Overview and Scrutiny Forum for Community Safety...2005/07/22 · Overview and Scrutiny Forum for Community Safety Part 1 22 July 2005. Item No 5 Subject Waste Disposal Site – 2005-2006

Overview and Scrutiny Forum for Community Safety Part 1

22 July 2005. Item No 5

Subject Waste Disposal Site – 2005-2006

Purpose To seek the views of the Overview and Scrutiny Forum on longer term

Waste Options.

Author Head of Public Protection and Environmental Services

Head of Finance

Ward ALL

Summary Consultants have looked into longer term waste options for the Council and

it is opportune for Overview and Scrutiny to give views on long term options for Waste Management.

Proposal To visit the Landfill Site before meeting to make recommendations.

Contact Stephen Davison 01633 232802 [email protected]

Joyce Steven 01633 232201 [email protected]

Action by Head of Public Protection and Environmental Services.

Timetable

mailto:[email protected]


1 Background 1.1. The reasons for this report being before the Forum are:-

Major operational works at the existing site;

Need to continue to direct waste from landfill.

1.2. Waste disposal is an issue which is becoming increasingly regulated and subject to targets. By 2010 Newport will have to achieve a diversion rate from landfill of biodegradable waste of 25%; based on 1995 figures. This target increases to 50% by 2013. In Wales the 2010 target is said to be reached by a 40% recycling rate.

1.3. In Wales, achievement of the 2010 figures is being assisted by funding from the Welsh

Assembly Government providing that progress is made through recycling and composting. 1.4. Progress towards the 2010 target has recently been favourably ‘Peer Reviewed’ and when

the formal report is received it will be presented to Overview and Scrutiny. 1.5. Although we are on track to achieve the 2010 targets; achieving the 25% level of recycling

two years ahead of national targets, it is apparent that unless there is a major change in public habits, the 2013 targets cannot be met by recycling and composting alone. We will, therefore, require some method of processing bulk waste.

1.6. At the same time as these changes are progressing, landfill is creating more issues due its

increasing complexity following new legislative requirements, considerable capital requirement and landfill tax which is currently rising by £3 a tonne per year.

1.7. Newport is in the fortunate position in that our Landfill Site will, if permitted, give twenty

years life at current rates of fill. This is considerably more than is available to most Councils. The site is being engineered to meet the new requirements of the Landfill Directive and Consultants advise that the engineering will allow the site to meet new legislative requirements. These requirements are complex and specialised and small operators such as the City Council have to rely on outside Specialists.

1.8. Newport City Council employed Consultants to look into:-

1. The Capital and Revenue implications of maintaining the Waste Disposal Site under Client Management;

2. The operational and financial implications of outsourcing the site;

3. Advising on a suitable plant for reducing waste to landfill [eg MBT] detailing rates of

diversion. 1.9. The report of the Consultants is appended to this report. 1.10. The scope of the report is important in that it deliberately does not look at the overall waste

management operations. From a waste disposal point of view, the report suggests savings of up to £3 per tonne. However, this would be achieved by closure of the Waste Reception Area. The use of this area has in fact been shown to save considerably on the costs of the Refuse Fleet, allow checks to be made on waste being admitted to the site prior to landfill and allows receipt of waste to continue when bad weather temporarily closes tipping operations.

1.11. There are a range of technologies available to treat new waste, many of which become

better value for money at larger size and will have some residue for landfill.

2 Financial Comments

The Consultants Report rightly points out the revenue benefits to the Council of operating its own Landfill Site (paragraph 5.4). However, in order to continue to receive these revenue benefits considerable Capital Investment will be needed at the Site over the next twenty years (Table 5.2). The report also examines alternative methods of dealing with waste disposal. The Council will need to carefully consider all the options suggested in order to determine the most efficient and effective strategy for future waste management.

3 Options Considered/Available

The views of the Overview and Scrutiny Forum are sought on:-

3.1. Should the Council continue to operate the Docksway Waste Disposal Site; 3.2. Should the Council outsource the site; 3.3. Should the Council look to work with other Council’s to form a ‘Partnering’ arrangement for

treating bulk waste and seek to achieve the asset of the Landfill Site being included in the partnership arrangements.

4 Preferred choice and reasons 4.1. The Consultants report does show financial benefits in the longer term to continued

ownership of the site. However, the capital costs are significant. An option may be, therefore, to explore with potential partners, private/other Local Authorities, future use of the site.

4.2. In tandem with the above the Council should also investigate partnerships for alternatives to landfill in the treatment of waste.

5 Sustainability and Environmental Issues

Waste Management is ‘key’ to a sustainable future.

6 Equalities Impact

There are equalities impact issues in this report.

7 Crime Prevention Impact

There are no crime prevention impact issues in this report.

8 Comments of Head of Law and Standards – Monitoring Officer

There are no legal implications at this stage. However, depending on the preferred option for future waste management , there may be legal issues which will need to be considered in due course. It is clear that unless Government and EC policy changes the law will make it increasingly difficult for the Council to rely on the waste disposal site as a significant element of its waste disposal strategy. I support therefore the proposal to consider alternative methods of waste disposal.

9 Comments of Head of Finance – Chief Financial Officer

Contained within the report.

10 Background Papers

Consultants Report – E C Harris

DOCUMENT1

Newport City Council

Waste Disposal Site

Consultancy Report

Consultancy repotyStrategy Report

April 2005

Issue : 4b Final Issue

The Royal Exchange Manchester

M2 7EH

Tel: 0161 214 0214 Fax: 0161 214 0215

www.echarris.com

7, The Crescent Taunton

Somerset TA1 4EA

Tel: 01823 350 203 Fax: 01823 351 203

www.pba com


Report Issue 4b 13/12/2014 Final Page 5

CONTENTS

GLOSSARY

1. Executive Summary .................................................................................................................... 7

1.1 Objectives .................................................................................................................................. 7

1.2 The Capital And Revenue Implications Of Maintaining The Site Under NCC Management .. 7

1.3 The Operational And Financial Implications Of Outsourcing The Site .................................... 7

1.4 Advising On A Suitable Plant For Reducing Waste To Landfill .............................................. 8

2. Background & Strategic Context ......................................................................................... 10

2.1 Objectives ................................................................................................................................ 10

2.2 A Spatial Profile Of Newport .................................................................................................. 10

2.3 Profile Of Newport City Council ............................................................................................. 12

2.4 Strategic Context ..................................................................................................................... 14

3. Analysis Of Existing Service Provision .............................................................................. 22

3.1 Introduction.............................................................................................................................. 22

3.2 Key Policies And Strategies .................................................................................................... 22

3.3 Existing Waste Management Infrastructure ............................................................................ 23

3.4 Performance Of Existing Services ........................................................................................... 25

3.5 Existing Contractual Arrangements ......................................................................................... 27

3.6 Trends In Waste Volumes ....................................................................................................... 28

3.7 Minimisation Of Waste............................................................................................................ 28

4. Technical Solutions For Reducing Waste To Landfill .................................................. 30

4.1 Overview Of Waste Treatment And Disposal Processes ........................................................ 30

4.2 Experience Of MBT Plants ...................................................................................................... 34

4.3 Outputs From MBT Processes ................................................................................................. 34

4.4 Environmental Issues ............................................................................................................... 35

4.5 Diversion Rates ........................................................................................................................ 41

4.6 MBT Process Costs ................................................................................................................. 44

4.7 Diversion Rates ........................................................................................................................ 47

4.8 Attractive Options .................................................................................................................... 50

4.9 Less Attractive Options ........................................................................................................... 51

4.10 Conclusions ............................................................................................................................. 53

5. Options Appraisal ...................................................................................................................... 54

5.1 Introduction.............................................................................................................................. 54

5.2 Aims & Objectives .................................................................................................................. 54

5.3 Description Of Options ............................................................................................................ 54

5.4 Option 1 – Maintaining The Waste Disposal Site Under Council Management ..................... 54

5.5 Option 2 - Outsourcing The Operation And/Or Ownership Of The Waste Disposal Site ..... 59

5.6 Option 3 –Contracting The Use Of A Site Under Alternative Ownership .............................. 65

5.7 Evalution Of Project Options .................................................................................................. 68


GLOSSARY

BioDry Biological Drying BMW Biodegradeable Municpal Waste BPEO Best Practicable Environmental Option CA Civic Amenity Site CC Combined Cycle CFB Circulating Fluidised Bed CP Cement Production DryDig Dry Digestion EFW Energy From Waste ER Energy Recovery GF Grate equipped Furnace GS Gasifiers GWC Green Waste Composting HP Combined Heat & Power unit IP Incineration Plant MBT Mechanical and Biological Treatment MecSep Mechanical Separation MRF Materials Recovery Facility MSW Municipal Solid Waste NCC Newport City Council NWS Newport Waste Savers PY Integrated Pyrolysis R&C Recycling and Composting RCS Refuse Collection Service RCV Refuse Collection Vehicle RDF Refuse derived Fuel RotKil Rotary Kilns SG Synthetic Gas (SynGas) StaFur-i Static Furnace with moving bed and indirect heating StaFur-d Static Furnace with fixed bed and direct heating STIG Steam Injected Gas Turbine WetDig Wet Digestion WMS Waste Management Strategy Document – edited by Newport City Council March

2004


EXECUTIVE SUMMARY

OBJECTIVES

The Welsh Assembly Government have set challenging targets for Councils in Wales to

recycle and compact 40% of BMW by 2010. Newport City Council (NCC) currently recycle

20% of BMW and have plans to increase this amount to 40% by 2010. NCC recognises, that

it needs to be investigating methods of dealing with bulk waste, and that these methods will

inevitably impact upon the landfill site at Docksway.

NCC has contracted EC Harris to deliver a Report to NCC answering the following questions: a) The Capital and Revenue implications of maintaining the Waste Disposal Site

under Client Management, b) The operational and financial implications of outsourcing the site, c) Advising on a suitable plant for reducing waste to landfill [e.g. MBT] detailing

rates of diversion.

The Capital and Revenue implications of maintaining the Waste Disposal Site under NCC Management

Current net operational costs for the Docksway site under NCC management are approx £10/t, excluding Landfill Tax (Section 5.4).

There are opportunities to improve the efficiency of operation of the Docksway site, which could achieve savings of up to £3/t (Section 3.4).

Considerable capital investment is required at the site, both in the short and long term. Total capital expenditure is estimated at £14.3m over the next 20 years, with £12m to be required within the first 10 years. It is estimated that the cost of engineering the Phase 2 void will be approx £9.50 per tonne. Costs of aftercare are estimated at £1.70, and operational costs at £12.00 per tonne giving a total cost (operation, engineering & aftercare) of £23.20/tonne. (Section 5.4).

The operational and financial implications of outsourcing the site

There is considerable interest amongst waste management operators in the prospect of acquiring the Docksway Disposal Site from Newport City Council.(Section 5.5.2)

Key drivers for potential operators are the dearth of landfill void in the South East Wales region, and the security of a reliable disposal route on which their waste collection activities can be expanded.

