http://www.resource.uk.com/article/Latest/Defra_withdraws_funding_thre
e_PFI_projects-2785#.Uai9tGT71Xc
Defra withdraws funding for three PFI projects

22 February 2013 by Annie Reece

The Department for Environment, Food and Rural Affairs (Defra)
yesterday (21 February) withdrew £217.1 million of funding for three
waste PFI (private finance initiative) projects, after finding that
the 29 projects that already have funding are ‘sufficient’ to meet the
EU’s 2020 landfill diversion targets.

The three incinerators that have seen their funding withdrawn are:
•Merseyside Waste and Recycling Authority’s Covanta/SITA UK CHP
project (£90 million in PFI credits);
•North Yorkshire County Council and the City of York Council’s
Allerton Waste Recovery Park project (£65 million in PFI credits); and
•Bradford and Calderdale councils’ Bowling Back Lane CHP plant (£62.1
million in PFI credits).

According to Defra, these three projects were the only remaining waste
PFI contracts that had yet to reach financial close and would
reportedly reduce the likelihood of meeting the 2020 diversion targets
by two per cent.

In a statement, Defra said: “We are investing £3.6 billion in 29 waste
infrastructure projects. This will reduce the amount of waste sent to
landfill, promote recycling and stimulate economic growth. We now
expect to have sufficient infrastructure in England to enable the UK
to meet the EU target of reducing waste sent to landfill. Consequently
the decision has been taken not to fund the remaining three projects.”

Defra added that the withdrawal of the funding “does not necessarily
mean the three projects will stop”, and that the local authorities
concerned must now make the decision

“We will continue to provide commercial and technical advice to those
projects that continue with their procurement process.”

Defra has made available its full methodology for choosing these
contracts for withdrawal.

‘Dismay and surprise’

North Yorkshire County Council has reacted with ‘dismay and surprise’
to what it describes as a ‘government U-turn’ over the funding for
Allerton Waste Recovery Park.

Leader of North Yorkshire County Council John Weighell, said: “This
announcement has come as a complete surprise to us. We have been
repeatedly assured throughout the procurement process of Defra’s
commitment to PFI credits. To be informed now, after the granting of
planning consent and the decision of the government not to call in the
planning application for a public inquiry, that the funding commitment
is being withdrawn is frankly baffling and disappointing.”

Adding that the procurement process for Allerton Waste Recovery Park
had been going on for more than five years, Weighell voiced surprise
at the fact that “at no stage in that period…has any issue been raised
by the government”.

“To make this unexpected announcement, without consulting us and
without warning, is extremely disappointing”, he added.

However, the council emphasised that the decision does not
‘necessarily’ signal the end of the scheme and that they will ‘examine
all the options available to [them]’.

Bradford and Calderdale Councils also voiced surprise at the decision,
saying that the withdrawal of the funds will have a ‘big negative
impact’ on the planned waste treatment plant in Bowling Back Lane,
Bradford.

The 193,000 tonne facility was expected to be built by preferred
bidder Pennine Resource Recovery (PRR) in the hopes of delivering ‘at
least 50 per cent recycling by 2020 and divert at least 90 per cent of
our waste away from landfill’.

‘Massive blow’

Bradford Council’s Executive Member for Environment, Sport and
Sustainability, Andrew Thornton, said: “This is a massive blow that
jeopardises the delivery of an important project which would have
resulted in major long-term cost savings for council tax payers in
both local authorities. We are currently assessing the impact of
losing £62.1 million of PFI credits on the affordability of the
project.

“The PFI credit contribution was intrinsic to the scheme and Defra has
been involved every step of the way. The government had not given us
any indication that these PFI credits would not be available and we
are just a few months away from starting construction on site.”

Leader of Calderdale Council, Tim Swift added: “We are shocked to hear
of this decision. It threatens the entire project, and the jobs and
benefits it would bring to the people of Bradford and Calderdale. We
are urgently trying to establish what this means for our local area.”

Members of Merseyside Recycling and Waste Authority have said that
they will meet next week to ‘discuss a way forward to deal with
Merseyside and Halton’s residual waste (waste that cannot be recycled)
while continuing to deliver value for money’ and ‘considering the
implications of this announcement’.

A further announcement from MRWA is expected in ‘due course’. The
councils are now seeking to meet with ministers to “ask them to
explain their position”.

