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UK Retailers Turning to Bioenergy as Alternative Energy Source

Fish heads and chicken fat are the latest sources of electricity for major retailers in the U.K. including Walmart, Tesco, Marks & Spencer, Waitrose, William Morrison Supermarkets and Sainsbury.

Not only is bioenergy the evolution of alternative energy sources, but the meat, fish, cooking oils and leftover food would otherwise be transported to landfill at additional cost and fuel consumption.

“Diverting food waste from landfill to anaerobic digestion is a no-brainer for the supermarkets — landfill charges and energy costs are only getting more expensive,” said Niamh McSherry, a food retail analyst at Berenberg Bank, to Bloomberg.

The official definition: “Bioenergy is renewable energy derived from biological sources, to be used for heat, electricity, or vehicle fuel.” Biofuel from plants has been the most rapidly growing renewable source, but animal waste is catching-up.

Bioenergy could provide about 8% of the U.K.’s demand by 2020, which is valued at about $13 billion in today’s oil prices. Food retailers are motivated by a landfill tax instituted in April of $98 per ton, increasing by eight pounds annually.

Worldwide, companies have invested close to $18.2 billion in waste-to-energy (WTE) assets since 2007. In the U.K., state subsidies from the government’s Renewable Obligation program support waste-to-power projects, requiring utilities to buy escalating amounts of electricity from clean energy sources, one Renewable Obligation Certificate per every megawatt-hour produced.

“Reducing energy consumption and sustainably managing waste is just good business,” Bob Gordon, head of environment at the British Retail Consortium, told Bloomberg. “U.K. retailers are saving literally hundreds of millions of pounds per year through their sustainability agendas.”

According to a recent report from Pike Research, “The global market for thermal and biological WTE technologies will reach at least $6.2 billion in 2012 and grow to $29.2 billion by 2022. Under the optimistic forecast scenario, market value could reach $80.6 billion by 2022.”

Airlines and refineries are also exploring energy-from-garbage projects including Air France-KLM and Lufthansa who are flying planes fueled by cooking oil.

Sainsbury, the U.K.’s third-largest supermarket after Tesco and Asda has invested in Tamar Energy Ltd., with plans to build 40 plants that generate electricity from waste by 2017, backed in part by the Duchy of Cornwall estate held by Prince Charles.

“A modern brand is a sustainable brand,” said Lucy Neville Rolfe, executive director, corporate and legal affairs at Tesco. “Reducing energy tends to save money.”

Using the proverbial wheat and the chaff turns out to be ecologically and economically sound.

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