Why Large AD Portfolios are Leaving Money on the Table

Article 1 of 6 from the Series - P2P for Large AD Generators

Across the UK, many large anaerobic digestion (AD) operators have built highly efficient generation portfolios.

Plants are running well. Output is stable. Existing PPAs, optimisation arrangements and trading strategies are delivering reliable routes to market.

However, a growing number of generators are beginning to ask a different commercial question:

Are we capturing the full value of every MWh we generate?

This question matters because not all electricity buyers place the same value on renewable power. An increasing number of large commercial and industrial organisations are seeking electricity that is:

• Renewable and demonstrably clean
• Traceable to a specific generation source
• Supported by credible evidence of origin
• Aligned with their own sustainability commitments

For many of these organisations, energy is no longer viewed purely as a commodity purchase. Increasingly, they are buying certainty, provenance and credibility, and in many cases, they are prepared to pay more for it.

This creates an opportunity that many AD generators have not yet fully explored.

The hidden limitation of traditional routes to market

Most AD portfolios currently sell most of their power through established commercial routes, including:

• Power Purchase Agreements (PPAs)
• Wholesale market participation
• Trading and optimisation arrangements
• Flexibility market revenues where appropriate

These remain valuable and important mechanisms. However, they also share a common characteristic:

Most generated power is effectively treated in the same way, regardless of who ultimately consumes it.

That raises an important commercial question. If some buyers place significantly greater value on traceable renewable power than others, is there an opportunity to allocate selected volumes differently?

Not every MWh has the same commercial value

Most generators spend considerable effort optimising how electricity is produced. Far fewer are able to optimise who receives that electricity. Yet different consumers may value exactly the same unit of power very differently, depending on:

• Provenance
• Traceability
• Sustainability reporting requirements
• Internal net-zero commitments
• Brand and stakeholder expectations

As a result, some AD portfolios may unknowingly be averaging value across their entire output, rather than capturing the highest available value from selected buyers.

Introducing Peer-to-Peer (P2P) Energy Supply

This is where P2P energy supply becomes relevant.

In simple terms, P2P enables selected volumes of electricity generated by an AD operator to be supplied directly (through the standard grid) to named commercial consumers seeking traceable renewable power.

Rather than replacing existing routes to market, P2P introduces an additional option that sits alongside current arrangements.

The objective is not to redirect all generation. It is to identify selected "slices" of output that can achieve greater value from specific consumers who place a premium on traceable, renewable supply.

Why demand is growing

The opportunity is being driven by a significant shift in corporate energy procurement. Many large businesses now face increasing pressure from:

• Investors
• Customers
• Regulators
• Sustainability reporting frameworks
• Internal carbon reduction targets

Consequently, many are seeking stronger evidence linking their electricity consumption to identifiable renewable generation assets.

Stakeholders are increasingly sceptical of standard market practices, such as buying power in the normal way and purchasing certificates, such as REGOs, to claim green provenance.

They increasingly want to contract directly with named renewable generators.

Connecting Generators with Corporate Buyers

The opportunity can be visualised simply.

A growing population of commercial and industrial electricity consumers is actively seeking access to identifiable, provably renewable power.

P2P creates direct commercial relationships between generators and multiple consumers. This allows selected volumes of generation to reach buyers who place greater value on traceability and provenance, whilst preserving existing routes to market for the remainder of a portfolio.

P2P optimises the value of selected “slices” of generated power.

The key takeaway

The most important idea in this article is simple: Not all electricity buyers value renewable power equally.

For large AD generators, this creates the possibility that certain portions of generation may achieve greater value when matched with specific corporate consumers seeking traceable, clean energy.

The question is no longer simply: "How efficiently are we generating power?", but rather "Are we directing the right power to the right buyers?"

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