Attendees of the Waste Management Association of Australia (WMAA) 2016 national Energy from Waste conference gathered at the Novotel Brighton on 26 and 27 October 2016 to explore recent achievements, current opportunities and ongoing challenges for the energy from waste (EfW) sector in Australia and internationally. Key issues for industry: • Securing long term supply and offtake contracts – front and back-end contracts for 15-20 year terms • Bankability – Australian market still immature so international lenders likely to be more comfortable with the energy from waste technology or less risk adverse than domestic lenders • Small and underdeveloped market – not necessarily about scale, but need to develop smaller-medium size projects with strong investor rate of return to deploy the known technology • Keep it simple and learn from lessons – look at overseas experience and apply to local jurisdictions that have more developed markets 26-27 October 2016 Brighton, NSW In this report: The keynotes – Day 1 The sessions The keynotes – Day 2 Energy from waste: Waste today, energy tomorrow Financial institutions Energy Infrastructure, mining and commodities Transport Technology and innovation Life sciences and healthcare
Transcript
Attendees of the Waste Management Association of Australia (WMAA) 2016 national Energy from Waste conference gathered at the Novotel Brighton on 26 and 27 October 2016 to explore recent achievements, current opportunities and ongoing challenges for the energy from waste (EfW) sector in Australia and internationally.
Key issues for industry:
• Securing long term supply and offtake contracts – front and back-end contracts for 15-20 year terms
• Bankability – Australian market still immature so international lenders likely to be more comfortable with the energy from waste technology or less risk adverse than domestic lenders
• Small and underdeveloped market – not necessarily about scale, but need to develop smaller-medium size projects with strong investor rate of return to deploy the known technology
• Keep it simple and learn from lessons – look at overseas experience and apply to local jurisdictions that have more developed markets
26-27 October 2016Brighton, NSW
In this report:
The keynotes – Day 1
The sessions
The keynotes – Day 2
Energy from waste:Waste today, energy tomorrow
Financial institutionsEnergyInfrastructure, mining and commoditiesTransportTechnology and innovationLife sciences and healthcare
The Keynotes – Day 1
Joyanne Manning, Associate Principal, Arup, set a motivating scene for the conference: less talk and more action. The sector has been talking about the opportunity for EfW for the last five years and now it’s time for Australia to learn from international experiences and deploy projects across the country.
WasteAid
WasteAid was the perfect case study to begin the day by showcasing simple, effective projects in remote indigenous communities. Mark Conlon, CEO, WasteAid, highlighted the key lessons of their projects in central SA and Bourke, NSW. Here simple initiatives like co-designed educational materials, locally-run waste audits and provision of donated bins have led to waste transformation for these underserviced communities. Conlon’s messages were clear: engage and work with community early on, identify the legacy issues and collaborate with community members to develop culturally appropriate solutions that are owned by community.
Delivering EfW Projects
The EU and the UK are leaders in waste recovery and extraction of energy from waste globally. Dr Kevin Whiting, Senior Technical Director, WSP Parsons Brinckerhoff, showcased the EU and UK experience and the strong policy drivers that have led to tangible outcomes over almost 20 years. Key policies for the EU include
the EU Landfill Directive (2002), the EU Waste Framework Directive and the EU Renewable Energy Directive. The Landfill Directive, motivated by a strong landfill tax, has resulted in 80-90% diversion by weight of residual waste, where organic and inorganic material can be converted into other products, including energy. Fiscal incentives, such as the former Renewables Obligation Certificates (ROC) (now Contracts for Difference, providing a strike price for purchasing renewable energy), can provide finance certainty for projects, particularly heat projects, and increase bankability. Targets have played a key role in the success of such policies. UK Local Governments have reduced waste by over 20% since the EU Landfill Directive was introduced. The EU average rate for incineration of waste is 26% of municipal solid waste (MSW) per year
Dr Whiting illuminated the benefits of energy from waste, including the ability to use residual waste as a valuable resource, recover renewable energy as power for heating and cooling, divert waste from landfill, avoid methane emissions and recover inorganic content for further recycling.
Despite the benefits, the technical risks and failures present clear challenges for industry. Finding the right technology to use and sourcing reliable feedstock are the primary issues, alongside the efficiency of energy conversion and the management of residues. Public
and political acceptability of plant and technology continue to be barriers, attracting three memorable acronyms: NIMBY (not in my backyard), NIMTOO (not in my term of office) and BANANA (build absolutely nothing anywhere near anyone).
For Australia, Dr Whiting’s advice was clear: use conventional, proven technologies to power revenue driven projects. With no current organised market in Australia, successful emerging projects will need to:
• prove the credibility of both contractors for waste supply and offtakers, and ensure any residual offtakers can consume residual waste;
• work with credible lender technical advisers; and
• put in place long term contracts with waste suppliers and offtakers.
