Industry figures have expressed fears that investors in gasification technology will be put off by bad press surrounding Air Products’ withdrawal from its Tees Valley plants.
The company announced it was quitting the energy-from-waste (EfW) sector on 4 April, pulling 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.
Now Keith Riley, proprietor of Vismundi and partner in BH EnergyGap, has told MRW it was a “great shame” for the industry but he was not surprised by the announcement.
He said he could not see another company buying the facilities because few had as much financial capital as Air Products.
“Even if they gave it away for a pound, the liabilities are pretty high in terms of the investment that you need,” he said.
“If they have failed at this point – and bear in mind that Air Products has very deep pockets compared to most other waste companies – so others would struggle.”
A thorough technical review would be required by any potential buyers, he added, because only the company and its contractors would know what specific problems they had encountered.
Industry figures told MRW they were concerned for the knock-on effect the announcement could have for the EfW industry in general, with resulting bad press “unhelpful for investor confidence in the sector”.
A spokesperson for investment firm Foresight said: “This halt in activity is likely to raise questions amongst investors in the EfW sector and could well lead to a more cautious approach.
”However, we would point to the many successful examples of good quality assets round the UK and overseas that are performing well. We believe that any resulting reticence and caution from investors can certainly be overcome, but it will need the evidence explained.”
Riley said it would be unfair for the rest of the sector to be affected by the failure of Air Products’ plasma gasification technology to come to fruition.
“What they were doing was brave and had it worked would have been very exciting in what they would have achieved.
“We may start to get the view that gasification does not work and, of course, that is not the case at all. It is specific to this unique project. Unfortunately, that is the negative PR that could come out of it.”
Shlomo Dowen, United Kingdom Without Incineration Network national co-ordinator, said he was also unsurprised at the announcement, but added that gasification and pyrolysis were “synonymous” with technology and financial failures.
“We hope this latest admission of defeat acts as a wake-up call for the Government which has unwisely been stoking this whole misadventure with environmental harmful subsidies and other unwarranted financial support.
“Investment should focus on sorting technologies and other infrastructure that will move us towards a circular economy, not wasted on disposal technologies which, even if they worked, would still be destroying valuable materials whilst exacerbating incineration overcapacity.”
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.
Former cabinet secretary Francis Maude agreed a deal for the Government to buy the energy from the output of TV2 in 2013 while the energy of TV1 was set to go to food giant MacDonald’s.