Turn back the clock to 2010 and outsourcing company Amey “had absolutely no presence whatsoever in environmental services”, explains Rob Edmondson, managing director for the company’s environmental services division. Today, its turnover is just over £350m after a number of strategic acquisitions and “some very targeted growth”.
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I meet Edmondson at Amey’s Milton Keynes waste recovery park (MKWRP), now fully operational. After a thorough health and safety (H&S) briefing, complete with Powerpoint presentation and an unannounced questionnaire to check our understanding of the rules, we donned full personal protective equipment and toured the facility.
MKWRP was constructed by Amey on behalf of Milton Keynes Council and brings together three technologies – mechanical treatment, anaerobic digestion and advanced thermal treatment (gasification) – to both recycle and create energy from waste (EfW). What makes it unique is its bringing together of these technologies rather than “just putting waste directly into the gasifier”. The objective is to extract as much recyclate from residual waste before it goes through thermal treatment.
The choice of gasification was “very much selected by the client”, according to Edmondson, because it was keen to attract the Renewables Obligation Certificate subsidy. But that gasification element provided the greatest challenge because, during the plant’s construction, Energos, the gasification technology provider, went into administration. This meant that, at a stroke, the project lost its main contractor and related expertise.
Edmondson explains that it was “75% of the way there when we had to effectively step in as the Tier 1 contractor” and put together the rest of the plant.
“We have found that the gasification technology here is very efficient… and delivers an output which is greater than the design capacity.”
He is proud of how Amey handled the situation: “Even though it was delayed, we were able to support the investment, from a point where it could have gone into termination. But we took it to a point of success and we are in service commencement now which is, again, a great reflection on our ability to work with the client to deliver a sustainable outcome.”
On gasification, which is questioned by some people as a technology choice for waste, he says: “Gasification works successfully in other geographies – it has been around for a number of years within the coal industry. We have found that the technology we have here is very efficient…and delivers an output which is greater than the design capacity.”
MKWRP has the capacity to process around 130,000 tonnes a year of waste. The input is made up of around 80,000 tonnes from Milton Keynes Council and the rest will be filled by merchant contracts. For the next three years it has secured that waste from neighbouring local authorities and local commercial operators, including the commercial waste it collects itself. But Edmondson explains that, during the 15 years of the contract, there is the opportunity for it to attract waste from other commercial inputs.
“We are not necessarily wedded to local authorities,” he adds. “But if we can get the right commercial terms and it is a solution that works within the framework of our contract, then we will look to have a mix of both council and commercial inputs. It is very much based on risk and reward. Councils are far more financially sound than perhaps some commercial enterprise but, equally, commercial enterprises might be at a higher gate fee. It is balancing some of that risk.”
There have been high-profile break-ups of long-term deals between councils and their waste service providers. In April, the Environmental Services Association launched a campaign to promote the use of outsourcing to deliver cost savings and drive innovation in service delivery for local authorities and their residents – a response to the increasing number of councils moving away from competitive tender procedures for their waste services.
Of this relationship, Edmondson says a one-size-fits-all approach does not work and you might have to work with customers “who do not necessarily want to work with the private sector to deliver those services”. He adds that it is important to recognise that local government is “not only driven by economics but also political pressure around how services are delivered”.
He cites the Surrey joint waste partnership contract, in its final stages of roll-out, as showing it can deliver “high-quality services at a competitive price and do it on a timely basis”. He adds: “There were a number of challenges which we had to overcome at the very early stages of the contract, which I think under normal circumstances you wouldn’t have foreseen.” But he says the key performance indicators now show that it is stable and delivering effectively.
“What we will also see evolving over the life of that contract, and as that contract matures, is ‘how do you take the benefit of some cross-boundary working with those districts which historically may not have had the ability or capability to deliver efficiencies and synergies across a number of districts?’ ”
“Currently, our mix of public sector to commercial is probably 80/20 but, over a period of time, that will shift and you will see a more balanced portfolio towards a 50/50 split.”
