Aviva PLC's (LSE:AV.) fund management division is reportedly moving to place three incinerator power plants into administration, after writing off over £350 million on the investment already.
The waste-to-power plants backed by Aviva Investors have accrued significant financial losses after struggling to meet performance targets and are poised to go into liquidation, according to reports.
Last week, it was revealed that staff face redundancy at the three Aviva-backed sites after operation and maintenance deals were scrapped, according to specialist sector website ENDS Waste and Bioenergy.
While Aviva had seen the investments as a renewable energy bet, the report suggested the company was reluctant to provide the significant investment to help the technology overcome its current limitations, the Guardian reported.
Accounts from Aviva, the report said, show the incinerators, located in Hull, Boston and Barry, accumulated loans amounting to £480 million from investors over an eight-year period.
The projects, initially designed to operate by burning wood biomass, shifted to burning household waste and have underperformed, leading Aviva to write off £368 million related to these investments.
The plants in Hull and Boston have underperformed in electricity output, while the Barry facility has been mothballed due to a dispute with the Welsh government over planning approvals.
Critics have raised environmental concerns about energy-from-waste (EfW) incinerators, labelling them as contributors to greenhouse gas emissions.
Much of what is incinerated could have been recycled, critics say, while incineration releases tonnes of CO2 in exchange for very little energy, as well as contributing to poor air quality.
Partner ends operations deal
Operations partner Evero ended its operations and maintenance (O&M) deals for three biomass-gasification plants in the UK, it was reported earlier this month, placing staff at risk of redundancy
Evero's statement did not explain whether a new O&M contractor would be sought or if the facilities would be closed down.
At Barry, the campaign group United Kingdom Without Incineration Network (UKWIN) website notes the planning application stated the facility is intended to treat waste wood using Outotec fluidised-bed gasification technology.
Following a revised planning application approved in 2015, the Vale of Glamorgan Council voted in 2021 to order the closure of the plant and the removal of buildings, which the operator announced an intention to appeal.
In August 2023 it was reported that the enforcement notice had been thrown out by the Welsh government’s chief planning body and in March 2024 it was reported that plans to bring the Barry incinerator back into use have been "halted for now" as the Vale of Glamorgan Planning Committee rejected two retrospective planning applications.