Making the most of waste and secondary resources over the next 20-30 years will require investment of up to thirty-five billion pounds, according to a report published today by SUEZ, which explores the current and future economic outlook for the resources and waste sector.

The report, entitled “The Economics of Change in the Resources and Waste Sector”, provides an analysis of the current economic drivers in the sector and goes on to explore how future environmental policy target metrics related to CO2, natural capital and biodiversity will necessitate substantial additional investment.

Among the new cost drivers in the next twenty years will be the need to invest in new technologies and facilities capable of converting residual waste not just into electrical energy, but fuel and chemical molecules too; to overhaul logistics and container infrastructure; collect new or niche material streams, such as flexible packaging; develop new data collection and analytics systems; and invest in education and behavioural change communications campaigns.

The report provides a breakdown of the cost and value drivers in the current resources and waste management landscape – such as the proportion of costs for various waste management activities within council budgets and comparators in costs between England and the devolved administrations.

The coming transition over the next twenty years will be even more radical, and will require accelerated investment more than three times greater than that made over the past decade or so

The report will be formally launched by SUEZ at the RWM with CIWM Exhibition in Birmingham on Thursday 12 September at 13.15 in the Circular Economy Connect Theatre.

CEO of SUEZ recycling and recovery UK, David Palmer-Jones said: “The resources and waste sector has seen massive change over the past decade, and actors in our sector have invested more than ten billion in the transition away from landfill, moving waste materials further up the waste hierarchy.

“However, SUEZ believes, as is set out in this short report, that the coming transition over the next twenty years will be even more radical, and will require accelerated investment more than three times greater than that made over the past decade or so.

“The money flows and economics of future resource management systems will be fundamentally different to today, in support of new objectives and through new participants in the sector, drawn in by new legislation and regulation.

“The weight-based metrics we have used to date have taken us so far, and resulted in more sustainable practices as material has shifted away from landfill, but new more sophisticated metrics, seeking to directly address the major environmental challenges of our time – climate change and the loss of biodiversity and natural capital – will change the game significantly. Full net Cost Recovery producer responsibility and new methods of harvesting materials, like deposit return schemes, will change revenue and material flows and will require new consumer behaviours – which we know from the last decade of recycling, are not easily or quickly changed.

We welcome the challenge though and, with the support of Government, through transparent, consistent, and ambitious policy, there is no reason why the sector cannot deliver the investment, skills and technologies required for a more sustainable future.”

From the outside it looks like a tall, metal-clad barn. But step in, through a large airlock designed to keep out the bugs, and a kaleidoscopic scene emerges. A central aisle is flanked by two pairs of towers. Each tower is stacked with a dozen or so trays on which are growing strawberries, kale, red lettuce and coriander. And each tray is bathed in vibrant light of different colours, mostly hues of blue and magenta. Douglas Elder, who is in charge of this artificial Eden, taps some instructions into an app on his mobile phone and, with a short whirr of machinery, a tray of lush, green basil slides out for his inspection.

Mr Elder is product manager for Intelligent Growth Solutions ( IGS ), a “vertical farming” company based at Invergowrie, near Dundee, in Scotland. Each of the nine-metre-high towers in the demonstration unit that he runs occupies barely 40 square metres. But by stacking the trays one on top of another an individual tower provides up to 350 square metres of growing area. Using his phone again, Mr Elder changes the colours and brightness of the 1,000 light-emitting diodes ( LED s) strung out above each tray. The app can also control the temperature, humidity and ventilation, and the hydroponic system that supplies the plants, growing on various non-soil substrates, with water and nutrients. Armed with his trusty phone, Mr Elder says he can run the farm almost single-handedly.

Plant power 

Vertical farming of this sort is not, of itself, a new idea. The term goes back to 1915, though it took a century for the first commercial vertical farms to be built. But the business is now taking off. SoftBank, a Japanese firm, Google’s former boss Eric Schmidt and Amazon’s founder Jeff Bezos have between them ploughed more than $200m into Plenty, a vertical-farming company based in San Francisco. And in June Ocado, a British online grocery, splashed out £17m ($21.3m) on vertical­farming businesses to grow fresh produce within its automated distribution depots.

The interest of investors is growing just as technology promises to turn vertical-farming operations into efficient “plant factories”. The high-tech LED s in IGS ‘s demonstration unit are optimised so that nary a photon is wasted. The hydroponics, and the recycling that supports them, mean the only water lost from the system is that which ends up as part of one of the plants themselves. And towers mean the system is modular, and so can be scaled up. Most of the systems which IGS hopes to start delivering to customers early next year will consist of ten or more towers.

