North Yorkshire Council
Transport, Economy, Environment and
Enterprise Overview & Scrutiny Committee
19 October 2023
Allerton Waste Recovery Park
Performance Update
Report of the Corporate Director of
Environment
1.0 PURPOSE
OF REPORT
1.1
To provide members of the Transport,
Economy, Environment and Enterprise Overview and Scrutiny Committee
with an update on Allerton Waste Recovery Park (AWRP) contractual
performance since services commenced in 2018.
1.2
To provide information about options
being considered around how to decarbonise AWRP in the
future.
2.0
SUMMARY
2.1 This
report summarises the contractual performance of the Allerton Waste
Recovery Park (AWRP) facility since services commenced on 1 March
2018 to the most recent contract year of 2022/23.
2.2 Having
regard to the current legislative framework and the likely changes
required by a number of Government consultations around Climate
Change and Carbon, the report also outlines options being
considered for utilisation of the asset and future decarbonisation
of AWRP.
3.0
BACKGROUND AND RECENT LEGISLATIVE CHANGES
3.1
The long-term waste Public Private
Partnership (PPP) contract was signed by North Yorkshire County
Council and AmeyCespa (AWRP) SPV Limited (Amey) on 30 October
2014. Following contract completion, the development
commenced on 5 January 2015 and Amey completed a three-year
construction and commissioning programme.
3.2 AWRP has
been operational since 1 March 2018 and consists of a Mechanical
Treatment (MT) plant, an Anaerobic Digester (AD) and Energy from
Waste (EfW) facility to receive and treat residual waste from
across York and North Yorkshire.
3.3 The site
also has a Visitor and Education Centre where members of the public
and groups can visit the facility to learn about management of
waste. AWRP has hosted over 6,500 tours either in person or
virtually (which commenced during the COVID-19 pandemic).
Between March 2018 and August 2023, online carbon pledges have
offset 1,538kg of carbon.
3.4
Amey’s parent company Ferrovial sold the Amey business at the
end of 2022. The Amey waste treatment business unit was not part of
this sale and this business unit, which operates the AWRP facility,
was retained by Ferrovial. The waste treatment business unit
has been renamed and re- branded as Thalia Waste Management.
There was no change to the managerial or operational staff as
part of this transfer.
3.5 At the end of
2022, HMT published draft legislation on the Electricity Generator
Levy relating to a tax on exceptional profits to apply from 1
January 2023 – March 2028. The EfW sector has been
included as an industry that would be in scope – which
broadly speaking is a 45% tax on exceptional generation receipts
(above a floor price of £75/MWh and a company/group has an
allowance of £10m income prior to the tax being
applied). Currently the legislation is still in draft, and
the project revenues for 2022-23 may need to be revisited once the
Bill has been published.
3.6
Following a consultation exercise in March 2022, on 3 July 2023, UK
Government released a consultation response which looks to include
Energy from Waste facilities in the UK Emissions Trading Scheme (UK
ETS) from 2028
https://www.gov.uk/government/consultations/developing-the-uk-emissions-trading-scheme-uk-ets.
3.7 This
proposal could have potentially significant impacts on the
contractual costs for the AWRP facility. The UK ETS places a
tax on the amount of carbon produced which is derived from
fossil
sources in the waste stream when waste is incinerated and
incentivises decarbonisation measures which are further discussed
in section 11.
4.0
PERFORMANCE AGAINST CONTRACTUAL TARGETS
4.1 The AWRP
contract contains two main targets relating to recycling and
diversion from landfill. The table below sets out performance
since the first full year of operations (2018/19).
|
|
Target
|
2018-19
|
2019-20
|
2020-21
|
2021-22
|
2022-23
|
|
Recycling of Contract
Waste
|
5%
|
1.16%
|
1.58%
|
1.08%
|
1.04%
|
2.02%
|
|
Diversion of Contract Waste from
Landfill
|
70%
|
82.22%
|
82.82%
|
80.94%
|
89.40%
|
92.64%
|
Table 1 – Performance against Contractual Targets
5.0
RECYCLING PERFORMANCE
5.1 The
contractual target is to recycle or compost a minimum of 5% of
Contract Waste annually. For material to count towards this
target, any recylates that are extracted from the processes at AWRP
need to be placed into recycling markets. AWRP separates
recyclables from residual waste meaning that the quality of the
product is poorer than recyclables collected separately from
households at the kerbside.
5.2 Since
operations commenced, there have been several factors effecting
recycling markets including the Covid - 19 pandemic, which saw an
increased supply of clean material collected from the
kerbside. Recycling re-processors choose higher quality
materials over poorer quality ones meaning that despite the
materials being separated at AWRP, there were times when they could
not be placed into the market.
