A long-standing composter has claimed that anaerobic digestion (AD) facilities are starting to under-cut the gate fees of in-vessel composting plants (IVC) and called on others not to invest in IVC technology further.

AD operators can charge less because they are also selling the electricity they produce

 
Trelawney Dampney, Eco Sustainable Solutions

However others in the sector have claimed that the prices are still broadly comparable and that there will always be a place for IVC, particularly to treat food waste which is mixed with a large proportion of green, wood waste.

Trelawney Dampney, who is managing director of Dorset-based Eco Sustainable Solutions and a director at the Association for Organics Recycling (AFOR), told letsrecycle.com that his own IVC facility, near Bournemouth, had started to lose business to AD facilities which were able to charge lower gate fees.

He said: "AD operators can charge less because they are also selling the electricity they produce. Electricity from AD typically brings in about £15 per tonne of material inputted."

"Building IVC now and focussing on it long-term would be a mistake. The industry needs to be aware of the way things are heading," he added.

Mr Dampney claimed that his contract loss "was a sign of things to come" and predicted that gate fees for AD would continue to fall as more facilities came online and began to produce electricity.

He explained that he had quoted £45 per tonne for a food waste contract but lost out to what he claimed was a "heavily subsidised, government sponsored", AD facility which was charging £15 per tonne.

Struggle

Mr Dampney claimed this could lead to IVC becoming the more expensive option for local authorities and cause IVC operators to "struggle" to get feedstock into facilities for a good price. He expects this to happen over the next three years.

He said: "We're now competing with the energy boys. The market is changing very quickly and industry needs to wake up to this."

Eco Sustainable Solutions, which received planning permission to build an AD facility in March (see letsrecycle.com story) is no longer investing in new IVC technology.

Comparable

However, others in the sector have disagreed with this analysis. Harry Waters, sales and marketing director of Chipping Norton-based composting firm Agrivert, said that at the moment AD and IVC prices were "probably comparable and to say there is undercutting would be wrong".

Agrivert runs IVC facilities but is also developing AD plants to treat waste from councils in Oxfordshire (see letsrecycle.com story). Mr Waters said that in some cases AD "could be more economical" for local authorities but pointed out that "it is horses for courses" and IVC facilities were more suitable for certain councils.

He commented: "There are many different drivers in this game and AD can be more cost effective in some areas but likewise IVC is better for other areas."

Generally, Mr Waters claimed, IVC treatment was more suitable for councils with rural collections routes and AD was better for urban food waste collections where source-separated food waste collections were more cost effective.

He added: "It's our hunch that AD facilities are going to be built closer to cities."

Investment

Mr Waters said Agrivert was set to continue investing in both IVC and AD operations. In other areas of the country, IVC facilities are still be constructed. TEG Environmental is currently developing four IVC facilities near Manchester as part of the Greater Manchester waste PFI contract which was signed in April this year. And, Armargh-based Natural World products is also developing a £6 million IVC plant in West Belfast.

Mr Dampney also admitted that, despite losing the contract, his IVC facility would remain operational in the short to medium term. However, he said he hoped to "add some sort of AD system eventually to extract the gas but that is five to seven years away because it is still profitable at the moment".

The Association for Organics Recycling (AFOR), the trade body which represents organic recyclers, including IVC and AD operators, broadly agreed with Mr Dampney's comments but stressed that there was still a place for IVC in the organics recycling sector.

Jeremy Jacobs, managing director at AFOR, commented: "When you look at the ROC'able value of food waste and its embedded energy value there is going to be stiff competition for this material in the future. The only way of ensuring continuity of supply is by having an advantageous price point.

"When the financial value from the gas yield is good AD operators will be able to charge a competitive gate fee for inputs."

Mr Jacobs said that AD had a valuable role to play in the management of biowaste and renewable energy generation and was likely to continue to drive forward but pointed out that it was still early days for the technology.

Collection

However, Mr Jacobs said that IVC was also important, particularly with regard to treating lignin wastes such as wood. He said both methods of treatment were necessary due to the different collection methods employed by councils and that commingled green and food waste required IVC treatment as, in general, AD could only treat source separated food waste.

He said: "There is still a place for IVC because treatment depends on how material is collected, if its comingled food and green waste it has to go to IVC and suits this technology extremely well, a number of local authorities are not going down the separate food waste collection route required for AD.

"Unless all local authorities go for separate food waste collection AD won't dominate"

Mr Jacobs was positive about the future for both types of technology and added: "You can't say AD will win hands down and become the dominant technology, there is room for all technologies in the current marketplace."