June 2008 Consultation on Thames Water s Draft Strategic Proposals for Sludge Management

June 2008 Consultation on Thames Water s Draft Strategic Proposals for Sludge Management

Ltd _ EXECUTIVE SUMMARY Background Thames Water Utilities Ltd. (Thames Water) has developed high-level strategic proposals for sludge management/disposal in our region for the 25 years to 2035. The decision to carry out the strategy development was taken for the following reasons: (1) to provide a broad framework for our specific investment proposals, particularly in the period 2010-2015 for the periodic review of our charges in 2009, and (2) to review the appropriateness of our current strategy (i.e. wherever possible recycle sludge to land) going forward, given the increasing costs and regulatory/other constraints arising from this outlet. Thames Water further decided to commission a voluntary, independent Strategic Environmental Assessment (SEA) of our proposed long-term strategy, carried out by consultants, Entec. This was to ensure that potential environmental, economic and social impacts were properly understood and accounted for in all stages of the strategy development. A key benefit of completing the SEA is that it involves formal stakeholder consultation and we were keen to ensure that consultation was carried out concurrently with the development of our proposed strategy. This approach was reviewed and approved by the Executive Management Team of Thames Water. In developing our proposals, the following objectives were adopted: To manage sludge so as not to endanger human health or harm the environment, by ensuring that all regulatory and legislative controls are met; To establish long term, secure and sustainable outlets; To ensure that sludge is managed on behalf of customers in a cost-effective and efficient manner, minimising the potential for impact from transport and odour; To have due regard to non-statutory Codes of Practice and industry guidance; To use the latest available information in formulating and implementing the strategy; and To encourage stakeholder participation in the development of the strategy. The strategic proposals cover all wastewater sludges produced at Thames Water sites and consider predicted sludge production up to 2035, over a 10 year and 25 year horizon. Current Strategy In the Thames Water region the quantities of sludge produced have risen in recent years. Similar increases are common to all regions in the UK and elsewhere in Europe, arising mainly as a result of population increases and from more stringent levels of wastewater treatment. The current sources and quantities of sludge produced are identified in greater detail in Section 2 of the full strategy document. Thames Water has always sought to adopt a variety of sustainable, beneficial and costeffective solutions to sludge management. The breakdown of outlets in 2006 is summarised in Figure 1 below.

Ltd _ Figure 1. Thames Water Outlets for Sewage Sludge 2006 1% 1% Agriculture 36% Thermal with energy recovery Compost 62% Land Restoration A number of issues are impacting on the land recycling outlet and these have, in part, driven the need to review and revise the company-wide sludge strategy. The most notable constraints (legislative and practical), which affect potential outlets, are considered more fully in Section 3 of the strategy document but include: A gradual loss of available landbank in the region due to the reluctance of some parts of the supply chain to accept products grown on land treated with sludge; The impact of the Nitrates Directive (Nitrate Vulnerable Zones Regulations) that has reduced the volume of sludge able to be applied to most of the land in our region, with resulting implications on the available land-bank; and In addition, in the future, it is expected that there will be increasing competition for the available landbank from other fertilisers and organic resources such as composted material from Local Authorities ADAS/Grieve Strategic consultants were commissioned to complete a detailed review of landbank availability to inform our proposals, a summary of which is provided in Section 4 of the strategy document. Strategic Proposals General The main conclusions of our strategic vision are to favour processes that (a) maximise energy recovery and (b) minimise sludge volumes. Where there is suitable land bank availability, utilising the recycling to land outlet remains the favoured option. To help protect this outlet we anticipate investing in sludge treatment to improve product quality e.g. reduced odour and dry solids. However, in predominately urban areas, the use of thermal processes with energy recovery may be more appropriate, thus avoiding the increased environmental impact and costs of transporting the treated sludge to land. Further, more detailed conclusions include: Processes that enable the efficient extraction of energy from sludge should be adopted e.g. the installation of enhanced digestion or best practice thermal with energy recovery; The minimisation of vehicle movements on and off sites is also an important factor in identifying our preferred options. Reducing lorry movements will provide benefits in

Ltd _ minimising carbon footprint and environmental impacts through reducing fuel use and reducing the potential for nuisance to our customers; Techniques that minimise sludge volumes will also be adopted and this will provide benefits through: a) Reducing vehicle movements if the sludge is being recycled to land; b) Minimising the need to store sludge hence reducing the potential for odour nuisance; and In addition, should we be required to find alternative disposal routes as recycling to land becomes more restricted, then volumes for disposal will have to be minimised. In the longer term, the benefits of carrying out co-digestion with other wastes (e.g. municipal wastes) are attractive, particularly from the point of view of increasing energy production. However, the potentially negative impacts of increased traffic movements required to transport additional material on site and the increased operational complexity involved, would need to be assessed on a site-by-site basis. 10-year strategic recommendations Convert our main sludge treatment centres, where the primary disposal route is recycling to land, to enhanced digestion to increase energy production and minimise solids. Our preliminary view of sites that are projected for the installation of enhanced digestion in the next 10 years include Banbury, Basingstoke, Beddington, Bracknell, Camberley, Crawley, Didcot, East Hyde (Luton), Hogsmill, Little Marlow, Oxford, Riverside, Swindon and Witney. However, this selection will be reviewed on the basis of more detailed site-specific assessments. Although recycling to land remains our favoured option, we plan to reduce our current dependence on land bank in view of potential constraints on this outlet. This will be achieved in the short to medium term through solids reduction as a result of improvements to digestion. The impact this will have on our outlets is shown in Figure 2. Figure 2. Predicted Outlets for Sewage Sludge - 10 year recommendations* 1% 1% Agriculture 42% Thermal with energy recovery Bioenergy crops 56% Land Restoration * There is anticipated to be a relative increase in the proportion of sludge being treated by the thermal process due to increase in sludge production in East London based on population growth including urban regeneration. The reduction in the proportion of sludge recycled to land is as a result of solids reduction through enhanced digestion

Ltd _ Provide additional sludge treatment capacity for our large East London treatment works at Beckton and Crossness to deal with population growth and refurbishment of existing assets. This is likely to be additional thermal capacity with energy recovery. Towards the end of the 10-year period (2017-2018) we will undertake a further strategic review of the current capacity of treatment/outlets employed, location and number of sludge centres in the Region, in order to inform the next 15-year investment programme. 25-year strategic recommendations Our strategy for the period 2020-2035 will be informed by the outcome of an updated strategic review and on assessment of landbank availability. However, it is anticipated that our main proposals will be to: o Maintain recycling to land where the landbank availability allows o Introduce thermal units with energy recovery at large urban sites impacted by land-bank constraints o Introduce co-digestion with municipal waste where capacity exists or it can be deployed Further development of sludge management proposals It should, however, be stressed that these preferred treatment/outlet options should not be regarded as site-specific recommendations. For developments at specific sites, the preferred options would need to be reconsidered in order to check that the assumptions made here are still valid. In progressing favoured options, it is recognised that some of these may fall within the scope of the Environmental Impact Assessment (EIA) Regulations. This high level assessment of sub-regional areas will contribute to future assessments but further detailed work on a sitespecific basis may be required to take any preferred option forward.

CONTENTS 1. INTRODUCTION 8 1.1 THE ROLE OF THAMES WATER 8 1.2 WHAT IS SLUDGE? 8 1.3 PURPOSE OF THE STRATEGIC PROPOSALS 9 1.4 STRATEGIC OBJECTIVES & SCOPE 10 1.5 BUSINESS PLANNING 2005-2010 11 1.6 METHODOLOGY 11 1.7 INTEGRATION OF THE STRATEGIC PROPOSALS WITH THE SEA 12 2. SLUDGE PRODUCTION, TREATMENT CAPACITY & HEADROOM 14 2.1 SLUDGE LOADINGS 14 2.2 TREATMENT CAPACITIES 15 2.3 SLUDGE PRODUCTION 15 3. REGULATION OVERVIEW 19 3.1 INTRODUCTION 19 3.2 SUMMARY OF KEY LEGISLATION AND NON-STATUTORY GUIDANCE 19 3.3 REVIEW OF PLANS AND PROGRAMMES 22 4. TREATMENT OPTIONS, CURRENT & FUTURE OUTLETS FOR SLUDGE 23 4.1 AGRICULTURE 23 4.2 NON-AGRICULTURAL OUTLETS 28 4.3 ENERGY BASED OUTLETS 30 4.4 LANDFILL 32 5. OPTIONS ASSESSMENT METHODOLOGY 34 5.1 ASSESSMENT OF OPTIONS 34 5.2 SELECTION OF POTENTIAL TREATMENT/OUTLET OPTIONS PHASE 1 34 5.3 SELECTION OF POTENTIAL TREATMENT/OUTLET OPTIONS PHASE 2 35 5.4 FURTHER DEVELOPMENT OF SLUDGE MANAGEMENT PROPOSALS 37 6. DETAILED ASSESSMENT OF SUB-REGIONAL AREAS 38 6.1 INTEGRATED IMPLEMENTATION STRATEGY FOR EAST LONDON 38 6.2 EAST LONDON (THERMAL DESTRUCTION WITH ENERGY RECOVERY) 38 6.3 EAST LONDON (DIGESTION) 41 6.4 MOGDEN (WEST LONDON) 43 6.5 MAPLE LODGE 45 6.6 SOUTHERN REGION 47 6.7 WESTERN REGION (DIGESTION) 49 6.8 SOUTH-EAST REGION (LIME) 51 6.9 WESTERN REGION (LIME) 53 6.10 WEST LONDON 55 6.11 NORTH LONDON 57 6.12 NORTH EAST PROVINCES 59 7. MAIN CONCLUSIONS 61 8. GLOSSARY 63 APPENDICES

Ltd _ 1. INTRODUCTION 1.1 The Role of Thames Water Thames Water Utilities Ltd (Thames Water) is the UK s largest regulated water and wastewater services company based on number of properties served. We have over 8 million clean water and over 13.5 million sewerage customers, which is nearly a quarter of the total population of England and Wales. The region within which we provide regulated water and sewerage services occupies about 13,750 km 2 and encompasses more than 9% of the total area of England and Wales. Thames Water serves London with the consequent very high concentrations of traffic and economic activity around the clock and our regulated business area reaches as far as Cirencester in the west, Dartford in the east, Banbury in the north and Haslemere in the south. We have a responsibility to supply clean, safe drinking water and to collect, treat and safely return society s wastewater to the environment. Thames Water is a privately owned business with a duty to deliver all of its activities in compliance with relevant regulations and at a cost that delivers value to our customers. The supply of water to our customers involves abstracting water, treating it to strict drinking water quality standards and then distributing it to customers premises through our network of pipes or mains. Water is abstracted from surface sources, such as rivers or via reservoirs, or from underground sources, via wells and boreholes. We use reservoirs to store untreated raw water and underground service reservoirs for treated water, in order to maintain supply. Providing sewerage services involves the collection, treatment and disposal of sewage. Sewage is collected through our network of sewers and moved, by gravity or pumping, to sewage treatment works where it is treated. The bulk of Thames region s sewers are combined surface water and foul water systems, taking wastewater from domestic, trade and commercial customers as well as runoff from roads and roofs. Collection and treatment of these wastewaters is regulated through the Urban Wastewater Treatment Directive and associated Regulations. The relevant legislative requirements have driven extensive investment in wastewater treatment in recent years to ensure that appropriate treatment is delivered for the vast majority of Thames Water region s population, with the remainder being largely individual settlements with private septic tank arrangements. In addition to this, trade inputs to the wastewater system have been subject to increasingly stringent, rigidly enforced trade effluent discharge consents in order to protect both the quality of the water discharged from wastewater treatment works and to maintain the quality of the residual sludge. 1.2 What is sludge? Sludge is produced as an unavoidable natural by-product of the processes used in both wastewater treatment works and water treatment works, and comprises the solids removed during the treatment processes. 1.2.1 Wastewater Treatment Works Sludge Sludge from wastewater treatment works is primarily the organic by-product of the biological treatment of wastewater, formed during the settlement of the breakdown products of the treatment process. Wastewater treatment works operate biologically active processes and sludge is the natural product of this process. It should be emphasised that sludge is not untreated faecal matter, nor is it an industrial or hazardous waste. When appropriately treated and managed it does not present a risk to the environment or human health and it can be safely recycled to provide a benefit to society and the environment - sewage sludge resulting from the treatment processes is predominately recycled to land, acting as a fertiliser or incinerated and used for power generation. 8

Ltd _ Thames Water treats around 2,8000 million litres of sewage per day from households, businesses and industry in the Thames Water region. There are two basic forms of sludge produced from the treatment of wastewater raw primary sludge (consisting largely of faecal material) and secondary sludge (a living culture of organisms that help remove contaminants from wastewater before it is returned to rivers or the sea). Wastewater is initially collected as a liquid containing typically 0.1% dry solids (DS). It is then dewatered to typically 3-5% DS for efficiency of treatment and transported to one of 37 sludge treatment centres. Here the sludge is further treated via mechanical, biological or chemical processes prior to recycling. Typically Thames Water will manage liquid sludge at between 1% and 5% DS and caked sludge at around 25% DS. The sewage sludge is transformed into treated products (also known as biosolids) using a number of treatment processes such as digestion, thickening, dewatering and lime stabilisation. With respect to the recycling of sludge to agricultural land, two levels of sludge treatment are defined: Conventional treated sludge - Processes that are capable of reducing the microbiological content of sludge by 99%. The most common form of treatment is anaerobic digestion, where sludge is digested at a temperature of around 35 o C for several days, followed by a further period of maturation. Enhanced treated sludge - Processes that are capable of virtually eliminating (99.9999% removal) any pathogens that may be present in the sludge. Processes such as thermal drying the sludge, lime treatment or pasteurisation followed by digestion are capable of achieving this. Whilst the drive to improve wastewater treatment standards has led to a significant improvement in the quality of Thames region s streams and rivers, this has in turn resulted in wastewater treatment works producing more sludge. As this drive for water quality improvement is continuing, in addition to anticipated increases in the population served, we expect the quantity of sludge produced in the Thames region to continue to increase for the foreseeable future. 1.2.2 Water Treatment Works Sludge Water treatment produces much smaller volumes of sludge than wastewater treatment - around 19,000 tonnes dry solids annually. With respect to water treatment processes, coagulants are added to the untreated water that assist silt and other fine particles to settle out. The resulting water treatment sludge is thickened to around 2-3% DS and then dewatered to a 20-25% DS cake by pressing or centrifuging. Much of this sludge is discharged to sewer and treated within a wastewater treatment works therefore, water treatment works sludge will not be considered separately but as part of the Sludge Strategy for wastewater treatment sludge. Water treatment sludge is a very different material to sewage sludge being largely inert, but containing useful trace elements and carbon that are beneficial to soils, when the product is recycled to land. 1.3 Purpose of the Strategic Proposals These strategic proposals (the sludge strategy) have been developed to address the current and future requirements for the management of sludge in the Thames Water region. It will form a framework within which Thames Water s investment, operational and planning decisions will be made and takes into account key contextual factors including: Changes in the quantity of sludge produced; Regulatory requirements and changes in the way that legislation controlling current sludge outlets is implemented; and 9

Ltd _ The perception of sludge and the outlets employed by the public, regulatory authorities and commercial organisations. The strategy considers the quantities of sludge that will be produced by Thames Water as a consequence of wastewater treatment processes up to a planning horizon of 2035. Thames Water has responsibility for the management of the sludge produced in the course of these wastewater operations. As such Thames Water seek to manage the production, treatment and recycling of sludge by adopting sustainable, secure and cost effective methods and outlets. In developing an appropriate strategy, it must be recognised that sludge production is a direct consequence of human activity. Equally the outlets selected for the recycling or disposal of sludge can also have direct or indirect effects on society. It is therefore essential that the public, regulatory authorities and other stakeholders have an understanding of the issues affecting sludge management and can contribute to the approach to finding the most appropriate solutions to the management of sludge in the Thames region. In order to develop sustainable, secure and cost-effective solutions, this strategy aims to look beyond immediate operational issues and will inform long-term strategic decisions and investment plans. However, it must also be recognised that circumstances may continue to change in future and therefore the strategy will be reviewed at appropriate intervals to ensure its continued relevance. 1.4 Strategic Objectives & Scope Thames Water treats large volumes of sludge on a daily, weekly, monthly, annual basis. The volumes are such that only tried and tested technology can be used as the waste stream cannot simply be switched off given its origin, or stored for a long periods of time given its nature and volume. Thames Water cannot expose itself to the risk of investing in unproven or innovative technology, particularly in the short term, which may not work. Equally, Thames Water is subject to financial regulation by Ofwat. The regulator sets the charges Thames Water may make to its customers. This has regard to the capital investments Thames Water needs to make but Ofwat will broadly favour proven affordable solutions. The consequence of the nature and volume of the waste stream, and the financial regulation Thames Water is subject to, means it can only invest in proven, robust and affordable treatment/outlet options. In developing and implementing the strategy, Thames Water will adopt the following strategic objectives: To manage sludge so as not to endanger human health or harm the environment, by ensuring that all regulatory and legislative controls are met; To establish long term, secure and sustainable outlets; To ensure that sludge is managed on behalf of customers in a cost effective and efficient manner, minimising the potential for impacts from transport and odour; To have due regard to non-statutory Codes of Practice and industry guidance; To use the latest available information in formulating and implementing the strategy; and To encourage stakeholder participation in the development of the strategy. The strategy covers all wastewater sludges produced at Thames Water sites and considers sludge production up to 2035 over a 10 year and 25 year horizon. We further decided to commission an independent, voluntary Strategic Environmental Assessment (SEA) of our 10

Ltd _ long-term strategy (carried out by the consultants, Entec) which has been completed concurrently, with the plan to ensure that the environmental, social and economic effects of the strategy, and its alternatives, are properly evaluated. In addition, ADAS/Grieve Strategic were commissioned to complete a detailed review of landbank availability (the area of agricultural land available for recycling treated sewage sludge) to inform our strategic proposals. It is important to note that this strategy does not attempt to develop site-specific recommendations but rather to set out our broad preferred approaches at a sub-regional level. 1.5 Business Planning 2005-2010 Our investment programme for 2005-2010, agreed with our economic regulator Ofwat in 2004, includes no specific investment on sludge treatment assets other than that required to maintain existing asset condition. We did, however, set out a broad strategy for sludge management and this is set out below. The strategy set out here updates this. The Thames Water Business Plan for 2005 2010 included the following main sludge related elements: Our strategy, in line with Government policy, is to focus on recycling to agricultural land. Currently we recycle around 60% of sludge to agricultural land with the remainder put to beneficial use through the generation of energy in our two Sludge Powered Generators. We have put in a great deal of effort over the past 3-4 years (alongside other companies and Water UK), to try to improve communication with our stakeholders to ensure that the recycling outlet remains available to us. Indeed, the focus of our 2000-2005 investment was to ensure that the agricultural land outlet remained viable. We do not envisage a major change in our use of the recycling to land option in the short term. However, it is clear that this outlet remains vulnerable to external pressures and, in particular, to media scares and individual stakeholder concerns, regardless of the good science and safety record underpinning the practice. Thus, whilst we remain confident in the viability of the agricultural outlet, we are reviewing alternatives with a long-term aim of reducing our dependence on this outlet. Few feasible alternatives are currently available. However, the most promising with respect to the sustainability of the outlet and relative cost, is the thermal of sludge with energy recovery. We have had preliminary discussions on this subject with the major power producers in the UK and they did express an interest. Whilst it is technically feasible to co-fire sludge in a coal or oil fired power station, some issues remain to be resolved, notably in the design of suitable sludge reception facilities and the control of emissions from the plant. Discussions have indicated that it is unlikely to be cost effective to burn sludge in existing power stations, largely because of the expense of retro-fitting necessary emissions control equipment. Therefore we do not anticipate making extensive use of this outlet in the short term (before 2010). Investment will be made at existing wastewater treatment works and sludge treatment facilities to deal with additional quantities of sludge production. Where sludge treatment already exists, the level of treatment currently installed will be maintained. 1.6 Methodology The work undertaken to develop this Sludge Strategy has been structured to produce an analysis of potential outlets for sludge up to the 2035 horizon. A range of outlets have been identified and considered including: a) Those that are currently used or have been used in the past; b) Those that have been previously proposed as realistic outlets; and 11