Addressing community concerns may be achieved by education and engagement early on in projects, as well as building with architectural design and aesthetic in mind to create a sense of pride in local projects.
Global Lessons
Norton Rose Fulbright gave an informative and practical overview of financing and contracting for energy from waste. Mark Berry, Partner, Norton Rose Fulbright, identified
Energy from waste: Waste today, energy tomorrow
02 Norton Rose Fulbright – November 2016
public procurement and merchant (privately contracted) finance as the two options for infrastructure procurement in a new jurisdiction. With limited government incentives or government-led activity in the space, merchant financing is recommended as the most efficient and effective approach, particularly if timing is an issue and the project proponent is technology neutral. However, Simon Currie, Partner and Global Head of Energy, Norton Rose Fulbright, recognised the problematic nature of each state wanting a bespoke approach to projects, which leads to a lack of consistency and standardisation of contract form and content across the country. As the EfW market emerges, perhaps this is an opportunity to adopt more template-style approaches to contracting to save money and time for proponents and contractors.
Mark Berry assessed the pros and cons of technologies, noting that in the UK gasification is the preferred technology
rolled out across the country, with six projects in operation taking advantage of Renewables Obligation Certificates (ROCs), now replaced by Contracts for Difference incentives. Simon Currie emphasised the importance of keeping technology choices simple and limiting the complexity in early projects.
On the contract side, three contractual protections will ensure the strength of an agreement between parties and limit the risk for lenders:
• Waste volume – setting a guaranteed minimum tonnage to establish the size of the facility and establish certainty in waste supply contracts;
• Waste composition risk – limiting the risk of waste source and type, though this is dependent on the type of technology employed; and
• Exclusivity – guaranteeing waste supply from a local, reliable source
requires exclusivity to limit the impacts of competition disrupting supply.
Affirming these protections in contract terms will boost lender confidence, particularly in new or uncertain technologies. It is essential to have bank and lender support as the sector grows and new technologies are introduced. A challenge in Australia is the conservative, risk averse approach of project finance lenders to other renewable energy projects that they may adopt also in relation to EfW. Special attention to risk allocation might help address this challenge.
A table of risk (above) consequences for energy infrastructure projects can help project developers navigate comparative risks in the market.
Category of RiskEnergy from
WastePre-treatment
FacilitiesAnaerobic Digestion
Desalination Plant
Wind Farms Solar PV farms
Environmental Permitting
Social Licence
Technology/ Design
Feedstock/ Resource
Offtake
Construction
Scalability
O&M and performancePolitical/ Change in LawDisruptive Technology
Comparison of risk consequences for energy infrastructure projects
Energy from waste: Waste today, energy tomorrow
Norton Rose Fulbright – November 2016 03
NSW EfW Policy Guide
The NSW Environment Protection Authority (EPA) will be releasing the NSW Energy from Waste Guidelines (Guidelines) to accompany the 2015 Energy from Waste Policy and assist project developers. The Guidelines will present two pathways for eligible waste fuels, categorised as lower risk known fuels and energy recovery facilities.
The Guidelines will provide information for project developers on community consultation requirements to gain social licence, and provisions around timing to account for planning approval – up to 6 years in some locations. The Guidelines will walk developers through the assessment process from site location to emissions monitoring and commercial viability.
The Guidelines are due to be released soon.
The Discussion
Key points arising from the plenary discussion:
• Six years for projects is inefficient for project development, but comparable with other countries – learning from the lessons of other countries and having conversations early with stakeholders, partners and contractors can shorten the process
• Risk sharing between municipal councils and contractors can be addressed through long term contracts containing guarantees of reliable waste streams based on volume – locked in volumes give protection for banks, particularly important as Australian lenders are less educated and experienced with such technology than their European peers
• Be aware of timing risks where volumes or supply may decline over time – factor this into modelling and only model contracted volumes
• Community engagement should be dealt with on a case by case basis, with early conversations, education and communication targeted and specific to community needs – in NSW the EPA can assist with this process.
Take-away from experts
Joyanne Manning
What are your three take-away points from the conference?
1. Know your waste streams you are proposing to treat – source, composition and quantity and understand the technologies that most appropriately suit your criteria
2. Understand what technologies are suitable for treating your waste stream and select the technology that most appropriately suits your criteria
3. Take the time to inform stakeholders and start engagement early.
What are the next steps for the EfW sector in Australia?
Realisation of projects. Actually getting
a large scale EfW facility to financial close, constructed and successfully operational. The delivery of a successful facility on time and budget, will inject the confidence in the market needed to support its growth and prosperity.
What is the biggest challenge for the EfW sector in Australia to address?
