practice,
H&S,
regulations,
quality
protocols)
Operator –
Management level
X

(see Health and
Safety tab for more
details)
(but will
depend on actual
hands on role -
specific to
organisation)

See Technical
Competence Tab
for details and
contacts
safe maintenance
of equipment
understand
requirements for
odour, noise,
bioaerosol
monitoring,
monitoring of process
plus interpretation of
results etc
day to day
operational
knowledge subject
to expert advise
some
knowledge relating to
process control and
feedstock

 plus
limitations of use
of non PAS 110
digestate (see
tab for more
details)
 

(see tab for more
details)

(see tab for more
details)

(process
best practice,
H&S,
regulations,
quality
protocols)
Gas Utilisation

(see General AD
Awareness tab for
more details)
ATEX
Regulations,
Confined space
awareness + ????
(see Health and
Safety tab for
more details)
X X  X

clean up, CHP
generation/ use,
biomethanisaion,
injection to grid,
use in transport
X X X not specific for AD not specific for AD

(see tab for more
details)
X 
(process
best practice,
H&S,
regulations,
quality
protocols)
Digestate users

(see General AD
Awareness tab for
more details)

(see Health and
Safety tab for more
details)
X
yes if
landspreading
waste under permit
See Technical
Competence Tab
for details and
contacts
X X X X 
 plus
limitations of use
of non PAS 110
digestate
(see tab for more
details)
not specific for AD not specific for AD

(see tab for more
details)
 X
(process
best practice,
H&S,
regulations,
quality
protocols)
consider content of
FACTs training -
does it cover use of
AD digestate
sufficiently?
Include landbank
availability
allowance tool.
Consultants
depends on role - all
should have general
awareness of
technologies
(see General AD
Awareness tab for
more details)

depending on
whether involved
in on site
activities
(see Health and
Safety tab for
more details)
depends on role X depends on role depends on role depends on role depends on role  depends on role not specific for AD 

(see tab for more
details)
Awareness
(see tab for more
details)

(process
best practice,
H&S,
regulations,
quality
protocols)
Retail

(see General AD
Awareness tab for
more details)
not specific to AD X X X X X X 

awareness only
plus limitations on
use of non PAS 110
digestate
(see tab for more
details)
not specific for AD not specific for AD X

(see tab for more
details)
X

(relevant to
initial training
requirments)
Waste Producers

(see General AD
Awareness tab for
more details)
not specific to AD X X X X X X X X not specific for AD not specific for AD X

(see tab for more
details)
X

(relevant to
initial training
requirments)
Environmental
Monitoring 
(see General AD
Awareness tab for
more details)

(see Health and
Safety tab for more
details)
X X X
odour, noise,
bioaerosol
monitoring etc
X X X X not specific for AD not specific for AD
Awareness of permit
requirements re
monitoring
(see tab for more
details)
X X

(relevant to
initial training
requirments)
Public plus
awareness of other
technologies
(see General AD
Awareness tab for
more details)
X X X X X X X X X X X X X X

(relevant to
initial training
requirments)
Design and build

(see General AD
Awareness tab for
more details)

(see Health and
Safety tab for more
details)
 include
understanding of
end use
requirements
X  X

Understanding of
requirments
X X
ensure equiptment
fit for purpose
(see tab for more
details)
not specific for AD not specific for AD X X 
(process
best practice,
H&S,
regulations,
quality
protocols)
Equipment
Manufacturing

(see General AD
Awareness tab for
more details)
awareness
to ensure
appropriate
safeguards built in
(see Health and
Safety tab for
more details)
in so far as
understanding
system
requirements
X
Engineering
(mechanical and
electrical)
transferable
skills from
existing UK
Engineering
base
X

Understanding of
requirments
X X X not specific for AD not specific for AD X
As waste
producer they
will need to
understand Duty
of Care
(see tab for
more details)
X

(relevant to
initial training
requirments)

