EWB Insight report: Feb 2023

This month: Interest in biogas facilities continues to rise, Sweden holds stance on bioenergy, Northacre gains planning consent, and our regular full facilities update

The planned Darwen-based biogas plant

Biogas plants have been changing hands at an increasing rate over the past few months with the trend clearly accelerating in February. 

Multinational investment bank Goldman Sachs revealed plans to invest €1bn into the growing biomethane-production market over the next four years. It has started with a deal to buy Verdalia Bioenergy, which has a portfolio of biomethane projects in “mid-stage development” in Spain, with total capacity of about 150GWh per year. 

Another fund, Copenhagen Infrastructure Partners (CIP) also bought a large-scale biomethane-producing plant known as Envo Biogas in Tønder. CIP said it had bought the facility from Canada-based biogas company Anaergia, but did not disclose financial terms. 

Currently the plant is “expected” to be commissioned by 2025, but has suffered from delays in the past. When it is up and running it will process about 900,000t/yr a year of “agricultural and industrial organic waste” into around 40 million m3 of biomethane. As a result the project is one of Europe’s largest planned biogas plants. 

EWB also understands the trend for consolidation in the biogas sector is likely to continue with investors and fossil fuel companies all keen to invest in new facilities to produce biogas, which can be upgraded to biomethane. 

However, the only business pulling out of the sector has been Denmark-based utility giant Ørsted. It confirmed in February “waste treatment is no longer part of our business model and strategic focus” and as a result it is looking for a buyer for its UK-based Renescience facility. 

The exit from waste and sale of the facility was revealed in the company’s annual report for 2022. The Northwich-based Renescience facility was delivered behind schedule, but produced both biogas and solid-recovered fuel and has been running for more than a year. 

However, even with increased prices for power, Ørsted did not see the facility in its future. The UK has also started its 'Electricity Generator Levy' (EGL), which is a temporary 45% tax on renewable power. 

While it is not clear how much of an impact it would have on Renescience, the government has said the tax would be applied across a company’s portfolio and would therefore hit Ørsted’s much-larger interests in wind power across the UK.

Policy update 

Sweden, which holds the six-month rotating EU Council presidency, refused to discuss a European Commission compromise proposal for biomass definitions in the ‘trilogue’ negotiations on the revision of the Renewable Energy Directive (RED) that were held in Strasbourg in February. Ahead of the talks, the Swedish presidency had put forward a new definition of primary woody biomass that only excluded “quality roundwood”.

CEWEP, the EfW trade association, and FEAD, the European Waste Management Association, strongly criticised a study carried out by UK-based waste consultancy Eunomia, on behalf of Reloop and Zero Waste Europe. The study claims that applying sorting systems to mixed waste prior to thermal treatment and landfilling can significantly support Europe’s climate objectives and contribute to achieving ambitious plastics and municipal waste recycling targets. 

UK government department DEFRA removed digestate as a source of ammonia pollution in a key emissions reduction plan, leaving it on track to achieve compliance with legally binding targets, although it has faced criticism over the removal. 

The much-anticipated second part of an independent review into the role of energy recovery in the waste hierarchy in Scotland was released. At the time of publishing, the government had yet to respond to the second part of the review, but it broadly backed all the recommendations of the first part, which would indicate a similar approach would be taken to the second half. 

Recycling and recovery activities in Scotland contributed the equivalent of the UK’s 6% of the UK waste sector’s total avoided emissions, according to a report published by the Scottish Environmental Services Association (SESA).The trade body commissioned consultants Ricardo AEA to understand the Scottish waste sector’s contribution to greenhouse gas emissions generated by the UK’s waste and recycling sector.

Local authority-owned North London Waste Authority (NLWA) paid back £10.2m (€11.5m) after increasing profits from its EfW plant and called on the government to rethink its current tax policy on the sector. The NLWA also called for publicly owned EfW facilities to be “excluded” from the electricity generator levy, which began on 1 January. 

Denmark’s government is now in the process of restarting its controversial policy of closing down EfW capacity. The policy originally emerged in 2020, but a year later a number of government bodies, including its energy agency Energistyrelsen dismissed it. It then slipped off the political radar, until now. 

Waste management firm Veolia criticised the amount of money invested in fighting waste crime in the UK. Veolia said waste crimes was a “£1bn illegal industry and only a fraction of what's needed is being allocated to bring these criminals to justice, when every pound spent on stopping waste crime brings an immediate return on investment”.