5.3 During
2022 and 2023, rising energy costs meant that a number of offtakers
either slowed production or closed processing plants for periods of
time. This impacted the contractor’s ability to access
recycling markets resulting in lower annual recycling
performance.
5.4 The
majority of local Authority long-term energy from waste facilities
are not able to extract any materials for recycling so all their
waste is burnt, whereas AWRP has a Mechanical Treatment plant that
recovers materials which contribute to the overall NYC recycling
figures which are reported annually.
5.5 The
recycling/composting performance for NYC for 2022-23 was 43.6%
which is slightly above the mean derived from 26 other Waste
Disposal Authorities. The Authority continues to work with
Thalia to build upon the progress made in 2022-23, both in terms of
recovering plastics from residual waste but also seeking behaviour
change so that residents deposit plastic containers in their
kerbside recycling container as opposed to the residual
bin.
6.0 LANDFILL
DIVERSION PERFORMANCE AND CONTRACT WASTE TONNAGES
6.1 Since
operations commenced, landfill diversion performance has been
higher than the contractual target and has improved year on
year. 2022-23 saw the lowest amount of waste sent to landfill
since service commencement. The planning permission for AWRP
allows the facility to receive up to 320,000 tonnes of waste per
annum.
6.2 The
facility is sized to ensure there is sufficient capacity to treat
NYC and CYC waste for the 25-year contract term. Thalia can
accept and treat waste from third parties to maximise plant inputs
and generate third party income.
6.3 AWRP has
two planned maintenance shutdowns per year (Thalia are looking to
move to annual shutdowns from 2025). During this time, some
of the Contract Waste is diverted to Contingency Delivery
Points. Historically, these have mainly been landfilling
sites, however, work is ongoing to secure more treatment facilities
when AWRP is undergoing planned maintenance.
6.4 There is
a provision in the contract called Tonnage Not Accepted (TNA),
where if the Contractor cannot accept Contract Waste at AWRP, the
Authority can make disposal arrangements and re-charge the
costs. There have been a small number of occasions where this
has happened in prior years, however in 2022-23 there were no
instances of either unplanned shutdowns or TNA.
6.5 The
table below sets out the amount of Contract Waste treated at AWRP,
sent to Contingency Delivery Points, or reported as TNA since
2018-19. Local Authority tonnages increased throughout the
Covid-19 pandemic; however, these have now returned to pre-pandemic
levels. The figures contained in the ‘Tonnage
origins’ section of the table shows whether the Contract
waste originated from NYC, CYC or Yorwaste commercial (which is
classed as Contract Waste and enables the Authority to access the
most cost-effective rates under the Contract).
|
Total Contract Waste
|
2018-19
|
2019-20
|
2020-21
|
2021-22
|
2022-23
|
|
Treated at AWRP
|
216,295
|
221,566
|
221,615
|
253,097
|
245,593
|
|
Contingency tonnage
|
50,996
|
23,762
|
40,944
|
21,852
|
32,471
|
|
TNA
tonnage
|
1,349
|
25,249
|
11,164
|
1,182
|
0
|
|
|
268,640
|
270,577
|
273,723
|
276,131
|
278,064
|
|
Tonnage origins
|
|
|
|
|
|
|
NYCC
|
167,006
|
165,995
|
168,551
|
174,609
|
166,261
|
|
CYC
|
51,951
|
50,731
|
52,031
|
52,556
|
49,252
|
|
Yorwaste Commercial
|
49,683
|
53,851
|
53,141
|
48,966
|
62,552
|
|
|
268,640
|
270,577
|
273,723
|
276,131
|
278,064
|
|
|
|
|
|
|
|
|
Contract Waste to
Landfill
|
47,529
|
45,698
|
49,059
|
22,645
|
17,749
|
|
Contract Waste to alternative
Treatment
|
4,817
|
3,313
|
3,049
|
389
|
14,722
|
Table 2 – Contract Waste tonnages
7.0 ENERGY
FROM WASTE PLANT PERFORMANCE
7.1 EfW
plants are complex, and it is not uncommon to encounter technical
issues in their early years of operation. AWRP is no exception,
however, the plant has been performing more consistently and at a
higher level over the last two years in terms availability and
electricity production as issues have been addressed and
resolved. As a result, the tonnage throughput of the EfW has
increased since 2020-21 and the Contractor is working to optimise
plant performance.
