When rubbish energy policy makes a circular economy

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When rubbish energy policy makes a circular economy  

Australia is poised to unearth the missing link in its waste management sector. Waste to energy (WTE), a well-established technology in comparable countries, is close to commercial viability in some parts of Australian and presents a promising candidate for government incentives in others. While energy has long been recovered from organic waste and landfill gas in Australia, the emergence of WTE for residual non-organic waste will be an important step forward.

WTE commercial proposition   

WTE is primarily a waste management proposition and waste disposal fees constitute the majority of a WTE plant’s revenues, with sale of energy output being a lesser order revenue stream. The fees a WTE plant can command for disposing of waste will depend to a large extent on the availability of alternative disposal options. In the UK for example, where large scale thermal treatment of waste was first developed in the nineteenth century and where steep waste disposal levies have raised the price of waste disposal, WTE developers have long been able to sell waste disposal services to municipal councils and other entities at a price that makes WTE plant economically viable.

In contrast, Australian jurisdictions have offered a patchwork of varying and uncertain levies, most too low to make WTE commercially viable. The discrepancy between NSW’s waste levy ($141.20/tonne) and Queensland’s (nil) has by some estimates sent 1.5m tonnes of waste market arbitrage up the Pacific Highway each year. Meanwhile, Australia exported increasing volumes of waste to China while promoting piecemeal resource recovery initiatives that deflected attention from the seemingly intractable issue of residual non-organic waste. With China now declining foreign waste imports and Queensland looking to shed its dumping ground image via new waste disposal levies, a solution is required for non-recyclable waste.

State-led progress

While Australia’s National Waste Policy has not progressed beyond the agreement struck by environment ministers in 2009, many of these ministers have implemented WTE polices for their respective states and territories. In addition to Queensland’s recent commitment, Victoria, South Australia and ACT have each released discussion papers on WTE within the last 12 months, while in April, NSW established an inquiry into waste disposal with a focus on WTE. Western Australia is the national leader in WTE, having established relevant policy in 2013 with bipartisan support, and now two promising projects in the pipeline (Phoenix Energy’s 32MW facility in Kwinana and New Energy Corporation’s 28MW facility in Rockingham).

In Victoria, Australian Paper is aiming to build a WTE facility in the Latrobe Valley which would process 650,000 tonnes of mostly municipal solid waste per year and supplying up to 225MW of thermal energy to its pulp and paper mill. ItelliGas has received a $500,000 grant from Sustainability Victoria to develop a 10MW WTE facility near Bacchus Marsh that would divert 150,000 tonnes of commercial and industrial waste from landfill per year. Recovered Energy Australia has proposed to develop an advanced WTE facility in Laverton North, Victoria. The 15MW facility would accept 200,000 tonnes of municipal solid waste per year and use gasification technology to convert waste to energy and other usable outputs in a cleaner way than direct combustion can.

Gasification technology that Recovered Energy Australia intends to use in its proposed facility in Laverton North;  https://recoveredenergy.com.au/technology

In NSW, The Next Generation (part of the Dial-A-Dump group) continues its effort to develop a 70MW facility in Eastern Creek that would accept 552,500 tonnes of municipal solid waste per year, though opposition remains strong with the NSW Independent Planning Commission having refused consent for the project in July and recent efforts by NSW Labor MP and Blacktown mayor Stephen Bali having recently attempted to impose a state-wide moratorium of WTE projects.

Potential to advance   

Despite these developments, broader uptake of WTE along the eastern seaboard may be challenging in the short term, given that estimated gate fees required for stand-alone commerciality are around $200 per tonne, well above current levies in the states and territories that have them. While the Queensland government has recently announced that it will re-introduce a waste disposal, with a proposed starting point of $70 per tonne, it may be too low to spur WTE development.

Another consideration is the opportunity for technological incubation. Some of the more advanced waste conversion technologies involving gasification or pyrolysis are still being proven on a commercial scale but offer scope for clean and efficient conversion with outputs including fuel gas, industrial materials, and heat, as well as electricity generation. Advanced conversion technology still requires support in some jurisdictions with well-established WTE sectors.

In the UK, for example, Spencer Group’s Energy Works project in Hull is expected to commission a 25MW in the coming months, at which time it will commence 15 years of subsidy payments under CFD arrangements. Similar subsidies have been allocated by the UK government to basic incinerator projects that incorporate combined heat and power technology, such as the 50MW Wheelabrator Kemsley project in Kent, illustrating how government support schemes may be used to nudge the WTE sector towards more efficient technology.

Some of the fuel technologies, including advanced conversion technology and energy from waste with combined heat and power, listed Low Carbon Contracts Company’s CFD register; https://www.lowcarboncontracts.uk/cfds

Anticipated government assistance

In April 2018, then Federal Energy and Environment Minister Josh Frydenberg announced that the Australian Renewable Energy Agency and the Clean Energy Finance Corporation are to prioritise the development of WTE. With state and territory governments already offering various clean energy incentives, including CFD arrangement schemes developed by ACT and Victoria for large scale wind and solar, as well as state-level ‘circular economy’ frameworks, it is now conceivable that targeted assistance may be available at a state level of for WTE projects.

Watch this space.