There’s going to be a £2bn-a-year building boom in energy-from-waste plants, like this one, over the next 15 years. Kristina Smith finds out how to turn base matter into gold

“It’s a wonderful place to be at the moment,”says Mark Huddart, Costain’s waste director, with heartfelt enthusiasm. It might surprise you to know he’s talking about the waste business, and specifically, building plants that turn waste into energy. A quick scan of the facts explains things. According to John Oakey, head of the Energy Technology Centre at Cranfield University, we need 468 energy from waste (EfW) plants of various types between now and 2025, with investment in the market rising to £2bn a year.

Huddart and his waste sector colleagues can thank the EU landfill directive for this building bonanza. The government aims to recycle 50% and recover 25% of municipal waste by 2020, with between £9bn and £11bn to be invested in the public sector by then. Meanwhile the commercial and industrial sector, which produces twice as much waste as households, is starting to look for ways to avoid the cost of landfill, which will be £80 per tonne by 2014 plus gate fees.

As appealing as all this sounds, the EfW market does come with challenges because it’s a risky business and one that few people want happening in their back yard. So if you’re interested in working in EfW, be prepared for a tortuous planning process and long hours spent wrangling over contractual details. If you can handle that, then this market is well worth a look.

What’s being built

To date, many of the EfW plants, which burn rubbish to produce heat which then makes steam to turn power station turbines, have been built under the government’s PFI programme. Now in its fourth and final round, there are still plenty of opportunities of work there. Firms with a PFI track record include Covanta, MVV Umvelt, United Utilities, Amey Cespa, Urbaser and CNIM.

And now the big waste operators such as Veolia, Viridor, Sita UK, Waste Recycling Group, Cory and Shanks are speculatively developing “merchant plants” which will take a mixture of household and commercial and industrial waste. The Lakeside EfW, developed jointly by Viridor and Grundon, at Colnbrook near Slough is a merchant plant which officially opened for business this year. And Cory Environmental is developing what will be the UK’s biggest EfW plant, Riverside, at Belvedere in London, for which Costain is the civils contractor.

Viridor is planning more merchant plants to help serve commercial and industrial waste streams. “We are looking at the commercial and industrial waste market as well as local authority,” says Chris Cooke, the company’s director of strategic development. This includes a 350,000-tonne plant at Trident Park in Cardiff, a combined heat and power (CHP) plant that gained planning approval at its second attempt last month.

Jon Dedman, head of energy at Davis Langdon, says:”The vast majority of enquiries we are having are from privately funded schemes. In some cases they are schemes where they have planning permission and are looking for funding, in other cases they are looking for the waste contract. There is a whole host of different opportunities for consultants and contractors in terms of where and how things are likely to be structured.”

Dedman says the sector is in transition as new technologies emerge and green funds and other equity funds start to get interested. “If you can provide a large heat and power source on a mixed-use scheme, then that makes the mixed-use scheme more viable.” A £500m industrial eco-park at Ince Marches in Cheshire, on which Covanta and Peel Environmental are partnering, is an example of this new order.

Although only two of the UK’s 23 EfW combustion plants are CHP plants, this is the most efficient way to operate such facilities since the residual heat can be used in district heating systems, or to heat or refrigerate industrial units. In Scotland, planning decisions have favoured this route, a trend that some experts believe will spread south.

EfW doesn’t have to involve burning at all. The term encompasses a range of technologies including gasification and pyrolysis - where the waste is heated up, degrades and produces syngas - and anaerobic digestion, which uses bacteria to break down organic waste, producing a biogas and digestant that can be used as a fertiliser. The gases from all these processes can be used in place of fossil fuel to produce electricity.

Gasification and pyrolysis, sometimes called advanced thermal treatments, are in their infancy in the UK and are therefore considered risky by many funders, although they are well established in mainland Europe, Japan and the US. However, manufacturers and other big companies are starting to consider building their own gasification plants, according to Huddart. An example of this is the joint venture between BA and Solena which is to build a plant in east London that will use plasma arc gasification to turn waste into aviation fuel.

