Models for financing a solar energy projects and the global renewable energy sector has shown steady growth over the past decades.

According to the Energy Outlook 2021, the combined market for wind and solar PV technology in Europe could grow by 35 GW during 2021, requiring an investment of 60 billion euros.

The International Energy Agency says wind power will grow by 8% and solar power by 13%.

Once completed, the solar power plant becomes the cheapest technology to operate for power generation, since solar radiation is available completely free of charge, and modern equipment requires minimal operating costs.

Thus, renewable energy sources easily displace fossil fuels as soon as they enter the market.

This gap will widen even further in 2021. Positive market trends plus preferential terms persisting in many countries will drive the sector’s growth. This is complemented by technological advances that have made newly built solar power plants cheaper on average than coal or nuclear power plants.

An important point in the context of increasing the competitiveness of solar energy is the correct choice models for financing a solar energy plant project.

Among the potential instruments for the implementation of these capital-intensive projects, long-term investment loans and complex project finance instruments are now available to businesses.

CP Finance UK offers the implementation of investment projects in the field of renewable energy around the world.

Our specialists are ready to provide customized solutions for each project, from long-term financing to the development of technical documentation and the construction of a solar power plant under an EPC contract.

Contact us.

Long-term bank loans as models for financing a solar energy plants

A bank loan is one of the oldest and most popular business financing instruments that remains in high demand in solar energy.

A significant percentage of the $ 2.7 trillion invested in renewable energy sources in the world over the previous decade came from long-term loans.

In general, there is no fundamental difference between short-term and long-term loans. Some of the features of the latter are listed below:

• Long-term loans for the construction of solar power plants are usually provided for a period of 5-7 years or more, depending on the type of project.

• The interest rate can be fixed or variable, the latter being common. Recently, loans with a more complex variable interest rate are often offered.

The volatility of interest rates makes it necessary to propose new financial transactions adapted to changing market conditions.

In this sense, the variable interest rate makes the financial model of the solar power plant project more flexible, adapting it to the general conditions of the financial environment. For this reason, banking operations that were previously subject to fixed interest rates are gradually being replaced by indexed loans (linked to the index), the parameters of which vary depending on market fluctuations.

Any lending operation involves the assumption of a certain risk by the lender.

As the maturity period increases, the uncertainty increases, so the requirement for guarantees that protect the lender becomes more common.

A loan for the implementation of a solar project can be protected by real guarantees in the form of securities, real estate, movable property and other valuable assets. If there is not enough collateral, the financial institution may request one or more guarantors to provide debt repayment in the event of a default on the borrower’s company.

Considering that the construction of a large solar power plant with an installed capacity of 100 MW may require about $ 80-100 million or more, some projects are financed by bank syndicates, rather than individual banks.

Syndicated loans are provided for the implementation of large projects and models for financing a solar energy through one credit operation.

This type of lending helps energy companies reconcile the demand for large volumes of financing with their desire to avoid excessive concentration of risk from financial institutions.

Benefits of investment loans for solar energy projects

Investment bank loans as models for financing a solar energy projects have become extremely popular and the ease of obtaining funds is far from the only reason for the demand for this versatile financial instrument.

Long-term bank loans, although used most often for solar projects, cannot be seen as ideal financing.

When determining models for financing a solar energy project, a company should consider the advantages and disadvantages of each of them in a specific business situation.

Disadvantages of using bank loans:

There are no ideal financial instruments.

Every company has a unique economic and financial situation, so not every solution for one company will work for another.

Business owners or those responsible for managing corporate finance should not forget about other alternative financing options that are emerging in the market and can often be more attractive than the popular investment loan.

Borrowers should understand current financial market offerings and carefully analyze individual offers.

The financial team of  CP Finance UK  is ready to provide you and your employees with comprehensive advice on the implementation of investment projects.

Project finance for solar power plants

The project finance (PF) method is one of the most advanced methods of raising funds for the construction of large solar power plants or other capital-intensive energy facilities.

The PF allows a business to attract significantly larger funds in comparison with traditional bank lending.

