But questions are being asked about the viability of the plans, while residents are kept in the dark about an ugly gantry to be built over the River Wandle.
EXCLUSIVE by DAVE BURTON
Hot and bothered: the Lavenders, better known as Riverside, largely comprises Clarion social housing heated by a communal system. SDEN is keen to land a supply deal
For six years, SDEN has been trying to convince Clarion Housing to buy its heat and hot water to supply its Lavenders social housing estate at Hackbridge.
The Lavenders, better known locally as Riverside, comprises mainly social housing, though some homes are privately owned: Bobby Dean, the Liberal Democrat MP for Wallington and Carshalton and borough councillor for The Wrythe, is a resident.
The 348 properties were built with a high standard of insulation.
When planning permission for the Lavenders was granted, it included a condition that the estate should have a combined heat and power network, or CHP in councilspeak jargon. But this was never implemented.
Dodgy pipeline: residents at nearby New Mill Quarter have long complained about SDEN’s unreliable heating supplies
A gas-powered heat network providing hot water and heating was installed instead.
Sutton Council never attempted to enforce the planning requirement for a CHP. It seems that the council had a cunning plan. The council wanted to sell to Clarion a heating alternative. Some suggest that this represents a huge conflict of interest, but then scruples have never been part of the culture at council-owned SDEN – Sutton Decentralised Energy Network Ltd.
SDEN wants to extend its heat network from the edge of the New Mill Quarter with a 600-metre-long underground pipeline running to the Clarion energy centre at Riverside.
Selling a heating system that existing residents don’t really need, just to help a failing council business have a better bottom line, might seem dodgy enough. But were any of Clarion’s residents at Riverside to hear from their neighbours at New Mill Quarter about their heating problems on the SDEN network, and their soaring heating bills, it would make the whole proposal a very hard “sell” to the public.
This proposed pipeline extension is reckoned to cost £2.2million, to be funded by a government grant, plus a connection charge to Clarion of around £300,000, and a loan of £1million of more public money from Sutton Council.
But despite promises by SDEN to consult with residents and stakeholders, nobody in the area appears to know what is coming their way – neither the Clarion residents nor the residents living along the footpath the pipeline will take.
To reduce costs, SDEN is proposing that two large insulated water-carrying pipes should cross the River Wandle above ground, next to a pedestrian footbridge in a local beauty spot on Riverbank Way. It seems that SDEN and Sutton Council only want to tell residents what will happen to their local beauty spot after planning permission is granted. Sutton Council, of course, is the planning authority.
The pipeline is then expected to travel underground up Culvers Retreat, a quiet road with sheltered housing, and on to Riverside.
Warning message: Councillor Nick Mattey on the bridge where SDEN wants its pipeline gantry to cross the River Wandle
Nick Mattey, the independent councillor for Beddington, has been a long-term sceptic about the failed business model for SDEN – he even spent thousands of pounds of his own money to force the council to release its original business plan for the heating network, which brought a damning report from CIPFA, the local councils accounting authority.
CIPFA found “below standard” levels of governance in evidence surrounding the establishment of the heat network, which was set up to “greenwash” the building of the Viridor incinerator at Beddington Lane.
Visiting the pipeline route and after talking to residents living nearby, Mattey has gathered feedback that suggests the SDEN plan is speculative and based on very poor data.
The planning application has just gone in, but residents have never been approached or advised about the pipeline by the council or SDEN.
There has been no equality impact assessment for the residents of the Riverside estate. Sutton Council and SDEN appear to want to ignore this essential step on the basis that their only relationship is with Clarion, as its bulk heat supplier, and not with the residents, even though those residents live in the borough.
Mattey wrote to SDEN’s managing director, David McIntyre, asking him to justify the somewhat speculative turnover figures in his business plan – which is being used to justify the government grant and the £1million loan from the council.
What Mattey got back – in error – was an exchange of emails between McIntyre and Richard Simpson, the council’s finance director, which betrayed the council’s role in the deal, and its complete lack of interest in the impact of the scheme on the residents of Riverside.
SDEN is basing its business plan on energy requirements dictated by Clarion.
Getting ‘otter on Otter: Sutton Council’s SDEN is looking to sell expensive heating that residents don’t really need
Mattey has discovered that residents only pay for the usage of the heat and hot water, and many say they only paid around £300 a year in heating bills. They have no standing charge. “Even if the average across the estate was £600 per property, it would fall short of that was needed for SDEN’s business to be viable,” Mattey claims.
“The properties are incredibly well insulated, but the way heat is used seems bonkers,” says Mattey.
“In the middle of a cold December day I was standing in a communal area, and the temperature was 28 degrees. I was told by many residents that parts of the building were so warm that the heat was effectively free and they didn’t need to turn their heat on. People had their windows open to cool their properties.