Procurement
Sales
Regulators
Elected members
Planning Officers
WDA/ WCA
Operator – operative level
Operator – management level
Gas utilisation
Digestate users
Consultants
Retail
Waste producers
Environmental monitoring
Public
Design and build
Equipment manufactures
AD Training needs matrix – considers whole AD supply
chain

General AD awareness
H&S
Detailed AD process/ operation
Technical Competence ( holding a
permit!)
Plant and equipment
Env monitoring
Gas management
Biochemistry
Digestate management
PAS 110 / ADQP (PAS 100)
Management
Negotiation/ communications
Duty of care
Permitting
Economics of operation
Ongoing update/ development
Looks at a range of ‘needs’
Looks at more than just ‘operation’

Identifies areas for training / awareness
Doesn’t prescribe a ‘syllabus’ or way of delivering/
obtaining knowledge (other than TCM)
Open to market development
Links to known/ available quals/ schemes where applicable
(see additional tabs for details)

Operations - Operative Level
General AD
Awareness
H&S
Detailed AD
process /
operation
Technical
Competence
Plant and
equipment
Environmental
Monitoring
Gas
Management
BioChemistry
Digestate
Management
some
ancillary staff may
need awareness
other = detailed
knowledge/ skills
(see General AD
Awareness tab for
more details)

(including
confined
space
training,
ATEX,
(see Health
and Safety
tab for more
details)

? Will
depend on
company
structure
See
Technical
Competence
Tab for
details and
contacts
safe
maintenance
of equipment

understand
requirements
for odour,
noise, bio
aerosol
monitoring,
monitoring of
process plus
interpretation
of results etc
day to day
operational
knowledge
subject to
expert advise
some
knowledge
relating to
process
control and
feedstock

PAS 110
/ADQP
Management
Negotiation /
communication
Economics
of
Operation
Ongoing
Update/
development
Other
comments
 plus
limitations
of use of
non PAS
110
digestate
may need
supervisory
skills
?

(see tab for
more
details)

(see tab for
more details)
X

(process best
practice, H&S,
regulations,
quality
protocols)

Operations – Management level
General AD
Awareness
H&S
Detailed AD
process /
operation
Technical
Competence
Plant and
equipment
Environmental
Monitoring
Gas
Management
BioChemistry
X

(see Health
and Safety
tab for more
details)

(but will
depend on
actual
hands on
role -
specific to
organisation
)

See
Technical
Competenc
e Tab for
details and
contacts
safe
maintenance
of equipment
understand
requirements for
odour, noise,
bioaerosol
monitoring,
monitoring of
process plus
interpretation of
results etc
day to day
operational
knowledge
subject to
expert advise
some
knowledge
relating to
process
control and
feedstock
Digestate
Management
PAS 110
/ADQP
Management
Negotiation /
communication
Economics
of
Operation
Ongoing
Update/
development
Other
comments

 plus
limitations
of use of
non PAS
110
digestate
(see tab
for more
details)
 

(see tab for
more
details)

(see tab for
more details)


(process best
practice, H&S,
regulations,
quality
protocols)

Design and Build
General AD
Awareness
H&S
Detailed AD
process /
operation
Technical
Competence
Plant and
equipment
Environment
al Monitoring
Gas
Management
BioChemistry
Digestate
Management

(see General AD
Awareness tab for
more details)

(see Health
and Safety
tab for more
details)
 include
understandi
ng of end
use
requirement
s
X  X

Understanding
of requirments
X X
PAS 110
/ADQP
Management
Negotiation /
communication
Economics
of
Operation
Ongoing
Update/
development
Other
comments
ensure
equiptment
fit for
purpose
(see tab for
more details)
not specific
for AD
not specific for
AD X X 

(process best
practice, H&S,
regulations,
quality
protocols)

Digestate Users
General AD
Awareness
H&S
Detailed AD
process /
operation
Technical
Competence
Plant and
equipment
Environment
al Monitoring
Gas
Management
BioChemistry
Digestate
Management

(see General AD
Awareness tab for
more details)

(see Health
and Safety
tab for more
details)
X
yes if
landspreadin
g waste
under permit
See
Technical
Competence
Tab for
details and
contacts
X X X X 
PAS 110
/ADQP
Management
Negotiation /
communication
Economics
of
Operation
Ongoing
Update/
development
Other
comments
 plus
limitations
of use of
non PAS
110
digestate
(see tab for
more
details)
not specific
for AD
not specific for
AD

(see tab for
more
details)
 X

(process best
practice, H&S,
regulations,
quality
protocols)
consider content
of FACTs training -
does it cover use
of AD digestate
sufficiently?
Include landbank
availability
allowance tool.

