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Pennon Group PLC (PNN)

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Monday 11 October, 2010

Pennon Group PLC

Engineering Procurement and C

RNS Number : 1393U
Pennon Group PLC
11 October 2010


Notification under Listing Rule 10.4.1


11 October 2010


Runcorn - Energy from Waste Plant Phase II - EPC Contract signed


Pennon Group Plc is pleased to announce that its subsidiary, Viridor Waste Management Limited ('Viridor'), has signed the Engineering Procurement and Construction ('EPC') Contract for Phase II of the Energy from Waste ('EfW') plant at Runcorn in Cheshire with Keppel Seghers Belgium NV and Keppel Seghers UK Ltd ('Keppel Seghers').


A key part of Viridor's stated strategy is the construction and operation of EfW plants to handle residual waste which is being diverted from landfill in line with the European Landfill Directive, and to maximise the associated renewable energy generation.  As announced in April 2009, Viridor has secured all of the rights to Phase II of the planned Runcorn facility.  Phase I is being built primarily for the Greater Manchester Waste PFI contract.  Phase II will be available for the market generally, as steeply rising landfill tax drives residual waste disposal away from landfill towards EfW.


The Phase II project requires capital investment of approximately £160 million, from available internal funds as required, for a 375,000 tonnes per annum capacity plant. This is in addition to the £34 million of advanced and shared works required for both Phase I and Phase II, announced in April 2009.   


Colin Drummond, Chief Executive of Viridor, said "The combined Runcorn plant will be one of the largest and most efficient in Europe with a total capacity of 750kt of waste p.a., 70MW of electricity and 51MW of heat.  Construction of Phase II will be coordinated with ongoing work on Phase I which permits significant cost savings.  It will enable Phase II to come on stream by 2014/2015 by which time large scale energy from waste facilities will be cost competitive against landfill with landfill tax by then being £80 per tonne."



Further information:


Further information on Pennon Group and Viridor can be found on and


For further  enquiries, please contact:

            Colin Drummond on 01823 721435

            Jo Finely on 01392 443401

            Katie Johnson (Finsbury) on 020 7251 3801











Background Information to the Greater Manchester Waste PFI contract:


As announced last year, financial close on the Greater Manchester Waste PFI 25-year contract was achieved on 8 April 2009.  It is the UK's largest ever combined waste and renewable energy project, managing 1.3 million tonnes of waste per year and is designed to achieve at least 50% recycling levels and 75% landfill diversion for the Greater Manchester area. 


The PFI is a joint venture between Viridor and John Laing Infrastructure.  Operation of the associated facilities is being carried out on a sub-contract basis by Viridor.  In October 2009 it was confirmed that all required facilities planned for development had received planning permission.  At 30 September 2010 of these 42 facilities, 28 had been completed and handed over to Viridor to operate.


Associated with the Greater Manchester waste PFI contract is the EfW Combined Heat and Power (CHP) facility (Runcorn Phase I), a three-way joint venture between Ineos Chlor, Viridor and John Laing Infrastructure.  Planning permission was achieved by Ineos Chlor for both phases of the EfW CHP plant at Runcorn in September 2008 and construction of Phase I has commenced.  Total capital expenditure for the Greater Manchester PFI was projected to be £405 million with an additional £235 million for the associated EfW CHP plant (Runcorn Phase I).  Viridor's funding contribution to these will be £85 million.   


Background Information on Viridor's Strategy


Viridor's stated strategy comprises:


-     capitalising on its strong position in landfill waste disposal;

-     proactively developing new recycling operations to meet ambitious EU/UK targets; and

-     successfully exploiting the huge potential in waste-based renewable energy generation.


After Runcorn Phases I and II are completed, Viridor's total energy from waste disposal capacity will be around 800kt p.a. (including its share of joint venture plants).  Its total waste based renewable energy capacity on the same basis will be around 190MW.


Published: 11 October 2010



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