Peel and UK Coal could build 11 EfW plants

Plans to develop waste-to-energy facilities on 11 UK Coal sites in the North of England and the Midlands took a major step forward yesterday (July 11) after the coal giants shareholders approved plans to establish a joint venture for the project with Peel Environmental.

The move comes just seven months after Jonson Cox joined UK Coal, which is the countrys largest mining company, as executive chairman. Mr Cox joined from Anglian Water and has previous experience in the recycling and waste sector when he was chief executive of Valpak between 2002 and 2004, where he was credited with streamlining the scheme (see letsrecycle.com story).

Mr Cox has focused on reducing UK Coals debt by maximising the value of its property portfolio, and last month said working with Peel Environmental, part of the Manchester-based Peel Group, would be part of this strategy.

“This proposed waste to energy joint venture with the Peel Group will enable UK Coal to benefit from, and mitigate the risk and cost of, the development of eleven sites in the Company’s property portfolio, he said.

These sites have not been identified as suitable for alternative development uses. This represents part of UK Coal’s focus on simultaneously unlocking and developing the maximum value from its property portfolio.”

C&I waste

While Peel Environmental yesterday said the plans were at a very early stage and there were no firm plans or decisions yet on the nature of the projects, UK Coal investor information reveals the joint-venture is set to focus on waste-to-energy projects utilising commercial and industrial (C&I) waste.

Discounting the potential to secure local authority waste, it claims that LATS has acted as a driver to bring forward projects to divert residual household waste from landfill and as such there are already several projects in procurement near to the 11 sites for treating this material.

It notes that, for C&I waste, the main driver to divert material from landfill is landfill tax, which has historically not been high enough to allow non-landfill technologies to compete with landfill.

But, it explains: At an 80/t landfill tax, the total cost of landfill would rise to approximately 100/t and at such levels it is considered that there are a number of alternative waste treatment technologies (including mechanical biological treatment, anaerobic digestion and large thermal plants such as incineration with energy recovery) which are capable of operating at a lower total cost to users than landfill.

Accordingly, there is an opportunity to target C&I residual waste for disposal in non-landfill treatment technologies.

UK Coal also cites research from its waste adviser, consultancy Eunomia, which predicts a 10 million tonne capacity gap in residual waste treatment capacity by 2015 unless alternatives to landfill are developed.

The Company therefore considers that the non-landfill market provides a significant opportunity whereby residual commercial and industrial waste can be targeted by non-landfill treatment operations in the UK utilising the increased landfill tax rates as a benchmark for pricing, it concludes.

Covanta

While no specific technology partners for Peel Environmental have been named, the companys most high-profile waste project to date is the proposed 500 million Eco Park it is developing in partnership with US EfW specialist Covanta Energy at Ince Marshes in Cheshire (see letsrecycle.com story).

This project is cited by UK Coal as evidence that Peel Environmental has demonstrated its ability to obtain planning permission for, and successfully market, sites for use as waste facilities.

However, a spokeswoman for Covanta Energy this morning told letsrecycle.com had no comment at this stage about whether it would be involved in the projects on UK Coal sites.

Sites

UK Coal notes that, due to their historic use for coal operations, much of its site portfolio is well positioned for road, rail and electricity connection. This is likely to be of particular benefit for waste-to-energy projects brought forward under the joint venture.

In light of Peel Environmental’s expertise in exploiting potential energy-from-waste sites by obtaining planning permission and the opportunities existing within UK Coal’s property portfolio, a number of sites have been identified as potentially suitable for development of waste facilities.

Typically these sites are located on industrial sites (predominantly existing or former operating coal mining sites) which UK Coal has historically been unable to successfully develop for alternative uses.