Some people, however, remain sceptical about how much vertical farms have to offer that good-old-fashioned greenhouses do not. Vertical farms are certainly more compact—a bonus in places like cities where land is

expensive. Since sales of fresh produce to the urban masses are often touted as one of vertical farming’s biggest opportunities, that is important. But a greenhouse gets its light, and much of its heat, free, courtesy of the sun. And modern greenhouses can also use solar-powered supplementary LED lighting to extend their growing seasons and hydroponic systems to save water, says Viraji Puri, co-founder of Gotham Greens, an urban-farming company that operates greenhouses on the roofs of buildings in New York and Chicago. As for food miles, they could not get any shorter for Gotham Greens’s rooftop greenhouse in Brooklyn, which supplies the Whole Foods Market located downstairs.

The biggest drawback of vertical farming is the high cost of the electricity required to run the large number of LEDS . This has meant that production has been commercially viable for high-value, perishable produce only, such as salad leaves and herbs. That, nevertheless, is a market not to be sniffed at. But for a broader range of produce, it can prove too expensive. In 2014 Louis Albright, an emeritus professor of biological and environmental engineering at Cornell University in America, calculated that a loaf of bread made from wheat grown in a vertical farm would be priced at about $23.

Blue is the colour

One way of saving electricity is to use LED s that generate only the colours that plants require, instead of the full spectrum of plain white light. Plants are green because their leaves contain chlorophyll, a pigment that reflects the green light in the middle of the spectrum while absorbing and using for photosynthesis the blue and red wavelengths at either end of it.

The vertical farm at Invergowrie takes this idea further. It uses LED s that are highly tuneable. Although the lights produce mostly blue and red wavelengths, researchers now know that other colours play an important role at various stages of a plant’s development, says David Farquhar, IGS ‘s chief executive. A dose of green at an appropriate moment produces a higher yield. A timely spot of infrared can improve the quality of foliage. The lights can also produce various blue/red mixes.

To operate these LED s efficiently, the company has developed a low-voltage power-distribution system. This, says Mr Farquhar, can cut energy costs to about half of those incurred by existing vertical farms. As a result, all four towers can produce 15-25 tonnes a year of herbs, salad leaves, fruit and vegetables. This, the company claims, is between two and three times more than a conventional greenhouse with an equivalent but horizontal growing area, and equipped with supplementary lighting and heating, could manage. And the system can grow all this produce at a similar cost-per-kilogram.

One of the jobs of the Invergowrie unit is to develop lighting regimes tailored to individual crops. Another is to develop algorithms to control, in an equally bespoke way, the climatic conditions preferred by different crops. The idea is to design crop-specific weather “recipes” in order to boost the yield and quality of whatever varieties are grown in the vertical farm. All the processes involved are engineered to be efficient. Irrigation, for instance, relies on captured rainwater. This is cleaned and recycled, but only 5% gets used up by each harvest—and most of that as the water-content in the plants themselves. Ventilation is also a closed loop, harvesting surplus heat from the LED s while managing humidity and oxygen levels.

By reducing running costs, the system should make it profitable to grow a wider variety of produce vertically. The firm has already succeeded with some root vegetables, such as radishes and baby turnips. Bulk field crops, such as wheat and rice, may never make sense for a vertical farm, and larger, heavier vegetables would be tricky to raise. This means full-grown potatoes are probably off the menu, at least with existing technology.

Seed potatoes, though, are a good candidate, says Colin Campbell, head of the James Hutton Institute, a plant- science research centre backed by the Scottish government. It is based next door to IGS and works with the company. Many fields around the world, Dr Campbell observes, are suffering a growing burden of pests and disease, such as potato-cyst nematode. In the controlled environment of a vertical farm, from which both pests and diseases can be excluded, seed potatoes could be propagated more efficiently than in the big, bad outdoor world. This would give them a head start when they were planted out in fields.

The institute’s researchers are also looking at plant varieties that might do particularly well indoors, including old varieties passed over in the search for crops which can withstand the rigours of intensive farming systems. By dipping into the institute’s gene banks, Dr Campbell thinks it may find some long-forgotten fruits and vegetables that would thrive in the security of a vertical farm.

All this could go down well with foodies, and unlock new and forgotten flavours. Shoppers might even find some exotic varieties growing in supermarket aisles. In Berlin a company called In farm provides remotely controlled shelved growing cabinets for shops, warehouses and restaurants. Herbs and salad leaves, including exotics such as Genovese basil and Peruvian mint, are resupplied with seedlings from the company’s nursery as the mature plants are picked.

Vertical farming then will not feed the world, but it will help provide more fresh produce to more people. It may even be that, as vertical-farming systems improve further, miniature versions will be designed for people to put in their kitchens—thus proving that there is nothing new under either the sun or the LED . Such things used once to be called window boxes.

National Grid ESO outlines its plans to deliver a cleaner energy system in this sponsored post.

