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Lakeside EfW andCrayford MRFTuesday, 12 July 2011
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David Dupont
Group Director of Finance
4
• Pennon Group Plc is a large FTSE 250 utility infrastructure company. The Group is
committed to:
- sustainable development;
- enhancing the environment; and
- providing high quality customer services
• We have around £4.1 billion assets and employ over 4,300 people
• The Group has two principal subsidiaries:
- South West Water provides water and sewerage services in Devon, Cornwall
and parts of Dorset and Somerset
- Viridor is one of the UK‟s leading recycling, waste management and renewable
energy businesses
Pennon Group PlcOverview
5
Colin Drummond
Chief Executive, Viridor Ltd
6
ViridorEfW: Major Planning Successes since 31 March 2010
• Cardiff EfW (Trident Park)
• planning permission achieved June 2010
• Dunbar EfW/CHP (1)
• planning appeal won December 2010
• Ardley EfW (Oxfordshire)
• planning permission achieved February 2011 and Residual Waste Treatment
PPP contract signed March 2011; Secretary of State decision being challenged
locally
• Avonmouth EfW
• planning appeal won with costs April 2011; Secretary of State decision being
challenged locally
• Total 1.3m tonnes, 125MW (electricity plus heat)
(1) Combined Heat and Power
Viridor Renewable Energy Summary – Operational
• Landfill gas
108MW (as at 31 March 2011)
• Lakeside Energy from Waste (EfW) plant at Colnbrook near Heathrow joint venture
with Grundon Waste Management
410,000 tonnes pa and up to 37MW
• Bolton EfW facility (part of GMW sub-contract)
120,000 tonnes pa and 9MW
• Reliance Street, Manchester mechanical biological treatment / anaerobic digestion
(first of 4 facilities as part of GMW sub-contract) operational post year-end
50,000 tonnes pa and 2MW
• Total operational capacity 136.5MW (1)
(1) Includes share of joint venture capacity
Viridor Renewable Energy Summary – Consented
• Runcorn / Ineos Chlor Combined Heat and Power (EfW / CHP)
750,000 tonnes pa, 120MW, Phases I and II
– both phases under construction
• Ardley (Oxfordshire) EfW - 300,000 tonnes, 25MW
– contracts signed March 2011; Secretary of State‟s planning decision subject to
challenge
• Exeter EfW - 60,000 tonnes pa, 3MW
• Cardiff EfW - (Trident Park) - 350,000 tonnes pa, 30MW
• Dunbar EfW / CHP - 300,000 tonnes pa, total 40MW
• Avonmouth EfW - 350,000 tonnes pa, 30MW; Secretary of State‟s planning decision
subject to challenge
• Planning permission achieved for 3 further AD plants in Manchester, now all under
construction; also in Somerset and Croydon
• Total consented but not operational capacity (1) c.190MW (electricity plus heat)
• Target total capacity over 300MW (1) in 5 years‟ time
(1) Includes share of joint venture capacity
Viridor Current PPP/PFI Projects
• Oxfordshire PPP – contract signed March 201125 years; £205m capexEfW; 300kt; 25MW (1)
• Greater Manchester PFI – April 200925 years; £640m capex, 1.1m tonnes paUK‟s largest ever combined waste and renewable energy projectHWRCs, MRFs, MBT, AD, composting, transfer stations, bulk transport (including rail)associated EfW / CHP (Runcorn)
• South London Waste Partnership PPP – September 200814 years, 450kt parecycling, transfer stations, transport, AD, landfill
• Somerset PPP – May 200625 years, 200kt palandfill, composting, HWRC centres, partnership re AD / future residual treatment
• West Sussex PFI – April 200525 years, 350kt paHWRCs, MRF, transfer stations and bulk transport
(1) Secretary of State’s planning decision subject to challenge
ViridorPPP Prospects (1)
• Provisional preferred bidder for Cheshire
• One of last two for South Lanarkshire
• One of last two for Glasgow
• One of last two for South London Waste Partnership
• One of last two for each of Peterborough EfW and MRF
• One of last two for West Lothian
• One of last three for South East Wales (Gwyrdd)
• One of last three for Heads of the Valleys
• Viridor continues to bid selectively for other contracts
• Increasing landfill tax is the fundamental driver for the above projects
• Healthy list of prospects including renewable energy / Combined Heat and Power and recycling opportunities