In some ways the biggest challenge is the same as the next steps. Australia needs to actually realise some projects. To date no project has reached financial close due to uncertainly for a number of reasons including – concerns on technology, insufficient secured waste supply, inappropriate gate fees, no or inequately valued PPA, variability of the value of LGC/RET and experienced companies willing to operate. In the short term, Australia should adopt
a conservative approach and seek to replicate the successful projects delivered elsewhere in terms of feedstock, technology, procurement and funding and be happy to be ‘First to be Second’ until there is the confidence in the industry that it can successfully operate in an Australian Environment and deliver the returns on investment demanded by the funding institutions.
Australia would also really benefit from federal direction to provide uniformity across all states on policy, emissions limits, residue management, renewable energy targets and prioritised energy generation mix
The Clean Energy Finance Corporation (CEFC) provides and develops financing solutions across the clean energy sector, spanning renewable energy, low-emissions technologies and energy efficiency. Henry Anning , Associate Director, CEFC of the energy, waste and bioenergy team focused on supporting emerging and innovative technologies based on the CEFC Strategic Framework, aiming to scale proven technologies.
In November 2015, the CEFC released the Australian Bioenergy and Energy from Waste Market report. The report identifies three focus areas, of which urban waste is the largest, with a potential to unlock:
• $5 billion of investment opportunities to 2020;
• 800MW of new generation capacity, three times as much as wind/solar;
• over 9 million tCO2e avoidance.
Recognising that Australia lags other markets, CEFC investment channels provide direct debt or co-financing programs working with banks, and indirect finance through the Australian Bioenergy Fund.
Key sector challenges are:
• complexity of projects compared to other renewable projects;
• capital availability in an immature project market in Australia, particularly for complex projects;
• development experience and capability limited in Australian project developers;
• EPC/O&M price tension is limited
due to small number of projects to attract competitive prices;
• approvals regimes are immature with few EfW projects approved; and
• levy inconsistency between states leads to interstate waste movement.
The CEFC poses solutions to address these challenges by simplifying projects
Risk Factor Low Risk High Risk
TechnologyCommercially deployed in Australia eg, anaerobic digestion, landfill gas
Not commercially deployed in Australia eg, pyrolysis, gasification
FeedstockLong contract for supply and no cost eg, waste that provides gate-free revenue
as much as possible and attracting experienced international investors and EPCs. Building the market is crucial to ensure first projects are successful to generate a critical mass of projects to showcase the opportunity and drive costs down.
Municipal solid waste challenges in Western Australia have led to Regional Councils providing innovative solutions through resource recovery initiatives. Alex Upitis of Talis showed case studies of Southern Metro, Mindarie and West Metro Regional Councils, as well as the Pilbara, establishing large scale composting facilities. Regional Councils can aggregate feedstock across local government authorities to generate multiple sources of waste, resulting in good economies of scale and sharing supply risk across partners.
Each project employed different
contractual arrangements to meet project specific needs, depending on whether the infrastructure was local government owned or contractor owned. These case studies provide good examples of local government working with the private sector.
The National Electricity Market (NEM) provides opportunities for EfW facilities on the East Coast to bid into the NEM by selling generated energy. David Dawson from Arup suggests EfW projects could generate Large Generation Certificates (LGCs) to contribute to the Renewable Energy Target through small to medium scale generation. The adaptability of EfW to precinct-scale projects means energy may be suited to supply through embedded generation in the NEM.
Matching the type of project to the type of finance source will be key to finding the right capital available in the
market, particularly as early financiers may have perceived technology risks or have a limited understanding of the sector. For Nigel Aitchison, Partner, Foresight Group, certainty can address some of these issues and can be achieved through simplicity and clarity of project goals, design and supporting evidence supplied to merchants. At the development stage, effort is required to create certainty around contracts, grid connection and a long term feedstock strategy, which may involve considering alternatives such as behind the meter opportunities or integrating heating and cooling.
Session 2: Development Approvals
Navigating the regulatory maze can be complex for EfW projects. Noni Shannon, Partner, Norton Rose Fulbright, gave a clear, step by step guide to negotiating the approval process, understanding the current
Energy from waste: Waste today, energy tomorrow
06 Norton Rose Fulbright – November 2016
policy framework and navigating future reforms. In NSW, the core approvals required are:
• development consent under the Environmental Planning and Assessment Act 1979 (EP&A Act), granted by the Department of Planning and Environment; and
• environment protection licence (EPL) under the Protection of the Environment Operations Act 1997 (POEO Act), granted by the NSW Environment Protection Authority.
The NSW Energy from Waste policy statement upholds the waste hierarchy and establishes a two-tiered framework for classifying EfW: eligible waste fuels and ‘other’ energy recovery facilities (based on international best practice). The difficulty with approval processes for EfW is the classification – is it energy or waste infrastructure?
As waste is involved, the EPA has an elevated role in planning assessment. For licensing purposes, EfW is classified as ‘energy recovery from general waste’ under Schedule 1 of the POEO Act, and the regulator has no legislative scope to take strategic planning into account when granting an EPL. Yet EfW has integrated impacts on precinct and regional scale infrastructure, land use and energy production. Potentially a more coordinated approach could be taken towards strategic planning for land use and infrastructure as well as coordinated impact assessment.
