JLEN shifts investment from wind and solar, forsees better returns in biomass and greenhouse farming

Returns for wind and solar infrastructure assets have been driven down by increased competition and a maturing market, according to JLEN Environmental Assets. Announcing a new £60 million share offering it said future investment would be directed towards the wider environmental infrastructure sector, including anaerobic digestion, controlled environment farming, low carbon & energy efficiency and biomass.
The company said recent investments across anaerobic digestion (AD), battery storage, biomethane refuelling stations for compressed natural gas vehicles and energy-from-waste plants have been “typically acquired with higher return expectations” and it expects to continue to focus on those assets. AD is now the JLEN’s second largest sector exposure, and it said “the AD portfolio has consistently out-performed”. The company sold its French wind assets on 10 January for €5.9 million – 25% more than their valuation on 30 June 2021.
Controlled environment agriculture and aquaculture, possibly co-located with renewables, is a “significant opportunity,” the company said, announcing plans to build a 3Ha glasshouse on land adjacent to its Codford AD. It said it may provide the glasshouse with energy by diverting electricity normally destined for direct export to the grid to be sold at a premium price. Waste heat from the existing CHP engines will be captured and delivered by pipe and a heat exchanger to the glasshouse. Wastage from the glasshouse produce may also be returned to the digester.
Two battery storage assets are on track to start up at the end of 2022 and the company is considering at least two similar opportunities in this sector with an aggregate investment of £40 million.
On CNG refuelling assets, 31% more biomethane had been dispensed to customers than budgeted. The take-up of vehicles by fleet operators has significantly exceeded the first year investment case and JLEN expected further refuelling stations to be rolled out in the coming year.