Industry needs to reinforce training / skills development
message.
Especially where no statutory requirement exists.
Benefits of improved staff training
safety
environmental/ regulatory impacts
costs………………………………………… and many more

Dan Purvis, Head of Operations, Future Biogas

HEALTH AND SAFETY – WHAT
HEALTH AND SAFETY PROTOCOLS
ARE NEEDED FOR YOUR PLANT?
CHAIR: TERENCE BROWNHILL, BUSINESS DEVELOPMENT
MANAGER, CAPITA-PROJEN
ALAN FITZPATRICK, RISK ENGINEER, CAN HARDY
IAN HITCHEN, ROWAN HOUSE
DAN PURVIS, HEAD OF OPERATIONS, FUTURE BIOGAS
JESS ALLEN, ENVIRONMENT & REGULATION MANAGER, ADBA

Chair: Terence Brownhill, Business Development
Manager, Capita-PROjEN

BIOGAS
Power and Renewable Energy
“Keeping Your People Safe and your Plant Insurable”

My Manager says I have an exciting job?

108108
AGENDA
108
1 Afew slides

CNA Policy Wording
• Feedstock Quality to check, any
changes notified to insurer
• Foaming
• Maintenance
• Limit of incorrect BI figures

The MAXIMUM FORESEEABLE LOSS (MFL) which could occur
This is the most extreme loss that might occur
that is within the bounds of reasonable
possibility. It includes the consequences of
the most severe natural peril as well as
explosion, fire and breakdown as
appropriate. It assumes the failure of
emergency services to attend the site and
the failure of all control, protection and
detection systems. The consequent
interruption is assumed to last throughout
the indemnity period with no make up
assistance in mitigation of the lost income
“

Fire and Explosion
HAZOP hazard and operability study
Separation what distance?
Explosion, ATEX, DSEAR
Gas detection
Construction what materials?
Fire Detection, Alarm
Fire Fighting facilities

Pre-site survey to identify issues
Electrical
Missing Hand rail
Need to check
safety valve
Separation?

DESIGN Electricity Import and Export Arrangements
The export and import transformers
are located in the same space, with no
separation, no fire / explosion walls, no
fire protection and no bunding.
The building is open wood slatted
sides this is very unusual for an oil
cooled transformers room
This room is a single point of failure for
the whole business in the event of an
incident.
Prefer oil transformers outside, small
transformer minimum 7.6M separation
/ 2 hr fire / explosion wall

Testing Biogas Tanks
Typical Biogas tank note the safety device

Site Survey End of Construction Survey
115
Client states 2 hour fire walls
wooden door, cable openings ?

Summary
• No Insurance company has to
provide coverage
• The premium you pay will
reflect you’re site, attitude to
Health & Safety and
willingness to Learn

When it comes to business insurance…
We can show you more®.
CNA Insurance Company Limited (registered number 950) CNA Switchboard: +44 (0)20 7743 6800 Facsimile: +44 (0)20 7743 6801 Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority (number 202777) Hardy (Underwriting Agencies) Limited (registered number 1264271) Hardy Switchboard: +44 (0)20 7105 0382 Facsimile: +44 (0)20 7327 3615 Authorised by the Prudential Regulation Authority
and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (number 204843) CNA Services (UK) Limited (registered number 8836589) CNA Switchboard: +44 (0)20 7743 6800 Facsimile: +44 (0)20 7743 6801
The above companies are all registered in England with their registered office at 20 Fenchurch Street, London, EC3M 3BY. VAT registration number 667557779.
The information contained in this presentation does not represent a complete analysis of the topics presented
and is provided for information purposes only. It is not intended as legal advice and no responsibility can be
accepted by CNA Hardy for any reliance placed upon it. No representation or warranty, express or implied, is
made as to the contents of this presentation, or for the omission of any material from this presentation. Legal
advice should always be obtained before applying any information to particular circumstances.
Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts,
conditions and exclusions for an insured. All products may not be available in all countries.

