HERTFORDSHIRE COUNTY COUNCIL

CABINET THURSDAY, 28TH APRIL 2011 AT 12.30PM (or on the rising of the Waste Management Cabinet Panel, whichever is the later)

HERTFORDSHIRE WASTE PROCUREMENT PROGRAMME

Report of the Director Environment & Commercial Services

Author: Bryony Rothwell, Programme Manager (Tel: 01992 588350)

Executive Member: Derrick Ashley Environment, Planning and Waste

Local Members: Stuart Pile (Hatfield South), Aislinn Lee (St Stephen’s) and Caroline Clapper (Watling)

1. Purpose of report

1.1 To provide Cabinet with an update on progress with the Hertfordshire Waste Procurement Programme and details of the analysis of final tenders submitted by E.ON Energy from Waste AG and Veolia ES Aurora Limited.

1.2 To enable Cabinet to consider the appointment of a preferred bidder for the project and the process to award the PFI contract.

2. Summary

2.1The Waste Management Cabinet Panel and Cabinet have previously received reports detailing progress with the Hertfordshire Waste Procurement Programme to secure a long term solution for Hertfordshire’s municipal waste treatment and disposal needs. This report summarises the process, the key aspects of the two final tenders received, the evaluation, the timetable for completion of the procurement programme and the process to be undertaken before the PFI contract is finalised to provide a deliverable and affordable solution.

2.2The programme has taken over 3 years since inception and has involved a rigorous and robust procurement process to satisfy the County Council’s requirements and those of Defra and HM Treasury, in order to qualify for the PFI credits. There has been a substantial commitment from the County Council with dedicated internal resources and commissioned specialists.

2.3 This report is supported by more detailed information which is exempt under Part 1 of Schedule 12A to Local Government Act 1972 (as amended).

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Agenda Item No.

3

3. Recommendations

3.1The Waste Management Cabinet Panel will consider a report on this item of business at its meeting on Thursday, 28 April 2011. The Panel will asked to recommend to Cabinet that, having considered the matters set out in this report and the issues that have been raised during the Programme, Cabinet proceeds to appoint the Preferred Bidder for the Hertfordshire Waste Procurement Programme as set out in the Part 2 papers and, subject to the matters mentioned in the Part 2 papers, authorises the award of the contract to the Preferred Bidder.

3.2The recommendation(s) of the Panel will be reported orally at the meeting and circulated to Members in the Order Sheet.

4. Background

4.1 The Hertfordshire Waste Procurement Programme (HWPP) was initiated to assist the statutory duty of Hertfordshire County Council, as Waste Disposal Authority (WDA), to provide disposal facilities for all of the residual municipal waste collected by the county and district councils. Like other WDAs, Hertfordshire is facing decreasing landfill capacity, increasing costs for example from landfill tax and the legal responsibility through the Landfill Allowances + Trading Scheme (LATS) to reduce the amount of biodegradable waste landfilled.

4.2 The process has its roots in the Joint Municipal Waste Management Strategy 2007 (JMWMS07) agreed by the Hertfordshire Waste Partnership (the ten district and borough councils and the County Council) in November 2007. The JMWMS07 was prepared after a countywide public consultation exercise which received over 11,000 responses. The key findings arising from this consultation were:

70% of respondents supported a target of recycling at least 50% of household waste by 2012.

95% thought it was important to consider the environmental impacts of any waste disposal facility.

95% said it was important to consider turning waste into energy. 90% thought it was important to consider the cost effectiveness of

any new facilities. 86% thought the County Council should seek to minimise the

transportation to any facility.

As a result JMWMS07 concluded that there was a requirement for interim arrangements to meet the LATS targets set for 2013 and 2020 whilst a longer-term solution was put in place.

4.3 These factors were incorporated in the Outline Business Case to Defra for PFI Credits and further into the subsequent procurement documents. The approach sought a solution to deal with all municipal residual waste rather than just the biodegradable portion as the continued increases in

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Landfill Tax alone, which will rise to £80 per tonne in 2014/15, represents a budgetary pressure of £2.4m p.a. for the County Council.

5. The procurement process: Outline Business Case to Detailed Solutions

5.1 Following the public consultation and the publication of the JMWMS07, the County Council established the HWPP to seek a long term solution to meet residual waste treatment and disposal needs.

5.2 Outline Business Case. In order to achieve a suitable financing solution, the County Council made an application for Waste PFI Credits through the submission of an Outline Business Case (OBC) to Defra in October 2008. The OBC detailed the work carried out to prepare a potentially deliverable Reference Case which consisted of treating Hertfordshire’s residual municipal waste at an Energy from Waste (EfW) plus Combined Heat and Power (CHP) facility. The OBC confirmed that a facility could be operational from 2014/15 for a period of 25 years. The Reference Site location for the facility was given as the County Council owned site at New Barnfield, South Hatfield. The OBC and the supporting documentation provided the baseline for the evaluation of tenders although the County Council remained strictly technology and site neutral throughout the process and remained open to the offer of alternative waste treatment technologies and sites both within and outside the County. Further discussions with Defra resulted in a revised OBC being approved by the Cabinet on 19 January 2009. At the same Cabinet meeting it was acknowledged that the potential use of New Barnfield required a programme of projects to address the range of impacts that this would have. Papers were thus presented regarding the relocation of services from New Barnfield and requesting Cabinet approval to release the site from its then current function.

5.3 The OBC received Ministerial approval on 12 February 2009 and was forwarded to HM Treasury’s Project Review Group (PRG) for consideration. The application for £115.3 million of Waste PFI Credits was provisionally approved on 9 April 2009 with a condition that the County Council had two years to complete the procurement process.

5.4 For the purpose of compliance with the Waste Infrastructure Development Programme (WIDP), when considering the OBC the Cabinet was required to approve the range between the cost of delivering the contract compared to the current projected service budget, this being described as the Affordability Gap. In addition, in order to understand the impact of risks on the cost of delivering the contract, the Affordability Gap was based on two scenarios, the first recognising the delivery of the contract in accordance with the planned timetable etc, the second calculation, based on certain risks being realised, such as increased capital costs, and planning delays. This latter, higher cost of delivering the project (than the current projected budget) provides an upper limit to the range of the Affordability Gap.  In October 2008, an overall affordability gap of £144.2m was identified. Members were also

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made aware of an overall affordability range of £144.2m up to £338.5m. Following further developments entailing reviews to the financial model and assumptions relating to the project timetable the Cabinet agreed in January 2009 that the Director of Finance, Information and Commercial Services issued on 27 January 2009 the Section 151 letter indicating that the County Council was committed to meet a best case affordability gap of £176.7m over the life of the contract. The County Council also acknowledged that a worst case scenario indicated an affordability gap of £375m.

5.5 Procurement Process. The County Council placed a Contract Notice in the Official Journal of the European Union (OJEU) on 9 April 2009. The OJEU notice stated that "Hertfordshire County Council, a Waste Disposal Authority for the purpose of the UK Environmental Protection Act 1990 is seeking to enter into a long term PFI/PPP contract with a single contractor (or consortium) for the design, build, finance and operation of, or capacity at, a residual waste treatment and disposal facility or facilities". It also stated that "the Residual Waste Project will be procured using Competitive Dialogue procedure in accordance with Regulation 18 of the 2006 Regulations". It was at this early stage of the process that the procurement needed to make clear the exact methodology for evaluation, with defined criteria, in order that Bidders were fully aware of the basis upon which they would be assessed as they developed their solutions.

5.6 Thirteen pre-qualification questionnaires (PQQs) expressions of interest were submitted to the County Council in response to the OJEU by the deadline of 15 May 2009. The thirteen are set out in the table below.

Applicant

Waste Recycling Group LimitedBiffa Waste Services LimitedCovanta Energy LimitedVeolia ES Aurora LimitedEthos Recycling Limited / Murphy Group consortiumSITA UK LimitedE.ON Energy from Waste AG (EEW)Shanks PFI Investments Limited / Wheelabrator Technologies Inc consortiumUrbaser S.AJohn Laing Investments Limited / United Utilities Waste Management Ltd / Keppel Seghers Belgium nv consortiumKier Construction LimitedVT Group plcMVV Umwelt GmbH

5.7 The submitted PQQs were assessed against published criteria in accordance with the requirements of the Public Contracts Regulations 2006 as below:

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Criteria for the rejection of economic operators (Regulation 23)

Economic and financial standing (Regulation 18(10)(b)(i) and Regulation 24); and

Technical or professional ability (Regulation 18(10)(b)(ii) and Regulation 25); and

The result was a recommendation approved by the Cabinet on 6 June 2009 that the top scoring 6 companies and consortia be Invited to Participate in Dialogue (ITPD). These companies were:-

Covanta Energy Limited E.ON Energy from Waste AG (EEW) MVV Umwelt GmbH Shanks PFI Investments Ltd / Wheelabrator Technologies Inc

consortium SITA UK Limited Veolia ES Aurora Limited

5.8 In order to ensure that there was both a competitive environment and issues of key importance to the County Council could be considered at an early stage, the procurement documents created by the County Council invited the companies to submit Outline Solutions (ISOS), with submissions received on 2 October 2009.

The Outline Solutions addressed the following issues:-

Sites and Planning. The County Council owned site at New Barnfield, South Hatfield was made available to the market. However, its use was not mandatory and Bidders could promote different sites. In response to questions on sites and planning, Bidders needed to demonstrate the deliverability of site(s) and how they would mitigate planning risk in the context of the County Council’s extant and emerging waste policies.

Funding Routes. Due to the changes in financial markets, the County Council had to be certain that Bidders were able to fully-fund any solution. The County Council wished to receive proposals from Bidders on how they would deliver a fully funded solution.

Technology and Contract Waste. The procurement documentation stated the County Council was technology neutral and willing to entertain any proven technology capable of meeting its requirements as set out in the draft Output Specification. In addition to exploring different technology solutions, the County Council wished to consider any proposals for the treatment of the whole of the residual municipal waste stream including the 75,000 tonnes per annum of waste identified in the OBC as "potentially untreatable" residual waste. In terms of the contract waste of 345,000 tonnes p.a. in 2039/40, the County Council explored with Bidders how much waste could be diverted from landfill and what guarantees could be offered, the amount that could not be treated by the

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proposed solution (and therefore needed to be landfilled or treated off-site) and any opportunities for recycling. All Bidders at ISOS proposed EfW as the technology they thought was the best solution for the County Council.

Spare Capacity and Third Party Waste. The County Council recognised that, in addition to the forecast contract waste, there was a substantial quantity of commercial waste arising in Hertfordshire. The County Council wished to explore with Bidders any operational and/or financial advantages of treating and disposing of third party waste at the facility but, in considering third party waste, there would be caveats to ensure that the County Council's contract waste took priority and acceptance of third party waste offered value for money. In addition, the proposed solution should not be reliant on third party waste for its successful operation either from an operational or financial perspective.

