An interesting play on the biomass story.

Aggregated Micro Power Holdings offer a diverse mix of offerings under its umbrella, with its primary business line being the biomass operation Forest Fuels. Biomass is a relatively small part of the British renewables mix, so it is worth some further explanation of analysis of the work they undertake, as well as some background on the wood pellet and wood chip business.

The company – headquartered in Mayfair in London but with operational offices in Shropshire and Devon – supplies wood pellets and wood chips to biomass boilers under its ‘Forest Fuels’ line. As well as the supply of wood pellets and chips it provides maintenance and servicing to the owners of biomass boilers. Its customers are typically commercial and public sector operations.

Biomass boilers, for those unfamiliar with them, are run off of biomass source of fuels (typically wood chips and pellets). Whereas a traditional boiler is supplied with gas or oil and require limited maintenance, biomass boilers need their customers to physically load the boiler with wood chips.

The issue of biomass and whether it constitutes a renewable energy source stems from where the wood is sourced. Clearly if forestry is burned down to provide fuel it is not very “renewable” in the broader sense of the word neither is it of benefit to the planet. However the biomass projects in the UK and Europe thankfully follow rigorous guidelines around sustainability.

AMPH sources its fuels from the UK and Europe, so the concerns over biomass’ sustainability in countries such as Brazil are not an issue. Indeed, a comparison should be made to the alternative to biomass boilers, which are clearly not sourced from renewable or sustainable forms of energy.

The team at AMPH is led by CEO Richard Burrell, who previously founded Mathieson Capital, an investor in biomass and sustainable energy projects. The chairman of the group is Neil Eckert. Eckert previously founded carbon trading exchange Climate Exchange.

An interesting figure on the board is Nicholas Soames, a non-executive director at AMPH. The grandson of British Prime Minister Winston Churchill, Soames served as the Minister of State for the Armed Forces under John Major’s government.

In addition to its biomass boilers operation AMPH has a number of “grid balancing” projects underway. Grid balancing is a way of managing the intermittency related to renewable energy generation.

This October the company acquired wood pellet provider Billington Bioenergy from energy giant Drax Group for £2 million.

In its results for the year to March 2017 AMPH reported a profit before tax of £930,000 on sales of £19.7 million.

With a strong position in a niche market, the company is an unusual proposition for those looking to add biomass exposure to their portfolio. In addition, the ethical and environmental destruction of biomass in many emerging and developed markets means that there is a scarcity of suitable ventures for investors interested in the long term impact of their holdings.

The group is well poised for further growth, with a strong cash position and opportunities in the grid balancing space.

Note: Neither the author nor any of the members of the Renewables Investor staff have received any payments from Aggregated Micro Power Holdings or associated companies for this article. The above does not constitute financial advice and those seeking out financial advice should seek out the services of an Independent Financial Adviser.