Concerns about competition and fairness surrounding Opportunity Sutton Limited

- its relationship with Viridor and any potential developers of Felnex

Concerns

  1. London Borough of Sutton used the original Fichtners report into a devolved energy network in the judicial review to justify an incinerator. The report was ludicrously over optimistic but was accepted on face value.
  2. Establishing a heat network became a political imperative for Sutton Lib Dems   they believed that opposition to the Viridor incinerator might be mitigated by a heat network.
  3. Viridor needed a heat network to work as none of their incinerators has so far heated a single dwelling.
  4. Sutton Council  made wild claims about the heat network and will face a massive loss of credibility if it fails. (19,000 homes to be connected slashing CO2 emissions by 30%)
  5. Opportunity Sutton Limited was  registered before planning permission was granted for an incinerator showing predetermination
  6. Opportunity Sutton limited was created for the sole purpose of delivering heat from Viridor ERF to Felnex by hot water pipes. Opportunity Sutton limited is controlled by the London Borough of Sutton  An obvious conflict of interest when a council attempts to make money from a business opportunity created after giving planning permission for an incinerator and a housing development
  7. Viridor  have given £100,000  to   Sutton Council towards   a feasibility study into examining the business case for selling waste heat from the Viridor incinerator to residents of the Felnex development. They are unduly influencing the choice of the source of heat,
  8. Failure to comply with the requirements of  The Future of Heating:Meeting the challenge DECC publication 2014

Glossary of Terms 

  • SLWP the  South London Waste Partnership
  • EfW Energy from waste Plants
  • OSL Opportunity Sutton Limited Opportunity Sutton Limited a dormant company created in 2012 whose object is to sell heat energy to domestic and industrial customers. The company is  controlled By the London Borough of Sutton
  • Viridor a preferred supplier  of waste disposal services  to  the  South London Waste Partnership
  • ERF energy Recovery Facility. A term used by Viridor and the London Borough of Sutton to describe  an unsorted  waste  incinerator whose principle function is to burn rubbish
  • Beddington Lane a 1.5 mile long road within the London Borough of Sutton that has operating  or will have operating 12 EfW plants within the next 4 years
  • 79-83 Beddington Lane  a waste transfer site originally granted permission in 2011 to operate   a 30,000 tonne a year wood burning  plant operated by a company called Bioflame Limited
  • LRRE London Recycling & Renewable Energy, a limited company granted permission by the London Borough of Sutton in 2014 to build a 150,000 tonne per year synthetic gas plant burning recovered solid waste sourced from a 30 mile radius it will to generate heat and electricity at 79-83 Beddington Lane.
  • Felnex   a 7.8  Hectare  development of 725 dwelling  in Hackbridge to be built to very high levels of energy performance   requiring on average only 4400 KWh of heat energy per year  per home for heating and hot water
  • Savills PLC  a  global estate property company that acted as agents in the sale of 79-83 Beddington Lane to LRRE and are agents for the Felnex development of residential and commercial property
  • The Viridor ERF a 302,000 Tonne a year capacity  incinerator   due to be  burning  trade waste  and municipal solid waste  sourced  from SLWP Opportunity Sutton Limited a dormant company created in 2012  whose object is to sell heat energy  to domestic and industrial customers  . The company is  controlled By the London Borough of Sutton
  • SDEN the Sutton Devolved Energy Network a district heating system that will transfer   heat energy from the Viridor Incinerator through a system of pipes to the Felnex Development.

Issues surrounding Opportunity Sutton Limited

  • Lack of transparency, in the aims and objectives of OSL.
  • Possible abuse of its monopoly heat supply role in supplying Felnex customers.
  • Possible overcharging of Felnex Residents for heat supplied  through the  SDEN
  • Lack of any evidence of   environmental benefits resulting from the activities of Opportunity Sutton Limited.
  • Lack of any evidence of claims that Opportunity Sutton  will help eliminate fuel poverty
  • Lack of any  data  on the cost or feasibility of extending the SDEN beyond Felnex in Hackbridge
  • No clear explanation on why Viridor chosen as the heat supplier.
  • No explanation of why  electricity  sourced from   Viridor , LRRE or other generators were  not considered as an alternative to using hot water pumped from the Viridor Incinerator
  • Lack of impartiality and objectivity in choosing the most cost effective and sustainable way to provide heat to Felnex.
  • Possible conflicts of interest  namely  that council that can approve  a planning application  for  a large housing development and  then put itself forward as the sole  supplier  of heat energy to that housing development
  • No provision for providing cooling in summer or avoiding swingeing standing charges for unwanted heat,

