Warning Sent to GB Waste Investors to "Mind the Gap"

28 October 2011

A bi-annual review of waste treatment infrastructure in Great Britain (England, Scotland and Wales) shows that in some regions there may be an over-supply of treatment infrastructure by 2015, while in other regions it appears that there will remain significant opportunities for investment for many years to come.

The research, conducted by environmental consultancy, Eunomia, showed that the Great Britain (GB) generated over 35.4 million tonnes of residual waste arisings from local authority collected (LAC), commercial and industrial sources in 2009/10. Currently the region has around 13.1 million tonnes of residual waste treatment capacity either 'operating' or 'under construction'.

According to the report, this capacity is made up of 28 dedicated incineration facilities, four gasification facilities, 26 pre-treatment facilities using either Mechanical Biological Treatment (MBT) or autoclave technologies, 12 Waste Incineration Directive (WID) compliant biomass facilities and six cement kilns processing Solid Recovered Fuels (SRF).

Eunomia claimed that there is currently a capacity gap of 22.3 million tonnes (per annum) between residual waste arisings and the amount of treatment infrastructure capacity either 'operating' or 'under construction'.

However, this capacity gap will be reduced to 11.1 million tonnes per year if the 11.2 million tonnes of waste treatment capacity that has planning consent is constructed, while planning consent is being sought for a further 4.2 million tonnes of waste treatment capacity that could further reduce the deficit to 6.8 million tonnes.

According to the researchers, the significant increase in the level of residual waste treatment capacity suggests that it is important to undertake analysis of the potential future 'capacity gap'.

In analysing this 'gap' Eunomia said that consideration of several key related influences and associated assumptions must be made. Firstly, the recycling and composting rate for LAC waste in England is currently at 45%, while there are ambitious plans in Scotland and Wales to reach the equivalent of 70% by 2020.

Data relating to Commercial and Industrial (C&I) wastes is less reliable, however the researchers have assumed that across all sectors the recycling and composting rate for the GB as a whole (including LAC waste) will rise from 50% in 2010 to around 67% in 2020.

Among other factors, such as the exporting of SRF, low cost disposal routes for C&I wastes, such as direct land spreading and the government's drive to minimise waste - as outlined in its recent Waste Review.

The report also takes into consideration the difficulties in reaching financial close on waste projects, for facilities which have received planning consent, but are not yet under construction.

Scenarios

The authors used these factors to draw up three scenarios - 'Low', 'Central' and 'High'.  For the central scenario the authors have assumed that only 70% of the capacity from facilities with planning consent comes into operation. This figure is 50% for the 'low' scenario and 100% for 'high'.

In addition, the difficulty in gaining planning consent for those facilities still within the planning process has been considered, with the 'central' scenario assuming that only 30% of the related capacity comes into operation. This figure is 0% for the 'low scenario and 100% for the 'high'.

According to Eunomia, modelling of the central scenario suggests that the capacity gap between residual waste arisings and available treatment capacity will fall over time, decreasing from the current 22.3 million tonnes to potentially an overcapacity in the GB of around 800,000 tonnes in 2020.

However, this does not include potential future capacity, which has not yet entered into the planning system, The report warned that this could result in earlier overcapacity.

This is a situation reflected in the researcher's 'high' infrastructure scenario, in which overcapacity begins in 2016. Should a far lower level of capacity become operational - as reflected in the 'low' scenario - it is possible that GB will remain in a situation of undercapacity in 2020.

As a result of transport costs, along with capacity being unevenly spread, the potential situation of overcapacity will occur sooner in some geographical regions than in others.


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