Request
Dear Chair
Edmonton Incinerator, EcoPark, Advent Way, London N18 3AG
1. We are instructed by Stop Edmonton Incinerator Now (StEIN). StEIN is a coalition of groups and individuals opposed to the development of the proposed Edmonton incinerator (“the Project”), which is part of the North London Heat and Power Project.
2. Our client has asked us to write to raise concerns with the North London Waste Authority (“NLWA”) in advance of the meeting on 16 December, during which the NLWA board is to confirm that the Project contract to build the Edmonton incinerator is to be awarded to the only remaining tenderer, Madrid-based Acciona (“the Decision”). Representatives will be addressing the meeting today but have asked us to write to you to ensure you have a written record of their concerns before the meeting. We include an Appendix to this letter with supporting documents, including a list of some of our client’s related deputations, correspondence, and requests for information relating to the Edmonton incinerator (Appendix 1).
3. Our client’s principal concerns relate to the high environmental costs of incineration as opposed to other means of treating waste and the overcapacity that a further incinerator will create in London. Our client is similarly concerned about the environmental racism and social injustice inherent in siting a new incinerator in areas of high racial diversity and poverty. NLWA has ignored the Climate Change Committee (“CCC”) guidance regarding reducing incineration emissions and moving toward carbon capture and storage (“CCS”) by the mid- or late 2020s. Our client also questions the business case for more incineration capacity.
4. For this letter, we refer to the report entitled North London Heat and Power Project Energy Recovery Procurement and dated 16 December 2021 (“the Report”). The Report contains information that is relevant to the NLWA’s decision.
5. Prior to our instructions, our client instructed Alex Goodman and Nick Grant, Landmark Chambers on direct access. Counsel identifies the fiduciary duties a local authority owes its ratepayers and the possibility of legal proceedings where a LPA makes a decision to expend money in breach of this duty as a matter of public law since the LPA is approving expenditure of public and not private funds, see Roberts v Hopwood [1925] AC 578 as set out in School Facility Management Ltd v Governing Body of Christ the King College [2020] PTSR 1913, [301-302]. Many of our client’s concern relate to the need for NLWA to have undertaken some form of cost–benefit analysis in deciding whether to continue with the Project and award the contract.
6. Counsel also notes the general public law principle that our client’s considerations are capable of being material considerations which need to be taken into account in the decision to award the contract.
7. With respect to the following passages from the Report (in bold), our client raises the following points:
(i) 1.7.1. that the ERF remains the most beneficial technical and environmental solution. 1.7.2. that the overall NLHPP cost forecast remains within the agreed budget in light of current and forecast expenditure
1.7.3. that the NLHPP provides the most economical waste disposal solution for the boroughs.
Our client notes that:
a. 1.7.1: The business case must include a comparison of the environmental impact of building the Edmonton incinerator vs. not building the incinerator, building a state-of-the-art mixed-waste sorting facility to reduce north London’s truly non-recyclable waste by up to 70%, and sending the truly non-recyclable waste for treatment to nearby energy-from-waste (EfW) plants with surplus capacity, noting that a recent Tomra white paper on pre-sorting says: ‘Sending residual mixed waste directly to incineration or landfill without sorting plastics, metals, and other recyclable materials is no longer reasonable’ (emphasis added).[1]
b. 1.7.2 and 1.7.3: The business case must include a breakdown of costs, including risk contingencies and anticipated costs such as incineration taxes should EfW incineration be integrated into the Emissions Trading Scheme as of 2022, as signaled by Government, and the costs of installing and operating CCS technology by the late 2020s, in line with guidance from the Climate Change Committee, as well as the cost of using surplus capacity in nearby EfW facilities, including in Bexley (particularly as the two Cory facilities are expected to operate with CCS by 2026), Sutton, Bermondsey, and Essex.
(ii) 1.10. Levy projections show that while an increase in the levy is necessary, associated with the financing of new assets, this is a lower levy increase than would be required if the Authority did not develop a new facility and relied instead on bids from private companies outside the area to accept north London’s waste.
Our client requests supporting documentation for the assertion that the commercial EfW plants would cost the seven north London councils more than the Edmonton incinerator anticipated levies, given:
a. growing overcapacity (and competition for feedstock) in London and throughout the UK;
b. increases in the proportion of recycling; and
c. decreases the amount of in non-recyclable waste are expected to drive down the cost of EfW incineration over time, and especially by the time the Edmonton incinerator would become operational.
(iii) 1.11. Alternative options for waste disposal are either unproven at the required scale or significantly less cost-effective
Our client notes that this assertion fails to take into consideration the latest technology in mixed-waste sorting facilities, and notes that the NLWA has yet to assess the relative cost, impact on waste, and impact on revenue generation through recycling of such a facility in Edmonton, despite a) numerous requests from our client, b) the proven ability of such facilities to reduce the current amount waste that currently goes to disposal by at least 53% (based on the most recent Defra assessment of the proportion of readily recyclable materials that are currently sent to landfill or incineration [2]) and up to 70% or beyond, and c) recycling assessments that indicate that north London could generate about £70 million per year in revenue through the use of a mixed-waste sorting facility (see Appendix 2 and Appendix 3).