Delivery Vehicle. The County Council wanted to ensure that the proposed Special Purpose Vehicle (SPV) was a robust and cohesive entity and, where Bidders were proposing a consortia and/or Significant Sub-Contractors, how it would ensure that the parties remain committed throughout the process.

Combined Heat + Power (CHP) benefits. The benefit of the recovery and utilisation of energy in the form of electricity or heat was recognised in the procurement documents, therefore Bidders were encouraged to propose innovative adoption of CHP within their Solution(s) to maximise energy recovery.

Environmental and Social Sustainability (ESS). The County Council wished to ensure that any solution provided tangible benefits to Hertfordshire in terms of its whole life environmental impact, its contribution to the better use of energy, the provision of employment, particularly in the local area, the management of traffic and engagement with local people to raise awareness through the Hertfordshire WasteAware campaign of the impact of their waste.

5.9 The Outline Solution evaluation process applied the agreed evaluation criteria and methodology. The Waste Management Panel considered the result of the evaluation at a meeting on 18 November 2009. The agreed short-list recommended and adopted by Cabinet were the following top 4 scoring companies and consortia (in alphabetical order):

E.ON Energy from Waste AG (EEW) MVV Umvelt GmbH Shanks PFI Investments Ltd / Wheelabrator Technologies Veolia ES Aurora Limited

After the Cabinet decision the four Bidders were Invited to Submit Detailed Solutions by April 2010.

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5.10 To ensure a robust and transparent process in accordance with the Public Contracts Regulations 2006, the Invitation to Submit Detailed Solutions (ISDS) documentation, was very clear and explicit and the requirements for Bidder responses were structured to reflect the agreed evaluation criteria and were, therefore, sub-divided into the following categories:

Legal: A key requirement was for the Bidders to respond to the draft Project Agreement, which is based on the Waste Infrastructure Delivery Programme (WIDP) Residual Waste Treatment Contract. This document required the Bidders to identify their commercial positions including risk transfer back to the County Council over the full elements of what will become the contract. The County Council also considered the extent of the proposed changes from WIDP’s standard form contract as any such changes may involve a risk transfer to the County Council and would need approval from Defra and HM Treasury to ensure continued PFI support

Technical: The operational requirements were described in the Output Specification, which included a Performance Management Framework that is reflected in the Payment Mechanism. Bidders were required to propose their detailed technical responses to these requirements in the form of developed designs and method statements.

Financial: A central part of this requirement was the completion of the payment mechanism that set out in detail how the annual charge to the County Council is created through a set of components including payments for non-performance, income and associated profit sharing mechanisms. The financial requirements also required Bidders to confirm their funding proposals and their “Base Case” assumptions for pricing and income share with the County Council on the basis of projected electricity sales and income from third party sources (including sale of recyclate and spare capacity).

Environmental and Social Sustainability: The County Council sought to encourage Bidders during the pre-submission meetings to consider in particular the local benefits of heat exploitation.

5.11 Evaluation of ISDS bids was undertaken by the programme team officers supported by their external advisors. The agreed evaluation methodology for ISDS stage was applied to arrive at scores for the four Detailed Solutions received. This evaluation was considered by the review team, which comprised of senior officers meeting on 24 June 2010. The review team recommendation was further considered by the ratification team (which comprises of the Director Environment and Commercial Services, the Assistant Director Environment & Commercial Services responsible for the project and the Programme Director) on 28 June 2010. The recommended list of Bidders was approved by Cabinet on 19 July 2010 and an Invitation to Participate in further Dialogue was issued to the top 2 scoring Bidders:-

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E.ON Energy from Waste AG (EEW) proposing Harper Lane, Nr Radlett

Veolia ES Aurora Limited– proposing New Barnfield, South Hatfield

6. The procurement process to Final Tender

6.1 A range of issues was identified from the detailed solutions submitted by the Bidders that needed to be addressed during further Competitive Dialogue. These issues included:-

Ensuring that there is a deliverable town planning strategy. Ensuring that adequate mitigation measures were in place and the

County Council had sufficient contractual remedies if the planned operational commencement date is delayed.

Ensuring that the operational arrangements of the plant, such as waste delivery and weighing arrangements are practical, that the traffic management arrangements around the site and the tipping hall are adequate, that the bunker is sized appropriately to deal with any down time due to maintenance, that there are alternative arrangements, other than landfill, to treat the Contract Waste in the event of longer site closures, and that the treatment of Bottom Ash and Flue Gas Treatment residues is effective. By its very nature, an Energy from Waste plant is a complex facility and it is, therefore, important to fully address the operational details before the close of Competitive Dialogue.

A wide range of financial issues with regard to construction of the unitary charge to be levied on the County Council. A particular issue is the amount of guaranteed income from energy production and the treatment of third party waste together with the mechanisms for income sharing above the guarantee and the issue of index linking of the price structure.

Bidders proposed commercial positions and how these align with the WIDP Residual Waste Treatment Contract (latest version published December 2010) (see 6.2 below).

6.2 In order to secure revenue grant support, Private Finance Initiative (PFI) contracts must comply with standard principles and drafting in HM Treasury’s guidance known as the “Standardisation of PFI Contracts” Version 4 (SoPC4). Further, such contracts must also comply with guidance set out by the relevant sponsoring department. In the case of waste PFI, the sponsoring department is Defra which has published its own model contact complying with HM Treasury guidance and containing approved derogations specific to the waste sector (WIDP Residual Waste Treatment Contract (latest version published December 2010)(see Appendix B). This contract was the discussed in Competitive Dialogue and save for solution specific changes was largely adopted by both Bidders. It provides an appropriate balance of risk between the parties and is a generally accepted position in current waste procurements.

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6.3 The County Council could not close Competitive Dialogue until it had identified one or more solutions capable of meeting its needs in accordance with Regulation 18(24) of the 2006 Regulations. Further, the County Council also required permission from the appointed WIDP Commercial Manager and, therefore, through Competitive Dialogue, officers worked closely with him to ensure that close was achieved without delay.

6.4 The Competitive Dialogue process took place between 19 July 2010 and 21 January 2011 with the deadline for submission of final tenders one week later on 28 January 2011. Prior to dialogue being closed, the County Council hosted a final meeting with each Bidder at which they were invited to confirm whether there were any further topics or issues on which they required dialogue before they submitted their Final Tender and whether there was anything further that they required the County Council to clarify, confirm or agree.

6.5 The review and ratification process of the Final Tenders submitted by the two companies has been completed. Both bids received were fully complete and compliant.

6.6 Evaluation of ISFT bids was undertaken by the programme team officers supported by their external advisors. The agreed evaluation methodology for ISFT stage was applied to arrive at scores for the two Final Tenders received. This evaluation was considered by the review team which comprised of senior officers meeting on 16 March 2011. The review team recommendation was further considered by the ratification team (which comprises of the Director Environment and Commercial Services, the Assistant Director Environment and Commercial Services responsible for the project and the Programme Manager) on 18 March 2011. The recommendation to appoint as Preferred Bidder the Bidder scoring the highest and, therefore, offering the most economically advantageous tender to the County Council, is set out in the supporting Part 2 Report.

7. Details of the Solutions offered in the Final Tenders.

7.1 Below is a summary of the details contained within the two Final Tenders received on 28 January 2011. The information within this report is supplemented with additional detail contained within the part 2 report.

E.ON Energy from Waste AG (EEW)

E.ON is a German company and a major producer of energy with a number of EfW plants in operation across Germany, the Netherlands and Luxemburg. For the purposes of this Bid. E.ON are working with Biffa (formally Greenstar), a waste management company.

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Finance: The Company intends to fund the construction of the Facility through Corporate Finance.

The Proposed Plant: E.ON's proposal is a single line EfW treatment facility operational with a capacity of nominally between 320,000 and 345,000 tonnes per annum (actual capacity dependant on the Calorific Value of the incoming waste). The proposed solution is based on well tested moving grate technology that is supported by operational references from continental Europe.

Architecture: E.ON is proposing a facility that it believes will provide a positive impression to the neighbourhood with the appearance of the building having consideration of the size, materials, scale and colour of the cladding. The building will give full consideration to the BRE Environmental Assessment Method (BREEAM) and E.ON’s proposal assumes a high rating will be achieved.

Town Planning Strategy: E.ON is proposing to site its facility at Harper Lane near Radlett, on a site owned by Lafarge. The ISFT required E.ON to set out the planning context of the proposal in a detailed method statement. Key planning matters were addressed by E.ON in its Final Tender and the strengths and weaknesses of the planning proposal were evaluated in accordance with the published evaluation criteria.

Energy: The plant is projected to generate up to 26 MW of electricity. In terms of CHP, E.ON is providing a heat enabled plant and looking to work with local off takers although it does not consider that there is a fully viable market at present

Transport Impact: E.ON has provided a robust set of travel plans which manage the transport movements for all access to the site. This includes consideration for pedestrians, cyclists and use of public transport whilst encouraging staff and visitors to reduce reliance on accessing the site in private cars.

Job Creation: E.ON proposes to provide a number of skilled and semi-skilled jobs at the facility. There will be support provided for employees with a good benefits package and consideration for employment of local people.

Stakeholder Engagement: E.ON has outlined in detail its approach which includes the provision of a visitor centre with a Community Liaison Manager who will support the proposed Community Liaison Panel and the WasteAware programme.

Veolia ES Aurora Limited

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Veolia ES Aurora Ltd is a wholly owned subsidiary of Veolia Environmental Services Plc which is, in turn, owned by a French corporation. The Company is a leading player in the UK waste management sector with around 120 local authority contracts.

Finance: Veolia intends to use Corporate Finance to fund the construction and operation of the plant.

Proposed Plant: Veolia is proposing a two stage process as its solution. The proposal is that all residual municipal waste collected by the district and borough councils will be treated in a Mechanical Pre-Treatment (MPT) Facility to remove plastics, ferrous and non-ferrous metals and fibre (paper and card).

Architecture: The design is bespoke and provides a facility which aims to achieve a high BREEAM standard. The building aims to make a positive contribution to the landscape ensuring re-use of materials.

Town Planning Strategy: Veolia is proposing to site its facility at

the New Barnfield site, South Hatfield. The ISFT required Veolia to set out the planning context of the proposal in a detailed method statement. Key planning matters were addressed by Veolia in its Final Tender and the strengths and weaknesses of the planning proposal were evaluated in accordance with the published evaluation criteria.

Energy: Veolia is proposing to generate over 26 MW of electricity and is providing a CHP enabled solution.

Transport Impact: Veolia has provided a set of Framework Travel Plans which encourage construction staff awareness about accessing the site, encouragement to use public transport, cycling and walking and which sets targets for reduction of private vehicle access and reduce the overall carbon footprint of the facility.

