Three waste projects in the South and East of England have been awarded a share of over £300 million in Private Finance Initiative (PFI) credits today (March 27).
The Department for the Environment, Food and Rural Affairs (Defra) has announced that Hertfordshire county council, Norfolk county council and the South London Waste Partnership have qualified for a total of £319.2 million of support.
Reducing our reliance on landfill is an essential part of the drive to tackle climate change and I welcome the ambitious commitment made by these partnerships
Jane Kennedy
Hertfordshire is set to receive £115.3 million for a project to divert up to 170,000 tonnes of biodegradable municipal waste a year from landfill. Last year, the council indicated that energy from waste was its preferred technology (see letsrecycle.com story).
Norfolk, which has also based its outline business case on energy from waste with combined heat and power (CHP) (see letsrecycle.com story), has been awarded £92 million for a project to divert up to 70,000 tonnes of waste a year from landfill by 2020.
The council had originally submitted an outline business case based on mechanical biological treatment (MBT) with anaerobic digestion (AD), but revealed last month that it had changed its preference due to uncertainty over finding markets for the output of the MBT process (see letsrecycle.com story).
And, the South London Waste Partnership – comprising of the four unitary authorities in Croydon, Kingston-upon-Thames, Merton and Sutton – has been awarded £112.9 million in PFI credits, which represents the first PFI awarded for a waste project in London since 2002.
This will provide up to 50% of the capital costs of developing facilities to divert up to 102,600 tonnes of BMW from landfill a year once operational. Although no technology has been chosen, the partnership has expressed an interest in generating “heat and energy” from waste.
Commenting on the funding, environment minister Jane Kennedy said:
“Reducing our reliance on landfill is an essential part of the drive to tackle climate change and I welcome the ambitious commitment made by these partnerships.
“This will create a real incentive for the local authorities and industry to work together to reduce waste as well as reducing the environmental impact of landfill,” she added.
All authorities involved are now aiming for a long-term minimum recycling and composting rate of over 50% by 2020.
They are now expected to issue notices to prospective bidders in the Official Journal of the European Union over the next month. The climate change impacts of the proposed technologies will be assessed during the procurement process.
South London
Following the award of the PFI funding, the South London Waste Partnership said that it intended to begin its tendering process for developing a waste management facility in spring of this year with the contract awarded in spring 2011. It is expected that the new facilities would become operational in 2014/15.
The four boroughs under the partnership generate half a million tonnes of waste every year. Recycling rates are improving, but over 70% currently still goes to landfill.
Chair of the South London Waste Partnership, councillor Derek Osbourne, said: “The funding will provide a huge opportunity for us to work for a cleaner, greener and more sustainable south London. We are committed to dramatically reducing the waste we send to landfill and contributing significantly to minimising climate changing gas emissions in the atmosphere.
“We are a strong and successful partnership working together to deliver efficient services that provide value for money. Now we are going to have to take responsibility for dealing with our own waste by managing it locally,” he added.
Norfolk
In Norfolk, the county council's cabinet member for waste management and the environment, Ian Monson, also welcomed the PFI support.
He said: “The cost of dealing responsibly with waste is escalating and this huge cash boost will enable us to invest in long term facilities to treat and recover value from household waste.”
The council now plans to invite companies to put forward their bids to build and operate a facility and stressed that while its outline business case was based on energy from waste, it was considering other technologies.
Cllr Monson added: “We are keeping our options open on the best solution for Norfolk. Rather than us dictating the technology to be used, when we tender for the waste treatment facility, we will assess what different proposals are capable of as well as how much they cost. It is important that any facility meets our needs to recover more value from waste and help us avoid the huge fines and taxes we could face if we continue to landfill waste.”
The county council is providing prospective bidders with a potential site for them to use when drawing up their proposals. The location is on the Willow's Business Park on the Saddlebow Industrial Estate, south of King's Lynn, next to the Centrica power station and the new Palm Paper mill, although it acknowledged that contractors might wish to propose alternative locations.
Hertfordshire
In Hertfordshire, the council said that the PFI credits would fund a “significant proportion “of the overall £200 million cost of developing a new waste treatment facility.
“This is a great result for the county,” said Derrick Ashley, executive member for planning, external relations and waste. “In the past couple of years there has been a significant increase in the number of projects being submitted to Defra to compete for PFI support so it is really encouraging that our project has been granted funding.”
The funding will enable the council to support residents' efforts on waste reduction, reuse and recycling through the provision of a facility to recover energy from non-recyclable materials. In addition to diverting 170,000 tonnes of biodegradable municipal waste from landfill every year, the facility will also create new jobs.
At present, the award of the PFI credits is subject to 'conditional approval', which is not unusual in the PFI funding process. In order to meet these conditions, the council has to show that it has a suitable site for a new waste treatment facility. It has proposed a former secondary school site at New Barnfield, Hatfield, as a suitable location.
Following detailed studies, it concluded that the most suitable technology would be an energy from waste plant recovering both heat and electricity from the waste.
Councillor Ashley continued: “As we have stated previously, the inclusion of New Barnfield does not mean that this site will definitely be used for the new waste treatment facility. We will now be inviting potential suppliers to tender for the contract and the successful bidder may propose a completely different site and/or technology.
“In order to ensure that we end up with the most suitable facility in the best location, any proposals put forward by the successful bidder will go through a stringent planning process and will include extensive public consultation,” he added.
Hertfordshire county council hopes to appoint a final contractor for its project in March 2011 and have its facility up-and-running by March 2015.
Climate Change
Defra said that the three projects which received support were all expected to make an important contribution to tackling climate change by diverting a total of 342,600 tonnes of biodegradable municipal waste from landfill a year by 2020, and reducing carbon emissions from landfill. The total potential carbon dioxide emissions saving is believed to be approximately 137,500 tonnes.
In addition, it said that the projects would have the potential to create over 100 jobs in total once the plants are operational and up to 1000 jobs during construction and commissioning.
To date, including these recent projects, over £2.4 billion has been committed by Defra to 36 waste PFI projects, and there are another eight projects still in the application process.
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