We look at the models Asian governments are employing in order to manage crippling levels of waste – a major challenge that has been overlooked for too long.
Rising levels of waste
The world is more waste producing than ever before. Asia Pacific wastes are expected to grow from about 802 million tons in 2016 to 1.1 trillion tons in 20301. The volume of waste has increased rapidly in Southeast Asia alone since 2000, reaching around 150 million tons in 2016. By 2030 the expected sum will be more than double.
We see this happening around us, and feel it happening. Take for example the distribution online. With only a few taps on our smartphones, the introduction of e-commerce made it much easier to get products shipped to our doorsteps. With no understanding of what happens to them after they end up in the landfill, we dispose of the packaging and the leftovers. While some of our waste can be recycled, a significant portion of it will end up in landfills.
Unfortunately, some waste persists for years and makes waste management a serious issue that deserves no less attention than the likes of eliminating poverty and climate action. Poorly handled waste will result in far too serious consequences to bear. Solid waste clogs rivers, exacerbates flooding and encourages vector breeding. Waste builds up in nature, washes out and contaminates rivers and ultimately ends up in the oceans. Open burning releases toxic pollutants and respiratory related allergens. Landfills take up considerable land space and, in many cases, may not be viable in the long run.
No wonder that numerous countries have stepped up their efforts to reduce the amount of waste by recycling and handling solid waste better. Many of us are contemplating waste-to-energy (WTE) technologies, such as incineration, which takes solid municipal waste into an eco friendly combustion process and retains the heat value of the combusted waste for steam and electricity production. Second, less waste management to landfills means less methane and other greenhouse gases (methane is more environmentally damaging than carbon dioxide, at least 20 times more). Secondly, energy is now generated from waste instead of burning fossil fuels which further reduces greenhouse gas emissions.
Yet it is not without their difficulties to build a waste treatment facility. Below are just some of the most important considerations when a waste management facility is built.
Selection of the technology would depend on factors such as form of waste, quality of waste moisture and calorific value, regulatory framework and proximity of waste facilities. The technology needs to be defined early, for instance at the pre-feasibility study phase of a waste management project, because selection of technology will affect the project’s viability and bankability.
A basic rule is if the waste has a calorific value of about 6 MJ per kg, it can be classified as WTE using grate-based combustion. In Southeast Asia, the problem with municipal solid waste is that it is mostly fairly wet and thus has a calorific value of below 6 MJ per kg. There’s a few choices for handling this. One may consider pre-treating the waste to extract moisture thus enhancing its calorific value, or simply designing the bunker to remove free water for pre-storage of the wastes. This will be enough in several cases to extract sufficient water to combust the waste.
Biological treatment such as anaerobic digestion or aerobic composting may be considered for very wet waste and waste which comprises mainly organic fractions. The residue from such processes can often be used as a fertiliser, but it can be very difficult to achieve the sanitation necessary for agricultural use, due in particular to micro-plastic and other contaminants. The further separated and cleaner the fractions of incoming waste are, the higher performance can be achieved. Another option is mechanical waste treatment to sort high-calorie fractions of waste to be used as a fuel, typically in cement kilns, called Refuse Derived Fuel (RDF). The challenges facing these initiatives include securing long-term off-take agreements and meeting the high technical demands for RDF quality to be produced. The potential revenue sources provided by the Power Purchase Agreement (PPA) are easier to predict for the electricity-producing treatment methods.
In Southeast Asia where usually the waste fractions are co-mingled, an incineration plant, a mixture of combustion and anaerobic digestion, an RDF plant or hybrid with the other technologies may be considered. In a circular economy strategy, initiatives can often be seen, where waste is recycled to the degree that it is technologically and economically feasible. When deciding the technology, technical advisors must weigh all aspects, including the waste management mechanism and economics, as both of these aspects are interconnected. Eventually, the customer will end up with a good long-term equipment, and a price-effective and safe electrical services customised to local requirements and legislation.