Job Creation: Veolia will provide a number of skilled and semi-skilled jobs at the facility and will encourage local residents to work there. The Company will seek to become accredited in “investors in people” and provide a good work life balance.

Stakeholder Engagement: Veolia is planning to provide a visitor centre and will appoint a Communications and Education Manager, who will conduct public tours; liaise with Groundwork and the Herts and Middlesex Wildlife Trust; engage with the education sector (both teachers and pupils), businesses and other stakeholders

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8. Next Stage of Procurement

8.1 Clarification and confirmation of commitments. This stage of the process will take place between May 2011 and July 2011, . Preferred Bidder announcement, clarification and confirmation of commitments is permitted by Regulation 18 of the Public Contracts Regulations 2006 following close of dialogue and it involves the finalisation of all contract documentation and due diligence checks being undertaken by the parties. As part of this stage the County Council will also need to obtain final approval from Defra of its Final Business Case (see 9 below).

8.2 Contract and Financial Close. The contract and ancillary documents developed in Competitive Dialogue will be finalised post Preferred Bidder appointment and before contract signature.

8.3 Financial Close before planning. In accordance with WIDP guidance and the WIDP Residual Waste Treatment Contract it is proposed to enter into the PFI Contract in advance of the Contractor obtaining planning permission for the proposed Facility. This is a standard position that has been adopted on numerous PFI and PPP contracts in the waste sector. The WIDP model contract provides a mechanism that obliges the Contractor to take prescribed steps to apply for planning permission for an agreed design and in an agreed timeframe. The model contract also provides an agreed process for dealing with planning appeals, delays and planning failure. The strengths and weaknesses of the Preferred Bidder’s planning proposals have been evaluated by the County Council in accordance with the published evaluation criteria.

8.4 Planned Services Commencement Date. This is the date when the contractor takes over responsibility for the treatment and disposal of Hertfordshire's residual municipal waste. The commencement date (after achieving planning permission and obtaining an environmental permit plus the construction and commissioning of a treatment facility) is planned as 1 April 2015 but will be dependent on the Preferred Bidder’s timescale and any potential delays in the process. The proposed operational period is 25 years from the Planned Services Commencement Date.

9. Pre-Preferred Bidder Final Business Case

9.1 In tandem with the preparation for the evaluation and decision making process for the Preferred Bidder, the County Council has prepared an updated version of the Outline Business Case called the Pre-Preferred Bidder Final Business Case. This business case reviews the methodology used to compile the facts and figures such as the forecast of waste tonnages, recycling and composting tonnages as well as the costs and the County Council’s requirements. This is to ensure that the basis of the tender is still sound and robust. The production of the document is ongoing until the final contract is agreed and completed; however, the review of the Pre-Preferred Bidder Final Business Case by

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WIDP gives an external examination of the commercial terms and the governance arrangements, the technical solution and the legal agreements that have been reached during competitive dialogue. WIDP intend to provide a view on the Pre-Preferred Final Business Case prior to this Panel meeting and a verbal update will be provided.

9.2 The Pre-Preferred Final Business Case demonstrates that the Preferred Bidder’s solution is an affordable and value for money solution that meets the objectives of the JMWMS07, the OBC and will comply with current and foreseeable waste management legislation. Members will be aware that the Government is in the process of conducting a review of waste policy. According to Defra it is expected that the outcome of that review will be published in May this year. Officers have considered the terms of reference of the review and other information available regarding the consultation and review and are satisfied that nothing in the review would have an adverse impact on the recommendations to Cabinet.

9.3 The Final Business Case will be made available to the public save only for commercially sensitive or confidential information once the PFI contract has been signed.

10 Communications

10.1 The communications strategy is reviewed at each stage of the procurement process to enable the strategy to accommodate the developing messages within the procurement and new stakeholder groups. In order to protect the commercial aspect of the procurement the County Council has had to balance its desire for open and proactive communication with the limits of what information can be put in the public domain.

The aim of the strategy is to:

raise awareness of the Hertfordshire Waste Procurement Programme’s objectives and how these support the County Council’s corporate objectives.

set the context of waste management issues in Hertfordshire and the County Council’s commitment to the waste hierarchy (reduce, reuse, recycle, recover).

raise awareness of, and engagement with, the procurement process: key stages and decisions being made.

10.2 Communications activities so far have included press releases issued throughout the procurement generating regular articles and interviews in the local press. The Council’s magazine, Horizons, has carried an article about the procurement, and there is a newsletter that is published a minimum of twice a year to let stakeholders know how the procurement

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is progressing. The Council’s website has background information for anyone wanting to find out more detailed information (within the constraints of commercial confidentiality); this includes general information, background documents and Panel and Cabinet papers.

10.3 In addition to ongoing communications about the procurement and the proposal, once a preferred bidder has been selected the County Council will work with the successful company to support their communications and public engagement activities.

10.4 In addressing the correspondence that the County Council has had with stakeholders of this programme, a set of questions and answers in Appendix C provide information about areas of concern. In addition, to enable greater understanding about the process of an Energy from Waste facility, Appendix D is a simplified overview of how Energy from Waste works. During the process, the stakeholders involved have also been keen to understand and become involved with the outcome of the procurement. To explain to the public how they can have their say in the planning process, Appendix E is a flow chart which demonstrates this.

11. Financial Implications

11.1 The County Council originally allocated £4.4 million for the procurement programme for the period up to 2010/11 with award of Contract and Financial Close in March 2011. Since the commencement of the procurement programme there have been a number of changes to the timetable to allow for political approval at all stages of the process and extra time to develop the procurement documentation. These have resulted in additional costs and these have been met from within existing budgets.

11.2 It is proposed that following selection of a Preferred Bidder, Financial and Contractual Close be achieved by the end of July 2011. This timetable will be discussed with the Preferred Bidder at the commencement of the next stage of the process to ensure that the most efficient route to commercial and financial close can be followed. If such a route can be followed then further savings to procurement costs may be realised.

11.3 The cost of the solutions were evaluated and reviewed at the Detailed Solutions stage and again at Final Tender stage. The score allocated at Detailed Solution stage was 30% for finance and 40% at Final Tender stage as prescribed in the published evaluation methodology for the each stage. The award criteria in accordance with the Public Contracts Regulations 2006 and the recommendation for Preferred Bidder is on the basis of the solution that is the Most Economic Advantageous Tender . The final cost of the Preferred Bidder’s Solution may still be subject to changes within the provisions of the Public Contracts Regulations 2006 as a result of the clarification and confirmation of commitment stage which may include confirmation of the Foreign Exchange rate and

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inflation. It is vital for the County Council to continue to ensure that the solution provides best value for money for the residents of Hertfordshire.

11.4 To ensure that the best financial outcome is reached the financial details will be disclosed to the Cabinet so that it can fully understand the impact of entering into the contract. These financial details will be exempt under Part 1 of Schedule 12A to Local Government Act 1972 (as amended). Some of the financial elements of the tender such as the financial model and price breakdown will continue to be exempt from disclosure to the public even when the contract has been signed but the County Council intends to release as much information as possible after the contract has been signed.

11.5 The overall costs of the service to be provided pursuant to the proposed contract, as presented within the bids is significantly less for the council taxpayer with the contract structures proposed than if the service continues by way of sending Hertfordshire’s waste to landfill. Once the contract has been finally agreed, the total figure of what the successful Bidder’s overall solution will cost to the County Council is anticipated to be made publicly available.

12. Alternative Options

12.1 The County Council has been fortunate to benefit from a very competitive procurement process and the evaluation process established the most economically advantageous tender. It would not be lawful to recommend to appoint a Preferred Bidder and subsequently to make an award to a Bidder other than that which submitted the most economically advantageous tender. The alternative to an award to the Preferred Bidder is, therefore, to abandon the procurement which would lead to substantial wasted procurement costs, the loss of the PFI credits and require an alternative long term strategy to be established.

12.2 There are no grounds to delay the decision to appoint a Preferred Bidder and award a contract. However, to do so would delay the proposed services benefits to the County Council and expose the County Council to substantial additional costs, it would increase the risk of losing the PFI credits as these are only a provisional allocation until financial close is reached and it would have a negative impact on the County Council’s reputation and the credibility of its procurement process.

13. Conclusion

13.1 This procurement has been carried out in full compliance with The Public Contract Regulations 2006 and the proposed contract will comply with HM Treasury Standardisation of PFI Contracts version 4 and the WIDP Residual Waste Treatment Contract (December 2010). In addition a full

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external review of the Pre-Preferred Bidder Final Business Case has been sent to WIDP for approval. This business case is to demonstrate to HM Treasury that the HWPP is fully compliant with its requirements and to obtain approval to progress to financial close in order to receive the £115.3m of PFI credits. A verbal update will be provided at the Waste Management Cabinet Panel meeting on 28 April 2011 on the outcome of the WIDP review. The involvement of WIDP will continue through preferred bidder until financial close and requires the re-submission of the Final Business Case updated with any further adjustment for approval.

13.2 The Programme and procurement process has taken the HWPP over 3 years from its inception through narrowing down competition from thirteen companies to two to the recommendation of a Preferred Bidder. All of the companies and their proposals were subject to rigorous analysis to ensure they met the requirements of the County Council. The competitive dialogue process has enabled the County Council to explore the best value solution using a reliable, robust and proven technology to provide a long term solution that will deal with all of the residual waste produced in the County.

13.3 Concerns that have been raised about the need for the service have been considered and addressed in Appendix C to this report.

13.4 Officers will recommend to the Waste Management Cabinet Panel on 28 April 2011 that the procurement proceeds to preferred bidder stage and (subject to the provisions of the detailed recommendations in the Part 2 Report) to award the contract. The Panel’s recommendations to Cabinet will be reported orally at the Cabinet meeting and circulated to Members in the Order Sheet.

Background Information

All the background information is available at:http://www.hertsdirect.org/waste

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National Context

Hertfordshire County Council is one of the final eleven projects being considered for PFI credits under a programme run by the Waste Infrastructure Delivery Programme (WIDP), part of the Department for Environment, Food and Rural Affairs (Defra), established to support local authorities to accelerate investment in the large-scale infrastructure required to treat residual waste, and to enable England to meets its share of the UK’s Landfill Directive diversion targets

Other local authorities across England have been taking part in the PFI programme where £2 billion in PFI credits has been allocated to 32 projects. The table below provides details of the projects.

Authority PFI credits approved

(£m)

Date approved/contract

signed

1Current project status

Contractor

Isle of Wight* 1 IVC, 1 Gasification Plant & 1 Resource Recovery Facility

13 Signed 1997/98 Fully Operational

Biffa

Hereford & Worcester*1 EfW facility

57.4 Signed 1998/99 Partially Operational

Focsa

Kirklees*1 EfW, 1 Materials Recycling Facility (MRF), 1 Composting site, 5 HWRC’s & 1 WTS.