(iv) 1.14. The intended peak capacity of the ERF at 700,000 tonnes per annum provides the most reliable solution for north London’s self-sufficiency in waste disposal. The ERF can operate at lower tonnages than the peak capacity whilst still meeting electricity and heat supply commitments
Our client notes that if the above-mentioned mixed-waste facility were installed, the amount of waste that is currently going to incineration (roughly 500,000 tonnes or below) would drop by at least 50%, obviating the need for a 700,000-tonne facility (which is 30% greater than the current plant’s operational capacity of 540,000 tonnes) and the associated expense. The client also observes that:
a. the NLWA’s business case includes reliance on income from treating 128,000 tonnes from outside north London, with that amount dropping to around 88,700 tonnes by 2050.[3] This calls into question the claim of “self-sufficiency” — which, either way, pertains to “net” self-sufficiency for London, rather than north London. In this context, it may be worth noting that the London Plan does not specifically cover sorted waste that is sent for recycling outside of London under the net self-sufficiency guidance. Should the Edmonton incinerator be built, recyclates would be shipped into and out of London, like some unrecyclable waste.
b. Our client also notes that there is no legislative barrier to sending waste to commercial incinerators such as the Cory plants in Bexley, so long as the normal procedures are followed and the companies running the plants agree to make the capacity available at an acceptable price. Other nearby plants include one in Hoddesdon and Slough.
c. After Mayor Sadiq Khan dropped his judicial review of the Cory 2 incinerator in Bexley in September 2020, City Hall forecast 950,000 tonnes of incineration overcapacity for London if both the Edmonton plant and the Cory 2 facility were to be built. This is confirmed in an email from Anne-Marie Robinson, Principal Policy Manager, Greater London Authority, to XR Zero Waste, dated 16 November 2020, see Appendix 4), which is expected to have surplus capacity, along with other EfW incinerators near Edmonton, especially as waste arisings dwindle and overcapacity grows, meaning that there is no expected shortage of EfW capacity to treat north London’s waste reliably.
d. the current Edmonton incinerator plans are tantamount to building overcapacity in London.
e. actual waste arisings are significantly lower than predicted in the NLWA’s 2015 application for building consent, meaning that the proposed plant is considerably larger than required to treat north London’s non-recyclable waste.[4]
(v) 3.4. The evaluation criteria for the procurement were set at the start of the process, and details are contained in the report in Appendix A. This split the criteria into three workstreams: Quality and Management, Technical, and Commercial.
Given the significant environmental impact of the proposed plant — in terms of both CO2 emissions and air pollution, among other toxins — our client asks to see a detailed description of the methodology employed to derive the weighting criteria used for the assessment and, in particular, an explanation of the choice to accord only 1% of the points to “environmental management” (category B7 in Annex A: ISFT Weightings). The principal concern is that a “1% weighting for environmental management” does not begin to assess the environmental impacts of incineration and effectively hides the fact the incinerator will impact on a racially diverse community with a high degree of poverty, and consequently distorts the true cost-benefit analysis.
(vi) 3.24. The DCO sets outs the key design principles including that the ERF will utilise the highest performing proven technology; will meet the strict requirements of the applicable emission directives and environmental permit; and result in no significant environmental effect on the surrounding area.
Our client notes that:
a. The World Health Organization has clearly stated that there is no safe level of exposure to particulates.[5]
b. NLWA has a duty to compare the emissions of the proposed plant not to the emissions of the current plant as a baseline, but rather to consider the baseline without incineration emissions. In this scenario, north London’s truly unrecyclable waste would be treated in EfW incinerators that are not sited in densely populated areas, such as the Cory plants in Bexley or other ones within 50 miles of Edmonton, as our client has suggested on previous occasions.
c. Based on our client’s meeting with Acciona on 26 October 2021, it is our client’s understanding that the proposed abatement technology would cut NOx emissions to 80 mg/Nm3, which is mid-range in terms of BREF limits for NOx (50–120 mg/Nm3), although BREF guidelines state that the lower end (50 mg/Nm3) is achievable through the use of SCR, as has already been demonstrated elsewhere for some time. Section 5.15 the Report says “the SCR system can achieve a NOx emission as low as to 30 mg/Nm3”. Our client seeks assurances that if the incinerator proceeds, enhanced abatement measures will be deployed to ensure that emissions would be reduced to at most 50 mg/Nm3 rather than 80 mg/Nm3.
d. At the same meeting with Acciona, it also is our client’s understanding that CO (carbon monoxide) and TOC (total organic carbon) emissions will be significantly higher than those from the current plant. Our client notes that if the plant were to remain unbuilt, these pollution-related concerns would fall away.
e. As has been pointed out repeatedly by Black Lives Matter and other Stop the Edmonton Incinerator Now coalition members, EfW plants in the UK are three times more likely to be sited in the most deprived areas,[6] such as Edmonton, whose racially diverse population has experienced a Covid mortality rate that is 40% higher than the national average.
f. A growing body of scientific evidence links long-term exposure to air pollution with a greater risk of serious medical conditions and premature death, including from infectious diseases. Building a new plant in densely populated Edmonton reinforces environmental racism and social injustice. These concerns have also been highlighted by the All-Party Parliamentary Group on Air Pollution, which recently released a report on air pollution from waste incinerators.[7] This point is particularly relevant to section 10.4 of the Report (10.4. In coming to a decision Members must take into account the Authority’s Equalities Duty under the Equality Act 2010. In summary, these legal obligations require the Authority, when taking decisions about its function, to have due regard to the need to (1) eliminate discrimination). This point also calls into question the NLWA’s assertion, in the second table of Appendix B, that the project “demonstrates the commitment to real social value”.
(vii) 4.5. The conclusion of this work is that the contract would, if entered into as bid, offer value for money. The submitted price would be materially higher if the procurement were to be rerun. The contract provides a fair market rate for the work.
It is our client’s understanding that the cost is significantly higher than that of other state-of-the-art incinerators. Our client requests information on comparable EfW incinerator projects, including the second Cory facility in Bexley. See also point (ix), below.
(viii) 5.4. As would be the case with the outcome of any procurement and the subsequent contract agreement, there are residual contract risks which the Authority will retain. These are detailed in Appendix C.
Since this Appendix C is confidential, it is not possible for the public to understand the risks to which this project exposes taxpayers. Our clients request more clarity on this point, including with respect to the likelihood of a partial or total stranded incineration asset in Edmonton (as StEIN members have sought in vain to ascertain through FOIA and other requests), given that a) the NLWA has stated that it would not import waste from elsewhere and b) the Cory Group expects CCS to be available at its Bexley facilities by 2026, in line with the Climate Change Committee guidance and years before it would be available in Edmonton, if at all.
