The GCC’s waste volume is expected to reach 180 million tonnes in the next five years, which augments the case for investment in waste-to-energy (WTE). Is the region now overcoming bottlenecks that previously stood in the way of utility scale WTE?
In May, Sharjah based environmental management company, Bee’ah, and Abu Dhabi’s renewable energy company, Masdar, announced the creation of a joint venture (JV) that will develop the GCC’s first waste-to-energy (WTE) plant.
The Sharjah Multi-Fuel Waste-to-Energy Facility will be the first in the region and will treat, within its first phase, more than 300,000 tonnes of municipal solid waste (MSW) each year and have a power capacity of around 30 megawatts (MW).
The first project by EWEC is expected to leverage the strengths of both Bee’ah and Masdar to pave the way for further waste-to-energy facilities in the UAE and the region, delivering commercial solutions to meet the challenge of solid waste disposal and the ever-growing demand for clean energy.
To set things in motion, Sharjah Electricity and Water Authority (SEWA) has signed a power purchase agreement (PPA) with EWEC, where the company will supply SEWA with the power generated from its waste-to-energy plant, the first PPA of its kind in the UAE.
This is not the first such announcement in the GCC. Neighbouring Dubai announced last year that it was setting the stage to build one of the largest waste-to-energy plants in the Middle East with the $21bn global WTE market forecast to increase by nearly 60% over the next eight years.
Dubai Municipality is building a Dh2 billion facility to convert solid waste into energy in Warsan district two in line with the emirate’s move to reduce landfill waste by 75% over the next five years.
It will take three years to bring the plant online with operations expected in the second quarter of 2020. The first phase will receive 2,000 metric tonnes of municipal solid waste per day to produce 60 megawatts of power. Dependence
In an emirate where nearly 7,800 tonnes of domestic waste is produced on an average each day, the government of Dubai is undoubtedly looking for innovative and resourceful ways to use that waste. It is believed that one of the previous attempts to start the project was cancelled because of financing issues, while the first tender was cancelled because the scope of the project was too open. One of the project plan was to build three incinerators in Al Warsan each with a capacity of 50MW with abilities to process about 6,000 t/d of domestic waste under a 20-year contract.
The global WTE market has been rapidly increasing, with the market size forecast to grow to more than $33bn by 2023 from last year’s $20.86bn, according to the American research and consultancy company Global Market Insights. The region will grab a chunk of the market, says Mhairi Main Garcia, the director of Dubai-based Clean Energy Business Council.
"The GCC states rank among the highest per-capita producers of municipal solid waste in the world with the majority of waste dumped in landfills using valuable land and resulting in quantified environmental damage," she says.
Landfills in the GCC have been overflowing due to rapid industrialisation and growing population, forcing governments to rethink ways to dispose of waste. And with environmental well-being under immense spotlight, governments cannot just take any measures to get rid of waste, but devise an ecologically balanced, yet economically viable plan.
Taking forward the oft repeated policy of reduce, reuse and recycle, the nascent and evolving waste-to-energy industry focuses on using municipal solid wastes through incineration to generate energy in the form of electricity or heat. A growing volume of municipal solid waste, and increasing need to generate energy and stricter legislations are together driving the waste-to-energy plant market globally, according to a Frost & Sullivan report, which claims that the market revenues - which at the end of 2012 accounted for US$19bn - are expected to reach US$29bn by 2016.
“Landfilling of waste is no longer the economically sound process that it used to be a few years ago. Gate fees have risen considerably, leading market participants to explore competitive solutions,” says Monika Chruciak, Research Analyst Environmental & Building Technologies, Frost & Sullivan.
“Waste-to-energy plants provide a waste treatment solutions which shift from limited recycling value to recycling with energy recovery. Successful operation of such plants relies on internal waste-to-energy plant economies, understanding of local conditions and also on an innovative business model. The market’s future prospects highlight the need for increased collaboration among stakeholders to complement each other’s expertise and knowledge base in tapping future growth opportunities.”
Directly proportional to the accelerating consumption rates in the Middle East is the waste generation rates. Counted among the world’s largest waste producers is countries like Saudi Arabia, UAE, Qatar, Bahrain and Kuwait, some of which are said to produce as much as 2kg of per capita waste per day. According to a news report, the urban waste generation from the region has crossed 150 million tonnes per year which has forced policy-makers and urban planners to look for sustainable waste management solutions, including recycling and waste-to-energy.
According to Kshitij Nilkanth, program manager, Environmental and Building Technologies Practice, Middle East, North Africa and South Asia at Frost & Sullivan, waste to energy is an emerging market in the GCC and has immense potential. “Existing landfill sites are under pressure and sometimes are not sufficient to manage the huge volume of waste generated. For instance, Al Ghusais landfill site in Dubai is overloaded with dumped waste. Waste to energy projects are a solution to this growing problem as a well-managed mechanism can reduce up to 90% of waste going to the landfill.”
