Viridor’s parent company has decided to invest in a 12th energy recovery facility (ERF), as it reports strong performance for the waste business overall.
Pennon announced in its half-year results that it will commit to a £252m ERF at Avonmouth, near Bristol, expected to be completed in 2020-21.
Once completed, the plant will have a capacity of 320,000 tonnes a year and deliver 33MW of electricity, which equates to about 260,000MWh a year.
Viridor is confident of being able to fill the facility’s capacity on opening with more than 50% of fuel already agreed, including 35% from a long-term contract with Somerset Waste Partnership, which is in the final stages of negotiation.
It says a further 800,000 tonnes of feedstock is available from households and businesses in the area surrounding the ERF.
Pennon’s report shows a 3% reduction in revenue for its waste subsidiary compared with £410.1m in H1 2015-16, which it says is due to the Glasgow facility being delayed.
Commissioning has started at parts of Glasgow’s Recycling and Renewable Energy Centre, although contractor delays mean takeover of the centre is now expected in 2017.
But the company says its eight operating ERFs are on track to deliver the target of around £100m of EBITDA in 2016-17.
Construction at its Dunbar and Beddington (south London) facilities are progressing as planned and to budget, according to the statement.
Pennon chief executive Chris Loughlin (pictured) said: “We are continuing to invest for growth. Following a review, we have taken the decision to commit to an ERF at Avonmouth, expanding our portfolio to 12 plants.
“This is a significant investment in the UK’s environmental infrastructure, and will add to the already expected significant increase in EBITDA from our ERF portfolio once all facilities are fully operational.”
Speaking about the Avonmouth plant, Viridor managing director Phil Piddington said: “Not only will the development boost the sustainability of waste management across Bristol and the West of England, but it is another significant infrastructure investment in the region.
“We look forward to announcing our supply chain partners in the coming months and to working with all our other stakeholders to deliver a world class project.”
Recycling revenues grew by more than 50%, and the firm has closed two landfill facilities in the half-year period to incoming waste arisings.
No mention is made of Viridor chief executive Ian McAulay’s surprise departure in September.
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