EWB Insight: June 2016

This month: UK looks to the positives for energy-from-waste after Brexit vote, EfW’s developing role in the circular economy and positive developments on coal-to-biomass conversion projects in Denmark and Belgium.

EfW sector reacts to Brexit

To read the insight as a PDF click here.

The UK’s energy-from-waste market is attempting to find positives from the nation’s surprise vote on 23 June to leave the European Union.

Business leaders are looking on the decision as an opportunity for the UK to develop better EfW infrastructure and perhaps improve the collection of food waste for biogas treatment.

Untha UK managing director, Marcus Brew, who is a specialist in the RDF and SRF markets, said UK waste export businesses could benefit from a weaker pound in the short term as most contracts are made in euros.

In the longer term, however, and especially if the UK leaves the UK single market, there could be negatives. Brew said: "Waste to Europe is pretty much an open door right now, but that door is going to close. It’s not a strong voice (the RDF market) so I am concerned it will be a tickbox exercise as more pressing matters could take precedence."

On the other hand, Brew also said that any reduction in UK RDF exports could "breathe new life" into the UK’s domestic EfW market: "The UK has been sending millions of tonnes a year to Europe; what is going to happen to it? Landfill can’t be restarted, so it is an opportunity to invest in our infrastructure. This industry must be strong and pull together or we are going to be sidelined."

The UK chief executive of France-based multinational SUEZ, David Palmer-Jones, who is also president of European Federation of Waste Management and Environmental Services (FEAD)was clearly downcast following the vote.

He said: "Our focus remains with our policy of deriving the maximum value and energy from the waste Britain's households and businesses produce every day. While the UK renegotiates its EU membership for the years ahead there is a risk of a void at a national policy level.

"As we transition to a more resource efficient economy, something to which all UK devolved administrations aspire, the waste and resources sector continues to seek vision and leadership from Whitehall. EU membership for Britain has been a crucial and effective driver of environmental policy and legislation which has seen the United Kingdom transform from being the ‘dirty man of Europe’ to a solid environmental performer."

Pennon, owner of solely UK-based EfW business Viridor, said in a short statement it had conducted "extensive analysis" of the possible implications of a vote to leave and considers it is likely to have a "limited operational impact" on the company.

Anaerobic digestion business ReFood’s commercial director, Philip Simpson, chose to look at the positives. He said: "Let’s use Brexit as a springboard for introducing a total ban on food waste to landfill in England. Free from the shackles of EU red-tape, DEFRA has a critical role to play in setting such targets and can help Britain to implement waste management laws at a far greater speed – tailored with the country’s needs firmly in mind."

The Environmental Services Association, executive director, Jacob Hayler, said: "Once the dust settles it will be absolutely critical for investment in our industry that the government acts quickly to set out the terms of a UK exit and what it means for the waste sector."

A spokeswoman for Dutch EfW company AEB Amsterdam, which is a large importer of UK RDF, said it was still looking at the implications, but that it was "too early to say something".  A view that was echoed by other businesses and trade associations, based in Europe.

Data Watch

Data from the UK and French national grids shows how British electricity production from biomass has grown enormously in the past five years, while production in France has plateaued. The conversion of coal-fired boilers at Drax power station to biomass has been a major driver of the growth in UK production.

Policy Insight

European waste management association FEAD called on the European Commission to extend its plan to boost energy recovery from non-recyclable municipal waste to commercial and industrial (C&I) streams. The Commission is due to publish a policy paper on energy-from-waste before the end of the year.

Separately, the Commission official leading preparation of the EfW communication Jorge Diaz Del Castillo told the CEWEP annual congress in Rotterdam that while the EU’s waste hierarchy was not up for revision, EfW technologies’ place in it would be "redrawn" by the communication.

At the same event DG Environment’s acting head of clean technologies, Fulvia Raffaei, said Europe’s municipalities must "ensure the right conditions" for the development of EfW technologies. Local authority-led initiatives, such as separate collection of waste streams was "crucial".

Responding to a draft EU regulation on security of .gas supply, the European Biogas Association called for greater recognition of the potential of biogas to safeguard long-term energy security in Europe. The regulation should encourage connection of biomethane producers to the grid and give greater weight to the climate change benefits of biomethane, it said.

