People have realised that waste is the major source of renewable energy in the UK
Colin Drummond, Viridor
The revelation by the Taunton-based company came as its parent company Pennon Group published results for the half year to September 2009, which showed Viridor's profit before tax had grown by 14% (£22 million) compared to the same period for 2008/09.
The results showed that 40% of Viridor's profits for the period came from the recovery of resources from waste with 26% being renewable energy and 13% from its recycling operations.
The company explained that it was a “big change” that recovering value from material had overtaken landfill in terms of producing revenue.
Speaking to letsrecycle.com, Colin Drummond, chief executive of Viridor, said: “We getting more and more into renewable energy and recycling. I think what some people have realised is that waste is the major source of renewable energy in the UK.”
“We are going to treble energy generation bringing in various energy from waste and anaerobic digestion facilities.”
Energy
Mr Drummond explained that currently 1.5% of all electricity produced in the UK came from waste sources and said “my figures predict it could be as much as 6%”.
Viridor's existing energy generation amounts to 102MW, which is drawn from its landfill gas generation operations.
However, Mr Drummond said that “there is not much room for further expansion” in landfill gas operations and the future would be “more and more in recovery of energy from waste”.
He added that the firm intended to capitalise on this by tripling its energy generation operations, which will include adding a further 130MW under its PFI deal with the Greater Manchester Waste Disposal Authority (GMWDA) contract (see letsrecycle.com story).
This increase would be achieved through the construction of anaerobic digestion facilities (10MW) and work with the Ineos Chlor at Runcorn on its combined heat and power plant (120MW).
As part of the contract, the company has also taken over the operation of the existing Bolton energy-from-waste plant, which produces 9MW.
In addition, Mr Drummond pointed to the 37MW Lakeside facility being developed with waste firm Grundon at Colnbrook, which is in its final stages of commissioning, and also the capacity of energy-from-waste and AD plants at various stages of the planning process in Croydon, Somerset, Exeter, Oxford, Dunbar and Cardiff.
The emphasis switching focus to energy generation echoes a similar move by Birmingham-based Biffa in December last year (see letsrecycle.com story).
Performance
Mr Drummond explained that although the closure of the GMWDA contract “obviously helped” the company to grow profits during the economic downturn it was part of wider growth, which included the renewable energy and landfill gas generation operations.
Furthermore, Mr Drummond said the firm would continue to bid for local authority waste contracts, as long as it made “financial sense”.
He said: “We are preferred bidder in Oxfordshire and we are one of the last two in Cheshire and one of three in South Devon and we will continue to bid for others. And, the other area we are growing is in recycling with the purchase of London Recycling and Intercontinental Recycling in Skelmersdale.”
Pennon
The Viridor growth in half-year results was matched by 13% growth in profit before tax by Pennon, which also owns South West Water.
In the document, Pennon said it is “well placed in the current financial market” and has substantial cash resources and facilities at its disposal. It also explained that South West Water and Viridor remained its key focus and that it would help Viridor in “successfully exploiting the huge potential in waste-based energy generation”.
Commenting on the Viridor performance, Ken Harvey, chairman of Pennon, said: “Viridor continues to deliver a strong performance based on both organic growth and sound acquisitions. The Greater Manchester Waste PFI contract and Lakeside energy from waste project are further major steps in the delivery of Viridor's successful growth strategy.”
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