For NSW, the opportunity for greater strategic planning for EfW infrastructure may occur through the introduction of the Greater Sydney Commission in 2016. A key objective of the Commission is to lead metropolitan planning and integrated development. The Committees of the Commission will influence the planning approval process to align with long term planning objectives.
Increased population and urbanisation will lead to the “three cities” within Greater Sydney needing to think strategically and sustainably about waste and energy solutions.
Greenhouse and other air emissions can pose a perceived threat to society and the environment from EfW facilities. Damon Roddis, Principal, Pacific Environment, gave a practical explanation of the emissions controls in place for The Next Generation EfW plant in NSW. The site has capacity to process up to 1,300,000 tonnes per annum residual waste fuel and generate approximately 140 MWe through the steam turbine. Flue gas treatment applies Best Available Technology from the UK/Europe, including selective non-catalytic reduction for NOx and dry lime scrubbing for acidic gases, including SO2.
For scope 1 emissions, waste incineration and emissions diverted from landfill can be calculated using NGER Technical Guidelines Method 1 to estimate emissions output. Greenhouse gas emissions can be estimated based on the substitution of grid electricity. Scope 3 emissions may also apply in the form of commuting and transport, including fuel usage transporting waste to the site. Based on these calculations, The Next Generation plant potentially avoids 3 million tonnes per annum CO2-equivalent – over a 25 year life this equates to 68.5 million tonnes CO2-equivalent. For emissions intensity, the plant contributes approximately 2% of the annual NSW electricity supply and is only bettered by hydropower.
Ronan Kellaghan, Senior Manager, Ramboll Environ, gave the Scandinavian approach to emissions and public perceptions of risk. Human health risks have been proven by UK government studies to be very small. Many European cities place EfW plants
in close proximity to residential areas, including Zurich, Nuremberg and Paris. EfW plants may also be located in sensitive airsheds, for example valleys or sites of higher elevation, including Oslo, northern Italy and the Swiss Alps.
Session 3: Social Licences
Understanding the technical, legal and financial requirements of an EfW project can be complex and take years to develop. However, gaining community support and communicating effectively with locals can be the key to a successful, non-contentious project. Social licence refers to the level of acceptance or approval by local communities and stakeholders of infrastructure, particularly energy, and operations.
Noel Davies, Director, Aurora Environmental, explained how the East Rockingham project in WA has attained strong community support following effective communications with the local community throughout the development approval process. Community engagement must occur at the beginning of a project using formal EIA processes, following a plan that is transparent, building trust and explaining complex issues in a way that is relevant to the public.
Emissions concerns were allayed by communicating the outcomes of emissions analysis and air dispersion modelling and showing processes in the facility to comply with criteria and address concerns. The key to communicating complex issues and concerns is simple and direct messages that speak beyond the science and risk assessment language.
Key communication tips:
• start consultation early and be inclusive and open;
• communicate in small groups or one-on-one environment;
Energy from waste: Waste today, energy tomorrow
Norton Rose Fulbright – November 2016 07
• actively listen and respond to issues raised. If you are wrong admit it and move on;
• be consistent and honest throughout;
• the proponent should have the courage to be directly involved; and
• as far as possible keep the PER readable for the public.
Hazel Storey, Regional Strategic Coordinator, SSSROC and Vickey Critchley, Project Manager, Elton Consulting, drew out the major findings of their work on gaining social licence for waste projects. Community needs must be identified and addressed early, before a development application is submitted.
Community needs can include:
• prioritised environmental and health benefits;
• providing an alternative to landfill;
• increased understanding and education about how EfW works
• long term community benefits; and
• being informed early and taken on the journey.
Meeting these needs can be achieved by addressing the ‘how’ and the ‘why’ specific to your project. This can include:
• using appropriate, simple and clear language and communication tools;
• defining the scope and using an engagement framework (ie International Association for Public Participation principles);
• listening to and learning from overseas experiences;
• targeting your audience through tailored engagement tools (ie age
and culture sensitive, location specific); and
• emphasising the environmental and economic benefits and framing these based on the values of the community you are working with.
Communication in this process should address key information, such as how the plant works, energy generation, emissions production, building and operation timeframes etc. The benefits of effective engagement are useful for planning approval processes, but more importantly it is the ongoing support throughout the life of the plant and the role of the service in the community that makes the difference.
Session 4: EfW Plant and Infrastructure
Energy from waste can be implemented using a range of technologies and meet a variety of policy goals. For example, the EU and the USEPA have implemented legislation to regulate emissions from EfW facilities to address lifecycle carbon emissions, where the EfW process acts as a carbon sink for sequestration. Emissions reductions can be achieved by the breakdown of the chemical composition that occurs during the cycle, to corrode potentially hazardous substances and stabilise the organic output to prevent leeching.