Whilst no firm cost estimates have been provided by potential operators, it is considered that given the attractiveness of the Docksway landfill void, the benefits of


economies of scale and the efficiencies of commercial operation, offset by the profit element, the net cost per tonne of disposal would be similar or slightly less than the cost of operation by NCC.A Discounted Cash Flow analysis has shown that, assuming the site can be sold for £5m (based on market soundings), outsourcing is an attractive financial option in the short term (ie less than 10 years) for all tonnage costs of up to £40/tonne (excluding landfill tax). However, over a 20 year period, the benefit of outsourcing becomes marginal at tonnage costs in excess of £30/tonne (Section 5.5.3).

The alternative approach of contracting NCC’s waste out to an alternative landfill is likely to be difficult to achieve as other sites have limited void and many are fully committed to existing contracts (Section 5.6).

Costs associated with utilising an alternative landfill are likely to be in excess of £32/t (excluding landfill tax), and as such are considerably higher than options utilising the Docksway site (Section 5.6.3).

Advising on a suitable plant for reducing waste to landfill [e.g. MBT] detailing rates of diversion

MBT is potentially an attractive option for NCC to consider as part of an integrated approach to diverting Biodegradable Waste away from landfill and increasing recycling rates.

There is a vast range of technologies, with over 30 international vendors. There are approximately 80 operational MBT plants worldwide, with a total operating capacity of 8.5m tpa. The largest experience is in Spain, Italy and Germany; however application has recently spread to 13 other countries, including the UK (Section 4.2).

Use of MBT is at an early stage in the UK, with a small number of active facilities and many under consideration. A range of techniques is being adopted in different areas. At the present time, the market for certain outputs, such as RDF, SRF, and certain composts, are limited and it is unclear how these markets will develop (Section 4.3).

The MBT technologies offering the lowest risk currently are those utilising integrated combustion of the output (biogas or SRF) in an EFW or incineration process, and those producing a land remediation material (Section 4.8).

Given the timescales by which NCC will need to utilise alternative approaches to meet diversion targets (2013), it is not necessary to make an immediate decision regarding selection of appropriate MBT technologies. Indeed, it will be prudent to observe how the markets for outputs and regulatory issues develop over the next 1-2 years, and also to study the


ongoing effectiveness and viability of existing UK MBT facilities. This will enable a decision to be made in 2007, providing a reasonable timescale for planning and build of appropriate plant before the critical deadline of 2013.


BACKGROUND & STRATEGIC CONTEXT

objectives

The Welsh Assembly Government have set challenging targets for Councils in Wales to

recycle and compost 40% of BMW by 2010. Newport City Council (NCC) currently recycle

20% of BMW and have plans to increase this amount to 40% by 2010. Development of these

plans for recycling and composting falls outside the scope of the Sub-Consultancy Services.

NCC recognises, however, that it needs to be investigating methods of dealing with bulk waste, and that these methods will inevitably impact upon the landfill site at Docksway. Over and above this, is the need to consider advantages and disadvantages of maintaining current rates of fill of the site and maintaining a site life of approximately 20 years, or filling the site at a more rapid rate. NCC has contracted EC Harris to deliver a Report to the NCC answering the following questions: a) The Capital and Revenue implications of maintaining the Waste Disposal Site

under Client Management, b) The operational and financial implications of outsourcing the site, c) Advising on a suitable plant for reducing waste to landfill [e.g. MBT] detailing

rates of diversion.

2.1.1 METHODOLOGY

This project was completed over the period Jan-April 2005. The project was led by E C Harris LLP, working in conjunction with Peter Brett Associates (PBA) and Bureau D’Ingeniere Bourgeois Et Harris (IBH S.A.). The principal personnel and their roles in the project were:

Dr Ian Kennedy, Project Manager, E C Harris

Mike Rigby, Principal Consultant, PBA

Willem Deboyser, Consultant, Technical Solutions, IBH S.A.

The authors wish to express their thanks to Stephen Davison, Head of Public Protection and Environmental Services and other staff at Newport City Council for their assistance in the preparation of this report.

Spatial profile of newport

Newport is located on the edge of the coastal plain of the south east coast of Wales. The

rivers Ebbw and Usk flow through the town and the confluence of their estuaries

encompasses the industrial areas of Newport Docks, recent commercial redevelopments and

the Docksway Landfill site. The coastal fringe is known as the Gwent Levels and is

characterised by low density of residential development but has seen incursions of


commercial development into an area valued for its distinct landscape and natural history.

Residential areas such as Pillgwenlly, Maes Glas to the west , Liswerry and the Lanwern site

include established and new residential developments on the edge of the Levels. The main

residential areas and historic centre of the city are located on higher ground to the north. The

main road and rail crossing points of the Usk are in this area and the M4 motorway corridor

runs along the northern side of the city. The main concentration of population and

employment is in the City of Newport.

Newport City covers an area of 84 square miles (218 square kilometres), with a population of

around 139,000, divided into 20 Wards, the largest (by population) being Liswerry which

contains 7.4% of the total population. The rural area of Langstone is the smallest of the

Wards with just 2% of the total population. Caerleon, the largest outlying “village” has over

8000 inhabitants, just over 6% of the total population. (Source Newport Waste Strategy

2004).

Population

Newport is the third largest city in Wales after Cardiff and Swansea with a population of 138,800 (ONS Mid Year Population Estimate 2002) which has increased by 0.8% since 2001.

Main industries and sources of employment

The urban area of Newport dominates the central area of the City. Newport is almost evenly distributed to the east and west of the River Usk, the southern area being dominated by industrial land uses.

The south eastern area is characterised by heavy industry and several industrial estates have been established, such as Reevesland, and Queensway Meadows. To the east of these is Corus Steel Works which dominates the eastern fringes of the town. Other notable industrial areas are the Star Trading Estate north of Caerleon, and Tregwilym Industrial Estate in Rogerstone where Alcan Rolled Products is based.

In the last two decades Newport has seen a steady transformation in its employment characteristics. There is still a strong reliance on heavy manufacturing, but significant increases in the numbers employed in the electronics sector highlights the changing face of employment in South Wales. Manufacturing is still prevalent in the employment profile of Newport, with 25.5% of the workforce, compared to a Great Britain average of 17.5%.

Employment Structure


There are 71,300 employees working in Newport (Annual Business Inquiry 2001). It is an important sub regional employment centre with an estimated 35% of the workforce travelling in from outside (Labour Force Survey 2001).

Newport is predominantly a manufacturing city and port. 19.8% of the workforce was employed in manufacturing in 2001 compared with 14% nationally (ABI). The conditions that gave rise to its growth are still reflected by the presence of four large metal manufacturing and finishing plants employing between them over 2000 people and a host of dependent companies. However this is a declining sector in terms of employment and Newport has a disproportionate share of its workforce in it, when compared nationally. This high dependency has created significant problems due to restructuring resulting in significant job losses at Corus Llanwern and Alcan Rogerstone over the last three years.

New manufacturing industries have set up in the last two decades, particularly in the electronics sector which now employs around 3,000. However, the whole manufacturing sector has come under particular pressure over the four years 2000 to 2003 with the loss of over 5,600 jobs, representing around 34% of all jobs in this sector. Collapse of global markets, increasing competition from low cost manufacturing regions, the high value of sterling, are all contributing factors. (Source Newport Waste Strategy)

Growth Strategy

DTZ Pieda Consulting, in a study carried out to add further detail to the Regeneration Programme, estimated the total additional job creation for the period 2001-2011 in Newport as between 13,800 and 15,650 (Growth Strategy economic forecasts final technical report, March 2003). This forecast is based upon:

Continued restructuring of the economy. Increasing the role of Newport as the economic engine for the 5

Counties. Developing employment opportunities in global and UK growth

sectors.

A Unitary Development Plan covering the period up until 2011 has been placed on deposit and the Growth Strategy has been formally approved by the Council and incorporated into the UDP as the Second Proposed changes to the Deposit Plan, May 2003. This includes proposals for a major eastern expansion of the City, which are currently the subject of a Masterplan exercise which has been commissioned by Newport Unlimited. (Source Newport Waste Strategy 2004).

profile of newport city council


Newport City Council is a unitary authority formed in 1996, and is the 8th largest in Wales,

providing all major services such as education, leisure, housing, social services, planning and

highways.

There are 50 councillors - 31 Labour, 11 Conservative, 6 LibDem, 1 Plaid Cymru and 1

Independent. (2004)

The council employs approximately 7,500 people. (Source Newport City Website 2004)

During 2000-2001 the Council restructured in an effort to modernise the political decision-making process and to help focus on tackling ‘cross cutting’ issues that span traditional departmental responsibilities. As a result the number of directorates and departments were reduced and a ‘Cabinet’ system was introduced in place of the traditional committees. Eight Councillors were appointed as „Cabinet Members‟ with responsibility for running

groups of related services. The Cabinet Members „portfolios‟ correspond with the functions

of the new administrative divisions, known as „Service Areas‟. In addition, eight Overview

and Scrutiny Forums will actively contribute to policy development and monitor decisions

made by Cabinet Members, the Cabinet and by individual services. Each Forum is made up

of non-cabinet members and they correspond directly with the eight cabinet portfolios.

The member with responsibilities for waste disposal within the authority has the Transport and Sustainable Development portfolio. Other issues within that brief include:

Engineering, Highways and Transportation, Local Transport Plan, Sustainability and Local Agenda 21, Environmental Services and Grounds Maintenance

The Management Structure The current senior management structure consists of a Managing Director and three Corporate Directors with responsibility for corporate policy development & strategic delivery across the Council. Four Service Groupings are split into fifteen operational divisions known as Service Areas, each of which is managed by a Head of Service. They have responsibility for the effective working of their specific Service Areas. Public Protection and Environmental Services is the service area responsible for waste management. The Waste Management Group delivers its services in five key areas: Waste Disposal concerned with the management of the council’s own

Civic Amenity Site. This also includes a Recycling Centre for the general public.


Street Cleansing responsible for keeping Newport’s streets cleansed to the highest possible standards.

Refuse Collection this service provides a weekly collection of domestic

refuse for 58,500 properties across the whole of the city. This service also collects trade waste from 1,000 businesses.

Public Conveniences maintains these facilities across the city. Recycling this service sets up and supports the recycling and

composting initiatives across the city.

strategic context

Introduction

Key Drivers of Change

EU Landfill Directive

The Landfill (England and Wales) Regulations 2002 came into force on 15 June 2002, implementing the Landfill Directive (Council Directive 1999/31/EC), which aims to prevent, or to reduce as far as possible, the negative environmental effects of landfill. The main aim of the Directive is to prevent or reduce as far as possible the negative effects of landfilling waste on the environment and human health. It will ensure that landfill sites across the European Union face strict regulatory controls on their operation, environmental monitoring and long-term care after closure.