(1) Government PFI cutbacks may lead to some delays or changes (PPP vs merchant)
Viridor Operational Highlights – Recycling
• Volumes traded increased by 0.3m tonnes (22%) to 1.7m tonnes with improved mix
existing business 0.2m tonnes (13% increase)
acquisitions 0.1m tonnes
• Overall recycling revenues per tonne back up to peak levels (after the deterioration in
H2 2008/09 and H1 2009/10)
• Landfill tax to increase by £8 per year from current £56 per tonne to £80 per tonne
from 1 April 2014
enhances long-term economics of recycling and energy recovery
• Recycling and Waste Management Business of the Year (National Recycling Awards,
July 2010)
• Profit per tonne in recycling appreciably above the level in landfill
• Recyclate very economical compared to virgin materials
ViridorAcquisitions
• 2010/11 five recycling companies acquired for c.£50m:
Reconomy, £23.8m: 3 MRFs in East Anglia and the South Midlands
Pearsons, £16.0m: MRF and associated facilities in Norfolk
Adapt Recycling, £0.7m: recycling and waste management operator in Bury
Swinnerton, £1.8m: recycling and waste management operator, also in Bury
Martock, £7.4m: MRF and associated facilities in Somerset
• Above acquisitions
have significant operational synergies in the UK
provide additional recyclate volumes for Viridor network
nationally
internationally
• Reinforces Viridor‟s position as the largest operator of MRFs in the UK
• For a three minute introduction to Viridor‟s MRFs, see http://www.youtube.com/user/ViridorTV
ViridorFinancials Outlook
• Next step change in Viridor‟s performance will come as major EfW projects start to
come on stream in 2013/14
a 300kt EfW plant generates c.£25m plus EBITDA (UK GAAP basis) once
operational
• Runcorn EfW/CHP under construction
Phase I to open late 2012/13 (20% Viridor ownership)
Phase II to open late 2014/15 (100% ownership)
• Planning permissions achieved for four further major EfW plants (two subject to
challenge)
• EfW could more than double Viridor‟s EBITDA (currently £117m) by 2015/16
• For the next two years Viridor‟s profits will be driven by Recycling
Dan Cooke
Communications Manager, Viridor
WELCOME TOLAKESIDE EfW
Dan Cooke – External Affairs Manager
December 2005
May 2007
• Lakeside EfW Ltd is a joint venture with Grundon and
Viridor – leading UK recycling, renewable power and
waste players
• Cost to build the plant: £160M
• Design life: 25 years
• Capable of treating 410,000 tonnes of waste per year
• 37 MW capacity - equates to generating 250,000 MWh
of electricity annually to the national grid
• Lakeside EfW is privately funded and therefore the
cost to the tax payer is nothing.
• Created 46 new jobs
Lakeside EfW Overview
The Waste Hierarchy and Resource
Efficiency
• Waste Hierarchy: Reduce, Re-Use, Recycle,
Recover, Dispose
• Grundon and Viridor – recycling-led service providers
• Facility inputs from local authorities and businesses
across SE England – delivering landfill diversion and
improved resource efficiency
• Lakeside recovers energy from non-hazardous
residual (post-recycling) waste only
• New generation plant – safe, robust and efficient
• CHP-ready
Project Structure
LakesideOwner
TakumaEPC
FortumO&M
FichtnerOwners Engineer
Actual Layout
Waste
Flue Gas
Slag
Fly Ash
Primary Air
Secondary Air
Recirculation
Flue Gas
Combustion Flow
Steam Water Cycle
FurnaceSuperhtrEconomsr
Feed Water Pumping
Boiler Drum
Feedtank & DA
Bypass Station
Steam Turbine
Gen
ACC
Cond Tank
Make Up WaterWTP
CWI
Reducing StationCombustion
Air
Air Pre-heater
•Two process streams - throughput of 27 tonnes of waste per hour each.
•Each stream will produce approximately 5.5 tonnes of bottom ash, and 1 tonne metals - re-useable commodities
•Ash from the Flue Gas Treatment (FGT) system is approximately 0.9 tonnes per hour (c.24 tpd) - classed as hazardous waste - taken from site, neutralised and landfilled.
•95% of input produces energy or is recycled
•<5% final disposal
Lakeside EfW
• State-of-the–art engineering, monitoring and environmental control systems
• Emissions controlled and monitored by Lakeside EfW
• Also monitored and regulated by the Environmental Agency.
• Emissions from all EfW plants must comply with the Waste Incineration Directive (WID) – do not compromise local air quality standards.