Anthony Douglas, Project Engineer, Phoenix Energy Australia, showcased the Kwinana EfW project in WA by Phoenix Energy Australia, a mass combustion furnace system of 400,000 tonnes per year capacity with an aim of 100% landfill diversion and low noise, odour and water emissions. Two 20 year waste supply agreements have been entered with the City of Kwinana and Rivers Regional Council and plant works are expected to commence in late 2016.
Processed Engineered Fuel (PEF) is a solid fuel derived from raw materials that can be processed for use in cement kiln consumption as a substitute for fossil fuels. Ben Sawley, COO ResourceCo, described how PEF is commonly used in Scandinavia and Northern Europe, where around 40 million tonnes of PEF is produced per annum and growing. Like all EfW projects, the key to success is securing the back and front ends of the supply chain.
The circular economy is at the forefront of the sustainability sector, but what does it mean for EfW? Dr Marc Stammbach, Managing Director, Hitachi Zosen Inova Australia, explained how the circular economy is about establishing clean cycles to minimise and control hazardous materials and use these materials in a productive way. This is known as ‘urban mining’ and is used to extract new sources of secondary metals found in 20% of bottom ash and 3-5% of fly ash. Processes include decontaminated flue gas treatment that generates ash for landfill or road base, bottom ash thermos-recycling and multi-composite recycling that reduces toxicity and makes the output more amenable to use.
Energy from incineration is a common practice globally. Bodo Rohs, Business Development Manager, Steinmüller Babcock, explained how the resultant bottom ash can be used for road construction, as construction material on landfills and as fine fractions mixed into cement. Optimised recycling can stabilise hazardous materials through a leaching process for fly ash. The leaching residue from incineration produces metal carbonates that can be sold to market. Filtrate liquid can be evaporated or processed into landfill.
Energy from waste: Waste today, energy tomorrow
08 Norton Rose Fulbright – November 2016
The Keynotes – Day 2
Anne Rabier, Vice President Municipal, SUEZ, opened day two showcasing recent projects designed, developed and delivered by SUEZ across Europe. The Suffolk, UK EfW facility uses residual household waste to generate power equivalent to powering 30,000 households. Operations commenced in December 2014 for the iconically designed facility that has received energy and sustainability acclaim (ie first BREEAM rated building in UK). Benefits include:
• council saves £350 million over life of project;
• £200 million government grant for over 25 years;
• enough electricity for 30,000 homes and some heat production;
• reduce GHGs by 75,000 tonnes per year; and
• greater recycling of bottom ash for road use.
The project had a strong community engagement and communications focus. SUEZ ran experiential site tours and held two rounds of public exhibitions. During development, communication was maintained through newsletters and building ongoing relationships with local community groups, with a strong focus on local employment and economic opportunities during the construction
phase and lifetime. Ongoing, a visitor’s centre and website provide real-time information and regular updates.
Key lessons for SUEZ were:
• client commitment is key, based on a demonstrated willingness to achieve the final project; and
• communication at all times from early public engagement to contractor procurement.
Switzerland has well-established sophisticated waste management processes, driven by a strong recycling and landfill diversion policy, where today over 50% of urban solid waste is recycled and most non-recyclable waste is incinerated. Public acceptance and support for EfW facilities is strong, with plants often situated in the middle of cities – partly due to space constraints and partly to sell CHP to nearby consumers. Local communities and authorities are engaged early in the process to ensure needs and requirements are met, including emissions levels or architectural aesthetics, limiting NIMBY concerns.
Ruedi Kummer, Managing Director, EfW Plant Lucerne, introduced a new plant that began operations in Lucerne in 2015. Located in the centre of the collection area and producing CHP, the criteria for site selection were: availability of energy source, building site potential, traffic impacts and local
Energy from waste: Waste today, energy tomorrow
Norton Rose Fulbright – November 2016 09
politics. Community support was achieved with over 5000 visitors to the plant in the first 6 months. The plant now produces energy supply for around 38,000 households or 100,000 people with a capacity of 50-80MW and generally clean emissions output. The CHP is efficient, with the ability to switch from heat to electricity in several minutes. The project was designed, developed and delivered in just under 5 years at a cost of €200 million.
Session 1: International experiences
North America
North America has a long history of producing EfW, with the first facility built in 1975. The US and Canada produce more waste per capita than any other countries in the world resulting in a greater push for landfill diversion initiatives driven by the enhancement of 3Rs (reduce, reuse, recycle), organics collection and greenhouse regulation or carbon taxes. However, North America face different barriers to the EU, as landfill is cheap and accessible, energy and fuel prices are cheap making EfW projects less competitive and tough social opposition and environmental regulation slow the development process.