Whilst the Government recognises that landfill has an important role to play in waste

management both now and in the future, it is committed to reducing the UK‟s reliance on

landfill, which makes little practical use of waste and could be a missed opportunity to

recover value from waste. The Government‟s views on the relative merits of different waste

management options are discussed further in the Waste Strategy 2000 for England and

Wales. However, landfill may remain the Best Practicable Environmental Option (BPEO)

for certain wastes in certain circumstances, and it will continue to play a role in waste

management in the foreseeable future. The Government welcomes the Landfill Directive as

an instrument which can serve to ensure that landfill activities throughout the European

Union are well regulated and managed.

Another main objective of the Directive is to reduce the emission of methane, a powerful

greenhouse gas, from landfill sites. Where methane is produced, the Directive aims to

ensure that it is used productively. Climate change is one of the most serious environmental

threats facing the world today, and the draft UK Climate Change Programme, published in

March 2000, sets out the Government‟s far reaching strategy for tackling climate change in


the UK. Currently, more methane gas collected at landfills is flared rather than used to

produce energy. Using methane from landfills to produce energy reduces carbon dioxide

emissions from the burning of fossil fuels to produce energy. The Directive will require the

collection, treatment and use, where possible, of the gas from all landfills receiving

biodegradable waste.

Also, to help fulfil its objective of reducing methane emissions, the Landfill Directive

introduces progressively diminishing limits on the landfill of biodegradable municipal

waste. These were the subject of a consultation paper entitled "Limiting Landfill" released

by the Government in October last year, and the Waste Strategy 2000 England and Wales

The key elements of the new regulations are: -

Existing landfills had to demonstrate that they will be able to comply with the directive if they wished to operate beyond July 2002;

Sites were classified into one of three categories: hazardous, non-hazardous or inert, according to the type of waste they receive;

Higher engineering and operating standards are to be followed;

Biodegradable waste to be progressively diverted away from landfills;

Certain hazardous and other wastes, including liquids, are prohibited from landfills;

Pre-treatment of wastes prior to landfilling is to become a requirement.

The Landfill Directive sets the following targets for the reduction of biodegradable municipal waste sent to landfill: -

Table 2.1 : Landfill Directive Reduction Targets

Year Reduction target (as a % of the 1995 level of waste landfilling

2010 75

2013 50

2020 35

Failure to meet these targets will lead to EU fines on the UK government that may be as

much as £500,000 per day. Given that municipal waste management is the responsibility of

local authorities, the Government has indicated that local authorities who fail to meet these

targets will be subject to a penalty of £150 for each tonne the authority falls short of its

reduction target.

National Waste Strategy

The National Waste Strategy 2000 set out further targets to improve the sustainability of


waste management in England and Wales. However, this document was replaced in Wales

by „Wise About Waste: The National Waste Strategy for Wales. This document sets out the

following targets for Wales:-

a). Public bodies to reduce their own waste arisings:-

by 2005, achieve a reduction in waste produced equivalent to at least 5% of the 1998 arisings figure;

by 2010, achieve a reduction in waste produced equivalent to at least 10% of the 1998 arisings figure.

b). Minimum recycling and composting targets for each local authority to deliver;

by 2003/04 achieve at least 15% recycling/composting of municipal waste with a minimum of 5% composting (with only compost derived from source segregated materials counting) and 5% recycling;

by 2006/07 achieve at least 25% recycling/composting of municipal waste with a minimum of 10% composting (with only compost derived from source segregated materials counting) and 10% recycling;

by 2009/10and beyond achieve at least 40% recycling/composting with a minimum of 15% composting (with only compost derived from source segregated materials counting) and 15% recycling.

c). Improved segregation of hazardous household waste:

by 2003/04 all civic amenity sites should have facilities to receive and store, prior to proper disposal, bonded asbestos sheets. All sites should also have facilities for receiving and storing, prior to recycling, oils paints, solvents and fluorescent light bulbs.

The following secondary targets have also been set: -

a). Stabilisation and reduction of household waste:

by 2009/10 (and to apply beyond) waste arisings per household should be no greater than those (for Wales) in 1997/98;

by 2020 waste arisings per person should be less than 300kg per person.

b). The Assembly Government encourages businesses to join in with the public sector

to meet, and exceed where possible, the following waste minimisation targets:

by 2005, achieve a reduction in waste produced equivalent to at least 5% of the 1998 arisings figure;


by 2010, achieve a reduction in waste produced equivalent to at least 10% of the 1998 arisings figure.

c). To divert waste from landfill:

By 2005, to reduce the amount of industrial and commercial waste sent to landfill to less than 85% of that landfilled in 1998;

By 2010, to reduce the amount of industrial and commercial waste going to landfill to less than 80% of that landfilled in 1998.

d). To reduce hazardous waste:

by 2010, to reduce the amount of hazardous waste generated by at least 20% compared with 2000.

e). To divert biodegradable waste from landfill:

by 2005, to reduce the amount of biodegradable industrial and commercial waste sent to landfill to 85% of that landfilled in 1998;

by 2010, to reduce the amount of biodegradable industrial and commercial waste going to landfill to 80% of that landfilled in 1998.

f). To re-use and recycle construction and demolition waste:

By 2005, to re-use or recycle at least 75% of C&D waste produced;

By 2010, to re-use or recycle at least 85% of C&D waste produced.

Proximity Principle

The Proximity Principle as a concept was introduced to waste planning through PPG23 in 1994. It has been retained through successive changes and is still a key locational determinant in assessing suitable sites for waste management uses. In essence, the Proximity Principle requires that waste materials be managed/treated/disposed of as near to their source as possible. This has a number of benefits, not the least of which is the minimisation of pollution from excess vehicle miles in the waste’s transportation from point of generation to waste management facility. It also encourages communities to ‘take control’ of their own waste rather than simply shipping it out and making it ‘someone else’s problem’.

As with much of the UK, S Wales has historically relied heavily on landfill for disposal of its waste. However, the dwindling number of landfill sites available in the region, reduced by way of completion or premature closure, is making compliance with the proximity principle increasingly difficult. The landfill diversion targets set by the EU and the Welsh Assembly Government combined with huge regulatory obstacles are minimising the opportunities to obtain permits for significant further landfill voidspace in every locality. In order to meet the landfill diversion targets


waste disposal authorities will need to examine what other forms of waste management are available to them in their own localities.

Self-sufficiency

While there is no actual requirement that wastes produced in a particular region must be disposed of in that region, many planning policies, not just those associated with waste management, encourage that materials be managed locally wherever possible in order to minimise unnecessary transport and to encourage communities to manage their own wastes rather than export the problem to their neighbours.

There may be occasions when the concepts of proximity principle and self-sufficiency conflict given that the shortest distance for waste to travel may involve it passing into another region. It is generally accepted that proximity will take precedence in such situations given that environmental impacts are reduced most in this way.


Availability of Landfill Disposal Sites

There are few operational landfill sites licensed to accept household waste in South East

Wales. See Table 2.2 below

Table 2.2 : South East Wales Operational Landfill Sites

Site Location Void Status

Silent Valley, Ebbw Vale

Blaenau Gwent

1,400,000m3 Contracted to Blaenau Gwent for 50k TPA to 2009;

Contracted to Caerphilly for 35k TPA to 2009;

Contracted to Torfaen for 50k TPA until April 2006.

Trehir, Llanbradach

Caerphilly 150,000m3 Fully contracted to Caerphilly & Vale Of Glamorgan

Lamby Way Cardiff 3,045,419m3 Fully committed to Cardiff CC

Trecatti, Dowlais

Merthyr 7,600,000m3 Contracted to RCT for 20k TPA to June 2003

Contracted to Merthyr for £29k TPA to March 2004

Docks Way Newport 1,197,000m3 Fully committed to Newport CBC

Bryn Pica, Llwydcoed

RCT 3,135,000m3 Contracted to RCT for £95k TPA until June 2003.

SE WALES TOTAL CAPACITY

16,527,419m3 5,312,019m3 committed/contracted

Therefore 11,215,400m3 not committed/contracted.

Source: South East Wales Regional Waste Assessment. Accurate as at May 2002


The aggregate void at the above sites is relatively generous at around 16.5M m3

as at

May 2002. We are not aware of any significant additions to this figure since that date

and with year on year void consumption, it is safe to assume that current available void

is less than 15M m3. While some of this void is committed to existing clients and

contracts, around two-thirds of it remains uncommitted. On the face of it there is

sufficient available landfill void in SE Wales to accept Newport’s waste for the

foreseeable future in the event that the decision is taken to manage the waste other than

by landfill at Docksway. Section 5.7 of this report identifies costs associated with the

various options, including the results of a survey of the costs and availability of landfill

disposal capacity at the landfill sites listed in Table 2.2 above.

Landfill Taxation

Landfill Tax, currently £18/t, is set to rise by £3/t annually until the tax reaches £35/t.

Conclusions

There is a great weight of legislation and fiscal drivers increasing the pace of change in how wastes in the UK are managed. Key amongst these are the Landfill Directive targets requiring that significant volumes of waste be managed by means other than landfill. The financial penalties for failing to meet the targets together with the steadily increasing cost of landfill tax payments are probably the two main drivers for minimising the quantity of waste disposed of by landfill. The proximity principle will play a supporting role in determining the location of the alternative facilities required.


Newport City Council Waste Management Strategy

In March 2004, the Authority published a Waste Management Strategy Document. This set out the Council‟s strategic aim to reduce the use and consumption of natural resources and production of waste. This is planned to be delivered through implementing a number of strategic objectives:

To operate NCC’s waste management techniques according to the principle of a waste ‘hierarchy’, by prioritising operations according to their environmental impact;

To incorporate waste minimisation in the forward plans of departments within the Authority;

To ensure that producers within the Authority and in the city are made responsible for their waste products;

To ensure that waste is recovered or disposed of as close as possible to where it has been produced and so reduce the environmental impact of its transportation;

To ensure that the pre-treatment and final deposit of waste is carried out in a manner that minimises risks to the environment;

To ensure that the standards prescribed in relevant legislation and formal guidance shall form the minimum standards adopted by NCC in dealing with municipal waste;

To set targets and monitor performance in implementing the Council’s Waste Management Strategy.

The NCC Unitary Development Plan 1996-2011 identified land use policies with respect to waste. These allocate land for continued landfill at Docks Way, which was considered to have capacity for the remainder of the current Plan Period. Recycling initiatives are encouraged, and criteria are established for determining any further proposals for waste disposal operations within the plan period. Local authorities in South East Wales have established joint arrangements for the preparation of a Regional Waste Plan, which will be agreed by 2006. This will include the apportionment of facilities in the constituent local authorities.


