We have enough time for pause & review of the new Edmonton incinerator

The following information demonstrates that there is indeed sufficient time—in addition to an urgent need—to pause and review the plans for a new energy-from-waste (EfW) incinerator in Edmonton. These points focus on timing, financial impacts, and related considerations. They do not include details on carbon emissions, pollution, health impacts, overcapacity, or other reasons to review the plans, which are covered elsewhere.

• No construction contract until mid-2022. The North London Waste Authority (NLWA) has selected three (international) bidders and plans to award the contract to build the incinerator itself in Q2 of 2022. Contract execution is to begin at the start of Q3 2022, following a month-long pause (see page 26 of this NLWA tender presentation, which is also pasted below). That means the seven north London councils have a significant window to pause and review the current plans and put the most appropriate solution in place. Ideally, the councils will withdraw support for the incinerator before the contract is signed, in part to avoid the cancellation fee in the contract. Such fees tend to be substantial and typically increase over time (the later the cancellation, the higher the fee).

• Limited sunk costs to date. At the end of March 2020, the NLWA had entered into contracts totalling just under £23 million on the Edmonton site (see page 25, Section 6: Capital commitments, of the NLWA’s statement of accounts for the year ended 31 March 2020). The majority of these works are necessary regardless of which type of waste management plant is to be established there, including works related to access, sewerage, and the EcoPark area. Similarly, the £100 million resource recovery facility, which is already under construction, is required regardless of whether an incinerator is built.

• Sunk costs can be written off. Councils will be able to write off a portion of lost costs, even if that process is cumbersome and affects council budgets. Any resulting reduction in a budget is sure to be far smaller than the massive budget spend that would be caused by a stranded asset down the road—the consequence of building an incinerator whose capacity far exceeds the current amount of residual (non-recyclable) waste, while expecting rapid growth in recycling rates, which will significantly slash waste treatment needs in north London (and beyond). Budget concerns are not a reason to ignore the need for a pause and review; in fact, they are a reason for a pause and review. Moreover, fears about the current budget should not outweigh responsible, long-term decision-making.

• The new incinerator itself would be a sunk cost if built. The NLWA estimates that the construction of the incinerator itself will cost £600 million, while associated land purchase, utility, and relocation costs, together with risk contingencies, account for an additional £350 million. Given that the plant would be a stranded asset well before the end of its operational life of at least 50 years, these expenses themselves would effectively be sunk costs if the north London councils are serious about achieving 2030 recycling targets. Since the plant is oversized, at least 50% and probably 85% of its capacity would not be used over its lifetime.

• Don’t throw more good money after bad. If the incinerator plans are reconsidered and deemed incompatible with the climate and ecological emergency and associated imperatives, or unjustifiable in the light of developments that have taken shape since the plans were drawn up in 2015, then surely the approach should be to stop throwing more money at it and move on with plans that are compatible with the climate and ecological emergency.

• The current incinerator is operational until 2027. Given that London will have surplus EfW capacity even if the new Edmonton incinerator is not built, as confirmed by the Mayor’s office (evidence available), and that the councils have legal, practical, and financial reasons to get serious about meeting municipal and national recycling and waste reduction targets by 2030, there is plenty of time to draw up realistic waste management plans that do not involve a new incinerator and that provide solutions for treating north London’s drastically reduced amount of residual waste once the current incinerator is decommissioned. The long-overdue Joint Waste Strategy (JWS), drawn up by the NLWA and its seven constituent councils, is the perfect vehicle for such analysis. The now expired extant JWS was drawn up in a different era, for a different era.

• One north London council could lead the way. One council may be able to set the tone for the new Strategy. By being the first council to reevaluate the Edmonton incinerator plans, that council could potentially persuade the other north London councils to follow suit. This move could be seen—and remembered—as bold and far-sighted.
  

• Funding. Funding to date has not come through PFI but rather from the Public Works Loan Board (PWLB), which does not get involved in how the money is spent. PWLB funding so far is relatively small and would certainly be dwarfed by the much larger financing required to actually build the plant.

• Pending decisions also require a pause. The following decisions, among others, may have an impact on the viability of EfW incineration, which could have serious financial implications for the councils and taxpayers of north London:

• • UK ETS. A favourable decision in Georgia Elliott-Smith’s legal case against BEIS regarding the exclusion of EfW emissions from the UK Emissions Trading Scheme (which came into force post-Brexit) could very well cause a significant increase in the cost of EfW incineration. The court date is set for April; more details are available here.
    

  • CO2 tax. If the Government decides to impose a carbon tax, the cost of EfW incineration would increase considerably.

• • COP26. The outcome of the international conference could affect the UK’s overall approach to counting and costing carbon emissions from EfW incineration.

• Future risk. In view of climate and temperature forecasts, it is difficult to envisage that burning waste—with all its CO₂ implications—will be politically acceptable in the not-so-distant future, and certainly not in 2050 (when the incinerator would be only halfway through its operational life). A decision to proceed now would thus place a burden on decision-makers in the not-so-distant future to take a decision to reverse matters, at a time when it will be far more costly to do so. Since incineration contracts stipulate minimum tonnage requirements to ensure the financial viability of the operator, going forward with plans to build the Edmonton incinerator also means agreeing to supply enough waste to keep the plant operating at capacity—and emitting the corresponding greenhouse gases—into the distant future. The question before north London’s councils is: Will the decision to reverse course be taken now, responsibly, before costs skyrocket, opportunities for a green recovery are lost, and the equivalent of 250,000 diesel cars are added to our roads? Or will the decision be pushed off to the near future? That’s the real call being made.