UK review of waste-to-energy plants a ‘significant risk’ to Solar 21 plan viability, says renewables firm

The Rathcoole-based renewables investment firm – which owes thousands of Irish investors as much as €300m – is currently working through a High Court-approved arrangement to sell assets and repay loan notes it issued to finance waste-to-energy incinerators in the UK.

The High Court scheme – seen as an alternative to liquidation after the firm ran into difficulty last year – is aimed at repaying at least 80pc of the amount owed to investors involved in one of the projects.

The success of the scheme depends on the sale of a number of waste-to-energy plants that Solar 21 has built or is proposing to build.

Britain’s Department of Levelling Up last month wrote to Stockton-on-Tees Borough Council directing it not to grant permission on Solar 21’s application “without specific authorisation” on one of those proposed plants, the Teeside Green Energy Park.

The Solar 21 subsidiary has since written to the department stating that the delays presented by the direction “represent significant risks to the project and the huge investment made in it to date with further impact on project employment both currently and in the future".

“We would therefore respectfully request that you provide details of the grounds on which the SoS [secretary of state] is considering calling in this application for his own determination.

“We also note that there is no timescale in the SoS letter and while we understand that the SoS does have the power to do this, you will understand, for obvious reasons, this is not helpful and exacerbates the commercial disadvantage of the direction.”

Review being carried out into the role of a number of new waste-to-energy plants in England

The letter outlined a £3.6m (€4.2m) “milestone payment” it is due to pay to the local power-grid operator related to the project, that “if not made on time, and in accordance with the contract”, could result in either the loss of a grid connection or a delay of over five years in getting one.

“In either of these eventualities, the project is not viable,” said the Solar 21 letter.

The direction from the Department of Levelling Up relates to a review being carried out by the Department of Energy, Food & Rural Affairs (Defra) into the role of a number of new waste-to-energy plants in England.

The BBC has previously reported concern that sanctioning more incinerators will make hitting recycling targets more difficult and Scotland has already banned any such new developments.

In its letter, Solar 21 argued it had already previously received permission for such a facility on the site and that the size of the bigger new proposal – about 37pc bigger – was “arguably not material”.

The consenting process for a second Solar 21 project – a proposed plant in North Lincolnshire, which it has told the High Court in Dublin that it believes it can sell for £100m – has also been paused by the review.

Its future also depends on the government review clearing the way for planning authorities to grant permission for more such incinerator facilities.

With ongoing difficulties bringing into full operation a previously built plant at Tansterne – also due to be sold as part of the scheme to repay investors – any failure to get the go-ahead for either of the two proposed projects in Teeside or North Lincolnshire would come as a major blow to Solar 21.

In a statement to the Sunday Independent, a Solar 21 spokesman said “the delay is in fact temporary”.

“We together with the rest of the very large energy-from-waste industry… look forward to the update due from Defra on May 24.”