Oil in the making


Ian Collins is managing director of REG Bio-Power whose subsidiary, Living Fuels, has pioneered a new technique to convert used cooking oil into combined heat and power (CHP). Thanks to investment from AIM listed Renewable Energy Generation in 2007, the green energy company is enjoying a period of sustained growth despite the economic downturn. Here, Collins tells Resource Recovery Forum the secret to their success and some of the challenges that lie ahead…

“When people are asked to list sources of alternative energy, wind, solar and even wave might come out on top. Already, electricity generated from renewable sources has more than doubled in the last five years (UK Low Carbon Transition Plan July 2009), but what many don’t realise is that used cooking oil (UCO) has the potential to make a huge impact on our renewable energy capacity.In the year 2007/08, the United States Department of Agriculture estimated the total world consumption of major vegetable oils at 128 million tonnes.If all of that were to go through our refinement process, we’d be able to provide power for 1.28 million homes.

“We started life as a local company with a skeleton staff, small fleet and oil collection tanks at some 18 Civic Amenity sites. Now, just three years later, we’ve grown into a large scale operation with three CHP generation sites, nine staff and 260 oil collection facilities at local authority recycling and refuse sites across the UK – a number that is continually expanding – all from a great idea.

“The initial concept was simple.We wanted to make use of this huge waste stream in the production of energy, turning an unwanted product into a useful commodity.The process starts by collecting UCO from a multitude of producers, typically working in partnership with local authorities, schools, food manufacturers, restaurants and prisons, among others.Once collected, we refine the oil through a unique process to create our own proprietary fuel named LF100.It’s then passed to a second subsidiary, Living Power, that is responsible for generating CHP in dedicated generators.Essentially, we offer a complete energy generation cycle that ends with virtually carbon neutral electricity.

“However, there are barriers to production that we’re still facing. The gulf that exists between UK strategy and Environmental Permitting Regulations means that there’s currently a greater legislative and financial burden on our carbon-neutral fuel than less environmentally-friendly fossil fuel counterparts, such as diesel.

“This is because, despite being classified as an end of waste product by the Environment Agency – which means the fuel ceases to be a waste product once it completes our recovery and testing process – LF100 is still subject to the Environmental Permitting Regulations. While we have plenty of support for our schemes, evidenced by the number of partnerships we have currently in action, this incompatibility between strategy and legislation is hampering the development of large scale innovative solutions to bring renewable energy technologies to market.

“Importantly, the LF100 production process, which is fully patented, does not require any chemical or reagent additives such as those used in the production of biodiesel.

“As with many forms of renewable energy in the private sector, we’re able to partner with a wealth of third parties.For UCO producers, we’re building waste management programmes and preventing oil from ending up in the drainage system or having to go through other expensive disposal options. The end result is that we’re able to provide contracts for green heat and power at advantageous rates for companies. It’s the best of both worlds – not only does it offer an element of economic stability for all involved throughout the production life-cycle, but it also allows many organisations to comply with environmental policy.

“Of course, one of our key aims is to reduce waste which, in the UK, is a huge and often under-publicised issue. The Waste and Resources Action Program (WRAP) estimates that the UK produces 8.3 million tonnes of food waste each year. In terms of UCO, water companies spend millionsof pounds per year clearing blocked drainage systems due to its illegal disposal. The Living Fuels operation is starting to make a difference in reducing this harmful activity.

“Of course, one of our biggest challenges is to find the best channels to collect large quantities of UCO, and we’re increasingly aiming to partner with industrial users of cooking oil that produce large volumes of waste.The investment from REG Bio-Power is helping us to achieve this aim, meaning we’re now able to collect and refine much larger quantities of UCO at once.

“For example, in the last three months, we’ve secured planning permission for an extension to our LF100 processing plant at Hockwold near Thetford and added a new 18,000 litre tanker to our fleet of collection vehicles.From a business perspective, the impact of these additions is huge as we continue to expand our collection and processing capacity.

“This is a very positive step, not just for Living Fuels but for renewable technologies as a whole, towards raising the profile of our industry and proving the potential it holds for assisting economic recovery.The expansion of our plant at Hockwold, for example, will bring £1 million of investment and capital development to the region using local Norfolk companies, not to mention the resulting growth of our management, service engineering and collection teams.

“Freedom Farm, the recycling estate on which our Hockwold plant is based, will soon be powered and heated by a 0.4 mega watt CHP generator on site.This embedded CHP model can be replicated in businesses with a power requirement between 150kW and 5MW. A 150kW CHP scheme was commissioned at the Port of Dover in March of this year, for example.

“It’s claimed in the UK Renewable Energy Strategy 2009 that our sector will underpin economic recovery.By 2020, the renewable energy industry could generate anywhere between 160,000 and 500,000 jobs – a potential shot in the arm for the UK job market.

“We are also faced with a fresh opportunity through the new coalition government. In their recent report, The Coalition: Our Guide for Government, the Conservative – Lib-Dem coalition make reference to energy market reform, delivery of secure supply and investment in low carbon energy. While this is an early promise, it’s a positive move toward freeing up the renewable energy sector and loosening the regulations currently holding the industry back.

“The environment needs to be right for companies who are investing in renewable energy innovations to do so in a commercially-viable and government-supported way.At present, there is a risk that environmentally-friendly and sustainable technologies are being placed at a marked competitive disadvantage as companies are being dis-incentivised from pursuing such technologies and the UK renewable energy sector risks falling further behind its European competitors.There needs to be an environment that allows sustainable technologies to flourish and the new government needs to address this.

“Essentially, the responsibility lies with the private sector and companies like us developing new ways to harness latent sources of alternative power, but the environment and structure needs to be in place to allow us to develop. We’ll continue to grow, but the strongest growth agent for us will be a reworked system with an emphasis on re-regulation of the sector. Other than oil, finding the resource to do this might prove to be our next biggest challenge.