Taking EfW projects across the finishing line
Energy from waste offers a valuable, alternative fuel at a time when energy security is shaping the political debate. Dr Chindarat Taylor reports
The UK is walking into an energy security crisis because around a quarter of the existing power generation capacity will be shut down as it comes to the end of its natural life, or because it is too polluting.
The scenario that the lights will go out, as Ofgem has warned, is very real unless swift action is taken and investment moves in the right direction.
Waste represents a readily available alternative fuel that can create new generation capacity and deliver energy around the clock while diverting waste from diminishing landfills.
Escalating landfill taxes, incentives such as renewable obligation certificate (ROC), and the Government's target of 15% of energy from renewables by 2020 are all helping to drive the development of renewable energy from waste (EfW).
The Government is also planning to slash carbon emissions, which will involve a revolution in energy production systems.
It is working on electricity market reform, including contracts for difference to provide mechanisms to secure and decarbonise the long-term energy supply within the framework of the forthcoming Energy Bill.
The sector has changed significantly since the Government terminated PFI support for seven municipal waste projects in 2010 (and three more projects in 2013).
There has been a shift to smaller-scale merchant projects with more focus on commercial & industrial and residual waste. Along with this shift, we are seeing increasing use of advanced thermal treatment technologies such as gasification.
Most projects currently in the pipeline are moving very slowly towards delivery, so what is holding them up?
The viability of projects depends on a range of factors, including security of supply for waste feedstock in terms of minimum tonnages and contract lengths, suitability of the technology for the scale and type of waste, and energy conversion efficiency of the technology.
Planning and co-location with heavy energy users are important site considerations. Proven technology with commercial scale reference plants is also a significant factor.
To ensure project deliverability, the experience, financial stability and track record of companies that supply the technology, build the facilities, and operate and maintain the plants are critical.
The skills required to operate successful EfW plants, where you have to operate equipment such as reactors and turbines, are very different from traditional waste management skills.
The delivery and commissioning of these plants in a timely manner requires genuine experience and skill. Collaboration along the supply chain helps to speed up their development.
Planning is a crucial stage. However, a number of projects are currently sitting on planning permits but are unable to move to successful delivery.
Projects must ensure that their end products and energy contracts are secured at a realistic price. Careful identification and mitigation of key risks such as the feedstock and technology throughout the project's lifecycle are also critical.
Finance is emerging as the most pressing issue in developing infrastructure. Discussions with financial institutions indicate that there is money out there, but they only deal with projects that have a robust business case; evaluation of the business case early on is absolutely critical.
The Government has set up the Green Investment Bank to assist and a number of innovative developers have secured substantial funding for groups of projects, rather than individual projects, thereby overcoming the high costs associated with individual projects.
Companies seeking to get their EfW projects across the finishing line, should evaluate all their options to ensure that the projects are bankable and deliverable.
The security of waste feedstock, the selection of appropriate and proven technologies and a reliable supply chain will help unlock funding and ensure delivery in a timely manner.
Dr Chindarat Taylor is director of Resource Efficiency Pathway