Resilience testing of the gasification facility at Milton Keynes Waste Recovery Park could mean that the council loses income next year.
The “undelivered” income – or saving – is a part consequence of the testing by contractor Amey which is taking place at the advanced thermal treatment plant and will carry on until March 2020.
Thermal treatment is one of three technologies at the Recovery Park, along with a mechanical treatment system and dry anaerobic digestion plant. The facility has been developed under a 15-year contract between contractor Amey and the council.
A budget pressures document prepared for the council’s budget scrutiny committee states that “no income is forecast in 2019/20 whilst the resilience test is being undertaken”. According to the document, the testing is due to be completed in March 2020.
The authority had forecast a total income of over £1.34 million in 2019/20 from MKWRP – which means it would have made £750,000, which is not going to be received. This income would have come from processing the waste from other local authorities, generated through energy, recyclables and third party gate fees.
A further £520,000 was anticipated from Renewable Obligation Certificates for the new waste facility. And there was also expected to be £22,000 income from photovoltaic cells and £45,000 from 450 tonnes of hospital waste.
The document explains that the contractor (Amey) has a ‘basecase’ to deliver and that “only after the basecase has been made then any ‘profit’ can be made.” Milton Keynes council will receive the first £750,000 of profit.
Income will be made on the basecase through recycling sales, energy income and gate fees, the document notes.
The council has been told about issues surrounding: “Current suppressed value in commodities, less waste coming into the plant and therefore less energy being produced (both as a result of the resilience test) and the overall efficiency of the plant still being tested then the financial base case delivery is not producing any profit.”
The contractor, Amey, has to “absorb the risk” of not making the basecase financially. The Authority said it is working to understand the deficiency in the delivery of the basecase from Amey which is preventing any profit being generated.
“The resilience test also sees the plant operate at a lower performance than established for the basecase which will also be a major contributing factor,” notes the budget pressures report.
When contacted by letsrecycle.com, a spokesperson for Amey said the company was “pleased to operate the first fully commissioned gasifier running exclusively on residual waste in the UK”.
“Amey is working with the Council to improve the availability and performance of the facility and meet the requirements of the Council.”Amey
“We have been dealing with a number of teething issues on the facility, which are fairly normal in the first year of operation of any waste treatment asset,” the spokesperson said. “During a planned annual maintenance shutdown, most waste has been processed at the plant in order to maximise recycling and the production of biogas and energy, but a portion of waste has been diverted to landfill.
“Amey is working with the Council to improve the availability and performance of the facility and meet the requirements of the Council as set out in our extended availability test, known as ‘resilience test’, which takes place over a 2-year period.”
The advanced treatment facility was due to be open in July 2017, according to a budget report for the council in February 2017.