Millions in profits from electricity generation at a north London incinerator are set to be handed back to seven councils whose rubbish it burns.

The dividend, worth £10.2 million, is due to income from generation at the Edmonton Incinerator, which is overseen by North London Waste Authority.

The incinerator serves two million residents in Barnet, Camden, Enfield, Hackney, Haringey, Islington and Waltham Forest, burning their rubbish to produce electricity.

The waste authority is currently projected to charge the councils a £74 million levy in 2023-24 to cover the costs of processing their waste.

But this will now be reduced across the financial year as a result of the dividend.

This follows a dividend worth £4.75 million received by councils in November 2022.

But NLWA warned that future dividends may be curtailed by the government’s new Electricity Generator Levy, as this will also tax energy-from-waste facilities such as the Edmonton incinerator.

NLWA is a local authority comprising two councillors from each of its constituent boroughs.

In February 2022, Sir Iain Duncan Smith, MP for Chingford and Woodford Green, requested that the secretary of state for levelling up, Michael Gove, check that NLWA was complying in its duties as a “best value authority”.

Sir Iain raised concerns about plans to increase the capacity of the current Edmonton incinerator by at least 30 per cent.

Work has already begun on the new incinerator, with work expected to be completed by 2026.

The new incinerator would be able to process more than 700,000 tonnes of rubbish per year.

The MP warned this would have “grave consequences for public health and the environment”.

But in January, the department for levelling up announced that it would take no action in response to his request.

The authority's chair, Waltham Forest Cllr Clyde Loakes, said: “While we all want to see energy prices normalise, in these exceptional times, rather than windfall profits going to private shareholders, NLWA can ensure that local people and communities can benefit instead.

“It also shows that having a wholly publicly-owned, well-managed facility is far preferable to paying vast sums to a private contractor to dispose of household waste.

“And that’s why NLWA is now overseeing the building of a replacement facility, an advanced, high-teach Energy Recovery Facility so that the public can continue to benefit from public ownership in the long term.”