ESA’s Director of Policy, Matthew Farrow, likewise criticised the
decision, saying: “Removing credits at such a late stage in the
procurement process has potentially wasted millions of pounds’ worth
of time and money, both for the local authorities involved, and also
for the bidders participating in complex PFI processes… this
decision will have the knock-on effect of undermining private sector
confidence in public procurements and will raise the political risk
associated with these types of project.”

Overcapacity

The news has been welcomed by some sectors of the industry, however,
with former WRAP Director Phillip Ward, telling Resource: “Evidence of
falling waste arisings, rising RDF exports and improved recycling
capacity has been growing for some time. So a reappraisal of the need
for public subsidy for EfW was overdue.

“With a current recycling target of only 50 per cent in England, we
are still planning to burn too much recyclable material.”

Indeed, a 2012 report from waste management consultancy Eunomia, found
that planning consent for incinerators in the UK is being granted
‘faster than applications are being made’, and that without any change
in residual waste quantities, by 2015/16, there would be ‘overcapacity
of 6.9 million tonnes per annum’.

Further to this, GAIA (the Global Alliance for Incinerator
Alternatives), has warned that the EU’s increasing incineration
capacity could damage recycling rates as for incinerators to run
efficiently, waste would soon have to be ‘ sent to incineration,
rather than prevented or recycled’.

http://www.resource.uk.com/article/News/Northern_Ireland_announce_new_compulsory_60_cent_recycling_rate

Northern Ireland announce new compulsory 60 per cent recycling rate

19 June 2012

Northern Ireland’s Environment Minister Alex Attwood has announced plans to introduce a statutory 60 per cent recycling target by 2020 for waste collected by local authorities, ten per cent more than the European Commission’s 2020 target for member states.

Introducing the plans for the legislation yesterday (18 June), Atwood said: “Northern Ireland can step up to the plate and surpass the existing target. Making the 60 per cent recycling target compulsory gives certainty to everyone involved in this area of the waste industry. They now know where they have to get to by 2020.”

“Although significant progress has been made over the last decade, I am mindful that we cannot be complacent. Instead, we must increase the momentum of change towards achieving a resource efficient and low carbon economy. Setting a challenging recycling target should help achieve this goal.”

The 60 per cent target is ambitious as the provisional household waste recycling rate for Northern Ireland in 2010/11 was 37.5 per cent. Atwood suggested that the statutory target would deliver “economic opportunities and growth, improved productivity and profitability and ensure local businesses remain competitive in the global market” and reaffirmed his commitment to providing financial support to local councils and the private, community and voluntary sectors through the Rethink Waste Fund.

Primary legislation is expected to be processed by 2014 will be followed by a public consultation on the draft legislation to allow stakeholders to be able to assist in developing the detail to support this target. This law would follow on from recent legislation, which sets the recycling and recovery target for construction and demolition wastes at 70 per cent.

Further information on Northern Ireland Municipal Waste Management Data reporting can be downloaded from the DOE website

Waste management consultancy Eunomia’s latest report

indicates that the UK is on track to see a 12 million tpa shortfall in the amount of waste needed to feed residual waste treatment plants, while the Global Alliance for Incinerator Alternatives (GAIA) has warned that some EU states, including the UK, have the capacity to burn ‘more than the non-recyclable waste generated’

http://www.resource.uk.com/article/UK/UK_see_residual_waste_treatment_%E2%80%98overcapacity%E2%80%99-3158#.UdVolj772gk

UK to see residual waste treatment ‘overcapacity’

03 June 2013 by Annie Reece

Image from Eunomia’s ‘Residual Waste Infrastructure Review’

The UK is on track to see a 12 million tonne per annum (tpa) shortfall in the amount of waste needed to feed the growing number of residual waste treatment facilities, new data from waste consultants Eunomia reveals.

According to Eunomia’s ‘Residual Waste Infrastructure Review’, released today (3 June), if the residual waste treatment plants – including incinerators, gasification and biomass facilities – that have received planning consent but have not yet commenced construction come online, and residual waste arisings remain at current levels, there will be a 12 million tpa shortfall in the amount of waste needed to fuel them. This is almost double the ‘overcapacity’ figure Eunomia had predicted in November 2012.

However, it is unlikely that residual waste arisings will remain steady, as there has been a growing trend of falling residual waste and increasing recycling rates. Further, Eunomia predicts that total waste arisings will be two million tonnes lower in 2020/21 than in 2009/10 (depending on economic growth and structure, and the ‘effect of drivers such as the Landfill Tax in incentivising further waste prevention efforts’, amongst others).