Bruce Howie, Vice President, HDR Incorporated, illustrated recent successful EfW projects across North America include: 100MW incinerator at West Palm Beach Florida; the Newby Island Resource Recovery Facility known as “the Recyclery” and the largest MRF in the world, processing 360,000 tonnes per annum; the Durham York Energy Centre in Toronto began as an EfW plant in 1999 as the first true greenfield facility in North America producing 17MW of electricity and 7MW thermal heat; the MBT to biochemical facility in Edmonton Alberta processing 70,000 tonnes per
annum of municipal solid waste and producing 38 million litres per year through the biofuel facility.
Key lessons from North America are:
• know your waste stream, including quantity and composition – especially foreign developers who may not have local networks to find the right source;
• technology must work and be ‘right-sized’ for your needs – do due diligence on tech and scale-up;
• save room for leftovers – there are always residual outputs of EfW process that may be used or marketed;
• have a site that works for your project before you issue your tender – don’t rely on developers to have or find a site for you; and
• development process must be transparent and have a (political) champion to back it – needs long term commitment and support to get across the finish line.
UK
The UK market has seen immense growth over the past 10 years, with
over 200 plants for anaerobic digestion, 28 incinerators and 14 advanced thermal treatment plants (ATT). This journey has been led by waste management, energy and circular economy initiatives at the EU level, as well as an increase in the landfill levy from $14 to $145 to 2015. Landfill diversion is currently around 85%.
Anaerobic digestion uses a range of different types of feedstock generated from around 7 million tonnes of waste across the UK annually. Over 80 mechanical biological treatment (MBT) plants processing over 10 million tonnes of material are now exporting to mainland Europe, but the challenge is what to do with the fuel once produced. Thermal facilities have a total capacity of 12 million tonnes of input and are approaching capacity in the market. Fourteen ATT plants are already online with a pipeline of 66 prospective plants, but many are unlikely to be financed as the technology remains uncertain.
Andrew Street, Director, SLR Consulting Limited, showcased successful examples of EfW projects, including the 3MW Marsh Barton near Exeter; the 30MW Grident Park built
Energy from waste: Waste today, energy tomorrow
10 Norton Rose Fulbright – November 2016
on balance sheet; the 66MW Riverside Resource Recovery site; and the 70MW Runcorn facility neary Manchester, sourced by the biggest waste contract in all of the EU at 275,000 tonnes per annum generated from 9 different authorities. For ATT, projects have been complex. The 1.8MW plant in the Isle of Wight had alleged problems with reliability during operation and the EPC went into administration, while the Air Products project in the Tees Valley had projected capacity for 50MW for two phases but Air Products has walked away from the project due to technical and contractual issues.
Key lessons from the UK include:
• strong government policy and increased openness can lead to market confidence;
• increasingly easier to secure development approvals and planning permits over the past 10 years;
• investors (banks and private equity) are looking at key issues around bankability, including sites secured with permits, feedstock secured with contracts, proven technology, and outlets for process outputs secured with contracts;
• production of around 100,000-300,000 tonnes per annum is the sweet spot for generation; and
• EfW has been key to meeting landfill diversion targets and institutionalising a sustainable approach to waste management in the UK.
Japan
KobelCo is a Japanese infrastructure and energy company specialising in metals, construction and engineering. Toshinori Nii, General Manager, Kobelco Eco-Solutions, is part of the environmental business branch offering EPC and O&M services for waste, water and sewerage treatment
plants as well as extensive experience in EfW using a range of technologies including fluidised bed gasification processes. KobelCo Eco-Solutions manages across Japan 19 gasification and melting plants in operation and under construction at a total of 3,157 tonnes per day, 2 gasification and combustion plants for biomass (woodchip) and MSW.
Comprehensive waste management systems have been introduced in Japan as a result of strong legislation in the 1990s to regulate waste and recycling and integrate material use and environmental considerations into the economy and supply chain. This has resulted in significant change: municipal waste has reduced by 44.3 million tonnes in 2014; 254 million tonnes for industrial waste in 2013; and greenhouse gas emissions from non-waste sectors have reduced by 220% from 2000-2013 due to recycling and EfW.
Europe
Sewage sludge is high in chemical properties and can generate energy through fluidised bed technologies including sludge incineration and advanced stage gasification. The UK has 7 projects generating a total of 90MW. Activities for sewage sludge include landfill, farming, composting, co-incineration, sludge drying and dedicated incineration. The residual bottom ash from the incineration process can be used as a source of fertiliser.
According to Roger Bligh of Outotec, the challenges of sewage sludge are to avoid chemical pollution and emissions, especially methane, emitted from the sludge and to recover nutrient values for re-use. The challenges for EfW are the limited electricity produced, community acceptance and the cheap alternatives for sewage disposal, such as ocean dumping.
