EWB Insight: August 2016

This month: UK passes peak EfW development, German biogas woes continue and a full facilities update

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UK passes peak EfW development

Construction and financing of new UK-based energy-from-waste plants peaked last year after two years of solid growth, according to new figures.

New data, compiled by consultancy Tolvik, comes as two major businesses that were heavily involved in EfW builds have both decided against pursuing further opportunities in the sector.

According to Tolvik Consulting director and waste industry expert, Adrian Judge, there is a definite levelling off. He said: "Our research suggests that the number of new EfW projects being financed is declining and so we expect 2015 will be the peak in terms of the new capacity being brought into operation."

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During August, Interserve said it was ending its four-year venture into EfW development after publishing poor first-half 2016 results, down off the back of troubled waste projects.

The story was much the same only a month earlier for rival construction firm Clugston, which has also suffered technical setbacks with its EfW development, and  said it would actively be seeking opportunities in other sectors.

While Clugston said the UK’s boom in EfW development, driven by the European Union’s Landfill Directive was drying up, another factor hitting long term development has been ever increasing refuse-derived fuel (RDF) exports.  

Data Watch

The German biogas sector added just 23MWe of capacity in 2015, the smallest increase since 2000, according to biogas association (FvB). A total of 150 new plants were put into operation in Germany last year bringing the total to 8,856. However, as 130 of those were small-scale, manure-based facilities, the boost to power generation was "relatively low".

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Policy Insight

Associations CEWEP, ESWET and FEAD raised concerns about the new EU best available techniques reference document (BREF) for waste incineration, just months before it is due to be published. The three bodies raised several objections, including a "very high chance" that legally binding emission limit values (ELVs) for incineration would be "non-implementable".

At the European Commission’s request, researchers from Danish consultancy COWI analysed the increased use of biomass from south-east US forests. The study found bioenergy was the "expected largest source" of new wood demand from the region and said this could speed up conversion of natural forests into pine plantations with lower ecological value.

Dutch biomass sustainability criteria for awarding energy subsidies are the EU’s "most comprehensive" and the only ones to deal adequately with indirect land-use change (ILUC) impacts, said a report edited by green group Fern.

A report from the European Court of Auditors (ECA) cast doubt on the reliability of the EU’s system for certifying sustainable biofuels. The majority of EU biofuels, mainly bioethanol and biodiesel, are certified through Commission-recognised voluntary schemes. But, the ECA said there were "weaknesses" in the procedures and its supervision.

The UK government’s decision to restrict financial aid to biomass-based combined heat and power (CHP) plants came under fire from the Renewable Energy Association (REA). The change reduces funding available to facilities that direct less than 20% of their fuel towards electricity.

EfW operators in Turkey became eligible for state support for renewables as part of changes to the country’s Electricity Market and Renewable Energy laws. The change included EfW in the definition of biomass, meaning it would be able to apply for subsidies.

Denmark’s Dansk Fjernvarme called for an "open and public debate" on district heating’s future after a government-commissioned report identified a potential for €228m savings in the sector. The association called the report, which has not yet been made public, by consultancy McKinsey a "democratic challenge".

Market Update

Hong Kong-based China Everbright’s financial results for the first six months of 2016 showed its EBITDA was up 12% to about €148m for its EfW, sludge and food waste treatment operations. The company said a continued focus on overseas expansion would "ensure long-term sustainable growth". Earlier this year it bought Poland-based RDF and biogas business Novago for €123m, in its foray into Europe.

Spain-based Abengoa said it expecte creditors to agree a €1.47bn recovery package at the end of September and its cash flow would turn positive by the end of 2017. The company also confirmed that sales of its European and US bioenergy divisions, which are focused mainly on bioethanol, were at an "advanced stage".

The UK government-backed Low Carbon Contracts Company stated that remaining projects applying for contracts for difference (CfD) funding had reached necessary "milestone markers", enabling their applications to proceed. Three waste processing facilities and a host of wind projects had not hit an official deadline that passed this spring.

Two Swiss businesses announced plans to merge, creating one company targeting the biomass heat and photovoltaic solar sectors. Solothurn-based AEK Energie and Langenthal-headquartered onyx Energie Mittelland said they would form AEK onyx in November. The precise nature of the company will be announced after a formal consultation with staff of both companies.

