The Pennon Group subsidiary has won an engineering procurement and construction contract with Keppel Seghers for phase two of the energy-from-waste facility at Runcorn in Cheshire.
Phase one is being built primarily for the Greater Manchester Waste PFI contract. Phase two will be available for the market generally. Viridor, appointed in April 2009 to phase two, said steeply rising landfill tax is driving residual waste disposal away from landfill towards energy-from-waste.
Phase two will cost £160m and have a capacity of 375,000 tonnes a year. Colin Drummond, chief executive of Viridor, said: "The combined Runcorn plant will be one of the largest and most efficient in Europe with a total capacity of 750kt of waste p.a., 70MW of electricity and 51MW of heat.
"Construction of phase two will be coordinated with ongoing work on phase one which permits significant cost savings. It will enable phase two to come on stream by 2014/2015 by which time large scale energy from waste facilities will be cost competitive against landfill with landfill tax by then being £80 per tonne."