Environment
Monitoring Lakeside EfW
The plant is designed to meet the requirements of the Waste
Incineration Directive (WID) as a minimum for release.
Abatement equipment is designed to reduce emissions:-
– Lime to remove acidic gases such as HCl, SO2 and HF
– Activated Carbon to reduce dioxins, PCB's, PAH's, mercury
vapour and heavy metal salts.
– The final stage is a bag filter to remove particulates
– NOx removal is by ammonia injection into the furnace to reduce
the NOx to N2
Monitoring Lakeside EfW
The plant will not continue to operate if:
• emission limit values are exceeded for a period of more than 4
hours
• Continuous monitoring equipment is out of service for more
than 4 hours
• Cumulative duration of abnormal operation exceeds 60 hours
in either of the above cases, calculated over one calendar year.
• Total particulates shall not exceed 150 mg/m3
• Total particulates half hourly limit 30 mg/m3 or 10 mg/m3 daily
average
How do We Compare – 58 mile Stretch?Annual emissions from the Lakeside EfW facility and the
Surrey section of the M25
0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
Oxides of nitrogen Carbon monoxide Fine Particulate Matter
Volatile Organic Compounds
Ton
ne
s e
mit
ted
pe
r ye
ar Annual Actual Emissions to air from Lakeside EfW
Annual Actual Emissions to air from the Surrey Section of the M25
Substance
Actual Emissions from Lakeside
EfW (tonnes per annum)
Permitted Emissions from Lakeside EfW
(tonnes per annum)
Surrey Section of the M25 (tonnes per
annum)
Actual EfW emissions as a percentage of
the Surrey Section of the M25
Oxides of Nitrogen (NOx) 306 416 2,987 10.3%
Carbon Monoxide (CO) 24 104 2,330 1.0%
Fine Particulate Matter(PM10)
2.73 21 78 3.5%
Volatile OrganicCompounds (VOCs)
4 21 366 1.0%
Carbon Dioxide 355,614 n/a 696,818 51.0%
Annual Emissions – Lakeside vs
Surrey M25
Lakeside - Summary
• Converts up to 410,000 tonnes residual waste into 37MW
of power
• By-products (bottom ash and metals) recycled
• Safe, robust and reliable technology
• EfW – potential significant contribution to base-load
power for UK
• Value for money treatment option
• Complements high levels of recycling, delivers landfill
diversion and improved resource efficiency.
H & S Site Tour Brief
• PPE - Everyone will wear :-
High-visibility jacket or vest
Hard hat
Glasses
Gloves
Protective footwear
• All visitors will sign an induction form
Site Tour Brief
• Please stay in your groups and stay with your escort
• Please be aware of moving vehicles and of contractors moving around sometimes carrying equipment
• In the event of an emergency the site siren will sound
• Vacate the building and go to the muster point which is by the Grundon offices
Emergency
Assembly Point
Gate C
Gate D
Enjoy your visit!
Graham Warren
SE Regional Director, Viridor
Stuart Wood
Regional Manager, Viridor
Introduction to Crayford Materials Recycling Facility
Graham Warren and Stuart Wood
Viridor South East Region
Site history
• Former oil terminal
• Recycling facility developed by Grosvenor Waste
Management
• Acquired by Viridor in 2007
Location
• South east London
• C. 2 miles from M25 Dartford crossing
• Good road links to M25 and London
• Potential for river/rail links
• Improved local access from adjacent development
Crayford MRF
• One of Europe‟s largest and most-advanced MRFs
• Produces high-quality materials for end-market
reprocessing.
• Helps local authorities meet recycling targets and
businesses improve their environmental performance.
• Inputs include:
– Source segregated materials (glass and plastic bottle
banks, paper – office grade or mixed)
– Commingled collections
Operational overview
• Site capacity approximately 350,000 tonnes per annum
• Can operate 24 hours per day/363 days per annum
• Wide range of contracts servicing local authorities across the UK - emphasis on London and the Home Counties.
– 200,000 tpa of commingled recyclate from local authorities
– Trade dry recyclables, single stream materials
– Reject rate 4%
Operational overview (2)
• Site has 3 plants – Main MRF, Mini MRF and Plastics
Plant
– All of them use the latest mechanical sorting
technology
– Range of NIR separators
– Strict manual inspection and quality control processes
in place
– End products are single stream recyclables: paper,
card, cans, tins, plastic bottles, glass and textiles.
