RegEnergy

The article below was originally published in Politiken's supplement Green Future on April 20, 2023 by Jakob Rohde-Brøndum.

A green investment with an expected annual return of over 15 percent and a significant contribution to a sustainable, circular economy. These are the expectations for Selected Alternative's investment project Selected RegEnergy Fund. The project utilizes waste heat from industrial companies for sustainable local food production. In one of the fund's first projects, waste heat from a Swedish paper mill, for example, is used to heat greenhouses.

"This is a super exciting project where we use the invested capital to establish and own green infrastructure, which in this case are greenhouses that can utilize the waste heat from heavy industry. In other projects, it could be waste heat from hybrid technology industries or data centers," says Frederik Hoff, Investment Director at Selected Alternatives, adding that the whole concept of utilizing industrial waste heat has great potential. "There is a huge untapped market. Historically, low-temperature waste heat is a waste product with no real customer. At the factory in Sweden, for example, the waste heat was previously simply discharged locally because it could not be used for district heating. In this fund's projects, we instead channel the waste heat into large greenhouses which enables us to produce local food at very low cost and with less impact on the planet's resources," says Frederik Hoff.

5-7 projects in the pipeline

Selected Alternatives is a Danish investment community under Selected Group, which gives private investors access to alternative investments in green energy, green infrastructure and real estate, which are normally reserved for institutional investors. The focus of the investments is to give investors the opportunity to invest sustainably in the green transition.

"Not many people have yet looked at utilizing waste heat in food production, which is otherwise ideal for this, and it provides a comparative advantage. In the first fund, the intention is to establish 5-7 projects, but we see such great potential that it is conceivable that additional parallel funds will be relevant to establish in order to utilize this entire pipeline. When the infrastructure achieves turnkey status, there are agreements with leading food producers who lease the infrastructure. In other words, the investor owns the means of production through the fund, and then the professional operators utilize it so that everyone does what they do best. They then pay a fixed rent and a share of the turnover if they make a particularly good profit," Frederik Hoff points out.

From waste product to tomatoes

In the specific projects in Sweden, the waste heat will be used to heat greenhouses for tomato production. The waste heat comes from one of the largest paper product manufacturers in the Nordic region, which provides access to 45 GWh of waste heat every year - equivalent to the average annual consumption of 10,000 Danes.

The project has been established in collaboration with some of the world's leading experts in heat recovery and management for industrial use, and the day-to-day operation is contractually secured with the leading food producers, who themselves incur large start-up costs in connection with the establishment and thus have significant incentives to remain associated as long-term operators.

"It's crazy that there hasn't been more focus in the industries on utilizing waste heat earlier, because it's not rocket science," says Simon Lander, Sales Director at Selected Alternatives, emphasizing that the concept is based on well-known technologies.

"It's a factory that's already running, it's greenhouses. We use existing technologies in a new way, so it's a unique opportunity to invest in projects where we combine a good operating return and added value with the opportunity to contribute to the green transition," adds Simon Lander.

Many sustainable benefits

In addition to the obvious benefit of utilizing waste heat, there are a number of other sustainable effects of the project in Sweden, according to Simon Lander. "The project solves a major energy challenge, and because Sweden has a low self-sufficiency in food, there is also a high demand for local food. Sales is therefore primarily done locally in Sweden. This means less CO2 emissions due to the shorter transportation time, and the food is also produced with minimal use of pesticides and medicines. In addition, there is a positive local impact by employing up to 220 full-time positions, so the project also meets a wide range of sustainable requirements," says Simon Lander.