US gas giant halts work on energy-from-waste projects citing technology problems and cost fears

Global industrial gases firm Air Products is cancelling plans to build two energy-from-waste plants in the North East of England, writing off a £700m investment because of fears over additional development costs.

The business said its board had decided to exit its energy-from-waste (EfW) business and stop development of the projects on industrial land adjacent to the North Tees Chemical Complex near Billingham.

Work was largely complete on the first advanced plasma gasification plant - dubbed TV1, planned to be capable of providing 49.9MW of renewable electricity from an annual intake of up to 350,000 tonnes of non-recyclable waste.

Construction had passed the half-way stage on a second plant, due to have identical capacity, but was suspended in November last year pending the resolution of technical issues with TV1.

However, in an announcement yesterday Air Products said testing and analysis completed during the company’s fiscal second quarter indicated that “additional design and operational challenges would require significant time and cost to rectify”.

It said the firm’s board of directors had decided it was “no longer in the best interest of the company and its shareholders to continue the Tees Valley projects”.

A company spokeswoman said that around 20 contractors had been working on TV1, and that it was in the “final stages” of completion.

Seifi Ghasemi, chairman, president and CEO of the Pennsylvania-headquartered business, said Air Products was “disappointed” with the outcome and appreciated the hard work of employees and contractors in the Tees Valley.

“Air Products is focused on our core Industrial gas business,” he said.

“We pushed very hard to make this new EfW technology work and I would like to thank the team who worked so diligently.”

Air Products said it expected that wind-down activities with respect to the Tees Valley projects would cease by the end of December this year.