While there is no shortage of solutions around the globe, the adoption of energy recovery facilities in Australia has been slow to take hold. So what does it take to find the right energy recovery solutions for our market? Why is it so important to find the right expertise and partnership so critical to its success? And what are some of the misconceptions surrounding energy recovery?
The National Waste Report in 2018 showed us that landfill gas, processed engineered fuels and anaerobic digestion were still the most common forms of energy recovery in Australia. About 1.97 million tonnes of waste was used for energy recovery, 90 per cent of which was achieved through landfill gas.
Thermal treatment, on the other hand, is creeping up as an emerging technology, with Australian governments and the private sector increasingly recognising its local potential even though thermal technologies have been successfully used overseas for many years.
According to Sustainability Victoria’s 2018 Resource Recovery Technology Guide, combustion processes have been widely deployed for processing waste materials across the globe and have the strongest technical and commercial track record of all residual waste treatment technologies. It cites the European example, where energy recovery facilities are coupled with recycling schemes to achieve resource recovery and landfill diversion rate above 75 per cent.
Earlier this year, construction began on Australia’s first thermal ERF facility. Based in Kwinana, WA, the site will be operated and maintained (O&M) by Veolia post-construction for 25 years.
The local team will be able to leverage the experience of the group, who currently operate more than 65 energy recovery facilities (ERF) across the globe. And with the range of technology options available, it’s never been more important to find the right partner to help business and Government navigate towards the best solution.
Whilst waste minimisation is always the primary goal in the waste management hierarchy, ERFs can serve as a complementary technology to recycling, while providing communities a source of affordable and reliable energy. ERFs can also benefit businesses by reducing their environmental footprint, and minimise landfill taxes.
In France, Veolia operates 45 energy recovery facilities, supplying almost 40 per cent of the nation’s active plants, 43 of which comprise an energy recovery system. Thermal energy supports district heating networks, green houses or is transformed into electrical energy which is then on-sold to distributors.
Across the European Union, around 27 per cent of municipal waste was incinerated using energy recovery. This rises to more than 30 per cent in countries like France and more than 50 per cent in Scandinavian nations.
While the various forms of 'energy recovery” can be confusing for some, Guillaume Wallaert, Vice President of Waste Municipal & Commercial Offers at Veolia in France, sums it up into six options: thermal treatment; RDF in various forms, including a dedicated combustion facility, co-incineration and gasification; anaerobic digestion and biogas from landfill.
“Thermal energy’s main advantage is that it's reliable, we know it works, and you can reduce the volume of waste quite significantly while creating high quality energy for industrial purposes,” Guillaume says.
When it comes to the different forms of ERF, Guillaume says, there are various considerations that will work better for some ERF proponents more than others. For example, thermal mass burning is costly and combined heat and power systems (CHP) need to be prioritised to ensure energy recovery remains efficient. However, it’s a mature technology that offers good waste reduction of up to 90 per cent in volume and 70 per cent in weight. It can also be adapted to a large scope of waste.
RDF, on the other hand, can be costly due to the need for pre-treatment, but Guillaume says it’s mature technology provides a high calorific value. He says CHP mode needs to be prioritised to enhance energy. Guillaume also considers it to be more suited to commercial and industrial waste.
Co-incineration is another viable option and according to Guillaume, it is a mature technology with a low carbon footprint, but requires high quality RDF and reliable and long-term users.
In RDF gasification, he says the limitation can be cost, while highlighting this as a less mature technology. Fortunately, it provides good waste traction, a solid carbon footprint and high levels of material recovery, but requires very high quality input.
Anaerobic digestion is also quite costly, Guillaume says, but a mature technology with high organic valorisation and a low carbon footprint. It can also only be adapted to organic fractions, requires good input quality and downstream solutions for digestate or compost.
Finally, biogas from landfill offers a low cost, mature and simple technology with a very high footprint, he says. It can also be adapted for all waste.
In Australia, the Kwinana Waste to Energy project will use Keppel Seghers moving grate technology, a proven technology used extensively in Europe. The plant has obtained all the necessary regulatory approvals from the WA EPA laid out in the Public Environmental Review document and Air Quality – Stack Emissions standards.
SOCIAL LICENCE TO OPERATE
Obtaining a social licence to operate is often a deciding factor of whether an ERF project successfully gets off the ground in the Australian market. This makes it critical that ERF proponents select the right strategic partner to operate and maintain a facility.
With ERFs relatively new to Australia, notably thermal treatment, Laurie Kozlovic, Chief Strategic Development & Innovation Officer at Veolia Australia and New Zealand, highlights the factors that have stalled investment in the past. Additionally, he points to the lessons Veolia is applying to manage the new energy landscape.
Firstly, he points out that there’s been a growing interest from the government, consumers and suppliers for more ERFs which provide a viable alternative to landfill within a waste hierarchy.
“In some parts of the country, the increase in waste levies has inspired a discussion around alternatives,” Laurie says.
Victoria, for example, announced in its long-awaited circular economy policy that it would raise the waste levy from $65.90 a tonne to $125.90 by 2022-23. Given the plan to double the levy over two years, this may inspire complementary energy recovery solutions.
Secondly, he says that when it comes to the economic factors driving ERFs, proponents need a clear regulatory environment to inform their investments.
“A lot of investments are made based on the ‘rules of the game’ so to speak, so the regulators need to be clear whether they want energy recovery as a complementary part of their waste management strategy and if so, how they want it to happen,” Laurie says.