Meanwhile, UK-based Andigestion criticised government proposals to reduce subsidies for larger biogas-to-electricity plants and argued that it should not promote biomethane production over of electricity from biogas. The world "is awash" with natural gas, said executive chairman Peter Prior.

The Swedish government launched a year-long review into a possible tax on waste incineration. The review will look at EfW infrastructure as well as domestic waste generation and imports. Norway abolished a similar tax in 2010 after it encouraged large-scale exports of waste to Sweden.

Stronger policies on waste collection drove an increase in energy recovery from waste in Sweden in 2015, according to Avfall Sverige. Household waste incineration rose 6% to 2.2 million tonnes. Biological treatment was up 7% to 729,000 tonnes, although the latter figure includes composting as well as biogas production.

Market Update

Levels of new biogas facility construction in Europe are unlikely to again match the boom years around 2011, German consultancy ecoprog said. The sector is slowing due to cuts in subsidies, even though Europe will remain the "most important market for new biogas plants" globally until 2025.

Half of under-development UK biogas projects are "unlikely to see the light of day", according to research by UK consultancy BDS Marketing Research. It said there were 110 consented but unimplemented biogas projects at risk.

Bankrupt firm German Pellets sold its Flanders-based Langerlo NV power plant (pictured below) to subsidiaries of a rival wood pellet producer Estonia-based Graanul Invest. After conversion to biomass from coal and gas the plant is due to start operating in 2018.

Alcogroup, Groep Vanden, Avenne Commodities and Vandema jointly bought Abengoa’s Rotterdam-based bioethanol production facility for an undisclosed sum, following the bankruptcy of the Spanish firm’s Dutch arm. The plant is one of Europe’s largest biorefineries, with an annual production capacity of 480 million litres. It also has a capacity of 48MWe.

Veolia said that its entire portfolio of ten UK-based EfW plants had achieved coveted R1 recovery rather than disposal status and claimed at UK first among operators. The plants take a combined 2 million tonnes of waste per year and have a production capacity of 240MWe.

UK-based Viridor revealed an adjusted EBITDA up 30.5% to £176.5m in 2015/16 from 2014/15’s £135.3m. The increase was driven by eight of Viridor’s planned 11 EfW plants now being operational. Six of the facilities went online between 2014/15 and the first half of 2015/16, according to a financial report by Viridor’s parent company Pennon.

The Czech owners of Lynemouth Power Station in the UK signed an agreement with US-based Enviva to take 800,000 tonnes per year of wood pellets until 2027. Energetický a Pruumyslový Holding (EPH) is converting Lynemouth to be powered by biomass rather than coal from next year.

Researchers at Hamburg University of Technology said they had demonstrated 89% recovery of metal residues from incinerator bottom ash (IBA) based on tests at a German EfW plant. The current average across Europe is only 50% the university said.

Britain’s WRAP organisation released its annual gate fee report showing that EfW plants built before 2000 charged an average of £56/t in 2015, well down from its estimate of £73/t in 2014. Newer facilities charged a median of £95/t, marginally down on the previous year.

Britain’s Anaerobic Digestion and Bioresources Association (ADBA) highlighted rapid growth in UK on-farm anaerobic digestion, reporting that numbers of such plants had increases from 19 in 2009 to 200 now.

Facilities Update

DONG Energy said it would complete conversion of one of three lines at Avedøre power station from coal and natural gas to biomass this autumn. The line will burn about 1.2 million tonnes of biomass per year, providing heat for 65,000 Copenhagen households.

Chemical manufacturer Calachem submitted a planning application for an RDF-fired power plant to Falkirk Council. The Replacement Energy Plant, will process up to 200,000 tonnes of RDF a year, depending on calorific value. It will have capacities of 15MWth and 15MWe.

Nestlé Waters and Groupe E Greenwatt jointly opened Switzerland’s largest agricultural biogas plant. The facility (pictured below) will process 25,000 tonnes of cattle and chicken manure and about 3,800 tonnes of food waste, mainly coffee grounds, from the production of Nespresso and Nescafé. It will produce about 4,000MWh of electricity and around 4,500MWh of heat annually.