(ix) 8.4.3 Commercial […] Termination for Convenience: The Authority has agreed to an enhanced payment to the Contractor in the event that the Authority cancels the contract in the 12 months following contract signature. The Authority has proposed 5% of the Contract Price which would have been payable to the Contractor for the first six months following termination. The tenderer had requested 5% for the first 12 months following termination and was considering the Authority’s proposal.
and
7.5 Closing dialogue [...] the indicative price provided by the Tenderer was higher than anticipated
Our client is concerned that Acciona’s score is extremely low at 36 out of a possible 100 points. Our client also seeks to understand why the price was significantly higher than would have been predicted based on the estimated cost of the Cory Group’s new incinerator: £500 million for a 655,000-tonne facility,[8] compared to an estimated £755 million for the 700,000-tonne Edmonton plant based on the Report. Appendix 5 shows Acciona’s contract price is not, as Section 6.2 says, “representative of current pricing levels in the market.” Indeed, the price per 1,000 tonnes of capacity is 20% to 40% higher than prices of other current EfW projects, even though three plants have the same technology vendors.
Since Acciona asked for a higher price than the NLWA anticipated, our client is asking for explanations as to the low score and the high price, and assurances that the risk of possible international settlement action by Acciona has been properly factored into the risk assessment.
Our client also asks that the NLWA clarify how Acciona came to be the sole bidder for the Project. In this regard our client requests clarity regarding reports that CNIM was a “nominal” bidder and never really interested in this tender,[9] and details on why the NLWA selected HZI and Acciona as separate bidders even though they had formed a consortium to build a waste incinerator in western Australia before the Edmonton tender process began. The fact that HZI dropped out of the tender process to form yet another consortium with Acciona for the Edmonton project raises questions as to whether their collaboration could arguably have been seen as likely if due diligence had been conducted prior to the selection of bidders.
(x) Appendix B: […] The Value for Money for the ERF is the foundation for a rational and well-made decision to award the ERF Works EPC Contract to Acciona to be made.
As noted in point 6(i), above, our client argues that no value-for-money assessment and no business case is complete unless it factors in the costs and benefits of integrating the most advanced mixed-waste sorting facility into the Edmonton complex, given that such a facility would help the NLWA slash treatment costs by drastically reducing the amount of waste to be disposed of, while also generating an estimated £70 million per year via high-quality recycling.[10] To date, the NLWA has not assessed the most relevant facilities, such as those currently operating in Northwich, UK, and Norway, as sustainability expert Dr Rembrandt Koppelaar, of the StEIN coalition, has presented via deputations, including the one to the full Haringey Council on 22 November 2021.
(xi) Appendix B: […] A full risk analysis has been completed in accordance with its declared progressive position.
Our client indicates that there is a lack of evidence, despite FOIA and other requests, that the councils comprising the NLWA have factored national policy measures into their forward planning, even though DEFRA specifies that local authorities ‘judge their capacity needs at local level, and need to factor national policy measures being implemented into their forward planning’, including measures introduced in the Environment Act. [11] Such measures include ones designed to drive down waste through consistent collections, deposit-return schemes, extended producer responsibility, and separate food and garden waste collections, as well as measures to reduce and prevent waste and encourage reuse and repair. Not factoring the impact of these measures into forward planning would constitute an indefensible failure to follow Government guidance.
(xii) Appendix D: 1.2. This report provides a summary of the review of the business case for future waste disposal and confirms that the replacement ERF at the Edmonton EcoPark remains the most environmentally, socially, and financially responsible waste management solution for north London residents. It confirms that the alternatives will lead to higher net carbon emissions and cost significantly more than building a replacement ERF.
In addition to points raised above, our client notes that:
a) to date, the NLWA has not made public any financial assessment (or technical feasibility assessment) for CCS;[12]
b) the Cory Group has already notified the Planning Inspectorate of its intent to submit a development consent order application for its massive CCS project in Bexley, which the company says will ‘deliver 1.5 million tonnes of CO2 savings by 2030’;[13]
c) if north London’s councils were to agree to pause and review the current plans, it would be possible to look into the cost of available surplus capacity in the nearly CO2-free Cory facilities (and other plants) for treating north London’s waste, and to assess north London’s potential CO2 savings.
Additionally, it would be responsible to assess this option before voting to proceed with the Edmonton plans, especially since the NLWA does not appear able to follow the Climate Change Committee (CCC) guidance regarding CCS. The CCC has called for the halving of incineration emissions in the UK and for all EfW plants to be equipped with CCS by the late 2020s, but NLWA is talking about the mid-2030s and has not set a target date.
The Edmonton incinerator’s emissions — about 700,000 tonnes per year at full capacity — would be equivalent to those of 250,000 additional diesel cars on the road, during a climate and ecological emergency. Our client also points out that Section 4.6, which says that "[o]nce CCUS has been implemented, the ERF will be a priority waste asset able to operate if non-CCUS plants are required to cease operation", indicates that Edmonton may be required to close if it does not install CCS. Our client requests proof that this risk has been properly assessed.
(xiii) 2.4. Prior to the decision to award the ERF contract based on a successful procurement process, it is necessary to revalidate the business case, primarily related to determining that the ERF remains the most beneficial solution for disposal of north London’s waste.
Our client is not satisfied that the revalidation took critical factors into consideration and requests another assessment prior to the Decision. In particular, our client asks for an evaluation of factors such as — but not limited to — the costs and benefits of a state-of-the-art mixed-waste sorting facility (with optical near-infrared sorting stations) and affiliated recycling revenue; the financial cost and CO2 savings associated with treating north London’s truly non-recyclable waste in Bexley and/or elsewhere; and benefits of accelerating the transition to a circular economy, in part through boosting employment in the reuse and repair sectors, which already generate 15 times more jobs than the disposal sector. Our client is happy to (re)send the NLWA a full set of factors to consider. As stated in Section 7.9 of the Report, the assessments “do not assume any investment in relation to “pre-treatment” of waste, which would increase costs further.” Our client does not accept that costs would be increased and asks for an independent review that factors in pre-treatment.