The Discussion
Key learnings from the international experience of measures to control feedstock quality:
• UK – make sure you know exactly what your technology is able to receive and how your feedstock is going to change overtime;
• US – anticipated variation in waste streams can be addressed through a performance guarantee that the supplier will provide a minimum over the period, especially for heat generation which will be impacted if the source varies too much;
• Japan – analyse seasonal variations in feedstock by working closely with local authorities to understand the change in supply over an annual period; and
• Europe – sewage sludge can be an effective method of organic processing at scale, but refuse-derived fuel still generates limited supply in Australia and the real shift will occur when the bin strategy changes to incorporate organic separation.
Energy from waste: Waste today, energy tomorrow
Norton Rose Fulbright – November 2016 11
Session 2: Wood
Biochar is the carbon-rich material (charcoal) produced from the slow pyrolysis (heating in the absence of oxygen) of biomass. Biochar can be introduced to the soil to improve and maintain soil fertility and to increase soil carbon sequestration. Dr John Sanderson, Principal Environmental Engineer, Earth Systems, spoke about the CharMaker MPP, a transportable furnace for waste, char and energy production.
The CharMaker produces biochar for horticultural use through a pyrolysis system using biomass sourced from demolition sites, trees, urban clearing and pruning etc. The facility has been deployed across Melbourne and in a botanic gardens centre in Hong Kong, where heat recovery systems are used on site and the biochar product is used in gardens. This closed loop system means energy and consumption costs are lower than alternative disposal costs.
In Perth, wood waste to energy (WWTE) is being deployed at the Hazelmere Resource Recovery Park by Stephen Fitzpatrick, Director of Waste Services, Eastern Metropolitan Regional Council, where recycled timber is used to produce woodchip. The site has a commercial and industrial waste sorting plant (sourcing 50,000 tonnes per day) and a WWTE site (generating 3MW) under construction. The wood-based feedstock is only sufficient to run the plant for 14 hours per day, Monday to Friday.
The project attracted a grant from the former Clean Energy Innovation Fund and underwent a 2.5 year approval process, with a focus on air quality by the WA EPA. Air quality assessments showed the WWTE plant has a negligible impact with no breaches of air quality standards. Extensive community engagement occurred throughout the development process
with relationships built with regulators and local authorities, as well as community groups through public and stakeholder meetings.
Micro auto-gasification system (MAGS) is a method for repurposing materials to generate fuel. Dr Peter Tsantrizos, President and Chief Executive Officer, Terragon, introduced an system of cooking waste to produce syngas to fuel the energy production process. The result is biochar and energy at a rate of approximately 2.5kWh per kilogram with the machine processing 50kg/hour. The system has had international certification and is used in isolated communities, commercial, marine and military environments and in the industrial or hospitality sectors.
Daniel Roberts, Research Group Leader, CSIRO, is conducting research to further understand thermochemical waste to energy approaches, with a focus on gasification. The purpose is to better understand the ‘black box’ of energy composition and combustion to help match feedstock to technologies at commercialisation. Understanding the gasification fundamentals of feedstock requirements, pyrolysis and drying techniques, gasification design and syngas quality will better inform technical due diligence for projects and build local knowledge of EfW in the Australian context.
Organic rankine cycle (ORC) was introduced by Carlo Minini, Sales Business Development Manager, Turboden, as an alternative to steam turbines that can turn waste into distributed power, heating and cooling using high molecular mass fluid. The fluid is vaporised and then expanded in a vapour turbine that drives a generator, producing electricity. The spent vapour is condensed to liquid and recycled back through the cycle. Since 2005, 15 ORC plants have been constructed by Turboden around the world. Technical benefits include more compact turbines but low rpm, limiting
Take-away from experts
Carlo Minini
What are your three take-away points from the conference?
1. Australian EfW sector lags behind;
2. However (and for that reason), there’s a lot of potential;
3. Things are starting to happen and there is increasing interest in developing WtE projects, also from foreign companies.
What are the next steps for the EfW sector in Australia?
Have some new good “success stories” and build upon them.
What is the biggest challenge for the EfW sector in Australia to address?
Policies and levies not uniform throughout Australian States.
Ruedi Kummer
What are your three take-away points from the conference?
1. As far as I can tell Australia has a well working and modern waste disposal infrastructure, except the WfE.
2. Authorities are very confused or even anxious about how to take their responsibility.
3. none
What are the next steps for the EfW sector in Australia?
Presenting a top project to the authorities, to convince them of the idea of using MSW as a resource, that has to be used carefully.
What is the biggest challenge for the EfW sector in Australia to address?
To realise one first powerplant, fired with MSW. If once a plant is realised and under successful operation, others will follow.