Large enterprises making long-term investments today are forced to attract capital from outside, since they rarely have significant amounts of their own funds. Various financial instruments come to the rescue, which include loans, leasing and project finance.

Energy companies that run several expensive projects at the same time or are faced with debts for previously consumed energy need capital for further development and implementation of large projects. PF opens up new opportunities for business expansion, relying on the prospects of a specific project, and not on the assets of the borrowing company.

Along with the growing popularity of project finance and the development of more and more efficient variants of Models for financing a solar energy, it is becoming suitable for smaller and smaller projects.

Choosing a model for financial a solar energy project

Companies that succeed in the auction often have limited time to expand their PV capacity.

What are the best models for financing a solar energy project today?

There are two main ways.

The first business models for financing a solar energy projects and  the construction of  the facility is through a long-term bank loan.

In many countries, such a loan is not difficult to obtain by holding a successful auction and submitting a serious business plan.

The second business model involves the organization of project finance (PF) with the involvement of an investor who, at a price determined depending on the capacity of a given facility, finances its construction and acquires ownership of this asset. Sometimes the company, in addition to cash injections associated with the completion of the solar power plant, receives a long-term contract for its maintenance.

The transaction is usually carried out as the purchase of shares in a limited liability company whose assets are a photovoltaic installation.

Typically, a long-term contract for the operation and maintenance of the facility is signed between the same parties.

The company that is the subject of the transaction receives a guaranteed sales price for the energy produced for 10-20 years and guarantees the estimated costs necessary to keep the installation at the highest level of efficiency.

This situation allows investors not only to gain know-how related to the engineering design and construction of power plants, but also to secure a long-term source of income. Equally important in this case is the availability of free funds that can be spent on the development of new projects.

How much does a 1 MW solar power plant cost?

The cost of building a solar power plant remains a secret, which is revealed to the initiator only as a result of detailed design calculations and negotiations with potential contractors and equipment suppliers.

The cost of each megawatt of installed capacity can be named only approximately, focusing on the specifics of the project and the market of the host country.

When developing models for financing a solar energy projects, it is important to take into account the complexity of the construction of such facilities, which in some cases are associated with a certain risk and unpredictability.

This is not only about the construction and installation time of equipment, which can vary from 3-6 months to 1 year or more, taking into account the scale and technical difficulties that may arise at the site.

The project depends on successful planning, engineering design of a solar farm, finding and preparing a suitable site for construction, obtaining licenses, supplying electrical components and metal structures, installation, etc.

If you are planning to build a large solar power plant, contact our consultants.

Our financial and technical team will help you get the expected construction cost estimate, select engineering solutions and determine the optimal financial model for a specific project.

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Solar photovoltaic power plant remains the reasons for investors’ interest in renewable energy sources are growing concerns about climate change, the effects of air pollution on health, the issue of energy security and affordability, as well as fluctuations in hydrocarbon prices.

Currently, the total installed capacity of PV power stations in the world exceeds 600 GW, excluding concentrating solar systems.

It is the second largest renewable energy source after wind farms.

Since the late 2010s, this technology has been a leader in the pace of construction of new power plants.

These figures are twice as much as that of wind farms.

They are even higher than those of fossil fuel plants and nuclear power plants together.

In the past four years, the installed Solar photovoltaic power plant capacity is planned to be increased by 140 GW.

According to experts from the International Renewable Energy Agency (IRENA), the development of solar energy is driven by cost savings, technological advances and the creation of the necessary associations to support the sector.

Solar photovoltaic power plant construction

According to IRENA forecasts, the number of new solar photovoltaic stations can increase 5 times over the next 10 years, reaching a total capacity of 2840 GW by 2030 and 8500 GW by 2050.

This means that the installed PV capacity in 2050 will be 18 times more than in 2018. According to European experts, in 2050, 60% of the installed capacity will come from large-scale photovoltaic installations, and the remaining 40% from in-roof PV systems.

Asia dominates the global solar energy market today, accounting for more than half of the world’s new photovoltaic capacities.

In 2019, China added over 30 GW of installed capacity, while the European Union added 16 GW and the United States 13.3 GW.