(xiv) 5.11. The plant will operate two independent process lines or grates with a maximum throughput capacity of 43.75 tonnes per hour (tph), equivalent to 350,000 tonnes per annum (tpa) per processing line over the anticipated 8,000 operating hours each year, or 700,000 tpa for the ERF as a whole. The advanced moving grate system means that the ERF will have the ability to “turn down” its throughput to 70% of the maximum design capacity meaning that it will have the ability to operate at a throughput of 490,000 tpa. At this level, the Authority would continue to meet its heat and power supply obligations.
Our client is concerned about the implications of a reduction of truly non-recyclable waste below the 490,000-tonne threshold. Such a reduction would be desirable in the sense that it would be a sign that north London is transitioning towards a more circular economy, but our client seeks reassurances that homes that would depend on the incinerator for (unnecessarily carbon-intensive) heat would not be cut off from a heat source and that efficiency standards could be maintained without incentivizing the incineration of recyclables. What would happen, for example, if waste were to drop to below 250,000 tonnes per year, as would be anticipated with proper recycling infrastructure and reduce, reuse, recycle campaigns and investment? On this point, our client wishes to note that comparisons with gas boilers are misleading and inappropriate in view of the ongoing decarbonization of the National Grid. Energy from a waste incinerator is already four times more carbon-intensive than energy from the grid, and its carbon-intensity will continue to grow as the grid decarbonizes.
(xv) 5.19 The net CO2 emissions from the facility have been calculated to be approximately 28,000t per annum.
Our client wishes to stress that the Department for Business, Energy and Industrial Strategy (BEIS) altered the methodology to be applied for calculating CO2 emissions in October 2021. The new guidance, Valuation of energy use and greenhouse gas,[14] underpins the Treasury’s Green Book. Our client asks whether the NLWA was unaware of this significant change. If applied, this methodology shows that the proposed Edmonton incinerator would emit more than 210,000 tonnes of fossil CO2 per year. This figure does not include biogenic emissions, which IPCC guidance indicates must be reported alongside fossil CO2. Our client is deeply disturbed by the NLWA’s failure to provide honest, public information on this critical issue as the globe faces climate and ecological systems collapse.
(xvi) 5.30 Operating the ERF at lower capacity will be more expensive than operating at full capacity, primarily due to the loss of energy income from heat and electricity and also the loss of third-party gate fees. However, this would also be accompanied by the lower cost of treating recyclate and its associated income streams.
Our client notes that in this section, NLWA admits that operating at a lower capacity is expensive. The NLWA appears willing to consider downsizing in the future, but doing so will come at extra cost. Our client asks why the NLWA is not seeking to avoid these extra costs by downsizing now, before construction begins.
(xvii) 8.3 Value optimisation: Table 7 (page 19)—Redundant Continuous Monitoring System: Option for CEMs system to be simplified subject to demonstration of required performance and acceptance by the Environment Agency.
Our client asks for reassurances that the “value opportunities” listed in Table 7 do not weaken pollution monitoring or the NLWA’s ability to implement punitive measures on the contractor, as they look like efforts to cut costs by curbing environmental and other checks.
Our client would like to draw attention two sets of recommendations presented to during a meeting of the All-Party Parliamentary Group for Air Pollution on 14 September 2021, which members of the NLWA attended. As discussed below, one set of recommendations is based on a meta-study for longitudinal cohort health studies; the other relates to the Stockholm Convention. Our client asks for the NLWA to provide evidence that both sets of recommendations have been taken into consideration in evaluating the “value opportunities”.
Unlike the limited studies often cited by EfW proponents, a significant meta-study15 published by Wiley in 2019 assesses 93 scientific research papers and corroborates the plausibility of a causal link between waste incineration and birth defects and miscarriage. This study finds that there is insufficient evidence to conclude that any incinerator is safe; and observes that it is premature to conclude that new technologies improve EfW safety.
This study goes on to make three recommendations, calling for a precautionary approach to licensing and monitoring incinerators; independent third-party population studies and long-term surveillance cohort studies as a condition of applying for a licence; and incinerator design that meets the Stockholm Convention guidelines, meaning that incineration is eliminated as far as possible through enhanced reuse and recycling, which links to Tomra and other experts’ recommendations that licences not be granted to any incinerator that is not extracting recyclate before burning.[16]
The second set of recommendations relates to the Stockholm Convention. Signatories to the Stockholm Convention, including the United Kingdom, must dispose of waste in the way that POP content is not just reduced but destroyed. The Convention recommends avoiding the burning of PVC and other chlorine-containing compounds, which are a significant source of dioxins, and it recommends avoiding incomplete combustion, which is caused by the burning of flame-retardant chemicals that are found in many fabrics and home furnishings. The Convention’s key recommendation is to eliminate incineration as far as possible by implementing enhanced reuse and recycling. Dioxins pose a health risk on contact and can be carried on ultrafine particles through the air for hundreds of miles, so there is a dispersion effect from high chimneys. They bioaccumulate in crops, insects, animal fatty tissue, eggs, and dairy, meaning that they enter the food chain and can end up being consumed by humans. The environmental statement for the Edmonton incinerator states that no monitoring is undertaken for dioxins (or furans) in the north London boroughs and that the only monitoring station for dioxins in London is in Westminster, but that no data has been available since 2010. Our client requests a full accounting of the ways in which the NLWA sought to eliminate incineration as far as possible by implementing enhanced reuse and recycling, including how the NLWA justifies not implementing state-of-the-art mixed-waste sorting technology.
Please ensure that these comments are fully considered by the Board at today’s meeting and that the information requested in this letter is provided to us by 15 January 2022.
Notes
[1] See https://solutions.tomra.com/mws-white-paper.
[2] In its latest monitoring report of its Resources and Waste Strategy, DEFRA reports: ‘In 2017, an estimated 53% of residual waste consisted of readily recyclable materials, with only 8% being completely unavoidable. This represents a significant opportunity to further decrease the amount of residual waste produced in England’ (emphasis added). Defra concludes that while while 53% is recyclable today with current technologies, about 90% of materials in residual waste streams are either recyclable or could be replaced with materials that can be recycled, based on existing technologies and those under development
(https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1036297/resource-waste-monitoring-progress-second-edition-nov-2021.pdf).
