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João Aleluia
Project Coordinator
Sustainable Urban Development Section
Environment and Development Division
Jakarta, 13 November 2014
Implementing the Integrated Resource Recovery Center(IRRC) model in Indonesia with the conversion of waste
into energy
www.waste2resource.org
2
The IRRC model and the conversion of waste into energy
The recovery of recyclables and the production of compost have been so far the main focus of the IRRC model
Screening
Sorting
Composting
Maturing Compost
Compost
Bagging
Organic Waste Used Cooking OilRecyclablesOrganic Waste
Fish & Meat Waste
Grinding
Biogas Digester
Mixing
Biogas
Slurry
Electricity
Compost
Sorted Recyclables
Shredded, compacted and baled
Plastic
Metal
Glass
Paper
Processing Unit
Biofuel
Glycerine
Waste with high Calorific Value
Refused Derived
Fuel (RDF)
Faecal Sludge
Drying
Co-composting
with municipal organic waste
Compost
Shredded
Sorting
Extruded
Source of Waste
Source: Waste Concern
3
Why the waste-to-energy conversion route?
… while reducing external energy requirements and contributing to enhanced energy security
The conversion of waste into energy has the potential of resulting in the double dividend of improving waste management practices and the harnessing of a resource for the production of energy
Opportunity to treat waste…
Collection and disposal of waste in landfills and open dumping are still the common practice in Indonesia
Avoids and/or minimizes the need for disposing waste in landfills or open dumps, also reducing costs incurred with the transport of waste to disposal sites
Waste is an abundant and “renewable” resource
Context of growing demand for energy and increasing energy prices
Highly subsidized fuel prices in Indonesia
4
Technologies and approaches for WTE conversion
Several approaches exist for converting waste into energy, with different benefits and drawbacks associated with their development…
Not Exhaustive
Waste-to-Energy Routes
Thermal Conversion
Physical Treatment
Biological/ Chemical treatment
• Thermal combustion (Incineration)
• Gasification
• Pyrolysis
• Etc.
• Refuse-derived fuel
• Densification and Peletization
• Etc.
• Anaerobic Digestion
• Fermentation
• Transesterification and esterification (biodiesel produ.)
Source: Own Elaboration
5
Why the anaerobic digestion (AD) of MSW?
Biological treatment methods are amongst the most adequate for treating MSW in developing countries in Asia-Pacific, given the high organic fraction of waste streams (50-70%) and the potential for deriving significant sustainable development benefits
Mechanical Biological Treatment
CompostingAnaerobic Digestion
Biogas is a gas mixture consisting mainly of methane (55-60%) and Carbon dioxide (40-45%)
The gas can be either converted into electricity or used as an alternative fuel, while thedigestate as a fertilizer or soil conditioner
Potential for unlocking many direct and indirect benefits
6
Municipal solid waste and biogas generation
Different wastes streams rich in biodegradable organic matter have the potential of being converted into biogas…
Municipal waste Agricultural waste Industrial waste
Organic fraction of municipal solid waste
Faecal sludge
Manure
Agro-industrial waste
Energy crops
Algal biomass
Slaughterhouse waste
Food processing waste
Pulp and paper waste
Biochemical waste
Source: EAWAG 2014
BiogasPost-
treatmentUtilization
Collection and Transport
Additional Sorting and
Pre-treatment
Anaerobic Digestion Process
DigestatePost-
treatmentUtilization
Plant boundary
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Objectives of the Project
1) To demonstrate the viability of a decentralized, community-based and pro-poor waste management model that has at its core the conversion of the organic fraction of municipal solid waste into energy, and which is in support of national policies
2) To develop a multi-stakeholder partnership which can serve as a blueprint for further replication of the model in other locations in Indonesia as well as other countries in Asia-Pacific
The overall objectives of the waste to energy pilot are:
8
Project Concept
Waste-to-Energy Pilot Concept
Key design features
Envisaged Capacity: 5 ton of source-separated organic waste per day
Location: preferentially a small city or secondary town in Indonesia
Technology: anaerobic digestion of the organic fraction of MSW
Technical and Operational Considerations
Source segregation of waste will be a key component – presence of fruits and vegetables market
Preference for a technology provider that is locally available
Involvement of a national research institute or university to support and oversee the technical aspects related to the design and operation of the facility
Financing Model and partnership arrangements
The financial sustainability of the model is one of the pillars of the pilot
In-kind contributions expected from local governments (e.g. co-financing, provision of land free of cost, access to water supply, etc.)