Local councils, with an urgent need to reduce waste to landfill, may also opt for gasification rather than combustion once the technology has been proven. “Local authorities might find these technologies attractive because they tend to be small scale, typically less than 10MW,” says Nick Escott, Matt MacDonald’s biomass and EfW sector leader.

Anaerobic digestion received a political boost in May when the coalition published its “programme for government”. Under the section on energy and climate change, it stated: “We will introduce measures to promote a huge increase in energy from waste through anaerobic digestion”. Hundreds are likely to be built, all small scale to serve local markets, some of them privately funded, for example to serve supermarkets. At the moment there are 38 anaerobic digestion plants producing bioenergy, 26 of them based on farms.

Most waste treatment strategies, such as the Greater Manchester Waste PFI (see box, right), will include a mixture of treatments and technologies depending on issues like the make-up and reliability of the waste streams and how they will be handled.

“There are so many variables and parameters to be considered, it’s very hard to find the right solution,” says Neils Christiansen, technical director, waste and energy for Scott Wilson. “Each case has a unique set of parameters and although they look very similar, the winning solution is not obvious sometimes.”

In the pipeline

  • Viridor has recently been granted planning permission for a £150m energy from waste (EfW) scheme in Trident Park, Cardiff
  • Covanta and Peel Environmental are partnering for the new £500m industrial eco-park at Ince Marshes
  • Veolia is preferred bidder on a Staffordshire PFI (£122.4m of PFI credits) with a 23MW energy recovery facility
  • Covanta has planned a large EfW in excess of 50MW at Rookery South, Bedfordshire as part of the Buckinghamshire waste project.
  • Waste Recycling Group is proposing a new EfW scheme in Newport to compete for the Prosiect Gwyrdd in Wales
  • Shanks gained planning permission in March 2010 for their second MBT for the Cumbria council PPP project, to process 75,000 tonnes of waste a year
  • Covanta has a 50MW-plus plant for a scheme in Merthyr Tydfil
  • SITA UK is preferred bidder on £1bn Suffolk council PFI which includes a £180m EfW plant in Great Blakenham near Ipswich
  • Viridor has submitted a refreshed planning application for a 24MW EfW plant in Ardley, near Bicester
  • Viridor is to build a 3MW EfW facility on Marsh Barton industrial estate in Exeter
  • North London Waste PFI which is currently out to tender in the Official Journal includes an EfW plant at Edmonton
  • South London Waste PFI which has announced its shortlist of four bidders includes a combined heat and power EfW plant

With thanks to Davis Langdon for its help in compiling this list

Getting involved

So how do you win a slice of all this action? EfW facilities are built under EPC (Engineer, Procure, Construct) contracts. “Generally we select the technology provider to work with, and they would subcontract out the civils,” says Chris Cooke. “There are probably half a dozen big companies, most of them from overseas, generally European, and they would tend to use an English civils contractor.” The big names include Keppel Segha, CNIM, Takuma and AE&E.

Projects like north London waste should be safe, as long as they provide value for money to the government

Mark Huddart, Costain

Ideally the technology companies will be looking for designers and constructors with experience in the EfW sector, although a background in process engineering could also be useful. “If it’s a big thermal power station, you really do need to have experience of working with heavy mechanical processes because there are so many interfaces,” says Christiansen. “Bits of the structure support the boiler system. If you are not familiar with it, you should not really be there.”

There are myriad opportunities at several points up and down the supply chain for contractors. Dedman says that a large firm could take on the lead role in EPC, as Costain does in its portion of the Greater Manchester Waste PFI; smaller firms could come in downstream on building or civils packages. Consultants could find roles with the waste management companies, energy developers, or contractors. Those with process engineering expertise could work with the technology providers or with the funders and local authorities.

However, Dedman warns: “Starting from a standing start in the waste sector has a very steep and difficult learning curve, whether you are a consultant or a contractor.” For one, you’ll need the patience and resources to sit through the planning process. Despite the obvious need for EfW facilities, getting these projects off the ground requires a huge amount of time and money. The Belvedere plant was 15 years in planning.