“You can’t build 50-year infrastructure with a two to three-year policy framework, so for us, a clear and consistent long-term policy and strategy is important for getting the right investors into the sector,” he adds.
When it comes to Veolia’s O&M contract in Kwinana, Laurie highlights that the market signals were suitable for Veolia to be involved.
“The framework and guidelines were first in place there, and seemed to be further progressed than others, so that's why it happened there. Whether it’s the best place or not, I guess only time will tell,” Laurie says.
“As an operator of a facility like Kwinana, we’re responsible for delivering an energy output based on the volume that’s coming in, and we need to be sure we can achieve that based on the material coming into the facility. That’s a key part of our role - working with our partners to provide them with the best advice and global experience to make the facility a success.”
DE-BUNKING THE MYTHS
Managing Australia’s ERF transition effectively, Laurie says, means breaking misconceptions. He recognises that not everyone will be in favour of energy recovery, but those that choose to take that position should do so with an informed view.
“It’s important that any misconceptions are cleared so that the people who are making decisions on ERFs know exactly what it is all about,” he says.
That said, Guillaume says that even with Europe’s extensive experience in ERFs, there are some broader misconceptions globally, including the common argument that ERF “cannibalises” recycling.
Guillaume points out that the EU has a common target to achieve a 65 per cent recycling rate for municipal waste by 2030. He says that the other 35 per cent then becomes a critical residual component.
“We’ve all heard this a few times: if you have a ERF facility you won’t recycle any longer. We have plenty of evidence that proves that wrong. In fact the more you recycle, the more you develop ERFs and we have to combine both to create an efficient solution,” Guillaume says.
This view is shared by Laurie, who says that we need to share the global experience where ERFs are mature technologies and in the middle of cities around the world.
“I think there’s a lot of work to be done in educating key stakeholders to ensure you don’t get decisions made on unproven technologies or ideas that sound great at the time but haven’t been tested or proven in other markets,” Laurie says.
Pondering on the planning phase, Laurie says that there is no one-size-fits-all answer for energy recovery in Australia. There are not only unique circumstances in different geographies, but other variables such as the type of waste a facility is receiving, their pricing mechanisms, energy offtake, allowable inputs and desired outputs.
“That is why we’re technology agnostic, because there are different solutions appropriate for different environments,” he says.
He says Veolia Australia and New Zealand will assess the above variables and then draw on its global counterparts to come up with the right solution or technology for that particular market.
“The beauty of having access to some of the best experts in the world, who have successfully managed multiple plants using various technologies around the world, is that it allows us to draw on that experience and make informed decisions in our own market.”
Pointing to the European example, Guillaume says that in many cases, ERF facilities operate in close quarters to urban communities in Europe. As such, he says integrating these facilities into the surrounding environment has become a focal point.
In Leeds in the UK, Veolia partnered with architects in the UK to line its ERF facility with healthy green foliage, helping it blend in with the local scenery while providing a striking architectural landmark. Guillaume says the facility is the largest of its kind, and helps improve community confidence in ERF by creating a positive and innovative landmark for the Aire Valley region.
“This is a key point for all countries adopting a ERF solution and also in countries where the technology is relatively new such as in Australia,” he says.
Likewise, he says that collaborating with stakeholders and local authorities from the outset of a ERF project is important. In some cases, he says projects in Europe are led by the local council or statutory authority with integrated facilities that incorporate materials recovery facilities.
CHOOSING THE RIGHT TECH
Choosing a reliable technology is also an important part of achieving long-term success, says Guillame. A poor choice in technology, he says, can be the difference between seven years of equipment service life, and 40. Effective management can also significantly determine long-term financial outcomes. For example, predictive maintenance can eliminate costly maintenance cycles.
“If you use predictive maintenance, you can potentially do it once every 18 months or even every two years instead of every year with the right data and tools,” he says.
With Australia steadily advancing towards increased ERF, Laurie recognises there are still barriers to entry in the Australian market. Competition by low cost landfill, emerging legal frameworks, cheap energy prices and emerging market maturity could see operators face hurdles. Moreover, a lack of space (geographically) and higher demand for district heating helped propel projects forward in markets such as Europe - drivers which simply don't exist in Australia.
But even if operators get all of these ingredients right and the approvals process progresses, there are some deciding factors that can make or break a project. This is where Guillaume highlights the importance of finding the right risk allocation among engineering, procurement and construction players. Getting a project to financial close, he says, requires robust and experienced contractors.
He adds that the banks and investors will look closely at all revenues the proponent expects to gain from the facility, including expected gate fees and energy spot prices.
“It’s a really key point we’re always discussing with customers – a project has to be affordable for a city,” he says.
Adding to these views, Laurie highlights the importance of sizing your ERF appropriately.
“If you look around the world there are both small-scale and large-scale ERFs. You don’t want to be in a situation where you make your ERF too big and you end up having problems being able to find volumes to feed them. On the other hand, if you make them too small and you’ve got to return your investment on a smaller volume, then it doesn’t make it economical to run. It’s why there’s no one-size-fits-all solution to ERFs,” Laurie says.
As for how the Australian ERF market will evolve? Laurie is optimistic about its future based on what’s already been achieved around the world.
“There’s no doubt that ERF’s will become a more integral part of Australia’s waste management strategy in coming years - and with new approaches and technologies emerging all the time, this knowledge will only prove valuable as we start to apply what works best within our local regulatory and commercial frameworks,” Laurie says.