National Grid ESO’s ambitions

With climate change high on the Government’s agenda and National Grid ESO’s ambition to be able to operate a zero-carbon system by 2025, it’s important we manage our network in a cleaner and more flexible way. This means breaking down barriers to entry for new market entrants, creating liquidity to realise consumer value, and ensuring security of supply whilst embracing new types of generation and ever-changing needs.

Our analysis shows that by 2050, a decarbonised energy system could add 19 million jobs and £44 trillion gross domestic product (GDP) to the global economy, as well as generating a 15% increase in global welfare and a 60% reduction in health effects caused by local air pollution.

Having published our Towards 2030[1] ambition in April 2019, National Grid ESO sees success by 2025 as:

• An electricity system that can operate carbon free
• A strategy for clean heat, and progress against that plan
• Competition everywhere
• The System Operator is a trusted partner

Progress against this plan is already taking place having operated the grid coal-free for two consecutive weeks in May 2019, for the first time, and we estimate that delivering our Business Plans[2] net zero ambition, could achieve benefits of around £2.3 billion over the RIIO-2 period.

In the near-term, our recently published Forward Plan[3] lays out our intentions from April 2019 to March 2021 and beyond. The top five priorities are continuing to improve safety and reliability, improving quality of service by listening to stakeholders and acting on feedback, lowering bills for the end consumer, reducing environmental damage, and creating greater benefits for society as a whole.

Achieving the ESO’s ambitions

One of the most significant barriers we face in order to achieve our goal of carbon-free operation is to enable all technologies to participate in our ancillary service markets. Traditionally, renewable sources of generation have struggled to participate due to their intermittent nature and variable output. To allow these technologies to operate on an even playing field we are currently looking to understand how short-term markets can reduce barriers to entry for such technology types who cannot guarantee output months in advance.

There is a question over whether the existing pay-as-bid tenders are the appropriate approach for procuring balancing services. Pay-as-bid tenders are useful when there is a market with a small number of participants and where there are highly standardised products, however, a pay-as-clear auction approach may incentivise bidding at marginal price and increase transparency of pricing signals in a market with standard products.

As a result, we are looking to openly engage, redesign and implement new ancillary service opportunities. Some of the measures being taken to reform the Firm Frequency Response (FFR) market are: moving from monthly pay as bid tenders to trialling weekly pay-as-clear auctions; holding periodic long-term tenders; developing day ahead auction designs; and implementing a single platform for all ancillary service participation.

FFR Weekly Auction Trial

As part of our move towards closer to real time procurement, on 13th June 2019 we held the first Phase 1 weekly frequency response auction to procure a low frequency static service. Four parties entered the first auction, to secure a contract for the coming week, with service delivery to commence the following day at 23:00.

Since then, more participants have joined the Phase 1 auction. We have also carried out additional work on the detail of Phase 2 and will seek to procure dynamic response through a platform being implemented in partnership with EpexSpot.

For more information on the FFR Weekly Auction Trial please visit: www.nationalgrideso.com/balancing-services/frequency-response-services/firm-frequency-response-ffr

Reform of Reserve Services

In time, we will also be looking at reforms to Reserve Services, including STOR and Fast Reserve, potentially moving to monthly ‘EFA block’ pay-as-clear auctions, whilst implementing measures to increase market transparency and facilitate competition.

New Areas of Focus

Demand Side Flexibility has a vital role to play in the evolution of electricity markets which will shape how we all behave as consumers and providers. The UK’s focus is firmly on the facilitation of new up and coming technologies such as EVs and smart devices in our homes. For example, in our recent Future Energy Scenarios report we estimated that, by 2050, there will be over 35 million electric vehicles on the road. These and other demand side changes increase the need for the grid as a whole to be more dynamic and flexible.

Power Responsive is looking to expand its focus to include domestic consumers and community-based energy projects, and we are actively involved in multiple innovation projects looking at vehicle to grid (V2G) technologies, domestic DSR, a system-wide DER asset register, and whole-system approaches to the flexibility procurement.

We are going through a period of unprecedented change, which will improve the way the energy industry adapts and operates, ultimately delivering greater value for consumers. However, we cannot do this alone. We need to work together across the energy industry to ensure that we are ready to facilitate the energy system of tomorrow.

Contacts us

If you would like to learn more about Power Responsive or find out about the opportunities that exist by using energy or generation assets more flexibly, as well as hear stories from businesses that are taking part and enjoying the rewards of the balancing markets right now, go to: www.powerresponsive.com or sign up to our mailing list on the homepage.

Contact us at powerresponsive@nationalgrideso.com

[1] Towards 2030 – https://www.nationalgrideso.com/news/towards-2030-system-operator-gbs-energy-future

[2] ESO RIIO-2 draft business plan – https://www.nationalgrideso.com/about-us/business-plans

[3] Forward Plan April 2019 to March 2021 – https://www.nationalgrideso.com/about-us/business-plans/forward-plans-2021