33.9 Signed 1997/98 Fully Operational

Sita

South Gloucestershire*2 Transfer station, 2 HWRC’s, 2 Vehicle Depots & 2 Dry recycling storage depots.

34.3 Signed 1999/00 Fully Operational

Sita

Surrey*2 EfW, 3 IVC’s & 1 MRF facility

85.5 Signed 1999/00 Partially Operational

Sita

Central Berkshire^2 Transfer Stations, 2 HWRC’s & 1 MRF facility

37 Signed 2006/07 Fully Operational

WRG

ELWA2 Mechanical Biological Treatment (MBT), 3 MRF’s & associated infrastructure.

47 Signed 2002/03 Fully Operational

Shanks

East Sussex, Brighton & Hove 1 EfW, 1 IVC, 1 MRF, 2 Transfer Stations & 15 HWRC’s

49 Signed 2002/03 Partially Operational

Veolia

Leicester City1 MBT & 1 Anaerobic Digester

30.84 Signed 2003/04 Fully Operational

Biffa

West Sussex 3 Transfer Stations

25 Signed 2003/04 Fully Operational

Viridor

West Berkshire1 MRF and 1 IVC facility

23.74 [+ 4.75];

Signed 2007/08 In Construction Veolia

1

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Appendix A

Total 28.49 Cornwall1 EfW + CHP facility

25 + [4.9] + [15.1]; Total 45

Signed 2006/07 Partially Operational

Sita

Nottinghamshire1 EfW & 1 MRF facility

31.93 [+6.38];Total 38.31

Signed 2006/07 Partially Operational

Veolia

Lancashire 2 MBT & 3 Transfer Stations.

75 [+15];Total 90

Signed 2006/07 In Construction Global Renewables

Northumberland1 EfW, 1 MRF with Transfer Stations & 1 HWRC with 11 upgrades to HWRC’s & 2 Transfer stations expansions.

34 [+6.8]Total 40.8

Signed 2006/07 Fully Operational

Sita

Shropshire Waste Partnership 1 EfW & 1 IVC facility

35.8 [+5]Total 40.8

Signed 2007/08 Partially Operational

Veolia

Wakefield Metropolitan District Council1 MBT, 1 IVC & 1 MRF facility

33 Approved December 2004

In Procurement VT Environmental Engineering (Preferred Bidder)

Greater Manchester Waste Disposal Authority1 EfW + CHP, 5 MBT, 1 MRF & 4 IVC’s

100 [+9.5] + [15]Total 124.5

Signed 2009/10 In Construction Viridor Laing

London Borough of Southwark1 MBT, 1 MRF, 1 Transfer Station & 1 HWRC

34.5 Signed 2007/08 In Construction Veolia

Cambridgeshire County Council 1 MBT & 1 IVC facility

35 Signed 2007/08 Fully Operational

Donarbon

Merseyside Waste Disposal Authority 1 EfW & 1 MBT facility

90 Approved April 2007 In Procurement Not yet selected

North Yorkshire County Council & City of York Council †1 EfW, 1 MBT & 1MRF facility

65 Approved July 2007 In Procurement Amey Cespa(Preferred Bidder)

Leeds 1 EfW facility

68.6 Approved March 2008

In Procurement Not yet selected

Suffolk 1 EfW, 1 IVC & 1 MRF facility

102 Signed 2010/11 Contract Signed Sita

Bradford 1 MBT, 1 IVC & 1 Advanced Thermal Treatment facility.

62.1 Approved March 2008

In Procurement Not yet selected

Barnsley, Doncaster and Rotherham**1 EfW + CHP & 1 MBT facility

77.4 Approved March 2008

In Procurement Not yet selected

South Tyne & Wear 1 EfW + CHP facility

73.5 Approved July 2008 In Procurement Sita(Preferred

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Bidder)Staffordshire 1 EfW + CHP facility

122.4 Signed 2010/11 Contract Signed Veolia Environmental Services

South West Devon Waste Partnership 1 EfW + CHP facility

95 Approved October 2008

In Procurement

MVV Umwelt (Preferred Bidder)

Norfolk 1 EfW + CHP facility

91 Approved March 2009

In Procurement

Amey Cespa (Preferred Bidder)

Essex MBT technology

100.9 Approved October 2009

In Procurement

Not yet selected

* Pre SR2000 allocation^ Comprising of Reading Borough Council, Wokingham Council and Bracknell Forest Borough Council† North Yorkshire CC lead** Barnsley lead

‘In Procurement’ relates to projects that are in the process of selecting a contractor. ‘Contract Signed’ relates to projects that have awarded their contract but have not yet begun building the waste facilities. ‘In Construction’ one or more of the waste facilities is in construction, the others may still be waiting planning consent. ‘Partially Operational’ one or more of the facilities is processing waste; the other facilities may be waiting planning consent or still being built. ‘Fully Operational’ all facilities are up and running and processing waste.

These projects demonstrate that a range of technology solutions have been used or are proposed by local authorities to treat their residual waste. Nineteen of these projects have settled on the same technology as being proposed in Hertfordshire. In addition some projects have chosen Gasification or Advanced Thermal Treatment which are alternative forms of heat treatment for waste.

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PFI and the Public Contracts Regulations 2006

Hertfordshire's procurement followed the Competitive Dialogue process, as set out in The Public Contracts Regulation 2006. In addition the County Council was required to comply with HM Treasury Standardisation of PFI Contracts version 4 (SoPC4) (March 2007), Defra guidance on SoPC4 Derogations (2006) plus Waste Infrastructure Delivery Programme Guidance. The 2006 Regulations are designed to ensure that all Bidders are treated in a fair and impartial manner. HM Treasury and Defra guidance are designed to ensure that public bodies enter into contracts that reflect an acceptable risk share and are value for money

Hertfordshire's process reflects the complex nature of the PFI and Competitive Dialogue procurement processes. It must be recognised that the County Council is procuring a long term Solution from the market and while stating its needs and requirements, it does not provide the Solution. Whilst the County Council stated its requirements through an output specification, Bidders could seek to vary the solution to ensure that they could offer the best value for money solution that was financially sustainable to them. They could offer, for example:

Sites in their own ownership, either in the county or elsewhere Different capacities with a greater reliance on income from the treatment

and disposal of third party waste Different treatment solutions

All these options, and many others, have been evaluated to achieve a Solution that is acceptable to the County Council as Waste Disposal Authority.

Not only is the procurement process subject to variables, it is also subject to commercial confidentiality. It was, therefore, not possible to publicly release information on progress on matters such as the emerging technology or the likely location until almost the conclusion of the procurement process. The County Council as a public body is keen to keep the public informed, but also to ensure that a fair and legislatively compliant competitive process has been followed, which has meant that it has been necessary to recognise certain limits in the release of information pertinent to this process. The competitive process is not concluded until a contract is awarded and nothing that is commercially sensitive should be disclosed in the public arena that could prejudice the on-going procurement process or the commercial interest of the Bidders. It is expected that a contract will be signed in July 2011.

SoPC4

It is a requirement of HM Treasury that any PFI contract is compliant with HM Treasury’s guidance on the Standardisation of PFI Contracts.

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Appendix B

The following link takes you to the HM Treasury website where the Standardisation of PFI Contracts version 4 (SoPC4) is available. This is the base document from which the WIDP model contract has been sourced. In addition, the Standardisation of waste management PFI contracts; guidance on SoPC derogations (May 2006) may also be found here. It should be noted, see section 5.11 above, that the County Council has reached an agreement without any major or unacceptable derogations. A full copy of the SoPC4 document is available to Members on request.

http://www.hm-treasury.gov.uk/ppp_standardised_contracts.htm

WIDPThe following link will take you to the Waste Infrastructure Development Programme website where the WIDP model contract (December 2010) template may be found. This specialised contract, based on the SoPC4 model has been perfected to provide specifically for the needs and requirements of the public sector and the waste sector when entering into PFI funded contracts. In addition, this model contract includes additional elements that are specific to these waste PFI projects. By the use of this document and subsequent confirmation with WIDP, the County Council has secured an acceptable contract, with no major nor unacceptable derogations from the base document supplied by WIDP.

http://www.defra.gov.uk/environment/waste/localauth/funding/pfi/widp-contract.htm

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Hertfordshire Waste Procurement Programme: Q and AApril 2011

PART ONE

Background to the procurement

Why do we need a waste treatment facility in Hertfordshire?

Hertfordshire’s household waste recycling rate is 48% - above the national average of around 39%, even with an

increase in recycling the reality is that a substantial amount of waste will still need to be disposed of every year. Last year 284,000 tonnes of municipal waste wasn’t recycled and most of this waste has been sent to landfill,

mainly out of the county. Local Authorities are being encouraged to ensure that they plan for and manage their

waste within their borders. It is no longer acceptable for Hertfordshire to export so much of its waste.

Government and European Union legislation means local authorities will face significant fines if they do not

reduce the amount of waste sent to landfill. Landfill Tax is currently £56 per tonne and rising by £8 a tonne each

year until it reaches £80 a tonne in 2014/15. The cost of landfill tax on the waste Hertfordshire sent to landfill last

year was £11.6 million.

Due to escalating costs associated with landfill, the county council embarked on a procurement process to find an

alternative way to dispose of residual municipal (household) waste which remains after recycling and composting.

This began with the submission of an Outline Business Case (OBC) to DEFRA in October 2008, which secured

£115.3 million of Private Finance Initiative (PFI) credits to go towards developing a new waste treatment solution

Appendix C

for the county. From the outset, the county council expressed no preference for either the technology to be used

or the location of facilities. This gave the broadest range of options available to the waste market and aimed to

get the best commercial deal from the process.

If we continue sending our waste to landfill this could cost the council an estimated £544 million extra over the

period of this contract in landfill tax, fines and disposal costs and these costs would have to be met by

Hertfordshire’s taxpayers.

How is waste in Hertfordshire presently managed?

Hertfordshire's county and district councils work together as the Hertfordshire Waste Partnership to deliver the

Joint Municipal Waste Management Strategy 2007 (JMWMS 07).

The strategy sets out the current position and the objectives for the Hertfordshire Waste Partnership. It also lays

down policies which will form the basis for delivering on those objectives and provides a route map for delivering

them.

Last year (2010/11) Hertfordshire produced 537,000 tonnes of municipal waste. 47% of this was reused, recycled

or composted but 45% (241,847 tonnes) still ended up in landfill. Around 8% of our municipal waste is currently

treated through EfW – mainly at the Edmonton facility.

Costs

How much is this going to cost and can we afford it?

