Waste-to-Energy: What is the Future of the Waste Industry 2020 – 2030?


INSIGHT


  • THE WASTE INCINERATION INDUSTRY MAKES A MASSIVE CONTRIBUTION IN COUNTRIES WITH LARGE AMOUNTS OF WASTE. THE HEAT AND ELECTRICITY CAN BE USED AS BASELOAD POWER FOR INDUSTRY AND HOUSEHOLDS.
  • WASTE INCINERATION IS GROWING RAPIDLY IN EAST AND SOUTHEAST ASIA. IN MANY LOCATIONS, LAND AVAILABILITY IS LIMITED, A LOT OF WASTE IS GENERATED. PRICES FOR WASTE DISPOSAL ARE HIGH.


1. LONG-TERM INVESTMENT OPPORTUNITIES IN THE WASTE INCINERATION INDUSTRY.


We have addressed the potential of waste-to-energy as a great way to dispose of waste. According to Green Giraffe Energy Blog (2019), waste-to-energy facilities have great potential solving the waste crisis many countries face. Waste-to-energy plants can offer a solid return on investment (ROI)

We would add this is despite the fact that they are now many different players in the market offering different solutions. This is mainly due to the fact that this sector of the waste industry is still growing and shows a particularly strong growth in Asian countries. Just to emphasize this point, publicly-available news (outlets) have pointed this out in a great number of news articles.


2. INTERNATIONALIZATION OF THE EUROPEAN WASTE INDUSTRY WILL HAVE SERIOUS CONSEQUENCES.


There are currently some major changes in the European waste industry that will reshape the whole industry in the coming decades. In particular, we see the internationalization of the European supply chain. My general impression is that the construction of waste incineration plants might have levelled off in the European Union. Publicly available data by Eurostat may suggest that the amount of waste grows at a slower pace in Europe. At a hazard guess, this would imply further restrictions on the development of new waste incineration capacity.

There is also recurring competition with the cement plants for alternative fuels as pointed out by Waste Management World (2015). One might add this is partly related to climate policy, and partly by higher prices for coal imports. Cement plants pay to receive the alternative fuels to create cement, whereas incineration plants are paid to incinerate municipal solid waste, assuming that they produce heat and electricity from it. Although the calorific value for alternative fuels might be higher than the calorific value for Refuse Derived Fuels found in the bunkers of waste incineration plants, the competition is strong.

IMG_0080


3. A GENERAL UNDERSTANDING OF ASSETS AND LIABILITIES SUGGESTS WASTE BUSINESSES ARE RELATIVELY STABLE.


This is mainly due to the fact that some of these companies have other business models with potentially very high growth rates, often combining their energy and water business lines in unique ways. In case of sewage sludge treatment, it allows companies to recover phosphorus. Waste incineration companies also have a considerable amount of fixed assets, which is obviously the case because of high CAPEX and land acquisition. What follows from that is this may provide collateral for investors.

In addition, we are seeing that French waste companies invest heavily in new incineration capacity in East Asia and Southeast Asia, where investor demand for new plants may grow in the future.


4. INTEREST IN THE WASTE SECTOR MAY INCREASE GRADUALLY OVER TIME, AS THIS AREA PROMISES STRONG GROWTH DESPITE GLOBAL DOWNSWINGS.


China’s economic rise means that more and more waste incineration plants are being built in East Asia, where an increasing amount of municipal solid waste is being generated.

The economic rise of a country correlates very strongly with waste growth. China, in particular, is rapidly expanding its waste incineration capacity, which in the foreseeable future will allow China to become a leading market in the development of environmental technology in this area due to the rich experience it will have gained in building waste incinerators. So it is worthwhile for European companies (such as is currently the case with French waste businesses) to get a foot in the door to partake in Asia’s economic development. But investors should be careful to distinguish between good and bad investment opportunities.


5. THE PROSPECT OF WASTE-TO-ENERGY IN THE RUSSIAN ENERGY MARKET


5.1.) Waste incineration technology is site dependent. It is economically viable in certain locations that are densely populated and have high per capita incomes, i.e., places like the East Coast of the United States and New York, Shanghai, Tokyo, the Netherlands, the Moscow metropolitan area, and the southeast of England. This may sound trivial, but it is a criterion for proposing to build a waste-to-energy plant somewhere.

5.2.) Why is it so important to have a high per capita income in combination with a high population density? The main reason is that you can’t just build a landfill because there is no space, it affects nearby land use, it limits infrastructure, and it can affect groundwater quality.

5.3.) A waste-to-energy plant is an industrial site that requires a special permit.

5.4.) Another reason is that disposal prices for municipal solid waste (household waste and commercial waste similar to household waste) at locales similar to those mentioned above are high enough to justify the construction of a waste-to-energy plant.

5.5.) The reason for building a waste incinerator is to dispose of the waste. Electricity and heat extraction are secondary to the primary objective.

5.6.) There are also health considerations. In some African countries, the construction of waste incinerators falls under the jurisdiction of the Ministry of Health rather than the Ministry of Environment or Energy. In urban areas, there is time pressure to dispose of waste at sorting facilities and recycling plants because storage capacity is limited some days and some weeks. The transportation of waste needs to run more smoothly, be better coordinated, and have shorter time windows. That requires more coordination, and that’s why prices are going up.

5.7.) The price differential is also different.

Does this work in other cities in Russia outside the major metropolitan areas? It’s hard to say. It’s hard to argue that waste-derived energy could be considered a reliable baseload for electricity supply when there are enough high-calorific energy sources in the country itself. In addition, the distances would be too great and the electricity losses too high to effectively use an energy source with such a low calorific value (municipal waste). In addition, landfills may be the preferred option in many places because land is available.