7.2 In
2020-21, Thalia began recording whether downtime of the EfW was as
a result of planned or unplanned events. Unplanned downtime
is categorised as ‘defects’ or ‘other’
(which includes any operational or system issues impacting the EfW
availability). It is important to note that not all the
unplanned downtime events resulted in diversions of waste, and time
lost to unplanned downtime has reduced year on year.
|
|
2018-19
|
2019-20
|
2020-21
|
2021-22
|
2022-23
|
|
EfW
Availability %
|
81.13%
|
75.16%
|
77.82%
|
84.25%
|
84.87%
|
|
Planned downtime %
|
|
|
5.73%
|
7.64%
|
9.27%
|
|
Unplanned downtime %
|
|
|
16.45%
|
7.99%
|
5.80%
|
|
Tonnage throughput
|
231,774
|
230,054
|
227,653
|
256,728
|
262,400
|
Table 3 – EfW availability and throughput
7.3 Each
year a consultancy company called TOLVIK produces a report on the
UK Energy from Waste sector summarising information provided in
annual reports submitted by Contractors. The weighted average
availability information reflects the differing ages of facilities,
input specifications for waste, approach to management and
technical specifications. Historic reports up until 2021
listed individual operators weighted average availability
performance. The 2021 report listed a range of plant
availability between 79.9% – 94.3% with AWRP performing at
84.25% in 2021/22.
7.4 In 2022,
the weighted average availability of all EfW plants included in
TOLVIKs report was 87.7%. AWRP achieved 84.87%
availability for 2022-23. Although AWRP is slightly behind
the TOLVIK average, availability has improved over the last two
years due to utilising planned down time to install a ‘best
in class’ refractory lining. Unplanned downtime has
reduced from 16.45% to 5.80%. In 2023-24 Thalia forecast both
planned and unplanned down time of 6% each as the major refractory
bullnose issues have now been resolved, which will bring plant
availability in line with the TOLVIK average in the EfW
market.
8.0
FINANCIAL IMPLICATIONS
8.1 This
report is a factual summary of the information provided by AWRP SPV
as part of the Annual reports required under the AWRP
contract. There are no financial implications of this
report.
9.0 LEGAL
IMPLICATIONS
9.1 This
report is a factual summary of the information provided by AWRP SPV
as part of the Annual reports required under the AWRP
contract. There are no legal implications of this
report.
10.0 EQUALITIES
IMPLICATIONS
10.1 There are no
significant equalities implications arising from this
report.
11.0 CLIMATE CHANGE
IMPLICATIONS AND OPTIONS TO DECARBONISE AWRP
11.1 A climate change
impact assessment is attached at Appendix A of this report.
No significant impacts have been identified relating to this
report, which is a summary of contractual performance of AWRP since
2018.
11.2 The UK Government
has committed to achieve net zero greenhouse gas emissions by
2050. Waste sector emissions accounted for c6% of the
UK’s greenhouse gas emissions in 2018. There are
several government consultations and initiatives around carbon
reduction and climate change that may impact on the AWRP facility
over the life of the contract.
11.3 EfW’s produce
around 25 times less carbon than landfill sites, however, AWRP
still emitted around 289,600 tonnes of carbon during 2022-23.
UK Government plan to include EfW plants in the UK ETS from 2028
which is likely to affect the AWRP facility by taxing the amount of
fossil derived carbon produced. Further consultation on the
UK ETS is expected from Government later in 2023.
11.4 AWRP has been
designed so that heat and/or electricity could be taken from the
plant and utilised. There have been a number of discussions
since operations began around maximising the asset at AWRP,
however, no firm proposals have been put forward to
date.
11.5 At the end of 2022,
the waste team undertook some soft market testing to assess whether
any companies could prepare a feasibility study identifying
preferred options for the following decarbonisation
projects:
·
Heat/power offtake from AWRP for
either domestic or commercial premises or a mixture of
both.
·
Production of green hydrogen
utilising some of the electricity or waste heat produced at AWRP
and options to deploy either commercially or for NYC/CYC/Yorwaste
vehicles.
·
Options for Carbon capture usage,
storage, or transport from AWRP.
11.6 Five companies responded
to the market testing exercise and in January 2023, the team
applied for funding from the York and North Yorkshire Local
Enterprise Partnership Devolution Deal Net Zero Fund to support
preparation of feasibility study considering decarbonisation
options for AWRP.
11.7 The NYC team are working
closely with Thalia and hope to undertake a procurement exercise in
the Autumn to appoint a consultant to prepare the feasibility study
and options appraisal. It is anticipated that the study will
be available in the summer of 2024. Once a preferred option
has been identified, this will be brought to Members with a view to
developing an investible Financial Business Case.
|
12.0
|
RECOMMENDATION
|
|
12.1
|
To note the
content of this report
|
APPENDICES:
Appendix A – Climate Change Impact Assessment
BACKGROUND DOCUMENTS:
Karl
Battersby
Corporate
Director – Environment
County
Hall
Northallerton
19 October
2023
Report Author
– Lisa Cooper – Commercial Manager, Waste
Presenter of
Report - Peter Jeffreys – Head of Waste (Contracts) and Lisa
Cooper - Commercial Manager, Waste
Note: Members
are invited to contact the author in advance of the meeting with
any detailed queries or questions.