[3] See pp. 2, 3, 14, 15 in http://northlondonheatandpower.london/media/mxljblm3/ad05-05_fuel_management_assessment_lores.pdf.
[4] See p. 7 of https://ukwin.org.uk/files/pdf/UKWIN-2020-Edmonton-VfM.pdf.
[5] See https://www.theguardian.com/environment/2021/sep/22/who-cuts-guideline-limits-on-air-pollution-from-fossil-fuels.
[6] See https://www.theguardian.com/environment/2020/jul/31/uk-waste-incinerators-three-times-more-likely-to-be-in-deprived-areas and https://unearthed.greenpeace.org/2020/07/31/waste-incinerators-deprivation-map-recycling/.
[7] See https://www.theguardian.com/environment/2021/dec/14/mps-call-for-halt-to-britains-incinerator-expansion-plans and https://appgaq.files.wordpress.com/2021/12/211208-waste-incineration-and-public-health-appg-air-pollution-report.pdf.
[8] See https://www.bloombergquint.com/technology/london-draws-667-million-trash-to-power-investment-from-cory.
[9] See https://www.endswasteandbioenergy.com/article/1725826/ewb-insight-report-august-2021.
[10] This estimate is based on calculations presented by StEIN member Dr Rembrandt Koppelaar. At a minimum, StEIN seeks NLWA’s assessment of the possible revenue stream based on the installation of cutting-edge (4th-generation) mixed-waste sorting facilities.
[11] DEFRA: ‘We are currently assessing, at a national level, planned incinerator capacity against expected future residual waste arisings so we can understand what future incineration capacity may be required following implementation of key commitments in the Resources & Waste Strategy. This further assessment of residual waste treatment capacity needs will be published in coming months. […] Local Authorities have Waste Local Plans in which they consider their area’s waste infrastructure needs. LAs judge their capacity needs at local level, and need to factor national policy measures being implemented (e.g. through the RWS [Resources and Waste Strategy]) into their forward planning’ (DEFRA statement for APPG on Air Pollution meeting on 14 September 2021, which NLWA received as its representatives participated in the event).
[12] See https://www.nlwa.gov.uk/ourauthority/scheme-of-publications/request-information-about-potential-carbon-capture-and-storage.
[13] See https://www.corygroup.co.uk/media/news-insights/cory-announces-plans-worlds-biggest-energy-waste-decarbonisation-project/.
[14] See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1024040/valuation-energy-use-greenhouse-gas-background-documentation.pdf.
[15] See https://onlinelibrary.wiley.com/doi/full/10.1111/1753-6405.12939.
[16] See https://solutions.tomra.com/mws-white-paper.
Appendices
- Appendix 1: Major correspondence and deputations related to pause and review of NLHPP
- Appendix 2: The Way Forward, presented by Dr Rembrandt Koppelaar at Haringey Council forum on 22 November 2021
- Appendix 3: Cost and benefit comparison: EfW incinerator (NLWA plan) vs. turbocharged recycling via a mixed-waste sorting facility, as shared with Haringey NLWA councillors
- Appendix 4: GLA forecast for 950,000 tonnes of EfW overcapacity in London
- Appendix 5: Comparison of contract values for incinerators to be commissioned in the same timeframe as the NLHPP Edmonton Energy Recovery Facility by technology providers Hitachi Zosen Inova AG & Indaver - Ranked by cost from lowest to highest
Response
Dear X,
Thank you for your letter of 16 December 2021 addressed to Cllr Loakes, the Chair of North London Waste Authority (Authority). This letter contains our responses to the various points raised. The Authority has prepared individual responses to the deputations to the meeting of the 16th which covers a large number of the topics you list in your letter, and this can be found on the project website here.
As a reminder, the Authority is the statutory waste disposal authority for the seven north London boroughs of Barnet, Camden, Enfield, Hackney, Haringey, Islington and Waltham Forest. It has a statutory obligation to arrange the disposal of the local authority waste collected by these boroughs. The Authority also promotes recycling and encourages waste prevention through targeted programmes of activity including communication and outreach campaigns, and through working closely with the boroughs in their capacity as waste collection authorities. The decision made on 16 December 2021 on the outcome of the procurement exercise for a contract to construct and commission a new Energy Recovery Facility (ERF) as part of the North London Heat and Power Project (NLHPP) is one in a chain of decisions through which the Authority performs its functions.
Your introductory commentary is noted. We will respond to your points using the numbering in your letter starting at paragraph 7.
7(i) a) The NLHPP started in 2014 with preparation for the Development Consent Order (DCO) application. The stage of the project in December 2021 was that the Authority was making a decision on whether to award a contract following a procurement process which the Authority had authorised in June 2020 in pursuit of a scheme permitted under a DCO which had been approved in 2017 after consideration of all the relevant evidence and many of the issues you raise again in your letter. The Authority considers that the review of the business case met all requirements to support proceeding with the award of the contract. This review included appropriate and proportionate consideration of alternatives based on proven technology operating at an appropriate scale for north London local authority waste volumes in UK conditions with UK waste composition. The Authority does not consider that the text from a promotional brochure by Tomra is a material factor in informing the Authority’s decision.
7(i) b) Various points are made. The responses are:
- The business case includes risk contingencies to cover all relevant issues.
- With regard to the Emissions Trading Scheme, this would not affect the construction costs of the facility. The Government has not put forward any proposals for including energy from waste in the UK emissions trading scheme nor indicated on what basis any extension of the scheme might be undertaken. A judicial review challenge which sought to mandate the inclusion of energy from waste in the emissions trading scheme was resisted by the Government, and rejected by the High Court in June 2021.
