Plans to refurbish the Forest Road, Newport, gasification plant have been shelved.
The plant, which has suffered repeated breakdowns and breached emissions levels since it was installed in 2009, was due to be refurbished as part of waste contractor Amey's multi-million pound plans to redevelop the site.
But when the company that built the plant, Energos, went into administration last summer, the IW Council was unable to find another contractor to carry out the specialist work.
Instead, it has opted for an alternative type of 'energy-from-waste' incinerator, to generate energy from waste that cannot be recycled, which will be built by German company Michaelis Environmental Technology.
The council was unable to confirm the cost of the work and whether any extra costs would be met by council taxpayers or by Amey.
As reported, the council has already agreed to borrow £70 million over three years to invest in the capital element of the waste contract - which includes redeveloping the Forest Road site.
According to, it will be Michaelis's first such project in the UK. The industry website reported the incinerator could produce 23,000MW hours of energy per year from 40,000 tonnes of waste.
Although energy from the waste element of the redevelopment has now been delayed by a year - the incinerator is due to be completed in May 2019 - the rest of the work, which includes building a new mechanical treatment plant, to extract recyclable materials from waste, offices and a visitor centre, should be operational by November 2018 as planned.
The council's cabinet member for procurement, waste management, projects and forward planning, Cllr Michael Murwill, said: "The IW Council and Amey remain committed to achieving the high-reaching waste targets set out in the contract to divert 90 per cent of waste from landfill and to recycle or compost 55 per cent of municipal solid waste by April 1, 2020.
"The partnership approach to managing the Island's waste services with Amey has helped us to secure a new energy-from-waste provider with minimal delays to the programme and still achieving the Island's desired environmental outcomes."
Amey's managing director for environmental services, Rob Edmondson, said: "The new technology is a two-stage combustion process with a fixed bed grate similar to the Energos technology, but it will not operate in sub-stoichiometric conditions on the first chamber, hence it cannot be strictly classified as gasification."