Ltd _ c) Those that are commonly used elsewhere in the UK and Europe. For the purposes of developing this strategy, the range of potential outlets considered has been restricted to those that have the potential to form principal outlets. Potential minority, subsidiary or contingency outlets may then be considered in the context of the agreed overall strategy. In order to assess the risks associated with the range of outlets considered, options have been assessed with regard to their likelihood of providing a sustainable, secure, cost effective outlet over the life of the strategy. The methodology by which this has been carried out is described in more detail in Section 5. The strategy has been developed by considering a number of regional areas, due to the different circumstances across the Thames Water operational areas (e.g. in terms of sludge production, population distribution, topography, agricultural practices and current operational facilities). The defined regions and sludge production in each area are described in Section 2. The strategy development for wastewater sludges comprised the following key activities: Data gathering and validation, including analysis of; a) Existing and future sludge production b) Sources and existing outlet routes for Thames Water c) Constraints affecting potential outlets, including legislative, commercial, environmental and practical constraints; Identification of areas to be adopted for strategy development; Identification of the range of outlet options to be considered; Internal workshops to agree options and the method of assessing sustainability/security risk; Assessment of selected options, based on sustainability/security risk, using the information regarding potential outlets; Presentation of the results of the assessment for each area and production of strategy recommendations for each area; and A sensitivity analysis undertaken to double-check that the accepted methodological approach is appropriate. The methodology from the wastewater sludge treatment/outlet options assessment is detailed in Section 5 and the results from the assessment are summarised in Section 6. Appendix 4 details the sensitivity analysis undertaken. 1.7 Integration of the Strategic Proposals with the SEA The SEA process envisages early and continual, interaction between the preparation of the strategy and the SEA, from the generation of objectives through to scoping, assessment of impacts, consideration of alternatives and through to final reporting. A technical specialist from Entec was involved in developing and commenting on the methodological approach attached to the strategy from Summer 2007. Entec validated our method of assessment and provided supporting specialist advice on the operational performance of sludge management options not currently present within Thames Water's operational area such as pyrolysis and gasification. This assisted in providing a comparative strategic level assessment of the options within each sludge sub-region. Entec also helped facilitate an external workshop on 30th November 2007 to explain the SEA objectives, the scope of the study, and the intended approach to the assessment of impacts 12

Ltd _ attached to the options within the draft strategy. This allowed the objectives of both documents to be compared as detailed in section 3.2 of the SEA. The SEA has benefited the strategic proposals in that the compilation of the SEA assessment matrices (see Appendix C of the Entec SEA Environmental Report) has allowed the high level environmental performance of the initial preferred options to be assessed across the eleven sludge catchment areas. The scope of the SEA's objectives (see Section 3.2 of the SEA Environmental Report) has achieved consistent consideration of all aspects of environmental impacts, from biodiversity and landscape issues through to energy use & climate change. The SEA matrices will also be helpful to Thames Water in assisting future decision making within the life time of the Strategy and provide a point of reference to the development of specific proposals at particular locations. 13

Ltd _ 2. SLUDGE PRODUCTION, TREATMENT CAPACITY & HEADROOM Not all sludge is treated on the site of origin a number of sites have been designated as sludge centres which act as regional hubs treating both indigenous as well as imported sludge from nearby satellite sites. Due to day-to-day operational constraints, it is possible that sludge from satellite sites may be processed at a secondary location, sometimes through alternative treatment technologies. However, by calculating sludge loads from a population equivalent base for all sites, the net effect of this variation is zero. The location of our current sludge centres is illustrated in Figure 3. 2.1 Sludge Loadings Sludge loading is calculated using the per capita sludge figure of 80g sludge/head/day for standard non-chemically assisted treatment. This value is then adjusted depending on process type (Table 1). Table 1. Sludge loading design parameters per capita Type Total g/head/day Primary g/head/day SAS g/head/day Current Generic 80 Filters 73 73 0 Crude Sewage Activated Sludge 65 0 65 Settled Sewage Activated Sludge 80 48 32 Biological Nutrient Removal 80 45 35 Pre-Precipitation Filters 96 96 0 Simultaneous Precipitation Activated 92 48 44 Sludge Simultaneous Crude Activated Sludge 78 0 78 Pre-Precipitation Activated Sludge 100 75 25 Wastewater sludge loading figures in Table 2 are listed per sludge centre and are the sum of indigenous sludge and sludge imported from satellite sites. They are subdivided into the following treatment types and display sludge production from 2006 with expected growth until 2035: Mesophillic Anaerobic Digestion; Lime treatment; Thermal with energy recovery; and Composting. The quantities listed in Table 2 are considered to be sufficiently accurate for the development of the Sludge Strategy, but will be reviewed in more detail when considering future project feasibility and implementation at specific sludge centres. The quantities detailed in Table 2 are derived from Thames Water s Strategic Overview of Long-term Assets and Resources (SOLAR) database of current and projected population equivalents. Data in the SOLAR database comes from flow and load surveys carried out by Thames and Local Authority Development Plans, which detail projected population growth per area. It includes population equivalent data for trade effluent and cess loadings in addition to the residential and commuter populations. Future loadings until 2021 are based on Local Authority growth projections, taking into consideration such variables as new development and housing density. Data beyond 2021 has been linearly extrapolated to provide best future estimates. No specific allowance has been made for additional sludge arising from currently unknown changes in legislation, treatment standards, customer behaviour or other factors, such as the impact of Local Authority waste strategies. 14

Ltd _ 2.2 Treatment Capacities Digestion capacities are calculated as ranges, which give a conservative capacity and a stressed maximum available capacity to meet the required standards for the control of pathogens and provide acceptable product quality. This range is generated from a model that considers factors such as effective digester volumes; feed dry solids and hydraulic retention times; volatile solids loading from proportions of primary and surplus activity sludge; amount and type of secondary storage. It is clear from the figures that our current digestion capacity is limited and plants are operating at or close to their maximum. Lime treatment capacities are also expressed as a range. This is calculated on a known throughput over a normal 8-hour working day and a 24-hour working day. Assumptions are made on actual working hours based on down times associated with start up and shut down times, to give a range based on 8 hrs to 18 hrs operation per day. Sludge Powered Generator capacities are expressed as a range from a 24-hour 365-day operation, to a more achievable level, which incorporates maintenance shutdowns. 2.3 Sludge Production As a data check, the calculated sludge loading figures for 2006 were compared to the measured annual sludge mass removed from each site. It is important to remember that calculated sludge loading is a pre-treated annual mass and sludge hauled to land is a posttreated annual mass. A total value for 2006 actual digested sludge hauled to farm is expected to be between 45% and 60% of calculated pre-treated sludge mass. This takes into account known variables: Expected in digesters (35%); Consented solids in final effluent (calculated from known data); and An estimated +/- 16.6% combined error (+/- 15% sludge hauled to farm, +/- 5% percapita sludge loads and +/- 5% in SOLAR figures). For lime treatment, the mass of sludge recycled should increase by approximately 5% through lime addition. A total value for 2006 actual limed sludge hauled to farm is expected to be between 95% and 110% of calculated pre-treated sludge mass. This takes into account known variables: Consented solids loss in final effluent; and An estimated +/- 16.6% combined error (+/- 15% sludge hauled to farm and +/- 5% per-capita sludge loads and +/- 5% in SOLAR figures). 15

Ltd _ Table 2. Wastewater sludge loading figures per sludge centre* Sludge Centre AMP4 Conservative capacity (85% EDV & 5% DS) TDS/year Sludge Loading tds/year Sludge to Land tds/year Projected Sludge loads, tonnes dry solids per year (tds/year) 2006 2011 2016 2021 2026 2031 2035 2006 Thames Valley Mesophilic Anaerobic Digestion All sites capacities include AMP4 Upgrades Ascot 1,143 1,061 967 964 961 912 881 851 276 Aylesbury 7,804 5,273 5,552 5,866 6,157 6444 6762 7005 2640 Banbury 4,174 4,542 4,713 4,751 4,814 4877 4927 5020 1877 Basingstoke 5,567 5,768 5,957 6,112 6,257 6530 6757 6950 3432 Beddington 7,821 10,786 11,085 11,301 11,440 11549 11657 11882 4988 Bishops Stortford 3,171 2,399 2,844 2,906 2,970 3294 3517 3695 1909 Bracknell 4,158 3,697 3,683 3,820 3,971 4107 4225 4291 1562 Camberley 3,411 4,490 4,553 4,614 4,682 4749 4799 4858 2283 Chertsey (Cambi) 9,472 10,708 10,732 10,796 10,812 10818 10820 10876 4598 Cranleigh 886 505 498 494 493 493 491 487 142 Crawley 2,495 5,634 5,863 6,059 6,116 6534 6832 7070 1647 Deephams 26,515 27,148 27,493 27,730 28,122 28590 28885 29172 9028 Didcot 1,740 1,879 2,007 2,271 2,385 2495 2519 2724 1035 East Hyde (Luton) 3,463 4,711 4,839 5,144 5,364 5443 5506 5820 2428 Haslemere 591 468 467 464 460 459 458 456 109 Hogsmill 9,560 11,787 12,023 12,267 12,464 12586 12698 12929 4226 Maple Lodge 26,705 20,087 20,298 20,541 20,735 20802 20815 21103 9791 Mogden (Prepasteurisation) 82,733 58,797 60,322 61,474 62,470 64447 66080 67386 22039 Oxford 6,335 8,559 8,904 8,999 9,117 9233 9316 9530 4644 Reading (Prepasteurisation) 13,335 8,702 8,890 9,089 9,258 9422 9566 9738 3262 Rye Meads 22,604 16,927 17,843 18,627 19,361 20925 22198 23283 10514 Slough 12,103 11,140 11,360 11,437 11,500 11536 11548 11693 5710 Swindon (Acid 7,825 9,051 9,564 10,098 10,533 11103 11628 12075 6589 Phase Digestion) Wargrave 4,895 3915 4,166 4,372 4,555 4611 4629 4877 1720 Woking 2,686 2563 2,557 2595 2639 2681 2714 2732 811 Others 3676 Subtotal Digestion 268,509 240597 247180 252792 257635 264641 270226 276501 110936 Lime 8 hr operating capacity tds/year Basingstoke 2417 Farnham 4,942 5,942 6,159 6,335 6,481 6768 7003 7201 5077 Guildford 4,530 6,892 6,946 7,006 7,070 7151 7221 7281 9219 Earlswood 3,594 4,207 4,266 4,382 4,482 4578 4610 4713 3847 Fleet 2,471 4,410 4,491 4,495 4,486 4578 4631 4675 1958 Newbury 4,118 3,643 3,771 3,862 3,950 4037 4111 4210 4484 Bicester 1,498 1,652 1,722 1,797 1,856 1914 1965 2029 1093 Wantage Batch 2,548 2,567 2,668 2,755 2824 2865 2960 2003 Witney 1,498 3,439 3,593 3,655 3,686 3717 3813 3881 2223 Subtotal Liming 22,652 32734 33514 34199 34767 35567 36220 36952 32321 16

Ltd _ Composting Theoretical max tds/year Little Marlow 4,550 5,382 5,429 5,459 5,486 5638 5746 5833 2659 Sub total Composting 5382 5429 5459 5486 5638 5746 5833 2659 Sub Totals (Non-East London) 278712 286123 292449 297888 305845 312193 319286 145916 East London Mesophilic Anaerobic Digestion Long Reach 22,044 24,674 24,968 25,509 26,115 26689 27141 27553 9259 Thermal Destruction Design capacity if 100% operational tds/year Total sludge throughput 2006 (tds/year) Beckton 71,175 112,096 116,934 121,473 125,546 129146 134162 137710 49398 Crossness 38,325 56,940 57,487 59,382 61,243 62976 64313 65561 31733 Liming Beckton Batch 3310 Crossness 29,200 16467 Sub total East London 160,744 193,710 199,390 206,364 212,904 218,810 225,616 230,825 110,167 Waste Water Totals tds/year 472422 485512 498814 510792 524656 537808 550111 256083 *The quantities listed above are considered to be sufficiently accurate for the development of the Sludge Strategy and are a snapshot as of mid 2007. These will be reviewed in more detail when considering future project feasibility and implementation at specific sludge centres. 17

Figure 3. Thames Water Sludge Treatment Centres

3. REGULATION OVERVIEW 3.1 Introduction The production, treatment and consequent recycling, reuse or disposal of sewage sludge is controlled by a substantial amount of legislation. This legislation and non-statutory codes of practice and guidance are summarised below. This strategy will only consider legislation relevant for England, as the area of sludge production, consequent treatment and outlet is only likely to be within areas controlled by English legislation. It is possible for sewage sludge to be taken beyond the Thames Water region for treatment/disposal and, in theory, this movement is only limited by the distance involved. The legislation considered will impact sewage sludge at different stages of the process - the production/primary treatment, the movement/intermediate treatment and the final recycling/disposal process. All of these stages will be considered in this section. 3.2 Summary of key legislation and non-statutory guidance Driver Urban Waste Water Treatment (England and Wales) Regulations 1994 (SI 1994 No. 2841) implementing the Urban Waste Water Treatment Directive (UWWTD) 91/271/EEC Waste Framework Directive 75/442/EEC (as amended) Sludge (Use in Agriculture) Regulations 1989 implementing the Sewage Sludge Directive 86/278/EC The Safe Sludge Matrix 1998 (3rd edition 2001) Impact on Sludge Due to practical implementation of the Directive, and the cessation of sea disposal, sewage sludge quantities requiring disposal have increased due to the increased level of wastewater treatment and tighter discharge consents. This Directive forms the backbone of most of current legislation and sets the framework for waste management and most significantly defines the waste hierarchy as the hierarchy of all waste management options. The Directive is currently being revised - the effect of this revision will be felt through most of the forthcoming UK legislation. These Regulations lay down the requirements for applying sewage sludge to agricultural land and are supported by a Code of Practice, which details all aspects of sludge recycling to land. The regulations set permissible limits for soil concentrations and rates of annual additions of Potentially Toxic Elements (PTEs). The allowable limits for Zn, Cu and Ni in soils vary with the ph of the soil. There are no restrictions on the concentrations of PTEs in sludge. This voluntary agreement made between the UK water and sewage operators and the British Retail Consortium came into force in 1998 (revised in 2001). The matrix requires strict microbiological controls on the quality of Sludge and the correct procedures to be adopted for its application to agricultural land used to grow food crops. The provisions of the Matrix go beyond the requirements of the Sludge (Use in Agriculture) Regulations as they currently stand. It was originally envisaged that the Safe Sludge Matrix would be incorporated into the Revised Sludge (Use In Agriculture) Regulations and Code of Practice for Agricultural Use of Sewage Sludge. These amendments have been delayed and are still not embedded into the regulations. 19

Driver The Nitrates Directive (91/676/EC) and The Action Programme for Nitrate Vulnerable Zones Regulations 1998 Waste Management Licensing (WML) Regulations 1994 (as amended 2005) The Pollution Prevention and Control (PPC) (England and Wales) Regulations 2000 (as amended) (implementing EU Directive 96/61/EC and 2000/76/EC) Waste Incineration Directive (WID) 2000/76/EC implemented by the Waste Incineration Regulations (S.I. 2002 No. 2980) Environmental Permitting (England & Wales) Regulations 2007 Impact on Sludge The Nitrates Directive aims to tackle pollution of waters caused by nitrogen from agricultural sources. This limits application of nitrogen (and hence the amount of sludge) able to be applied to land in designated Nitrate Vulnerable Zones (NVZs). The Action Programme establishes NVZs inside which organic manure and sludge applications are limited and also includes soil type and application date restrictions to reduce the risk of diffuse nitrate pollution of watercourses. The impact of this is the need to find more land suitable for recycling sludge and the increased number of sites designated as NVZ will effectively reduce the amount of land available to spread sludge. Defra are currently consulting on revisions to these regulations it is expected that these will come into force during 2008. These Regulations state that anyone who proposes to deposit, recover or dispose of a controlled waste must hold a licence issued by the Environment Agency. Thames Water has a responsibility, under the duty of care, to ensure its wastes are only passed on to companies that hold an appropriate waste management licence (WML). There is a range of exemptions for activities with environmental benefits, but certain conditions apply. Most importantly, sewage sludge being applied to land is exempt provided it can be shown to demonstrate benefit to agricultural land or ecological improvement. Further exemptions allow sludge to be stored on site prior to agricultural land application, land reclamation and forestry. PPC applies an integrated approach to the regulation of certain industrial activities. Emissions to air, water and land plus a range of environmental effects are considered together. The EA set permit conditions that include a wide range of energy, waste and raw material efficiency measures. The permit also includes emission limit values and emission monitoring requirements for pollutants likely to be emitted from the installation in significant quantities and measures to prevent accidents and limit their environmental consequences. Permits are required for facilities from which sludge goes for disposal, or at which sludge is dried, gasified or burnt. These regulations put in place permit conditions on such plants and force onerous controls on these operators. Impacts on all thermal processes for the thermal of wastewater sludge. The disposal of sewage sludge by incineration or gasification/pyrolysis is required to meet the standards specified by the Waste Incineration Directive given in Annex I & V and emission limit values for discharges of wastewater from the cleaning of exhaust gases given in Annex IV. For co-incineration, fuel substitution in power generating plant or cement manufacture the emissions limits are given in Annex I & II. These regulations came into force in April 2008 and introduce a single environmental permitting and compliance regime to apply in England and Wales. This regime streamlines and combines Waste Management Licensing (WML) and Pollution Prevention and Control (PPC) to create a single environmental permit with a common approach to permit applications, maintenance, surrender and enforcement. These regulations will follow the format of PPC regulations but with a two-tiered approach. The WML permitted process will be changed into a simplified PPC permit format, although the PPC permit sites are not expected to change. 20

Driver Part III of the Environment Protection Act 1990 (EPA), The Noise and Statutory Nuisance Act 1993, and Section 17 of the Environment Act 1995 Code of Practice on Odour Nuisance from Sewage Treatment Works 2006 The Landfill Directive (99/31/EC) Landfill Regulations 2002 The Hazardous Waste Regulations 2005 National Emissions Ceiling Directive (2001/81/EC) Directive 2001/77/EC on the promotion of electricity produced from renewable energy sources in the internal energy market. The Renewables Obligation Order 2006 (Statutory Instrument (SI) 2006 No. 1004) Impact on Sludge It is an offence to create a statutory nuisance and under section 79(1)(d) of the EPA the definition of statutory nuisance includes: " smoke, fumes or gases, dust, steam or smell emitted from premises so as to be prejudicial to health or a nuisance. Local Authority Environmental Health Departments have the power to serve an Abatement Notice on any person causing or likely to cause a statutory nuisance. The Code of Practice aims to provide a framework under the statutory nuisance regime within which the appropriate regulators and sewerage undertakers can operate, to minimise the likelihood and impact of nuisance from odours. The code provides practical advice and a framework for local authority Environmental Health Practitioners who enforce the statutory nuisance regime and sets out for the public what they can expect during an investigation of a complaint of odour nuisance from sewage treatment works. Sewage treatment works operators have the responsibility and ability to put in place the measures to control or abate odour problems from their plant. Landfills are categorised into one of three groups; inert, nonhazardous and hazardous. Waste is categorised into these groups by using the European Waste Catalogue (EWC codes). Hazardous and inert wastes must meet Waste Acceptance Criteria (WAC) which specifies a series of leachable, inorganic and organic parameters (these are maximum limits) in order to be accepted to landfill. Each waste stream must undergo periodic checks to ensure its compliance. As of October 2007, landfill sites are unable to accept untreated waste with the aim to encourage the recovery of waste and to reduce the impact of the waste. An increase in gate fees, reduction in void space available in England, limitations on the biodegradability of the sludge cake/pellets disposed of and the prevention of liquid sludge disposal mean that the disposal of sewage sludge to landfill should only be regarded as the final option. The term "Hazardous Waste" refers to waste that has toxic or dangerous properties. Hazardous waste is classified by its entry found in the European Waste Catalogue 2002 (EWC). These regulations should not affect sewage sludge, as it is not classified as a hazardous waste. Although, this may affect dedicated processing plants such as incineration or gasification/pyrolysis where the ash may be classified as a hazardous waste dependent upon its physical characteristics and composition. Establishes national emission limits for releases of NOx, SO 2, VOC and NH 3 from all sources and impacts most forms of sludge treatment. Promotes the generation and use of electricity from renewable sources. A Renewables Obligation Order is issued annually detailing the precise level of the obligation for the coming year-long period of obligation and the level of the buy-out price. This order provides a market based system giving increased financial returns from the generation of electricity from renewable sources when there is less renewable generating capacity than the obligation placed upon companies licensed to supply electricity. The order allows for the power generated from the co-firing of wastewater sludge with fossil fuels to receive Renewable Obligation Certificates (ROCs) up to 31st March 2009 without the introduction of biomass as energy crops. 21

