Wrong Economics

The summary points of the Economic debate are…

WRONG ECONOMICS

Direct Capital Subsidy

Considerable direct government support would be required to make the Rose Energy proposal viable. At least a £30m pump-priming injection is needed towards a total cost in excess of £100m.

Indirect Capital Subsidy

Significant levels of indirect government support would also be required to, for example:

  • bring the local roads infrastructure up to the necessary safety standards, and
  • connect the company’s plant to the electricity grid.

Operating Subsidy

The government in NI, as in the Netherlands, is also likely to be asked to provide an ongoing subsidy for the plant’s annual running costs. The Dutch poultry incinerator not only required a large government subsidy to cover its capital costs, it also needs a “public feed-in tariff” to subsidise its operating costs.

Public Finances

Such a heavy financial burden on the public purse would be difficult to handle at any time – requiring resources to be diverted from other economically and socially desirable initiatives – but particularly now when public finances are being depleted by the worst recession since the 1930s.

In any case, why would the NI government want

  • its tax payers – now or even in better times – to fund the costs of an incinerator that is the least efficient way of producing renewable energy, the most environmentally destructive way of dealing with poultry litter, and the most expensive way of achieving the objectives of the EU’s Nitrates Directive;
  • an incinerator to be run by companies that have not been able to manage even their own poultry businesses well enough to make them profitable, and which have no expertise in running energy-from-waste plants;
  • when more efficient, less environmentally destructive, and less expensive technological alternatives are available.

RIGHT ECONOMICS

No Subsidy

Pyrolysis plants would not require a capital subsidy (either direct or indirect) nor an operating subsidy from government. Indeed, the plants would not even require Renewable Obligation Certificates to be viable; ROCs would come into play only when the products of pyrolysis were used to generate electricity.

Faster Deployment

  • Pyrolysis plants are operating in the United States and Canada. They are not, as the company suggests, a future dream; they are a current commercial reality.
  • Pyrolysis plants can be commissioned in a few months since they can be rapidly installed in existing light industrial units or on sites with existing planning permission for industrial use, whereas the company’s proposed incinerator would take at least three years to be operational.
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