Asian countries, led by China, are currently leading in the production of photovoltaic energy.

Europe is in second place and North America in third.

Projections show that Asia will continue to lead in installed PV capacity with a share of about 65% of total capacity in 2030. The most significant growth is expected in China, where the installed PV capacity will exceed 1,400 GW in 2030.

North America will take second place with 430 GW by 2030, with 90% of the facilities being built in the United States. Europe will occupy third place with an installed capacity of about 300 GW.

In 2050, Asia will still dominate with almost half of the installed photovoltaic power in the world. According to the estimates, this figure will be 4,800 GW, of which 2,800 GW will be concentrated in China. By then, Chinese solar power will show CAGR of about 9%.

Europe will retain third place with a total installed Solar photovoltaic power plant capacity of 890 GW in 2050. About 22% of European PV installations will be concentrated in Germany.

At the same time, market growth is likely to shift to other, less saturated markets. In the future, the rapid development of solar energy is expected in South America and Africa.

The future growth of solar energy depends largely on a balanced energy policy and a reduction in the cost of PV technology. The ways to achieve this are to use cheaper materials for solar cells, reduce the cost of manufacturing equipment and increase its efficiency.

Construction of solar PV power plants: economic feasibility and cost

Solar energy has been controversial in past decades, but today it is clear that solar power plants will soon replace traditional energy sources.

The widespread use of the technology depends on its current cost-effectiveness. Solar energy today cannot always compete with traditional sources. But the long-term trend is that fossil fuels will rise in price, and solar cells and ancillary electrical equipment will become cheaper.

According to BloombergNEF, in 2020 the cost of renewable energy has dropped significantly around the world.

The levelized cost of energy (LCOE) for large-scale photovoltaic systems has decreased by 4% compared to the second half of 2019 – to € 46 per MWh. Meanwhile, the base LCOE for batteries fell to € 138 / MWh, having fallen in price by 2 times over the past year.

In China, the largest solar market, solar LCOE has dropped to € 35 / MWh thanks to the introduction of more efficient PV cells. This is almost 9% less than in the second half of 2019. The cost of operating new solar power plants in the country is now almost equal to the cost of operating coal-fired power plants, at around € 32 / MWh.

According to BNEF reports, the cheapest Solar photovoltaic power plant projects financed in the first six months of 2020 should reach LCOE in the range of 21-27 € / MWh.

These projects in Australia, China, Chile and the United States will compete with the remaining fossil fuel power plants.

Meanwhile, Abu Dhabi-based EWEC has unveiled the results of the latest solar energy tender in the UAE for a 2 GW solar photovoltaic project. The operator plans to supply energy at a price of only € 12.46 / Mwh.

Solar power plants have a number of advantages over coal-fired TPPs and nuclear power plants:

• The construction of a solar power plant is much faster as the photovoltaic modules are easy to install and connect.

• It is easier for engineering companies to choose the location of the solar power plant in accordance with the infrastructure and terrain features.

• The construction of solar power plants in remote areas reduces the energy losses associated with long-distance transmission.

• Unlike traditional power plants, modular solar energy production can be smoothly expanded as consumption increases.

Solar power plants do not pollute air and water, maintaining an ecological balance. For this reason, solar energy production is stimulated by government initiatives in most developed countries.

Today, there is no longer any doubt about the economic feasibility of building solar power plants.

The time will come when solar energy will completely displace coal and gas from the energy sector.

Construction of solar power plants for industrial enterprises

Industrial enterprises are among the largest consumers of electricity in the world energy market. 

The huge number of equipment and machines requiring power, as well as the accompanying office premises of industrial companies determine the need for an uninterrupted and reliable power supply.

With the awareness of the negative impact of traditional energy sources on the environment, more and more enterprises are switching to renewable energy sources. The challenge is to reduce the carbon footprint at every stage of the manufacturing process.

Many companies, especially in the automotive and electronics sectors, are choosing solar power plants as the optimal technology for generating clean energy.

Industrial facilities use large amounts of energy in a wide variety of processes, which are usually designed for maximum intensity.