Eunomia has conceded, however, that it is ‘unlikely’ that the UK would ever reach such a level of overcapacity, as each time a ‘merchant’ facility begins construction in a given locale, the ‘likelihood of nearby merchant facilities reaching financial close decreases significantly’.

The report continues: ‘At the same time, the lead-times involved in the development process, and the level of inertia associated with this, imply that the speed with which the system responds to the emergence of overcapacity is unlikely to be rapid.

‘As a result of limitations in the ability of waste to be moved significant distances at low cost, and the fact that capacity is unevenly spread across the UK, the situation of overcapacity my occur sooner in some geographical regions than in others.’

Increasing reliance on incineration

Currently, the UK has around 18.2 million tpa of residual waste treatment capacity from 92 treatment facilities either ‘operating’ or ‘under construction’, with a ‘capacity gap’ of 9.3 million tpa (based on residual waste arisings from local authority collected and commercial and industrial (C&I) sources in 2012/13).

However, Eunomia’s report has found that in the past six months, one million tpa of treatment capacity has moved from being ‘consented’ to becoming either operational or under construction, with an additional 2.7 million tpa of treatment capacity being granted planning consent (but still awaiting financial close).

Further, planning consent is being sought for a further 2.1 million tonnes of waste treatment capacity, and 250,000 tonnes of capacity is currently ‘appealing a refusal of planning permission or being judicially reviewed’.

The largest proportion of residual waste treatment facilities currently in operation or waiting to receive consent is incinerators. This is despite increasing calls from environmentalists for the UK to phase out the energy-from-waste plants, with Friends of the Earth saying that by 2020, with increases in recycling and improved technology, these incinerators will be ‘almost as polluting in terms of CO2 emissions as new or refitted coal fired power stations, and 78 per cent worse than new gas power stations’. It argues that the government should be encouraging other, more climate-friendly technologies, such as mechanical biological treatment (MBT).

Residual waste treatment ‘investment trap’

It does appear, however, that the increasing awareness of ‘overcapacity’ has led some to rethink their investment policies.

According to Eunomia, the fact that 21.3 million tonnes of residual waste processing capacity has received planning consent but has not yet commenced construction is indicative of an ‘investment trap’, with the market seeing ‘difficulty [in] raising finance, rather than obtaining planning permission’.

The review reads: ‘The difficulty of raising finance appears to be having an impact on the number of projects being initiated. Only 0.6 million tonnes of new capacity entered the planning system in the last six months, resulting in a net reduction of 3.1 million tonnes in the amount of capacity seeking planning permission.’

Eunomia Principal Consultant Adam Baddeley, lead author of the review, said: “The development pipeline for residual waste treatment is becoming increasingly complex, and the picture is changing – not least because of the information that we are making available through our review.

“With a lack of long-term bankable feedstock contracts to meet tight lending criteria, along with strong competition from incinerators on the continent, the prospects for reaching financial close on pure merchant plant have worsened.

“The risk of overcapacity remains, in some regions more strongly than others; but at a national level, these influences suggest that we may not reach full capacity until around 2017/18.”

The slowing of projects being brought to completion, Eunomia claims, has been compounded by Defra’s recent withdrawal of PFI credits from three major local authority projects, after finding that the 29 residual waste treatment projects that already have funding are ‘sufficient’ to meet the EU’s 2020 landfill diversion targets.

The slowing of the market drive has also been highlighted by incinerator specialist Covanta UK’s announcement that, unless a buyer or partner is found to fund its energy-from-waste facilities, it will have to withdraw from the UK market and make ‘the majority’ of its 30 staff redundant.

Speaking to Resource, Baddeley said: “This certainly indicates that government is less supportive of spending vast sums on large EfW plants. What we need from government now [to promote a circular economy] is greater support for higher recycling targets, which could perhaps be achieved by revamping the producer responsibility system to direct funds to local authorities.”

Read Eunomia’s ‘Residual Waste Infrastructure Review’.

Comments

We already have incineration overcapacity

Submitted by shlomo.dowen on 3 June 2013 – 3:47pm.

If one accepts the notion that incineration should be limited only to genuinely residual combustible material (and many would go further to say that incineration should not be allowed at all), then the UK already faces incineration overcapacity. Even if we stick with Eunomia’s approach to calculating residual waste treatment requirements, if one uses the Government’s central waste arisings trends for England in 2015 and 2020 (from Defra’s Forecasting 2020 paper) then we can anticipate that by 2015 there will be more residual waste treatment capacity than residual waste to treat.