ROWAN HOUSE
LTD www.rowanhouse.co.uk
Slide 118
Profitable Safety
Anaerobic Digestion & Biogas Utilisation Plants & Equipment
Ian Hitchen, BA (Hons), C.Eng, MIET,
Director Rowan House Ltd
Copyright basis:
This presentation is made for educational purposes only. Some photographs and diagrams are copied
herein and text is reproduced within for the purposes of study. These items may not be reproduced for
any other purpose without the written permission of the relevant copyright holder
Overview of Risk Assessment

ROWAN HOUSE
Slide 119
Anaerobic Digestion Plants & Equipment
UK Health & Safety Law

ROWAN HOUSE
Slide 120
HEALTH and SAFETY at WORK Etc. ACT
Management of Health and Safety (MHSR)
Enabling Act for other Safety Regulations (including EU Directives) such as -
Dangerous Substances and Explosive Atmospheres (DSEAR)
Control of Substances Hazardous to Health COSHH
Common theme of Hazard & Risk Assessment
HASWA etc Every employer shall make a suitable and sufficient assessment of
the risks to the health & safety of his employees…and of persons not in his
employment
MHSR Reg3(1)..suitable & Sufficient assessment of RISK to -
Employees
Other Persons
Control of Major Accidents and Hazards (COMAH 2015)
UK Law
Supply of Machinery (safety) Regulations

ROWAN HOUSE
Slide 121
Regulations 9 and 10 set out the duties placed on designers. These include the duty
to eliminate, reduce or control foreseeable health and safety risks through the
design process, such as those that may arise during construction work or in
maintaining and using the building once it is built.)
Construction (Design and Management) CDM
UK Law
DSEAR
Reg 5 Risk Assessment:
Where a dangerous substance is or liable to be present every employer shall assess the
risk to workers (and others who may be affected) which may arise because of the
presence of dangerous substances
The risk assessment, where appropriate may be part of a goal orientated approach as
required by BS EN 61508 / BS EN 61511 (HazOp)

ROWAN HOUSE
Slide 122
Safety and Anaerobic Digestion Plants & Equipment
Safety - Who is Responsible?

ROWAN HOUSE
Slide 123
For the plant the employer – the Duty Holder
What about an equipment designer/supplier?
The employee for their own and others safety -
There is a requirement within the UK, (EU) to meet ‘essential ’safety
requirements enabling the fixing of the CE mark (Supplier of Machinery
Regs., ATEX 95, EMC, Low Voltage, etc.)
What about a supplier of process plant and equipment?
Here there is a combination of responsibilities – the supplier based on the
requirements specification and meeting CE. The specification is required from
the project team and the operator to ensure equipment is ‘fit for purpose’
meeting all the essential operating and safety requirements.
Construction (Design & Management) Regs., Pressure Equipment Regs, Pressure
Systems Safety Regs. Supply of Machinery Regs, DSEAR, PUWER, etc., may
apply

ROWAN HOUSE
Slide 124
'Duty Holders' are deemed to have the resources and the authority
necessary to provide a safety management system and can be held
legally accountable following a criminal offence. It is essential for 'Duty
Holders' to discharge their responsibilities effectively
The prime responsibility is placed on the Duty Holder –
Employers, Directors and Managers
Within the European Union the requirement to minimise risk to people set out in
‘Safety of Workers’ Directives
In the UK those Directives concerned with H&S become Safety Legislation
An important question that must be answered by any plant operator -
Is the operation of this unit and associated machinery ‘SAFE’?

ROWAN HOUSE
Slide 125
What is Meant by Safe?

