Wednesday, 14 October 2015

All sides close ranks in energy from waste scandal


The various parties involved in the spectacular failure of a so-called *disruptive technology which was supposed to revolutionise waste management across the United Kingdom have erected a complete wall of silence designed to protect them from criticism and embarrassment.

Earlier this week we told how New Earth Recycling & Renewables (NERR) based on the Isle of Man had offloaded their technically flawed £60 million Avonmouth Energy Recovery Facility (ERF) to an Australian bank without any cash changing hands.

An identical facility had been planned for Easter Langlee, on the outskirts of Galashiels to convert tens of thousands of tonnes of household refuse into heat and power. But the deal was only scrapped after Scottish Borders Council discovered the form of pyrolysis being used at Avonmouth was 'not fit for purpose'. They learned their lesson the hard way after squandering well over £2 million of council taxpayers' money on the useless venture.

But no-one seems prepared to explain exactly what is wrong with the product known as NEAT technology which has been under-performing at New Earth Solutions plant near Bristol ever since its completion in 2013. The ERF is now in the ownership of Australia's Macquarie Bank - the Avonmouth project's major lender - and a company called Aurium Capital Finance. A string of New Earth businesses previously linked to Avonmouth ERF have all been renamed and have completely new sets of directors.

NERR admitted it had been forced to separate the energy and waste businesses within the New Earth Solutions Group because it could not afford to finance additional capital expenditure at the ERF. But even substantial extra investment would not guarantee success, according to the Manx-based parent company.

When asked to outline the technological problems at Avonmouth which are likely to have resulted in the collapse of the Borders contract, NERR's controllers Premier Group replied: "The information that has been released regarding the Avonmouth ERF issues is as much detail as the directors wish to divulge publicly. They will not be providing detailed breakdowns of the technical issues encountered, nor the capital identified as being necessary to improve performance.

"It is also worth noting that the facility is no longer owned by the New Earth group of companies as the demerger and sale have now concluded. In terms of the Scottish Borders project, it would be more appropriate to request additional information from the management of New Earth rather than the directors of the fund".

Unfortunately, NES has been contacted several times, and have suggested contacting Scottish Borders Council for information. They maintain they have nothing to add to a joint statement issued by NES and SBC when the catastrophic deal was torn up in February of this year.

Meanwhile, readers of today's Border Telegraph, will know that yet another attempt to have confidential documentation held by SBC brought into the public domain has failed.

Councillor Gavin Logan asked for the release of a crucial report dated October 2012 which persuaded elected members to sanction a contract variation with NES to include the untried and untested NEAT technology in an Advanced Thermal Conversion facility at Galashiels.

We understand this facet of the £80 million contract would have cost up to £10 million, and that reservations about the technology were being expressed at the time the variation was approved.

But council leader David Parker told Councillor Logan last week that the contents of the crucial document were covered by a confidentiality agreement by which SBC were bound.

Macquarie Bank was also contacted and asked what was wrong with the Avonmouth operating systems. The bank said they were not in a position to respond on behalf of NERR, and had no involvement in the Scottish Borders project.

Aurium Capital simply did not bother to reply when asked about the shortcomings of their brand new acquisition and whether more Avonmouth-type ERFs were planned for other parts of the country.

*disruptive technology - an innovation that helps create a new market and value network, and eventually disrupts an existing market and value network displacing an earlier technology.

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