Driver The Climate Change Levy (General) Regulations 2001 and subsequent related legislation. SI 2001 No.1139 The Climate Change Agreements (Energy-intensive Installations) Regulations 2001. Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community The Climate Change Bill (expected to receive royal assent in summer 2008) Impact on Sludge The climate change levy is a tax on the use of energy in industry, commerce and the public sector with additional support for energy efficiency schemes and renewable sources of energy. The aim of the levy is to encourage users to improve energy efficiency and reduce emissions of greenhouse gases. This reduces the levy on electricity used on energy efficient installations and which come from renewable sources. This directive essentially sets greenhouse gas emissions limits for installations to meet the Kyoto agreement. Installation may be given credits from performance better than specified limits, these credits may be traded against poor performing installation. There is a requirement to reduce carbon use/emissions through implementation of the Climate Change Act, with an increasing requirement to manage/reduce carbon footprint and an increasing focus on GHG emissions other than CO 2 i.e. N 2 O, CH 4 The requirements of the Climate Change Act will be statutory. 3.3 Review of plans and programmes The SEA Scoping Report (October 2007) and Appendix B of the SEA Environmental Report identifies and reviews other relevant plans, programmes, policies and strategies that are applicable to the Thames Water region. The review identifies the relationships between the proposed strategy and these other documents i.e. how the strategy might be affected by the published plans aims, objectives and/or targets or how the strategy could contribute to the achievement of any environmental protection and sustainability objectives. 22

4. TREATMENT OPTIONS, CURRENT & FUTURE OUTLETS FOR SLUDGE As outlined in Section 1, Thames Water is considering a range of outlets for its wastewater sludges. In this section, the current and future outlet options are reviewed, with a description of the route, a summary of the current legislation and operating guidance affecting it and a discussion of the potential impacts of regulatory changes and other stakeholder impacts. This review is used in the assessment of the outlets for the wastewater sludges in the following sections. The following outlets are currently used for the recycling/disposal of the sludge produced at Thames Water s treatment plants. Figure 4 - Summary of sludge make and outlets 2006 1% 1% Agriculture 36% Thermal with energy recovery Compost 62% Land Restoration 4.1 Agriculture Treated sewage sludge (commonly known as biosolids) has been safely utilised on agricultural land for a substantial number of years and is recognised as the best practicable environmental option in most circumstances by the EU and UK Government at the current time, for dealing with this wastewater residual. Application of treated sewage sludge to agricultural land provides wastewater operators with a flexible solution to sludge management. Unlike incineration or other thermal technologies, agricultural sites can be changed or sourced relatively quickly in order to meet changing operational needs. Liquid sludges are transported to the field recycling site by tanker and discharged into a buffer tank from where they are pumped to the tractor via a hose (known as an umbilical) and injected below the surface of the soil; storage at the sewage works is either in tanks or lagoons. Cake sludges are stockpiled on the works before being transported to a field site by a tipping vehicle where they are stored prior to application with a self-propelled spreader. Sludge stored at a field site can remain there for up to 10 months. Energy recovery from sludge is widely practiced in the water industry through the use of Combined Heat and Power (CHP) plants in combination with anaerobic digestion. The ultimate disposal route in this case is recycling to land, but the combination of digestion and CHP both reduces the mass of sludge to be disposed of, and the subsequent number of associated vehicle movements, while providing heat and power for the site thus reducing fossil fuel usage. The high maintenance requirements of the CHP units mean that this methodology is not feasible for smaller sites. 23

4.1.1 Current Legislation The main legislation applying to the use of wastewater sludge in agriculture is derived from the Sewage Sludge Directive 86/278/EEC, incorporated into UK law by the Sludge (Use in Agriculture) Regulations 1989 (SI 1989/1263) (as amended) and supported by the DEFRA Code of Practice for Agricultural Use of Sewage Sludge. These regulations set certain limits on the concentration of potentially toxic elements permissible in agricultural land, depending upon the ph of the land, and on the addition rate of wastewater sludge in any 10-year period. They also identify requirements for the testing of sludge and soil, and withdrawal periods for the grazing of animals or harvesting of crops. Historically there were concerns from some food producers and retailers that using sewage sludge as a fertiliser may be linked to public health issues, despite there being no proven link. These concerns were primarily driven by perception and the need to protect the producers/retailers end markets (the consumer). This led to negotiations involving the UK water industry, the British Retail Consortium (representing the major retailers), the Government, the Environment Agency and ADAS, aimed at securing a sustainable route for recycling sludge to agricultural land that was acceptable to the food industry, water industry, regulators, farmers and growers. The negotiations resulted in the publication of the Safe Sludge Matrix, which came into force on 31st December 1998. This voluntary code identifies minimum acceptable levels of treatment to microbiological standards for sludge applied to various crop types and application windows related to harvesting of the crop. As an additional Quality Assurance measure, the UK water industry also adopted the Hazard Analysis Critical Control Point (HACCP) methodology in the treatment and management of its sludges. This approach involves the identification and close monitoring of Critical Control Points (CCPs) throughout the treatment process to ensure that the required treatment standard is met, rather than relying solely on the traditional final product testing quality assurance methods. Farmers within Nitrate Vulnerable Zones (NVZs) must also comply with the Action Programme for Nitrate Vulnerable Zones Regulations, maintaining a Fertiliser and Manure Plan, observing closed periods for fertiliser application and restricting the application of nitrates. In these NVZs, restrictions are in place to limit the application or organic nitrogen to 250 tonnes/ha on any one field and the whole farm average to 170 tonnes/ha. Prior to October 2006, Thames Water sludge was applied to land at a rate based on RB209 Fertiliser recommendations for Agricultural and Horticultural Crops (Defra publication). Since the auditing that is carried out on each farm examines the actual amount of organic nitrogen that is applied to land, spread rates had to be changed in order to prevent farmers from contravening the NVZ regulations and thus ensuring the land would continue to be available for recycling. 4.1.2 Potential regulatory changes and their impact Action Programme for Nitrate Vulnerable Zones In 2007, Defra consulted on a revision to the Nitrate Vulnerable Zone Action Programme, which implements the requirements of the Nitrates Directive. The changes are being driven by the European Commission who are not satisfied that UK regulations implement the requirements of the Directive. The key change is that the closed periods (when no nitrogen can be applied to land) will be extended. These revisions will restrict the application of organic manures with high available nitrogen to farmland to specific periods of the year - this includes liquid digested sewage sludge. Any extension of the closed periods would impact on our liquid sludge (or biosolids) recycling activities with the need for more storage facilities. Defra have recently announced in their summary of consultation responses, that the revised regulations will now come into force in mid-july 2008, with compliance required by mid-july 2010. 24

Sewage Sludge Directive 86/278/EEC Revision of the Sewage Sludge Directive 86/278/EEC has been on the agenda of the EC for some time but there has been a lot of uncertainty over the timing. The Directive is likely to introduce tighter metals limits for sludge and soil, and introduce new controls on organic compounds and pathogens in sludge. Common Agricultural Policy The EU have three separate exercises in the pipeline that will effect the Common Agricultural Policy (CAP), the first is the Simplification Exercise which is a minor tidying up of legislation and should hopefully simplify cross compliance rules. The second part of the exercise is the Health Check and the third is the Budget Review. The Health Check will consider the operation of Pillar 1 of the CAP (Single Payment and market support mechanisms) up to the end of 2012, with any changes being implemented from 2009. The two changes that may affect some UK producers are the capping of aid payments and an increased rate of EU compulsory modulation. Coupled with this is the likely end of set-aside by 2012. The Budget Review that is scheduled for 2008 2009, will look at the whole spending priorities of the EU budget, not just agriculture, with any changes affecting the 2013 2020 budget period. The following are some of the possible outcomes that may impact the agricultural sector: A major shift of agricultural budget funds from Pillar 1 to Rural Development (Pillar 2); The single farm payment will still be in existence but at a greatly reduced level by 2020; Full decoupling from production will be in place across the whole of the UK; and Market support mechanisms are likely to be further reduced to safety net levels (cereal & dairy). It is difficult to estimate the net effect that changes to the CAP will have on the sludge strategy therefore this area will be kept under review. Waste Management Licensing Regulations The Waste Management Licensing regulations are likely to be further reviewed in the short to medium term as Defra are already in the informal consultation stage with respect to the exemptions process. A formal consultation is planned in summer 2008, the aim of which is to streamline and standardise the exemptions process; this may result in the Paragraph 8b exemptions being brought into the charging structure that exists for other exemptions. 4.1.3 Outlet Constraints and Risks Nutrient Restriction In addition to the proposed changes to the Nitrate Vulnerable Zones Action Porgramme, the Single Farm Payment (SFP) system, which was introduced as a replacement to the production-based subsidy as part of the Common Agricultural Policy (CAP) review, has also started to impact on phosphate additions to farmland. In order to qualify for the SFP, the farmer has to enter into a stewardship scheme, which requires them to adhere to codes of practice and other guidelines. Previously, farmers were happy to accept sludge on a specific field every year as they valued the nitrogen and organic matter more than the phosphates; this has led to the development of higher phosphate indices on some fields. Now that farmers have to comply with all of the guidelines in order to receive the SFP they are generally only willing to accept sludge onto any particular field in a one in three year rotation, as each application of sludge will typically provide a three-year maintenance dressing of phosphate. This has resulted in a requirement for additional land, which has contributed to an increase in the required haulage distance. A consequence of this 25

increase is that the average haulage distance for sludge from the sewage works to suitable land has increased over the last few years. This has consequences with respect to increasing cost and greater carbon and environmental impacts. Safe Sludge Matrix and Producer Concerns It was originally envisaged that the agreement and the Safe Sludge Matrix would be incorporated into the Revised Sludge (Use In Agriculture) Regulations and Code of Practice for Agricultural Use of Sewage Sludge during 2001. These amendments have been delayed and are still not embedded into the regulations. The UK water industry has voluntarily complied with the requirements of the revised regulations since January 2002. Despite the introduction of the agreement and the water industry s voluntary adoption of the requirements prior to them becoming law, producer concerns and associated actions still present the greatest risk to agricultural recycling. Some food producers, retailers and grain merchants still have sludge exclusion clauses in their purchasing contracts and work continues via Water UK to resolve these outstanding issues. It is estimated that within the Thames Water region, the total capacity for accepting biosolids following the restrictions applied, was estimated to be 446,000 ha. This represents a reduction from the original capacity of just over 30%. Odour Odour complaints generated by sewage sludge vary depending on the source of the sludge, the treatment method and the recycling location. With the increasing incursion of suburbia into the countryside, more people are becoming aware that certain agricultural practices can generate short-term odour problems, one of which is sludge recycling. Planning stockpile and spreading locations and taking into account proximity to sensitive receptors and prevalent wind directions can mitigate odour risk. However, with the population growth in the South East and the other pressures on the farming community (single farm payment, financial, regulation etc.) finding suitable sites is contributing to a gradual increase in haulage distances and an associated rise in costs. Vehicle Movements During 2006, in excess of 44,000 vehicle movements (journey from STW to field site and back) took place whilst carrying out recycling operations; this represents approx. 1,500,000 radial kilometres hauled. With increasing sludge volumes and longer haulage distances, the number of vehicle movements and the carbon footprint of sludge recycling will both increase at it s most extreme, this may have an impact on the viability of this outlet in some subregions. Vehicle movements are also taken into account when planning a recycling operation in order to avoid impinging on local communities. This can involve avoiding sites during school run hours, having different in and out routes, or providing additional vehicles to minimise the amount of time it takes to deliver the sludge to a site. 4.1.4 Agricultural Landbank Assessment Over 60% of our current sludge production is currently recycled to agricultural land in the form of treated sludge cake or liquid (also known as biosolids), thus an assessment of the availability of suitable land going forward 25 years is an essential component of our strategy. In general farmers are very willing to accept biosolids on their land as it provides a very good source of nutrients and organic carbon at low cost. However, in recent years finding suitable land has become more difficult due to restrictions placed on certain products grown on land treated with biosolids by some sectors of the supply chain. In addition, tightening regulations, in particular the implementation of the Nitrates Directive and the establishment of Nitrate Vulnerable Zones (NVZs), has reduced the rate at which biosolids can be applied to land in most parts of our region. This means that an increasing area of land is required to manage the outlet. 26

Whilst the UK Government, the European Commission, the Environment Agency and a number of other organisations still regard recycling to land as best practicable environmental option for treated sewage sludge, it is important that a critical assessment was made of the viability of the outlet over the next 25 years. Thames Water therefore contracted ADAS and Grieve Strategic to carry out a detailed assessment of landbank availability over this period. A summary of their report is provided in Appendix 1. The assessment was made based on the following methodology and additional factors: Analyse agricultural land areas and cropping patterns where biosolids are applied; Input data on landbank availability to the ALOWANCE (Agricultural Landbank, Organic Waste A National Capacity Estimator) prototype data management tool and crop exclusion clause limitations ; Determine the current available landbank for biosolids; Compare the available landbank against likely future production trends; Input scenario data on exclusion clauses, land use restrictions and competitive materials (e.g. livestock manures); Provide an outlook for up to 25 years; Comment on the increased production of biofuels (e.g. bioethanol from wheat/maize/sugar beet, biodiesel from oilseed rape) and likely impact on landbank availability; and Comment on potential agricultural produce market volatilities (e.g. grain prices, inorganic fertiliser costs) and the influence this may have on the demand for biosolids. The main conclusions of the landbank assessment carried out are as follows: In principle, there is sufficient land available for recycling biosolids within the Thames region; However suitable land is becoming more difficult to secure as demonstrated by the increased volume of biosolids migrated into and out of the region; There is a significant urban area within the Thames region and, in particular the east and south east of the region is likely to become more constrained by the end of the period; In general, parts of the west, south and north-east regions appear to be less constrained and more able to accommodate the biosolids production; and The security of the landbank is critically dependant on the continuing support and confidence of the farming community and product supply chain. Continued access to arable land growing wheat and oil seed rape is crucial to the continued viability of the outlet in the Thames region. 4.1.5 Agricultural Outlet Conclusions Despite the restrictions limiting application rates and on-farm storage, sludge is still valued by farmers for the nutrients and the organic matter that it contains. Increasing oil prices and diminishing phosphate supplies provide greater incentive for farmers to accept alternatives to the main fertiliser options. There is also a growing need for farmers to put organic matter back into soils that are becoming poorer due to many years of intense production. This will also improve the soils water holding capacity and assist with improved yields. Agricultural recycling of treated sludges will continue to play a key role in the overall disposal strategy, however it is expected that this route will become more expensive as regulations tighten and haulage costs increase, thus impacting on the feasibility of the outlet for some sub-regions. Reliance on agriculture as the primary disposal route also brings an element of risk to Thames Water, as other disposal options cannot be implemented quickly if the land recycling route were to be severely curtailed especially at short notice. Although this scenario is considered unlikely, having more options available means that any fluctuations in any of the proposed disposal routes can, to a certain extent, be balanced out by the others. 27

In the short to medium term, it is unlikely that the primary legislation governing sludge recycling to agriculture will change significantly (unless any research identifies a proven link to an environmental issue), however further revisions to the Common Agricultural Policy (CAP) and Single Farm Payment schemes are planned. The biggest risk that still exists for agricultural recycling is public/market perception and producer concerns. Although there are early signs that some of the producers may be changing their stance on the use of crops grown on sludge treated land, this risk is one that could have the most dramatic impact on sludge disposal, with the ability to have a significant and rapid impact on agricultural recycling. Whilst having a strong reliance on agricultural recycling complies with the best practicable environmental option for sludge disposal in most instances, it means that there are no other options available to Thames Water for the short to medium term disposal of sludge if the land recycling route were to be curtailed due to perception issues, Thames Water (and all other water and sewerage companies) would be facing a severe problem. Overall, agricultural recycling is expected to remain feasible in the longer term, but it will become increasingly expensive as transport costs increase and land availability becomes restricted due to nutrient loading or changes to the agricultural industry. Going forward there will also be a knock-on effect from transporting the increasing volumes of sludge from our large urban centers further from their point of origin. This may impact on the available landbank for the predominately rural sites and hence reinforce the need to develop alternative sustainable outlets in order to increase business flexibility. 4.2 Non-Agricultural Outlets There are other uses of land where the sludge can be applied beneficially to complete nutrient cycles and conserve organic matter. The following section lists the more significant of these. 4.2.1 Forestry & Land Restoration There are many examples where sludge has been the key to successful restoration of disturbed and derelict land to agriculture, forestry and green areas. The use of sludge in forestry can increase the growth of trees and can be very useful for stabilising soil, establishing vegetation and re-forestation. Sewage sludge can also be used as a remediation material on brownfield sites or as an input for the restoration of closed landfill sites. The sludge is generally incorporated with poor quality soil, or other materials, prior to establishing grass, trees or other ground cover. The sludge provides structure, organic matter and slow release nutrients which are ideal for use in land restoration because one initial application can be used to provide enough nutrients for long-term vegetation growth. Opportunities for the restoration of landfill sites have been increasing over the last few years as a number of sites have reached capacity and are now moving into their remediation phase. 4.2.2 Energy Crops Bioenergy production could change the face of agriculture in the UK as farmers shift from food production to meeting the needs for alternative energy sources. This change may also assist sludge recycling, as these crops are not destined for the food chain although they would be grown as part of a normal agricultural cycle. As with recycling to agriculture, the use of sludge within Nitrate Vulnerable Zones (NVZs) must also comply with the Action Programme for Nitrate Vulnerable Zones Regulations. Bioenergy covers crops grown for: Biomass crops such as short rotational coppicing, miscanthus which are co-fired in power stations; 28

