Aviva's Green Bet Crumbles: Millions Lost in Failed Incinerators

Two incinerators operated by Aviva's investment arm have recently encountered severe financial distress, exacerbating the losses from the insurer's unsuccessful foray into renewable energy. This development follows the revelation that three other biomass plants within the same green infrastructure fund, managed by Aviva since 2015, had already gone bankrupt, resulting in a £500 million loss.

The controversial biomass projects, intended to generate energy from household waste, have been plagued by high operational costs, technical malfunctions, and planning permission disputes. Aviva has written off £368 million for three plants in Hull, Boston, and Barry, which entered administration in 2024. Creditors are anticipating minimal recovery, with Aviva Investors claiming nearly £480 million.

Further compounding these issues, a facility in Plymouth has been mothballed, and the Hooton Bio plant near Ellesmere Port has incurred losses of £145 million since 2018, including a £43 million shortfall and £270 million in debts as of 2024. Auditors expressed concerns about Hooton Bio's viability, only approving its accounts on a going concern basis after assurances from Aviva Investors regarding loan repayments.

Aviva has replaced the director overseeing the Hooton Bio and Plymouth sites and is under pressure to liquidate its remaining energy-from-waste plants. The fund is being wound down, and its assets are being sold. Aviva stated that the Plymouth facility is for sale and that there are no plans to close the Hooton site, noting improved performance and its capacity to heat approximately 30,000 homes. The company maintains that the fund has yielded positive returns since its inception, with no impact on Aviva shareholders.