Earth Capital’s Bezuidenhoudt: Energy security is driving sustainable energy deals

‘Bioenergy is a way to keep the base load secure,’ she said.

Earth Capital plans to improve the biomass-fuelled energy plants in its newly established bioenergy platform with an additional £4 million ($4.7 million; €4.7 million) of investment and is eyeing opportunistic new assets, head of investment and director, Avent Bezuidenhoudt, told PE Hub Europe.

In mid-August, Earth Capital announced the launch of its UK-based bioenergy platform, Sustainable Energy Holdings Limited (SEHL), the result of a merger of four of its portfolio companies: Eccleshall Biomass (based in Eccleshall), Limelight Energy (based in County Durham) and two firms based on the Isle of Wight, Black Dog Biogas and Bright Light Energy. All four firms are low-carbon bioenergy generation assets.

“Perhaps biomass isn’t quite as glamorous as the wind farms and the solar farms, but it has to form part of a bigger strategy,” said Bezuidenhoudt.

London-based Earth Capital has identified biomass as an area that needs more investment, particularly given Russia’s invasion of Ukraine. “We’ve known for the last couple of years that there was a risk around energy security, but this year shocked everyone,” Bezuidenhoudt said. “Watching what’s going on in Germany has taken everyone by surprise.”

Creating the SEHL platform has allowed Earth Capital to bring together generators that provide a base load. While Bezuidenhoudt does not believe bioenergy will replace wind or solar power, it is a way to ensure the base load stays secure.

Initially, Earth Capital plans to see how it can improve existing sites. SEHL will also implement a buy-and-build strategy to add new assets. “I think there are some unloved, isolated, forgotten assets which need a strong management team,” Bezuidenhoudt explained. “We are able to bring that on board.”

Earth Capital will also look at sites where it can add to a circular economy structure – making use of waste and supply the energy back to the owner of that site.

All SEHL sites are in the UK, but Earth Capital is not opposed to looking further afield. Ireland is an “obvious” area to expand into, but Bezuidenhoudt stressed the importance of assessing each site strategically. The same approach applies to any potential opportunistic assets, which the firm is “always keen” to look at. “We have to assess each one independently and make sure we can make a difference to it,” she said.

Bezuidenhoudt describes the current market as “incredibly volatile”, with inflation running at close to 10 percent. “That’s the unknown at the moment,” she said. “With a power plant, you’re supposed to be looking at 20-25 years. That’s quite difficult with numbers the way they are.”

Regardless of the uncertainty, Earth Capital is convinced of the potential within the renewable energy sector.

“For us, more sustainable means more profits,” said Bezuidenhoudt.

This article was updated on 22 August to include the amount of additional investment that Earth Capital plans for SEHL.