ANALYSIS OF EXISTING SERVICE PROVISION

Introduction

Newport City Council covers a population of 139,000 producing around 75,000 tonnes of household waste per year. The Council has the statutory responsibility for collecting and disposing of household waste generated in the City. Unlike most local authorities, Newport City Council has not vested its waste management services (either collection or disposal) in private contractors. Instead, the Council has continued to operate its own, modern fleet of collection vehicles and to manage the Docksway Disposal site itself. Recycling services in the form of kerbside collection are operated by Newport Wastesavers, a local charity operating in this field.

key policies and strategies

As well as the upper tier of legislation governing the management of wastes, such as the Landfill Directive, there are many other more local policies and strategies designed to provide for more sustainable waste management in the future. These include: -

‘Wise About Waste’ The National Waste Strategy for Wales;

The South East Wales Regional Waste Plan – March 2004;

Newport Waste Management Strategy – March 2004;

Newport Unitary Development Plan 1996-2011 – 2nd Proposed Changes to the Deposit Plan May 2003.

The key targets set out in the above documents are as set out in section 2.4.2 (ii) of this report. The Unitary Development Plan sets out policies designed to ensure that the land-use planning system plays its part in achieving these targets.


existing waste management infrastructure

Collection

According to the WMS and additional information given during the kick-off meeting the organisation of the collection may be summarised as follows, at least in major parts of the city of Newport:

Residual wastes are collected by Newport City Council‟s own fleet of refuse collection

vehicles (RCVs). The Refuse Collection Service (RCS) makes weekly collections for the

wheeled bins (and arranges alternative collections during bank holidays); larger domestic

items (bulky items) can be disposed off by contacting the Special Collection Service (for a

small charge).

The Newport Wastesavers (NWS) organise a weekly collection of the boxes, their contents

being transferred into larger containers on the collecting trucks themselves; the collected

products are taken to Wastesavers‟s new facility in Newport where they are sorted and sold

on to reprocessors.

NWS also collect furniture and electrical goods for re-use within the community (NWS to be

contacted directly by individuals);

Collection of commercial waste from about 80 % of the small to medium sized enterprises is

provided by NCC, the production from the remaining 20 % of these businesses together with

the waste from larger commercial properties being removed by private operators.

A garden waste collection service is in place for 25,000 homes. There are now 4 bins per house, i.e. a wheeled bin (240 l) for kitchen waste, another wheeled bin (240 l) for garden waste, a blue box (60 l) for the collection of paper (incl. newspapers, magazines, junk mail), old clothing and textiles and finally a green box (60 l) for the collection of glass, plastics and tin cans. There is a reluctance to add kitchen waste to green waste due to the increased cost of treating the combined kitchen/green waste stream. The only alternative, to add a fifth bin, is also not a popular option. The Council is reviewing its waste management arrangements in order to increase its recycling rates. The trial of a fortnightly waste collection with weekly recyclables collection service has shown an increase of 45% in recycling tonnage with no reduction in wastes received at CA/bring sites. This type of service is being considered for roll-out across Newport City Council over a two year period.


Disposal & Treatment

The Docksway Disposal Site is Newport’s primary waste management facility. The site is a landfill, civic amenity and composting site with 2No. 1MW generators powered by landfill gas. The landfill site is split in two with Phase 1 close to completion. Phase 1 has no formal engineered containment, relying instead on the low permeability in-situ alluvial clay for attenuation. Phase 2 is currently being developed to accept waste with stabilisation of the alluvial base of the site underway. This new phase of landfill will accept in the region of 1.5M m3 of non-hazardous waste. Applications for PPC Permits for both Phases 1 and 2 have been submitted to the Environment Agency, have been accepted as ‘duly made’ and are currently under consideration. As mentioned elsewhere in this report, the landfill site is served by a weighbridge and associated office. Incoming wastes pass over the weighbridge and are tipped in a large open-fronted ‘barn’. Here waste is transferred, after a brief pick over by operatives, into roll-on/off containers mounted on dump trucks and taken to the tipping face. The civic amenity site is arranged in a traditional fashion with roll-on/off containers sited at a lower level with a raised pedestrian and vehicular platform to facilitate the disposal of items brought by the public. A range of containers is available in order to segregate the wastes into type. Observations of this operation do not suggest that the facility is actively managed, with few visible operatives. Experience suggests that the best recycling rates are achieved at CA sites that are well-staffed by ‘interventionist’ operatives. ‘Interventionist’ is not always popular as it involves educating an impatient public to the requirement to separate waste as much as possible down to the detail, for example, of emptying the contents of a box into a bin and then throwing the box separately into a cardboard bin. Sites where operatives are rewarded with bonuses based upon the proportion of wastes diverted from landfill (by weight) typically achieve recycling rates of 60-70%, in excess of the 55% currently being achieved at Docks Way CA Site. The composting facility comprises an open concrete pad onto which collected green wastes are tipped, shredded and screened before being loosely arranged into windrows. The shredded wastes are turned in the normal way.


performance of existing services

Analysis of the information gathered from NCC, together with our observations enable some provisional conclusions on operational performance to be drawn and suggestions to be made.

Table 3.1 : Existing Costs Item 2004/5 2005/6 £ £ Total staff costs 298,434 306,259 Premises 188,715 195,466 Transport 214,973 228,421 Supplies 148,811 149,510 CDT support 66,212 Capital financing 185,433 Total 1,102,578

Expenditure data has been supplied for the whole facility so it has not been possible to differentiate between the costs of running the various parts of the site, i.e. landfill, CA site, composting operation and waste reception barn. Mike Rigby of Peter Brett Associates has visited the site and inspected the various parts of the operation on 23 August 2004, 25 October 2004, 19 January 2005 and 28 February 2005. During the visits of 23 August and 19 January, Gwyn Jones and Lyndon Underwood respectively conducted tours of the site pointing out salient features of the operation and the contemporary engineering works. These inspections of the site called into question the role of the waste transfer ‘barn’. It appears that the barn accepts most, but not all, of the incoming waste where it is tipped on the concrete base. Some rudimentary sorting appears to take place but only a small fraction of the waste stream is removed for treatment elsewhere. No more than one operative engaged in sorting has been observed at any one time. It is our opinion that this is a potential source of inefficiency at the site. Double-handling of materials adds to costs through the need for machinery, machine drivers/operatives and fuel, without taking account of the capital cost of constructing the barn itself. It is anticipated that were a private operator to take control of the site this operation would be dispensed with entirely or, perhaps, the operation would be transformed into a proper MRF with all incoming wastes (except those that are clearly not recyclable) being tipped and sorted in the barn with all timber, metal, inert materials and, where possible, plastics being separated from the residues, which would be transported to landfill. Discussions with Newport City Council suggest that


significant savings have been made in terms of vehicle maintenance and operational wear and tear (tyres/wheels/suspension) on vehicles by avoiding tipping at the face. Tipping at the barn also enables Refuse Collection Vehicles (RCVs) to return to their collection rounds more quickly. It is our opinion that there is nothing to stop the site haul road, which is high quality for much of its length, being improved to allow the passage of RCVs to the tipping face without significant risk of damage being caused. Significant quantities of rebar were observed in the hardcore access roads on site and more attention should be paid to ensuring that rebar is removed from hardcore before or after laying. In one 50m stretch of haul road, Mike Rigby removed 26 lengths of rebar, ranging from 5mm to 10mm diameter from the surface during his visit on 28 February 2005. Given that the new area of landfill will require a new haul road, the opportunity should be taken to construct it to a high standard from day one.

With regard to minimising the length of time that RCVs spend on-site, we believe that the biggest improvement that could be made here would be the installation of a second weighbridge. We have observed significant queues building up (4 vehicles trying to leave and two waiting to enter) due to the inherent conflict between incoming and outgoing traffic. Depending on software compatibility issues, a second weighbridge could be added for less than £20,000. It is difficult to be precise due to the aggregated nature of the costings supplied, but it is anticipated that the above changes could save in the region of £1.50-£3.00/tonne handling costs. The saving will vary depending on whether the barn is entirely by-passed or used as a materials recovery facility. While the latter option is unlikely to produce huge savings in terms of machinery and personnel, as these will still be required for the sorting operation, against these costs can be offset the income from the metals and potentially plastics together with the landfill tax saved on the weight of all the materials that have been diverted from the landfill. The value of saved void also needs to be factored into this equation. A full waste composition survey would need to be undertaken before an accurate assessment of the proportion of recyclable wastes could be made. It is anticipated that an incoming operator would increase the volumes of commercial and industrial waste deposited at the site. An increase in these streams would naturally alter the view as to whether the barn should be kept in another guise. On the basis of observations, it is estimated that a further 5-10% of waste going from the barn to landfill could in fact be recycled. A further 10% diversion would naturally preserve the valuable voidspace beyond the existing end-date and at current rates of landfill tax would produce a saving of up £108,000 per year. AEA Technology plc underook a study on municipal waste composition for the National Assembly in Wales in February 2003. NCC believes that the results of the study can be applied to Newport. However, without a waste composition survey it is not possible to predict the level of income from separated materials such as metals.

Tipping waste directly at the face (avoiding the barn) is an option and could save up to £180,000 in operating costs. However, the combined economic and environmental benefits of instituting proper separation operations, particularly in the


event that significant additional quantities of commercial and industrial wastes are accepted, suggest that this is likely to be the preferred method of waste handling.

Landfill tax is currently set at £18/tonne for active wastes and £2/tonne for inactive wastes. The UK Government, which has control of these matters in Wales, has announced that Landfill Tax is to rise by £3/tonne per year on the way to a medium- to long-term rate of £35/tonne. There are no current proposals to alter the rate of landfill tax applied to inactive wastes. During the visit of 28 February 2005, large quantities of vehicle fragmentiser (frag) waste were observed being tipped. Discussions with site staff indicated that this was coming from a plant in Newport Docks and was being used as cover. There have been questions raised historically by the Environment Agency as to the suitability of frag waste as cover although we understand from site staff that the current Agency position holds that it can be used. The frag waste appeared to be very coarsely shredded with whole components and sizeable sections of tyre visible in the waste. Significant quantities of fist-sized shredded foam were strewn across the surface of the landfill all the way down the face access road to the metalled haul road. Special care needs to be taken not to use loads that contain a high proportion of foam when using frag waste as cover. Such loads need to be buried beneath heavier materials in order to stop the foam from being blown around the site.

Also observed on the same visit were a higher then expected proportion of contraries, largely plastic bags in the compost. It was not immediately apparent whether these were intrinsically mixed with the compost or had blown in. The topography and coastal location of the site is such that windblown litter is always going to be difficult to control but additional litter-picking patrols would be advised to combat the significant amount of windblown litter that was observed within the site and also (in lesser quantities) at and outside the site boundary.

existing contractual arrangements

As discussed, the Council has retained the waste collection and disposal service in-house, choosing this option over contracting the service out to a private contractor. Clarification has been sought from NCC with regard to the relationship between the waste management section (operations) of the Council and the Department that pays for the service. Newport Wastesavers are contracted to operate the kerbside recycling service both in terms of collection and management of the recyclate.

