Pennon invests £252m in new Avonmouth energy recovery facility

Pennon has announced a £252 million investment in a new energy-from-waste plant in Avonmouth near Bristol. The project is expected to be completed by 2020/21.

Pennon Group chief executive Chris Loughlin told Utility Week this is “a very significant investment” in infrastructure, which will create around 600 jobs during construction and about 40 permanent jobs when it is in full operation.

“There is a very good strong addressable market for it,” he said. “We have already secured about half of its throughputs – 160,000 tonnes – and we are very confident about the market demand for a plant in that area.”

Once completed, the plant will have a capacity of 320,000 tonnes per annum and will deliver 33MW of electricity which equates to around 260,000MWh per year.

The latest plant takes the number of energy recovery facilities (ERFs) in the group’s portfolio to twelve, eight of which are already in operation.

In its interim financial report for the half year, Pennon said that, of the three ERFs under construction, Dunbar and Beddington ERFs are progressing well and to budget.

Glasgow’s recycling and renewable energy centre is receiving waste and the materials recycling facility is in commissioning. The anaerobic digestion facility is ready to enter commissioning and the advanced combustion facility is around 85 per cent complete.

However, contractor delays mean full takeover of the centre is now expected in 2017. These delays have resulted in Pennon subsidiary Viridor terminating the construction contract with Interserve.

ERF investment to date is £991 million, excluding the £72 million spent on the Peterborough ERF, which was local-authority-financed.

This leaves around £460 million left to invest in the ERF programme; £80 million in H2 2016/17, £180 million in 2017/18, £140 million in 2018/19 and £60 million in 2019/20.

Also in its report, the group announced that the £11 million of cost savings and synergy plans announced last year has increased to £17 million per year from 2019, following the successful conclusion of the shared services review.

The review resulted in the planned centralisation of key corporate services and operational functions, including corporate affairs and communications, facilities, finance, HR, information services, logistics, procurement and aafety, health, environment and quality. Combining these activities is expected to create annual savings of around £6 million, Pennon said.