The waste to energy market in the GCC has witnessed 20-25% growth in the past three years. It is expected that this trend will continue in 2017 during which more waste-to-energy plants will be established. The main factors driving the market are growing population, high per capita waste generation (among the top ten in the world) and high economic growth.
“Per capita waste generation is highest in Bahrain, although the country is smallest among the GCC states. It generates about 1.5 million tonnes per annum of municipal solid waste. Also, the GCC is swiftly turning out to be one of the major commercial hubs globally and witnessing large floating populations. This also contributes to increased waste generation. It is expected that more funds will be diverted towards waste management and waste to energy projects in particular,” Nilkanth says.
Energy to be gained
The total energy produced from waste globally is about 140 terrawatt-hours (TWh) per annum, while the GCC countries contribute between 0.25 - 0.3 TWh, signifying that the market is at a nascent stage in the GCC. According to Nilkanth, certain states in the GCC have plans to produce a total of 2.7-3 TWh of energy from waste by 2017, with some planned projects in the Saudi Arabia and the UAE. “The Aksar project in Bahrain is also expected to commence operations during the next year in full swing contributing an additional 25 Mega-Watt (MW) power generation capacity,” he says.
Among the GCC countries, Qatar is said to be the first to implement waste-to-energy projects on a large scale. Presently, Qatar generates more than 30MW of energy from its plant. “Next in line is Bahrain which is expected to generate about 25 MW of power by 2014 followed by the UAE and the KSA, both targeting over 100 MW capacity in the near future,” Nilkanth says.
Globally, the number of installed such plants is expected to increase by 10% between 2012 and 2016. But as far as UAE is concerned, the country is sending out mixed signals about investing in the waste to energy market. On one hand, Abu Dhabi is building a demonstration facility in Dalma Island, on the other, Dubai last year scrapped plans to tender a mega 2000-3000 tonne project for good.
Abu Dhabi National Energy Company (TAQA) and the UAE’s Center for Waste Management (CWM) signed an agreement in 2014 to study and develop the facility, which is expected to produce one to two megawatts of alternative energy, enough to supply power to more than 200 households.
Waste from Dalma Island, located 32km offshore Abu Dhabi’s western region, was being dumped in city landfills. The demonstration facility, a first in the UAE, is expected to begin operations in 2016-17.
The waste to energy technologies have been around for a while and have also been infamous for polluting the air, making them not so ecologically beneficial after all. So the question is how much has such technologies evolved in the past few years.
“Conventional technologies include mechanical biological treatment and incineration. Among the newer technologies anaerobic digestion, gasification, pyrolysis and plasma incineration are prominent. These technologies are being used extensively to extract energy from waste worldwide. Technological focus and research is underway to increase the efficiency of the technology and to decrease cost incurred, both in terms of initial capital and operating costs,” Nilkanth says.
According to him, in a well-executed waste-to-energy plant air pollution is negligible. “In fact, for every megawatt of energy generated through combustion of solid waste there is net saving of emissions of greenhouse gases as compared to energy generated from conventional (fossil fuel) power plant,” he said. The plant fire is said to be carefully controlled and the exit air is said to pass through a series of separators which eliminate the release of harmful gases to the environment.
Currently, the installation of new waste to energy plants is witnessing strong interest in regions with the highest population density and limited area, such as Western Europe, the Middle East and also South Asia. At the same time, regions with developed economies and an existing installed base of waste to energy plants are expected to create vast modernisation opportunities by 2016. However, there are still obstacles to get the market up and running.
Low-cost landfills will need to be addressed if WTE or even recycling is to be successful. "Recycling in the GCC is currently ad hoc but there is huge scope for recycling across the region," Ms Garcia says.
From WTE projects, a secondary recycling market could open up with the by-products from these plants being used in areas such as road construction.
She points to other regional examples where large-scale WTE plants are being built. This will lead to more private-sector participation, which is the trend throughout the region in other areas in the power sector. Kuwait is tendering a large WTE project on a public-private partnership (PPP) basis.
The UAE’s ministry of climate change and environment is planning to invite private-sector bidders to run a huge project to handle waste in the Northern Emirates, capable of processing between 1,000 and 1,500 tonnes per day.
"What is still unclear in this relatively new market is whether governments will continue to fund these projects directly as is the case with Qatar’s Domestic Solid Waste Management Centre or whether this will be growth area for PPPs, with regional and international lenders providing finance to WTE projects," Ms Garcia says.
"The next 12 to 18 months will be key in understanding whether a PPP market will develop regionally in this area."