Statement on Biomass Investments
- Aviva Investors entered the Energy from Waste (EfW) and Biomass sectors in 2015 with the ambition of supporting alternative energy creation whilst contributing to long-term investment performance.
- The 2015 Biomass investments comprise three 10 MW gasification projects at Hull, Barry, and Boston.
- Since the original investment, it has become apparent that the gasification technologies at these plants have significant challenges in their current form. The assets have therefore not performed as we expected.
- These assets have received regular investment over a number of years in an effort to address those challenges, but would still require further funding to carry out the engineering, design, and operational changes which would be needed to deliver an acceptable level of efficiency, and hence investment performance.
- This is not an issue specific to the assets in Aviva Investors’ portfolio, with other Energy From Waste plants using similar technologies having also failed to reach operational capacity, or operate as expected after extended periods of development, with some being abandoned as a result.
- We commissioned an independent review of these assets earlier this year, which assessed their performance, ongoing risks, and future potential for the plants.
- Following this review and informing investors of the situation, the decision was taken to divest from the assets.
- This is not a decision we have taken lightly, but we believe it to be in the best interests of the investors in this fund, given the ongoing cost that would be required to maintain the plants, and to reach operational efficiency.
- It is important to point out that these assets sit within a much larger diversified fund.
- We continue to engage with stakeholders, including investors in the fund, to keep them informed of the next stages in the process.
