Energy from waste continues to drive Pennon profit. The company predicts income growth for years to come as demand outpaces supply.
Earnings before interest, taxes, deductions and amortisation (ebitda) from its energy recovery facilities increased 29% to £66.6m according to half year results. Group ebitda increased 8% to £274m for the six months to 30 September.
The company said recycling revenues are set to improve, partially as a result of China’s moves to limit imports.
Meanwhile, Pennon is mulling opportunities to create energy parks at sites with spare grid capacity. These include providing energy to local businesses via private wire agreements.
Pennon’s Viridor business burns about a fifth of the UK’s combustible waste tonnage via energy from waste plants, or energy recovery facilities (ERFs).
It is ramping up operations at three new facilities, with a fourth under construction and has planning permission to extend capacity at two existing sites by around 100,000 tonnes.
The company foresees demand for energy from waste plants outstripping supply by some seven million tonnes by 2030.
“Waste market dynamics are favourable, said Pennon CEO Chris Loughlin. “The development of Viridor’s ERF portfolio will support Pennon’s earnings growth to 2020 and beyond”.