Novera Macquarie Renewable Energy Limited (successor to United Utilities Green Energy) is contracted to manage the landfill gas from Phase 1 of the Docksway Disposal Site and to generate electricity from it. NCC is paid according to the electricity generated.


trends in waste volumes

From the figures we have seen, it appears that waste disposed of to landfill has been steady at around the 60,000 tonnes per year level for several years. Discussions with NCC suggest that wastes disposed of to landfill will not exceed 62,000 tonnes per year between now and 2010. NCC will spend an estimated £1.2M on recycling services over the next 2 years, two-thirds operational and one-third developmental, the latter reducing with time.

minimisation of waste

It is difficult for Local Authorities to minimise the quantities of waste produced. The ultimate responsibility must rest with consumers who have the choice to purchase goods that are heavily packaged or themselves become waste quickly. The EU has recognised the contribution to overall waste arisings from packaging wastes and introduced the Packaging Wastes Directive in order to minimise the amount of packaging used in products.

This was translated into domestic law through the „The Producer Responsibility Obligations

(Packaging Waste) Regulations (1997)‟ which require all commercial parties involved in

handling packaging materials to recover a given percentage of those materials. The

percentage is different for each component in the chain, namely manufacturer, converter,

filler and retailer and for the different types of packaging materials. It is not generally

perceived that these regulations have made a huge difference in reducing the quantities of

packaging used. What they have undoubtedly done is to significantly raise the levels of

recycling of the materials covered by the regulations.

Other legislation has been introduced in an attempt to prevent the over-packaging of goods in the form of the Packaging (Essential Requirements) Regulations (2003). These powers are available to Trading Standards Authorities to punish companies that use grossly excessive quantities of packaging on their products. They are seldom used however with only a handful of cases having been taken in the UK since their introduction.

Local Authorities can and often do conduct or participate in educational programmes to help bring about waste minimisation. In addition, careful consideration needs to be taken by local authorities when specifying the size of waste receptacles distributed to its residents. Studies have shown that the larger the bin provided, the more waste residents will put in it. This is partly due to a reduction in the amount of separation that occurs with more recyclable materials being included in the general waste stream. It is also partly because patterns of consumption and associated behaviour are not affected by constraints in waste disposal capacity, i.e. consumers do not feel the need to factor in waste generation in their purchasing choices. Put simply, if a household only has a 100litre wheelie bin for residual wastes and that bin is only emptied once a fortnight, then residents will inevitably have to be more careful about what they purchase.


As regards the potential impact that such educational programmes and legislation is having, there is frankly little evidence that overall waste generation is falling as a result. It is therefore probably unrealistic to expect waste generation to fall significantly due to current waste minimisation drivers. What may change behaviours is the introduction of charging for the removal of wastes from domestic properties based on the weight of the waste although such schemes remain at a developmental stage. To conclude, in estimating the quantities of wastes that will need to be managed in Newport, it is not recommended that the quantities be discounted as a result of waste minimisation efforts.


TECHNICAL SOLUTIONS FOR REDUCING WASTE TO LANDFILL

OVERVIEW OF Waste Treatment and Disposal Processes

The main process that are available for the treatment and disposal of Municipal Solid Waste (other than landfill) are:

Materials Recovery Facilities (MRF)

Composting and – Anaerobic/Aerobic Digestion – for biodegradeable materials

Incineration

Advanced thermal treatment processes (Gasification & Pyrolysis)

Mechanical Biological Treatment (MBT)

Material Recovery Facilities

A Material Recovery Facility (MRF) is typically a site which receives mostly unsorted household waste. Using a series of screens and picking stations, a high percentage of the recyclable materials are separated. Various systems are available using different technologies and resulting in the separation of the recyclable materials into different categories.

A notable example is the £32m Materials Recovery and Energy Centre at Crymlyn Burrows

which will receive and process the municipal waste of Neath Port Talbot County Borough

Council and Bridgend County Borough Council under one roof and reportedly has the ability

to divert 70% of waste away from landfill. At this facility waste materials are sorted and

separated for recycling, garden waste is composted and suitable material processed to

produce a fuel that will generate energy for use by the facility. This makes the facility self-

sufficient in energy requirement and reduces the need for and use of energy from non-

renewable natural resources such as fossil fuels (coal, oil and natural gas). Any surplus

energy will be exported to the National Grid. The plant became operational in 2002 and has a

capacity of approx 150,000 tpa, of which no more than 35% will go to landfill, no more than

42% will be converted to energy and the remainder (not less than 23%) will be recycled.

The plant has not been without its problems, with a recent fire and public campaigns against

it.

Composting


There are four principal types of composting process:

(i) Windrow Composting

This is the method currently used at the Docksway Site. Composting may be considered as a (partial) oxidation of the organic material. It is a biological process by means of micro-organisms it is characterized by a relative low temperature (< 80 °C) and hence a relatively long process duration. The process can be operated with a minimum of human intervention. However, intervention may not only accelerate the process considerably but also facilitate the monitoring and control of the process and the labour related to it. These interventions could be:

• dispose the compostable materials into windrows (the process as implemented at the

Docks Way site);

• turn the windrows at regular intervals by a turn-over machine (frontal or lateral) to

homogenize the composting in terms of moisture content, temperature, etc.;

• cover the composting area in order to protect it from excessive rainfall (flooding) as well

as excessive sunshine (drying), the water demand being regulated by means of an

artificial watering (with bunkered rain water);

• close the building in order to avoid olfactory nuisances;

• create an artificial aeration of the windrows and related air treatment (e.g. bio-filter).

The operations at Docks Way being rather elementary (windrows and a sieving device) it could be improved considerably in order to increase the production on a similar area. In this way the covering of the site and the use of a turn-over machine together with a forced aeration would be a great improvement of the present situation.

(ii) In-Vessel Composting


In-vessel composting follows the same principals as Windrow Composting, as it uses the action of micro-organisms to breakdown the material. In-Vessel systems allow a greater control over the process, particularly oxygen, temperature and water content.

(iii) Vermiculture

Vermiculture uses the actions of earthworms to breakdown organic materials, and can produce a high-grade, nutrient rich product.

NCC is currently preparing a trial of this approach.

(iv) Aerobic/Anaerobic Digestion

Aerobic/Anaerobic digestion is relatively unproven. A number of pilot and small scale schemes are in operation, but their long term performance is not fully proven. By products of the process include a methane rich gas stream which can be used to generate electrical power.

A notable implementation is the Thornley aerobic digester in Durham. This is a pilot scheme reported to be able to handle 8,000 tpa of MSW, producing a pasteurised material. The biodegradeable fraction resembles a dark grey soil. The degraded material is then sorted to remove recyclables.

Incineration

Incineration plants for MSW have improved significantly in recent years, with the addition of sophisticated flue gas treatment and improved grate design. These modern Energy from Waste (EFW) plants are generally considered as proven, robust and reliable technology capable of meeting strict emission targets.

The principal problem with incineration remains adverse public perception.

Currently, EFW plants of less than 50,000tpa are viewed as uneconomic; however this is likely to change as landfill costs rise. There are very few smaller EFW plant that have operated successfully for an extended period in the UK, and hence small EFW plants should be considered as unproven.

A small new EFW plant is being built in Shetland with a capacity of 26,000 tpa, at a capital cost of approx £10m. An EFW plant is being proposed for Guernsey with an 80,000 tpa capacity at a capital cost of £80m.

Pyrolysis & Gasification


Pyrolysisis a thermal process, where the organic material is decomposed under pressure and in the absence of oxygen, at temperatures of 450-750C. It works best with single stream wastes such as sewage sludge, plastics, wood, tyres. It produces a liquid residue and gaseous output which can be burnt to produce electricity A solid slag is also produced which may require disposal or additional processing.

Gasification operates at a higher temperature range using a process where carbon-containing waste is converted under oxygen-poor conditions into synthetic gas (Syngas) which can again be burnt to generate electricity and a carbon char which may need to be landfilled if no market is available.

Mechanical and Biological Treatment

Traditionally, MBT was developed to treat the residual municipal waste (after recyclables and compostable wastes have been removed through separate kerbside collection). Advanced, modern MBT systems are also potentially suitable for un-segregated municipal waste.

MBT comprises the mechanical waste preparation and biological treatment parts of an integrated approach to waste management. In many cases, this has evolved to a fully integrated system within a single facility, combining recycling, composting and energy recovery. The Materials Recovery and Energy Centre at Neath is an example of this.

MBT plants range from small 10,000tpa plants up to large 150,000 tpa facilities.


EXPERIENCE OF mbt PLANTS

Worldwide, there are over 80 MBT facilities operating in 16 countries with a total operating capacity of approximately 8.5m tpa. A further 45 plants are expected to be built in the next 2 years. Spain, Italy and Germany are the leaders in operation, comprising 2/3rds of the total global capacity. Currently installed capacity in the UK is approx 200,000 tpa.

There are 27 major MBT suppliers internationally. Generally each supplier specialises in a particular process.

Outputs from MBT Processes

Fundamentally, any MBT process is designed to produce one or more primary outputs, summarised below:

BioGas

• Usually for combustion to produce energy in an integrated facility Material for compost applications

• On food crops • For forestry • On land used to grow energy crops • Horticultural & domestic • As landfill cap • Landscaping during road construction etc • On brownfield sites

Dry Recyclables

• To Recycling Industry Solid Fuel (RDF)

• Co-fuel for direct combustion in power plants • Fuel for indirect combustion in power plants • Co-fuel for cement kilns • Co-fuel for industrial boilers • Fuel for dedicated incinerator/gasifier

Residual Material for Landfill


• As landfill daily cover • As Bio-stabilised residue suitable for landfills

A key issue is the viability of utilisation of these outputs, from a viewpoint of Technical, economic, regulatory and existence of market demand. These factors are summarised in Table 4.1.

Environmental Issues

The environmental issues associated with each major type of MBT process are summarised in Table 4.2.


Table 4.1 : MBT Outputs and Applications Output Typical Uses/Applications Technical

Practicality Economics Regulatory

acceptability Market Demand

BioGas – Usually for combustion to produce energy in an integrated facility

✔ ? ✔ ✔

Material for compost applications

On food crops

For forestry

On land used to grow energy crops

Horticultural & domestic

As landfill cap

Landscaping during road construction etc

On brownfield sites

✔

?

✔

✔

✔

✔

✔

?

?

?

✔

✔

✔

✔

X

?

?

X

?

✔

✔

?

?

?

?

?

✔

✔

Solid Fuel (RDF) - for subsequent combustion to produce energy

Co-fuel for direct combustion in power plants

Fuel for indirect combustion in power plants

Co-fuel for cement kilns

Co-fuel for industrial boilers

Fuel for dedicated incinerator/gasifier

?

?

✔

?

✔

?

?

?

?

?

?

✔

✔

?

✔

?

?

?

?

?


Residual Material for Landfill As landfill daily cover

As Bio-stabilised residue suitable for landfills

✔

✔

?

?

?

✔

✔

✔

Dry Recyclables To recycling industry ✔ ✔ ✔ ✔

KEY : ✔Likely to be Viable, ? Minor Constraints on Viability , X Unlikely to be Viable Source : MBT : A guide for Decision

Makers, Juniper, March 2005


Table 4.2 MBT Environmental Considerations Process Pre-Treatment Environmental Issues Visual Issues

MBT None required, but also compatible with segregation at collection

Risk of odour (but should be eliminated through process controls)

Traffic, Noise

Tall industrial building

Gasification Pre-sorted to remove recylate & size reduction


Traffic, Noise

Air emissions well inside waste incineration directive standards

Small quantities of hazardous wastes generated from flue gas treatment – residuals can be treated as aggregate.