“You can’t base a serious business on scenarios like this. Any usage figures provided by Clarion to SDEN are based on a system that clearly is not running the way it was designed to.”
These inconsistencies may underpin the six-year negotiation with Clarion. Things seem not to have run smoothly, perhaps with Clarion waiting for SDEN to resolve its long-standing and well-deserved poor reputation for system failures.
Many residents also told Mattey that the heat exchangers in the Riverside properties were prone to breakdown and that Clarion’s service agent, Smith and Byford, was often unable to get parts to make repairs. One resident’s heating had been broken for more than a month.
Another huge risk is the source of the hot water to be supplied by SDEN to Clarion. SDEN relies on hot water generated using landfill gas at Beddington Farmlands. The landfill gas is the highly toxic methane greenhouse gas produced by millions of tons of decomposing organic material dumped in the landfill between 1997 and 2015.
Its designation as a “green” source of energy has always been criticised for being misleading. Methane has up to 80 times the warming power of carbon dioxide.
And, in 2022, Viridor sold the landfill site to Frank Solutions, which bought out Viridor Waste Management and renamed the business Valencia Waste Management.
Greenwashed: the Viridor incinerator is still not hooked up to SDEN’s heat network
So Viridor is no longer the owner of the landfill gas nor its engines. But SDEN’s contract for the supply of landfill gas remains with Viridor. So Viridor subcontracts the supply of gas to Valencia, meaning that the whole SDEN business is based on a non-direct relationship with the supplier of the energy.
This was admitted by SDEN’s McIntyre at a recent meeting of the Sutton shareholdings board. Mattey asserts that this indirect business arrangement is too risky to justify the £1million loan by Sutton Council.
“Sutton Council is proposing High Court enforcement action against Valencia Waste Management because Valencia has failed to restore the Beddington Farmlands,” Mattey says.
“Yet we are relying on Valencia to continue to sell its landfill gas to Viridor to sell to SDEN, owned by the council that is suing it. It’s a worry.”
The council loan to SDEN is likely to be signed off eventually by Richard Simpson, who when he was finance chief in Croydon oversaw highly dubious, multi-million-pound loan arrangements between the council and its wholly owned company – in this case Brick by Brick – which now seems likely to see a complaint filed about his conduct to CIPFA.
Inside Sutton has discovered another possible issue in the SDEN-Virdor-Valencia relationship. In its 2022 accounts, Valencia stated that when it acquired the Viridor assets, its “landfill gas assets and operations were transferred to a separate legal entity, Valencia Energy Ltd, to allow each company to solely focus on its core operational activities. Arms-length contracts have been entered into for any inter-company services that are required.”
Silent: LibDem Bobby Dean MP has kept very quiet about the council’s dodgy heating network coming to his neighbourhood
That could mean SDEN is effectively relying on a chain of three companies to supply its energy. And, as McIntyre has admitted, there are still no plans to connect SDEN to the Viridor incinerator, which was supposed to be the core heat supply in the original, flawed business plan. The landfill gas option is much cheaper and will be used for as long as possible.
Mattey remains concerned. “I wrote to my MP, Bobby Dean, quite some time ago and have not even received an acknowledgment.”
Mattey’s main annoyance lies in the fact that the Riverside residents know nothing about the proposed change in heat supply, or how it might affect them. “Residents are totally unaware of what’s happening, and that a local beauty spot is going to be defaced by an ugly gantry carrying hot water pipes whose sole purpose is to justify the existence of SDEN. The consultation will be a sham.”
At the recent meeting of the Sutton shareholdings board, many of the most sensitive topics concerning the extension of SDEN to the estate were only discussed in secret session. Whether the members of tonight’s strategy and resources committee will vote for a £1million loan on the basis of secret discussions in another committee remains to be seen.
There’s still a smell around SDEN, and it isn’t landfill gas.
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
FREE ADS: Paid-up subscribers to Inside Croydon qualify for a free ad for their business, residents’ association or community group, just one of the benefits of being part of our online community. For more information about being an iC subscriber, click here for our Patreon page
PAID ADS: To advertise your services or products to our near 10,000 weekday visitors to the site, as featured on Google News Showcase, email us inside.croydon@btinternet.com for our unbeatable ad rates
- If you have a news story about life in or around Croydon, or want to publicise your residents’ association or business, or if you have a local event to promote, please email us with full details at inside.croydon@btinternet.com
- Our comments section on every report provides all readers with an immediate “right of reply” on all our content. Our comments policy can be read by clicking here
- Inside Croydon works together with the Bureau of Investigative Journalism, as well as BBC London News and ITV London