ROWAN HOUSE
Slide 126
UK Law
'SFAIRP' and 'ALARP'
In terms of what they require of duty-holders, HSE considers that duties to
ensure health and safety so far as is reasonably practicable ("SFAIRP") and
duties to reduce risks as low as is reasonably practicable ("ALARP") call for
the same set of tests to be applied.
What is meant by Safe?
The key case from the courts regarding reducing risks as low as reasonably practicable
is Edwards v. The National Coal Board (1949) in which the Court of Appeal held that:
… in every case, it is the risk that has to be weighed against the measures necessary
to eliminate the risk. The greater the risk, no doubt, the less will be the weight given
to the factor of cost. …
Thus, determining that risks have been reduced ALARP involves an
assessment of the risk to be avoided, of the sacrifice (in money, time and
trouble) involved in taking measures to avoid that risk, and a comparison of the
two.

ROWAN HOUSE
Slide 127
Various UK legislation uses phrases such as:
• ‘So far as is reasonably practicable’
• ‘Appropriate arrangements’
• ‘All measures necessary’
Interpreted (by HSE) to mean
– Reduce risks to as low a level as is reasonably practicable (ALARP)
– (Ref: HSE SPC/Permissioning/12 www.hse.gov.uk)
ALARP
RISK UNACCEPTABLE
Broadly ACCEPTABLE
TOLERABLE
TOLERABLE ONLY WHERE FURTHER
COST/EFFORT DISPROPORTIONATE
FOR THE ADDITIONAL RISK
REDUCTION GAINED
Disproportion value depending on the severity of
the risk this needs to be demonstrated usually by a
Cost Benefit Analysis:
Base Line cost to save a life is circa 2.0E+6 £ (not the
value of a life)

ROWAN HOUSE
Slide 128
UK Law
The determination of control measures forms part of the statutory risk
assessment duty-holders are required to undertake.
Such assessments involve duty-holders identifying the hazards in
their workplace,
determining who might be harmed and how;
evaluating the risk from the hazards and
deciding whether the existing control measures are
sufficient or
'SFAIRP' and 'ALARP'
What is meant by Safe?
whether more should be done

ROWAN HOUSE
Slide 129
A Key Concept

ROWAN HOUSE
Slide 130
Key Concepts
HAZARDS:
(Temperature, Pressure: Toxic,
Flammable, Corrosive)
CONSEQUENCE
HARM to People,
Environment, Assets
1 in 200 years
1 employee fatality
RISK: 1 Fatality
per 200 yrs
(Trips, Slips Fall,
Crushing, Electrocution)
Likelihood of consequence
Severity of consequence
RISK reduced to a Corporate value by Identified Risk Reducers

ROWAN HOUSE
Slide 131
By safe H&S legislation means that the risk to People is deemed to be
‘TOLERABLE’…. the employer must safeguard "as far as is reasonably practicable"
(ALARP) the health, safety and welfare of their employees and others.
1. This requires identification of Hazards
2. Is there a potential to do Harm
3. An assessment of how likely they are to occur
4. What is the magnitude of the Risk and
5. Is this Risk Tolerable relative to a Target.
Key Concepts
An essential requirement is for the Duty Holder to determine the target risk of harm
to people (and environment) that may arise from abnormal operation of a plant unit
and to show that these values have been achieved and ALARP over the life time of
the plant
People Harm:
Injury
Serious
Recoverable
Injury Serious
None
Recoverable
A Fatality
Several
Fatalities

ROWAN HOUSE
Slide 132
Concept
Front end design
Project sanction
Main Design & Equipment
Specifications:
DSEAR Hazardous Areas Defined
Fabrication
Construction
Pre-commissioning (DSEAR
Reg.7 Verification):
BS EN 61511 SIF Validation Handover
Operation
Hazard study stage 2
Full HAZOP study FAT
Hazard Review stage 4
Final review of completed actions
Final Design
It is strongly recommended that risk assessments are carried out at the following
stages of a project:
Hazard study stage 1
Pre Commissioning
Considerations