Disposing of the household waste we all generate is the responsibility of the county council as the Waste Disposal

Authority, and residents’ council tax already goes towards paying for this and this will continue to be the case. The

current cost of waste treatment/disposal in Hertfordshire was £32.26 million last year. In addition the Waste

Collection Authorities in Hertfordshire spent £46.5 million on their waste activities (including street cleaning and

abandoned vehicles).

If we do nothing and continue to send waste to landfill, these costs will continue to rise significantly due to the

year on year increases in landfill tax. Over the period of the contract this could cost the council an estimated £544

million extra in landfill tax and fines, and these costs would have to be met by Hertfordshire’s taxpayers. So

finding a solution to landfill is something we can’t afford not to do. Recycling is also not a ‘no cost’ option, there

are costs associated in the collection, sorting and processing of the waste. It also depends on industry to provide

reprocessing facilities and customers to use those reprocessed materials.

In addition, the council was successful in its bid to Defra to secure £115.3 million of Private Finance Initiative (PFI)

Credits, which will go towards the £200 million capital cost of developing a new waste treatment facility.

In the past couple of years there has been a marked increase in the number of projects applying for PFI funding

as well as a number of projects losing their PFI funding, so it’s really encouraging that our project has been

successful in securing and retaining this significant financial investment from Government.

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We cannot be specific about how much the contract will cost at this stage because much of this remains

commercially confidential. However, what we can say is that we are pleased to have been offered a good deal for

Hertfordshire and the final bid is well below the do minimum cost from the Outline Business Case.

What is the Private Finance Initiative (PFI)?

The PFI was launched in 1992. It offers a significant means by which Government can fund major infrastructure

projects across the country – such as the building of hospitals and schools, getting best value for money.

For Hertfordshire, it’s one way of funding the changes we need to make to the way we manage our waste.

In the past, public authorities paid contractors directly for construction projects. However, through PFI, the private

sector pays for construction and will then fully service and maintain the facility for a period of up to 30 years in

return for an annual fee. The government’s contribution of £115.3 million in Private Finance Initiative (PFI) credits

will significantly reduce the amount we need to invest in waste treatment and disposal facilities.

Waste PFI schemes will help the UK meet EU Landfill Directive diversion and recycling targets and allows us to

capture the skills and expertise of the private sector in the provision and modernisation of public services.

The Chancellor’s announcement of the government’s spending plans for 2011/12 to 2014/15 included the

withdrawal of provisional PFI allocations from 7 local authority waste procurement projects. The PFI cuts were

made as part of Defra’s spending review settlement which will see the department cut its spending by 29% by

2014/15.

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We are pleased that, following the significant work Hertfordshire has done so far, ours is one of the projects to

retain its PFI allocation and aim to successfully secure this funding following Defra’s review of Hertfordshire’s

Final Business Case this summer.

The decision

What decision is being made on 28th April and what is the next stage in the process?

On 28th April the Cabinet will make a decision to invite the bidder that scored the highest in the evaluation phase

to proceed to Preferred Bidder status. Cabinet will also be making a decision on delegating the power to officers

to finalise the details of the contract with the Preferred Bidder and then award the contract, without further

decisions being sought from Cabinet. This contract is likely to be finalised in Summer 2011 and there will be a

mandatory 10 days standstill period where unsuccessful bidders are informed of the final decision before a

contract can be entered.

The project team will work with the Preferred Bidder to clarify and confirm commitments and to undertake final

due diligence. There is still some work to be done to finalise the details. It is anticipated that this will take a few

months before a final contract will then be entered into.

While this is going on, the Preferred Bidder will want to start working on their planning application as soon as

possible. Therefore, they will be undertaking an extensive public consultation which will be launched in May to

help them in preparing a planning application which we anticipate they will submit in the Autumn. This work will

enable them to get the views of the community of the potential impact of their proposal. Full details will be made

public very shortly.

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How were the bids evaluated before this decision was made?

At each stage of the procurement process the proposals received have been assessed against a series of

published criteria. The four main areas of evaluation are outlined below, however, they are described in very

general terms and for the precise evaluation criteria and weightings, reference should be made to the

documentation available on the county council’s website at www.hertsdirect.org/waste.

Technology and operationBidders were assessed against their proven track record and how successfully they have demonstrated the

effectiveness of their proposals in reducing Hertfordshire’s reliance on landfill. The flexibility of the proposed

solution is of key importance, with bidders required to demonstrate how well they can accommodate future

changes to legislation or the amount and make-up of the waste. Bidders were also assessed on their proposals

for recovery and recycling of materials and their plans for using recovered energy from their proposed facility.

Crucially, consideration was given to how deliverable the proposal is – from the procurement stage right through

to design and build and operation. The suitability of the site and the likelihood of gaining planning permission are

central to this part of the assessment.

Environmental and social sustainabilityThis category is all about examining the impacts of the proposed solution - environmentally and socially.

Environmentally, the proposals were assessed using the Environment Agency’s Waste & Resources Assessment

Tool for the Environment (WRATE), which provides a way to evaluate environmental performance, including

carbon footprint and energy. From a social perspective, a number of different areas were assessed including

whether the facility will create jobs; provide a public amenity or a visitor centre; and how any traffic movements

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associated with the facility will be minimised.

Financial & commercialThis section looked at the cost of the proposal and how affordable the ongoing service provision would be. The

funding and contracting structure was examined in detail, as were any associated financial risks.

Legal & contractualThis section assessed the proposed contractual structure and the extent to which it is sound, robust and

deliverable. There are also a number of areas of compliance to meet in line with the Government’s Waste

Infrastructure Development Guidance.

Once the decision has been made on Preferred Bidder can the county council make public the details in the successful bid (and in the unsuccessful bids)?

A contract has not been awarded yet and, therefore, we are required to maintain commercial confidentiality in the

interest of the bidder and the county council. Once a final contract is entered into there will still be some

information that will be deemed to be commercially confidential and will not be disclosed. Similarly, the county

council will not be able to release details within the unsuccessful bids. This is all to protect the commercial

position of the bidders; it is worth remembering that it is through a competitive bidding process that local

authorities are able to get the best value for taxpayers.

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The role of the Waste Planning Authority and Development Control

What are two roles that Hertfordshire County Council has with regards to waste?

The first is as the Waste Planning Authority, which has a statutory duty to produce planning documents which

set out the spatial vision and strategic objectives for waste planning in Hertfordshire. These documents will also

contain the policies needed to implement these objectives, as well as detailed generic development management

policies that will be used to make decisions on waste planning applications.  The waste planning documents will

also identify sites for future waste management facilities that will be needed to deal with all types of waste in the

county. 

To achieve this it is producing the waste planning documents, and as part of this it has conducted a number of

engagement exercises to establish the potential of sites within the county for future waste management uses.

The role of the county council as the Waste Planning Authority is to plan for all types of waste. Therefore it must

provide a flexible approach to the types of facilities that may come forward and the documents need to be flexible

enough to allow for future decisions on management and investment choices by the waste industry for all waste

streams.  The waste planning documents do not prescribe the use of particular technologies. This is to allow for

innovation and provide the industry with flexibility. 

The second role that the county council has with regards to waste is as the Waste Disposal Authority for

municipal (collected from households) waste. This means the county council has the statutory responsibility for

providing both a service which treats the recycled waste in the county and a network of Household Waste

Recycling Centres (HWRC), as well as the responsibility for the disposal of residual municipal (household) waste.

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Why is the waste procurement happening before the WPA adopts its waste core strategy?

The waste planning documents do not deal directly with the waste management activities of the county council

and its partners; however, the policy approach is consistent with their aims. The waste procurement project is

separate to the work the WPA is currently doing in updating their waste strategy but any planning application will

be considered by the WPA against their adopted waste policies.

Who makes the decision on the planning application?

As a planning authority, the county council has statutory responsibility for all planning applications relating to

mineral extraction and waste management as well as development for county council services such as schools

and libraries.

The successful bidder in the procurement will submit a planning application to the county council in its capacity as

the Waste Planning Authority (WPA) for assessment. Once the WPA receive the planning application they would

publicise and consult with those who have an interest in a decision on the proposal. This would include statutory

bodies, other local councils, local interest groups and local residents.

The WPA will then consider how the planning application fits with planning policy, from national to local policy

including its own waste planning policies. The planning application will include an environmental statement which

considers the likely impacts the proposal may have and measures to control these effects.

A decision on the application would be made by the county councils Development Control Committee. The

committee is made up of elected county councilors and makes decisions on planning applications, including ones

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for waste developments. A report would be prepared by planning officers setting out information about the

proposal, including the environmental statement, all the results of the consultation (letters written to the county

council about the application), and any other relevant planning matters  together with an analysis and

recommendation to the committee on whether the application would be granted or not.  The committee would

then consider the report and it would make a decision on the planning application.

(See flow chart for planning)

EfW and other waste management technologies

What is EfW? Energy from Waste (EfW) is a process where, in the same way as a power station, a fuel is burned in a controlled

environment to generate electricity. In an EfW facility the fuel is waste, so not only does the facility produce

electricity but it also deals with our household waste that is not recycled.

In simple terms, the waste collected from residents is tipped into an enclosed bunker so that any smell or flies are

controlled. The waste is then burned at very high temperatures heating up water in steel tubes and turning it into

steam. The steam drives a turbine and a generator to provide electricity which is exported to the National Grid.

In addition, with the right infrastructure heat can be produced for local commercial and domestic properties.

Modern EfW facilities are very different from incinerators of the past. Over the last 25 years, the EfW industry has

developed state-of-the-art technology that makes this one of the cleanest forms of energy generation. Energy

from Waste facilities meet or exceed the strictest EU emissions regulations.

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(see Appendix D brief outline of EfW process)

Are there other technologies that could be used instead to deal with Hertfordshire’s residual waste?

There are different waste technologies, they all treat the waste in different ways and therefore are often are

suitable for different quantities or types of waste. The county council is aware of and has considered processes

other than EfW. One of the key criteria for evaluating proposals was to have a proven technology with substantial

information on which to base sound decisions, so that the county council is not taking on unnecessary risk at the

expense of taxpayers. In Hertfordshire the intention is that the development of an Energy from Waste facility

would be part of an integrated waste management strategy which aims to divert as much waste from landfill as

possible, and will work alongside greater recycling as well as other waste treatment techniques such as in-vessel

composting for green garden waste, food waste and cardboard. We already have contracts to deal with up to

100,000 tonnes per year of this organic waste turning it into compost to be used in agriculture and so we also

need to look at processing technologies that can deal appropriately with the different waste streams.

Anaerobic Digestion is a waste treatment technology that is only appropriate for biodegradable

waste (like food and garden waste) and, therefore, other technologies will still be needed to deal with other

types of waste. (E.g. plastic wrappers, food-covered plastic trays and composite plastics).

