by LESTER CROSS
Our coverage of Scottish Borders Council's disastrous dalliance with the waste incineration industry, resulting in the loss of at least £2.4 million of public money, apparently failed to impress bosses at the Aviva whose investor clients (UK pension funds in this case) have had their fingers burned to the tune of around £350 million in similar circumstances, according to reports.
It has emerged that an Aviva shareholder, the late Barry Robinson, from Hull, warned the Aviva’s then Group chief executive Mark Wilson seven years ago of the dangers of putting cash into untried and untested technology being used in multi-million-pound gasification projects aimed at turning waste into electricity.
But despite Mr Robinson's intervention, and criticisms from other Aviva stakeholders, management of the investment giant continued to pour huge wads of their investors’ cash into so-called biomass plants in Hull, Boston in Lincolnshire, and Barry, South Wales.
Loans totalling £480 million were ploughed into the three sites by Aviva between 2015 and 2023.
However, just like the ill-fated £23 million waste incinerator planned for Easter Langlee on the outskirts of Galashiels, "the technology posed significant challenges that would require more investment to solve".
Our investigations into the Borders scheme which councillors were forced to abandon in 2015, revealed that the system being flogged to the local authority by insolvent outfit New Earth Solutions Group [NESG] was basically useless. And NESG's supposed offshore financial backers - Premier Group (Isle of Man) - could not come up with the money for the Galashiels incinerator.
Most of our information was gleaned via Freedom of Information requests to the council, several of which were rejected on 'commercial confidentiality' grounds. However, on several occasions the Borders authority was ordered to release the paperwork it wished to hide by the Scottish Information Commissioner.
A series of Not Just Sheep & Rugby articles published in August 2017 was used by Mr Robinson to back up his claims in his letter of September 2017 to Mr Wilson.
He wrote: "I understand that Aviva is investing heavily in UK infrastructure. Whilst this would seem sensible policy, I am perturbed by the enthusiasm for, (alleged), production of renewable energy by gasification of waste. I have been unable to find any evidence showing that gasification of waste to produce renewable energy works on an economically viable scale. Any 'evidence' supporting the validity of the technology seems to be dependent on small-scale experiments, the results of which are hyped-up so often that they appear to be evidence".
Mr Robinson claimed that many developers in this field seemed to have "an amoral disregard" for facts. They seemed prone to assuring investors that everything was going to plan, right up to the car-crash.
That was certainly true in Easter Langlee's case, with meaningless assurances from NESG repeatedly swallowed by those promoting the project.
According to Mr Robinson: "Jed Forrester, in his online blog, 'Not Just Sheep and Rugby' (entries for 20-27 Aug 2017), claims to have exposed a classic case of this in which Scottish residents will have to foot a £2.4 million bill for incompetence at all levels regarding a gasification plant at Easter Langlee. (I enclose copy)".
And he concluded: "Please reply. I will be grateful if you will supply me with a clear written assurance that Aviva has investigated my complaint and agrees or disagrees with the comments I have made."
The cash for Aviva's 'calamitous' involvement in incinerators - dubbed by critics as the dirtiest form of power generation - has been channelled through an Aviva Unit Trust based offshore in Jersey which then loaned the funds to another Aviva subsidiary, based in the UK, called Aviva Investors Infrastructure Income No.3 Ltd.
Yet the annual report stated: "The objective of the company is to achieve investment returns from investments in biomass projects".
The Guardian newspaper reported that Aviva now planned to put the three incineration plants into administration in an apparent bid to cut its substantial losses.
The newspaper claimed the plants in Hull and Boston had generated far less electricity than planned, while the plant in Barry had been mothballed due to a planning row with the Welsh government.
Shlomo Dowen, national co-ordinator at the UK Without Incineration Network (UKWIN) was a friend and colleague of Mr Robinson as well as a fierce critic of the Easter Langlee failed scheme.
He said incineration was “harming recycling and exacerbating climate change”.
“Additionally, at a time when all efforts should be made to improve air quality, incinerators are harming the air that we breathe. And that is just one example of why incinerators are experienced as bad neighbours.”
Anyone thinking of following SBC and Aviva down the waste incineration route would do well to read the newly published 'Considerations for Potential Investors in UK EfW Projects' produced by UKWIN.
The document points out that the UK Energy from Waste (EfW) incineration sector is encountering a range of new and growing challenges that could significantly influence profitability, and this warrants careful consideration by potential investors in existing and new projects.
It adds: "At a time when the range of risks is increasing, the sector’s traditional model of mitigating risks, such as feedstock availability and regulatory changes, through long-term public sector waste contracts is becoming increasingly difficult to maintain."
The authors explore key risks that support the conclusion that investors should consider investing higher in the waste hierarchy rather than in new UK EfW capacity.
The full report can be accessed here:
https://ukwin.org.uk/Considerations-for-EfW-Investors.pdf
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