ROWAN HOUSE
Slide 133
An assessed Risk v Target Values Methodology
BS EN 61511 has several methods
The most useful in a HazOp is a Calibrated Risk matrix
BS EN 61511-1,2&3 :Ed 2 2015
Functional safety. Safety instrumented systems for the process industry sector

ROWAN HOUSE
Slide 134
Inherent Process Risk
Severity Exposure Avoidance
Col1 Col2 Col3 Col4 Col5 Col6
Rwa1 1 + + + 0 0
Pexp1
Rwa2 2 1 1 + + +
S1
Rwa1 2 1 1 1 + +
Pexp2
Rwa2 3 2 2 1 1 1
Rwa1 2 1 1 1 + +
Pexp1
Rwa2 3 2 2 1 1 1
S2
Rwa1 3 2 2 2 1 1
Pexp2
Rwa2 4 3 3 2 2 2
Rwa1 3 2 2 2 1 1
Pexp1
Rwa2 4 3 3 2 2 2
S3
Rwa1 4 3 3 3 2 2
Pexp2
Rwa2 ***** 4 4 3 3 3
Pexp1 ***** 4 4 3 3 3
S4
Pexp2 ***** ***** ***** 4 4 4
S1
=
Serious: Slight to moderate pain for 2-7 days. Thereafter some
pain/discomfort for several weeks. Some restrictions to work and/or
leisure activities for several weeks/months. After 3-4 months return
to normal health with no permanent disability.
S2
=
Severe: Permanently incapacitating injury: Moderate to severe pain
for 1-4 weeks. Thereafter some pain gradually reducing but may
recur when taking part in some activities. Some permanent
restrictions to leisure and possibly some work activities.
S3 = one fatality
S4 = up to ten fatalities
Probability of presence in the danger zone:
Pexp1Unlikely to be present less than 10% of work period
Pexp2May be present, more often than 90% of work period
Probability of risk avoidance
Rwa1 a warning with a correct avoidance response
Rw2 Ano warning or incorrect avoidance respose
Inherent Process Risk Block: No independent layers of risk reductuin taken into account
Col1 Likelihood of Hazard 1 per yr.
Col2 Likelihood of Hazard 1 in 5 yrs.
Col5 Likelihood of Hazard 1in 50 yrs., the hazard might occur but wih a low likelihood within the lifetime of the plant
Col6 Likelihood of Hazard 1 in 100 yrs., the hazard might occur but wih a very low likelihood within the lifetime of the plant

ROWAN HOUSE
Slide 135
An assessed Risk v Target Values Methodology
Where there is an assessed residual risk then further Independent Risk
Reducers Must be provided in order to meet the target values and to
enable ALARP to be demonstrated
For reducing risk to people this may be a Safety Instrumented Function,
(SIF) with a defined Safety Integrity Level, (SIL)
Where The SIF has a SIL then its design and lifetime maintenance
MUST conform to the requirements of BS EN 61511
NOTE: BS EN 61511 is considered as Good Practice for the
Management of Functional Safety it is a Plant Life Cycle approach

ROWAN HOUSE
Slide 136
It is essential that any Package units are fully specified and that they are
included in the Hazard and Operability review and all considerations have
recorded responses
A HazOp is Internationally ackowlegleded method:
When facilitated by a good Team Leader at the right phase of a project with a
Knowledgeable team it will
SAVE MONEY
By avoiding costly late changes
Project completed on time
Plant commissioned within programme
Plant soon up to Design Production & Quality
AND
A plant that is Safer and Operable throughout its life

ROWAN HOUSE
Slide 137
In Summary it is essential that all associated plant unit’s including the
integrated packages hazards and associated risk have:
been Identified
And
Reduced to ALARP
That the life time requirements to achieve this legal requirement is
communicated to the Duty Holder (plant operator)

ROWAN HOUSE
Slide 138

HEALTH AND SAFETY:
BEST PRACTICE SCHEME
FOR AD
JESS ALLAN
ENVIRONMENT AND REGULATION MANAGER

Aims
The Best Practice Scheme aims to help the industry to:
• Improve environmental performance.
• Improve safety performance.
• Improve operational performance.
These aspects are all inter-linked and the scheme has a strong overall emphasis on
risk awareness and management and competence.
To draw together the expertise in the UK AD industry and raise awareness of best
practice across the sector.

