Partners Group strikes deal for German biogas plants

The firm plans to build out the operation’s project pipeline and innovate in using alternative sources of feedstock.

Partners Group has struck a deal to acquire a 60 MW portfolio of 35 biogas plants and 10 biomethane plants from Energiedenker Group. Financial details were undisclosed.

The independent private markets investor intends to rebrand the operation and build out its project pipeline, “develop innovative ancillary service lines, and strengthen its contract management capabilities,” said a statement.

Bioenergy has emerged as an integral part of the EU’s energy security and diversification strategy as the bloc plans to invest €37 billion into biomethane and increase annual production to 35 billion cubic metres (roughly 350 TWh) by 2030, up from roughly 3 billion cubic metres in 2022.

“We are investing in an infrastructure platform that is benefitting from tailwinds driving the transition of biogas and biomethane from peripheral fuels into mainstream energy sources,” said David Daum, Partners Group managing director, co-head private infrastructure Europe.

The cyclical nature of renewables combined with the phase out of fossil fuels will likely increase demand for baseload power as well as flexible electricity generation. Biogas and biomethane are ideal alternative fuel sources as established natural gas infrastructure can be used without requiring any additional capex.

Another tailwind in favour of the sector is the pressure on farm and food businesses to recycle all organic waste, as well as government targets to eliminate the use of landfill for food waste, which is a source of methane emissions.

The UK, for example, produces roughly 10 million tonnes of food waste annually and has committed to eliminating the use of landfill for food waste by 2030 – biogas plants offer a means of recycling this waste while also producing renewable energy.

In February, Goldman Sachs committed to deploy €1 billion in greenfield and brownfield European biomethane assets in the next four years.

IFM Investors acquired GreenGasUSA in January, while Macquarie Asset Management acquired Germany’s BayWa r.e. Bioenergy in October.

“Through our thematic research, we have built strong conviction in the growth potential of biomethane as an alternative fuel and in capturing and commercializing carbon dioxide,” said Kevin Gilhawley, Partners Group member of management, private infrastructure Europe.

“Additionally, only a fraction of Germany’s biogas and biomethane plants are ready to use other sources of feedstock, providing further opportunities for us to create value by expanding the inputs that can be accepted.”

Biogas dealmaking has also ratcheted up among the energy majors, with BP agreeing a $4.1 billion deal in October to acquire American renewable natural gas company Archaea Energy. Shell followed this up with a $2 billion deal in November to buy Danish RNG business Nature Energy.

Swiss company VARO Energy struck a deal of an undisclosed size to acquire Dutch biogas manufacturer Bio Energy Coevorden in January, while Chevron paid $3.15 billion for biodiesel business Renewable Energy Group in February.

Partners Group’s Private Infrastructure business has $21 billion in assets under management.