Market update

Aviation and renewables business Esken revealed a dent in its profits from “continued and further unforeseen outages” at biomass-processing plants it supplies. Overall, the company’s profits were down £2m (€2.2m) due to the outages at facilities it supplies, which in turn “reduced the total volume of waste wood supplied by Esken and the associated gate fee income”. 

Local authority Surrey County Council issued a new waste management contract saying it “anticipates” levels remaining steady at around the 200,000t/yr mark. The tender is open until 10 March and hopes to find a contractor to deal with the county’s waste until December 2037. Currently, Suez holds the deal. 

Local authority West Sussex County Council also tendered a £396m (€407m) contract to collect RDF from a mechanical biological treatment (MBT) plant and transport it for treatment or disposal. The successful bidder must be able to demonstrate it can divert at least 92% of RDF from landfill, according to the tender documents.

Veolia revealed its EfW, biomass-fired landfill gas and biogas plants generated 856GWh under the Renewable Energy Guarantees of Origin (REGO) scheme last year. It said it created more than six times the energy it needed for its 400 offices and sites across the UK. Overall, Veolia said it was supplying the “secure annual equivalent” to power 240,000 homes.  

Staying with Veolia, it has also revealed plans to expand its work in the clinical and medical waste sector. It aims to deliver 15,000 tonnes of clinical waste capacity, through “specially adapted and modified” EfW facilities, as well as its existing clinical capacity, and Ellesmere Port-based HTI site.

Sintef revealed it is working with the municipality of Årdal to develop a new form of carbon capture from EfW plants. Sintef switched from developing technology at the Oslo-based Haraldrud EfW facility, to developing a new demonstration facility planned in Årdal. 

Waste aggregator Andusia confirmed a second loose-waste deal this year. It is working with Buckinghamshire and Oxfordshire-based skip company Bucks Recycling.

Facilities update: EfW 

An industry source told EWB how they felt “pressure” to come up with a solution supportive of plans to rectify and use the Derby-based EfW facility. Speaking anonymously, the source explained they were asked to prepare a report on the future of the failed EfW facility, which Derby City and County Councils voted to restart work on in February. 

Northacre Renewable Energy Limited (NREL) secured planning permission to develop a grate-based facility in Westbury, allowing it to drop plans for a consented gasification facility, which were allowed in 2019. EWB was mentioned in the appeal process, which referenced coverage of a story where NREL was considering developing the gasification plant if it did not get consent. 

Local authority Aberdeen City Council confirmed the first waste was dropped in the bunker of the close-to-operational NESS EfW plant. Currently, the facility is officially in the hot commissioning phase and is “expected to become fully operational later in 2023”. It had been expected to be operational by the end of last year. Previously a target of this summer has been given.

The Indaver-led Becon Consortium confirmed a judicial review of the refusal of its Hightown Quarry-based EfW plant will be heard in April. A spokesperson for the consortium told EWB leave had been granted for April, with the hearing set to last up to three days. The hearing is needed after Becon pushed ahead with legal action last June, over the refusal of its previously consented 300,000t/yr EfW plant. 

The Planning Inspectorate confirmed the preliminary meeting into a potential expansion of the Slough Multifuel EfW plant’s electrical capacity took place in February. Developers SSE Slough Multifuel put in a bid in late September last year to increase the under-construction plant’s consented capacity from 50MWe to 60MWe.

A hearing started on plans by MVV for a 58MWe EfW in Cambridgeshire. The facility, known as MVV Environment Medworth, will divert more than half a million tonnes of non-recyclable waste from landfill every year, and potentially supplying steam to local factories. 

Urbaser Environmental secured a £9m (€10.2m) O&M contract for the Dudley-based EfW plant. According to a contract award notice, local authority Dudley Metropolitan Borough Council awarded the deal as it considers the next steps for the facility. The council had started the tender process last summer. 

EfW plant developer Powerhouse Energy Group signed a deal with Petrofac for its planned plastic-to-hydrogen developments. Powerhouse said Petrofac would provide “engineering design and supply chain development services” for its pipeline of projects, including the plastics-to-hydrogen project at Protos.

EfW plant developer Circular Fuels confirmed it has submitted a planning application for its Teesworks-based waste-to-dimethyl ether (DME) facility. It said a planning application had gone in for the facility, which aims to process “about” 220,000 tonnes a year of waste. Should the facility gain planning consent and become operational in 2025 as the developer hopes, it would be the first such plant in the UK, according to a statement. 

Local authority Sunderland City Council gave planning consent to a plastic-to-liquid facility planned by Norway-based Quantafuel. The company had applied to build the project last summer, saying at the time it was the first such facility planned for the UK. The new statement clarifies that construction is expected to “start later this year, with the plant opening in 2025”. 

