Thousands of waste plants at risk of closure in future
Thousands of waste facilities in the UK are at risk of becoming "stranded assets" due to them not being fit-for-purpose as the resource economy evolves, industry advisor Peter Jones has warned.
According to Jones, a lack of cohesive thinking and joined-up policy within the waste management sector has resulted in many plants being built over the past decade that may become redundant in the future. This could be due to either the wrong technology being adopted, security issues around feedstock supply, or decreasing values of traditional waste outputs.
Jones has done some number-crunching and believes in total some 2,000 composting plants, 600 materials recycling facilities (MRFs), 40 anaerobic digestion (AD) facilities and 23 non-CHP thermal plants could be at risk.
“I can see plants being built today that won’t be there in five years’ time because there won’t be the feedstock levels available,” he told delegates at the RWM show in Birmingham today (September 14).
“The industry is moving so fast, as is the investment base around it … the current drift we are facing is an ad-hoc piecemeal approach, with no coherent planning so we have disaggregated sites. We are building the wrong facilities in the wrong places – they will become stranded.”
He said the waste sector was on a cusp, where traditional front-end margins and added value such as gate fees were shifting to the back-end of materials processing, resulting in high value “exit outputs” from renewable gas and electricity.
“Waste management companies who don’t move into this space will find that energy and heating firms will,” Jones said, adding that in terms of scrap resources, the UK energy market was worth £108bn compared to recyclable materials (£1bn for 15 – 20m tonnes) and composting soils (£0.1bn for 4m tonnes).
“[The recyclables market] is peanuts in relation to energy, bankers and investors want to see the sorts of figures coming from the energy side,” he told delegates. He added that the carbon potential from composting soils would likely shift into new technologies promoting higher added value exits, such as energy-from-waste.
Jones called for more holistic thinking around the UK’s carbon profile, encapsulating other streams besides waste such as crop residues, sewage sludges, wood residues, gas and coal. He said valuable “energy sinks” needed to be established across the UK where this carbon mix could be tapped into and processed most effectively.
“We’ve got a commitment for renewables to form 20% of the UK’s energy needs by 2020. But we need better understanding and mapping of these material flows otherwise we are not going to develop a coherent set of financial instruments to make better use of them.”
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