Main MRF
• Processes 38 tonnes of commingled material per hour
with 32 employees per shift
• Material is fed through a bag splitter – some Councils in
London collect their recycling in plastic sacks.
• Next stage is the trommel – a rotating drum – to screen
out glass fines and mid-size fraction
• End-product is a high quality paper material (news and
pams).
Main MRF (2)
• Mid-size fraction enters a „Ballistic Separator‟, this
separates remaining paper from containers (plastic
bottles, tins and cans)
• Containers are then fed by overhead conveyor to the
Plastics Plant.
• Paper coming out from the ballistic separator is quality
inspected, producing News and Pams and mixed-paper
grade products.
• Glass screened from the trommel is fed to the glass
processing plant to remove any contaminants and then
using a „Destoner‟ the light fraction is separated by
difference of density.
Mini MRF
• It‟s a smaller version of main MRF and processes 12
tonnes of material per hour with 16 employees per shift.
• Same processing equipment: trommel, ballistic
separators and destoner.
• It was built in 2006 to allow additional throughput.
Plastic plant
• Processes containers – plastic bottles, aluminium cans,
steel tins and glass
– Feedstock from main and mini MRFs plus dual stream
local authority container collections
– Processes 6 tonnes of material per hour with 5
employees per shift
– Highly automated facility, commissioned in 2006
Plastic plant (2)
• A trommel pre-screens glass and fines (<60mm).
• Utilises optical sorting technology (infra-red) to remove
contaminants and identify different plastic polymers –
HDPE, PET.
• Over-band magnet removes steel tins.
• An „eddy-current‟ separator removes aluminium cans.
• At the end, a manual inspection assures quality of output.
Baling
• Three channel-press balers – each with a capacity of
processing 30 tonnes per hour.
• All end-products (except glass) are baled into mill-sized
bales of c.1 tonne.
Analysis – Data Reporting
• 24 hour analysis team sampling inputs, outputs and real
time production data
• Providing comprehensive monthly reports to local
authority and commercial clients on the quality and
composition of their inputs.
• Bespoke designed material weighing and database
system installed in 2010
Dispatch
• Bales are stored in despatch yard before being put into
shipping containers or curtain-sided vehicles.
• Site loads c. 40 shipping containers per day.
• All loads are rigorously recorded and photographed to
ensure traceability.
Imminent Site Developments
• Materials Shredder, for granulation of single stream hard
plastic polymers and fabric materials, such as carpets
and textiles.
• Upgrade of glass processing plant, for production of
higher grade glass cullit products suitable for colour
sorting, for the glass re-melt market.
• Installation of pre-sort cabin to allow more efficient
processing of trade and Commercial recyclables.
Basic Site Rules and Safety
• Site will be operational during visit
• Please leave incendiary materials behind
• Please wear PPE at all times when in the working area
• Be aware of vehicle movements
• Take extra care on steps and walkways
• Observe pedestrian routes
• Please stay as a group with your tour leader
In the event of an emergency
• Please follow the instructions of your Tour Leader
• The Assembly Point is the Main Car Park through which
you will have entered the complex
Thank you
and please enjoy your visit
Herman van der Meij
Commercial Sales Director, Viridor
Viridor Resource Management Limited
Materials, Marketing and Logistics
Herman van der Meij
Purpose & Objectives
VRML is charged with the responsibility for:
• The national, European and international marketing and sale of all
VWM‟s recyclables from its facilities through the UK;
• Onward logistics to end customers;
• Third party material procurement/trading - expand upon its activity and
transport to end customers or Viridor facilities for further treatment (VGR,
VPR and VER);
• Financial – take care of Viridor‟s financial interest within these markets;
• Robust marketing strategy – develop and implement strategy that shall
serve the company well through medium and long term market cycles;
• Efficiently and effectively manage the marketing, associated risks and
logistics of over 1 million tonnes of recyclables per year; and
• Position and then place quality products within the global markets in a
timely, professional, competitive and profitable manner.
Market Drivers
Recyclate demand and price key drivers by:
• Supply and demand – global economic trends and
supply and demand among manufacturers/reprocessors;
• Legislation and directives – National and European – setting
targets for landfill diversion, recovery and use, based on „polluter
pays‟ principals;
• Virgin raw materials – environmental impact and increasing cost of
sourcing and processing – more need for recyclables;
• „Raw materials poor‟ regions – typically the rapidly expanding
major manufacturing locations in China, India, Vietnam and
Indonesia; and
• currency exchange rates; and
Market Drivers
• high quality output grades that meet manufacturing‟s quality
standards, optimising end markets throughout the long term and
maximising revenue.