Bioethanol wheat or starch based crops that are fermented to produce ethanol; and Biodiesel rape or other oily crops that can be either blended with diesel or used as a diesel substitute. Sludge is used to increase yields of bioenergy crops that are harvested as sources of nonfossil fuel. High yielding perennial members of the grass family of plants (such as Miscanthus) or trees, such as willow and poplar, that will re-grow after they have been cut to the ground are harvested, dried and burnt as fuel. The nutrient requirements are similar to any other crops producing large amounts of biomass. Sludge can provide these nutrients, which would otherwise be supplied by mineral fertiliser or manure if comparable yields were to be obtained. Where crops have been forward sold into energy markets, or farmers have decided to use bioenergy crops as part of their rotation, an opportunity exists to increase farm profitability by using sludge as the fertiliser option provided that robust audit schemes are in place to ensure that the crop is not destined for the food chain. 4.2.3 Current Legislation Under the Waste Management Licensing (England & Wales) (Amendment and Related Provisions) Regulations 2005, in order to use sludge in land restoration, bioenergy crops or forestry there must be a Waste Management Licence exemption for each site, which must be authorised and registered in advance by the Environment Agency. These regulations control the maximum amounts of materials that can be applied on land exempt from a Waste Management Licence. The Paragraph 8a exemption (for which planning permission is not required) relates to the use of wastewater sludge for the ecological improvement of non-agricultural land or the improvement of non-food crops, and includes a cross-reference to the soil PTE limits identified in the Sludge (Use in Agriculture) Regulations 1989. As with recycling to agriculture, the use of sludge within Nitrate Vulnerable Zones (NVZs) must also comply with the Action Programme for Nitrate Vulnerable Zones Regulations. The Paragraph 9 exemption, which does require planning permission, relates to the treatment of land with identified wastes for agricultural or ecological improvement for restoration/reclamation, at a rate of up to 20,000 m 3 /ha and up to 2m depth. Both these clauses refer to wastewater sludges, but do not identify treatment requirements. Under the Waste Management Licensing Regulations 2005 Part 2 in assessing benefit to agriculture, the application rate for nitrogen is limited to 250 kg/ha/year. 4.2.4 Outlet Constraints and Risks Site availability There are no large forestry sites readily available in the South East of England. Forestry sites also tend to be smaller blocks of land (5 10 hectares) than those available for normal agricultural recycling. The longer haulage distances and exemption application costs are offset by the higher possible application rates and the use of raw cake - forestry sites provide alternative outlets for problem products such as untreated or very wet sludges. Costs of restoration of landfill with sludge are largely dependent on the location and the onsite activity required to receive and incorporate the sludge. This is currently comparable with both forestry and brownfield restoration sites, making these sites only suitable for untreated or problem sludges. As with forestry, there are a limited number of suitable sites in the South East of England and consequently haulage costs for these outlets may be higher than other options and in addition the operators of these sites may charge a gate fee. At present there is insufficient bioenergy crop production in the UK to meet the needs of all of the sludge producers, but this situation may change over time as more pressure is brought to 29

bear on fossil fuels and the UK or European markets acquire greater biofuel processing capacity. On the 23 rd January 2008, The European Commission (EC) presented a mid-term review of its Biofuels Directive, as part of a package on promoting renewable energies. The EC has adopted an action plan for the promotion of alternative fuels and biofuels in road transport concentrates policy efforts on the promotion of biofuels, natural gas and hydrogen. The action plan outlines a strategy to achieve a 20% substitution of diesel and gasoline fuels by alternative fuels in the road transport sector by 2020. Additional Risks Due to the higher application rates associated with land restoration, there may be an increased risk of odour from these sites, especially during warmer weather or when incorporation is slower than application. Each site is monitored on a regular basis to assess the odour and any potential leaching issues associated with the higher application rates. Both forestry and restoration are therefore only regarded as tactical opportunities for sludge disposal as it is difficult to predict where and when these sites will occur and if the landowner/operator will be willing to accept the use of sludge. Landfill restoration can be predicted in terms of location and when each site will be closing, but there still remains a risk associated with planning permissions and acceptability - both of which increase the cost and the mobilisation time of this type of outlet. Since some of these sites may be capable of taking many thousands of tonnes of sludge, planning them in as one of the primary recycling routes would bring significant pressure to the more established routes should the forestry/restoration site fail. 4.2.5 Non-Agricultural Outlets Conclusions There are no major changes expected to the forestry and land restoration recycling routes; they continue to be viewed largely as tactical opportunities to recycle problematic sludges due to the relatively small area of land available in the South East. However, it is expected that some of the drivers that will affect the agricultural route will also begin to influence these outlets, namely changes to the Waste Management Licensing Regulations (exemption process), perception issues and nutrient loading, all of which will drive up costs. If costs associated with other outlets increase at a faster rate than those associated with the forestry/restoration routes then this route may become more viable as time progresses, depending on land availability. 4.3 Energy Based Outlets Recovering energy from sludge is lower down the waste management hierarchy than recycling to land, but where recycling is less secure or problematic, this route can offer a sustainable outlet. 4.3.1 Thermal Destruction (dedicated sludge incineration) The end of sludge disposal at sea in 1998 brought about an increase in large-scale energy recovery from sludge using incineration. Incineration is the process whereby sludge is burnt in a furnace, the hot gases produced pass into a boiler, where steam is produced to meet the heat needs of the process and power a turbine for electricity generation. Several stages of cleaning of the flue gases are incorporated within the process to ensure they meet EU emission limits. Thames Water currently operates two Sludge Powered Generators at Beckton and Crossness, which use the heat from the incineration of the indigenous sludge to generate electricity. Liquid sludge from the treatment works is stored in buffer tanks prior to being pumped into plate presses from which a 32% (target) DS cake is produced. This cake is then fed into the incinerator where it is burnt, the residual ash (15-20% of the total volume) is collected and either recycled or disposed. 30

Typically, sludge incineration plants (such as Thames Water s existing operations at Beckton and Crossness) process undigested sludge. This is because the calorific value of undigested sludge is higher than digested sludge: more heat energy can therefore be released per tonne of sludge processed, offering the opportunity to both meet the heat needs of the process and generate electricity. A lower calorific value also means that the sludge would need to be drier when burnt for the process to be autothermic, i.e. not requiring supplementary fuels such as natural gas to maintain temperature within the process. 4.3.2 Co-incineration with other wastes Incineration as applied within the UK water industry is exclusively dedicated to sludge disposal. In other European Countries (e.g. Germany) co-incineration of sludge and municipal waste is also practiced. The sludge, either as dewatered cake, but generally as dried pellets, can be burnt in a specifically built plant with refuse derived fuel. It is possible to burn wastewater sludge with municipal waste however; the furnace technology used needs to be capable of handling both fuels because the municipal fraction tends to dominate both the design and operation. 4.3.3 Gasification & Pyrolysis Gasification and pyrolysis technologies are potential alternatives to incineration but have yet to be proven either at large scale, or using sludge as a feedstock. In gasification the sludge is heated (but not burnt) to produce a synthetic gas ( syn-gas ) which can be used either as a fuel source in a gas turbine, or in a boiler to raise steam for a steam turbine. The fuel value of syngas is not typically as high as that of digester gas, perhaps 60% of digester gas energy values. Pre-drying of the sludge is necessary, which takes most of the available energy unless a supplementary fuel is co-gasified with the sludge (such as a secondary recovered fuel (SRF) from municipal waste operations). Pyrolysis is similar to gasification with the main difference being that sludge is thermally treated in an oxygen free atmosphere. The sludge is not actually burnt, but brought to a temperature of typically 500 C. The process generates three residues: solids containing mineral matter/carbon, water, and pyrolysis gases (the main constituent is carbon dioxide). The pyrolysis gases may be condensed to produce oil which, in turn can be used to generate energy or in an engine. Pyrolysis is not an end disposal route for sludge and it is mainly used as a pre-treatment step to gasification or combustion. 4.3.4 Co-firing in Cement Kilns & Coal Fired Power Stations The cement industry is energy intensive and has a commitment to the use of alternative waste derived fuels. Wastewater sludge, generally as dried pellets, can be co-combusted in coal-fired power stations and cement kilns. In power stations, sludge can contribute <5% by weight of the fuel input. Dried sludge has a calorific value similar to a low-grade brown coal. Sludge cake is dried prior to firing using the spare water evaporation capacity of the power station required to dry the coal. If wet cake is co-combusted it will account for approximately 30% of the water load into the mills. Very little infrastructure is required in the power station compared with building similar thermal treatment technologies. 4.3.5 Current Legislation The Waste Incineration Regulations came into force in 2002 and transpose the Waste Incineration Directive (WID) 2000/76/EC. The Directive applies to incineration and coincineration plants and sets out measures such as operating conditions, emission limit values and emission and monitoring requirements. The WID requires the operators of incineration and co-incineration plants to apply for a permit to operate under the Pollution Prevention and Control regime (PPC). PPC permits are required for facilities from which sludge goes for disposal, or at which sludge is dried, gasified or burnt. 31

4.3.6 Outlet Constraints and Risks The high capital cost for a dedicated sludge powered generator (SPG) and complexity of the process equipment means this technology is likely to be only viable at large sites. Should the ash be classed as a hazardous waste this would further escalate operating costs. The poor perception of municipal waste incineration with the public to date has made promoting schemes through the planning system more difficult. Indeed, planning policies, such as policies within the London Plan (2004), do not support the development of more municipal incineration. The drying of sludge for use in co-firing in cement kilns and power stations is energy intensive and is only viable when combined with anaerobic digestion, such that the biogas can be used to fuel the dryer (as opposed to a CHP unit). The incorporation of sludge into other processes, such as a power plant, changes the licensing and regulatory framework for those operations. This, together with the low energy value of the sludge compared with the primary fuel has discouraged the uptake of this method. The process of gasification and pyrolysis is commercially unproven on wastewater sludge applications and has yet to be demonstrated at a large scale and using a mixed feed. Despite several pilot schemes on gasification of sewage sludge, there is a lack of commercial schemes that have gone forward. 4.3.7 Energy Based Outlets Conclusions Of the energy-based outlets for sludge disposal, thermal remains the accepted technology. The complexity of this process makes it only applicable to larger sites. Coincineration of sludge with municipal waste is practiced in some EU countries, however the municipal fraction tends to dominate both the design and operation of these facilities. Moreover, Municipalities (with responsibility for both municipal waste disposal as well as sewage treatment) purchase most co-incineration plants, avoiding any significant problems over priority (disposal route security) and accountability, which could pose significant contractual challenges for separate organisations. This application of co-incineration with other wastes is therefore unlikely to be widely implemented within the UK without clarification of the responsibilities for co-management of different waste streams. Emerging technologies, and in particular gasification, may become attractive alternatives to thermal in the long term. All the alternatives require the sludge to be much drier than for standard mass burn sludge incineration, which uses a significant portion of the available energy within the sludge. The more promising application of gasification is perhaps in combination with secondary recovered fuels from municipal waste plants, however this is yet to be proven at a significant scale. Furthermore, the low calorific value of sludge compared with primary fuels used in power stations or cement kilns, coupled with the increased complexity of the environmental monitoring and licensing that the introduction of sludge to these processes would bring, provides significant barriers to the widespread adoption of co-firing alternatives. In addition, while mass-burn incineration is a proven technology, the effectiveness of pyrolysis and gasification has not yet been fully demonstrated. 4.4 Landfill To date, very low volumes of sludge have been disposed of to landfill. The main advantage of landfill is that it can generally be used at very short notice, sometimes on the same day as a requirement is identified. This route is not sustainable in the longer term and the costs associated with it are increasing as landfill tax levels go up and void space is reduced. In addition, due to the high water content of sewage sludge only a limited number of sites are willing to accept it due to any potential impact on the sites leachate management programme. 32

4.4.1 Current Legislation The European Landfill Directive, transposed by the Landfill (England and Wales) Regulations, includes a ban of the landfilling of liquid wastes and also requires all wastes to be pre-treated. Under the Landfill Tax Regulations 1996 (as amended), any waste that is sent for disposal to landfill is subject to a levy according to the nature and weight of the material. Wastewater sludges fall into the active waste category and are subject to the standard rate of tax the current (2007/08) standard rate of landfill tax is 24 per tonne. The 2007 budget announced annual increases in the standard rate of landfill tax of 8 per tonne from 2008/09 until at least 2010/11, by which time it will have reached 48 per tonne. 4.4.2 Outlet Constraints and Risks As outlined in section 4.4.1, there is an EU policy towards progressive reductions in the amount of biodegradable waste sent to landfill. As such, the landfilling of sludge is becoming increasingly restricted and any available landfill will be at a very high cost - the cost for landfilling sludge now exceeds 50 per tonne including haulage, gate fees and landfill tax. In addition, other constraints on the landfill of sludges include the landfill operator s willingness to accept odourous sludge. 4.4.3 Landfill Conclusions Landfill does not present a sustainable option for the disposal of large quantities of sludge and loses the opportunity to recycle the phosphate and other beneficial constituents sludge contains. As per the waste hierarchy, the disposal of sludge to landfill should be considered to be the last solution. 33

5. OPTIONS ASSESSMENT METHODOLOGY A number of factors need to be taken into account when developing a view of the most appropriate outlets for sludge in different parts of our region. This process was therefore high level and aimed at generating a set of broad preferred strategic proposals for each region that would be tested by the independent Strategic Environmental Assessment (SEA). Where individual development proposals at particular locations are brought forward in the future, these will be the subject of a more detailed assessment. 5.1 Assessment of Options The high level options assessment process utilized has been derived from approaches used previously by Thames Water, and by other water companies/utilities, for similar assessments e.g. for the sludge strategy developed by Scottish Water. The broad process adopted was as follows: Phase 1 Assess suitability of treatment/outlet options based on generic criteria; environmental, climate change, customer and business impacts Phase 2 Divide the region into groups of treatment centres based on location and/or treatment/outlet, referred to as sub regions; For each sub-regional area, assess the preferred options for treatment/outlet against a set of agreed pre-selected business drivers by assigning a score of 1-5 (1 low and 5 high) according to significance. The list of business drivers, weightings and scores were derived from meetings with all parts of the business including Thames Water Senior Managers and Directors, whilst keeping in mind the basic principles of the Waste Management Hierarchy and taking advice from the consultants completing the SEA; and Rank options based upon the aggregated score each treatment/outlet and develop a matrix of preferred options for each sub region for (a) a 10-year and (b) a 25-year horizon. 5.2 Selection of potential treatment/outlet options Phase 1 A range of treatment/outlet options were considered for potential implementation at sludge centres. These were assessed against a range of generic criteria to assess their suitability for implementation and undertaken using the information in Section 4 regarding the constraints and risks associated with each outlet. This analysis was based on qualitative judgement and operational experience from a team drawn from experts in the business. This assessment was supplemented by a more detailed technical review carried out by consultants. The judgements made in this phase 1 analysis had no geographic focus since the approach in the first stage was to assess treatment/outlet options solely against the pre-set criteria. The criteria used in our assessment were as follows: Environmental impact emissions to air, water and land. Climate change impact greenhouse gas emissions, total energy use Customer impact potential nuisance (e.g. odour, vehicle movements), public perception Business impact supply chain security, market stability, robustness of technology. As a result of this exercise, those treatment/outlet options that were not considered to be feasible on the basis of issues such as product demand, proven technology and regional requirements were removed from further consideration. 34

Sludge dryers were not considered further in our assessment following this analysis, although it is recognised that there are potential advantages in producing a product that would be suitable for combustion as well as recycling to agricultural land. However, the disadvantages arising from (a) the high energy requirements for operation and (b) the technical difficulties experienced with respect to their routine operation for sludge processing, were considered to outweigh any potential advantages. The decision not to consider sludge dryers also effectively ruled out the options of coincineration and co-firing in a cement kiln or power station, as these outlets require an essentially dry product in order to be viable. In addition, the infrastructure for these outlets was not available in the Thames region at the time this assessment was carried out. (Note that powers stations that accept sludge as a fuel would have to meet the requirements of the Waste Incineration Directive and hence be equipped with flue gas desulphurisation). The following treatment/outlet options were therefore assessed in our detailed options appraisal. 1. Mesophilic anaerobic digestion (MAD) well-established digestion technology which is the main process currently in use in the UK water industry 2. Acid phase digestion (APD) pre-treatment process to MAD that allows more efficient digestion. System works by reducing the ph of sludge for about 2 days at a temperature of 35 o C and then passing onto conventional MAD. 3. Enhanced digestion - e.g. a Thermal hydrolysis process (THP) - a high pressure/temperature pre-treatment to MAD, allowing more efficient digestion. THP works on the basis of a pressure cooker, and raises the temperature of the sludge to approx. 160 o C. This is generally more effective than APD 4. Co-digestion anaerobic digestion with other wastes (e.g. green wastes) 5. Composting well-established technology used for sludge treatment. Sewage sludge is usually mixed in with a bulking agent such as woodchip or straw. 6. Co-composting sludge composted with additional wastes 7. Pyrolysis/gasification techniques not fully established for this application but expected to be developed over the next 25 years. Pyrolysis is the thermal degradation of waste in the absence of air. Gasification is the breakdown of hydrocarbons into a syngas by carefully controlling the amount of oxygen present. 8. Thermal Thermal treatments has traditionally been incineration, which is an established technology and there is potential for the development of alternative thermal processes. Mass burn incineration is well developed both commercial and technical respects, with nine major sewage sludge installations in the England. 9. Enhanced digestion/thermal combination of enhanced digestion or co-digestion (involving THP or equivalent), followed by thermal. Note that treatment options 1 to 6 would normally be followed by recycling the product to land while, for the remainder, the final product would be ash (or equivalent) that would either be recycled (e.g. into aggregates) or taken to landfill. 5.3 Selection of potential treatment/outlet options Phase 2 The following sludge centres were identified as requiring development over the 10 and 25- year periods, based on projected sludge volumes and available capacity. These centres were 35

grouped into the following sub-regional areas based on location and current treatment type and in some instances are named after the current sludge disposal outlets in operation: East London (thermal ) East London (digestion) Mogden area Maple Lodge area Southern region Western region (digestion) South East region (lime) Western region (lime) West London North East North London Crossness, Beckton Long Reach, Riverside Mogden Maple Lodge Ascot, Bracknell, Chertsey, Camberley, Cranleigh, Crawley, Haslemere, Woking Aylesbury, Banbury, Basingstoke, Didcot, Oxford, Wargrave, Reading, Little Marlow, Swindon Earlswood (Reigate), Farnham, Fleet, Guildford Bicester, Newbury, Wantage, Witney Beddington, Hogsmill, Slough Bishops Stortford, East Hyde (Luton) Deephams, Rye Meads, An assessment was then made of the suitability of the treatment/outlet options identified in the first phase against a set of business drivers and a weighting was applied to each business driver for the reasons detailed below: Business Driver Cost (capex) M/tonne Regulatory Capital Value (RCV) impact (capex) Cost (Opex) Ease of Promotion Minimise customer impacts Maximise energy production Avoid landfill Minimise carbon foot print Minimise other environmental impacts Rationale for business weighting and scoring Scores are relatively high for lower costs per tonne thus providing better value for money for customers. A weighting of 4 reflects the importance of demonstrating good value for money to Ofwat and other stakeholders Assumed that all capex will be part of the RCV therefore earning a return for investors. High capex therefore scores relatively highly. A weighting of 3 reflects the need to provide a return on investment to shareholders but is less important than efficient capital delivery Opex is assumed to be neutral through price limits but broad business objective is to reduce opex therefore low opex scores better. A relatively low weighting (2) as opex should be recovered through price limits therefore should be 'neutral' to the business. We will need to promote the development of new assets with local and regional stakeholders. The more difficult a scheme is to promote the greater the cost to the business. A high score indicates the option is perceived to be relatively easy to promote. Weighed 3 to reflect a desire to avoid the promotion of controversial/difficult schemes We want to reduce impact on customers e.g. reduce noise, odour, lorry movements. A high score implies relatively reduced impact. A maximum weighting (5) reflects the importance of customers in our business strategy We want to maximise energy recovery in order to reduce costs and to reduce our carbon footprint. A maximum weighting (5) to reflect the need to reduce use of energy and cost. High score for minimal use of landfill thus reducing cost and promoting sustainable recycling opportunities. Weighted 4 to reflect the importance of minimising the use of unsustainable outlets and reducing cost. The weighting on the 25 year assessment was increased to 5 to further reflect that landfill will be prohibitively expensive In line with likely business targets arising from the Climate Change Bill sustainability criteria. A higher score was awarded for a reduced carbon footprint. Weighted 4 to reflect importance of reducing carbon impacts. The weighting on the 25 year assessment was increased to 5 to further reflect the importance of carbon management Broad business objective consistent with stakeholder expectations. A higher score was awarded for reduced impacts. Full regulatory compliance is assumed for any option selected a weighting of 3 reflects the desire to minimise impacts beyond regulatory compliance. The development and operational features of each of the treatment/outlet options were assessed against each of the business drivers above. An indicative score of 1-5 (1 low and 5 high according to significance) was assigned for each driver. The analysis was based on qualitative judgement and operational experience using a team drawn from experts across the 36

business including engineering, operations, asset strategy, regulation, environment and finance. The team also included representatives from Entec, the consultants engaged to carry out the SEA. Professional judgement was applied in each topic area. Preferred options were then ascertained based upon the aggregated score. The conclusions from the assessment have been reviewed and endorsed by the Thames Water Executive Management Team. This exercise provided a broad view of the preferred hierarchy of treatment/outlet options for each of the groups of treatment centres over the 10 and 25-year periods. The Strategic Environmental Assessment was undertaken on this high level analysis and the results are presented in the SEA Environmental Report. The assessments made for each sub-region are explained in Section 6. This describes how the various options were judged to perform against the business drivers, and summarises (taking into account the relative weight that was considered to apply) how the options performed overall, indicating those that performed well. In support of this explanation, Appendix 2 presents the full business and sustainability assessment graphs. The accompanying scoring of all options for each sub-region can be found in Appendix 3. 5.4 Further development of sludge management proposals The preferred options for each area are described in more detail in the following section. The output from the options assessment is a hierarchy of preferred treatment options for the 10- year and 25-year horizon for each sub-region. It should, however, be stressed that these should not be regarded as site-specific recommendations. For developments at specific sites, the preferred options would need to be reconsidered in order to check that the assumptions made here are still valid. In progressing favoured options, it is recognised that some that some of these may fall within the scope of the Environmental Impact Assessment (EIA) Regulations. This high level assessment of sub-regional areas will contribute to future assessments but further detailed work on a site-specific basis may be required to take any preferred option forward. 37