Economic waste considerations
First, if one considers a WTE plant based on incineration, then a minimum amount of waste is required to make economic sense. A general rule is to have at least 500 tons of waste every day – the better, particularly when it is supposed to have low calorific value. This does not mean plants below 500 tons per day will be unfeasible. There are plants with outputs as low as 50 tons per day, such as airport waste management plants, so WTE can be adapted to local requirements, but it may be more difficult to make them bankable.
Second, in the case of a public-private partnership project, the developer in the private sector will need to be told that they would obtain enough waste daily to earn enough tipping fees and have enough waste to generate energy for sale. Developers, after considering the large capital outlay, would unlikely accept risk if the waste provision is unknown. That’s why Singapore’s National Environment Agency (NEA) received just one bid when, in 2001, it first called for a proposal for the fifth WTE plant in Singapore. NEA required the developer to take risks related to financing, architecture, service and demand.
A report was commissioned then, and the proposal was re-tendered in 2005 with improvements in terms of content. One of the biggest improvements was the introduction of the “take-or-pay” strategy, where either the government buys 100 per cent of the developer’s incineration capability or charges a cost to the developer. This means the government must bear “market” risks by providing maximum capacity payment to the manufacturer, irrespective of the WTE plant’s actual usage rate.
The tender had drawn positive business responses, and eventually processed 800 tons of solid waste daily to produce about 22 MW of renewable energy. It is fitted with a single condensing turbine generator with two incinerator-boiler units.
Not all policymakers will be able to follow the “take-or-pay” strategy and bear maximum risk of demand. The WTE plant developer and/or the structuring advisor will need to be innovative in these circumstances and find assured sources of waste and revenue. That can be achieved by, for example, signing waste supply treaties with mills, farms around the WTE facility, or waste collector businesses, and signing off taking agreements with local industries for refuse derived fuel (RDF) and electricity.
Legislation and necessary frameworks
Clear enabling legislation is critical if waste management programs are to get off the ground. Second, specific legislation provides clarification as to how the equipment used and discharges from plants comply with the applicable regulations and pollution requirements, which are vital to developers and funders. Second, legislation requiring higher tariffs to be paid on electricity generated by a waste-management facility would increase its financial sustainability and reduce dependency on tipping fees.
The Philippines has tabled the Waste-to-Energy (WTE) Act, and believes that clarifying the related WTE legislation is a positive step.
First, it demands the incorporation of a WTE policy in the solid waste management strategies of state, regional, and local governments. Furthermore, it offers assurance that WTE plants will be regarded as solid waste treatment facilities and exempted from the prohibition of incineration as long as they follow the pollution requirements set out in the Clean Air Act. Third and more significantly, local government units (LGUs) would be authorised to cluster and enter into long-term contracts, joint ventures, PPPs, and cooperative undertakings to build WTE projects. It not only solves the problem of one LGU not having adequate waste supply for a WTE plant, but also brings the LGUs together to reap efficiency gains.
Vietnam has pushed in the same direction, too. The government has adopted various policies for businesses that are interested in WTE programs. The major regulations provide for the support mechanism for WTE project growth.
The bill deals with investment opportunities and initiatives in different sectors like the building and collection, storage, recycling, and waste recovery in concentrated solid waste storage zones. Vietnam also stipulated tariffs applicable to WTE plants.
Commercial arrangements and structuring
Unlike a water treatment plant where the investment cost based on the generated MLD13 can be accurately calculated, a solid waste management facility is entirely a different ball game. This depends on a variety of variables, such as land-to-country and seasonal waste characteristics, climate, soil, water quality regulations, quantity of waste to be collected, space limitations, and overall solid waste treatment and state support regulations, to name only a few. Waste management is currently heavily based on the PPP and Build-Operate-Transfer (BOT) models, making revenue streams such as tipping fees, feed-in tariffs, and RDF rates, recyclables, and compost vital to successful implementation.