Bailey holds urgent talks seeking Viridor bail-out for SDEN

Our environment correspondent, PAUL LUSHION, on the backroom deals that have been going on to try to salvage Sutton Council’s struggling heat network business

Salvage mission: Sutton Council CEO Helen Bailey has been in urgent talks with Viridor

Helen Bailey, the chief exec at Liberal Democrat-controlled Sutton, has been holding emergency talks with incinerator operators Viridor in an urgent effort to salvage SDEN, the council’s struggling heat network.

The discussions included Bailey making a rare visit to the Beddington incinerator – a visit she has tried to keep secret from the borough’s councillors.

Sources at Sutton’s civic offices suggest that Bailey has offered to support profit-hungry Viridor’s application to vary the terms of its licence for its polluting incinerator at Beddington, increasing the volume of other people’s rubbish that they burn by an extra 35,000 tonnes per year, provided that they don’t pull out of their agreement to supply hot water to the 800 Barratt-built homes at New Mill Quarter.

Soaring fuel prices have prompted KKR, Viridor’s new owners, to seriously reconsider dumping their SDEN deal to seek even bigger profits elsewhere.

SDEN, the Sutton Decentralised Energy Network, was the greenwashing cloak used by Sutton’s LibDems in the planning process to justify building the polluting incinerator at Beddington Farmlands, with “green energy”, the water heated by the rubbish-burning furnaces, being pumped to public buildings and customers around the area.

After six years, New Mill Quarter’s residents remain the only customers of SDEN, their pipe network having been built with the help of a £100,000 grant from… Viridor.

Although the incinerator fired up in 2017, so far the heating provided has mainly come from a Viridor land fill “engine”. Bailey and SDEN want Viridor to connect the incinerator to the heating network.

The SDEN project has lurched from disaster to disaster. The mis-firing company has been raised in questions in the House of Commons no less than six times in its brief history.

Amid calls for a full-on fraud inquiry, Sutton Council was forced to order an investigation into SDEN’s finances, where it was confirmed that the business model that underpinned the project’s finances had greatly exaggerated demand and therefore the profitability of the company. By any reasonable estimates, even with the cheap, but not-so-very green, energy pumped from the incinerator, SDEN won’t manage to break even before 2069…

In its accounts, it is stated that SDEN is financially supported by Sutton Council. Without ongoing subsidies paid out of Sutton residents’ Council Tax, SDEN would be bust.

But what has put SDEN under greater pressure has been the 2019 acquisition of Viridor by KKR, an American company whose assets exceed $200billion (or about £200billion, after the damage done to the pound when Croydon South MP Chris Philp was in the Treasury).

Where there’s muck there’s brass…: the Beddington incinerator owners want to make even bigger profits from burning Londoners’ rubbish

The Beddington incinerator was built to burn the rubbish generated from four boroughs – Kingston, Merton, Sutton and Croydon, who together formed the unaccountable local quango, SLWP, the South London Waste Partnership.

Between them, SLWP agreed a contract with Viridor to operate the incinerator worth £1billion over 25 years.

But KKR’s plans for the Beddington incinerator do not involve connecting SDEN to their moneymaking incinerator.

KKR, also known as Kohlberg Kravis Roberts & Co, is a global investment company that manages alternative asset classes, including private equity, energy, infrastructure, real estate, credit and, through its partners, hedge funds.

The smart suits at KKR’s New York offices have become increasingly wary of having any dealings with the small-fry civic officials in Sutton, following a series of damaging reports appearing in the Rotten Boroughs column of Private Eye magazine, which have made LibDem Ruth Dombey the second-most toxic council leader in the country, narrowly trailing Croydon’s discredited Tony Newman. Reputational damage is anathema to hedge funds… 

And then there’s money, several millions of it, the likely cost to Viridor of connecting the incinerator to the heating network.

Diverting hot water to SDEN is also likely to have a cost to the KKR profit-driven business plan, which includes the incinerator powering electricity-generating turbines that sell energy to the National Grid.

Delivering hot water to SDEN will mean less hot water to be turned into steam for the turbines, generating less electricity. With prices soaring in the fuel crisis, it is likely that Viridor could get around £40million a year in electricity sales alone.

Sources at Sutton suggest that on her visits to Viridor, Bailey has gone armed with legal advice from a King’s Counsel, hired at great expense by the council.

Should Bailey fail to charm Viridor into a bail-out for the struggling SDEN, New Mill Quarter residents could soon face the prospect of their fuel bills multiplying three, even four times – likely dooming the election prospects at the next General Election of LibDem hopeful Bobby Dean.

Read more: Man behind failing SDEN’s plan is re-hired on £800 per day
Read more: Heat network’s plan depends on 75 homes that don’t exist
Read more: Opposition renews call for full-scale fraud probe into SDEN
Read more: Sutton heat network director quits as fraud inquiry begins

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This entry was posted in Bobby Dean, Business, Croydon Council, Environment, Helen Bailey, Kingston, London-wide issues, Merton, Refuse collection, Ruth Dombey, Shasha Khan, Sutton Council, Waste incinerator and tagged , , , , , , , , , . Bookmark the permalink.

6 Responses to Bailey holds urgent talks seeking Viridor bail-out for SDEN

  1. Lewis White says:

    What I have never understood is why the Beddington Incinerator is not aleardy providing hot water to heat the air in the nearby “crinkly tin sheds” of the nearby Beddington Lane Industrial area. Surely it must be easier to heat a warehouse –and extend a pipe network the relatively short distance through the simple landscape of the business parks of the area— than heat domestic dwellings.