6. DETAILED ASSESSMENT OF SUB-REGIONAL AREAS This section describes the assessments and summarises the recommended strategy for each sub-region. Appendix 2 presents the full business and sustainability assessment graphs. The accompanying scoring of all options for each sub-region can be found in Appendix 3. 6.1 Integrated Implementation Strategy for East London For East London, thermal and digestion sites have been considered in separate sub-regions, primarily to reflect the principal sludge management streams already in existence and to achieve consistency with the approach taken within the other sub-regions. However, the strategy does recognise the geographical proximity and the linkages between these sets of sites and the large volumes of sludge produced in the region. For East London, we consider that there is merit in having a strategy involving both digestion with recycling to agricultural land, taking advantage of the locations where there is reasonable access to the landbank, and thermal with energy recovery. The dual approach within this region therefore meets the operational needs of the company by reducing the risk from not relying on one outlet and also ensures that the benefits that can be derived from digestion and recycling sludge to land (energy generation and nutrient and organic value of sludge as a fertiliser) are achieved from a proportion of sludge generated within East London. 6.2 East London (Thermal Destruction with Energy Recovery) 6.2.1 Sludge Treatment Centres in Area There are two sewage treatment works in this part of our region - Beckton and Crossness. Beckton Sludge Powered Generator receives indigenous raw sludge from Beckton sewage treatment works and Riverside sewage treatment works via a dedicated pipeline. Sludge treatment comprises of dewatering and incineration of the raw cake. Energy is recovered from the installation, producing 41.5 GWh in 2006/07 which is used to supply the SPG requirements as well as a proportion of the sewage treatment works electrical supply. Beckton is the largest sewage works in the UK (3.3 million PE) and it serves a large part of central and east London. Due to on going long-term operational issues, a small proportion of the sludge from this site is currently being lime treated and recycled to agricultural land. Current sludge production (2006) including Riverside is 112,096 tonnes dry solids per year. Crossness Sludge Powered Generator receives raw sludge from Crossness sewage treatment works; a very large works (1.9 million PE) serving a large part of south and central London. Sludge treatment comprises of dewatering and incineration of the raw cake. Due to on going operational capacity constraints a small proportion of the sludge from this site is currently being lime treated and recycled to agricultural land. The energy produced from the installation was 18.7 GWh in 2006/07. Current sludge production (2006) is 56,940 tonnes dry solids per year. The Sludge Powered Generators at both sites were brought into commission at the end of 1998. Thus during the period considered by this strategy, it is anticipated that both assets will require substantial renovation or replacement. 6.2.2 Factors relevant to the assessment Both sewage works are located in predominately urban areas with little agricultural land in the immediate vicinity. The current option for sludge disposal (thermal with energy recovery) was selected in the mid 1990s following an extensive best practicable environmental option assessment that subsequently informed individual planning applications. Recycling to agricultural land was not favoured due to the very large volumes of sludge produced on the two sites and the corresponding high number of lorry movements required to take the treated sludge off site to land suitable for recycling. 38

This factor is just as relevant for the current assessment and a large number of lorries would be required to take the current sludge product to suitable agricultural land. The application of techniques requiring more lorry movements (e.g. composting, co-composting and codigestion) would therefore be potentially detrimental to local residents due to increased risk of nuisance, plus the carbon footprint and environmental impact due to the increased use of fuel. These techniques were therefore not considered further in this assessment. The land bank analysis carried out as part of the strategy development illustrates that these sites are located in a part of the region amongst the most constrained with respect to the availability of land for recycling. Both sites have some existing digestion capacity but the digesters are currently in a poor state of repair and in use for the blending and buffering of sludge prior to thermal and for temporary sludge storage during the annual statutory maintenance shutdown of the Sludge Powered Generators. Considerable refurbishment of the digesters would therefore be needed before they could be used for the digestion of sludge (or other wastes) and alternative storage capacity would be needed for use during annual maintenance and in case of other operational issues giving rise to loss of treatment capacity. Part of the assessment process involved consideration of the continued transfer of sludge between Riverside to Beckton, particularly in view of the long term capacity issues at Beckton and energy requirements of continued pumping of sludge between the two STWs during the period considered in the strategy. Riverside STW is considered a large enough site to enable efficient on-site treatment of indigenous sludge. 6.2.3 Summary of assessment The preferred options for the 10-year horizon are based on processes that minimise vehicle movements on and off site and enable efficient extraction of energy from the sludge. The processes included installation of additional thermal capacity and (if technically feasible) pyrolysis/gasification techniques and enhanced digestion (e.g. thermal hydrolysis) followed by thermal. These scored highly in our assessment with respect to maximising energy production, minimising customer impacts and minimising carbon footprint. The installation of additional thermal capacity was a favoured option in part, because this technology produces less residual waste than pyrolysis/gasification and involves minimal offsite disposal resulting in low traffic generation. The emissions from this installation would be regulated under Integrated Pollution and Prevention Control (IPPC) and the Waste Incineration Directive (WID) and, on the basis that permit conditions would be met, the potential for public nuisance arising from odour or emissions is judged to be low. Enhanced digestion followed by thermal of the remaining sludge, was amongst the best performing options, based on the assumption that it is an efficient way of extracting energy from the sludge and, at the same time, minimising the volume of sludge requiring further treatment. It should be noted, however, that this solution would need to be verified by a detailed technical evaluation of site-specific issues such as: a) The condition of the existing digesters and cost of refurbishment/replacement b) The energy balance of utilising digested versus raw sludge and c) The ability of the existing incinerator streams to burn digested cake compared with the raw cake it was designed to handle. The installation of pyrolysis/gasification technologies also scored highly. In our assessment, it was assumed that more efficient energy production would be possible with pyrolysis/gasification compared with thermal. The technology review has, however, indicated that currently neither pyrolysis nor gasification is considered to be a proven technology, either from the perspective of reliability or a secure supply chain. In the 10 to 25 year period this may change. The application of techniques that require sludge to be recycled to agricultural land were not favoured at East London thermal sites due to: 39

The size of the sites and large volumes of sludge, and hence, very high number of lorry movements required to take the product to land. The potential for public nuisance caused by the movement of these vehicles was therefore considered to be high Large land bank requirement and competition for available land with other sites in the area - the land bank assessment supports the conclusion that the sludge should be treated and disposed of on-site In the longer term (25 years), our assessment indicated consideration should also be given to co-digestion followed by a thermal process. However, the feasibility of installing additional digestion plants at either Beckton or Crossness and the impact of importing additional material on site, would need to be investigated before this option could be promoted. 6.2.4 Conclusions Processes allowing the efficient extraction of energy and minimising lorry movements are the most suitable. Recycling to land is not a viable option for these sites due to the large volume of sludge produced. 6.2.5 Recommended strategy (a) 10 year Install additional thermal with energy recovery capacity Assess whether more efficient energy recovery can be achieved at these sites by carrying out digestion in advance of a thermal process To help manage short-medium term capacity issues at Beckton, install treatment capacity at Riverside (b) 25 year In the longer term consideration should also be given to co-digestion followed by thermal in order to try to maximise the potential for energy recovery. However this would involve bringing additional material on site and the impact of this activity would need to be fully assessed. 40

6.3 East London (Digestion) 6.3.1 Sludge Treatment Centres in Area There are two sites in this region; Long Reach and Riverside, serving areas to the east of London. The sites operate conventional wastewater treatment with sludge treatment at Long Reach via anaerobic digestion, followed by recycling to agricultural land. The sludge from Riverside is currently transported by pipeline to Beckton sewage works where it is incinerated, however, the Riverside site previously provided on-site digestion. The current sludge production (2006) from these sites is 24674 tds. Long Reach operates a CHP plant producing 15.3 GWh in 2006/07. 6.3.2 Factors relevant to the assessment Access to both sites is reasonable but with increasing congestion on all roads in the area, processes that minimise sludge volume and hence lorry movements in and out of the sites are favoured. These sites are considered potentially large enough to operate a thermal process; although a more detailed feasibility study would be required for each of the sites were a thermal process to be considered. As discussed in Section 6.2.2, it was deemed appropriate to consider the feasibility of reverting to digestion on the site since, (a) some of the required assets already exist and (b) to utilise more fully the potential for energy production. In addition, Riverside is considered a large enough site to enable efficient on-site treatment of indigenous sludge. In the longer term, this would also have the added benefit of avoiding the need to regularly pump sludge between Riverside and Beckton. Both Long Reach and Riverside are situated in parts of the region that are constrained with respect to land availability. However, these sites do offer reasonable access to the North East part of the region where land availability is better. 6.3.3 Summary of assessment The preferred options for the 10-year horizon included using enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land; and installation of enhanced digestion followed by thermal. These scored highly with respect to avoiding landfill and maximising energy production. Utilising enhanced digestion (with thermal hydrolysis) followed by recycling to land was a preferred option largely on the basis that it minimises the sludge volume, resulting in fewer vehicle movements compared with acid phase digested sludge. This option also maximises gas (energy) production. Digestion (with thermal hydrolysis) followed by the application of a thermal process was amongst the best performing options on the basis that it would result in fewer vehicle movements and the assumption that this was an efficient method for energy production. However, as mentioned above, the technical feasibility and energy balance of installing a thermal plant would need to be assessed further on a site-by-site basis. Composting and co-composting were not favoured for this sub-region mostly due to the increased lorry movements associated with having to import additional material into the sites e.g. straw/woodchips, as well as more product leaving the site for recycling to land. These options also had no benefits of energy recovery. With respect to the 25-year period, the additional option of co-digestion followed by thermal should also be considered. This option, however, would be confined to those sites with reasonable access and able to accommodate the additional lorry movements. There would also need to be space on-site to construct more digestion capacity. 41

6.3.4 Conclusions Processes that maximise extraction of energy and minimise lorry movements are the most suitable Two options appear to be available to meet these criteria - both require implementation of advanced digestion followed either by recycling to land or thermal on site. Landbank constraints suggest that application of a thermal process may need to be considered in the longer term but currently there is sufficient land available to support sludge generated by these sites to be recycled to agricultural land 6.3.5 Recommended strategy (a) 10 year Introduce enhanced digestion on both sites followed by recycling to land In the longer term, review land bank availability for the sub-region and, if necessary, assess the feasibility of carrying out enhanced digestion followed by thermal. (b) 25 year The installation of enhanced digestion, possibly with co-digestion with municipal waste followed by thermal, should additionally be considered over the 25-year period. 42

6.4 Mogden (West London) 6.4.1 Sludge Treatment Centres in Area Mogden sewage treatment works is a large site (approx 1.8 million PE) receiving waste from West London. The existing sludge treatment process involves a pasteurisation phase followed by conventional anaerobic digestion, with 33.4 GWh power generated on site in 2006/07. The liquid sludge is then pumped via a dedicated pipeline to Iver South for dewatering before being taken to agricultural land for recycling. Current sludge production (2006) is 58797 tds per year. 6.4.2 Factors relevant to the assessment Mogden is located in a heavily populated part of west London and, although it is a large site, there is little opportunity for expansion of the existing treatment processes. Access to the site is via roads already heavily congested thus the application of processes that would require additional lorry movements (i.e. either taking material on or off site e.g. composting) is not favoured, therefore these techniques were not considered further. In addition, the close proximity of housing is connected to the number of odour complaints, thus the application of processes with the potential to exacerbate this problem should be avoided. Large-scale thermal would require the installation of dewatering equipment, currently located at Iver South. This was not considered feasible at Mogden due to the lack of space. At Iver South, where the current sludge production is dewatered and stored before removal to land, more land is available and access is less problematic. It is therefore likely that any future process development for sludge treatment at Mogden would have to make greater use of the site at Iver South. There is some agricultural land in the vicinity of Iver South but most of the sludge taken from the site has to be transported west along the M4 corridor to find suitable land. The land bank assessment shows that Mogden lies in a part of the region likely to be heavily constrained with respect to future land availability. 6.4.3 Summary of assessment The preferred options for the 10-year horizon are based on processes that minimise vehicle movements on and off site and enable efficient extraction of energy from the sludge. The processes included the application of enhanced digestion (with thermal hydrolysis) followed by recycling to land and (if necessary and technically feasible) pyrolysis/gasification techniques and installation of enhanced digestion (e.g. thermal hydrolysis) followed by thermal. These scored highly with respect to maximising energy production, minimising customer impacts and minimising carbon footprint. The continued application of enhanced digestion (with thermal hydrolysis or equivalent) followed by recycling to land was a preferred option largely on the basis that it minimises the sludge volume requiring further treatment, thus resulting in fewer vehicle movements compared with acid phase digested sludge or mesophillic anaerobic digested sludge. In addition, by minimising the volume of sludge requiring storage, this should reduce the potential for odour nuisance. This option also utilises the existing digesters on-site and maximises gas (energy) production thus offsetting grid power use. However, the land bank assessment illustrates that the land bank is relatively constrained in this part of the region. Thus, in the longer term, this outlet may not be viable. The installation of pyrolysis/gasification technologies was also a preferred option. In our assessment, it was assumed that more efficient energy production would be possible with pyrolysis/gasification compared with thermal. However, the technology review has indicated that, currently, neither pyrolysis nor gasification is considered to be a proven technology, either from the perspective of reliability or a secure supply chain. In the 10 to 25- year horizon this may change. Digestion (with thermal hydrolysis) followed by the application of a thermal process was a preferred option on the basis that it would result in fewer vehicle movements and the 43

assumption that this was an efficient method for energy production. However, the technical feasibility and energy balance of installing a thermal plant, would need to be assessed on a site-by-site basis. Composting and co-composting were not favoured for this sub-region mostly due to the increased lorry movements associated with having to import additional material into the sites e.g. straw/woodchips, as well as more product leaving the site for recycling to land. These options also had no benefits of energy recovery. Large-scale thermal was not considered viable at Mogden due to the space requirements for the installation of dewatering and other ancillary equipment. With respect to the 25-year period, the additional option of co-digestion followed by thermal should also be considered. However, the feasibility of installing additional digestion plant at Mogden or Iver South, and the impact of importing additional material to either site, would need to be investigated before this option could be promoted. 6.4.4 Conclusions Processes that enable efficient energy extraction and reduced lorry movements have been identified by this assessment to be the most suitable Enhanced digestion followed by either recycling to land, or thermal, meet these criteria Land bank constraints may impact on the feasibility of recycling to land in the longer term. 6.4.5 Recommended strategy (a) 10 year In the short to medium term continued use of pasteurisation, digestion and recycling to land is recommended In the longer term, review land bank availability and if necessary, assess the feasibility of carrying out enhanced digestion followed by a thermal process (b) 25 year Over the 25-year period, the potential constraints on available land bank may render the recycling outlet less viable. Thus increasing the capacity/efficiency of the existing enhanced digestion process (possibly with co-digestion with municipal waste), followed by application of a thermal process, should additionally be assessed. 44

6.5 Maple Lodge 6.5.1 Sludge Treatment Centres in Area Maple Lodge is a large sewage treatment works (478,000 PE) located in the north west of London, receiving waste from towns such as Watford, Rickmansworth and the surrounding area. The existing sludge treatment process is by conventional anaerobic digestion with 16.5 GWh power generated in 2006/07. The liquid digested sludge is dewatered before being taken to agricultural land for recycling. Current sludge production (2006) is 20087 tds per year. 6.5.2 Factors relevant to the assessment Maple Lodge occupies a large site near to the M25 and M40 and currently has reasonably good access and farmland suitable for recycling at a reasonable distance from the site. However, the roads are becoming increasingly congested and thus the application of processes that require additional lorry movements (i.e. either taking material on or off site e.g. composting) are not favoured due to the impact of potential nuisance, carbon footprint and the environment. The land bank assessment shows that Maple Lodge is situated in a part of the region fairly heavily constrained with respect to land availability. 6.5.3 Summary of assessment The preferred options for the 10-year period included the application of enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land and (if necessary and technically feasible) installation of enhanced digestion (e.g. thermal hydrolysis) followed by thermal. These scored highly with respect to maximising energy production, avoidance of landfill and minimising carbon footprint. Utilising enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land was a preferred option largely on the basis that there are fewer vehicle movements associated with this option as the technology minimises the sludge volume requiring further treatment. This option also utilises the existing digesters on-site and maximises gas (energy) production thus offsetting grid power use. However, the land bank assessment again illustrates that the land bank is relatively constrained in this part of the region. Digestion (with thermal hydrolysis) followed by the application of a thermal process was a preferred option on the basis that it would result in fewer vehicle movements and the assumption that this was an efficient way of extracting energy from the sludge. However, the technical feasibility and energy balance of installing a thermal plant would need to be assessed on a site-by-site basis. Composting and co-composting techniques were not favoured for this sub-region mostly due to the increased lorry movements associated with having to import additional material into the sites e.g. straw/woodchips, as well as more product leaving the site for recycling to land. With respect to the 25-year period, consideration should also be given to co-digestion followed by thermal (or an equivalent process). However, the impact of importing additional material on site would need to be investigated before this option could be promoted. 6.5.4 Conclusions Processes that maximise extraction of energy and minimise lorry movements are the most suitable Two options appear to be available to meet these criteria for Maple Lodge. Both require implementation of advanced digestion followed either by recycling to land or thermal on site. 45

Land bank constraints may impact on the feasibility of recycling to land in the longer term. 6.5.5 Recommended strategy (a) 10 year In the short to medium term, introduce enhanced digestion (thermal hydrolysis or equivalent) and continue recycling to land In the longer term, review land bank availability and if necessary, assess the feasibility of carrying out enhanced digestion followed by a thermal process (b) 25 year Over the 25-year period, the potential constraints on available land bank may render the recycling outlet less viable. Thus increasing the capacity/efficiency of the existing digestion process (possibly with co-digestion with municipal waste) followed by application of a thermal process should additionally be assessed. 46

6.6 Southern region 6.6.1 Sludge Treatment Centres in Area There are eight sludge centres in this regional area (Ascot, Bracknell, Camberley, Chertsey, Cranleigh, Crawley, Haslemere and Woking). These sites are of medium size located in the southern part of the region. All of the sites operate conventional anaerobic sludge digestion treatment processes with the products recycled to agricultural land. There are variations in the process used, notably at Chertsey where the Cambi process is employed. This is a thermal hydrolysis treatment phase designed to help break down the natural organic material present in sewage and hence obtain a more efficient sludge digestion phase. The total sludge production from these sites is currently (2006) 29126 tds. Energy recovery is currently in operation at Camberley, Crawley and Bracknell, producing a total of 3.5 GWh in 2006/07 and there are plans to install further CHP plant at Chertsey and Woking. 6.6.2 Factors relevant to the assessment Access to the sites is mostly reasonably good, although there is increasing congestion on all roads in the area thus processes that minimise lorry movements in and out of the site are favoured. Techniques that require the movement of additional material on and off site (e.g. composting, co-composting and co-digestion) are therefore not favoured. Some of the sites also face increasing pressure from urban encroachment, thus odour issues are likely to become more important in the future. Thus processes that reduce sludge volume and hence minimise storage requirements are favoured. In principle some of the centres are considered large enough to operate a small thermal process on each site. However, a more detailed feasibility study would be required for each of the sites should this option be taken forward. The eight sites cover a large area with variable land bank availability. The land bank analysis indicates that the region around Crawley, Cranleigh, Woking and Chertsey is particularly constrained. 6.6.3 Summary of assessment The preferred options for the 10-year horizon included the application of enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land and (if necessary and technically feasible) installation of enhanced digestion (e.g. thermal hydrolysis) followed by thermal. These scored highly with respect to maximising energy production, avoidance of landfill and minimising environmental impact. Utilising enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land was a preferred option largely on the basis that it minimises the sludge volume requiring further treatment, thus resulting in fewer vehicle movements and easing the congestion on the local roads. In addition, by minimising the volume of sludge requiring storage, this should reduce the potential for odour nuisance on-site. This option also avoids disposal to landfill and maximises gas (energy) production thus offsetting grid power use etc. However, the land bank assessment illustrates that the region is relatively constrained with variable land bank availability. Digestion (with thermal hydrolysis) followed by the application of a thermal process was a favoured option on the basis that it would result in fewer vehicle movements and the assumption that this was an efficient method for energy production. However, as mentioned above, the feasibility of installing a small thermal process would need to be assessed on a site-by-site basis. The implementation of large-scale thermal process by transporting sludge from several sites to a central location was not favoured due to a range of potential nuisance (e.g. traffic movements), carbon footprint and environmental impacts. In addition, composting and co-composting techniques were not favoured for this sub-region mostly due to the increased lorry movements associated with having to import additional material into the sites e.g. 47

straw/woodchips, as well as more product leaving the site for recycling to land and the lack of opportunity of renewable energy generation. With respect to the 25-year period, the additional option of co-digestion followed by thermal should also be considered. However, this option would be confined to those sites with good access, that have space on-site to construct more digestion capacity and be able to accommodate the additional lorry movements. The impact of importing additional material to site would need to be investigated before this option could be promoted. 6.6.4 Conclusions Processes that maximise extraction of energy and minimise lorry movements are the most suitable Two options meet these criteria. Both require implementation of advanced digestion followed either by recycling to land or thermal on site. Land bank constraints at some sites suggest that on site treatment and application of a thermal process may be the favoured option in the longer term. 6.6.5 Recommended strategy (b) 10 year Introduce enhanced digestion on all sites followed by recycling to land In the longer term, review land bank availability for the sub-region and, if necessary assess the feasibility of carrying out enhanced digestion followed by thermal at those sites with particular land bank constraints. (b) 25 year The installation of enhanced digestion possibly with co-digestion with municipal waste followed by thermal should additionally be considered over the 25-year period. 48