The application of technologies for thermal waste treatment in the European Union is carried out under different conditions than in the Russian Federation. The focus may be more on technologies for waste incineration.


6. THE PROSPECT OF WASTE-TO-ENERGY IN THE AFRICAN ENERGY MARKET


The shift to renewable energy has been embraced by many African energy companies. It has been recognized that renewable energy can make a significant contribution to community development and economic growth. This is partly because renewable energy sources are a cheaper alternative to many other energy solutions on the market, but they require much higher capital and operating costs. Consider coal-fired power plants, for example. The investment costs are significant, and the costs of building such a plant, operating it, and obtaining all permits are substantial.

Renewable energy technologies such as photovoltaic system and, to some extent, wind energy can be used in many locations. Such plans do not require connection to high-voltage grids. Other power transmission components, such as transformers, can be sourced much more cheaply if the goal is to build a decentralized energy system.

Bringing waste-to-energy solutions into it: We see that waste is a problem that needs to be solved. MSW is relatively abundant and has a low calorific value. Therefore, municipal solid waste is suitable for waste incineration. Waste-to-energy solutions are most applicable in urban centers, while they may not work as well in rural areas.

Another important aspect is that waste incineration plants is require relatively high waste disposal prices and high electricity prices. This is because waste incinerators make money by disposing waste and selling electricity and heat. The heat can be used in industrial purposes. Outside of urban centers, there are fewer uses for industrial heat.


7. THE OUTLOOK FOR WASTE-TO-FUEL TECHNOLOGY


This is not a criticism of the business models of the individual companies operating in this area. It merely reflects some ideas we have about the relevance of individual solutions from a technical perspective. In a broader context, we look at it through the lens of a business-minded, entrepreneurial person.

Chemical recycling has a very different purpose than waste incineration. While waste incineration is about disposing of waste while generating electricity and heat, the actual ways and means of chemical recycling are quite different. The purpose and intent of why we do what we do is also quite different.

For one thing, the purpose of chemical recycling is to create new valuable materials and chemicals that can be reused by industry and commerce. This also means that chemical recycling is much more focused on chemical engineering, while waste incineration is more related to mechanical engineering. This is just a higher level abstraction of how to think of the process and how industry experts think about it.

Chemical recycling is more closely linked to the refinery business, especially the downstream business. This makes a lot of sense, as a significant amount of recycled plastics and other residual fuels can be used near refineries.

Waste incineration is more closely related to industry in general, and the heat generated in waste incinerators is used in industrial parks or heavy industry of various kinds.

While the waste in a grate furnace of a waste-to-energy plant is enriched with oxygen, the waste in a pyrolysis process, which is part of chemical recycling, is not enriched with oxygen. This means that different chemical substances can be obtained from the decomposition of the waste material into its various components.

In terms of cost, it is quite difficult to say how much such a chemical recycling system would cost in practice, and it depends, of course, on the location, the technology used and, perhaps most importantly, the input material that is fed to the plant.

In general, we have much more experience with waste incineration plants. This is partly due to the fact that many such plants have been built in the past. Many of these waste incinerators, based on either a grate firing system or a fluidized bed system, have been built in the European Union, Japan, and on the East Coast of the United States.

Chemical recycling may be better suited for industrial sites near urban centers. This is because chemical recycling at a given site works without significant release of volatile compounds into the environment. In waste incinerators, the oxygen supply can cause increased decomposition into volatile components, producing particles that can potentially be released into the environment.


8. REFERENCES AND READING LIST


Jan Theulen (2015), Cement Kilns: A Ready Made Waste to Energy Solution? Waste Management World, viewed 09 02 20, https://waste-management-world.com/a/cement-kilns-a-ready-made-waste-to-energy-solution

Michael Ware (2019), Is energy from waste the next big investment opportunity?  Green Giraffe Energy Blog, viewed 20 08 2019, https://green-giraffe.eu/blog/energy-waste-next-big-investment-opportunity.


Many thanks for the shared interest in the energy world!



This article is meant to inform the reader of recent developments in the energy industry at large. We take great pride in our work. Despite all this, we would like to point out that we do not guarantee the reliability of the content on this website.
Please note that the information presented on this site reflects the opinion / views of the author himself. No relationship to artists, authors, companies, institutions or organizations can be inferred from these texts, illustrations, images and presentations. 
The contents are not to be understood as business advice in any form. The author does not put forth investment recommendations. This article should not be taken as investment advice and the author cannot be held to account for investments made. For more information, please refer to the Legal Disclosure and Privacy Policy, which you can click on or find at the top of this page in the menu bar. 

Email (case-based consultation and support): 
support@boegelsackenergy.com

Whether advice can be provided depends on the specifics and particular subject matter of each individual case.

COPYRIGHT CONTACT: Please contact us by email or phone if you would like to use the following content: i. Texts and articles, ii. Presentations (PowerPoints / PDF documents) and iv. Images (i.e. images of power plants and industrial facilities). 
COPYRIGHT: Please note that these texts, reports, presentations, including presentation layouts and presentation designs, and images are subject to copyright. Please contact the website owner if you wish to use copyrighted content. For copyrighted content, permission from the content owner is required. 
MAPS, MUSIC AND VIDEO CONTENT OF WELDER: Maps, music and video content of the welder are from third party providers. Maps, music and video content of the welder are NOT part of the offer. They are not part of the Boegelsack Energy portfolio.


Your subscription could not be saved. Please try again.
Your subscription has been successful.

Newsletter

Subscribe to our newsletter and stay updated.

Wir verwenden Sendinblue als unsere Marketing-Plattform. Wenn Sie das Formular ausfüllen und absenden, bestätigen Sie, dass die von Ihnen angegebenen Informationen an Sendinblue zur Bearbeitung gemäß den Nutzungsbedingungen übertragen werden.