LAWR

18 Local Authority Waste & Recycling March 2015 ENERGY RECOVERY There has been much publicity about UK energy resources being lost to the overseas market in the form of refuse derived fuels (RDF) and the fact that the UK lacks the thermal treatment capacity to ensure that the material is processed domestically. Paul Levett unpicks this issue further. iven that we have seen record levels of invest- ment in waste infra- structure in the last ten years, why does this capacity gap exist? There are probably four main factors; 1 . Much of the recent investment in the UK waste sector has been fund- ed on the back of private finance initiative (PFI) projects and/or long- term municipal solid waste (MSW) contracts. The much larger com- mercial and industrial (C&I) waste market was largely ignored. It is this C&I waste, and some construc- tion and demolition (C&D) waste that will feed the growth in RDF volumes. 2 .The state of the banking market didn't allow funders to gear their projects and waste collectors were reluctant until, recently, to under- pin projects with long-term feed- stock contracts. 3 . It must be recognised that a new thermal treatment plant will typi- cally take 5-6 years as it progresses from concept, through design , plan- ning consent , financing and pro- curement to commissioning. Back in 2011, RDF volumes were negli- gible but could reach four million tonnes in 2015. This has sparked the interest of operators and investors and there are now numerous sites with planning consents for mer- chant incineration or gasification plants. 4 . The market depends on EU and UK regulation, however this was sometimes undermined with uncer- tainty. Investors were unnerved by unexpected changes to solar power incentives. The argument regarding losing resources to over- seas markets was historically also made about domestic recycling infrastructure. However, when domestic capacity was built, many recyclers found it difficult to source adequate feedstock because mixed recyclates continued to be misdescribed as mono-green-list materials and export- ed illegally. Investors are hence sensitive to over reliance on regulatory support. Investable project From an investor's viewpoint, it is impor- tant to have confidence that such major projects will deliver in line with expecta- tions with risk levels consistent with lower cost refinancing later in the project life. Therefore an investable project is like- ly to have the following characteristics; ● Planning consent without excessively onerous conditions ● Technology which has a full-scale ref- G RDF: The domestic outlook C&I and C&D waste will feed the growth in RDF volumes, argues Levett

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