Material Fractions in Co-mingled Input
45%
8%17%
17%
2%2%2% 3% 2%1%1%
Material FractionsNews & pams OCC Mixed papers Glass
Fe Al Metals HDPE PET
LDPE Hard plastics Tetra Pak E fraction Landfill
Material Purchase & Sales Structure
LogisticsPLASTICSProcurement
SourcePRN / PERN’sMETALS GLASSPAPER
Tenders
Municipal
Commercial&
Industrial
Waste Man Co’s
Sold through Market Specialists
Sold through Market Specialists
Sold through Market Specialists
Sold through Market Specialists
VIRIDOR
Sold through Market Specialists
Marketing and Sales
• Comprehensive materials and market intelligence.
• „Customer Support‟ - understanding and servicing the customers needs.
• „Door to Door Service‟ – Logistics Department – UK, EU and
International.
• Maximising our economies of scale – allows us to enter into sales
arrangements and to purchase transport and shipping at competitive
rates.
• Local markets – preference is to sell into most local market available
(wherever possible).
• International – established EU and global markets for all material
grades.
• Financial – monitoring credit limits, checking Letter of Credits are OK
and being sure we diversify the sales. “A deal is done as soon as we
have the money in our bank!!”
The UK is now a net exporter of
recyclables since July 2006
GDP and Paper Consumption per
Capita for the Ten Largest Economies
COUNTRY
GDP Per
Capita
($)
PAPER PRODUCTION
(MILLION)
POPULATIO
N (MILLION)
PER CAPITA CONSUMPTION
(KG/YEAR/PERSON)
USA 47,568 83.8 305 297.1
JAPAN 42,653 28.93 127 233.6
FRANCE 40,591 9.87 65 178.7
GERMANY 40,512 23.17 82 231.7
UNITED KINGDOM 36,298 5.28 60 201.2
ITALY 33,828 10.11 59 205.7
RUSSIA 10,512 7.56 142 37.5
BRAZIL 10,471 9.15 196 39.5
CHINA 4,520 78.03 1,321 44.7
INDIA 3,563 8.5 1,148 8.5
Export sales are increasingly essential
• Decline in UK paper industry.
• Difficulty absorbing materials from increased
recycling targets.
• 38 UK mills closed since 2000 (energy costs key risk).
• 1.8M tonnes reduction in mill capacity since 2000 (300 KT in 2006
alone).
• UK exported 4.4M tonnes of paper in 2010 – a 2M tonne increase
since 2004.
• Asia absorbed 3.2M tonnes, China 2.7M tonnes in 2010, Viridor has
got +/- 18% market share of the UK export to China.
• Positive – Palm, Kings Lynn and Saica, Trafford Park, Manchester ,
severla new paper machines in Europe.
Certification and Auditors
Waste Management License (EA)
Waste Carrier and Broker License (EA)
PERN – Packaging Waste Exporter Accreditation (EA, DEFRA and
Environment Exchange)
WEEE Exporter Accreditation (EA)
PRN – Glass Packaging Re-processors Accreditation (EA, DEFRA and
Environment Exchange)
AQSIQ – China Import Accreditation (CCIC)
ISO 1400:2004 EMS Accreditation (BSI)
ISO 9001:2000 Quality Management Systems (BSI)
OHSAD 18001 (BSI)
Integrated Management System PAS 99 (BSI)
Participating in ESA‟s RRS Audit Scheme (B.Veritas/ESA)
Quality Assurance
• Input
– Non-conformances issued by email, including photographs
– Full record analysis of all suppliers input
– Trend analysis
– Monthly issuing of Quality Management information to all suppliers
• Output– Quality Assurance operatives on line
– Full recorded analysis of every output grade
– Quality assurance of every production grade
– Shift Quality Assurance tags on every bale
• Audit Trail– Dedicated shipping department
– PRN Accredited
– Audited by EA and DEFRA
– AQSIQ/CCIC system and audit
– ESA-RSS Audit Scheme
ISO 9001 FS 515984ISO 9001 FS 515984 ISO 14001 EMS 72946ISO 14001 EMS 72946
To end with a small but strong quote from Jim Rogers a
famous Raw Materials Guru!!
“I am very optimistic about the price of raw materials.
I think you’ll be rich because you’re in the right place
at the right time.”
THANK YOU!