Eggersmann Group took over fellow German business Bekon to give it a foothold in the biogas sector. According to a letter sent to customers, Bekon is "very pleased" with the deal as it offers opportunities to develop new projects both nationally and internationally. Bekon, founded in 1992, holds about 30 patents for biogas technologies using dry fermentation and will continue to trade under its own name.

UK-based Aquapak Polymers announced it had developed a biogas-friendly packaging polymer. The polymer is currently at the demonstration stage but could soon move to full production. It dissolves in water so should not need to be separated from food sent to biogas plants.

NGF Nature Energy revealed plans for two more large-scale biogas plants in Denmark. The facilities, in Middelfart and Kolding, are each expected to have capacities to process 400,000 tonnes of biomass per year, producing about 26 million cubic metres of biogas annually.

Facilities Update

Development of Copenhagen’s opulent Amager Bakke EfW plant (pictured below) was thrown a lifeline after a municipality agreed it could import waste from 2020. Copenhagen’s financial committee said that imports would be subject to the agreement of four other local authorities. It was originally agreed that the facility, due to open next year, would not import waste.

Finland-based Metsä announced that construction of its bioenergy-powered pulp mill in Äänekoski had reached the halfway point in August. The €1.1bn plant will be powered solely by biomass energy.

Also in Finland, Lahti Energia revealed plans for a new biomass-fired plant to replace the coal-powered Kymijärvi I station, which opened in 1976. The €165m cogeneration project, which would save it about €10m a year in coal costs by using forestry residues, is due to start construction this autumn.

Finland-based Fortum won a contract to operate the under-development MGT Teesside’s power plant (pictured below) in north-east England. The agreement covers the operation and maintenance services of the 299MW biomass-fired cogeneration plant, which is due to be operational by 2020.

An EfW plant planned for the German city of Olbernhau, next to the Czech border, failed to win EU funding, threatening delays and potential cancellation. The project is understood to have been backed by an unnamed Chinese investor, who unsuccessfully applied for the EU to grant financial support.

Three unidentified UK biomass plants to be run by Dutch developer Kara Energy Systems will operate with Siemens turbines. The SST-040 turbines will be made at Siemens’ production site in Frankenhal, Germany, and will be designed to have a capacity in the range of 300-420kW.

NGO Biofuelwatch criticised plans to convert the coal-fired Lynemouth power plant in the UK to biomass. More than half the plant’s feedstock is due to be  sourced from North American wood chip supplier Enviva. Biofuelwatch said there was "compelling evidence" Enviva uses whole trees from clearcut biodiverse coastal forests and has been logging wetland forests in North Carolina.

Czech customs officers began using an EfW plant in Brno, the country’s largest city, to destroy shipments of illegally imported tobacco. About 118 million cigarettes and around 180 tonnes of tobacco smuggled into the Czech Republic have been processed so far.

Lithuania-based Enerstena announced a contract to build a 4MWth biomass energy plant in the western Ukrainian city of Ivano-Frankivsk. The company said this was its first contract in the Ukraine and that it could complete construction within nine months at a cost of €1.3m.

The UK Green Investment Bank revealed £13.2m in funding for construction of a 2.2MW biogas cogeneration facility. The facility, in Nottinghamshire, will use poultry litter, straw, and other agricultural feedstock from nearby farms, supplying electricity and heat to local businesses.

Consultancy Arup won a contract to design the Kemsley cogeneration plant for Wheelabrator Technologies. The £340m, 43MWe facility will process 550,000 tonnes of waste per year and will also supply a neighbouring papermill with steam. Arup will work with civil contractor Clugston Construction and principal contractor, CNIM Group, over the 36 month build.

Burmeister & Wain Energy (BWE) was selected to supply a woodchip-fired boiler for a plant near Sandwich, known as the Kent CHP facility. The 77.8MTth device will burn virgin wood and forest residues and is due to begin operating in summer 2018.

Austria-based Ennox Biogas Technology replaced outdated equipment at a couple of biogas facilities based in Austria and Germany. New gasbags, filling level indication and safety equipment were added to the Kläranlage Zellhof plant, outside Salzburg and the Klärwerk Trostberg facility in south Germany.

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