6.7 Western region (digestion) 6.7.1 Sludge Treatment Centres in Area There are nine sludge centres in this regional area (Aylesbury, Banbury, Basingstoke, Didcot, Little Marlow, Oxford, Reading, Swindon and Wargrave). These sites are of small to medium size located in the western part of the region. All of the sites operate conventional anaerobic sludge digestion treatment processes with the products recycled to agricultural land. There are variations in the process used, notably at Reading where pre-pasteurisation is employed and at Swindon, where acid phase digestion is practised before conventional anaerobic digestion. The combined current sludge production (2006) from these sites is 53071 tds. Energy recovery is currently in operation at Aylesbury, Basingstoke, Banbury, Oxford, Reading, Swindon and Wargrave, producing a total of 14 GWh in 2006/07. 6.7.2 Factors relevant to the assessment Access to these sites is variable, although there is increasing congestion on all roads in the area, thus processes that minimise lorry movements in and out of the sites are favoured. The implementation of processes requiring the movement of additional material on and off site (e.g. composting, co-composting and co-digestion) is also therefore not favoured. Some of the sites also face increasing problems from housing encroachment and therefore odour issues are likely to become more important. Thus processes that minimise sludge volume and hence minimise storage requirements are favoured. Some of these sites are considered large enough potentially to operate a small thermal process, although a more detailed feasibility study would be required for each of the sites should this option be taken forward. Little Marlow has been included in this group as, although it currently operates a composting plant, the intention is to close this operation in the short to medium term due to problems arising from odour associated with the process and cost. The nine sites cover a large area but, in general, are located in those parts of the region with reasonably good access to land suitable for recycling. 6.7.3 Summary of assessment The preferred options for the 10-year period included the application of enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land and (if necessary and technically feasible) installation of enhanced digestion (e.g. thermal hydrolysis) followed by thermal. These scored highly with respect to maximising energy production, avoidance of landfill and minimising environmental impact. Enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land was favoured, largely because the process minimises the sludge volume requiring further treatment. This results in fewer vehicle movements thus easing congestion on the roads and a reduction in the volume of sludge requiring storage, which should help to reduce the potential for odour nuisance on-site. This option is also the least likely to utilise disposal to landfill and maximises gas (energy) production thus offsetting grid power use. Digestion (with thermal hydrolysis hence maximising gas production) followed by the application of a thermal process was also favoured. This was on the basis that it would result in fewer vehicle movements and the assumption that this was an efficient method of energy production. However, the feasibility of installing a small thermal process would need to be assessed on a site-by-site basis. The implementation of processes requiring the movement of additional material on and off site (e.g. composting and co-composting) were not favoured in the 10 year horizon due to the increased lorry movements associated with having to import additional material into the sites e.g. straw/woodchips and increasing congestion on all roads. In addition, the implementation of a large-scale thermal process by transporting sludge from several sites to a 49

central location was not favoured due to a range of nuisance, carbon footprint and environmental impacts. With respect to the 25-year period, the additional option of co-digestion followed by thermal, should also be considered due to the opportunity to align with Local Authorities waste strategies and thus avoiding the use of unsustainable and (anticipated) prohibitively expensive landfill. This option, however, would be confined to those sites with reasonable access and those able to accommodate the additional lorry movements and also have to space on site to construct more digestion capacity. The impact of importing additional material to site would need to be investigated before this option could be promoted. 6.7.4 Conclusions Processes that maximise the generation of energy and minimise lorry movements are the most suitable Two options appear to be available to meet these criteria. Both require implementation of advanced digestion, followed either by recycling to land, or thermal on site. Land bank availability is generally good, however, local constraints at some sites may mean that on-site treatment/thermal may be the favoured option in the longer term. 6.7.5 Recommended strategy (a) 10 year Introduce enhanced digestion on all sites followed by recycling to land In the longer term, review land bank availability for the sub-region and, if necessary, assess the feasibility of carrying out enhanced digestion followed by thermal at sites with specific land bank constraints. (b) 25 year The installation of enhanced digestion possibly with co-digestion with municipal waste, followed by thermal, should additionally be considered over the 25-year period. 50

6.8 South-East region (lime) 6.8.1 Sludge Treatment Centres in Area There are four sludge centres in this area (Earlswood, Farnham, Fleet, Guildford). They are medium-sized sites largely serving the town in which they are located plus the surrounding housing. All sites carry out conventional sewage treatment with the raw sludge treated with lime before recycling to agricultural land. The current sludge production (2006) from these sites is 21451 tds. 6.8.2 Factors relevant to the assessment Access is variable but generally poor thus the application of processes that minimise lorry movements is favoured. Techniques that require the movement of additional material on and off site (e.g. composting, co-composting and co-digestion) are therefore not favoured. All sites have experienced encroachment of housing to a certain extent. This is likely to continue and odour is already an issue at some sites. Due to the nature of the sludge treatment processes there is currently no energy recovery in operation on any of the sites. The lime treatment process increases the volume of sludge to be managed and it is our intention to replace this process in the short to medium term. The land bank assessment indicates that availability is relatively poor in this part of the region. 6.8.3 Summary of assessment The preferred options for the 10-year horizon are based on processes that reduce sludge volumes and maximise gas production potential. These processes include the application of enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land and (if necessary and technically feasible) installation of enhanced digestion (e.g. thermal hydrolysis) followed by thermal. These scored highly with respect to maximising energy production, avoidance of landfill and minimising environmental impact. Utilising enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land scored highly on the basis that it minimises the sludge volume requiring further treatment, thus resulting in fewer vehicle movements. In addition, by minimising the volume of sludge requiring storage, this should reduce the potential for odour production. This option also avoids disposal to landfill and maximises gas (energy) production thus offsetting grid power use. However, the land bank assessment illustrates that availability in the region is relatively poor, thus the viability of continuing to use this outlet will need to be kept under review. An alternative is to utilise digestion (with thermal hydrolysis hence maximising gas production), followed by the application of a thermal process on-site, in place of recycling. This was also a favoured option on the basis that it would result in fewer vehicle movements and on the assumption that this was an efficient method for energy production. However, the feasibility of installing a small thermal process needs to be assessed on a site-by-site basis to determine the most favoured option for each site. It should be noted that the implementation of large-scale thermal processes by transporting sludge from several sites to a central location was not favoured due to a range of nuisance, carbon footprint and environmental impacts. In addition, composting and cocomposting techniques were not favoured due to the relatively poor access and the increased lorry movements associated with having to import additional material into the sites e.g. straw/woodchips. In addition, these options would require more landbank and have no opportunity for the generation of renewable energy. Over the long term 25-year period, consideration should be given to the option of co-digestion followed by a thermal process providing an opportunity to align with Local Authorities waste strategies. However, site-specific issues, and in particular, the ease of 51

access for bringing in the additional material to be digested needs to be taken into account and investigated before this option could be promoted. 6.8.4 Conclusions Processes that maximise extraction of energy and minimise sludge volume and hence lorry movements are the most suitable Two options appear to be available to meet these criteria. Both require implementation of advanced digestion followed either by recycling to land or thermal on site. Land bank availability is variable and constraints at some sites may mean that on-site treatment/thermal may be the favoured option in the longer term. 6.8.5 Recommended strategy (a) 10 year Introduce enhanced digestion on all sites followed by recycling to land In the longer term, review land bank availability for the sub region and, if necessary, assess the feasibility of carrying out enhanced digestion followed by thermal at those sites with particular land bank constraints. (b) 25 year The installation of enhanced digestion with co-digestion with municipal waste, followed by thermal, should additionally be considered over the 25-year period. 52

6.9 Western region (lime) 6.9.1 Sludge Treatment Centres in Area There are four sludge centres in this area (Bicester, Newbury, Wantage and Witney). They are relatively small sites largely serving the town in which they are located. All sites carry out conventional sewage treatment with the raw sludge treated with lime before recycling to agricultural land. The outlet for sludge from Wantage is currently a land restoration site but this is a relatively short-term option. The combined current sludge production (2006) from these sites is 11252 tds. 6.9.2 Factors relevant to the assessment Access is variable but generally poor thus the application of processes that minimise sludge volume and hence lorry movements would be favoured. Techniques that require the movement of additional material on and off site (e.g. composting, co-composting and codigestion) are therefore not favoured. All sites suffer from encroachment of housing to a certain extent and this is likely to get worse; odour is already an issue at some sites. All sites are reasonably close to agricultural land suitable for recycling. Due to the nature of the processes on site, there is currently no energy recovery in operation. These sites are not considered large enough to operate a thermal process although a more detailed feasibility study would be required to completely eliminate this option for each site. This is a site-specific issue that would be picked up in considering any future development for that site. The lime treatment process increases the volume of sludge to be managed and it is our intention to replace this process in the short to medium term. The land bank analysis suggests that land is relatively unconstrained in this part of our region. 6.9.3 Summary of assessment The preferred options for the 10-year horizon included the application of enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land and codigestion followed by recycling to land. These scored highly with respect to maximising energy production and avoidance of landfill. Utilising enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land was a preferred option, largely because the process minimises the sludge volume requiring further treatment. This results in fewer vehicle movements thus easing congestion on the roads in the area and a reduction in the volume of sludge requiring storage, which should help to reduce the potential for odour nuisance on-site. This option is also the least likely to utilise disposal to landfill and maximises gas (energy) production thus offsetting grid power use. The implementation of a large-scale thermal process by transporting sludge from several sites to a central location was not favoured due to a range of potential nuisance, carbon footprint and environmental impacts. Similarly, the application of digestion followed by a thermal process was also not considered viable given the size of the sites in question this option would require the installation of several small thermal units with associated relatively high costs. In the longer term (25 years), consideration should also be given to co-digestion followed by recycling to land, although site-specific issues, and in particular ease of access for bringing in the additional material to be digested, would need to be taken into account before codigestion could be promoted. 6.9.4 Conclusions Processes that maximise extraction of energy and minimise lorry movements are the most suitable. 53

Installation of enhanced digestion followed by recycling to land meets these criteria The land bank assessment suggests that sufficient land should be available. 6.9.5 Recommended strategy (a) 10 year Introduce enhanced digestion on all sites followed by recycling to land (b) 25 year The installation of enhanced digestion with co-digestion with municipal waste followed by recycling to land should additionally be considered over the 25- year period. 54

6.10 West London 6.10.1 Sludge Treatment Centres in Area There are three sludge centres in this area (Beddington, Hogsmill and Slough). They are medium to large sized works largely serving areas to the south and west of London. The sites operate conventional wastewater treatment with sludge processing via anaerobic digestion with energy recovery, followed by recycling to agricultural land. The total current sludge production (2006) from these sites is 33713 tds. All sites operate CHP plant producing a total of 17.2 GWh in 2006/07. 6.10.2 Factors relevant to the assessment Access to all of the sites is generally poor and, with increasing congestion on all roads in the area, processes that minimise sludge volume and hence lorry movements in and out of the sites are favoured. Techniques that require the movement of additional material on and off site (e.g. composting, co-composting and co-digestion) are therefore not favoured. Some of the sites also face increasing problems from housing encroachment thus odour issues are likely to become more important. Thus processes that minimise sludge volume and hence minimise storage requirements are favoured. These sites are considered large enough to potentially operate a small thermal process, although a more detailed feasibility study would be required for each of the sites should this option be taken forward. These sites lie in a part of the region with relatively heavy constraints on available land for recycling. 6.10.3 Summary of assessment The preferred options for the 10-year horizon are based on processes that reduce sludge volumes and maximise gas production potential. These processes include the application of enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land and (if necessary and technically feasible) installation of enhanced digestion (e.g. thermal hydrolysis) followed by thermal. These scored highly with respect to maximising energy production, avoidance of landfill and minimising environmental impact. One of the preferred options was utilising enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land, largely because the process minimises the sludge volume requiring further treatment. This results in fewer vehicle movements thus easing congestion on the roads in the area and a reduction in the volume of sludge requiring storage, which should help to reduce the potential for odour nuisance on-site. This option is also the least likely to utilise disposal to landfill and maximises gas (energy) production thus offsetting grid power use. A favoured alternative would be to utilise digestion (with thermal hydrolysis hence maximising gas production) followed by the application of a thermal process on-site in place of recycling. This was also scored highly on the basis that it would result in fewer vehicle movements and on the assumption that this was an efficient method for energy production. However, as mentioned above, the feasibility of installing a small thermal process needs to be assessed on a site-by-site basis to determine the most favoured option for each site. Composting and co-composting techniques were not favoured for this sub-region, largely due to the poor access in this sub-region and the increased lorry movements associated with having to import additional material into the sites e.g. straw/woodchips, as well as more product leaving the site for recycling to land. This option also has no opportunity for the generation of energy. With respect to the 25-year period, the additional option of co-digestion followed by thermal should also be considered. This option, however, would be confined to those sites 55

with reasonable access and able to accommodate the additional lorry movements and also have to space on site to construct more digestion capacity this would need to be investigated before this option could be promoted. 6.10.4 Conclusions Processes that maximise extraction of energy and minimise lorry movements are the most suitable Two options appear to be available to meet these criteria - both require implementation of advanced digestion followed either by recycling to land or thermal on site. Landbank constraints suggest that on site treatment and application of a thermal process may be the favoured option in the longer term. 6.10.5 Recommended strategy (a) 10 year Introduce enhanced digestion on all sites followed by recycling to land In the longer term, review land bank availability for the sub-region and, if necessary, assess the feasibility of carrying out enhanced digestion followed by thermal. (b) 25 year The installation of enhanced digestion possibly with co-digestion with municipal waste followed by thermal should additionally be considered over the 25-year period. 56

6.11 North London 6.11.1 Sludge Treatment Centres in Area There are two sludge centres in this area; Deephams and Rye Meads. They are both large works largely serving areas to the north of London. The sites operate conventional wastewater treatment with sludge processing via anaerobic digestion with energy recovery followed by recycling to agricultural land. The total current sludge production (2006) from these sites is 44075 tds. Both sites operate CHP plants recovering 25.5 GWh in 2006/07. 6.11.2 Factors relevant to the assessment Access to the sites is reasonable but with increasing congestion on all roads in the area, processes that reduce sludge volume and hence minimise lorry movements in and out of the sites are favoured. Techniques that require the movement of additional material on and off site (e.g. composting, co-composting and co-digestion) are not favoured. These sites are considered large enough to operate a thermal process, if necessary, although a more detailed feasibility study would be required for each of the sites should this option be taken forward. Deephams is relatively close to the centre of London and, as expected, the land bank assessment confirms that availability of agricultural land is constrained in this area. However, Rye Meads is located in an area with good potential availability. 6.11.3 Summary of assessment The preferred options for the 10-year horizon are based on processes that reduce sludge volumes and maximise gas production potential. These processes include the application of enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land and (if necessary and technically feasible) installation of enhanced digestion (e.g. thermal hydrolysis) followed by thermal. These scored highly with respect to maximising energy production, avoidance of landfill and minimising environmental impact. One of the preferred options was utilising enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land, largely because the process minimises the sludge volume requiring further treatment. This results in fewer vehicle movements thus easing congestion on the roads in the area and a reduction in the volume of sludge requiring storage, which should help to reduce the potential for odour nuisance on-site. This option is also the least likely to utilise disposal to landfill and maximises gas (energy) production thus offsetting grid power use. A favoured alternative would be to utilise digestion (with thermal hydrolysis hence maximising gas production) followed by the application of a thermal process on-site in place of recycling. This was also scored highly on the basis that it would result in fewer vehicle movements and on the assumption that this was an efficient method for energy production. However, as mentioned above, the feasibility of installing a small thermal process needs to be assessed on a site-by-site basis to determine the most favoured option for each site Composting and co-composting techniques were not favoured for this sub-region, largely due to the poor access to these sites and the increased lorry movements associated with having to import additional material into the sites e.g. straw/woodchips, as well as more product leaving the site for recycling to land. This option also has no opportunity for the generation of renewable energy. With respect to the 25-year period, the additional option of co-digestion followed by thermal should also be considered. This option, however, would be confined to those sites with reasonable access and able to accommodate the additional lorry movements and also have to space on site to construct more digestion capacity. 57

6.11.4 Conclusions Processes that maximise extraction of energy and minimise lorry movements are the most suitable Two options are available to meet these criteria - both require implementation of advanced digestion followed either by recycling to land or thermal on site. Land bank constraints at Deephams suggest that on site treatment and application of a thermal process may be the favoured option in the longer term. 6.11.6 Recommended strategy (a) 10 year Introduce enhanced digestion on all sites followed by recycling to land In the longer term, review land bank availability for the sub-region and, if necessary, assess the feasibility of carrying out enhanced digestion followed by thermal. (b) 25 year The installation of enhanced digestion possibly with co-digestion with municipal waste followed by thermal should additionally be considered over the 25-year period. 58

6.12 North East Provinces 6.12.1 Sludge Treatment Centres in Area There are two sludge centres in this area; Bishops Stortford and East Hyde (Luton). They are medium sized works largely serving areas to the north of London. The sites operate conventional wastewater treatment with sludge processing via anaerobic digestion followed by recycling to agricultural land. The current sludge production (2006) from these sites is 7110 tds. Luton currently operates a CHP plant producing 1.8 GWh in 2006/07 and equivalent plant is currently being installed at Bishops Stortford, due for completion during 2008. 6.12.2 Factors relevant to the assessment Access to the sites is reasonable, although there is increasing congestion on all roads in the area thus processes that minimise sludge volume and hence lorry movements in and out of the site are favoured. Some of the sites also face increasing problems from encroachment, thus odour issues are likely to become more important. Thus processes that minimise sludge volume and hence minimise storage requirements are favoured. These sites may not be large enough to operate a small thermal process and a more detailed feasibility study would be required for each of the sites should this option need to be taken forward. The land bank assessment shows that availability is relatively good for both of these sites. 6.12.3 Summary of assessment The preferred options for the 10-year period included the application of enhanced digestion (with thermal hydrolysis or acid phase digestion) followed by recycling to land and (if necessary and technically feasible) installation of enhanced digestion (e.g. thermal hydrolysis) followed by thermal. These scored highly with respect to maximising energy production, avoidance of landfill and minimising environmental impact. Enhanced digestion (with thermal hydrolysis or acid phase digestion), followed by recycling to land, was favoured, largely because the process minimises the sludge volume requiring further treatment. This results in fewer vehicle movements thus easing congestion on the roads and a reduction in the volume of sludge requiring storage, which should help to reduce the potential for odour nuisance on-site. This option is also the least likely to utilise disposal to landfill and maximises gas (energy) production thus offsetting grid power use. Digestion (with thermal hydrolysis hence maximising gas production) followed by the application of a thermal process was also favoured. This was on the basis that it would result in fewer vehicle movements and the assumption that this was an efficient method of energy production. However, the feasibility of installing small thermal process would need to be assessed on a site-by-site basis. The implementation of processes requiring the movement of additional material on and off site (e.g. composting and co-composting) were not favoured in the 10 year horizon due to the increased lorry movements associated with having to import additional material into the sites e.g. straw/woodchips and increasing congestion on all roads. In addition, the implementation of a large-scale thermal process by transporting sludge from several sites to a central location was not favoured due to a range of nuisance, carbon footprint and environmental impacts. With respect to the 25-year period, the additional option of co-digestion followed by thermal should also be considered due to the opportunity to align with Local Authorities waste strategies and thus avoiding the use of unsustainable and (anticipated) prohibitively expensive landfill. This option, however, would be confined to those sites with reasonable access and those able to accommodate the additional lorry movements and also have to space on site to construct more digestion capacity. The impact of importing additional material to site would need to be investigated before this option could be promoted. 59

