Two billion pound contracts for Teesside incinerator signed

The agreement marks the financial close of the Tees Valley Energy Recovery Facility (TVERF), a long-debated scheme approved in 2023 by Redcar and Cleveland Council despite sustained opposition from campaigners and some politicians.

Planning permission was granted for the plant on land west of Tees Dock Road, near Grangetown, part of the Teesworks complex, with environmental permits secured last year.

Waste firm Viridor was later named as the preferred bidder following a lengthy procurement process involving seven councils – Darlington, Durham, Hartlepool, Middlesbrough, Newcastle, Redcar and Cleveland and Stockton.

It was chosen by the project’s governance board, which consists of chief officers from the seven councils involved who will pay service fees to Viridor as part of a 29-year long contracting term.

The TVERF will burn an expected minimum of 400,000 tonnes of residual ‘black bag’ bin waste a year from the local authorities – rubbish unable to be recycled – creating electricity for the National Grid.

The Local Democracy Reporting Service asked several questions in relation to the financial arrangements, with a spokesman stating that the “precise financial terms of the agreement remain commercially confidential”. 

There was also no confirmation of a break clause for one or both parties, only the option to extend the initial contract duration at its end for a further 11 years.

Some of the partner councils have existing private sector waste management contracts due to run out and believe that the agreement provides both long-term security and potential economies of scale.

But numerous concerns have been raised, including the impact on air quality and the health of residents living in Grangetown, the potential of financial penalties to be imposed on the councils should they not meet waste targets, the inability to pivot to future potential changes in Government policy that comes from signing a long-term contract, while critics also say there is enough incinerator capacity on Teesside already.

Supporters say this method of disposal is safe, an alternative to landfill, and subject to strict environmental standards, with councils also continuing efforts to get residents to reduce, re-use and recycle as much material as possible. 

Speaking on behalf of the partner authorities, Denise McGuckin, chief executive of Hartlepool Council, said: “We are very proud to reach the delivery phase of this critical infrastructure project for the North-East, which will provide a safe, reliable, sustainable and affordable solution for the waste left over after recycling and re-using as much as we can.

“We are delighted to partner with Viridor, which is a highly experienced operator of UK energy recovery infrastructure, and we look forward to working with them.”

Viridor has selected Swiss-headquartered Kanadevia Inova to carry out the engineering and construction phase of the project, the firms having worked together on other energy recovery facilities most recently at the Port of Tilbury, Essex, and in Fife, Scotland.

Once operational from 2030, the TVERF will support 50 full-time jobs with Viridor also promising supply-chain opportunities and said to be committed to delivering an “extensive package of community benefits” over the lifetime of the contract.

Richard Belfield, a group development director at Viridor, said the plant would be a “responsible neighbour” to the local community and wider region.

Redcar and Cleveland councillor, Dr Tristan Learoyd, a long standing opponent of the scheme, said: “The TVERF incinerator has no need justification, will increase council tax across Teesside, cause environmental damage, put off high value industries coming to the area, and is the result of policy failures by outdated councillors and chronic poor decision making by executive officers.”

Redcar and Cleveland Council leader Alec Brown had claimed that, should the local authority “pull out at the 11th hour” of the project, it would have to foot the bill for its share of the procurement costs – an estimated £900,000.

The Tees Valley Combined Authority previously contributed £5m in a loan facility towards the procurement costs.

Redcar MP Anna Turley also came out in opposition to the TVERF, asking residents to sign a petition to stop the area being a “dumping ground for rubbish”.

Meanwhile, in Newcastle councillors voted narrowly in September to withdraw support for the scheme following a Liberal Democrat-led motion.

But it was not binding and the council’s cabinet opted to press on amid a declaration there was “no alternative”.

The seven partner councils are each represented on the board of a special purpose vehicle limited company set up which has entered into the agreement with Viridor, who will also take a long-term lease for the land to be built on at Teesworks.