The challenge to the wider implementation of such collective working is having a standard approach and methodology for collecting both residual waste and recyclables.
“The one thing we have seen in Surrey is that they have been committed to having the same service delivered for the four authorities, so you can potentially take the full benefit of the synergy of working effectively over a wider geography,” he says. Standardisation of household collections would make efficiencies for councils more achievable.
“Most of our facilities are predicated on the basis that they will have an anchor client, currently a local authority,” Edmondson says, when asked how reliant Amey is on councils. “If you take our Waterbeach EfW development, that is a pure merchant development. So we recognise that we will have a mix of both local authorities and commercial customers making up our portfolio.
“Some of that merchant capacity may be sold to other local authorities which don’t have solutions but, equally, that can also go to the private sector. Currently, our mix of public sector to commercial is probably 80/20 but, over a period of time, that will shift and you will see a more balanced portfolio towards a 50/50 split.”
Would a council contract always be needed for a new facility? “It depends on how we invest in it. It is great if you can have a local authority anchor to contribute to the input, but that does not necessarily mean it is not possible for us to deliver the solution.
“It is about the risk associated with developing that facility and it is also about ‘how investable is it?’ At the moment, you do need a council client because it makes a project investable from an investor’s perspective, but if there are other incentives then clearly merchant becomes far more viable.”
He says Amey’s strategy “isn’t about being a national operator”, it is not necessarily about being ‘the biggest and the best’ – “it is about looking at where there are opportunities and gaps in the market to create long-term merchant facilities. And those facilities will provide outlets to local authorities which have yet to determine long-term solutions for their waste arisings, and also opportunities within the commercial sector”.
Amey runs four facilities – Milton Keynes, Allerton in North Yorkshire, Waterbeach in Cambridgeshire and Isle of Wight – and Edmondson says the business has shown it can bring “an innovative and creative way” to funding projects.
“North Yorkshire, for example, was a project that had its PFI credits withdrawn, but that project still happened because we were able to attract investment partners and actually deliver that solution for the authority.”
He reveals that it has “a number of pipeline opportunities” and is looking at expansion into other facilities, “but again that will be driven by the availability of waste in that particular geography”.
I ask how Amey ensures its facilities are future-proofed. Edmondson recognises that implementation of a deposit return scheme (DRS) or even pay-as-you-throw would affect the residual waste that its facilities treat.
As an example, Edmondson explains that if a DRS resulted in an incoming waste stream that had no plastic, cans or glass to recover, then the plant could be converted into “some form of grading or some other form of treated recyclates into a more refined fraction”. There would also be the opportunity to bring in organic waste if this fraction was no longer available in the residual waste.
At Amey’s Isle of Wight facility, the mechanical treatment line runs on an alternate daily basis: “One day it splits and sorts the residual waste and on the second day it grades plastics, cans and glass. So the technology is able to be configured to that degree of flexibility.
“That is some of the benefit from having a Spanish parent company which runs this technology throughout Europe. It is typically how you would see plants operating there: dealing with residual waste on a certain shift and then grading other materials on another. Clearly, you have to implement cleaning regimes to avoid contamination but it is a solution that works.”
Edmondson believes the challenge ahead for the waste and recycling sector will be in managing the innovation and change that will come about because of new measures such as a DRS: “I think it will see us become a far more responsible society in terms of the amount of waste that we put out for genuine disposal and how much is then recovered for recycling and reuse.”
CV: Rob Edmondson
Appointed to his current role in 2016. He is responsible for the management of multi-location operations and oversees Amey’s municipal and commercial waste services. This involves working with over 20 local authority clients and around 9,000 commercial waste customers.
Before joining Amey in 2013, Edmondson worked for more than 25 years in the sector including roles at Veolia, Cleanaway and the London Borough of Lewisham.
More on Edmonson’s views on opportunities ahead for Amey