The annual electricity consumption for the average US enterprise, for example, is 95.1 kWh per 0.09 m², which is at least 10 times the annual consumption of a typical household. Most of the energy consumed in factories is used in the form of heat, with the remaining about 20% in the form of electricity.

According to the latest research, this ratio is changing. In the 1980s, factories used 25-50% less electricity than they do now. Experts predict that by 2030 the share of electricity in the energy consumption of industrial enterprises will reach 30%.

The electrification of industry not only opens up many opportunities, but also poses new challenges for business. An example is companies that make full use of the electricity generated by coal-fired power plants.

These producers contribute to the problem of greenhouse gas emissions, which, in turn, leads to increased energy costs due to additional environmental taxes. Renewable energy sources minimize these problems. Several studies have shown that the use of solar energy can lead to significant savings in energy costs for manufacturers.

As with many other technologies, the efficiency of solar power plants increases as the scale of construction increases. In 2019, the cost of building a solar PV system for small consumers was US $ 3 per watt. However, this figure drops to $ 1 per watt when it comes to systems with an installed capacity of more than 1 MW.

Compared to coal, solar power is a clear winner because modern technology makes it possible to produce energy cheaper every year.

EPC contracting in solar energy

Investors and companies are stepping up in financing for biomass energy projects around the world from the angles of growing interest in renewable energy sector.

CP Finance UK offers long-term financing for large energy projects, including loans for the construction of biomass thermal power plants.

Our experienced financial underwritten team is ready to provide you with comprehensive support at all stages of the investment project, guiding you from the stage of pre-investment studies and contracting to the operation of the finished facility.

Woody biomass, cereal straw, corn production waste and other agricultural waste can become a valuable fuel for biomass thermal power plants. Agriculture and forestry has enormous potential for the production of biomass for the generation of electricity and heat. Modern biomass energy projects are able to produce natural gas from silage and manure, which is especially important for countries that are heavily dependent on hydrocarbon imports. However, the cost of project financing for biomass energy varies widely from 1 to 5 million euros per 1 MW of installed capacity, which requires a flexible professional approach to financing biomass energy projects

Investment side of biomass energy projects

Companies should also take into account the growing competition in the fuel market due to the gradual replacement of natural gas in heat production. This means rising prices for organic waste and the continued complexity of logistics processes.

Electricity generation from biomass thermal power plants is considered to be one of the most challenging businesses in the green hydrogen energy sector from an economic and operational point of view.

1. Financing of biomass energy projects are heavily dependent on a continuous supply of large volumes of organic waste. Unlike solar power plants and wind farms, which operate on “endless” natural resources, a biomass thermal power plant is very demanding in terms of logistics, which includes the interconnected processes of harvesting, transporting and processing agricultural or wood waste.
2. high technical complexity and operating costs. Compared to other renewable energy projects, biomass thermal power plants are the most difficult to operate. For example, the 10 MW thermal power plant mentioned above may require the installation of about 2000–3000 sensors of various types, which, combined with sophisticated control systems, will require hundreds of thousands of euros for maintenance, periodic repairs and upgrades.
3. 3) important aspect is the construction period. The construction of a biomass thermal power plant requires 2–3 years, including the stages of engineering design, construction and installation of equipment.

Of course, the cost of biomass is not commensurate with the current prices of natural gas and fuel oil, which skyrocketed amid the geopolitical upheavals of 2022, but each project requires an individual approach to comparing LCOE and determining economic feasibility.

Biomass thermal power plants require annual scheduled repairs, as well as the training and maintenance of a significant number of personnel, including highly qualified engineers. This is similar to the processes that take place at any thermal power plant in the conventional energy sector.

Benefits of  biomass energy for investors and local economy

Biomass thermal power plants have a number of parameters that make their development highly desirable both for business and for the energy system and for the economy as a whole.

The first of the benefits of such projects is considered to be a stable mode of operation. Thermal power plants on biomass and biogas generate a relatively stable amount of energy during the day and, unlike solar and wind energy, do not require replacement capacities. This is extremely important for developing agricultural countries, where the lack of flexible capacity is one of the potential barriers to renewable energy.

