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Investment in waste: James Samworth, Foresight

We’ve seen some fairly radical changes in recent months in the support for all kinds of renewable energy.

Much of the waste industry’s recent investment has been underpinned by renewable energy support. Unsurprisingly this environment raises questions for sponsors and investors committing funds for new renewables projects.

It’s been known for some time that the Renewable Obligations Certificate (ROC) regime and PFI credits for local authority waste are both coming to an end. There is now significant amount of uncertainty over the future of the Renewable Heat Incentive (RHI) and developers are none the wiser about when the next Contracts for Difference (CfD) auctions will be.  Changes in the review of Feed-in Tariffs (FIT) will likely lead to a large reduction in support for Anaerobic Digestion (AD).  

All these programmes have seen major capital investment in recent years and have driven the UK forward in the sustainability of its approach to waste. So the question is, can that progress be maintained?

We have seen a move to a consolidation phase in other industries with similar dynamics. It wouldn’t surprise me if companies with stronger balance sheets are already assessing the opportunities that these rule changes present.

Despite all of the changes, some underlying drivers remain unchanged and I’m not convinced it’s all doom and gloom. The desire and incentive to move away from landfill remains strong. The UK continues to recognise the importance of creating a sustainable waste management sector and that a return to old ways is not an option.

The market remains rightly cautious about over-reliance on waste exports. Although this can appear a cost effective solution, it is one that could be put at risk with the least amount of notice. It is a less attractive option for UK plc due to the value added opportunities that a thriving high technology process industry the waste sector in the UK can become.

Finally, innovations in the supply chain will be required to move the waste industry forward, keep disposal costs down both for companies and consumers, and to produce clean, renewable energy from which the UK will benefit.

It remains a fascinating market to play a part in.

James Samworth, director, Foresight

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