MBT is an aerobic 'semi composting' process where, in its most complex form, a range of

recyclables are mechanically removed and the organic fraction of the remainder aerobically degraded, thus

reducing its weight and volume prior to some other final disposal process. With further separation the

degraded fraction can be used as a soil improver on landfill but the remainder has to be disposed by some

other method, such as incineration or landfill. As such, it does not represent a complete solution in itself.

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These facilities also tend to be much larger than EfW plants (around one and a half to two times the size).

On a national scale, along with EfW via incineration, MBT with Anaerobic Digestion (AD) has been identified

as a key technology in the delivery of the UK’s zero waste future and in helping to meet the country’s long-

term renewable energy needs. However, compared to EfW, MBT with AD is much less well demonstrated.

Advanced Thermal Treatment technologies including pyrolysis and gasification, where the

waste is heated to produce a solid residue and a syngas, are relatively unproven with large quantities of

residual municipal waste in the UK; and overseas experience is patchy. They are more suitable for pre-

processed, homogenous waste streams (i.e. Refuse Derived Fuel) and are typically small scale (30 –60,000

tonnes per annum).

Plasma gasification, like EfW, is a thermal process too and it still leaves gas cleaning residues

to be dealt with. Unlike EfW, the technology is in its infancy, meaning no reliable, long-term operational

information is available on its ability to handle the complex mix of municipal solid waste.

How did the county council decide what waste technology to use?

From the outset of this process, the county council has been technology neutral and it has been up to the bidders

to submit whichever technology solution they felt most suitable based on the county council’s evaluation criteria.

The main criteria were for a robust and proven technology, safety, social benefit, protection of the environment,

cost and sustainability. Having considered Hertfordshire’s waste management needs, all bidders that passed the

test of financial stability proposed EfW as the technology they thought best fitted these criteria.

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Can you be sure that your procurement process has not given unfair advantage to one technology over another?

There is clear guidance in the procurement documents submitted to the bidders that the county council has been

technology neutral. While restrictions were in place to ensure that the solutions they presented were deliverable,

flexible and affordable, bidders have been free to propose a range of technology options so long as they could

demonstrate compliance with the evaluation criteria.

Is EfW proven? Energy from Waste via incineration is a tried and tested technology throughout Europe.

During the last ten years more than 200 new, expanded or retrofitted EfW plants went into operation across

Europe, bringing the total to about 430 with a capacity to power 7 million homes and provide heat for 13.4 million.

By 2014 another 120 could be built. Many are located within major European capitals, often in areas of high

residential population and value.

There is plenty of evidence (E.g. from France, Denmark, the Netherlands and Germany) that vibrant communities

and EfW plants can coexist and that they offer a safe, reliable, efficient and green solution to the growing waste

problem, whilst making a contribution to energy production.

Will it be noisy or smell? The planning permission and environmental permit needed to build and operate any waste treatment facility will

set strict limits for factors such as noise and odour. The Environment Agency closely monitors waste disposal

facilities to ensure compliance with such limits. Properly run facilities are usually all enclosed and the waste is

tipped into an enclosed bunker so that any smell or flies are controlled. The bunker operates under negative air

pressure with the ‘smelly’ air being drawn through the facility (to prevent odours from escaping) and used in the

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combustion process.

EfW facilities are subject to strict monitoring by the Government’s Environment Agency. Operators usually

provide public help lines to report any problems.

EfW and recycling

Shouldn’t we be encouraging recycling instead?

Hertfordshire County Council, and the ten district councils, work together as the Hertfordshire Waste Partnership

on a waste strategy, at the heart of which is the principle of the waste hierarchy where reducing the amount of

waste we produce and reusing waste is better than recycling, and that after recycling, energy should be recovered

from waste before it finally disposed of.

Our policy is to encourage as much recycling as possible and only process the minimum waste left over. The

partnership is committed to meeting government targets of increasing recycling and composting to at least 50% of

all waste collected by 2012, eight years earlier than required, and reducing the amount of waste sent to landfill.

An Energy from Waste facility will ensure that we make the most of the waste left after recycling and composting

by producing energy.

In addition, recycling and EfW have been demonstrated in Europe to be complementary. The countries with the

highest recycling rates (Germany, Sweden and Belgium) send little or no municipal waste to landfill, with the

remainder largely being sent for incineration. Even amongst the Scandinavian countries that are leading

innovation in recycling, around 30% of waste still cannot be recycled or reused and has to be sent to alternative

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methods of disposal. Accepting this reality in no way alters our ongoing commitment to increasing the reduction,

reuse and recycling of waste.

Government recognises that in order to deliver a fully effective approach to waste management, recycling must be

combined with the reuse, reduction and recovery of waste. In February 2011, Richard Benyon, under-secretary of

state Environment, Food and Rural Affairs, spoke in the House of Commons on the issue of incineration. He

stressed the importance of the waste hierarchy, including recovery, to put the country on the road to a zero-waste

economy.

If the council is committed to increasing recycling levels, won’t this make ‘feeding’ a waste treatment facility increasingly unviable, making this a poor investment of tax payers’ money?

Whilst it is true that long-term contracts for waste treatment and disposal facilities rely on a consistent supply of

waste, the minimum amount HCC has negotiated with the bidder has been set low at 180,000 tonnes so as not to

interfere with any proposed increases in the level of recycling and composting. In actual fact, based on our

original waste projections, this minimum tonnage that has been negotiated will allow us to recycle up to around

75% by the end of the contract without any financial penalty to the council.

In the event that HCC exceeds all targets for recycling, overtakes every leading European country and is no

longer producing the amount of waste needed to run the waste treatment and disposal facility then there are other

options available to the operator of the facility. There is still another 1 million tonnes of waste requiring disposal

from commerce and industry generated by businesses in Hertfordshire; businesses which are crucial to the

economy of the county. The annual cost of residual waste disposal, leaving aside inflation, would actually fall if the

county council were sending less waste to the facility as it would be getting a share of the income from this other

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waste.

These figures are based on prudent population growth and waste arising figures and undoubtedly, in a county like

Hertfordshire there will be both economic growth and a growth in the population.

Now that the Regional Spatial Strategy will be abolished, are the projections of population and housing growth realistic?

Government’s view is that by abolishing Regional Strategies local authorities will (in partnership with their

communities) be responsive to local needs and provide more houses in future and therefore stimulate housing

growth. The Minister for Housing, Rt Hon Grant Shapps MP believes that one of the measures of the success of

Department for Communities and Local Government will be whether more houses will be built annually in future

than were built immediately before the recession:

“Building more homes is the gold standard upon which we shall be judged. The idea is to get a system which

delivers housing in this country.” (Communities and Local Government Committee - Second Report

Abolition of Regional Spatial Strategies: a planning vacuum? Feb 2011)

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Capacity of the facility

How much waste will the EfW facility treat and where will this waste come from?

The bidders in the process were asked to submit a proposal to deal with all of Hertfordshire’s residual municipal

waste for the term of the contract. The county council projected that there would be up to 345,000 tonnes of

residual municipal waste by 2039/40 and, therefore, the facility will need the capacity to deal with this amount and

be commercially viable. The bidders have each proposed a solution that will deal with Hertfordshire’s projected

residual municipal waste for the term of the contract

The new contract will cover waste generated by residents in homes across the county, waste from street

cleansing and waste from commercial premises which is collected by the district councils.

This is not to say that the waste disposal authority will have 345,000 tonnes of waste each year, especially if

recycling levels go up as we hope they will. But this doesn’t take away from the fact that we must plan for this

level of waste needing disposal towards the end of the contract. To make up the difference, the contractor will

source additional waste, firstly from across the county such as commercial waste, to operate the plant efficiently.

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Health and environmental concerns

How can you be sure EfW is safe and won’t cause health problems?

We know people are concerned about emissions, but one of our priorities has been to ensure the waste treatment

and disposal technology chosen has a proven track record for safety. Facilities are closely monitored and

regulated by the Environment Agency and are regularly checked for compliance with permit conditions. The

facility will be carefully designed and managed to ensure there are no unacceptable impacts on local people or

surroundings.

An EfW plant can only operate with a permit from the Environment Agency (EA) under the Pollution Prevention

and Control regulations. It must continuously monitor and report emissions from the plant and the EA has the

power to close a plant if it breaches these. EA inspections are both scheduled and unannounced. All facilities

publish their emissions monitoring data in their annual performance report and many make continuous monitoring

data available in real time on the internet. In deciding whether to grant a permit to operate the waste treatment

facility, the Environment Agency would consider its potential impact on people and the environment. If the

Environment Agency believes the facility would have any unacceptable impacts on people (including public

health) or the environment, a permit to operate would not be granted.

All EfW technologies are subject to maximum emission limits (regulated under the EU Waste Incineration

Directive or WID) to protect the environment and human health. The emission limits and monitoring requirements

for EfW plants are very strict compared to other combustion activities. For instance, the limits are significantly

more stringent than those for coal-fired power stations. There are controls in place to ensure that emissions are

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within permitted limits.

There are around 23 household waste incinerators operating in the UK today. They provide data on emissions

which are strictly monitored by the Environment Agency (EA). This information is available to the public and can

be viewed on their website. The data shows that the plants are safe and operate well within the requirements.

Modern flue gas cleaning technology and strict regulations mean controls are now in place that were not there for

older incinerators.

Case studies from across Europe demonstrate that EfW is a tried and tested technology forms a safe, integral

part of any well balanced waste management strategy. There have been substantial cuts in emissions from

incinerators since 1996. All EfW plants are new or have been significantly modified to meet the much tighter

emission standards under the European Waste Incineration Directive (Council of the European Union (2000) and

associated domestic (UK) legislation. Hence, emissions in the past were likely to have been higher than at

present. Consequently, any associations identified with adverse health effects and incineration in the past cannot

be extrapolated to the present.

The Environment Agency has stated that the contribution to pollution from EfW plants is very small compared to

other sources, such as traffic, road development and other industrial sites. The 2007 data shows that air pollution

from modern incineration is a fraction of one per cent. Industry and traffic account for more than 50%.

The Health Protection Agency, an independent UK organisation that was set up by the government to protect the

public from threats to their health, concluded in its latest report (The Impact on Health

of Emissions to Air from Municipal Waste Incinerators, Sept.2009), released on 3 September 2009 that: ‘Modern,

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well-run and regulated waste incinerators do not pose a significant threat to public health’

Is it true that energy from waste plants are the biggest source of heavy metal emissions and produce harmful dioxin and furan emissions?

No. The contribution from energy from waste plants to the total amount of pollution nationally is very small and

has been decreasing over the past years due to stricter controls on emissions through the Waste Incineration

Directive. For example, in 2006, EfW plants produced less than 0.5% total lead released from industrial plants in

the Environmental Agency’s control.