The development of the regional economy is also important. In this context, companies should develop the collection, delivery and preparation of organic waste (eg drying and crushing).

According to leading experts, the minimum distance between biomass TPPs should be 200–250 km, since the economically viable distance for the supply of organic waste for energy generation should not exceed 100–150 km.

In the solar and wind energy sectors, it is mainly based on imported equipment, but in the biomass energy sector, the share of the local component is extremely high.

The third benefit of such projects is, of course, the substitution of natural gas. For example, the Eastern European states, which are heavily dependent on imported hydrocarbons, can diversify their energy mix by financing biomass thermal power plants. Agricultural countries such as Poland or Ukraine annually produce several tens of millions of tons of agricultural biomass, in addition to millions of tons of logging residues.

Project financing for biomass energy projects

Financing is carried out through specially established financial structures with a high proportion of borrowed funds. Since lenders rely only on future profits from the sale of electricity and heat, the partners conduct an in-depth study of the risks at the stage of planning and preparation of financing.

The PF is applicable to large-scale projects involving the private or public sector, including the construction of thermal power plants using biomass and biogas.

Financing biomass energy projects is attractive if the deal is off the balance sheet and the sponsor’s creditworthiness remains unchanged.

The main disadvantage of the PF is the high cost of debt capital, which makes this scheme suitable only for large projects with strong cash flows sufficient to service the debt. It also implies the need for complex project structuring, including adequate collateral and insurance to mitigate risks.

Hereunder, project finance contracts structuring are below;

Construction contract: The key to success in EPC contracting is the experience of contractor, which largely determines the quality, adherence to schedule and the risk of cost overruns.

Administration Operations: maintenance of assets can lead to their failure, which will affect future cash flows, in addition to a direct impact on the life of the equipment and on project lifespan.

Supply contracts: Since biomass thermal power plants are highly dependent on the supply of fossil fuels from nearby farms, long-term contractual relationships with these suppliers are critical for future investment projects of this type of a take-or-pay basis, meaning the buyer’s obligation to pay whether the company currently needs the product or not.

Power Purchase Agreement (PPA): Contracts for the sale of electricity and heat will allow project participants to predict future cash flows and ensure their safety.

The sources of financing for such projects can be international financial institutions (EBRD, IFC, African Development Bank, Inter-American Development Bank), commercial and state banks, credit unions, municipalities, government bodies, leasing companies, equipment manufacturers, agricultural producers, as well as various investment funds, willing to invest in biomass energy projects in exchange for participation in them through shares, warrants, convertible bonds, etc.

If you are looking for long-term financing for a major energy project, please contact CPUK Finance for advice.

Our team is ready to develop a customized investment solution for any project, taking into account your goals, business scale, tax incentives, as well as any restrictions and time frames.

Email:finance@cpuk-financeltd.com
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Commercial energy production using solar concentrators is becoming an energy priority for countries with high levels of solar insolation, including Spain, Morocco, UAE, USA, Mexico and others. Solar thermal power plants (STPP) energy is gaining worldwide recognition as one of the leading innovative technologies aimed at transitioning from fossil fuels to clean renewable sources of electricity and heat.

Solar thermal power plants (STPP) construction remains a balancing technique for socio-economic developments and environmental stability.

Thanks to government assistance in the form of high tariffs for electricity generated and tax deductions, STPPs have become profitable systems that guarantee an acceptable level of profitability for investors.

CP Finance UK offers comprehensive services in the field of financing, construction and modernization of STPPS, providing customized technical solutions to companies in many countries.

Our team, together with partners from Spain and other European countries, is also ready to offer you financing and construction of solar projects on favorable terms.

Types of solar thermal power plants

Photovoltaic and solar thermal technology are two main ways to use solar energy for commercial purposes.

The rest of the technologies, which may have a promising future, are still considered largely experimental. About ten solar thermal technologies have gone beyond research and have already become the basis for large STPPs with an installed capacity of up to several hundred megawatts.