Industrial building with stack 30m high

Pyrolysis Pre-sorted to remove recylate & size reduction


Traffic, Noise


Small quantities of hazardous wastes generated from flue gas treatment – residuals can be treated

Industrial building with stack 30m high


Table 4.2 MBT Environmental Considerations as aggregate.

Incineration None Risk of odour (but should be eliminated through process controls)

Traffic, Noise


Small quantities of hazardous wastes generated from flue gas treatment – residuals can be treated as aggregate.

Industrial plant with tall Stack

Composting - Windrow

Pre-sorting to ensure biowaste only – generally only applicable to green wastes

Risk of odour and bio-aerosols. Should not be located within 250m of residential property.

Windblown material, water pollution risks

Traffic, Noise

Large site with open air composting windrows

Composting – in-Vessel

Pre-sorting to ensure biowaste only

Risk of odour and bio-aerosols but should be eliminated through process controls and environment

Large site

Anaerobic Digestion

Pre-sorting to ensure biowaste and size reduction. Can also be used for organic industrial wastes

Risk of odour and water pollution but should be eliminated through process controls and environment

Sewage works type of installation, open and cosed tanks. Can be housed in industrial building


Table 4.2 MBT Environmental Considerations with shredder, gas collection Pipework and gas storage.

Materials Recycling Facility (MRF)

None Risk of odour and water pollution but should be eliminated through process controls and environment

Standard industrial building


Diversion Rates

A key requirement for NCC is to meet the regulatory targets for Diversion of Biodegradable Municipal Waste (BMW) from landfill:

By 2010 to reduce BMW landfilled to 75% (by weight) of that produced in 1995



Technical solutions for treatment and disposal of waste and can potentially provide processes which can enable NCC to achieve these targets, in combination with other appropriate actions such as separation of waste streams at collection.

There remain a number of issues regarding the clarification of what outputs will be considered as BMW diversion. Where the output is used as a fuel, it counts as BMW diversion; however when the output is used on land or sent to landfill the position is more complex. This is the subject of a consultation exercise with DEFRA and the Environment Agency. Given these uncertainties, and the inevitable range in performance of individual processes, the figures shown in Table 4.3 below must include a considerable uncertainty. However, the comparison is useful in highlighting a number of approaches which yield high diversion rates.


Table 4.3 : BMW Diversion Rates for MBT Configurations Ref Process Goal Configuration

Mechanical Treatment followed by:

Outputs

Dry Recyclables, Rejects and :

Estimated BMW diversion rates when market exists for the

outputs %

Estimated BMW diversion rates when market fails for the outputs (and output is

landfilled) %

1 Stabilisation of output for landfilling

Aerobic Composting

Bio-stabilised outputs to landfill

24-90 N/A

2 Make a compost from MSW

Aerobic Composting

Compost 82-90 34-83

3 Make a soil improver from MSW

Aerobic Composting

Soil Improver 87-92 679

4 Make a Refuse Derived Fuel (RDF)

Biological Treatment

RDF 90-95 6-70

5 Produce a fuel using bio-drying

Bio-drying Solid Recovered Fuel (SRF)

85-92 6-68

6 MBT with Incineration to produce Enregy

Biological Treatment with dedicated combustion or gasification

Ash & Energy 85-92 N/A

7 Producing Biogas with digestate to

Anaerobic Digestate Biogas to energy

14-61 N/A


landfill digestion recovery

8 Producing biogas and a soil improver

Anaerobic digestion followed by Aerobic composting

Soil Improver Biogas to energy recovery

79-85 28-79

Note : Calculations represent the amount of wastes received by the MBT facility Source : Report – MBT : A guide for Decision Makers – Processes Policies and Markets Published by Juniper Consultancy Services March 2005


MBT Process Costs

The capital and revenue costs for the major types of MBT plant are shown in Table 4.4. These costs have been obtained through research of a number of sources, including equipment vendors, operators and consultants. Note that the operational costs (£/tonne) are inclusive of amortisation of the capital costs (typically over a 15-25 year period).

The costs are typically in the range £40 - £70 per tonne, which appear high when compared with the ongoing landfill costs for NCC at the Docksway site (£10-15/tonne). However, when the rising cost of Landfill Tax is included (reaching £35/tonne in 5-6 years) to give a cost of £45-50 per tonne, the costs of MBT processes become increasingly viable.

Table 4.4 : MBT Process Costs Process Capital Cost

Approximate

(for c 60ktpa unless otherwise stated)

Typical Size Range

tpa

Cost per Tonne

MBT, generic £5-15 million 10,000 – 250,000

£35- £50,

poss up to £70

Gasification £10-20 million 20,000 – 100,000

£50-£70

Pyrolysis £15-30 million 20,000 – 100,000

£70 - £90

Incineration (EFW) £20-50 million 60,000 – 600,000

£50 - £70

Composting - Windrow

£1 million Any


Composting – in-Vessel

£2.5 million

25,000-50,000 £30 – £50

Anaerobic Digestion

£4 million 3,000 – 200,000

£45 - £55

Materials Recovery Facility (MRF)

£5-20 million 50,000-200,000

£60-£80


FURTHER ANALYSIS OF THE COSTS PER TONNE ARE PROVIDED FOR THREE OF THE PRINCIPAL PROCESSES AS DETAILED IN TABLE 4.3 ARE PROVIDED IN TABLE 4.5. NOTE THAT WHILST THE DATA IN THIS TABLE IS BROADLY CONSISTENT WITH THE DATA IN TABLE 4.4, FIGURES DO NOT MATCH EXACTLY AS THEY HAVE BEEN DERIVED FROM DIFFERENT SOURCES.

TABLE 4.5 SHOWS THAT WHILST IT IS IMPORTANT THAT A MARKET EXISTS FOR THE OUTPUT PRODUCTS AND ENERGY, THE ACTUAL FINANCIAL RECOVERY FROM THE SALE OF THESE ITEMS IS TYPICALLY LESS THAN 15% OF THE TOTAL COST OF THE PROCESS.

Table 4-5 • Economical aspects Designation Make a Refuse

Derived Fuel Produce a Fuel

using Bio-Drying

MBT with Incineration to

produce energy

(4) (5) (6)

COSTS (or EXPENSES)

Capital costs £28.00 £30.87 £24.24

Operational costs £32.20 £31.75 £27.19

Overheads £ 7.43 £ 7.83 £ 6.48

Total costs £67.63 £70.45 £57.91

RECEIPTS (or REVENUES)

Useful products (sale) -£ 2.50 -£ 2.95 0.00

Electricity production to the grid

-£ 8.27 -£ 7.50 -£ 8.33

Total receipts -£10.77 -£10.45 -£ 8.33

BALANCE £56.86 £60.00 £49.58


Diversion Rates

A key requirement for NCC is to meet the regulatory targets for Diversion of Biodegradable Municipal Waste (BMW) from landfill:




Technical solutions for treatment and disposal of waste and can potentially provide processes which can enable NCC to achieve these targets, in combination with other appropriate actions such as separation of waste streams at collection.

There remain a number of issues regarding the clarification of what outputs will be considered as BMW diversion. Where the output is used as a fuel, it counts as BMW diversion; however when the output is used on land or sent to landfill the position is more complex. This is the subject of a consultation exercise with DEFRA and the Environment Agency. Given these uncertainties, and the inevitable range in performance of individual processes, the figures shown in Table 4.6 below must include a considerable uncertainty. However, the comparison is useful in highlighting a number of approaches which yield high diversion rates.


Table 4.6 : BMW Diversion Rates for MBT Configurations Ref Process Goal Configuration

Mechanical Treatment followed by:

Outputs

Dry Recyclables, Rejects and :

Estimated BMW diversion rates when market exists for the

outputs %

Estimated BMW diversion rates when market fails for the outputs (and output is

landfilled) %

1 Stabilisation of output for landfilling

Aerobic Composting

Bio-stabilised outputs to landfill

24-90 N/A

2 Make a compost from MSW

Aerobic Composting

Compost 82-90 34-83

3 Make a soil improver from MSW

Aerobic Composting

Soil Improver 87-92 679

4 Make a Refuse Derived Fuel (RDF)

Biological Treatment

RDF 90-95 6-70

5 Produce a fuel using bio-drying

Bio-drying Solid Recovered Fuel (SRF)

85-92 6-68

6 MBT with Incineration to produce Enregy

Biological Treatment with dedicated combustion or gasification

Ash & Energy 85-92 N/A

7 Producing Biogas with digestate to

Anaerobic Digestate Biogas to energy

14-61 N/A


landfill digestion recovery

8 Producing biogas and a soil improver

Anaerobic digestion followed by Aerobic composting

Soil Improver Biogas to energy recovery

79-85 28-79

Note : Calculations represent the amount of wastes received by the MBT facility Source : Report – MBT : A guide for Decision Makers – Processes Policies and Markets Published by Juniper Consultancy Services March 2005


Attractive Options

Reviewing factors discussed above, namely Viability, Costs and Diversion Rates, the three most attractive options in a UK context currently appear to be:

Table 4.7 : Attractive Options for MBT Option Features

Close Coupled MBT & Gasification / Incineration of the SRF fraction

Eliminates market risk associated with sale of the fuel.

Maximises revenues from electricity generation

By using an MBT output as the input to the gasifier or incinerator the technical issues associated with handling raw MSW in a gasifier are significantly reduced

Make a Land Remediation Material using a fast composting type of MBT process

Significantly reduces capital and operating cost

Can achieve high levels of performance against recycling and diversion targets

Production of BioGas Increases revenues from electricity generation

Potential for further economic factors such as carbon credits

Very high BMW diversion potential


Less Attractive Options

The three least attractive options, again in the current UK context appear to be:

Table 4.8 : Less Attractive Options for MBT Option Features

Making a compost for compost applications

Long process time and need to remove contamination increase cost and land-take

Economic benefit is uncertain due to the difficulties in marketing the output as a compost

Making an RDF/SRF for co-combustion in a separate power plant

Lack of market enthusiasm for the product

Making a bio-stabilised residue that goes to landfill

Cost of disposal an use of scarce void space

Uncertain diversion performance relative to other options

It should be noted that whilst the compost application is generally viewed as unattractive due to difficulties in marketing the output, this is the approach being taken by Gwynedd Council, who plan to use in-vessel composting to

produce compost suitable for forestry and agricultural use within Gwynwedd.



Conclusions

MBT is potentially an attractive option for NCC to consider as part of an integrated approach to diverting Biodegradable Waste away from landfill and increasing recycling rates.

There is a vast range of technologies, with over 30 international vendors. There are approximately 80 operational MBT plants worldwide, with a total operating capacity of 8.5m tpa. The largest experience is in Spain, Italy and Germany; however application has recently spread to 13 other countries, including the UK.