- The costs of Carbon Capture and Storage (CCS) would be inappropriate to include in the business case for construction and commissioning of the ERF as the installation of CCS is a separate project. The business case relates to delivery of the NLHPP, authorised by the DCO, in February 2017. The ERF have carbon emissions better than the Mayor's carbon intensity floor. The option to be carbon negative will be an added advantage, to be progressed with its own business case and pursuant to the Authority’s published CCS Strategy which is on the NLWA website here . BEIS have announced that waste management CCS projects will be eligible to apply for support under the ICC business model for Phase 2 of the CCUS Cluster Sequencing process. It is our expectation that government support will be available for the next tranche of CCUS clustering in which the NLHPP is targeting for implementation by 2035.
- You reference an expectation that the two Cory facilities are expected to operate with CCS by 2026. That is either a grammatical misreading or misrepresentation of their press notice (here) as it is clear that the 2026 reference in the press notice is to operation of the second facility not implementation of CCS.
- The cost of sending north London’s residual waste to third party facilities was considered and is addressed in the report to the Authority meeting on 16 December 2021 (“the Report”) at figure 7.2 which compares the levy for disposal through third party facilities and through the ERF built through this project.
7(ii) To estimate the costs of residual waste disposal if the Authority did not develop a new facility and relied instead on bids from private companies outside the area to accept north London’s waste, the following assumptions were used:
- That the EcoPark South element of the project and the subsequent demolition / remediation of the existing EFW facility proceeded as they are still required.
- The same tonnage projections were used for both the Energy Recovery Facility (ERF) solution and the non-ERF solution.
- No additional costs were assumed for transfer stations to collect the waste and bulk it for onward transfer, although the residual waste to be transported would be some 11,000 tonnes per week on current average, filling some 500 lorry loads per week to take the waste away. In practice a separate assessment and potential planning application would be needed to establish if further bulking facilities would be required.
The Authority took account of market costs and forecasts for bulking, transport and disposal. This produced a cost assumption for third party disposal. It noted the real risk that there would be a lack of market capacity/interest but did not include a premium for this. It also assumed that the Authority would use a mix of shorter term and longer term contracts to provide flexibility to cope with varying volumes. Our analysis showed that it would be more expensive to send waste to third parties, and that this difference would increase over time as costs for third party disposal would increase in line with inflation indices whereas in constructing the Authority’s own energy recovery facility, construction and interest costs would be fixed and not vary when the facility is operational.
7(iii) As referenced above, the decision on 16 December 2021 followed previous decisions to implement the DCO. The application for the DCO included a comprehensive assessment of alternative solutions, and the key elements were reviewed as part of the business case reconfirmation (see Appendix D to the Report). We have reviewed the alternatives and there is no evidence of any facility with the demonstrable ability to reduce by 53% the residual waste delivered from north London households.
In relation to the suggestion that £67.4m per year could be earned from recycled plastics income, the Authority has considered this and disagrees. Some plastics do attract a high value per tonne. However, this is not sufficient to secure anything like the level of income claimed. Indeed, large volumes of plastic have little reprocessing value and certain plastics such film have a cost (currently over £70 per tonne) to reprocess which would further reduce any potential net income.
NLWA’s plastic recycling is collected separately from residual waste and part of dry mixed recycling collections. It is sorted in a highly efficient plant. The Authority therefore considers that it receives good value from its recycling contract although income is substantially below levels assumed in Appendix 3, which the Authority does not consider a tested and viable alternative to the Authority’s proposals.
7(iv) a) The business case is based on robust forecasts of waste volumes arising and a summary can be found at Figure 5.2 in Appendix D to the Report. The Authority’s duty is to dispose of waste collected by the waste collection authorities, and therefore the point chosen for the sizing of the facility takes account of the need to dispose of all that waste. The Facility is sized to manage the reasonably assessed volume of waste arising. In the event that residual waste volumes are towards the lower end of the forecast range, there may be spare capacity for treating waste collected by north London’s boroughs. The figures quoted in your letter are from fuel management assessment which was part of the DCO application. The purpose of this document was to demonstrate that the waste volumes could be handled successfully on site. In the event that local authority collected waste (LACW) from north London would not use the full capacity of the energy recovery facility, this report identified that – at the central forecast – around 128,000 of non-LACW could be sourced in 2024/25. Possible sources for this included Constituent Borough commercial and industrial (C&I) waste. This is not currently disposed of in north London and is disposed of outside the area. The question of whether to use any unused capacity would be a matter for Authority Members at the time if the circumstances arose. But such use is not essential for making this the best solution in the public interest of north London.
7(iv) b) No argument has ever been made that there is a legislative barrier to sending waste to a commercial incinerator, provided the Authority complies with the legal requirements for public procurement. To that extent we do not understand why this point is made. Any public procurement would be on an open basis – no facility operator could be compelled to bid, and it would be a matter for them at what cost they proposed to treat the Authority’s waste. The location of any third party facility would also be a material factor because of the cost and environmental impact of the transport of waste. The Authority is acting in an environmentally responsible manner in not exporting waste from the area for treatment elsewhere. This is consistent with the London Plan policy to manage London’s waste within London by 2026 (London Plan).
7(iv) c) The published analysis underpinning the Mayor’s London Environment Strategy identifies that with (a) a 50% recycling rate, a 20% food waste reduction and a 5% landfill rate London would require 3,194,000 tonnes of energy from waste capacity; and (b) with a 65% recycling rate, with a 50% food waste reduction and 5% landfill rate, London would require 2,070,000 tonnes of energy from waste capacity. If the proposed ERF is not provided, then when the Edmonton facility is retired and the South London Combined Heat and Power Plant (which is already nearly 30 years old) ceases operation there would be well under 2,000,000 tonnes of capacity in London which would be located at only two sites, one in Bexley and one in Sutton. That is a shortfall of capacity under all scenarios and a shortfall of capacity of well over a million tonnes in the Mayor’s first modelled scenario above. As indicated in 7(iv) b) no facility operator could be compelled to take north London’s waste.
7(iv) d) For reasons set out in 7(iv) c) this is an inaccurate claim.
7(iv) e) Residual waste volumes are in line with forecasts. The waste forecasts carried out for the project anticipated residual tonnages of between 582,000 and 663,000 tonnes in 2019/20. Actual arisings were around 581,000. For 2020/21 the waste forecasts were for a range of 567,000 to 661,000. Actual arisings were 570,394 tonnes.
