Councillors at North Yorkshire County Council approved plans to take the £1.4 billion Allerton Park incineration project to financial close at an extraordinary meeting on Wednesday (24 September).

The proposal had already been discussed and endorsed by the county council's executive members and City of York Council cabinet members at meetings on 9 September. However, on Wednesday, the decision was taken to move ahead with the 25-year waste recovery contract held with AmeyCespa – which lost £65 million of private finance initiative (PFI) credits from central government in 2013 – subject to the final costs being within the ‘value for money envelope’ set out by the council.

If the project is found to be ‘value for money’ (the meeting on 9 September outlined that the contract would provide a net benefit of £169 million to the councils over its lifetime), then up to 320,000 tonnes of residual household waste generated in North Yorkshire and the City of York (currently sent to landfill) will be sent to the recovery park, near Knaresborough, for processing.

This will involve:

• mechanical treatment, which will screen out organic matter and recover metal, paper and plastic for recycling;
• anaerobic digestion (AD), which will break down the separated organic waste into biogas, which will be used to generate around 1.1 megawatts (MW) of renewable power and produce a biofertiliser;
• incineration, which will heat the remaining waste to produce steam to feed an electricity generating turbine that will generate around 24MW of power. Spare heat produced by the process could be supplied to local external customers if a market can be established; and
• incinerator bottom ash (IBA) recovery, which will process residual material from the incineration plant into an aggregate which can be used in construction.

If financial close is reached soon, it is expected that the facility will be up and running by January 2018.

Speaking of the decision, a spokesperson for AmeyCespa said: “We look forward to working in partnership with North Yorkshire County Council and City of York Council to provide a waste facility which secures a sustainable long term waste management service for North Yorkshire and York.

“Allerton Waste Recovery Park is a common sense solution for dealing with North Yorkshire and York's waste and will save local taxpayers millions of pounds.

“In addition, it will increase recycling, generate renewable electricity, create jobs and provide an economic boost for local suppliers.”

Allerton Park background

North Yorkshire County Council agreed to award a contract for the long-term management of waste to AmeyCespa in December 2010. It was touted as AmeyCespa’s first major UK waste contract, and the proposed energy recovery park was expected to handle and process up to 90 per cent of the area’s residual waste.

Despite local criticisms over the proposed plant being ‘too big’, concerns over traffic congestion and local property devaluation, the recovery park received planning consent from the county council in October 2012, and, following a commitment from the Department for Environment, Food & Rural Affairs (Defra) to provide £65 million of PFI credits to the project, was scheduled to open in 2015.

However, the plans were put on hold in February 2013, when Defra announced that it was withdrawing PFI funding from three energy-from-waste projects, including Allerton Park, after finding that the 29 projects that already had funding were ‘sufficient’ to meet the EU’s 2020 landfill diversion targets.

After voicing its ‘complete surprise’ at the decision, which reportedly was taken without consultation with the county or city council, a judicial review application was submitted to the High Court in May 2013, on the grounds that the withdrawal was not done ‘in the proper manner’.

Current waste disposal contract expires in March

Speaking at the time, Richard Flinton, Chief Executive of North Yorkshire County Council, said: "We consider that the Secretary of State has not made the decision to withdraw our credits in a proper manner and that he has failed to follow Defra's own published criteria. We also consider him to have failed to take account of the waste management obligations in the Waste Framework Directive; failed to consult with us on his decision; and failed to give proper reasons for his decision.

"At no point, during a lengthy five-year procurement process, had the government indicated that PFI funding would not be available.”

However, in January of this year, North Yorkshire County Council and York City Council dropped their legal case against the government, after concluding it would ‘not be in the public interest for the councils to continue to prosecute’ and would be ‘unlikely’ to change Defra’s decision.

The county council’s current disposal contracts expire on 31 March 2015, and the council is now beginning the process of procuring a four-year framework contract to provide facilities for the disposal and/or treatment of waste ‘to ensure continuity of a disposal service regardless of the decision to proceed with the Allerton Park project’.

Read the full report into North Yorkshire County Council’s reasons for moving to financial close.