Dioxins and furans are considered, by many, to be serious health hazards. While it is the case that older

generation incinerators not equipped with adequate gas cleaning technologies were, indeed, significant sources

of dioxin emissions, due to advances in emission control designs and stringent new governmental regulations,

incinerators today emit virtually no dioxins. The Environment Agency has stated that modern EfW plants must

meet tight emissions standards so they make a very small contribution to the background levels of air pollution.

In 2005, The Ministry of the Environment of Germany, where there were 66 incinerators at that time, estimated

that "...whereas in 1990 one third of all dioxin emissions in Germany came from incineration plants, for the year

2000 the figure was less than 1 %. Chimneys and tiled stoves in private households alone discharge

approximately twenty times more dioxin into the environment than incineration plants.” (Waste incineration a

potential danger: bidding farewell to dioxin spouting, Report by Germany's Ministry of the Environment,

September 2005).

According to the United States Environmental Protection Agency, incineration plants are no longer significant

sources of dioxins and furans. In 1987, before the governmental regulations required the use of emission controls,

there was a total of 10,000 grams (350 oz) of dioxin emissions from U.S. incinerators. Today, the total emissions

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from the 87 plants is only 10 grams (0.35 oz) yearly, a reduction of 99.9 %. Backyard barrel burning of household

and garden wastes generates 580 grams (20 oz) of dioxins yearly. (Evaluation of Emissions from the Burning of

Household Waste in Barrels, EPA November 1997).

What is the environmental impact of an Energy from Waste plant?

When assessing bidders, minimising any environmental impact from the facility has been a key consideration

throughout the process.

When proposing their technology solutions for Hertfordshire’s waste management needs, all bidders were

required to use the Environment Agency's WRATE (Waste and Resources Assessment Tool for the Environment)

tool. This is a whole lifecycle assessment of the impact of the proposed technology that enables the

measurement of the direct impact and also its impact compared against other technologies.

EfW replaces energy from dirtier fossil fuels and reduces the country’s dependence on landfill, thereby cutting

methane emissions from landfill and carbon dioxide (CO2) emissions from conventional energy generation.

All the options considered in the outline Business Case result in an overall positive impact on the environment

when compared with landfill, due to the energy generated by each of the processes, and the reduction in the need

for energy production from virgin materials.

Results form this work indicated that Energy form Waste (EfW) with Combined Heat and Power (CHP) has the

least impact on the environment in terms of CO2 production - when compared to landfill it’s actually the equivalent

of taking 27,000 cars off the road for a year or 6 million fewer car journeys from Bishops Stortford to Tring.

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In a recent address to the House of Commons on the issue of incineration (February 2011), Richard Benyon,

under-secretary of state Environment, Food and Rural Affairs, stressed that recovering energy from waste is

necessary to meet the country’s energy needs and the need to reduce greenhouse gas emissions. He goes on to

say ‘A green economy means generating renewable energy. We have tough targets for that, with 15% of energy

required to be from renewable sources by 2020. We need an energy mix to meet. Recovering energy from waste

is part of that. Waste offsetting the fossil fuels that would otherwise have been burned and reducing methane

emissions from landfills. That offers a net climate change benefit’

In respect of modern research as to the health implications of waste disposal by way of incineration, DEFRA have

said that  "….concern over health effects is most frequently cited in connection with incinerators. Research carried

out to date shows no credible evidence of adverse health outcomes from those living near incinerators"  (The

Waste Strategy for England), Report by DEFRA 2007.

In Germany, which combines a 67% recycling rate (one of the highest in the world) with a 32% incineration rate,

the Environment Ministry states that incinerators have actually helped to improve air quality by reducing the need

for dirtier coal-fired power plants. Moreover, by converting waste into energy, incinerators contribute to saving 4

million tonnes of CO2 annually in Germany.

Waste-to-energy plants are a ‘clean, reliable, renewable source of energy’ that ‘produces electricity with less

environmental impact than almost any other source of electricity.’

US Environment Protection Agency

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‘Coal-fired power stations produce many more times carbon dioxide than incinerators. Whilst a coal-fired power

station will generate energy more efficiently than an incinerator generating electricity only (i.e. no CHP) these

stations are much larger than incinerators and use more carbon rich fuels.’

Environment Agency, 2009

‘Currently, Waste-to-Energy plants in Europe can supply 20 million people with electricity and 32 million people

with heat. The technology is one of the most robust and effective alternative energy options to reduce CO2

emissions and to save limited fossil fuel resources.’

International Solid Waste Association position paper on waste-to-energy

‘Waste to energy conversion is an increasingly recognised approach to resolving two issues in one - waste

management and sustainable energy. Waste represents an increasingly important fuel source. Using waste as

fuel can have important environmental benefits. It can not only provide a safe and cost-effective way of waste

disposal but can also help reduce carbon dioxide emissions.’

Renewable Energy Association, 2009

‘Waste incinerator operators have improved their environmental performance greatly in recent years. They used

to be the largest producers of harmful substances called dioxins, but these days, they're among the lowest.’

Environment Agency

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‘Energy from waste can make a contribution to replacing the high emission power stations that must be taken

offline in the next decade’

The state of the nation, waste and resource management: Institution of Civil Engineers.

Is the ash from incinerators bad for your health and dangerous?

The waste is burnt under controlled conditions to generate energy and is reduced to ash. A large proportion of

this, the Incinerator Bottom Ash (IBA), which is typically 20-25% by weight of the waste throughput, mainly

consists of heavy inert materials which don’t burn such as glass, rubble and metals. IBA is classed as a non

hazardous waste and is used throughout the UK and Europe as a substitute aggregate for construction purposes

such as in roads. The IBA from Hertfordshire’s EfW facility will be reprocessed.

The Air Pollution Control (APC) residues, often referred to as fly ash, also contain hydrated lime and activated

carbon used to neutralize and remove potentially harmful chemical products from the flue gases and are typically

2-4% by weight of the waste throughput.   APC residues are captured in the process and must be consigned to an

appropriately licensed site for safe treatment and disposal as they are classified as a "hazardous waste", in part,

because it is very alkaline due to the presence of lime in the mixture. This alkalinity is characteristic of a number

of commonly used materials in the construction industry such as cement, concrete and of natural materials such

as lime. APCR is generally classified as hazardous waste, therefore, its storage, transport and disposal are

regulated by the hazardous waste regulations and duty of care regulations. APC residues are sometimes used to

neutralise other industrial hazardous wastes or, in other cases, may be treated with cement to stabilise them

before landfill.

These regulations make waste producers responsible for ensuring they only pass waste to an authorized person,

providing enough information to enable the waste to be properly managed by others and preventing its illegal

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management. The waste can only be transported by registered waste carriers and the movement of such waste

must be notified to the EA. It must be deposited in special hazardous waste sites, as will be done with

Hertfordshire’s APC residues.

How are any toxins in the fly and bottom ashes to be prevented from leaching out into the sub-soil?

A full Environmental Statement is required as part of the planning process for a new waste treatment facility. This

statement must provide details on how the facility will operate, including air pollution control and the management

of any by-products, their storage, transport and final disposal. In short, all infrastructure provided to ensure

prevention and control of pollution from the facility will have to comply with strict regulations.

What is being proposed

What are the benefits of the proposal? We have been offered proposals from the bidders with a number of benefits - from financial and technical to

environmental and social. The proposals are offering the county council a cost effective way of dealing with

Hertfordshire’s waste and helping us divert the maximum amount of waste from landfill (as the bottom ash will be

reprocessed only a very small proportion of the waste will need to be sent to secure landfill).

Not only will this facility deal with all our residual waste, it will also generating electricity - enough to power at least

25,000 homes. This electricity will be fed into the national grid and the revenue from this will help offset the cost of

the facility to tax payers. In addition, any third party waste treated in the facility will generate further income to

offset the cost for the county council. Waste is a resource that when treated properly can produce significant

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levels of energy and reduce the country’s reliance on dirty, fossil-fuelled power. The facility will also have the

ability to produce heat should a local user be identified.

The facility will provide around 40 - 50 jobs when it is operational, with the company encouraging local residents

to work there, the construction phase will also see around 250 jobs being created. It is likely that this extra

employment in the area will also have a positive effect on local businesses who supply the workers.

The Visitor Centre will be used for activities to engage with schools and other community groups and

stakeholders, with the intention of generating and encouraging public interest and a change in behaviour towards

waste management issues.

A single contract for the 25 years of operation will reduce administration costs for the county council.

A low minimum tonnage of 180,000 tonnes has been agreed, which will allow Hertfordshire to keep increasing

recycling rates without the WDA being penalised.

Will the facility produce heat as well as electricity? 

The bidders have been evaluated on their facility’s ability for electricity to be supplied to the national grid and for

heat to be delivered (or made available) to a local community or business in the county.

The county council would welcome the ability to export heat but this has to be a decision made as part of the

whole solution - bearing in mind the costs as well as any financial benefit through the share in revenue. If no

current customer is identified, at the very least the facility would have the necessary technology fitted so that it is

‘enabled’ for heat off-take should a customer be identified in the future.

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Whether heat is delivered from the facility or not does not dramatically impact on the facility’s ability to generate

electricity. Hertfordshire’s EfW facility could produce enough electricity to power around 25,000 homes. Electricity

production can provide a valuable income from which Hertfordshire benefits through a reduction in the overall cost

of the waste treatment service.

Consultation

Were the public consulted in this? Findings from the Joint Municipal Waste Management Strategy 2007 were used to develop some of the selection

criteria against which potential sites were measured. This was put together after extensive public consultation by

the Hertfordshire Waste Partnership, a coalition between the county and ten district borough councils.

11,000 people contributed their views as part of the consultation. Some of the key findings were:

• Almost 98 per cent of respondents felt it was important to reduce the amount of waste produced.

• 83 per cent felt recycling should be compulsory, 72 per cent requesting a 50 per cent recycling target by 2012.

• When planning new waste facilities – 86 per cent agreed minimising transport to the facility is important or

essential; 90 per cent agreed it should be cost effective and affordable; 95 per cent felt considering the

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environmental impact is important or essential and 94 per cent felt that gaining energy from un-recycled waste is

important or essential.

In 2007 the county council as the Waste Planning Authority carried out a public consultation on the overall vision

for waste planning in the county, including potential sites for all types of waste facilities.

The council also consulted extensively with a large number of independent experts as part of the assessment

phase of the process.

The county council had a reference site in its Outline Business Case, which has been included in the Waste

Planning Authorities consultations since 2008 on potential waste sites in the county.

Hertfordshire County Council recognises the fundamental importance of involving the public in the planning

process.

How can the public get involved? Now that a successful bidder has been selected and a site has been formally identified, the planning process will

begin with a pre-application consultation being undertaken by the Preferred Bidder and there will be a programme

of communication with the public.

