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Air Products pulls out of Tees Valley EfWs

Air Products is quitting the energy-from-waste (EfW) sector and has pulled the plug on its two gasification facilities on Teesside.

A statement from the company’s base in Lehigh Valley, Pennsylvania, said that leaving the sector would cost between $900m and $1bn (£700m) in writing down its EfW assets.

The initial facility in the north-east, TV1 (pictured), was expected to be completed this year while the identical plant TV2, believed to be 72% complete, was mothballed in November, attributed to the first plant taking longer than expected.

Now the company has decided “it is no longer in the best interest of the company and its shareholders to continue the Tees Valley projects”.

It said testing and analysis indicated that “additional design and operational challenges would require significant time and cost to rectify”.

The firm said it “will work to optimise the cash value of its investments” but does not specify how this will be done.

It hopes that exiting the EfW sector “will allow the company to direct its resources to its core business of industrial gases”.

Chief executive Seifi Ghasemi said: “We pushed very hard to make this new EfW technology work and I would like to thank the team who worked so diligently.

“We appreciate the hard work of our employees and contractors at the site, and certainly understand their disappointment in this decision. We are also disappointed with the outcome.”

The company said there are currently around 125 employees on-site and in offices, along with approximately 20 contractors.

Unite union regional officer Steve Cason described the announcement as a “massive surprise”, and was hoping to find out more at a meeting with facility manager Andrew Connolly.

In March, the company denied Unite claims that the TV1 site had been mothballed, saying ”Air Products continues to work on starting up the TV1 facility, targeting the end of this year for commercial operation. Some contract workers have been released, but this is consistent with the type of work currently being carried out at TV1.

”As previously stated, we have identified learnings that are being implemented into the TV1 facility and we are currently in a period with higher engineering, design and procurement activity and less activity in the field. We expect the activity in the field to again pick up in a few months.”

Both facilities have been designed to generate 49.9MW of renewable electricity a year, using 350,000 tonnes of non-recyclable residual waste.

Readers' comments (1)

  • UKWIN told 'em to get out of the gasification business, and now they have.

    We can see from https://www.gov.uk/government/news/new-energy-deal-to-save-84m-from-government-bill that the Government expected to "save money and create jobs by harnessing government’s buying power".

    This is from just 3 years ago: "A new deal was agreed today that will significantly lower the cost government pays for energy and create hundreds of local jobs, the Minister for the Cabinet Office Francis Maude announced. The new 20 year contract with Air Products, worth 2% of government’s energy spend, is expected to deliver £84 million in savings over the life of the contract through an innovative fixed agreement that will provide stability in what the public sector pays for energy."

    The Government even added that: "Air Products has longstanding expertise in building and operating large, complex industrial gas and energy plants ensuring its projects are delivered safely, reliably and cost-effectively." and that: "Advanced gasification is a more efficient energy-from-waste process than incineration and has a lower overall environmental impact..."

    Now we read, in the Wall Street Journal, that: "Air Products & Chemicals Inc. said it would be shutting down its troubled energy-from-waste business after it couldn’t efficiently resolve operational and design challenges. Despite promises of powering more than 100,000 homes in England while reducing landfill waste and generating high-tech green jobs, Air Products couldn’t figure out how to efficiently solve problems with the technologically advanced project..."

    That article goes on to reveal how Chief Executive Seifi Ghasemi said in a news release that the company “pushed hard” to figure the technology out and was disappointed with the outcome.

    “How much money do you have to pour into this thing to actually make it work?” Mr. Ghasemi said on a February call with analysts, according to a FactSet transcript. “There is going to come a time when we will stop pouring money into it if it doesn’t meet our requirements.”

    http://www.wsj.com/articles/air-products-to-exit-energy-from-waste-business-1459778254

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