Use of MBT is at an early stage in the UK, with a small number of active facilities and many under consideration. A range of techniques is being adopted in different areas. At the present time, the market for certain outputs, such as RDF, SRF, and certain composts, are limited and it is unclear how these markets will develop.

The MBT technologies offering the lowest risk currently are those utilising integrated combustion of the output (biogas or SRF) in an EFW or incineration process, and those producing a land remediation material.

Given the timescales by which NCC will need to utilise alternative approaches to meet diversion targets (2013), it is not necessary to make an immediate decision regarding selection of appropriate MBT technologies. Indeed, it will be prudent to observe how the markets for outputs and regulatory issues develop over the next 1-2 years, and also to study the ongoing effectiveness and viability of existing UK MBT facilities. This will enable a decision to be made in 2007, providing a reasonable timescale for planning and build of appropriate plant before the critical deadline of 2013.


OPTIONS APPRAISAL

Introduction

Newport City Council is considering the options for the future management of its wastes in the context of the waste reduction targets that have been set by the policy background described in section 3.2.

aims & objectives

This section aims to examine and compare the various options that are open to NCC in seeking to provide a waste management service that both meets its performance targets over the next 5 years and beyond and provides value for money for the Council Tax-payer.

description of options

For the purposes of this exercise, NCC has asked us to examine 3 options as follows: - Option 1 – The Base Case: Maintaining the Waste Disposal Site under Council Management

Option 2 – Outsourcing the operation and/or ownership of the Waste Disposal Site Option 3 – Ceasing to Use the Waste Disposal Site and contracting the use of a site under alternative ownership

Option 1 – The Base Case : Maintaining the Waste Disposal Site under Council Management

The existing site costs NCC around £620,000 (net) to run per year, having stripped out the internal income received from tipping and the cost of landfill tax. This is made up as follows: - Table 5.1 : Existing Site Costs

Item £ Total income 2,132,200 Less Internal income (1,648,730) Net (External) income 483,470 Less total expenditure (Section 3.5) (1,102,578)


- Cost of Landfill Tax (based on 60,000 tonnes)

(900,000)

Total Net cost to NCC (1,519,108)

The actual cost to the Council of landfilling an annual 60,000 tonnes of waste, composting approx 4,000 tonnes of waste per year and running a Civic Amenity Site is around £1.5M, representing a cost per tonne for approx 64,000 tonnes of waste for landfill and compost of approx £10/t, excluding landfill tax. However, there are potential savings to be made through the suggested operational changes found in section 3.5. It does need to be borne in mind though that the above figures do not include capital expenditure, which with the recent requirement to prepare and submit PPC Permit applications and engineer the next phase of landfill development, are currently running very high.

As part of the PPC Permit and engineering design processes that PBA has undertaken, we have made an assessment of the future capital expenditure required for the next 20 years , as detailed in Table 5.3 on the next page, and summarised in Table 5.2 below. The elevated level of capital expenditure is likely to continue for some years with the continuing need to engineer the base and sides of Phase 2 of the landfill. Based on the total capital expenditure of £14.4 million, is estimated that the cost of engineering the Phase 2 void will be £9.50 per tonne. Costs of aftercare are estimated at £1.70. Operational costs are estimated at £12.00 per tonne, comprising the current £10/tonne plus an additional £2.00 for future monitoring and leachate costs. This gives a total cost (operation, engineering & aftercare) of £23.20/tonne (excluding landfill tax).

It should be noted however, that if a shorter time period of say 10 years is used, the average cost due to capital expenditure is increased to £16.00 per tonne (assuming the void is filled at the same rate), hence increasing the total cost to just under £30/tonne.

Table 5.2 Phase 2 Capital Cost Summary

Category 20 years from 2005

Separation bund 175,000

Stabilisation 2,895,000

Clay Liner 3,965,000


Basal Drainage 1,544,000

Other Engineering 488,000

Capping & Restoration 3,141,000

Leachate Removal/ Treatment 1,850,000

Professional services for capital works 326,000

Total £ 14,384,000


Table 5.2a: Phase 2 Capital costs Years 1-10 2005 to

2006 Year 2 Year 3 year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Total yrs 1-10 Separation bund

175,000 175,000 Stabilisation

891,000 610,000 534,000 534,000 326,000 2,895,000 Clay Liner

556,000 556,000 467,000 467,000 407,000 407,000 354,000 354,000 3,568,000 Basal Drainage

193,000 193,000 193,000 193,000 193,000 193,000 193,000 1,351,000 Other Engineering

36000 39,000 61,000 42,000 38,000 38,000 38,000 38,000 12,000 12,000 354,000 Capping & Restoration

1,706,000 114,000 81,000 193,000 210,000 198,000 2,502,000 Leachate Removal/

Treatment

50,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 850,000 Professional services for capital works 66,000 40,000 40,000 20,000 40,000 20,000 40,000 20,000 286,000

Total 3,623,000 992,000 1,471,000 903,000 1,119,000 951,000 1,259,000 915,000 112,000 636,000 £ 11,981,000

Table 5.2b: Phase 2 Capital costs Years 11-20

Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Total Years 11-20

Separation bund 0 Stabilisation 0 Clay Liner 397,000 397,000 Basal Drainage 193,000 193,000 Other Engineering

12,000 26,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 134,000 Capping & Restoration 76,000 87,000 169,000 122,000 138,000 47,000 639,000 Leachate Removal/ 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 1.000,000 Professional services for capital works 40,000 40,000

Total 112,000 832,000 112,000 112,000 112,000 199,000 281,000 234,000 250,000 159,000 £ 2,403,000


TABLE 5.3 : DISCOUNTED CASH FLOW ANALYSIS – SITE MAINTAINED UNDER NCC OWNERSHIP

NET PRESENT COST / DISCOUNTED CASH FLOW ANALYSIS

Option :

3.5%

Year 1

2005 to 2006 Year 2 Year 3 year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

3,623,000 992,000 1,471,000 903,000 1,119,000 951,000 1,259,000 915,000 112,000 636,000

720,000 720,000 720,000 720,000 720,000 720,000 720,000 720,000 720,000 720,000

Total 4,343,000 1,712,000 2,191,000 1,623,000 1,839,000 1,671,000 1,979,000 1,635,000 832,000 1,356,000

Discount

Factor 1 0.97 0.93 0.90 0.87 0.84 0.81 0.79 0.76 0.73

Present value 4,343,000£ 1,654,106£ 2,045,322£ 1,463,853£ 1,602,582£ 1,406,937£ 1,609,918£ 1,285,095£ 631,830£ 994,939£

10 Year Net

Present Cost 17,037,583£

Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

112,000 832,000 112,000 112,000 112,000 199,000 281,000 234,000 250,000 159,000

720,000 720,000 720,000 720,000 720,000 720,000 720,000 720,000 720,000 720,000

Total 832,000 1,552,000 832,000 832,000 832,000 919,000 1,001,000 954,000 970,000 879,000

Discount

Factor 0.71 0.68 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52

Present value 589,820£ 1,063,036£ 550,604£ 531,984£ 513,994£ 548,542£ 577,283£ 531,572£ 522,210£ 457,217£

20 Year Net


Annual Tonnage cost assumes 60,000 tpa at a cost of £12 / tonne

Costs exclude landfill tax

Annual Capital Cost

Annual Tonnage

Cost

Annual Capital Cost

Annual Tonnage

Cost

Discount Rate

Continued Ownership and Operation of the Docksway site by NCC

Notes:


Option 2 - Outsourcing the operation and/or ownership of the Waste Disposal Site

Rather than continue operating the site, one option is to seek an experienced operator to either acquire the site or operate it under a management agreement with NCC. Such an arrangement would incorporate the continued acceptance of around 60,000 tonnes of BMW from NCC over the life of the site. For a site with 1.5M m3 of void, 60,000 tonnes of waste per year is a relatively modest input and would allow an operator to increase revenues by taking in commercial and industrial wastes as well as NCC’s BMW.

Soft Market Sounding

As part of the appraisal of the future options for Docksway Disposal Site, market soundings have been taken to examine: -

1. interest in the waste management industry in acquiring the site from Newport, while continuing to accept NCC’s waste; and

2. what options exist for taking Newport’s waste to an alternative site in the event that the decision is made to close the Docksway Disposal Site.

Interest in Acquisition of the Site

In order to complete the first task, letters were written to major waste management

companies (sample at the back of the appendix) to assess the level of interest in acquiring the

site as follows (with responses): -

Company Response Viridor Waste Management

Registered an interest in acquisition

Shanks No response received SITA Registered an interest in acquisition Cleanaway Not interested Hills Registered an interest in acquisition Cory Environmental Registered an interest in acquisition Wyvern Waste Services Ltd

Not interested due to sizeable capital costs (engineering).

The above exercise has shown that there is considerable interest amongst waste management operators in the prospect of acquiring Docksway Disposal Site from Newport City Council. This is not particularly surprising given the dearth of landfill void in the region. In addition to the income from NCC’s waste, any waste


management operator that acquired the site would have the security, in terms of a reliable disposal route, to be able to build or expand their waste collection activities in the commercial and industrial sector. While interest has been expressed by waste management operators, any potential acquisition would naturally require a thorough evaluation of the site through a due diligence process. We are not aware of any reason why such a process should prevent the transfer of the site. We were not able to gauge the likely financial basis on which such any such acquisition would be likely to take place. This would require significantly more input from waste operators than has been forthcoming to date.

Costs

The potential operators have not been willing to provide estimates of cost at this stage. However, given the attractiveness of the Docksway landfill void, the benefits of economies of scale and the efficiencies of commercial operation, and offset by the profit element, it is anticipated that net cost per tonne of disposal would be similar or slightly less than the cost of operation by NCC. Soundings from the market in the Southern UK indicate that a landfill site such as Docksway would be valued at circa £4 per m3 of consented void. This would value the Docksway site (1.5m3) at £6m. For the purposes of the following financial analyses, we have used a slightly more conservative figure of £5m, which would also be net of the costs of sale. A Discounted Cash Flow Analysis is shown in Tables 5.5 to 5.7, and the results are summarised in Table 5.4 below. It should be noted that the rate used per tonne, are illustrative. The analysis shows that, assuming the site can be sold for £5m, outsourcing is an attractive financial option in the short term (ie less than 10 years) for all tonnage costs of up to £40/tonne (excluding landfill tax). However, over a 20 year period, the benefit of outsourcing becomes marginal at £30/tonne.