Eqtec confirmed it is talking to other potential buyers for its Deeside-based project after talks with a “first prospective investor did not reach mutually acceptable terms”. Black & Veatch is onboard with the project, once funds to build are in place. 

Beo Cista Energija’s (BCE) Belgrade-based EfW plant has completed its first fire on waste. Multinational Suez and Japan-based Itochu won the contract, worth €285m, to build and operate the EfW plant in 2017, forming the BCE joint venture for the project. Luxembourg-based investment fund Marguerite then joined the consortium by buying a 20% stake in BCE in 2018. The EfW plant will process up to 340,000t/yr of household waste and a further 200,000t/yr of commercial and demolition waste.

Local authority Isle of Wight Council says its EfW plant is back on track with hot commissioning under way and a new target of being operational by the summer. A council spokesperson told EWB the plant was now making progress as it looked to put a series of false starts behind it. The council has previously claimed the facility was in the “final stages of commissioning” in May 2021 and when construction began back in May 2017, work was expected to be fully complete by the summer of 2019. 

Facilities update: Biomass 

Majority biomass-fired power station Drax posted an increase in core profits to £731m (€830m) for 2022. The company’s adjusted EBITDA, which was announced today, was up 84% from 2021’s £398m (€452m).

Staying with Drax, the Health and Safety Executive (HSE) also confirmed it will discontinue its prosecution of Drax Power over alleged health and safety failings. A spokesperson for the HSE said the decision to end the action was taken after “Drax supplied new information about the design and the commissioning of infrastructure at its power station near Selby, intended to minimise workers’ exposure to wood dust contained in biomass”. The power station has always denied any wrongdoing. 

UK-based biofuel supplier Green Biofuels Limited (GBF) launched Ireland’s first renewable biofuel terminal at Cork Harbour. The new 53 million litre terminal took its first cargo delivery in January and will act as both an import facility to service increasing demand for hydrogenated vegetable oil (HVO) renewable fuel in Ireland, and a blending/export facility for collection and use of renewable fuels overseas. 

Biomass-gasification plant developer Monnow Valley CHP asked its creditors for a nine-month extension before it starts to repay them as it battles with rising costs of woodchips and spare parts. In a letter to its creditors, sent in February and seen by EWB, the company said “unforeseen circumstances” meant it would miss the first repayment deadline established under its company voluntary arrangement (CVA). 

Engineering company Andritz revealed it and utility company E.ON have signed a deal for a waste-processing boiler for the planned Aschaffenburg-based facility. The 30MWth plant, which is due to be operational in 2025, will process paper-industry waste and sewage. 

Multinational insurance giant Aviva’s appeal over a local authority's decision to order the demolition of its Barry-based waste wood gasification plant is due to start on 16 May, it was confirmed during February. EWB understands the process is scheduled to last for eight days and will be held at the Memo Arts Centre in Barry. Back in September of 2021, the Vale of Glamorgan Council unanimously backed plans to knock down the facility, due to what it called significant inconsistencies between what was approved to be built, and what was constructed.

Facilities update: Biogas 

Local authority Surrey County Council reached an agreement with Suez recycling and recovery UK for the waste company to continue operating the Eco Park in Spelthorne. The council said its legal battle with Suez, which began in 2021, was over after both parties entered into a settlement agreement. The waste-gasification plant was only confirmed as operational last year, when Suez’s now chief sustainability officer Adam Read, revealed it had started operating on EWB’s Burning Issue podcast. The site, which includes a waste-gasification plant and a biogas-producing facility, was originally meant to be fully operational by November 2017, treating 55,000t/yr of municipal waste and 40,000t/yr of food waste. 

Staying with Suez, local authority Blackburn with Darwen Council has given its plans to develop a large scale biogas plant the greenlight. The 100,000t/yr will process food waste from “the wider Lancashire area”. 

Local authority Somerset County Council resolved to vary the layout of an anaerobic digestion facility at an industrial estate near Shepton Mallet and to revise the noise mitigation measures.The plant being built by Bioconstruct, was within an employment site developed on former railway sidings and was surrounded by agricultural land and scattered houses and farms. In January, the plant’s owner Adapt Biogas said the facility had sent its first biomethane to the grid and is currently ramping up to its full capacity. 

A biogas plant in the western Swedish town of Götene was granted its final building permits at the end of January.The facility, to be built and operated by Finnish state-owned energy company Gasum, will produce liquefied biogas (LBG) equivalent to 120GWh a year from early 2025.The plant will process around 400,000t/yr of feedstock, which will be mainly manure.

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