Pennon to build waste recycling, energy plant in Glasgow

Jul 23, 2012 - UK water and sewerage services provider Pennon Group Plc (LON:PNN) has been contracted to fund, build and operate a recycling and renewable energy centre with a power production capacity of 15 MW in Glasgow, Scotland.

Pennon today said its subsidiary Viridor Glasgow Ltd had signed a 25-year design, build, finance and operate (DBFO) contract with Glasgow City Council for the recycling and treatment of Glasgow's residual municipal waste.

Viridor will invest GBP 160 million (USD 249m/EUR 206m) in the project, which is scheduled to come online in early 2016. UK support services and construction company Interserve (LON:IRV) will build the plant in the role of engineering, procurement and construction (EPC) contractor.

The centre will include facilities for recycling, anaerobic digestion and energy recovery by gasification. Viridor chief executive Colin Drummond said that it would have a gross capacity to generate 15 MW of power and that the company would work with the council to maximise heat recovery opportunities.

The contract calls for the treatment of 175,000-200,000 tonnes of waste per year and seeks to achieve landfill diversion of about 90%. Pennon said it would contribute to Scotland's Zero Waste Plan.

The deal is subject to Viridor's obtaining planning permission for the plant, which is to be located at a site owned by the council in the south of the city. A planning application is expected to be submitted this summer and planning approval to be secured early next year.

(GBP 1.0 = USD 1.558/EUR 1.286)

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