Once a planning application is submitted, there will be a period of statutory public consultation that would be

undertaken by the Waste Planning Authority (Hertfordshire County Council).

Hertfordshire County Council will be keeping the public informed at every stage through newsletters, media news

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stories and updates on our website, as will the Preferred Bidder.

(See Appendix E flow chart for planning)

What’s happening elsewhere?

Isn’t Biffa proposing an EfW facility in Ware? Does this mean that Hertfordshire could have two EfW plants?

Potentially, yes. Biffa has announced their proposals to develop an EfW in Ware and have said they will submit a

planning application to the county council this year (2011) for its own development

Biffa, or any other company, is free to make an application to HCC as the WPA for planning permission to develop

a waste treatment facility and the WPA will assess any proposals against policies.

There is a total of around 3 million tonnes of waste in Hertfordshire that needs to be disposed of. Biffa are

proposing a site that will be capable of dealing with 400,000 tonnes per annum of residual waste – waste that

remains after recycling and composting. Principally, it would handle industrial and commercial waste. Biffa would

charge commercial and industrial organisations to dispose of their waste at the plant.

What’s happening elsewhere in the country?

The management of municipal waste is one of the greatest challenges facing local government. EU and UK

regulation supported by increasingly stringent financial measures mean we must find an alternative to landfill.

Numerous waste projects are in development and construction up and down the country as other local authorities

also face the challenge of dealing with residual waste.

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In London for example, the energy from waste (EfW) facility in Belvedere, South London will become operational

in 2012 and will be capable of managing 670,000 tonnes of waste per year. This is in addition to London already

incinerating 23 per cent of its municipal waste. The modelled municipal waste flows in the Mayor’s draft municipal

strategy show that London will send 33% (1.5 million tonnes) of its waste direct to incineration by 2015. However,

this will come down again to 21% in 2025 (as a result of Edmonton closing in 2021). London's intention - as it is in

Hertfordshire - is that this form of waste treatment works alongside recycling initiatives and the development of

other treatment methods.

Surrey has often been quoted as a local authority that has abandoned plans to use EfW to deal with its municipal

residual waste; instead it is developing plans for a smaller thermal treatment (gasification) facility. However, it is

important to note that although Surrey’s is certainly developing this facility, it has also recognised that this will not

deliver a whole solution for the county’s residual waste and therefore has a long term contract to send around

100,000 tones of waste per year to an EfW facility out of the county. The Surrey project was high profile due to the

fact that it had already received PFI credits but did not intend to proceed with building the 2 EfW facilities for

which these were awarded because it had consistently failed in its attempts to secure planning permission.

Recently Norfolk County Council announced its Preferred Bidder, proposing an EfW facility with Combined Heat

and Power. The site chosen was identified by the county council after looking at 260 options and was purchased

by the county council for the project. There was considerable concern within the community, especially about the

impact on agricultural land, and a local poll was conducted by two borough councils, West Norfolk and Kings

Lynn, in preparation for the announcement of Preferred Bidder. The poll asked "Do you support the construction

of a mass burn municipal waste incinerator on the Willows Business Park, Saddlebow, King's Lynn?" and Total

votes cast were 70,763 out of 115,382 eligible voters and 65,516 said "No" to the scheme. There were concerns

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raised by Norfolk County Council about the method used to gather the views represented by the poll. The decision

to appoint the Preferred Bidder was made by NCC Cabinet on 7 March 2011, as it did not feel that the opinions

expressed were sufficient to prevent the procurement proceeding to Financial Close. It was, however, made clear

that the public would have their opportunity to raise any concerns at the planning application stage.

Some counties like Hampshire have received criticism that their facilities now need to find waste from elsewhere.

In Hampshire this is not the case. The three facilities in the county had different constraints placed on them in

their planning permissions as to where the waste could come from and as a consequence of these arrangements

waste was being inefficiently and illogically transported excess miles across Hampshire to simply comply with

planning constraints. The planning permissions were amended in 2009 to allow for uniformity in waste sources

and each facility are permitted to receive municipal or commercial inputs from within and outside of Hampshire.

Some material is imported from outside of the County mainly from areas close to the boundary of Hampshire, the

majority of waste comes from within Hampshire and no waste is imported from abroad.

Hampshire as a County is a net exporter of waste although it aims to be net self sufficient by 2016. The

modification to the planning permissions assists in achieving net self sufficiency by utilising spare capacity as it

becomes available through the recovery of commercial waste, of which some was previously exported to landfill

outside of the county.

Across England, £2billion in PFI credits has been allocated to 32 projects. A range of technologies have been

adopted or proposed, 19 of the projects have settled on EfW, similar to Hertfordshire. Many local authorities are

adopting EfW e.g. Suffolk, Lincolnshire, Norfolk, Peterborough and Staffordshire. Many already benefit from the

same approach to that of Hertfordshire and intend to keep doing so, for example Hampshire’s three facilities and

those in Sheffield and Nottingham. It is estimated that 28% of the population in this country live within ten miles of

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an incinerator.

Is it true that the US has not had any new EfW facilities in the last 15 years due to health concerns of the technology?

No, this is not true. There has been a slow down in the construction of new facilities but this was driven by the

market and not by health concerns. In fact the US Environment Protection Agency states that Waste-to-energy

plants are a ‘clean, reliable, renewable source of energy’ that ‘produces electricity with less environmental impact

than almost any other source of electricity.’

If Bedfordshire is putting a planning application for an EfW facility there, why can’t we send our waste there?

Firstly, although a planning application has been submitted to the Infrastructure Planning Commission for an EfW

facility, there is no guarantee for Hertfordshire that it will be successful or that it would be a long term cost

effective solution for our residual waste.

Secondly, Local Authorities are being strongly encouraged to ensure that their areas are self sufficient in their

waste management and that there is no net movement of waste across its boundaries.

Hertfordshire’s waste procurement project has succeeded in finding a long term, cost effective solution that would

give the county council certainty over its waste management activities and budget for the next 25 years.

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Local impact

How will the roads cope? Wherever a waste treatment facility is ultimately located, the needs of any nearby residents will be of key

importance. As part of the planning process, the appointed Preferred Bidder would be required to undertake a

comprehensive Traffic Assessment and identify any potential impacts, such as increases in traffic or noise, which

may arise during construction and through the operation of the facility and, where deemed necessary, introduce

mitigation measures to ensure any negative impacts are minimised. The bidders have already done some work to

assess if their site could cope with extra traffic, but iff it is found that the impact on the transport network is

unacceptable, planning permission would be refused.

There will be a lot of work done to manage the timing of deliveries of waste – much of it will be bulked up at a

transfer station to reduce the overall amount of haulage. There will be timed deliveries of supplies and also

collection of process residues to minimise the impact.

What will it look like and how big will it be?

As part of their planning consultation the developer will show residents and other stakeholders their plans in order

to get feedback on them. The design is bespoke and aims to make a positive contribution to the landscape.

How long is the construction phase? A facility of this size will take 3 to 3.5 years to construct.

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Hertfordshire Waste Procurement ProgrammeBrief outline of the Energy from Waste process

Energy from Waste (EfW) is a process where, in the same way as a power station, a fuel is burned in a controlled environment to generate electricity. In an EfW facility the fuel is waste, so not only does the facility produce electricity but it also deals with our household waste that is not recycled. Modern EfW facilities are very different from incinerators of the past. Over the last 25 years, the EfW industry has developed state-of-the-art technology that makes this one of the cleanest forms of energy generation. Energy from Waste facilities meet or exceed the strictest EU emissions regulations. EfW facilities are designed to have very little residual waste, thus reducing the need for landfill to nearly zero.

EfW is a simple process within a complex facility. It consists of several discrete components making up a whole waste management process, all of which were discussed in detail during the procurement process. Broadly, an EfW waste treatment and disposal facility consists of:

Step 1:Vehicles delivering waste are weighed both in and out on Weighbridges. Some of the particular issues were to ensure that incoming vehicles do not have to queue for a long time, do not queue onto the highway and do not take a long time to tip their load thus allowing them to carry on collecting as efficiently as possible.

Step 2:In order to control smells, municipal waste that is left after recycling is tipped into an enclosed bunker. The bunker has to be of sufficient size to enable the plant to operate over bank holidays and must have sufficient capacity to store waste during planned and unplanned maintenance periods.

Step 3: The waste is grabbed with a feed crane from the bunker for it to be deposited on a grate, which is the heart of the combustion process as it is where the waste is fully burned.The bids that have been submitted are all based on technology that can deal with a wide range of different waste materials with different calorific values. The capacities have been predicted based on the average calorific value estimated from the composition of household waste arising both in Hertfordshire and across the UK. The waste is mixed in the bunker to ensure that there is an even balance across the grate and that all is burned efficiently, thus reducing the amount of unburned material in the Incinerator Bottom Ash (IBA).

APPENDIX D

Step 4:Waste is burnt at a very high temperature – air necessary for this process is drawn from above the refuse so that the facility operates under negative air pressure and smells do not escape. The combustion process is continuous.

Step 5:The heat produced on the grate is harnessed through a series of water filled boilers and heat exchangers to produce a superheated steam that is fed through a turbine to generate electricity. This electricity is exported to the National Grid. In addition, with the right infrastructure, heat can be produced for local commercial and domestic properties. All water used within the steam cycle is cooled, condensed and re-used.

Step 6:The combustion process produces a solid residue called Incinerator Bottom Ash (IBA). IBA amounts to between 20% and 25% of the total waste input and is further processed to remove any metals present and then recycled into aggregates for road construction and the building industry.

Step 7:The combustion process also produces gases which go through a rigorous cleaning process and filter system to remove toxic material and make sure there is no unacceptable impact on the environment or local air quality.

The residue from this is called the Air Pollution Control residue – it is also sometimes called flue ash, or fly ash and only makes up about 3-5% of the input. This residue is classified as hazardous waste (in part due to its alkalinity which comes from the Lime Scrubbing Process). As a hazardous waste it is disposed of in special landfill. The management of flue gas is highly regulated and emissions have to conform to strict EU standards. Both final solutions perform to higher levels than the standards and have included plans to meet even stricter standards should they be required in the future.

Step 8:Before the cleaned emissions are released they go through emissions measurement equipment. An EfW plant can only operate with a permit from the Environment Agency (EA) under the Pollution Prevention and Control regulations. It must continuously monitor and report emissions from the plant and the EA has the power to close a plant if it breaches these. EA inspections are both scheduled and unannounced. All facilities publish their emissions monitoring data in their annual performance report and many make continuous monitoring data available in real time on the internet.

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Hertfordshire Waste Procurement ProgrammeHow residents can have their say in the planning process

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APPENDIX E