Ferrybridge incinerator receives first funding of new Green Investment Group era
The Green Investment Bank has made its first investment in its new guise, providing £38 million to the Ferrybridge Multifuel 2 incinerator in West Yorkshire.acquisition by Australian investment firm Macquarie last month, the group has made the investment through a debt facility for Wheelabrator Technologies, one of the facility’s developers.
The £300-million Ferrybridge Multifuel 2 facility is being built by Multifuel Energy Ltd, a joint venture between American energy-from-waste (EfW) technology developer Wheelabrator and energy firm SSE. It will be located in Knottingley in West Yorkshire, adjacent to the Ferrybridge Multifuel 1 site, which began commercial operations in July 2015.
Following the GIG investment, Wheelabrator has announced that the development has reached financial close.
Construction of the second facility began last summer, with operations expected to begin in 2019. When the facility has become fully operational it is expected to be able to treat up to 675,000 tonnes of waste a year (with an expected throughput of 570,000 tonnes per year) and will be able to produce enough energy to power around 160,000 homes.
Together the two facilities will create the largest EfW site in the UK when both are fully operational.
Earlier this year, Leeds-based waste firm Associated Waste Management was named as preferred bidder for Bradford Council’s waste treatment contract, which will see a ‘significant portion’ of the city’s 150,000 tonnes of waste taken to the Ferrybridge site. Earlier this summer, Renewi announced a 20-year contract to supply the Multifuel 2 site with 50,000 tonnes of refuse-derived fuel from its facilities in in Wakefield, Barnsley, Doncaster and Rotherham (BDR) and Derby.
“We look forward to a long-term partnership with SSE and remain committed to investing in new long-term waste infrastructure across the UK, providing local and regional solutions to waste management and clean energy generation,” said Wheelabrator President and CEO Robert Boucher.
New era at the GIG
Macquarie’s purchase of the Green Investment Bank was extremely controversial due to the firm’s reputation for asset stripping. However, on completion of the £2.3-billion takeover in August, the group set out plans to invest £3 billion in green projects over the next three years.
Commenting on the investment, Edward Northam, Head of the GIG, said: “This first transaction under Macquarie ownership builds upon our well-established investment strategy.
“Working with Wheelabrator Technologies, we have helped finance the construction of major new energy infrastructure in West Yorkshire and facilitated the continued growth of the UK merchant energy-from-waste market.”
The Green Investment Bank was founded in 2012 to support the development of green infrastructure that would otherwise struggle to find support on the open market in the UK, and since then has committed nearly £4 billion in projects.
However, the majority of investments in the waste industry have been into incinerators. In August 2015, Eunomia Research & Consulting Chairman Dominic Hogg wrote that as of that summer, the 12 waste projects backed by the GIB yielded a total of 2.3 million tonnes per annum of treatment capacity, noting: ‘Of this, three per cent is for recycling, 11 per cent for [anaerobic digestion] AD and 87.5 per cent thermal energy from waste (EfW).’
Since that article was published, seven further waste projects have been backed by the GIB, of which three are incinerators, at a combined investment of £148 million, while three are anaerobic digestion facilities.
Mark Dooley, Head of Energy and Infrastructure, Macquarie Capital Europe, added: “The key measure of GIG’s success will be in making or arranging new investments. We have set ourselves an ambitious target of leading £3 billion of investment in green energy projects over three years and the completion of this transaction under Macquarie ownership is our first step.”