On the go: A number of UK pension funds have invested £120m – managed by Greencoat Capital – in the construction of two of the UK’s largest greenhouses at farmland sites near Norwich and Bury St Edmunds.
The initiative will provide a model for the decarbonisation of the agriculture and heating sectors, reducing the carbon footprint of produce by 75 per cent and increasing UK food security.
The greenhouses, among the largest ever constructed in the UK, with each covering more than 13 hectares – larger than the Millennium Dome (O2 Arena) at 10ha, will be warmed by residual heat from nearby water-recycling centres owned by Anglian Water.
Electricity for the greenhouses’ heat pumps comes from a combined heat and power plant, with waste heat from the CHP providing further warmth for the greenhouses. The gas-fired CHP plant’s carbon emissions will be transferred into the greenhouses, raising the carbon dioxide levels and further accelerating the growth of the plants, and capturing the majority of the carbon.
The construction phase of the project will begin straight away, and completion is expected in autumn 2020. Commercial-scale growers from the UK and the Netherlands have already committed to leasing the space.
The greenhouses should provide suitable growing conditions for a variety of plants and vegetables requiring a high-heat, and relatively low-light environment, such as tomatoes, cucumbers and peppers.
Once operational, the greenhouses will be capable of producing more than one in 10 of the UK’s tomatoes. They will also create 360 permanent new jobs.
This project follows the growing trend of pension managers to seek uncorrelated returns through direct investing into renewable infrastructure.
Greencoat claims the project will generate predictable cash flows with consumer price index inflation protection at attractive risk-adjusted returns for investors, while supporting the economy, local communities, environmental goals and food security.
Duncan Hale, portfolio manager at Willis Towers Watson, said: “We are delighted to be partnering with Greencoat Capital on this project, particularly as we are making best efforts to invest in the low-carbon economy while still delivering the strong risk-adjusted cash flows our investors are after.”
James Samworth, partner at Greencoat Capital, said: “Technology and cross-sector co-operation is continuing to unlock some amazing possibilities in energy and agriculture. We see considerable opportunity to invest in renewable heat in the UK, providing pensions investors with the predictable returns they require to pay beneficiaries, meanwhile reducing our carbon emissions as an economy.”