6.12.4 Conclusions Processes that maximise extraction of energy and minimise lorry movements are the most suitable Two options meet these criteria. Both require implementation of advanced digestion followed either by recycling to land or thermal on site. Land availability is relatively good hence recycling to land is the favoured option. 6.12.5 Recommended strategy (a) 10 year Introduce enhanced digestion on all sites followed by recycling to land In the longer term, review land bank availability for the sub-region and, if necessary, assess the feasibility of carrying out enhanced digestion followed by thermal. (b) 25 year The installation of enhanced digestion, possibly with co-digestion with municipal waste, followed by recycling to land or thermal depending on land availability should additionally be considered over the 25- year period. 60

7. MAIN CONCLUSIONS Although a detailed analysis has been carried out for each sub region and separate conclusions have been drawn for each of these areas, a number of common themes and trends are evident. The approach of carrying out separate assessment analyses for a 10 year and 25 year horizon has also provided useful information in identifying trends over the longer term. The main conclusions are that processes that (a) maximise energy recovery and (b) minimise sludge volumes are favoured. Where there is suitable land bank availability, utilising the recycling to land outlet remains the preferred option. To protect this outlet, we anticipate investing in sludge treatment to improve product quality e.g. reduced odour and dry solids. However, in predominately urban areas, the use of thermal processes with energy recovery may be more appropriate, thus avoiding the increased environmental impact and costs of transporting the treated sludge to land. Further more detailed conclusions include: Processes that enable the efficient extraction of energy from sludge should be adopted e.g. the installation of enhanced digestion or best practice thermal The minimisation of vehicle movements on and off sites is also an important factor in identifying our preferred options. Reducing lorry movements will provide benefits in minimising carbon footprint and environmental impacts through reducing fuel use and reducing the potential for nuisance to our customers Techniques that minimise sludge volumes will also be adopted and this will provide benefits through: a. Reducing vehicle movements if the sludge is being recycled to land b. Minimising the need to store sludge hence reducing the potential for odour nuisance In addition, should we be required to find alternative disposal routes as recycling to land becomes more restricted, then volumes for disposal will have to be minimised. In the longer term, the benefits of carrying out co-digestion with other wastes are attractive from the point of view of increasing energy production. However the potentially negative impacts of increased traffic movements required to transport additional material on site and the increased operational complexity would need to be assessed on a site-by-site basis. 10-year strategic recommendations Convert our main sludge treatment centres, where the primary disposal route is recycling to land, to enhanced digestion to increase energy production and minimise solids. Our preliminary view of sites that are projected for the installation of enhanced digestion in the next 10 years include Banbury, Basingstoke, Beddington, Bracknell, Camberley, Crawley, Didcot, East Hyde, Hogsmill, Little Marlow, Oxford, Riverside, Swindon and Witney. However, this selection will be reviewed on the basis of more detailed site specific assessments Although recycling to land remains our favoured option we plan to reduce our current dependence on landbank in view of the potential constraints on this outlet. This will be achieved in the short to medium term through solids reduction as a result of 61

improvements to digestion and the impact this will have on our outlets is shown in Figure 5. Figure 5. Predicted Outlets for Sewage Sludge - 10 year recommendations * 1% 1% Agriculture 42% Thermal with energy recovery Bioenergy crops 56% Land Restoration * There is anticipated to be a relative increase in the proportion of sludge being treated by the thermal process due to increase in sludge production in East London based on population growth including urban regeneration. The reduction in the proportion of sludge recycled to land is as a result of solids reduction through enhanced digestion Provide additional sludge treatment capacity for our large East London treatment works at Beckton and Crossness. This is likely to be additional thermal capacity with energy recovery to deal with population growth, plus refurbishment of existing assets At the end of the 10 year period (2017/2018) we will undertake a further strategic review of the current capacity of treatment/outlets employed, location and number of sludge centres in the Region, in order to inform the next 15 year investment programme 25-year strategic recommendations Our strategy for the period 2020-2035 will be informed by the outcome of the updated strategic review and on assessment of landbank availability. However, it is anticipated that our main proposal will be to: o Maintain recycling to land where the landbank availability allows o Introduce thermal units with energy recovery at large urban sites impacted by land-bank constraints o Introduce co-digestion with municipal waste where capacity exists or it can be deployed 62

8. GLOSSARY APD Biosolids BPEO BRC Acid Phase Digestion Treated sewage sludge. Product of treatment processes such as digestion, dewatering, lime stabilisation. Best Practicable Environmental Option British Retail Consortium. Trade Association representing a wide range of UK retailers. BSI PAS 100 Publicly Available Specification for compost materials. CAP Common Agricultural Policy Capex Capital expenditure CC Climate Change CCPs Critical Control Points used in HACCP methodology CHP Combined Heat and Power DEFRA Department of the Environment, Food and Rural Affairs Dewatering The process of reducing the water content within sludges; typically used to describe the transition from liquid sludge to sludge cake. DS Dry Solids content. The weight of dry solids per unit weight of sludge, expressed as a percentage or as mg/kg. EA EC EDV EEC EIA EPA EPP EU EWC Gasification GHG HACCP IPPC LA Landbank MAD MSW MWh NVZ Ofwat OJEC Opex PE PPC PTEs Pyrolysis QA RCV The Environment Agency European Commission Effective Digester Volumes European Economic Community Environmental Impact Assessment Environmental Protection Act Environmental Permitting Programme European Union European Waste Catalogue Gasification is the breakdown of hydrocarbons into a syngas by carefully controlling the amount of oxygen present. Greenhouse Gas Hazard Analysis Critical Control Point identification and close monitoring of CCPs throughout a treatment process to ensure the required quality standard is met. Also widely used in food safety management. Integrated Pollution Prevention and Control Local Authority The area of agricultural land available for recycling treated sewage sludge Mesophillic Anaerobic Digestion Municipal Solid Waste Megawatt hours Nitrate Vulnerable Zone Economic regulator for the water industry. Official Journal of the European Communities Operational expenditure Population Equivalent Pollution Prevention and Control Potentially Toxic Elements The thermal degradation of waste in the absence of air. Sludge is heated to a high temperature in an oxygen-free atmosphere. Mainly used as a pre-treatment step to gasification. Quality Assurance Regulatory Capital Value 63

ROCs SEA SFP Sludge SOLAR SRC SRF SSM STC STW Syngas TDS THP TTQI TWUL UWWTD WAC WID WML Renewables Obligation Certificates Strategic Environmental Assessment Single Farm Payment Sludge is produced as an unavoidable natural by-product of the processes used in both wastewater treatment works and water treatment works, and comprises the solids removed during the treatment processes Strategic Overview of Long-term Assets and Resources Short Rotation Coppice Secondary recovered fuel Safe Sludge Matrix voluntary code identifying minimum acceptable levels of treatment to microbiological standards for wastewater sludge products applied to various agricultural crops, and application windows related to harvesting. Sludge Treatment Centre the final location at which sludge is prepared for reuse or recycling. Sewage Treatment Works Synthetic gas Tonnes Dry Solid the preferred unit of measurement for sludge. Thermal Hydrolysis Process Thames Tideway Quality Improvement project. Thames Water Utilities Limited Urban Waste Water Treatment Directive Waste Acceptance Criteria Waste Incineration Directive. Sets specific concentration limits for emissions, operating conditions and monitoring requirements for facilities which combust waste. Waste Management Licensing 64

APPENDICES Appendix 1: Biosolids recycling to agriculture - The impact of exclusion clauses and other restrictions on the agricultural landbank Appendix 2: Business & Sustainability Assessments - graphs Appendix 3: Business & Sustainability Assessments - scoring sheets Appendix 4: Sensitivity Analysis

Appendix 1 Biosolids recycling to agriculture: The impact of exclusion clauses and other restrictions on the agricultural landbank Investigation for Thames Water carried out by ADAS and Grieve Strategic. October 2007 Summary Thames Water produces c.253,000 tonnes of sludge dry solids per year (2006 figure), with c.61% (c.156,000 tonnes dry solids) recycled to agricultural land within and outside the Thames region. Thames Water require an agricultural landbank of 20,000 25,000ha/annum (within and outside the Thames Water region) to recycle its biosolids products. Presently Thames Water uses c.14,000ha of land within the Thames region itself. The total agricultural landbank in the Thames Water region is c.670,000ha. The total capacity for accepting biosolids in the Thames Water region, after accounting for existing land use/physical constraints and the area already occupied by animal manures was estimated to be c. 460,000ha. Current exclusion clauses for arable crops (malting barley, milling wheat and milling oats) were estimated to reduce the landbank area by c.131,000ha, leaving an available area of c.329,000ha. The geographical spread of available agricultural land within the Thames Water region is illustrated in Figure 1. If in the future exclusion clauses were applied to all wheat, barley and oilseed rape crops (which are the main crops used for biosolids recycling by Thames Water) the estimated landbank remaining would be c.70,000ha. An illustration of how these potential exclusion clauses could impact on the size of the agricultural land bank is shown in Figure 2. Taking into account farmer acceptability and cropping constraints, such exclusion clause introduction would lead to a total collapse of the agricultural landbank. We recommend that Thames Water (in collaboration with other Water Companies who have participated in detailed landbank assessment work such as this) should form a Biosolids Club and lobby government on the landbank impacts of exclusion clauses, and to develop a positive public relations campaign.

Figure 6. The available landbank for biosolids within the Thames Water region under current exclusion clauses N.B. Each grid square = 10,000 hectares

Figure 7. Landbank assessments and the impact of current and potential arable crop exclusion clauses 800000 700000 600000 500000 ha 400000 300000 200000 100000 0 Headline landbank Post current exclusions Post oilseed rape exclusion Post ALOWANCE restrictions Post milling wheat exclusion Post feed wheat/barley exclusion

Appendix 2 Business and Sustainability Assessment Graphs East London (Thermal Destruction) Strategy 150 140 130 120 Option score 110 100 90 80 70 60 THP + digestion APD + digestion MAD + digestion Pyrolysis, gasification Thermal Composting Cocomposting Co-digestion Enhanced digestion + thermal Enhanced co-digestion + thermal 10 year strategy 25 year strategy East London (Digestion) Strategy 150 140 130 120 Option score 110 100 90 80 70 60 THP + digestion APD + digestion MAD + digestion Pyrolysis, gasification Thermal Composting Cocomposting Co-digestion Enhanced digestion + thermal Enhanced codigestion + thermal 10 year strategy 25 year strategy

Mogden Strategy 150 140 130 120 Option score 110 100 90 80 70 60 THP + digestion APD + digestion MAD + digestion Pyrolysis, gasification Thermal Composting Cocomposting Co-digestion Enhanced digestion + thermal Enhanced codigestion + thermal 10 year strategy 25 year strategy Maple Lodge Strategy 150 140 130 120 Option score 110 100 90 80 70 60 THP + digestion APD + digestion MAD + digestion Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Enhanced digestion + thermal Enhanced codigestion + thermal 10 year strategy 25 year strategy

Southern Region Strategy 150 140 130 120 Option score 110 100 90 80 70 60 THP + digestion APD + digestion MAD + digestion Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Enhanced digestion + thermal Enhanced codigestion + thermal 10 year strategy 25 year strategy Western Region (Digestion) Strategy 150 140 130 120 Option score 110 100 90 80 70 60 THP + digestion APD + digestion MAD + digestion Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Enhanced digestion + thermal Enhanced codigestion + thermal 10 year strategy 25 year strategy

South-East Region (Lime) Strategy 150 140 130 120 Option score 110 100 90 80 70 60 THP + digestion APD + digestion MAD + digestion Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Enhanced digestion + thermal Enhanced codigestion + thermal 10 year strategy 25 year strategy Western Region (Lime) Strategy 150 140 130 120 Option score 110 100 90 80 70 60 THP + digestion APD + digestion MAD + digestion Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Enhanced digestion + thermal Enhanced codigestion + thermal 10 year strategy 25 year strategy

West London (Digestion) Strategy 160 150 140 130 Option score 120 110 100 90 80 70 60 THP + digestion APD + digestion MAD + digestion Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Enhanced digestion + thermal Enhanced codigestion + thermal 10 year strategy 25 year strategy North London Strategy 160 150 140 130 Option score 120 110 100 90 80 70 60 THP + digestion APD + digestion MAD + digestion Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Enhanced digestion + thermal Enhanced codigestion + thermal 10 year strategy 25 year strategy

North-East Provinces Strategy 150 140 130 120 Option score 110 100 90 80 70 60 THP + digestion APD + digestion MAD + digestion Pyrolysis, gasification Thermal Composting Cocomposting Co-digestion Enhanced digestion + thermal Enhanced co-digestion + thermal 10 year strategy 25 year strategy

Business & Sustainability Assessments 10 year scoring sheets Appendix 3 10 year strategy - E London (Thermal Destruction Sites) Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal score total score total score total score total score total score total score total score total score total Cost (capex) M/tonne 4 5 20 4 16 3 12 2 8 1 4 0 0 0 2 8 RCV 3 3 9 2 6 1 3 4 12 5 15 0 0 0 3 9 Cost (Opex) 2 2 4 1 2 1 2 4 8 4 8 0 0 0 5 10 Ease of Promotion 3 2 6 2 6 1 3 4 12 4 12 0 0 0 5 15 Minimise customer impacts 5 1 5 1 5 1 5 4 20 5 25 0 0 0 5 25 Maximise energy production 5 5 25 4 20 3 15 4 20 1 5 0 0 0 5 25 Avoid landfill 4 5 20 5 20 5 20 1 4 3 12 0 0 0 3 12 Minimise carbon foot print 4 2 8 2 8 1 4 5 20 4 16 0 0 0 5 20 Minimise environ impacts 3 1 3 1 3 1 3 5 15 5 15 0 0 0 5 15 Overall 100 86 67 119 112 0 0 0 139 10 year strategy - E London digestion Business Driver weight THP APD MAD Pyrolysis, Thermal Composting Co-composting Co-digestion Digestion + gasification thermal score total score total score total score total score total score total score total score total score total Cost M/ton 4 4 16 5 20 3 12 3 12 1 4 3 12 2 8 3 12 2 8 RCV 3 2 6 1 3 3 9 4 12 5 15 1 3 3 9 3 9 5 15 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 2 4 Ease of Promotion 3 3 9 5 15 3 9 3 9 1 3 4 12 4 12 5 15 3 9 Minimise customer impacts 5 3 15 3 15 3 15 4 20 4 20 2 10 1 5 2 10 5 25 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 Avoid landfill 4 5 20 5 20 5 20 1 4 3 12 5 20 5 20 5 20 4 16 Minimise carbon foot print 4 4 16 3 12 2 8 4 16 3 12 2 8 1 4 3 12 5 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 5 15 1 3 1 3 3 9 5 15 Overall 129 122 103 112 93 75 68 113 137

10 year strategy - Mogden (West London) Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal score total score total score total score total score total score total score total score total score total Cost M/ton 4 4 16 5 20 3 12 3 12 0 0 0 3 12 1 4 RCV 3 2 6 1 3 3 9 4 12 0 0 0 3 9 5 15 Cost (Opex) 2 5 10 4 8 3 6 1 2 0 0 0 3 6 1 2 Ease of Promotion 3 3 9 4 12 3 9 3 9 0 0 0 1 3 5 15 Minimise customer impacts 5 3 15 3 15 3 15 5 25 0 0 0 1 5 5 25 Maximise energy production 5 5 25 3 15 1 5 4 20 0 0 0 4 20 5 25 Avoid landfill 4 5 20 5 20 5 20 1 4 0 0 0 5 20 3 12 Minimise carbon foot print 4 4 16 2 8 1 4 4 16 0 0 0 2 8 5 20 Minimise environ impacts 3 4 12 2 6 1 3 5 15 0 0 0 3 9 5 15 Overall 129 107 83 115 0 0 0 92 133 10 year strategy - Maple Lodge Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal score total score total score total score total score total score total score total score total score total Cost M/ton 4 4 16 5 20 3 12 3 12 1 4 3 12 2 8 3 12 2 8 RCV 3 2 6 1 3 3 9 4 12 5 15 1 3 3 9 3 9 5 15 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 2 4 Ease of Promotion 3 3 9 5 15 3 9 3 9 1 3 4 12 4 12 5 15 3 9 Minimise customer impacts 5 3 15 3 15 3 15 4 20 4 20 2 10 1 5 2 10 5 25 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 Avoid landfill 4 5 20 5 20 5 20 1 4 3 12 5 20 5 20 5 20 4 16 Minimise carbon foot print 4 4 16 3 12 2 8 4 16 3 12 2 8 1 4 3 12 5 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 5 15 1 3 1 3 3 9 5 15 Overall 129 122 103 112 93 75 68 113 137

10 year strategy - Southern digestion sites Business Driver weight THP APD MAD Pyrolysis, Thermal Composting Co-composting Co-digestion Digestion + gasification thermal score total score total score total score total score total score total score total score total score total Cost M/ton 4 4 16 5 20 3 12 2 8 1 4 2 8 2 8 2 8 2 8 RCV 3 2 6 1 3 3 9 5 15 5 15 3 9 3 9 3 9 4 12 Cost (Opex) 2 5 10 3 6 2 4 2 4 1 2 1 2 1 2 3 6 4 8 Ease of Promotion 3 3 9 4 12 3 9 3 9 1 3 4 12 5 15 4 12 2 6 Minimise customer impacts 5 4 20 3 15 3 15 3 15 1 5 1 5 1 5 2 10 5 25 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 Avoid landfill 4 5 20 5 20 5 20 1 4 3 12 5 20 5 20 5 20 3 12 Minimise carbon foot print 4 4 16 2 8 1 4 4 16 2 8 1 4 1 4 1 4 5 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 2 6 1 3 1 3 2 6 5 15 Overall 134 113 97 106 65 68 71 95 131 10 year strategy - Western digestion sites Business Driver weight THP APD MAD Pyrolysis, Thermal Composting Co-composting Co-digestion Digestion + gasification thermal score total score total score total score total score total score total score total score total score total Cost M/ton 4 4 16 5 20 3 12 2 8 1 4 2 8 2 8 2 8 2 8 RCV 3 2 6 1 3 3 9 5 15 5 15 3 9 3 9 3 9 4 12 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 3 6 Ease of Promotion 3 3 9 4 12 3 9 3 9 1 3 4 12 5 15 4 12 2 6 Minimise customer impacts 5 4 20 3 15 3 15 3 15 1 5 1 5 1 5 2 10 5 25 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 Avoid landfill 4 5 20 5 20 5 20 1 4 2 8 5 20 5 20 5 20 2 8 Minimise carbon foot print 4 4 16 2 8 1 4 4 16 2 8 1 4 1 4 1 4 5 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 2 6 2 6 1 3 3 9 5 15 Overall 134 115 99 106 61 71 71 98 125