Steering Group
Chaired by Amaya Arias-Garcia (Goals-PME)
ADBA
Chartered Institute of Wastes Management (CIWM)
Chartered Institute of Water and Environmental Management (CIWEM)
CNA Hardy (insurer)
Country Land and Business Association (CLA)
Energy Networks Association (ENA)
Environmental Services Association (ESA)
Institute of Chemical Engineers (IChemE)
Jelf (insurance broker)
NFU
NFU Cymru
NFU Scotland
Renewable Energy Association (REA)
Water UK
WRAP
Zero Waste Scotland
Plus input from regulators:
APHA, EA, HSE, NRW, SEPA

Steering Group Conclusions
• Priority topics identified included: odour management, containment, digestate quality,
risk management, training and competence.
• Scheme should improve awareness of existing guidance, standards and legislation
and make it more accessible.
• Checklists were proposed as a first step towards a certification scheme.

Health and Safety Executive
HSE are supportive of the scheme and have attended workshops:
‘It is excellent to see ADBA’s drive to develop a Best Practice scheme for the
Anaerobic Digestion industry come to fruition. The extensive industry consultation,
particularly with operators, insurers and regulators, really draws in a wide range of
knowledge and experience into the scheme. I hope that this guidance, produced by
the industry for the industry, will enable small and large companies alike to raise
their own health and safety standards and the overall performance of the Anaerobic
Digestion industry.’
Rick Brunt, Head of Waste and Recycling at the Health and Safety Executive
Click here to see the HSE’s strategy ‘Helping Great Britain Work Well’:
http://www.hse.gov.uk/strategy/

Delivery Plan
Step 2: Best Practice Certification
Scheme
(July 2017)
Develop a certification scheme, informed by the
checklists.
Step 1: Best Practice Checklists
(July 2016)
Develop a series of Best Practice checklists which
bring together regulations, guidance, standards relating
to best practice.

Best Practice Checklists
• Checklist-style guides on key topics identified through industry engagement:
 Operational Performance
 Risk Management
 Procurement
• Raise awareness of existing guidance, regulations and standards that contribute to
best practice.
• Collate guidance to make it more accessible.
• Provide a foundation for a certification scheme.

Risk Management
• Covers identifying and managing risks to:
- Health and safety
- Environment
• Explains benefits of effective risk management.
• Promotes instilling risk awareness for all individuals involved in operating a plant,
from senior management to site operatives and contractors.
• Encompasses risk management at different stages of an AD project.

• Guide to making procurement decisions for items of plant, equipment or
machinery, and services such as maintenance contracts.
• Focuses on ensuring:
- Compliance with legislative requirements
- Safety and environmental protection
- Suitability for intended purpose
- Cost-effectiveness
Procurement

Operational Performance
• Focuses on identifying and overcoming barriers to good performance.
• Features guidance and tips on:
- Monitoring operational performance
- Ensuring competence
- Managing digester biology
- Understanding feedstock
- Making the most of digestate

Next Steps
• July 2016 – end year
• Will be seeking feedback and
actively engaging with individual
organisations and working groups.
Test the
checklists
• July 2016 – throughout 2017
• Will entail devising suitable
assessment criteria, working with
UKAS and third party accreditation
bodies.
Design the
certification
scheme
• Intention is to start from summer
2017
• Will be looking for operators to help
us pilot the scheme.
Pilot the
certification
scheme

Get Involved
• Stakeholder Meeting – this afternoon (15:00, Piazza Suite)
• Food Waste Operator Group
• Crop Operator Group
• Training, Safety and Environment Working Group
• Finance Forum
• Visit ADBA website
• AD & Bioresources News
• ADBA events
• Get in touch with Jess

Thank you
Jess Allan
jessica.allan@adbioresources.org

UK AD & Biogas 2016: Day Two green seminar 7 July

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