A modern solar thermal power plants (STPP) are classified below:

• Hybrid STPPs combined with a gas boiler for fossil fuels.
• Hybrid STPPs combined with a solid fuel boiler for biomass.
• Hybrid STPPs using a combined cycle.
• Solar concentrators with parabolic trough and heat storage technology using inorganic salts.
• Solar thermal power plants with linear Fresnel concentrators.
• Tower solar concentrators with direct steam generation.
• Solar concentrators with parabolic troughs.

A technology based on concentrating solar energy along a pipe with a heat-conducting fluid using long parabolic troughs has been actively studied in the United States since the 1980s.

Based on this principle, the giant SEGS (Solar Energy Generating System) was built in the Mojave Desert, California.

As a result of years of operation of SEGS, researchers have accumulated tens of thousands of hours of experience to bring parabolic concentrator technology to its current state. No other technology has been studied so well. This is one of the reasons why most investors choose to build a STPP of this type, despite the well-known disadvantages and dangers (for example, the use of HTF based on aromatic hydrocarbons).

The first group of installations concentrates solar thermal energy along the line, and the second directs the rays to one point, reaching a much higher local temperature.

The first group of STPPs uses parabolic trough concentrators or Fresnel mirrors. The second group of installations, which operates with high temperatures and regulates the direction of the beams along two axes at once, uses either the central tower or Stirling engines. In the most advanced installations, thermal energy can be stored in order to convert it into electricity at the right time.

There are also hybrid solar thermal power plants that simultaneously use solar energy with fossil fuels or biomass. These engineering solutions significantly expand the list of opportunities for investors.

Solar thermal power plants

Solar thermal energy with a central receiver

The central receiver (solar tower) is responsible for converting concentrated solar radiation into heat, transferring it to a coolant, which can be air, water or inorganic salts. This medium can be used directly to convert water to steam and also to increase the performance of an integrated turbine by heating the intake air before entering the combustion chamber.

If the heat transfer fluid is water, central receiving units heat and vaporize the previously introduced fluid to produce steam at a specified pressure and temperature. This steam is then expanded in a steam turbine, following the general principles of any thermal power plant.

When the power plant is operating normally, inorganic salts are stored at around 290ºC in a large insulated tank.

A vertical centrifugal pump moves the salts from the reservoir to a receiver located at the top of the tower.

The heat transfer fluid, driven by the pumps, moves from the salt reservoir to a receiver at the top of the tower, where the temperature rises to about 560–600ºC.

The liquid is stored there until it is used to generate steam.

This technology allows CSPs to provide a relatively stable generation of electricity throughout the day, regardless of the intensity of sunlight.

Among others, the advantage of solar thermal power plants offer over other solar technologies are the following:

• The use of the same heat carrier for energy generation and storage, which simplifies the system and improves the economic performance of the facility.

• High temperature of the heating medium compared to alternative technologies, which contributes to an increase in the efficiency of the steam-water cycle.

• Heat transfer fluid (molten salts) circulates through a well-defined area with higher efficiency compared to parabolic systems.

• HTF pipelines can be drained by gravity when the unit is not running, without the need to install additional pumping equipment.

A prime example of a central tower CSP is the Noor Ouarzazate CSP power plant, which has been under construction in Morocco since 2013. It is considered the largest power plant of this type on the planet, which was designed for the extreme conditions of the desert.

Solar thermal power plants for energy storage

One of the major problems of renewable energy, which uses methods that are highly dependent on weather conditions, is the difficulty of generating energy during periods of peak consumption.

Generation is carried out under favorable natural conditions, but not at the peak of consumption.

Once electrical energy enters the grid, it must be consumed immediately. Since electricity is extremely expensive to store, production and consumption should ideally coincide in time.

This problem could be solved by generating electricity under favorable conditions and consuming it when needed. This means building a “storage” of energy in one form or another.

Since the storage of electrical energy on a large scale presents a number of problems that science has not yet solved, other types of energy storage have traditionally been used, for example, pressure or temperature differences.

So, pumped storage power plants are based on storing dammed water in order to drain reservoirs and use water at the right time.

Hybrid solar-fossil fuel power generation

Today it is extremely difficult to make reliable weather forecasts and predict the generation of electricity from a solar thermal power plant.