10 year strategy - South East Region (lime) Business Driver weight THP APD MAD Pyrolysis, Thermal gasification Composting Co-composting Co-digestion Digestion + thermal score total score total score total score total score total score total score total score total score total Cost M/ton 4 3 12 4 16 5 20 2 8 1 4 3 12 2 8 3 12 1 4 RCV 3 3 9 2 6 2 6 5 15 5 15 1 3 2 6 3 9 5 15 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 3 6 Ease of Promotion 3 4 12 4 12 3 9 3 9 1 3 4 12 4 12 5 15 1 3 Minimise customer impacts 5 4 20 3 15 3 15 3 15 1 5 1 5 1 5 2 10 5 25 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 Avoid landfill 4 5 20 5 20 5 20 1 4 3 12 5 20 5 20 5 20 3 12 Minimise carbon foot print 4 3 12 2 8 1 4 4 16 2 8 1 4 1 4 1 4 5 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 2 6 1 3 1 3 3 9 5 15 Overall 132 114 104 106 65 66 65 105 125 10 year strategy - Western Region Lime Sites Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal score total score total score total score total score total score total score total score total score total Cost M/ton 4 3 12 4 16 5 20 2 8 1 4 2 8 1 4 4 16 0 RCV 3 3 9 2 6 1 3 5 15 5 15 3 9 3 9 3 9 0 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 0 Ease of Promotion 3 3 9 4 12 3 9 3 9 1 3 4 12 5 15 4 12 0 Minimise customer impacts 5 5 25 4 20 3 15 3 15 1 5 1 5 1 5 2 10 0 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 0 Avoid landfill 4 5 20 5 20 5 20 1 4 3 12 5 20 5 20 5 20 0 Minimise carbon foot print 4 3 12 2 8 1 4 5 20 2 8 1 4 1 4 3 12 0 Minimise environ impacts 3 4 12 3 9 3 9 5 15 2 6 2 6 1 3 3 9 0 Overall 134 119 101 110 65 71 67 114 0

10 year strategy - West London Digestion Business Driver weight THP APD MAD Pyrolysis, Thermal Composting Co-composting Co-digestion Digestion + gasification thermal score total score total score total score total score total score total score total score total score total Cost M/ton 4 4 16 5 20 3 12 3 12 1 4 3 12 2 8 3 12 2 8 RCV 3 2 6 1 3 3 9 4 12 5 15 1 3 3 9 3 9 5 15 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 2 4 Ease of Promotion 3 3 9 5 15 3 9 3 9 1 3 4 12 4 12 5 15 3 9 Minimise customer impacts 5 3 15 3 15 3 15 4 20 4 20 2 10 1 5 2 10 5 25 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 Avoid landfill 4 5 20 5 20 5 20 1 4 3 12 5 20 5 20 5 20 4 16 Minimise carbon foot print 4 4 16 3 12 2 8 4 16 3 12 2 8 1 4 3 12 5 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 5 15 1 3 1 3 3 9 5 15 Overall 129 122 103 112 93 75 68 113 137 10 year strategy - N London digestion Business Driver weight THP APD MAD Pyrolysis, Thermal Composting Co-composting Co-digestion Digestion + gasification thermal score total score total score total score total score total score total score total score total score total Cost M/ton 4 4 16 5 20 3 12 3 12 1 4 3 12 2 8 3 12 2 8 RCV 3 2 6 1 3 3 9 4 12 5 15 1 3 3 9 3 9 5 15 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 2 4 Ease of Promotion 3 3 9 5 15 3 9 3 9 1 3 4 12 4 12 5 15 3 9 Minimise customer impacts 5 3 15 3 15 3 15 4 20 4 20 2 10 1 5 2 10 5 25 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 Avoid landfill 4 5 20 5 20 5 20 1 4 3 12 5 20 5 20 5 20 4 16 Minimise carbon foot print 4 4 16 3 12 2 8 4 16 3 12 2 8 1 4 3 12 5 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 5 15 1 3 1 3 3 9 5 15 Overall 129 122 103 112 93 75 68 113 137

10 year strategy - NE Provinces digestion sites Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal score total score total score total score total score total score total score total score total score total Cost M/ton 4 4 16 5 20 3 12 2 8 1 4 2 8 2 8 2 8 2 8 RCV 3 2 6 1 3 3 9 5 15 5 15 3 9 3 9 3 9 4 12 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 3 6 Ease of Promotion 3 3 9 4 12 3 9 3 9 1 3 4 12 5 15 4 12 2 6 Minimise customer impacts 5 4 20 3 15 3 15 3 15 1 5 1 5 1 5 2 10 5 25 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 Avoid landfill 4 5 20 5 20 5 20 1 4 2 8 5 20 5 20 5 20 2 8 Minimise carbon foot print 4 4 16 2 8 1 4 4 16 2 8 1 4 1 4 1 4 5 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 2 6 2 6 1 3 3 9 5 15 Overall 134 115 99 106 61 71 71 98 125

Business & Sustainability Assessments 25 year scoring sheets 25 year strategy - E London incineration Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal Co-digestion + thermal score total score total score total score total score total score total score total score total score total score total Cost (capex) M/tonne 4 5 20 4 16 3 12 2 8 1 4 0 0 0 2 8 2 8 RCV 3 3 9 2 6 1 3 4 12 5 15 0 0 0 3 9 5 15 Cost (Opex) 2 2 4 1 2 1 2 4 8 4 8 0 0 0 5 10 3 6 Ease of Promotion 3 2 6 2 6 1 3 4 12 4 12 0 0 0 5 15 4 12 Minimise customer impacts 5 1 5 1 5 1 5 4 20 5 25 0 0 0 5 25 4 20 Maximise energy production 5 5 25 4 20 3 15 4 20 1 5 0 0 0 4 20 5 25 Avoid landfill 5 5 25 5 25 5 25 1 5 3 15 0 0 0 3 15 4 20 Minimise carbon foot print 5 2 10 2 10 1 5 4 20 3 15 0 0 0 5 25 4 20 Minimise environ impacts 3 1 3 1 3 1 3 5 15 5 15 0 0 0 5 15 4 12 Overall 107 93 73 120 114 0 0 0 142 138 25 year strategy - E London Digestion Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal Co-digestion + thermal score total score total score total score total score total score total score total score total score total score total Cost (capex) M/tonne 4 4 16 5 20 3 12 3 12 1 4 3 12 2 8 3 12 2 8 2 8 RCV 3 2 6 1 3 3 9 4 12 5 15 1 3 3 9 3 9 5 15 5 15 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 2 4 3 6 Ease of Promotion 3 3 9 5 15 3 9 3 9 1 3 4 12 4 12 5 15 3 9 4 12 Minimise customer impacts 5 3 15 3 15 3 15 4 20 4 20 2 10 1 5 2 10 5 25 4 20 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 4 20 5 25 Avoid landfill 5 5 25 5 25 5 25 1 5 3 15 5 25 5 25 5 25 4 20 4 20 Minimise carbon foot print 5 4 20 3 15 2 10 4 20 3 15 2 10 1 5 3 15 5 25 4 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 5 15 1 3 1 3 3 9 5 15 4 12 Overall 138 130 110 117 99 82 74 121 141 138

25 year strategy - Mogden (West London) Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal Co-digestion + thermal score total score total score total score total score total score total score total score total score total score total Cost (capex) M/tonne 4 4 16 5 20 3 12 3 12 0 0 0 3 12 1 4 2 8 RCV 3 2 6 1 3 3 9 4 12 0 0 0 3 9 5 15 5 15 Cost (Opex) 2 5 10 4 8 3 6 1 2 0 0 0 3 6 1 2 3 6 Ease of Promotion 3 3 9 4 12 3 9 3 9 0 0 0 1 3 5 15 4 12 Minimise customer impacts 5 3 15 3 15 3 15 5 25 0 0 0 1 5 5 25 4 20 Maximise energy production 5 5 25 3 15 1 5 4 20 0 0 0 4 20 5 25 5 25 Avoid landfill 5 5 25 5 25 5 25 1 5 0 0 0 5 25 3 15 4 20 Minimise carbon foot print 5 4 20 2 10 1 5 4 20 0 0 0 2 10 5 25 4 20 Minimise environ impacts 3 4 12 2 6 1 3 5 15 0 0 0 3 9 5 15 4 12 Overall 138 114 89 120 0 0 0 99 141 138 25 year strategy - Maple Lodge Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal Co-digestion + thermal score total score total score total score total score total score total score total score total score total score total Cost (capex) M/tonne 4 4 16 5 20 3 12 3 12 1 4 3 12 2 8 3 12 2 8 2 8 RCV 3 2 6 1 3 3 9 4 12 5 15 1 3 3 9 3 9 5 15 5 15 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 2 4 3 6 Ease of Promotion 3 3 9 5 15 3 9 3 9 1 3 4 12 4 12 5 15 3 9 4 12 Minimise customer impacts 5 3 15 3 15 3 15 4 20 4 20 2 10 1 5 2 10 5 25 4 20 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 4 20 5 25 Avoid landfill 5 5 25 5 25 5 25 1 5 3 15 5 25 5 25 5 25 4 20 4 20 Minimise carbon foot print 5 4 20 3 15 2 10 4 20 3 15 2 10 1 5 3 15 5 25 4 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 5 15 1 3 1 3 3 9 5 15 4 12 Overall 138 130 110 117 99 82 74 121 141 138

25 year strategy - Southern digestion sites Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal Co-digestion + thermal score total score total score total score total score total score total score total score total score total score total Cost (capex) M/tonne 4 4 16 5 20 3 12 2 8 1 4 2 8 2 8 2 8 2 8 2 8 RCV 3 2 6 1 3 3 9 5 15 5 15 3 9 3 9 3 9 4 12 5 15 Cost (Opex) 2 5 10 3 6 2 4 2 4 1 2 1 2 1 2 3 6 4 8 3 6 Ease of Promotion 3 3 9 4 12 3 9 3 9 1 3 4 12 5 15 4 12 2 6 4 12 Minimise customer im pacts 5 4 20 3 15 3 15 3 15 1 5 1 5 1 5 2 10 5 25 4 20 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 5 25 Avoid landfill 5 5 25 5 25 5 25 1 5 3 15 5 25 5 25 5 25 3 15 4 20 Minimise carbon foot print 5 4 20 2 10 1 5 4 20 2 10 1 5 1 5 1 5 5 25 4 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 2 6 1 3 1 3 2 6 5 15 4 12 Overall 143 120 103 111 70 74 77 101 139 138 25 year strategy - Western Digestion Sites Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal Co-digestion + thermal score total score total score total score total score total score total score total score total score total score total Cost (capex) M/tonne 4 4 16 5 20 3 12 2 8 1 4 2 8 2 8 2 8 2 8 2 8 RCV 3 2 6 1 3 3 9 5 15 5 15 3 9 3 9 3 9 4 12 5 15 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 3 6 3 6 Ease of Promotion 3 3 9 4 12 3 9 3 9 1 3 4 12 5 15 4 12 2 6 4 12 Minimise customer impacts 5 4 20 3 15 3 15 3 15 1 5 1 5 1 5 2 10 5 25 4 20 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 5 25 Avoid landfill 5 5 25 5 25 5 25 1 5 2 10 5 25 5 25 5 25 2 10 4 20 Minimise carbon foot print 5 4 20 2 10 1 5 4 20 2 10 1 5 1 5 1 5 5 25 4 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 2 6 2 6 1 3 3 9 5 15 4 12 Overall 143 122 105 111 65 77 77 104 132 138

25 year strategy - South East Region (Lime) Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal Co-digestion + thermal score total score total score total score total score total score total score total score total score total score total Cost (capex) M/tonne 4 3 12 4 16 5 20 2 8 1 4 3 12 2 8 3 12 1 4 2 8 RCV 3 3 9 2 6 2 6 5 15 5 15 1 3 2 6 3 9 5 15 5 15 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 3 6 3 6 Ease of Promotion 3 4 12 4 12 3 9 3 9 1 3 4 12 4 12 5 15 1 3 4 12 Minimise customer impacts 5 4 20 3 15 3 15 3 15 1 5 1 5 1 5 2 10 5 25 4 20 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 5 25 Avoid landfill 5 5 25 5 25 5 25 1 5 3 15 5 25 5 25 5 25 3 15 4 20 Minimise carbon foot print 5 3 15 2 10 1 5 4 20 2 10 1 5 1 5 1 5 5 25 4 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 2 6 1 3 1 3 3 9 5 15 5 15 Overall 140 121 110 111 70 72 71 111 133 141 25 year strategy - Western Region (lime) Sites Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal Co-digestion + thermal score total score total score total score total score total score total score total score total score total score total Cost (capex) M/tonne 4 3 12 4 16 5 20 2 8 1 4 2 8 1 4 4 16 0 0 RCV 3 3 9 2 6 1 3 5 15 5 15 3 9 3 9 3 9 0 0 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 0 0 Ease of Promotion 3 3 9 4 12 3 9 3 9 1 3 4 12 5 15 4 12 0 0 Minimise customer impacts 5 5 25 4 20 3 15 3 15 1 5 1 5 1 5 2 10 0 0 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 0 0 Avoid landfill 5 5 25 5 25 5 25 1 5 2 10 5 25 5 25 5 25 0 0 Minimise carbon foot print 5 3 15 2 10 1 5 4 20 2 10 1 5 1 5 3 15 0 0 Minimise environ impacts 3 4 12 3 9 3 9 5 15 2 6 2 6 1 3 3 9 0 0 Overall 142 126 107 111 65 77 73 122 0 0

25 year strategy - West London digestion Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal Co-digestion + thermal score total score total score total score total score total score total score total score total score total score total Cost (capex) M/tonne 4 4 16 5 20 3 12 3 12 1 4 3 12 2 8 3 12 2 8 2 8 RCV 3 2 6 1 3 3 9 4 12 5 15 1 3 3 9 3 9 5 15 5 15 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 2 4 3 6 Ease of Promotion 3 3 9 5 15 3 9 3 9 1 3 4 12 4 12 5 15 3 9 4 12 Minimise customer impacts 5 3 15 3 15 3 15 4 20 4 20 2 10 1 5 2 10 5 25 4 20 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 5 25 Avoid landfill 5 5 25 5 25 5 25 1 5 3 15 5 25 5 25 5 25 4 20 4 20 Minimise carbon foot print 5 4 20 3 15 2 10 4 20 3 15 2 10 1 5 3 15 5 25 4 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 5 15 1 3 1 3 3 9 5 15 4 12 Overall 138 130 110 117 99 82 74 121 146 138 25 year Strategy - N London (digestion) Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal Co-digestion + thermal score total score total score total score total score total score total score total score total score total score total Cost (capex) M/tonne 4 4 16 5 20 3 12 3 12 1 4 3 12 2 8 3 12 2 8 2 8 RCV 3 2 6 1 3 3 9 4 12 5 15 1 3 3 9 3 9 5 15 5 15 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 2 4 3 6 Ease of Promotion 3 3 9 5 15 3 9 3 9 1 3 4 12 4 12 5 15 3 9 4 12 Minimise customer impacts 5 3 15 3 15 3 15 4 20 4 20 2 10 1 5 2 10 5 25 4 20 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 5 25 Avoid landfill 5 5 25 5 25 5 25 1 5 3 15 5 25 5 25 5 25 4 20 4 20 Minimise carbon foot print 5 4 20 3 15 2 10 4 20 3 15 2 10 1 5 3 15 5 25 4 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 5 15 1 3 1 3 3 9 5 15 4 12 Overall 138 130 110 117 99 82 74 121 146 138

25 year strategy - NE Provinces (digestion sites) Business Driver weight THP APD MAD Pyrolysis, gasification Thermal Composting Co-composting Co-digestion Digestion + thermal Co-digestion + thermal score total score total score total score total score total score total score total score total score total score total Cost (capex) M/tonne 4 4 16 5 20 3 12 2 8 1 4 2 8 2 8 2 8 2 8 2 8 RCV 3 2 6 1 3 3 9 5 15 5 15 3 9 3 9 3 9 4 12 5 15 Cost (Opex) 2 5 10 4 8 3 6 2 4 1 2 1 2 1 2 3 6 3 6 3 6 Ease of Promotion 3 3 9 4 12 3 9 3 9 1 3 4 12 5 15 4 12 2 6 4 12 Minimise customer impacts 5 4 20 3 15 3 15 3 15 1 5 1 5 1 5 2 10 5 25 4 20 Maximise energy production 5 5 25 4 20 3 15 4 20 2 10 1 5 1 5 4 20 5 25 5 25 Avoid landfill 5 5 25 5 25 5 25 1 5 2 10 5 25 5 25 5 25 2 10 4 20 Minimise carbon foot print 5 4 20 2 10 1 5 4 20 2 10 1 5 1 5 1 5 5 25 4 20 Minimise environ impacts 3 4 12 3 9 3 9 5 15 2 6 2 6 1 3 3 9 5 15 4 12 Overall 143 122 105 111 65 77 77 104 132 138

Sensitivity Analysis Appendix 4 In order to test the robustness of the original options assessment methodology it was agreed to undertake a sensitivity analysis of the weightings given to certain business drivers. In the original options assessment, a weighting was applied to each business driver according to significance as determined from meetings with Thames Water Senior Managers and Directors including representatives from Entec. The sensitivity analysis has involved the following changes to the original weightings as a double check that the accepted methodological approach is fit for purpose (i.e. able to ensure that changes to the weightings are real and not distorted by the ranking process): Option 1 - Change the weighting for the driver 'maximise energy production' from '5' to '4' ' for the 10-year horizon. This was on the basis that the weighting should take into account that the need to reduce energy use would become greater for the 25- year horizon. This resulted in no change to the preferred options for each sub region. Option 2 - Change the weighting for the driver 'Cost (Opex)' from '2' to '3' for the 10- year horizon. This was changed to reflect a different perspective within the business that the day-to-day operating costs should have been given more importance. This resulted in no change to the preferred options in each sub regions with the exception of Mogden as shown in Table 3. Option 3 - Change the weighting for the driver 'Cost (Opex)' from '2' to '3' for the 25 year horizon, as per the reasons above. This resulted in no change to the preferred options for many of the regions with the exception of the sites detailed in Table 4 where the order of the options changed. Option 4 - Change the weighting for the driver 'minimise environmental impacts' from '3' to '4' for the 10-year horizon. This reflects a view that more importance should be placed on minimising impacts beyond regulatory compliance. Again, this resulted in no change to the preferred options for all regions. Option 5 - Change the weighting for the driver 'minimise environmental impacts' from '3' to '4' for the 25-year horizon, as per the reasons above. Again this resulted in no change to the preferred options for many regions with the exception of those given in Table 4 where the order of the options changed. Table 3. Summary of changes to the preferred options - 10-year horizon Region Original (10 yr) Option 2 (10 yr) Mogden 1. Digestion with thermal 2. THP 3. Pyrolysis, gasification 1. Digestion with thermal / THP 2. Pyrolysis, gasification Table 4. Summary of changes to the preferred options - 25-year horizon Region Original (25 yr) Option 3 (25 yr) Option 5 (25 yr) Mogden 1. Digestion with thermal 1. Digestion with thermal 1. Digestion with thermal 2. Enhanced co-digestion with thermal 3. THP 2. THP 3. Enhanced co-digestion with thermal 2. Enhanced co-digestion with thermal / THP

Region Original (25 yr) Option 3 (25 yr) Option 5 (25 yr) Maple Lodge 1. Digestion with thermal 1. Digestion with thermal / THP 1. Digestion with thermal 2. Enhanced co-digestion with thermal 3. THP 2. Enhanced co-digestion with thermal 2. Enhanced co-digestion with thermal / THP Southern Region (digestion) 1. THP 2. Digestion with thermal / enhanced codigestion with thermal 1. THP 2. Digestion with thermal 3. Enhanced co-digestion with thermal 1. THP 2. Digestion with thermal 3. Enhanced co-digestion with thermal South East Region (lime) 1. Enhanced co-digestion with thermal 2. THP 1. THP 2. Enhanced co-digestion with thermal No change 2. Digestion with thermal 3. Digestion with thermal West London 1. Digestion with thermal 1. Digestion with thermal 1. Digestion with thermal 2. Enhanced co-digestion with thermal 3. THP 2. THP 3. Enhanced co-digestion with thermal 2. Enhanced co-digestion with thermal / THP North London 1. Digestion with thermal 1. Digestion with thermal 1. Digestion with thermal 2. Enhanced co-digestion with thermal 3. THP 2. THP 3. Enhanced co-digestion with thermal 2. Enhanced co-digestion with thermal / THP East London (digestion) 1. Digestion with thermal 1. Digestion with thermal / THP 1. Digestion with thermal 2. Enhanced co-digestion with thermal 3. THP 2. Enhanced co-digestion with thermal 2. Enhanced co-digestion with thermal / THP The sensitivity analysis has shown that in spite of rescoring the weightings given to selected business drivers the overall preference for the original options is largely unchanged and only some change to the order of options has occurred.