Table 5.4 : Summary of Net Present Costs

Continue under NCC Operation

Outsourced at

£20/ tonne

Outsourced at

£30/tonne

Outsourced at

£40/tonne

10 year Net Present Cost

£17.0 m £ 5.3m £ 10.5m £ 15.7m

20 year Net Present Cost

£22.9m £ 12.7m £ 21.5m £ 30.3m


NET PRESENT VALUE / DISCOUNTED CASH FLOW ANALYSIS

Option :

3.5%

Year 1


-5,000,000

1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000

Total -3,800,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000

Discount

Factor 1 0.97 0.93 0.90 0.87 0.84 0.81 0.79 0.76 0.73

Present value 3,800,000-£ 1,159,420£ 1,120,213£ 1,082,331£ 1,045,731£ 1,010,368£ 976,201£ 943,189£ 911,294£ 880,477£

10 Year Net



1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000

Total 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000

Discount

Factor 0.71 0.68 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52

Present value 850,703£ 821,935£ 794,140£ 767,285£ 741,338£ 716,269£ 692,047£ 668,645£ 646,033£ 624,187£

20 Year Net




Notes:

Discount Rate

Site operated by Commercial Operator : £20/tonne

Capital Receipt

Annual Tonnage

Cost

Annual Capital Cost

Annual Tonnage

Cost

TABLE 5.5 : DISCOUNTED CASH FLOW ANALYSIS – SITE OUTSOURCED : £20/TONNE



Option :

3.5%

Year 1


-5,000,000

1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000

Total -3,200,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000

Discount

Factor 1 0.97 0.93 0.90 0.87 0.84 0.81 0.79 0.76 0.73

Present value 3,200,000-£ 1,739,130£ 1,680,319£ 1,623,497£ 1,568,596£ 1,515,552£ 1,464,301£ 1,414,784£ 1,366,941£ 1,320,716£

10 Year Net



1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000

Total 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000

Discount

Factor 0.71 0.68 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52

Present value 1,276,054£ 1,232,902£ 1,191,210£ 1,150,927£ 1,112,007£ 1,074,403£ 1,038,071£ 1,002,967£ 969,050£ 936,280£

20 Year Net




Notes:

Discount Rate

Site operated by Commercial Operator : £30/ tonne

Capital Receipt

Annual Tonnage

Cost

Annual Capital Cost

Annual Tonnage

Cost

TABLE 5.6 : DISCOUNTED CASH FLOW ANALYSIS – SITE OUTSOURCED : £30/TONNE



Option :

3.5%

Year 1


-5,000,000

2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000

Total -2,600,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000

Discount

Factor 1 0.97 0.93 0.90 0.87 0.84 0.81 0.79 0.76 0.73

Present value 2,600,000-£ 2,318,841£ 2,240,426£ 2,164,662£ 2,091,461£ 2,020,736£ 1,952,402£ 1,886,378£ 1,822,588£ 1,760,954£

10 Year Net



2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000

Total 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000

Discount

Factor 0.71 0.68 0.66 0.64 0.62 0.60 0.58 0.56 0.54 0.52

Present value 1,701,405£ 1,643,870£ 1,588,280£ 1,534,570£ 1,482,676£ 1,432,537£ 1,384,094£ 1,337,289£ 1,292,067£ 1,248,374£

20 Year Net




Notes:

Discount Rate

Site operated by Commercial Operator : £40/ tonne

Capital Receipt

Annual Tonnage

Cost

Annual Capital Cost

Annual Tonnage

Cost

TABLE 5.7: DISCOUNTED CASH FLOW ANALYSIS – SITE OUTSOURCED : £40/TONNE


Option 3 – Ceasing to Use the Waste Disposal Site and Contracting the use of a Site under Alternative Ownership

The final option is to assess the feasibility of closing the Waste Disposal Facility and transporting the waste to an alternative facility. There is currently no practical alternative to landfill in SE Wales. An analysis of available void in the region has been undertaken in the SE Wales Regional Waste Plan and this is shown in section 2(iv). Soundings have been undertaken with the operators of these facilities to assess whether they have the willingness and capacity to accept Newport’s residual wastes and the commercial basis on which they would accept them.

Soft Market Sounding

In order to complete the second task, letters were written to the operators of all suitable landfill sites in SE Wales to assess their capability and willingness to accept NCC’s 60,000 tonnes together with the likely costs of ‘tipping away’. Letters were sent to: -

Cardiff County Council – operator of the Lamby Way Landfill Site – which responded as follows: -

1. We are currently considering the future of our landfill operations in

Cardiff. In doing this we are alert to the opportunity to take a regional perspective within the public sector involving relations with our neighbours in Newport. In this setting 60,000 tonnes per annum into a facility would in fact be a significant strategic advantage but not one that would be easily achieved because of the necessary political decisions and complexity of the EPA and more general procurement challenges;

2. In the setting above it may in fact be essential to the achievement of Best Value.

3. Our current gate fee is £27.50 (+ Landfill Tax) for active waste. Prices are escalating significantly in the region and therefore this cannot be taken as any measure of a long-term relationship. Further in the setting of 2 local authorities seeking Best Value, the measure is too crude to be meaningful.

Amgen Cymru – operator of the Bryn Pica Landfill – which stated that it was unable to provide an indication of whether it was able to accept NCC wastes or any indication of cost.

Evans Logistics - the operator of Bryn Posteg Landfill Site - which confirmed that the site does not have the capacity to accept an additional 60,000 tonnes p.a. Unlike the other sites that we examined, this site is not listed in the SE Wales Regional Waste Plan and was included in the survey for the purposes of completeness. Caerphilly County Borough Council –the operator of Trehir Landfill Site – advised that the landfill is to close in April/May 2005.


Biffa Waste Management – the operator of Trecatti Landfill Site – willing and able to accept NCC waste at an indicative price of £30 per tonne plus Landfill Tax. Silent Valley Waste Services – the operator of Silent Valley Landfill Site, Ebbw Vale, which responded that they were fully committed to existing contracts with no spare capacity.

Analysis

With regard to seeking alternative routes for the treatment of Newport City Council’s waste, the options are limited to landfill. That said, it is not going to be easy to contract NCC’s waste out to an alternative landfill as some have limited void and others are fully committed to existing contracts. Our enquiries have shown that of the 5 other potentially appropriate licensed/permitted landfill sites in SE Wales, one is to close in Spring 2005 and the operator of another site was not willing to discuss the prospect. A further site is fully committed to existing contracts and has no spare capacity.

This currently leaves only Lamby Way Landfill Site at Cardiff, and Trecatti Landfill at Merthyr Tydfil. The former, approximately 11 miles from Newport, is operated by Cardiff City Council, which acknowledges the need for joint working among the local authorities of SE Wales. The Council has expressed a willingness to entertain the prospect of accepting circa 60,000 tonnes p.a. of waste from Newport. They have advised that their current landfill gate fee for Municipal Solid Waste is £27.50 per tonne plus landfill tax. However, they rightly point out that prices are escalating significantly in the SE Wales region and that such a figure cannot be relied upon as any measure of costs in a long-term arrangement. Biffa Waste Services Ltd, operator of the Trecatti Landfill has responded similarly expressing a willingness to accept 60,000 tonnes of BMW p.a. without being able to offer any long-term certainty about their current indicative price of £30/tonne + Landfill Tax.

The cost of landfill in the UK has been rising steadily over the last 10 years with steeper rises in the last 3, without taking into account the impact of landfill tax, which is now to rise by £3/tonne for the foreseeable future. Given that landfill tax will be payable at the same rate wherever waste is disposed of, its impact has been ignored for the purposes of this assessment. The declining number of suitable landfill sites in SE Wales will also have contributed to the rising prices. Were Docksway Disposal Site to close, there would inevitable be a consequent increase in landfill costs at remaining sites. It would therefore be unwise to place much weight on the figures quoted by other operators.

Lamby Way landfill site is by far the closest to Newport and would therefore provide the best fit as far as the proximity principle is concerned. The shipment of waste from Newport to Cardiff would also accord with the principle of regional self sufficiency. In making this assessment, it should also be borne in mind that many of the landfill sites in SE Wales, including Docksway, Silent Valley and Lamby Way, have yet to compete fully the re-permitting process. Such authorisations are not granted automatically and we need to be alert to the possibility, however remote, that one or


more of the sites may fail to obtain a Permit and be forced to close. Such an event would inevitably lead to a further rise in landfill gate fees at the remaining sites. Trecatti Landfill Site received its Permit in March 2005 and the operators of Bryn Pica, falling into Tranche 5, are expected to apply for a Permit by the deadline in May. Cardiff City Council is also expected to apply for a Permit in Tranche 5. Silent Valley and Docksway both fall into Tranche 4. Permit applications have been made in respect of both and are currently being considered. Regardless of the responses detailed above, the Council will need to be mindful of the fact that the export of its waste to a landfill site in another authority, particularly one some distance away, is unlikely to accord with the proximity principle.

Costs

The above factors all point to continued upward pressure on landfill gate fees. The only uncertainty is the rate of the increase. There are too many variables to make an accurate assessment of what Newport City Council should expect to pay for the disposal of its residual Biodegradable Municipal Waste even beyond the short-term horizon of one year. Were NCC shortly to enter negotiations with one of the few landfill operators willing and able to accept 60,000 tonnes of waste per year, then we estimate that the range of costs where agreement is likely to be achieved between NCC and the operator will be between £28-35 per tonne plus landfill tax. However, this price could escalate rapidly after the first year and because of this volatility, it is unlikely that any landfill operator will enter into a medium- or long-term contract to accept 60,000 tonnes at a fixed cost, certainly not one that NCC would be likely to find acceptable. NCC should therefore expect significant rises in their disposal costs should the decision be taken to close Docksway and ‘tip-away’.

On the basis that the barn located at Docksway Disposal Site will act as a waste transfer station for the bulking up of waste collected by RCV in the City Council area for onward transfer to the alternative disposal point, transport costs to a site such as Lamby Way are estimated at approx £5/t.


EVALUTION OF PROJECT OPTIONS

Financial Evaluation

Option Cost per Tonne, Excluding Land Fill Tax

Comment

Option 1 £24.20/t Potential further savings of up to

£3/t through site operational

efficiency improvements.

Option 2 Circa £20/t Estimate of potential costs. It is

expected that a large waste

management operator will be able to

achieve significant capital and

revenue savings through greater

experience and economies of scale

in purchasing (including

engineering.

Option 3 >£32/t Based on Lamby Way costs plus

transport costs

Risks and Issues

Option Risk Factor / Issue Comment Option 1 Capital Investment Docksway site requires £19m of development

investment over the next 20 years, with much of this

required in the next 5 years. This will impact

negatively on NCC cashflow in the medium term.

Option 2 Transfer of Risk and management overheads

The transfer of the Docksway site to a commercial

operator would potentially reduce the overheads and

risks of site management. However, any transfer would

be subject to thorough due diligence by potential

operators.

Option 3 Future Cost

Escalation

The shortage of void in the SE Wales region, and the

responses from sites such as Lamby Way, indicate that

gate fees are escalating significantly. It is unlikely that

a contract with long-term fixed rates would be

achievable, leaving NCC exposed to cost escalation in

the future, independent of Landfill Tax increases.

Documents

Overview and Scrutiny Forum for Community Safety...2005/07/22 · Overview and Scrutiny Forum for Community Safety Part 1 22 July 2005. Item No 5 Subject Waste Disposal Site – 2005-2006