Two years of construction work got underway in Zabrze, Poland, on a €200m multi-fuel cogeneration facility. Finland’s Fortum is developing the plant that will be fired on about 200,000 tonnes of RDF, coal and biomass. The facility will have capacities of 145MWth and 75MWe when it enters operation in 2018.

A €140m waste-fired UAB Kaunas cogeneration plant in Lithuania received planning approval. The developer is Kauno Kogeneracine Jegaine, owned by Lietuvos Energija (51%) and Fortum (49%). The facility will process up to 200,000 tonnes per year of municipal waste and have output capacities of 24MWe and 71MWth.

Peel Environment gained planning consent for the Bilsthorpe Energy Centre waste-processing plasma gasification facility. The UK government approved the project having delayed a decision after rival developer Air Products said it was scrapping development of two similar facilities. Bilsthorpe’s technology is "demonstrably proven and in operation elsewhere", according to the government. The facility will have a capacity of about 14MWe.

A 68MWth woodchip-fired plant jointly developed by Nokian Tyres and Nokianvirran Energia entered operations. Located in Nokia, Finland, the plant will replace up to 70% of the tyre makers’ energy consumption, which used to be mainly natural gas.

French police evicted trade union protesters from Ivry EfW plant in Paris after a 23-day occupation, part of a wave on industrial action triggered by proposed French labour reforms. Plant owner Syctom said the eviction was "peaceful". But the World Federation of Trade Unions called it a "violent evacuation". The Ivry plant incinerates nearly 700,000 tonnes of waste a year to produce electricity, heat and steam.

UK local authority Northampton Borough Council withdrew an option to make land available for an EfW facility by Rolton Kilbride. The municipality blamed a lack of public consultation by the business.

Northern Ireland’s Antrim and Newtownabbey Borough Council said it was reconsidering its commitment to a planned 14MWe EfW, being developed by arc21. The authority is one of 11 municipalities making up arc21, but it wants reassurances over the duration of the contract, gate fee, minimum guaranteed tonnages and other elements.

The ITPOK EfW plant in Poznan, Poland, started burning waste and producing electricity. Sita Zielona Energia said it expected the plant (pictured below), which will process 210,000 tonnes of waste per year, to be fully operational by the end of November. However, "errors in the design documentation" and at least one "collision with underground infrastructure" has slowed progress on a new road network, which may delay an official opening.

The waste-fired K3 CHP Facility, under-development by K3CHP in the UK, belatedly passed its contracts for difference (CfD) milestone, according to the Low Carbon Contracts Company. The facility will have a capacity of 45MWe and will operate as a merchant plant processing about 550,000 tonnes of waste a year.

Valmet revealed a contract with Kotkan Energia to automate the latter’s Hovinsaari biomass-fired boiler’s turbine at its plant in Kotka, Finland. The contrac also covers modernising the turbine. The plant has a biomass system with capacities of 37MWth, 15-20MW steam and 15 MWe. It is fuelled mainly on industrial waste wood, forest residues and peat.

The Grøngas Vrå facility in Denmark was officially opened after an 11-month build. The €15m facility is a joint venture between E.ON and local landowner Jens Peter Lunden. The plant will annually process up to 300,000 tonnes of biomass, of which about 250,000 tonnes will be manure and the rest agricultural waste.

Finland’s KPA Unicon reported full operation for a steam boiler plant it delivered to Lahti Energia. The plant is designed to process wet biomass and mainly uses undried woodchips. It has a capacity of 13MWth.

Bournheath Parish Council objected to plans by Veolia to build an IBA reprocessing facility at a quarry in Worcestershire, UK. The plant would process 120,000 tonnes per year of IBA from the company’s EfW plants. Worcestershire County Council will decide on the application, which is open for comments until 15 July.

A biomass-fired energy plant in Wrexham, north Wales received £25m in funding from the Green Investment Bank, giving the green light for construction to begin. The 5.4MWe plant is the second to be developed by Liverpool-based Green Plan Energy. It will generate around 34GWh of electricity per year and will be combined and power (CHP) "ready".

Plans by Moor Bio-Energy to build a 4MW biogas-to-grid facility in Lincolnshire were approved by Lincolnshire County Council. The plant will process up to 55,000 tonnes of mixed feedstock per year.


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