Since the beginning of construction of the first SEGS power plants in California, the possibility of adding an auxiliary fossil fuel boiler to the solar system has been investigated.

It is difficult to store electrical energy, so energy production and consumption must coincide in time. Otherwise, there will be certain imbalances in the power grid, which can lead to power outages for enterprises and entire regions.

While some experts believe that solar thermal power plants must have a heat storage system, in practice it is too expensive for a business.

The possibility of integrating an auxiliary boiler that runs on natural gas or biomass is provided for in the current standards in Spain and several other countries. That is, it is assumed that the STPP should be independent of natural conditions. Moreover, the boilers provide the necessary heat to prevent freezing of the heat transfer fluid, which is about + 12ºC.

Hybrid power plants capable of mixing steam generated from solar collectors and from a gas turbine waste heat boiler are called ISCC (Integrated Solar Combined Cycle) power plants.

Fossil fuels have many disadvantages, but ISCC has two obvious benefits. This is a low cost of electricity generation and smooth power regulation to match the current load.

Our services include financing and lending for solar thermal power projects.

Contact our representatives to find out about our services.

Email:finance@cpuk-financeltd.com
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With recent government initiatives and increased investment and financing of biogas projects in Europe, the waste could soon become a valuable energy source. The European Environment Agency predicts that biowaste, mainly from food, could turn from a global problem into a new energy opportunity for the economy of the future. 

CPUK Finance Limited have an extensive experience in financing large projects in the energy sector, oil and gas sector, mining and processing of minerals, heavy industry, chemical industry, agriculture, tourism and other industries.

CP Finance UK, offers long-term loans for large corporate clients starting from 50 million euros and above for Investment and financing of biogas projects in Europe.

Biowaste as a source of energy for the future

There are two methods for processing this waste, composting and anaerobic digestion. The first method is more widespread, since in an oxygen environment it provides mainly valuable fertilizers for improving the soil. Anaerobic digestion is used to produce biogas, which provides energy and conserves the environment in many ways.

Among the largest fundamentals of financing of biogas projects in Europe are BERST, BIOSURF, Bin2Grid, GR3 and others.

Biogas production is currently most developed in Germany, Norway, Denmark and a number of other countries in Western and Northern Europe.

There are other technologies for the production of biogas, which for various reasons have not become widespread, but hide many possibilities for using biowaste as an energy source. These include pyrolysis, gasification, and hydrothermal carbonation.

Often, waste separation and subsequent purification use expensive equipment and materials that are impractical for industrial use.

Therefore, European experts today propose a number of legislative changes, including special labeling of biodegradable and compostable packaging.

As a reminder, food accounts for over 60% of biowaste in the EU. In turn, biowaste accounts for 35% of urban waste.

According to Eurostat, EU municipalities generated around 250 million tonnes of waste in 2019.

EU discards up to 90 million tons of food, which corresponds to 20% of all food produced, that gave rise to Investment in biogas projects in Europe.

By 2050, Investment in biogas projects in Europe will increase production of green gas by 10 times

Unfortunately, at the moment, renewable gases account for only 7% of domestic consumption in the European Union. Given Europe’s ambitious goals of achieving carbon neutrality by mid-century, countries will need to make significant efforts to scale up their renewable gas production.

Looking at the EU’s long-term scenario until 2050, in which the global temperature rise is capped at 1.5 degrees Celsius, renewable gas production should increase by 50-60% over current levels.

In terms of oil, this increase in green gas production will reach 200-250 million tons.

Investment in biogas projects in Europe are not seen as the backbone of future energy, but an addition to renewable energy sources. 

Although ecologists doubt that biogas can be a real salvation of nature after fossil fuels, biogas production can really reduce the burden on the environment, provide additional income for farmers and become a kind of intermediate point on the energy path of mankind.

Biogas projects in the EU are not seen as the backbone of future energy, but only as an addition to renewable energy sources such as wind or solar energy.

Be that as it may, the International Renewable Energy Agency (IRENA) expects bioenergy to grow 15 times between 2020 and 2050.

Most of the investment projects in this area will be concentrated in the EU countries.

Contact us to find out more.

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