October 7, 2019

By Lynda Kiernan

Greencoat Capital has announced a groundbreaking $148 million low-carbon and sustainable greenhouse project in the UK that is being funded by a collection of major UK pension funds.

Despite their disproportionately large carbon footprints, the decarbonization of the heating and agriculture sectors has been slow to be achieved. However, this project will address the issue in both sectors at scale.

Managed by Greencoat, the project consists of two large-scale, state-of-the-art  greenhouses that together will be the largest in the UK, and will aim to reduce the carbon footprint of produce production by up to 75 percent.

Located on farmland in Trowse in Norwich, and Ingham in Suffolk, the greenhouses, which were developed by Oasthouse Ventures, will be warmed by residual heat captured from nearby water recycling facilities owned by Anglian Water. 

Closed loop heat pumps (the largest ever deployed in the UK) will be powered by a new Combined Heat and Power (CHP) with waste heat from the CHP further heating the greenhouses. The CO2 generated by the CHP will then be transferred to the greenhouses to further accelerate plant growth, and will recapture a significant proportion of the carbon.

“We’re very pleased to have achieved another innovative first in the UK renewable energy sector,” said James Samworth, partner, Greencoat Capital. “Technology and cross-sector cooperation is 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.”

Construction on the 29 hectare (72 acre) greenhouses is expected to be completed in the autumn of 2020, and once fully operational, the project is expected to produce a range of vegetables that require a high-heat, low-light environment such as tomatoes, cucumbers, and peppers, and to create 360 permanent jobs.

Britain consumes 500,000 tons of tomatoes per year, however, only 20 percent of this amount is produced domestically. The investments being made in this project will enable these two greenhouses to produce 20 tons of tomatoes per day, or 12 percent of the tomatoes grown in the UK.

“This is a huge opportunity for us to become more self-sufficient in tomatoes,” Chris Starkie, chief executive of New Anglia LEP, told the BBC. “Norfolk and Suffolk are already leading agricultural production areas… and this is a real shot in the arm for the local economy and testament to the skills we have here.”

“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,” said Andy Allen, director, Oasthouse Ventures. “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.”

The capital driving this project is being committed by a number of public and private UK-based pension funds, reflecting how investments in agriculture and agtech are being increasingly seen as a means to achieving uncorrelated returns through direct investment, while also generating employment, bolstering local communities, increasing food security, and benefiting the environment.

“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,” said Duncan Hale, portfolio manager, Willis Towers Watson. “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.”

– Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com