NLWA Response on UKWIN Request for Value for Money Review

Dear       ,

Thank you for your email.

The North London Waste Authority (NLWA) is the statutory waste disposal authority for the north London boroughs of Barnet, Camden, Enfield, Hackney, Haringey, Islington and Waltham Forest. We are the UK’s second largest waste disposal authority, serving over 2 million people and dealing with three per cent of the UK’s household waste.

I would like to provide some context to the Project, before addressing your individual concerns. As a waste authority we take seriously the responsibility to help minimise use of resources and preserve resources for future generations. We’re passionate about increasing recycling rates and we are investing £100m into brand-new recycling facilities which are necessary to achieve a 50% household recycling rate in north London and help preserve these resources to support the transition to a circular economy.

The new Resource Recovery Facility (RRF) will manage around 135,000 tonnes of recyclable material every year, which will include removing the materials that are suitable for recycling or reuse such as wood, plastics and metal. We have futureproofed the facility through a flexible design to ensure it can accommodate more recycling as levels increase in the future. The facility will include a new Reuse and Recycling Centre (RRC), where for the first time ever, north London residents will be able to bring their recyclable and non-recyclable waste to the EcoPark for reuse and recycling. We’re also building a new community hub called EcoPark House, for local communities to learn more about the importance of recycling and reducing their waste.

We have a wide-reaching and award-winning programme of activity, working with our boroughs to support waste reduction and increased recycling for which we champion the principles of the circular economy and contribute to tackling the climate emergency.

We know that not producing waste in the first place is the most effective way to limit the amount of waste needed to be treated, which is why the NLWA engage with the boroughs to introduce new campaigns and initiatives to promote the importance of recycling and the circular economy. The campaigns, which call on Government to introduce strong and meaningful action, include the introduction of a deposit return scheme, Low Plastic Zones, initiatives to increase recycling on estates and education campaigns to reduce waste contamination. The measures in individual boroughs also include reducing the size of residual waste bins to encourage recycling, and moving to fortnightly residual waste collections.

Waste Forecasting

Our duty as a waste authority is to plan essential services on the basis of robust data and thorough analysis. We have prepared a Need Assessment, which was reviewed by the independent Planning Inspectorate, confirming that north London requires an Energy Recovery Facility (ERF) with capacity to manage up to 700,000 tonnes of non-recyclable waste in the future.

Waste modelling is complex and has uncertainties. It is widely accepted that many socio-economic factors have an influence on waste arisings. As well as population growth, number of households and household size, other important factors include Gross Value Added (GVA), Gross Disposable Household Income (GDHI), unemployment rate, housing type, and household expenditure.

However, the direct causal link and correlation between these factors and waste arisings is not clear. Moreover, within an overall total of waste arisings, forecasting between recycling and residual waste introduces further complexity.

You will be aware that the forecasts which were put forward as part of the Development Consent Order application indicated that residual waste tonnages for north London were likely to lie in the following ranges:

- in 2020/21 between 567,000 tonnes and 661,000 tonnes

- in 2036/37 between 491,000 tonnes and 687,000 tonnes and

- in 2050/51 between 509,000 tonnes and 713,000 tonnes.

We expect residual waste tonnages to be within that range in 2020/21. While the Authority and constituent boroughs are committed to promoting waste reduction and increased recycling, including through new borough Reduction and Reuse Plans (RRPs), it would be imprudent to assume that waste arisings in future years would fall wholly outside the ranges indicated above. Therefore, the Authority continues to consider that the ERF is a properly justified project.

The NLHPP is an essential piece of infrastructure that will prevent a capacity crisis for residual waste in north London. The Mayor of London’s Environment Strategy, which calls for London to become self-sufficient in waste management by 2026, confirms that the NLHPP is a necessary part of London’s infrastructure.

The NLHPP is an integral part of north London’s sustainable waste strategy which will deliver wide-ranging facilities that will allow us to improve recycling rates. It supports the NLWA's award-winning programme of activity to reduce waste and increase recycling, which is the most extensive of any authority in London.

Value for Money review of Project costs

The NLHPP is the most sustainable and cost-effective solution for managing our residents’ non-recyclable waste in the future. An indicative cost estimate was prepared in 2015, which mainly focused on the ERF. A detailed, robust cost estimate of £1.2bn in 2019 prices was then prepared last year by leading experts in engineering, architecture and waste modelling as the project entered the construction phase which included updates to the Resource Recovery Facility design, in line with the most modern specifications, as well as risk contingencies. The review confirmed the waste forecasts that underpin the project, which take account of increased recycling in the future, as well as the required size of the ERF.

We carefully monitor project costs. The 2019 estimate provides a solid basis upon which to do this. The Authority is actively working to minimise costs of borrowing and has successfully bid for £100m of lower interest ‘Local Infrastructure Rate’ borrowing from HM Treasury in 2019, which validated the project’s extensive environmental and financial benefits for north London’s residents.

Incineration tax

The UK Government has not introduced an incineration tax and the Environment Bill (2019-2021) does not propose one. If an incineration tax was introduced in the future, we expect that local governments would be compensated by central government.

Landfill, however, continues to be subject to a high, escalating tax every year, due to it being the least sustainable method of waste management. Treating waste in landfill has been costed and would be an additional £15 million to £26 million per year from 2027 which we believe is an unacceptable cost increase for our residents and undermine our efforts to tackle the Climate Emergency.

Alternative solutions

We have carried out an Alternatives Assessment which provides a breakdown of the potential alternative methods of treating waste, however, none of the considered alternatives provide the benefits of energy recovery. The alternative methods that were considered include landfill, gasification and pyrolysis, mechanical biological treatment and anaerobic digestion. Using any, or a combination of these methods would not be sustainable for north London. They have been discounted due to verified reasons that include having unproven technology or the inability to treat non-recyclable waste. As a waste authority, we cannot take the risk of using unproven or unreliable solutions that cannot handle the volume of waste produced by north London residents.

Energy recovery is the most environmentally responsible way to treat the volume of north London’s waste as it will replace more carbon intensive alternatives for generating energy, such as power plants that burn virgin fossil fuels. The ERF will be part of the UK’s efforts to decarbonise its energy supply and help speed north London towards Net Zero.

Low carbon target

The NLHPP is designed on the basis that our residents achieve 50% recycling rates in the future. It is vital in the transition to a low carbon, circular economy and will ensure that residual waste is not sent to landfill in the future. Instead it will use it as a resource for society, to generate low-carbon heat and power. The ERF will produce efficient, low-carbon energy in the form of heat and power, to supply to 127,000 homes in north London. This energy will be more carbon efficient than the energy supply it replaces (combined cycle gas turbine power plants). This aligns with Labour’s commitment to deliver nearly 90% of electricity and 50% of heat from renewable sources by 2030.

I’d like to conclude by reiterating that we held an extensive two-stage consultation for the DCO between 2014 and 2015 including 15 public events. Development consent for the project would not have been granted unless extensive consultation had been undertaken and additionally, if the consultation activities did not meet the high standard required for DCO application then it would have been rejected and wouldn’t have progressed to its Public Examination phase in the planning process.

I hope this help to answer your questions. Based on the response provided above, we are confident that since the Project was first proposed, our current plans have developed to accurately reflect changes in actual and forecasted waste capacity for north London. Our Alternatives, Air Quality and Carbon Impact assessments have all demonstrated that energy recovery is the most cost-effective and environmentally responsible solution to treat the growing volume of waste in north London. On this basis, we do not believe that a value for money review is necessary.

If you have any further questions, please don’t hesitate to get in touch.

Kind Regards,

Cllr Clyde Loakes