Aviva has confirmed it will pull out of the controversial Barry Docks incinerator.
The investments firm says it will divest itself of three gasification sites - including Barry Biomass - blaming "significant challenges".
Speculation over the future of the site was raised last week after accounts revealed Aviva had written off £368 million for the three sites, including Hull and Boston.
The Barry incinerator has been at the centre of a long-running planning row, remaining idle while waiting for the Welsh Government to grant final planning permission to start operating.
Vale Council has told Bro Radio News that they're seeking urgent clarification from Aviva over two planning appeals lodged by the operators.
According to industry news website Ends Waste and Bioenergy, all three sites are likely to be in the insolvency process by the end of the year.
In a statement, Aviva said it had carried out an independent review earlier this year, assessing the performance, ongoing risks, and future potential for the plants.
A spokesperson said since the original investment made in 2015 "it has become apparent that the gasification technologies at these plants have significant challenges in their current form. The assets have therefore not performed as we expected."
"These assets have received regular investment over a number of years in an effort to address those challenges, but would still require further funding to carry out the engineering, design, and operational changes which would be needed to deliver an acceptable level of efficiency, and hence investment performance."
"This is not an issue specific to the assets in Aviva Investors’ portfolio, with other Energy From Waste plants using similar technologies having also failed to reach operational capacity, or operate as expected after extended periods of development, with some being abandoned as a result."
The statement added: "Following this review and informing investors of the situation, the decision was taken to divest from the assets."
"This is not a decision we have taken lightly, but we believe it to be in the best interests of the investors in this fund, given the ongoing cost that would be required to maintain the plants, and to reach operational efficiency."
"It is important to point out that these assets sit within a much larger diversified fund. We continue to engage with stakeholders, including investors in the fund, to keep them informed of the next stages in the process."
According to The Guardian last week, Aviva's accounts show that the three incinerators have accumulated loans totalling £480 million from investors between 2015 and 2023.
While the Hull and Boston plants have been operational, it's believed they have underperformed in the amount of electricity output created.
The Barry Biomass site faced an enforcement order from Vale Council in 2021, but that was quashed two years later following an appeal to Planning and Environment Decisions Wales (PEDW), with the local authority told to pay costs.
In March this year, councillors rejected a retrospective planning application for the wood-fired plant - the planning committee said it failed to demonstrate that the plant would not have an adverse environmental impact.
Two further planning appeals were still active ahead of Aviva's decision to withdraw from the site.
Vale Council leader Lis Burnett said: "The council has seen Aviva's announcement that it intends to withdraw from the waste gasification sector and consequently its plant in Barry."
"We are also very much aware of the strength of local feeling regarding this development and that this news will be welcomed by a large section of the community."
"The council has always been mindful of those views, which have been an important consideration in our decision-making on this matter.
"As local planning authority, we have previously taken enforcement action after the plant failed to conform with its original planning permission."
"Two retrospective planning application were refused in March, decisions that are currently being appealed. We will now seek urgent clarification from Aviva regarding those appeals and its plans for the site."
Last week, the Welsh Government told the Local Democracy Reporting Service that decisions on both appeals will be "communicated in due course".
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