The debate over creating energy from waste (EFW) is as heated as the process of creating energy itself. Although EFW is already a proven, successful technology in some developed countries and select emerging markets (such as China), many developing markets have not yet adopted the model and are weighing carefully the pros and cons. EFW merits close examination, taking into consideration the geography, population, and economies of the locations that need waste sector services the most.
For EFW to be worthy of consideration in emerging markets, many of the following conditions should exist:
Land and transport infrastructure is constrained. EFW facilities can be put in city centers as they require little land and lower waste transport costs. This is helpful when large land sites for landfills are not available near urban centers, land is expensive, and when road infrastructure is constrained for truck traffic.
Electricity tariffs or energy costs are high in the grid or for end users. Electricity tariffs are high in the grid or for large end users who could contract for the electricity or steam. The site can also be located close to energy demand, co-located with an end user for “behind the fence” (i.e., on-site) co-generation or district heating/cooling applications.
EFW will not be the answer for many emerging markets.
There are attractive electricity tariffs for EFW and/or tipping fees exist. Many EFW projects in emerging markets rely predominantly on electricity revenues. Projects become more viable in markets where there is a renewable feed-in tariff or renewable portfolio standard for which EFW is eligible and/or there is a practice of paying for waste disposal or “tipping fees.”
There is evidence of end cost recovery for waste services. Revenues from tipping fees to support electricity tariffs can more readily be achieved when constituents pay a fee, however small, for waste services received. This allows
for a level of cost recovery that can be built upon, which would not otherwise exist.
There is a large urban center with a growing population and GDP. Megacities or very large cities, particularly in middle income countries, often have many of the characteristics that make EFW an attractive option, especially if they can take part in an integrated solid waste management plan including recycling, reuse, and waste reduction.
The government considering EFW is a small island nation. Island nations are also a good fit for EFW plants because land is constrained, economies are driven by tourism, and there are high electricity costs.
When several of the conditions above are met, EFW might be a good solution for local governments, electric utilities, and constituents, as well as for waste companies. In the “win/win” scenario, utilities and governments can get base load renewable electricity sources, while entities responsible for solid waste get an environmentally sustainable disposal solution financed by the private sector. EFW services can favorably impact other sectors and elements of urban infrastructure, such as tourism, property values, transport, and water and air quality. EFW can also contribute to the reduction of greenhouse-gas (GHG) emissions.
Furthermore, adoption of the EFW concept can drive policies and regulatory regimes that improve solid waste management and enforcement, give opportunities to improve cost recovery, and improve grid diversity in the electricity sector.
The shift toward requiring constituents to pay for improved service can also pave the way for public-private partnerships. When constituents pay for services, another revenue source opens up that can be used to manage risk, and this sound fiscal municipal policy supports a private sector transaction.
A challenging proposition
But there are significant challenges that may prevent EFW from achieving its potential in emerging markets.
High cost: Most notably, from a utility’s point of view, EFW may not be the least cost base load option, and not the least cost renewable option. From the perspective of public solid waste management authorities, EFW may not be the least cost waste disposal option, either.
Difficult to site: EFW is difficult to site for both utilities and public solid waste authorities because residents tend to reflexively reject the idea of waste processing and disposal taking place in their vicinity. This is also known as the NIMBY effect (“Not In My Backyard”). Once local citizens are educated about EFW—understanding that the footprint is small and low-impact, and that the facility can be integrated architecturally with the surroundings—perceptions can potentially change.
The shift toward requiring constituents to pay for improved service can pave the way for public-private partnerships.
Landfill still needed: EFW does not eliminate entirely the need for a sanitary landfill as part of the solid waste management plan. Landfills are still needed to address ash disposal, non-combustible waste streams, climate events (such as hurricanes), or extended facility outages.
Poor quantity and quality of waste: Smaller waste quantities (scale issues) and poor waste quality (low calorific value and high organic and moisture content) have also traditionally created challenges for EFW in emerging markets. Technological advances, driven by emerging markets’ requirements, are producing new designs and operating procedures better able to handle low calorific value waste.
Limited access to finance: Access to finance can be a concern in developing economies considering EFW. However, as environmental and social considerations become increasingly important for global financial institutions, countries can improve their access to finance by:
- Satisfying stringent air and effluent emissions requirements;
- Showing evidence of community engagement and acceptance; and
- Incorporating environmentally sustainable practices, including sustainable ash disposal solutions.
Plan for success
A solid waste management plan that integrates the EFW facility, demonstrating that it is technically and financially the best solution for the community, is one of the most effective ways for a government to evaluate whether or not an EFW plant is the right fit for its community. When recycling, waste reduction, and re-use concepts also complement the model, and there is a plan to leverage existing formal and informal sector participation, many of the pieces may begin to come together for the winning waste strategy that so many developing economies are searching for.