Points of Concern 

  1. In his ruling on whether to allow Mr Sasha Kahn had a right to a judicial review in Mr Kahn’s action to stop the Viridor ERF, the Honourable Mr Justice Collins said: “Despite lengthy attempts to show that this claim totally lacks merit on all grounds, I am satisfied that, save for Ground 2 (legitimate expectation) in respect of which I refuse permission, the claim is arguable. “The possible conflict of interest in the defendant’s roles and the contractual relationship with Viridor is all too obvious,” continued Collins.
  2. In light of the judges concerns and with the value of hindsight was it wise for Opportunity Sutton Limited to be created with the sole purpose of supplying heat from the Viridor ERF to Felnex?
  3. The Judge in giving permission for a judicial review over the Beddington ERF was worried about the links between LBS and Viridor, and conflicts of interest .What steps has LBS taken to ensure that a competitive tendering process has taken place to ensure that the Opportunity Sutton limited district heating scheme can buy and supply energy from whoever it wants at the best possible prices to sell to residents of Felnex?
  4. Given that the first objective of  a council is to look after the well being of its residents, what steps has the council taken to bring in industry leaders in sustainable energy to take an impartial view in  choosing a sustainable and low cost solution to providing heat to Felnex residents?
  5. Councillor Jayne McCoy has told the Sutton Guardian   “Anybody would be able to set up a commercial energy company” in the area should they wish. „There are a set of circumstances happening and there is an opportunity to take advantage of it. It’s an environmentally friendly thing to do.” With this in mind have the developers of Felnex gone through a competitive tendering process to find best value for residents in choosing a sustainable energy company?
  6. Councillor McCoy has said, “There is an opportunity to take advantage of it. It’s an environmentally friendly thing to do” Is there any data to support this statement? What is the environmental benefit of say using heat from hot water as opposed to say electricity ? Were any other schemes considered  outside of buying heat from Viridor and if so what were the conclusions ?
  7. When was it decided that the scheme to supply heat to Felnex through Solar panels and heat pumps as given to the GLA by the LBS abandoned in favour of buying heat from Viridor?
  8. What manufacturers of district heating schemes were contacted before the decision was taken to opt for linking Felnex to the Viridor ERF.
  9. What would be the benefits in reduced CO2 emissions of the SDEN  using heat from Viridor over say a gas fired district heating scheme or buying electricity from Viridor.?
  10. Did Viridor give LBS £100,000 to investigate the feasibility of creating a district-heating scheme for Felnex?
  11. If LBS were given £100,000 was this money given for an independent study where officers were free to consider any heating scheme for Felnex?
  12. If LBS have received £100,000 from Viridor would Viridor have reasonably expected that after the study that they would be the chosen supplier of heat,
  13. Would most impartial observer’s  people believe that if this large amount of money given by Viridor  could prejudice an impartial investigation into selecting the best and most competitive  district heating schemes?
  14. How much time is given to training officers and members of LBS on ensuring that all tendering for LBS business is fair  and complies with government and EU regulation regarding competition
  15. How much money has the council been given in total  or paid out in fees to consultants or received in grants so far in  order to become an energy supply company  ?
  16. Will the money the council has spent in consultant’s fees and research into the district heating scheme be recovered from Opportunity Sutton limited? If so over which period of time will it be repaid if not why not.
  17. If LBS officers carryout work on behalf of Opportunity Sutton limited will a clear scheme of hourly charges be established,
  18. If Opportunity Sutton Limited is to be run as a business will it be borrowing  money  to  finance the construction of a district hating scheme in its own right or will the council be borrowing the money on behalf of opportunity Sutton Limited.?
  19. Would not the need for the    borrowing required to finance   this pumped hot water scheme be unnecessary if Opportunity Sutton Bought electricity from the Viridor or LRRE and sold it to Felnex residents for heating?
  20. When the above option was considered if at all and if it was why was it rejected.
  21. Have LRRE been asked to tender for the supply of heat or electricity for Felnex if not why not?
  22. As Beddington is the place where the rubbish is being burnt why are the residents getting no benefits from these two incinerators? Would it not be a good idea to purchase electricity at a preferential rate from the Viridor Incinerator and supply it  to Beddington and Hackbridge residents
  23. Why is  the council is prepared to borrow £3.5 million to  fund a  fledgling company  with no expertise in energy supply
  24. Would the council be prepared to borrow £3.5 million to help other local companies with no track record in their chosen field of operation?
  25. Why was it decided the officers rather than members should become directors of Opportunity  Sutton Limited
  26. Would Viridors planning application for its incinerator   have failed if it could not prove that it could supply heat to local homes and businesses?
  27. Were the London Borough of Sutton the only body that has shown any interest in selling waste Viridor heat to residents and businesses?
  28. If this was the case why did the LBS think that it could run a business that was financially viable?
  29. Did the London Borough of Sutton decide to become an Energy supply company because this was the only way Viridor could get planning permission to build its incinerator on Metropolitan Open Land?
  30. How many members of the HEB committee that passed the SDEN   were aware before or during the committee meeting that?
  31. The Felnex requirement for social housing was reduced from 20% to 17%.
  32. Viridor gave LBS £100,000 for a study into Sutton becoming a heat supply company.
  33. Opportunity Sutton Limited was formed with the primary function of only selling Viridor waste heat.
  34. That it appears that no other heating schemes were considered apart from hot water from Viridor.
  35. I would welcome the chance to discuss what I see as conflicts of interest and possible suppression of fair competition.

Kind regards

Councillor Nick Mattey