A burning issue: Turning waste into energy
As Australia plays catch-up on turning waste into energy, this Westpac IQ cheat sheet explains how it works.
With two major waste-to-energy (WtE) facilities under construction in Western Australia, this Westpac IQ cheat sheet examines how such plants work and why they’re seen as one of the solutions to the nation’s landfill and electricity problems.
What are waste-to-energy facilities?
These plants – used for decades in Europe, Asia and the United States – burn municipal, commercial and industrial rubbish that can’t be recycled in giant incinerators, in order to generate steam, hot water, electricity and valuable raw materials.
Modern WtE sites use sophisticated filtration systems to minimise the release of harmful emissions into the environment.
David Scrivener, Head of Global Energy, Infrastructure and Resources at Westpac Institutional Bank says WtE makes sense as a means of destroying waste that would otherwise end up in landfill.
“Digging a big hole in the ground, throwing waste in it and then putting some dirt on top of it is pretty archaic,” he says. “Waste-to-energy plants are part of incentivising better management of waste.”
What are the benefits of such projects?
The Australian Renewable Energy Agency (ARENA) is confident WtE programs can play a key role in a ‘circular economy’ that champions the three Rs – reducing amounts of waste, reusing items more than once, and recycling products rather than disposing of them and buying new things.
Dr Amy Philbrook, a chemical engineer and member of the Business Development & Transactions team at ARENA, says it’s important to adopt alternatives to landfill, in which organic waste typically includes food scraps, textiles and non-recyclable cardboard and paper.
“They will eventually decompose naturally to become methane in a landfill environment, and methane is 20 times more potent than carbon dioxide,” she says. “So, by using waste as a fuel source you’re avoiding that methane release and it becomes a carbon benefit.”
Electricity generated at a WtE plant can also offset baseload power from main electricity grids that usually rely on coal-fired power stations.
Which countries have embraced WtE technology?
With hundreds of plants in both China and Japan, Asia is one of the hot spots for WtE.
Sweden has more than 30 plants that burn rubbish to help heat homes and power buses and taxis, while other European countries such as Switzerland, Germany and France are also seen as world leaders in the space. The US is very active, with about 70 plants.
Demand for WtE projects is unlikely to stall. The global market is projected to be worth USD 50.1 billion by 2027. In Europe alone, the Confederation of European Waste-to-Energy Plants (CEWEP) estimates that 142 million tonnes of residual waste treatment capacity will be needed by 2035 in order to fulfil European Union targets on municipal waste.
What about Australia?
Australia is playing catch-up on WtE technology, but two new facilities under construction in Western Australia promise to drive momentum.
One is in the Kwinana Industrial Area, 40km south of Perth, where moving grate technology will be used to process about 400,000 tonnes a year of municipal solid waste, diverting an estimated 25 per cent of Perth’s post-recycling rubbish from landfill sites. The plant will produce roughly 36 megawatts of baseload power for export to the grid (enough for 50,000 homes).
The second facility is in the East Rockingham industrial zone, 45km south of Perth, where it will process up to 330,000 tonnes of waste a year and produce 28.9 megawatts of power (enough for about 36,000 homes). Spanish company Acciona is the lead contractor for the project, together with Swiss entity Hitachi Zosen Inova.
Jose Sorto is executive general manager at John Beever Australia, a subsidiary company of Acciona. Acciona is the Engineering, Procurement, Construction (EPC) contractor for both the Kwinana and East Rockingham projects.
Sorto believes Australia will benefit from proven international technology at the plant. He anticipates rising interest in WtE plants amid discussions that some areas of Australia will adopt a three-, four- or five-bin recycling system – common in Europe – that should further streamline waste sorting.
“Then it will come down to further educating our communities about recycling and in 10 years’ time this will become second nature.”
ARENA has provided AUD 23 million of funding for the Kwinana project and AUD 18 million for East Rockingham.
Other schemes in Australia are improving waste management, including through gasification (converting waste into a clean fuel through a chemical reaction); pyrolisation (heating materials in the absence of air); anaerobic digestion (breaking down materials with microorganisms); and landfill gas recovery (collecting methane gas from solid waste in landfill).
What is driving the Australian market?
In response to China’s 2018 decision to limit recycling imports, Australia needs to find sustainable solutions for waste management, especially as landfill taxes have risen dramatically as some sites approach capacity. Burning waste is seen as part of the solution.
Scrivener says all eyes will be on the Kwinana and East Rockingham plants, which are scheduled to start operating in late 2021 and early 2022, respectively.
“These are new, modern and clean facilities and they respond to a desire to move towards a more environmentally friendly approach to dealing with waste,” he says.
What is the key to commercialisation?
“Bankability” is the crucial factor for commercialisation of such plants, according to Matt Walden, ARENA’s director of Business Development & Transactions. The fact that well-established financial institutions have backed the Kwinana and East Rockingham projects is a strong sign for future activities in Australia.
“In effect, it provides an endorsement because major banks are seen as critical barometers and they have a stringent approach to making these financial decisions,” he says.
A strength of WtE projects is that they have three broad potential revenue streams – the gate fee paid for processing waste, the sale of the electricity produced, and income from selling by-products, such as ash for roadworks and recycled aggregates for the construction sector.
The WtE industry plays a key role in reducing waste and emissions and as such, WtE providers should consider leveraging sustainable finance to fund these activities.
What is the biggest barrier for WtE projects?
In short, NIMBYism – not in my back yard. In Australia, where the technology is not widely used or understood, some opponents fear WtE facilities will generate dangerous emissions, offensive smells and too much noise.
By contrast, Walden says there is extensive backing for the concept in Europe. “They have a social licence there,” he says. “The facilities are located on street corners with houses next to them and often look like art galleries. It’s just accepted that these projects are good and have strong community and environmental benefits.”
Strict rules around emission limits add to this trust. Scrivener says it is critical to educate Australians about risk-mitigation efforts and the energy and environmental benefits to society of such plants.
Could WtE projects harm recycling campaigns?
While some critics argue that WtE sites could encourage the burning of waste at the expense of recycling, Philbrook says the directive of the plants is clear. They are commissioned to produce electricity from non-recyclable waste that would otherwise be sent to landfill.
“And any waste-to-energy proposition needs to be in line with the waste hierarchy – reduce, reuse and recycle – before any energy recovery is done.”
CEWEP states that WtE complements high-quality recycling, noting that countries with very high recycling rates – such as Austria, Belgium, Germany and the Netherlands – also embrace WtE efforts as a sink for pollutants and have reduced landfill to almost zero.
Scrivener is confident that WtE projects will be on the agenda for years to come in Australia.
“This will form an increasing part of the energy mix in the future,” he says.
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