Horrors of SERC

It's three years since the Localism Bill was proudly unveiled by Communities Secretary Eric Pickles. It would, he said

“herald a ground-breaking shift in power to councils and communities overturning decades of central government control and starting a new era of people power “ . 

There was a lot more of the same sort of populist guff....

Six months earlier, South Glos councillors had turned down an application from SITA to build an incinerator – sorry, waste-to-energy facility – sorry, Severnside Energy Recovery Centre - at Hallen, three miles north of Avonmouth. It was much more than a NIMBY decision; the area was already overcommitted to waste treatment plant over and above the local need, and the West of England councils were committed to a 'dispersal' strategy to reduce distances that waste must be carried . [Since then, our councils, with that unlikely Local Hero Gary Hopkins at the fore, have abandoned incineration altogether and gone for more advanced technology, along with then innovative food waste colections which are both proving themselves well . Gary survived the Evening Post vilification treatment. Lets hope Daniella Radice is equally resilient ].

But SITA now saw a commercial opportunity to burn as much as half the industrial and commercial waste produced in the West of England area. They appealed to the Secretary of State against the South Glos. decision. In 2011 there was a planning inquiry, at which Mr Pickles' Inspector took the SITA side. Pickles duly overturned the local councillors' decision. So SITA got their permission, but, in the absence of the local customers they'd described in their appeal, they still had nothing to give investors the confidence to put up the cash.

Incinerators need an assured flow of waste to burn – so the operators build in contract terms so that their customers must pay dearly for any shortfall in supply. Who cares that that obstructs any new measures to reduce waste or divert materials for recycling? If local authorities, desperate to avoid landfill taxes, commit to paying out £1.4 billion to burn waste by open combustion in an incinerator for 25 years; well, it's a proven if primitive technology, and financiers are keen to put up the capital with such low risks and high prospective profits. That's the theory.

Having had no more luck selling disposal contracts to local businesses than it had with the West of England local authorities, SITA cast its net wider. In west London it found a consortium of 6 underperforming and unambitious boroughs that were still sending high levels of waste to landfill, and were pretty low down the recycling tables. A deal was done. The incinerator would be built at Hallen as that champion of localisation, Pickles, had ruled; the waste to feed it would now come from the bins of Ealing, Brent, Hounslow, Richmond, Harrow, and Hillingdon.

Of the incinerator outputs, some would be the stack emissions, mostly drifting across North Bristol; some would be 'bottom ash'; some would be highly hazardous fly ash. Some of the heat would generate electricity for the grid, but unless neighbouring customers could be found for the bulk of the waste heat, that would just be dissipated to atmosphere.

Even given the deal, the promise of a cast iron long-term contract, and the profits and low risks that go with it, it seems that investors still didn't exactly queue up waving their cheque books.

Enter the Green Investment Bank. Set up about the same time as Pickles was banging on about the virtues of small government and local decision making, the GIB is supposed dip into its £3.8 billion to back 'green' projects in offshore wind, energy efficiency (especially the 'green deal') , or waste reduction/treatment where its “capital, knowledge and reputation make the difference that enables a project to be successfully financed“.

The GIB must be struggling, what with investors pulling out of offshore wind and the controversy over the big energy companies 'taxing' consumers with what Cameron reportedly dismisses as 'green crap'. It's been putting money into such bizarrely ungreen projects as converting Drax from coal to biomass – wood pellets imported from the forest clearance in the USA. Apparently that's a net reduction in local CO2 emissions, so it qualifies.

At Hallen, the GIB has put £20 million into SERC. As their press release put it, “GIB will invest £20 million of the senior debt alongside a lending club of Credit Agricole Corporate & Investment Bank, Bank of Tokyo-Mitsubishi UFJ Ltd, Sumitomo Mitsui Banking Corporation and Mizuho Bank. Equity will be provided by SITA UK, Japan's ITOCHU Corporation and Scottish Widows Investment Partnership.”

Thanks to them, and Mr “where there's muck there's brass” Pickles, household waste with plenty of recyclable materials still in it will be rail freighted from London to be burned here, in an area where our more progressive local authories have already found ways to recycle more, to pollute less, and to keep it local.

Happy Christmas.