Clarity on government policy is needed to unlock money from private investors to build infrastructure projects, a leading figure has said.
Speaking at the London First Infrastructure Summit last Thursday, Cory Riverside Energy chief executive Nicholas Pollard said if the UK turned all of its waste into energy a massive 13.7TWhr could be produced each year.
The ex-Bovis and Balfour Beatty chief executive said the plants required no government funding as private investors were lined up to build them, but he was “deeply frustrated” over lack of clarity from the government which meant they could not go ahead.
“If we made energy from all our waste we would generate 13.7 TWhr a year, that’s half a Hinkley Point,” he said. “Now that doesn’t need subsidy, that doesn’t need a fancy type of contract, that just needs common sense.”
Currently, he said the UK pays to export around 4M.t a year to the Continent where it is then turned into electricity, with another 9M.t to 10M.t of the same quality waste put into landfill. Even with an increase in recycling and a decrease in the amount going to landfill, he says there will still be a significant amount of unrecyclable waste to deal with by 2030.
But he said the government’s policies around building more plants to deal with the problem, contradicted the reality of the world around it. He said the government has not acknowledged that there is a problem.
Without this certainty, he said, investors could not guarantee and would be taking a risk on the supply of waste available for the plants, and would therefore not invest in building the plants.
“If you’ve got government aligned against you, then when a banker looks at it, it throws doubt on the business case,” he said. “It means it’s more difficult to fund or it’s expensive because the bank perceives unnecessarily that it’s risky, but it’s not.
“It also makes it more difficult to get planning because the first question is why is it needed and they look to government articles and they see that they say it’s not needed.”
Pollard said energy from waste (EFW) was a “win-win” for the UK; a solution for excess waste, creator of jobs, a way of creating a baseload, non-intermittent source of electricity and the ash created, could be used as aggregate in schemes like the M25 widening.
Another area which is affected by the lack of clarity is with the regulator. He said if the government and consequently regulation flip flopped, the business case could be damaged with revenues dropping as a consequence.
“It’s important to have joined up regulation and policy and then the industry can then efficiently design, secure planning, secure finance and build that are necessary to process this waste,” he said.
He said the government could even help industry, not by financing it, but by creating sensible policies.
“What the government could do is say in five years’ time, we’re going to create a refuse derived fuel (RDF) tax [the processed waste which is then shipped abroad] in a set of steps. That‘s what it did for landfill tax so it knows it works. If it did that, then all of the businesses who deal with waste would be able to go to a banker and present a strong business case for waste coming in to the UK plants because it will become uneconomic to ship it abroad.
“It would be beneficial to government as it would get a short term replacement for the landfill tax and in the longer term it would get a more rapid and efficient investment in the UKs energy from waste capability.”