Advanced conversion technologies (ACT) projects are more investable than other incineration facilities despite recent high-profile setbacks, according to consultancy Eunomia.
The consultancy’s ACT Market Report says all gasification and pyrolysis treatments for residual waste can apply for subsidy through the Department for Business, Energy and Industrial Strategy (Beis)’s Contracts for Difference (CfD) scheme.
But other incineration projects can bid only if they meet criteria for good-quality combined heat and power (GQCHP), which Eunomia says few facilities are planned to do.
There are 12 waste-fuelled ACT facilities either in operation or being constructed in the UK, of which one received CfD funding. Two others have been backed but construction is not yet underway.
Eunomia managing director Mike Brown warned, however, that despite ACTs currently being eligible for CfD support, they may not do so in the future.
“Despite current uncertainties, investors need to make a quick decision about whether to get involved in the ACT market,” he said. ”ACTs will be competitive in the April 2017 CfD auction, which could make a good business case for development.
”In future rounds, support for ACTs may be refocused on higher value applications of syngas, such as industrial heat, transport fuel or the manufacture of chemicals.”
The report recognises the failure of some ACT projects to come to fruition. A high-profile example was Air Products’ scrapping of its two near-completed Tees Valley facilities in April after encountering technological difficulties.
Another issue addressed is the availability of residual waste feedstock for the plants.
The report says Brexit might lead to more residual waste feedstock being available in the UK because, outside the EU, the country would not have to commit to higher recycling targets beyond 2020.
A growing export market of refuse-derived fuel (RDF), an alternative destination to domestic processing, could also be damaged by a weakened pound, raising the sterling equivalent gate fees at continental incinerators.
It adds that ACT facilities are actually better suited to process solid-recovered fuel (SRF) but could charge a higher gate fee for residual waste, which is of lower calorific content.
The Renewable Energy Association (REA) welcomed Eunomia’s report, calling on Beis to consider its findings in future policy-making decisions.
Policy analyst Mark Sommerfeld said: “The Government should act to ensure that a full suite of ACT renewable products are developed for domestic use and, eventually, for international export.
“ACT can produce green chemicals and renewable transport fuels, including valuable aviation fuel. We hope that this report will be taken on-board by the Government and is used to inform industrial strategy.”