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Energy from Waste: Between a ROC and a hard place

Ironic isn’t it that at a time we appear to have a waste infrastructure capacity gap. We are exporting over 1.5M.t per annum of refuse derived fuel to mainland Europe, enough to provide power for about half a million households, yet we have a hiatus in the development of our own domestic energy from waste facilities.

The UK Government’s “Renewable Energy Roadmap” has been a bumpy road with various government consultations causing the industry to stall. Most recently consultations on Grace Periods, and the Allocation of Contracts for Difference have “frightened the horses” leaving developers and their prospective funders pondering what to do and when to do it …if at all.

Energy from waste (EfW) projects, inherently more complex than many renewable technologies, are particularly affected. For the contracting fraternity, it means projects still on hold, with a start date just about visible on the horizon This no man’s land is a real frustration, keeping the project team ticking over but not able to fully engage the supply chain, get design details finalised and get cracking on site. It costs everybody money especially if there are dates to be met for power generation to grid. Two things all contractors crave, visibility and continuity of work are sorely lacking in the renewables sector.

The industry is grown up enough to recognise that renewables incentives cannot be a bottomless pit and that only good projects with a strong business case deserve funding. It’s also recognises that debt providers, having been lambasted for being too reckless in the pre-crash era, are now not surprisingly taking a more cautious view of life. But we do need to get funds moving.  The current consultation on Contracts for Difference (CfD) has derailed or at best delayed several projects that we are aware of, particularly in the transition period between ROCs (Renewable Obligation Certificates) and CfD. There is some clarity leaking into the market in respect of the approach to allocation and strikeprice for less established technologies, like gasification but there is still a lot more detail eagerly awaited.

Energy from waste using material that cannot be recycled and would otherwise be destined for landfill makes sense, it ticks all the boxes.  Essentially exporting our renewable energy ‘raw fuel’ to Sweden, Denmark, Latvia etc can’t really be a sensible long term solution; it certainly doesn’t go towards the UK renewables target! However the developer fraternity, not to mention their contractors, need more clarity, peppered perhaps with a degree of certainty.  Especially, if they are to embark upon perhaps a three year journey, from concept to financial close, on an EfW scheme. Would  you enter such an arena without a modicum of certainty in the mix?

We need a timely conclusion to the current consultations so that the broadly aligned objectives of waste management and renewable energy production can be achieved. EfW infrastructure is central to this and the new breed of more efficient advanced thermal technologies will help ensure the UK meets it 2020 renewable energy target. So come on, the Department of Energy and Climate Change, help us get on with it!

  • Ian Miller is MWH operations director for waste and energy

 

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