At the planning stages, opposition from the local population is often linked to fears about the toxic outputs from the plants’ huge chimneys, concerns that are fuelled by pressure groups such as the UK Without Incineration Group. The counter argument is that emissions now are a tiny fraction of what they were, as all gases are cleaned in line with the European Waste Incineration Directive.

Other objections are based on the opinion that EfW facilities discourage recycling because they need rubbish to survive. Proponents of EfW point to the fact that high recycling levels and EfW plants co-exist happily on mainland Europe and that recycling is only a viable option if a market for that recycled material exists.

Another problem is that these are not attractive buildings: huge sheds with tall chimneys, traditionally clad as cheaply as possible. This is changing as the developers seek to improve their chances. Sites must be chosen carefully, too: perhaps on low-lying ground or on industrial estates where big sheds are the norm.

Dan Cooke, Viridor’s external affairs manager, plays down problems due to public objections: “We would get a similar reaction if we were proposing a housing development,” he says, going on to explain that for two recent planning applications for EfW plants at Cardiff and Avonmouth there were only 14 and eight letters of objection, respectively. Even so Avonmouth, where the planning officers had recommended a yes, was turned down by the planning committee.

It seems that the coalition’s planning policies won’t necessarily have an impact on the sector. The Conservatives’ abolition of the Infrastructure Planning Commission will have little effect on EfW plants, since few of them breach the 50MW size necessary for them to be handled by the commission.


Another stumbling block for such facilities has come when they are part of a PFI scheme. Bidders must invest a huge amount as all those shortlisted have to go through the competitive dialogue route because of the technical complexities involved.

And after preferred bidder stage, things take time. As was the case for the Greater Manchester Waste PFI, the huge complexity of these projects combined with the inter-reliance of various processes means that lawyers and technical experts have to spend hours working out what the ramifications might be and how to express them in a contract.

There are changes afoot though. The North London Waste PFI, for example, having learned lessons from Greater Manchester, is letting its waste management and power generation packages separately. Now, it’s a matter of keeping fingers crossed as the coalition calls in all PFI projects, with only those beyond financial close technically safe.

“I’m reasonably confident that projects like North London Waste are safe, as long as they provide value for money to the government,” says Huddart. “In view of the fact we cannot just continue landfilling, these projects are important for the UK’s sustainability infrastructure. It would be more costly not to do them.”

The big one

The Greater Manchester Waste PFI deal, which was signed in April 2009, is the biggest of its kind in Europe with a capital cost of £1bn, and an estimated lifetime cost of £3.8bn.

Unusually, it has two special purpose vehicles: Viridor Laing for the whole scheme and Ineos Runcorn (TPS) for a 270,000MWh combined heat and power, energy from waste (EfW) plant which will supply power and heat for the chemical manufacturer Ineos Chlor.

Costain has the £405m contract to build the infrastructure for the waste handling. The three-year contract includes five mechanical biological treatment (MBT) plants, four of them with anaerobic digestion, one with composting; 24 household waste recycling centres, 17 refurbished, the remainder new; and various access roads and offices.

Technology provider Keppel Seghers has the £233m contract to build the energy recovery plant. The first regional EfW plant to be procured under a PFI deal, the facility will provide power and heat to Ineos Chlor’s chlorine plant.

Ineos Runcorn’s plant will take refuse-derived fuel from the MBT plants, as well as other waste supplied by Viridor. This interdependence caused much contractual deliberation and development. “It is very complex because of the collateral warranties going between the different parties,” explains Costain’s head of waste, Mark Huddart. “We have to prove that the fuel we are providing is within specification for the thermal power station. It’s all tied up in the complexities of the contract.

“I think it’s amazing that the whole thing came together in just under two years from preferred bidder to financial close.”

Firms working for Costain include Scott Wilson, Haase Environmental Consulting on the design of the MBTs, Eggersmann, which will provide some of the mechanical pre-treatment equipment, drier supplier Allgier, Enpure which has a turnkey package to build two of the MBT plants, and SES which won the £16m building services package.