7(v) The environmental management referred to in the tender evaluation applies only to the standard practice of assessing contractor’s approach to management of environmental risks during the construction, commissioning and handover for which they are responsible. These requirements are distinct from the environmental performance guarantees of the ERF once operational, which ensure emissions from the facility will comply with the Environmental Permit as issued by the Environmental Agency and other design requirements, such as those relating to the flue gas treatment systems, which will ensure that the plant is one of the highest performing facilities in the UK.
The requirements for the contractor’s environmental management will prevent nuisance and avoid any negative environmental impacts during construction, commissioning and handover. The contract requirements reflect the conclusions and mitigations measures developed as part of the DCO Environmental Impact Assessment including but not limited to the NLHPP Code of Construction Practice (AS05.12), NLHPP Environmental Commitments & Mitigation Schedule (AD06.03) and the NLHPP Sustainability Statement (AD05.13). Additional requirements above those set out in the DCO include programme wide processes for monitoring and measuring key construction environmental indicators as well as a target to reduce embodied carbon by 10%.
7(vi) a) The relevant factors, which the Authority has taken into account, are the directive and permit limits for facilities. The facility will comply with these limits, as authorised for the facility by the Environment Agency through the permitting regime.
7(vi) b) The Authority carried out air quality assessments for the DCO application, which were made public and informed the consideration of the DCO. That DCO was granted in February 2017 after consideration of all the evidence and a full examination in which the public could participate. The Authority is now taking forward the scheme approved in the DCO. The Authority has therefore complied with all duties as regards to the assessment of air quality. As referenced elsewhere, the facility has been specified to perform at a higher level than required by legal emissions limits and far higher than any other current plant in the UK or the subsequent 20 ERF that have secured DCO permission the Authority’s since 2017.
7(vi) c) The ERF to be built will be based on the Authority’s requirements. These include compliance with the Environmental Permit, which includes a NOx emission limit of 80 mg/Nm3. We can assure you that the facility will operate at or below the levels permitted by the Environmental Permit.
7(vi) d) The emissions limits applicable to the facility are set out in the Environmental Permit. They will not be exceeded. The calculated levels of emission for both CO and TOC for the new plant are significantly lower than those of the existing plant.
7(vi) e) The Edmonton EcoPark is an established waste management site, and consideration of alternative sites for an NLWA facility in preparation for the DCO application did not identify any other suitable site for the purpose of meeting the Authority’s waste disposal obligations. The information is in the alternatives assessment report. The opinion expressed on this point is noted.
7(vi) f) We note the reference to the All-Party Parliamentary Group on Air Pollution report. This reports on presentations from selectively invited individuals at a single event in September 2021. The Authority presented at the same event. However, it is the only participant to not have its evidence summarised in the report. A neutral reader would draw conclusions from that. Even so the report acknowledged that [the Authority’s plans] “make every effort on the basis of known technology to minimize health and climate impacts”. The Environment Services Association described the report as “one sided and misleading” https://www.esauk.org/application/files/4916/3957/0199/15122021_ESA_Press_release_APPG_Air_Pollutuion_EfW_Report.pdf. The issues raised in the Air Pollution report have been considered by the Authority. The Report expressly addressed air quality. Further, the Authority’s Legal Adviser comments in the Report expressly draw the attention of Members to their duties under the Equality Act 2010, and the Equalities Implications section of the Report references design and access requirements as well as the obligations relating to employment. The obligations placed on the contractor with regard to social value deliverables are referenced in the Report, and Members were aware of the local economic benefit that will be delivered.
7(vii) As stated in the Report, it is difficult to make a precise comparison with other contracts, as there will be a number of differences affecting the price, including the detail of the facility specification, the nature of commitments and obligations of both parties in any contract, the extent to which costs are fixed at the point of contract agreement and the risk allocation. Our contract includes provisions for high quality emissions control and for the protection of workers’ rights. The conclusions of the assessment are contained in the Report. Information on other contracts is only available to the extent that contracting parties are willing to disclose it. More information was provided to Members on comparator facilities based on the understand the Authority has gained. Such information is commercially confidential.
7(viii) The risks set out in Appendix C are normal contractual risks relating to client obligations and liabilities. They are confidential because public commentary on risk management would be commercially disadvantageous for the Authority and public purse relative to the contractor. Issues mentioned specifically by you – waste importing and CCS – are covered in the public Report and referred to in our response in this letter.
7(ix) The Procurement Report is Appendix A to the Report. This contains the detail supporting the conclusion in the Report that the score of 36 out of a possible 100 is an acceptable result. As stated above, direct comparison with the contractual and pricing arrangements for other facilities is not possible. There will be differences including environmental performance requirements, the creation of apprenticeship and training opportunities to benefit the local community, employment relations requirements, the nature of commitments and obligations of both parties in any contract, the extent to which costs are fixed at the point of contract agreement and risk allocation. All of these affect the overall price. The assessment followed the evaluation framework set out for this procurement, and the information is fully available in the Report.
With regard to the selection process, this is set out in the procurement report. The Authority received four expressions of interest at SQ. Of these, one was not a company with relevant expertise, and was discounted. The other three passed the selection process, namely Acciona, HZI and CNIM. An Invitation to Submit Detailed Solutions (ISDS) was issued to Acciona, HZI and CNIM on 9 October 2020. On 2 December the Authority received notification that Acciona and HZI proposed to combine, with HZI becoming a subcontractor in Acciona’s bid. CNIM continued to participate in the procurement separately. On 9 April 2021, one response to the ISDS was received.
7(x) The Value for Money assessment was appropriately carried out and alternatives were appropriately considered. The Report contains details.
7(xi) The decision made on 16 December on the basis of the Report was a decision on the outcome of the procurement exercise. That exercise had been authorised previously, and formed part of a strategy which was developed taking account of relevant national, regional and local strategies and policies. The Authority has taken account of the specific points mentioned. Proposed measures to reduce waste and increase recycling have been taken into account in the modelling, for example achieving 50% recycling in the north London area. would require the successful implementation of all of the measures referred to.