    Maybe the cost of building big , well-insulated hot water pipes, and burying them underground, jis just too great ?

    Space heating does not require enormous temperatures, as far as I am aware, but generating electricity needs very high temperatures to boil water that makes steam that turns a turbine to generate electricity, just like it has done since Ferranti did his pioneering work at Deptford Power Station in the Victorian era.

    That reminds me… talking of Deptford– and coming forward from then to our own times, the 1980’s– the SELCHP incinerator, near the Millwall Stadium off the Surrey Canal Road, Deptford…………….. was intended to deliver (to South East London) “Combined Heat and Power”. As far as I know, it has never delivered the “heat” .

    • The reason the Beddington incinerator “is not already providing hot water to heat the air in the nearby ‘crinkly tin sheds'” of the nearby Beddington Lane industrial estate, Lewis, is because the people who own said sheds would never agree to the hugely inflated energy prices that SDEN wants to charge. This will have included the costs of connecting to the SDEN network.

      No one wanted to pay SDEN’s prices.

      That only Barratts signed up with SDEN, in order to get planning permission for 800 homes, is Exhibit No1 in demonstrating how utterly uneconomic SDEN’s pricing, and therefore its whole business plan, has always been. Do try to pay attention.

      As for SELCHP… The prevailing winds take the pollution from Deptford off towards Tower Hamlets and Newham. The infant mortality rates and rates of child illnesses from the date that SELCHP was commissioned (we published them on this site some years ago) make for chilling reading, particularly if you are unfortunate enough to live downwind of Beddington, in places such as Broad Green, Fairfield and Waddon.

      • Ian Kierens says:

        And that is why Planning departments should not be allowed to link incentives to permissions. They are usually at best unethical and descend rapidly to being most definitely not ” perfectly legal developments”. nor in the Boroughs interests more to the point.
        Councils should realise that unless conditions and deals/incentives are both based on business sense and
        conditions are able to be enforced they usually very quickly fail to be of benefit and costs beging to mount. Business partners quickly pull the plug or fold and Councils are – well ask Cheesbrough, Townsend and Isles that!

      • Ian Kierans says:

        Or have Asthma or other breathing issues and live in Broad Green, Fairfield and Waddon. Watch your GP wonder why you are using your reliever inhalers or require more Oxygen that normal

  2. Lewis White says:

    Thank you for the timely reminder of the health-killing effects of SELCHP on the people who live down-wind of Deptford.

    Imagine living in a tower block anywhere within the toxic plume’s reach? You are high above ground– and if the wind blows sideways, your windows will let in the polluted air.

    There are plenty of such high rise blocks remaining in Deptford itself–then many more across the river in the boroughs you mention.

    As someone who was brought up in the very green Surrey/ Croydon urban/ rural fringe, we were bessed with very good air. In spite of a bit of asthma, I am blessed with good lungs–unlike a family member who was brought up in Bow in WW2. She is really suffering badly— damaged lungs due (the specialists say) to living in the polluted East end as a child. She never (as far as I am aware) smoked.

    On several occasions over the last 30 years I have been in Deptford in the morning, and smelled the fug of burning plastic from SELCHP. I have driven at dusk or night past the Maidstone incinerator which is right by the motorway — and suddenly entered a choking, lung-gripping, area of polluted air (the plume could be seen belching out its filth) , and in the middle of Croydon, I have breathed in a similar miasma of air smelling of burnt plastic–also lung gripping. After a minute of breathing this, I felt really distressed. Just a minute of exposure. That is nothing, compared with the expsoure suffered by residents who live around Beddington as well as to the NE– the normal “down wind” areas.

    I realised that fresh air along with fresh water, adequate food, and shelter, should be a fundamental Human Right.

    I have yet to see anything from any local MP, nor the South West London Waste Plan, or Environment Agency, nor other aspect of Goverment, that says that incineration must be got rid of.

    Plastic recycling schemes seem to be the initiative of some supermarkets…… but from Government, still deafening silence. Plastic bottle recycling deposits? Nope. Not yet, not in the UK.

    It is an abdication of responsibility for the health of the population. Particularly those poor (yes–not rich- people who live in tower blocks and homes (many right next to polluted roads) in SE and NE London–and , since Beddington Incinerator was built, also now in Waddon, West / Mid and East Croydon, Broad Green, Norbury, Thonton Heasth, Upper Norwood, and many other places in the boroughs of Croydon, Merton and Lambeth .

    I am as guilty as the next person in that I generate plastic waste, albeit that I try to avoid products in plastic packaging and on polystyrene trays, and recycle every plastic bottle etc.

    Even so, I know that when reluctantly, I consign a dried-up paintbrush to the bin, or a plastic bin bag, I know that it is going to be burned at Beddington, and that someone is going to get affected by the resulting toxic smoke.

    There must be a better way.

    The World Health Organisation website says

    “Clean air is a basic human right. Yet, air pollution continues to pose a significant threat to people worldwide – it is the greatest environmental threat to health and a leading cause of non-communicable diseases (NCDs) such as heart attacks or stroke. According to the World Health Organization, there are 7 million premature deaths every year due to the combined effects of outdoor and household air pollution– with millions more people falling ill from breathing polluted air. More than half of these deaths are recorded in developing countries.”

  3. Haydn White says:

    Downwind of Beddington also includes great lumps of all three boroughs depending on the wind direction that day. I know when the wind is coming due Beddington from the layer of fine dust deposited on my car. I dont know what gets deposited on or in people but I do know it wont be doing them any good, still as long as KKR can continue to make good profits they wont service / upgrade the scrubbers and we plebs can GAGF

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