Wednesday, 31 May 2017

Power plant which wowed SBC delegation stays shut till 2018


The delegation of councillors and senior officers from Scottish Borders Council who returned from a fact finding mission to a pioneering energy-from-waste plant in 2014, and afforded the place 'rave reviews', may be embarrassed to learn that the entire facility will remain completely shut down until at least 2018 due to major technological issues.

The Avonmouth RDF (Refuse Derived Fuel), operated by the council's now bankrupt contractors New Earth Solutions had to be closed by its new owners in June 2016 after a pathetic performance record.

Avonmouth, near Bristol, uses the same form of incineration which was to have been installed in a £21 million waste treatment plant at Easter Langlee on the outskirts of Galashiels.

Borders council taxpayers, who lost at least £2.4 million thanks to SBC's mismanagement of the NES contract, may never know the reasons for such enthusiasm by their elected members as no written minutes or report exist about the "jaunt to Bristol".

However, only four months after the team returned home to the Borders their catastrophic deal with NES collapsed and the Easter Langlee project was abandoned. The only winners were the consultants and lawyers commissioned by SBC to facilitate the scheme. Edinburgh law firm Brodies WS walked away with £679,000.

The bottom line is that a form of waste to energy technology, signed up to by SBC in 2012 is still not fit for purpose five years later. We ask yet again what did the visit in 2014 achieve?

The latest chapter in the Avonmouth saga is revealed in a strategic report from Avonmouth Bio Power Ltd., the group which now owns the misfiring facility.

According to the document "The plant is an advanced thermal treatment facility capable of processing 120,000 tonnes per annum of RDF using staged pyrolysis and gasification technology. Uniquely the site also benefits from grandfathered double Renewable Obligation Credits (ROC) for processing organic waste until 2033".

But the inability to provide a consistent RDF has meant has always operated well below full capacity ever since it opened in 2013. So this unsatisfactory situation was being experienced during the SBC 'due diligence' tour.

The newly published report continues: "As a result throughput of RDF has not met the financial targets and the export of electricity has been significantly below expectations. Additionally, the costs of operating and maintaining the plant have risen due to the poor availability as a consequence of the out of specification of RDF".

The document, accompanied by a set of accounts, covers the seven month period up to August 31 2016. It states that an "improvement programme" resulted in material improvements, but these tended to be sporadic and short-lived.

"As a result, in June 2016 the Board decided that a more fundamental approach was required to resolve the continuing operational and financial issues being experienced by the plant. It was agreed to suspend activity in order to undertake a major redevelopment programme, designed to address operational problems, including the potential switch of fuel supply from RDF".

Implementation plans for the redevelopment are currently being finalised..."it is anticipated that these works will commence in 2017 and that operations at the plant may re-commence during 2018".

The Group's accounts show the company's net liabilities stand at £4.035 million and the Group has net liabilities of £6.343 million. The loss for the seven months was £620,000 which followed losses in the previous eight months of £5.723 million.

The plant generated only £505,000 worth of electricity, down from £780,000 in the preceding accounting period.

Avonmouth Bio Power Ltd has outstanding loans of over £25.8 million. A loan of £13.084 million which matures in July 2018, is owed to Cogen Ltd. A further loan of £12.796 million is owed to Aurium Developments Ltd with maturity due in July of this year. This advance carries an interest rate of 18%, and interest of £1.266 million accrued over the seven months.

A waste treatment incineration expert told us: "Interesting that they seem to be trying to make excuses for their failures, including the lack of 'in-specification' RDF which shows their facility is inflexible. Surely they should have known that mixed waste is not a consistent feedstock and that it is hard if not impossible to regularise it sufficiently for their intended purposes in any quantity".

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