7(xii) a) The Authority’s CCS Strategy is public and available through the project website.
7(xii) b) The Cory indication that it proposes to submit an application has been noted. The press release containing this information says that “By 2030, this could (emphasis added) deliver 1.5 million tonnes of CO2 savings per annum”. Your letter refers to the Cory comment in the future tense when the company’s statement is in the conditional tense.
7(xii) c) A pause and review of the project would be a significant risk for the delivery of the Authority’s waste disposal obligations. Please refer to the Report.
In relation to your question about section 4.6, the Authority’s clear strategy regarding CCS is referenced elsewhere in this response. The Authority is actively addressing all requirements to bring the CCS deployment to fruition in line with the recommendations of the Climate Change Committee. Recently, the Government has confirmed commitment to support the UK’s CCS programme for phase 2 of tranche 1 and this now includes EFW. The Authority is in direct discussion with government as it develops its approach for subsequent phases of deployment, alongside engaging with other stakeholders in relation to the full CCS chain solution. As a modern standards facility with the availability of space to construct capture and conditioning plant, and the high level of flue gas cleaning which enhances the efficiency of post-combustion carbon capture, it is in the national interest for the ERF to be part of the UK CCS programme.
7(xiii) The Authority is confident that the decision was properly informed.
7(xiv) The Report contains the assessment of the ability to “turn down” the facility if waste volumes decrease. No forecast suggests that waste volumes would drop below 250,000 tonnes per annum during the life of the ERF. The Authority is confident the facility will be able to meet its obligations in the contract with Energetik regarding heat supply.
The statements regarding carbon intensity are incorrect. Carbon intensity is measured in gCO2/kWh, i.e. related to electrical output not gross emissions. The national grid is decarbonising and was at its lowest with 181 gCO2/kWh in 2020 (including natural gas and coal-fired power plant) but there is no guarantee that the decarbonisation will proceed with the same rate due to delivery risks of deploying alternative electricity generation sources such as nuclear. The carbon intensity associated with virgin fossil-fuelled generation without Combined Heat and Power is between approximately 394 gCO2/kWh (natural gas) and 937 gCO2/kWh (coal). The carbon intensity of the ERF with district heating will be between 356 and 284 gCO2/kWh (as the network expands).
EFW facilities also provide beneficial baseload electricity supply to the grid displacing natural gas when renewable energy sources such as wind are not available contributing to improved electricity supply security and mitigate against increasing electricity price increases.
7(xv) The BEIS document “valuation of greenhouse gas and energy use” sets out the Government’s latest guidance on analysing and valuing energy use and greenhouse gas emissions to support options appraisal for policies, programmes and projects. Table 1 associated with the guidance identifies – and the Authority recognises – that over time the average and marginal carbon intensity of power generation will reduce. This reflects the decarbonisation of the UK’s power supply. BEIS recognises that primary energy demand from solid fuel (mostly coal) has declined since 2013 due to switching electricity generation to renewables, waste and natural gas and will continue to decarbonise as the dependence on virgin fossil-fuelled generation diminishes with an increased reliance on lower carbon technology, including nuclear. As there is not a route for residual waste disposal which involves lower greenhouse gas emissions that a modern, efficient energy recovery facility, it remains the case that the Authority’s project remains beneficial in greenhouse gas terms compared to alternative residual waste disposal options. Moreover, the introduction of CCS in due course would reduce the carbon footprint of the facility further or completely.
We note that the Authority report which referenced the net carbon impact of the facility as 28,000 tonnes per year was not intended to be a lifetime appraisal. It remains realistic and accurate based on guidance from Defra which has not been withdrawn or superseded. Whilst there remains virgin fossil-fuelled electricity generation in the UK energy mix, in particular gas-fired plant which currently provides approximately 40% of the nation’s electricity, it is rational to assume that this should be displaced by less carbon-intensive baseload generation such as from the ERF. National Grid have reported that gas-fired generation could continue to meet anywhere between 7%–40% of annual electricity demand in 2035.
With regard to the comments made concerning IPCC guidance, the guidance states “only fossil CO2 should be included in national emissions under the Energy Sector while biogenic CO2 should be reported as an information item in the Energy Sector” – therefore, the Authority has correctly modelled and reported the ERF’s net carbon emissions.
The basis of calculation clearly demonstrates that the ERF is the most climate effective solution for dealing with the waste arising in the north London area compared to landfill disposal as the alternative.
7(xvi) This analysis is not contained in the Report, as the business case review confirms that the size is correct for the forecast waste volumes. In the event that the facility were operated below full capacity, the Authority recognises that this would not change the capital cost of the facility and that some operating costs are relatively fixed and so would not vary according to the lower volume. However, the Authority has also considered how this would compare with building a smaller facility. The latter is a more expensive solution overall for the following reasons: (a) the need for third party capacity to meet the disposal requirements for waste above the smaller facility capacity; (b) additional transport of that waste; and (c) constructing a smaller facility would involve a redesign and a reprocurement. This would (i) require the extension of the operating life of the existing plant, which could include the need to send additional waste to third party operators recognising the risks to ongoing reliable operation of the current plant, (ii) according to our market assessment, inflationary pressures in the energy from waste construction market would mean that any capital savings from a smaller plant would be more than outweighed by the cost of delay, (iii) even without inflationary pressures a reduction in the capacity of the facility does not equate to a proportional change in the capital cost.
7(xvii) The value optimisation exercise was carried out in the context of the Authority’s requirements. The contractor will have to comply with the specification for the plan (including the emissions control) and the requirements of the Environmental Permit. The exercise was set up to seek the best value for the public purse without any compromise in standards. Your client can be assured that the contract terms remain robust and that there is no adverse environmental impact from this exercise.
Your letter was drawn to the attention of all Authority Members prior to the meeting on 16 December. Members took account of all relevant information in reaching their decision to agree the awarding of the contract for the engineering, procurement and construction of the ERF.
Yours faithfully
North London Waste Authority