Energy from waste: Waste today, energy tomorrow
12 Norton Rose Fulbright – November 2016
mechanical stress, while molecular mass fluids reduce erosion or corrosion. Efficiency advantages include minimal operation and maintenance costs as no steam is required, the system can run automatically and has a long working life. Examples of ORC include: 11MW in Ankara, Turkey; 1.3MW in Helsinki, Finland; 1MW in Menands, US; 600kW CHP in Burgos, Spain; and 600kW reference project in Wagin, WA.
Session 3: Anaerobic Digestion
Anaerobic digestion (AD) is a biological process of organic matter degradation under the absence of air, forming biogas and emulating the natural breakdown process that occurs in animals. The process moves organic waste through substrate treatment, hydrolysis tank, fermenter system, digestate treatment and then energy conversion to CHP or gas (when CO2 is removed). Elmar Offenbacher described BDI Bioenergy International’s AD plants across Europe, including Austria, Poland and France.
Key lessons from developing these plants are:
• substrate treatment – ensure efficient removal of inert material and equalise fluctuating feedstock;
• fermenter system – robust screw pumps and a reliable agitator system can boost the fermentation process;
• automation and control – have comprehensive measuring points to track and monitor the system as waste moves through the stages.
In Australia, municipal solid waste is comprised of around 70% organic waste, one of the highest proportions in the world. This costs the economy around $229.6 million per year and each household $92 per year. Household food waste has significant
opportunity for EfW – Meris Zheng, PhD Candidate, Victoria University and a research team at Melbourne University are investigating potential treatment techniques. The current system relies on open and closed landfill, where high levels of emissions are generated, while AD and composting at the industrial and domestic scale also occur. AD was found to have the smallest environmental impact of all methods and the highest efficiency, suggesting that at scale AD systems could transform how we manage household organic waste.
EfW and AD may complement each other to achieve similar goals. Some benefits of EfW include: avoided emissions; fuel flexibility and reliability; recovery of ferrous and non-ferrous metals and minerals in bottom ash; and the ability to supply electricity, district CHP and heat for industrial processes. Edmund Fleck, Manager, Martin Biopower, introduced a ‘reverse acting grate vario’ to Australia to convert energy contained in waste only in electricity and sell different flue gas qualities to improve efficiency. There are strong synergies between EfW and AD, such as similar infrastructure, ability to treat impurities, waste gas and waste water, and the ability to recover low grade heat. When these are combined they can treat most waste gas or water and create a high generation of energy.
ReWaste is an initiative run by Damien Bassett, Manager of Waste to Energy Services, Yarra Valley Water, Melbourne’s largest water retailer. Since 2011, the authority has been developing the EfW facility to be collocated with the sewage treatment plant . The facility will recycle 33,000 tonnes of organic waste every year and power 1500 homes from residual power not consumed onsite. Drivers for the project were increased energy costs to run the water utility, and the
opportunity to utilise power onsite, combining biosolids produced by the authority with externally sourced food waste .
The project focused on strong stakeholder engagement and communicating the benefits and rationale of the project to community members. The business model is innovative for a public authority as it is structured as a commercial, income-generating arm. AD was chosen as the preferred technology as it aligns with the objectives and the business model of ReWaste. The facility aims to begin operations in 2017.
Take-away from experts
Kevin Whiting
What are your three take-away points from the conference?
1.There is significant interest in EfW.
2. The market needs help from Government.
3. The Banks and financial institutions need education.
What are the next steps for the EfW sector in Australia?
State Governments need to provide fiscal incentives to stimulate the EfW market, such as premium price electricity and a landfill levy to make landfill too expensive.
What is the biggest challenge for the EfW sector in Australia to address?
For project developers to access and secure long term waste supply contracts.
Energy from waste: Waste today, energy tomorrow
Norton Rose Fulbright – November 2016 13
References to ‘Norton Rose Fulbright’, ‘the law fi rm’, and ‘legal practice’ are to one or more of the Norton Rose Fulbright members or to one of their respective affi liates (together ‘Norton Rose Fulbright entity/entities’). No individual who is a member, partner, shareholder, director, employee or consultant of, in or to any Norton Rose Fulbright entity (whether or not such individual is described as a ‘partner’) accepts or assumes responsibility, or has any liability, to any person in respect of this communication. Any reference to a partner or director is to a member, employee or consultant with equivalent standing and qualifi cations of the relevant Norton Rose Fulbright entity. The purpose of this communication is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of any Norton Rose Fulbright entity on the points of law discussed. You must take specifi c legal advice on any particular matter which concerns you. If you require any advice or further information, please speak to your usual contact at Norton Rose Fulbright.
Norton Rose FulbrightNorton Rose Fulbright is a global law firm. We provide the world’s preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.
Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.
Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.
Norton Rose Fulbright US LLP, Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP and Norton Rose Fulbright South Africa Inc are separate legal entities and all of them are members of Norton Rose Fulbright Verein, a Swiss verein. Norton Rose Fulbright Verein helps coordinate the activities of the members but does not itself provide legal services to clients.
