Once upon a Time in the Waste
Waste was once just waste but then it became materials, then it became electricity then it became energy. Next up, I suggest, is water. In terms of income levels, waste and water are roughly similar in gross added value to the economy and they were historically classic Cinderellas treating unmentionables and charging for the process. Now both are being transformed into Swans, partly because they share common parentage in the form of emergent resource scarcities but also because their assets are ceasing to be mere neutralisation activities but are instead offering opportunities to lucrative added value end markets like electricity, gas and energy.
The 5 year review in Water recognised that and allowed a mere £60 m for renewable energy initiatives but the opportunity is far bigger than that! In reality the 100-odd very large sewerage sites owned by the Big 8 aquatics have precisely what the dozen big waste, electricity and gas companies want – land, space and consents. How to resolve this in a marriage? Simples.
Legislate to oblige the big 8 water companies to auction their large sewerage treatment sites capable of use as waste resource parks as evaluated by the AWM Planning tool. They can bid for them or lose out to alliances of waste and energy consortia. The proceeds offer the chance of uplift in balance sheet valuations over book value, thereby presenting the Treasury with the chance of a windfall tax on the proceeds to recover the higher than inflation fees to customers to modernise what was once a problem but is now a valuable resource – just like a lot more stuff that could go that way in a sclerotic planning framework suspicious of innovative waste solutions.
Peter Jones, 01/07/2011