_{^{By Chris Sloley}} 

Organics recycling firm TEG Group has unveiled plans for its first anaerobic digestion facility under a partnership agreement with equity investment firm Albion Ventures.

We are excited to be developing our first AD facility and to be entering into the renewable energy sector

 
Mick Fishwick, chief executive, TEG

The planned 16,000 tonnes-a-year capacity anaerobic digestion (AD) plant is expected to fit alongside TEG's existing in-vessel composting operations at Glenfarg in Perth and produce 0.7 MW of electricity, as well as 0.25MW of heat when it becomes fully operational at the start of 2011.

The plant is being developed under the TEG Biogas venture, which is a joint arrangement with Albion, and has received £700,000 in funding from Scottish Government waste delivery body Zero Waste Scotland to help construct the facility. The remaining costs of the £4.5 million plant are set to be covered by London-based Albion in the form of equity and debt.

The plant has already received planning permission and will draw on working arrangements developed by TEG over the past 12 months to deliver equipment, construction and grid connections.
Among such arrangements, German firm UTS Biogas will provide plant design, support services and core biogas plant equipment to TEG.

And, gas-to-power energy company Alkane Energy - who TEG signed a working agreement with in January 2010 (see letsrecycle.com story) - will be responsible for the gas to power element of the project which includes methane management, power generation equipment, grid connection and securing the power purchase agreement.

Manage

TEG will manage the facility on behalf of the TEG Biogas venture and supply waste to the site from its surplus currently under management. TEG Biogas has signed an offtake agreement with nearby Binn Farm Limited, with the heat produced by the AD being used to power the forthcoming Binn Eco Park development.

Commenting for TEG, chief executive Mick Fishwick said:"We are excited to be developing our first AD facility and to be entering into the renewable energy sector, and we look forward to working with UTS and Alkane.

"This AD facility promises to be an excellent showcase to support the many bids for AD plants throughout the UK and we look forward to developing our first venture with Albion. Albion is well informed and experienced in TEG's market place and we are delighted they have selected TEG as a partner."

David Gudgin, partner in Albion Ventures, added: "Albion is an experienced venture capital trust investor. We see the environmental sector as a key area for growth and change and have identified TEG as a leader in organic recycling. This is our first AD investment, but look forward to many more investments in AD with TEG."

The proposal to develop TEG's AD offering in Scotland comes as part of a wider plan for the company to roll-out the technology across the UK, with it outlining an intention in August 2009 to target South Wales for IVC and AD developments under an agreement with AD operator Anagest (see letsrecycle.com story).