A detailed project concept will be further developed based on the inputs of different stakeholders and the specificities of the local context
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Partnership model
A multi-stakeholder partnership model will be key to the success of the proposed project and one of its main components
Waste-to-Energy Project
National Government
ESCAP
Municipal Government
Local Community
University/ Research Institutions
Technology and Service Provider(s)
Others (e.g. NGOs and local partners)
Plant OperatorImplementing Partner
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Expected Benefits of the Pilot
The project is expected to result in tangible benefits to municipal governments as well as local communities…
1. Savings in waste transportation costs as the pilot is expected to be neighbourhood based
2. Landfill space saved, with costs incurred by municipalities reduced
3. Production/sale/utilization of biogas for conversion into electricity or other energy carrier (e.g. LPG)
4. Utilization of the biogas digestate as solid or liquid fertilizer or for further composting
5. Strong co-benefits: improved local environment, reduction of disease vectors, etc.
These benefits can be ordered differently based on the context and priorities of local stakeholders
11
Financial sustainability of the pilot
Sale of electricity generated from biogas
Digestate can be used as solid or liquid fertilizer, either with or without further composting / co-composting
Recovery and sale of recyclables, including the association of the project with the a waste bank
Charge of a tipping fee or waste processing fee
Carbon financing (e.g. through NAMA, CDM, voluntary standards, etc.)
Main source of revenue
Complementary source of revenue
The pilot will be based on the IRRC model, with one of the key pillars being the financial sustainability of the operation, which could be achieved through…
12
Financial model of a waste-to-energy plant
This example illustrates how a 5 ton per day plant could achieve financial sustainability with regards to its operational performance
Assumptions
- 5 ton per day plant
- Only 1 source of revenue for the plant: electricity from biogas
- Investment costs not recovered
- Operational costs: 16.8 Million IDR/month (1400 USD/month)
- Free delivery of waste to the plant
- 1 ton of organic waste generates 70 m3 of biogas
- Efficiency of the biogas engine: 25%
- Exchange rate: 1 USD = 12,000 IDR
Best case scenario, assuming that feed-in-tariff set by MEMR is paid to the plant
Lower-case scenario, assuming average subsidized electricity retail prices and a lower capacity factor
Middle-case scenario, assuming a power tariff above current retail prices and below FIT is paid
Scenario 1
Scenario 2
Scenario 3
13
Important considerations
The results of this modelling exercise should be understood in the specific context of the waste and energy sectors of Indonesia…
Feed-in tariff of 1.798 IDR/kWh (zero-waste, low-voltage, up until 10 MW)
Average production costs of electricity in Indonesia in 2013: 1.663 IDR/kWh
Wide range of retail electricity prices charged in Indonesia; average retail price assumed to be 725 IDR/kWh
Tipping fees are not standardized across Indonesia (e.g. 105,000 IDR/ton in Jakarta and 120,000 IDR/ton in Surabaya)
Capital costs of a 5 t/d plant can vary significantly
Operational costs of a 5 t/d plant are difficult to estimate
Sources: Carbon Trust 2014, Ministry of Energy and Mineral Resources 2013, Indonesia Investments 2013
3. Middle-Case Scenario
1. Best Case Scenario
2. Lower-Case Scenario
14
Financial model of a waste-to-energy plant
Profitability scenarios of a 5 ton per day plant
How much tipping fee to break even?
Tipping fee required?
TariffScenarios
5 days per week
(0.15 USD / kWh)
Capacity factor Profit / Loss
(3,300 USD/year)
NO1798 IDR/ kWh
40 Million IDR/year
3.5 days per week
(0.06 USD / kWh)(11,000 USD/year)
YES725 IDR/ kWh
(12.1 USD per ton)
145,000 IND per ton
4.2 days per week
(0.11 USD / kWh)(4,700 USD/year)
YES1262 IDR/ kWh
(4.3 USD per ton)
51,600 IND per ton
PROFIT
132 Million IDR/year
LOSS
LOSS
56 Million IDR/year
-
15
Other benefits that the project can generate
In addition to the income from the sale of electricity and the charge of a tipping fee, other benefits could be directly or indirectly derived from this initiative…
Obtaining data on MSW prior to and after the project is implemented will enable a more accurate quantification of the benefits generated by the pilot
Other Direct Financial Benefits
Sale of recyclables • Potential income generated: 50-500 USD/month
Composting of digestate • Potential income generated: 20-150 USD/month
Carbon finance • Potential income generated: 60-100 USD/month (assuming 2 USD/ton CO2)
Economic Benefits
Sustainable development benefits
• 10-15 new jobs can be created to the urban poor
• 10,000-15,000 citizens can directly benefit
• Cleaner and healthier urban environment, with reduced health risks
Landfill space saved and costs with transport of waste reduced
• 2,000 m3 of landfill space can be saved per year
Other benefits• Return of nutrients to the soil with the application of compost in fields
• Savings from subsidies to energy (depending on the power tariff paid)
16
Challenges
While a waste-to-energy pilot offers significant prospects of success, a number of challenges can be identified for its development and implementation
Local government support is essential for the success of the pilot
Payment of feed-in tariff (per kWh) by national government, power utility or municipality
Availability of adequate tipping fee for the waste processed in the plant
Limited technical experience in Indonesia on the AD approach for converting MSW into biogas
Design of a low-cost and easily to replicate technical solution
Availability of land in relative proximity to the source of waste generation to develop the project
Segregation of waste at source and participation of the community
Policy
Technical
Operational
17
Pictures of AD facilities
Small-scale, low-cost and decentralized AD plants are gaining interest in other countries in the Asia-Pacific region, especially in India…
Medium Biogas Plants, Pune
Domestic Waste, Chakan
Source: Green Elephant Group, 2014
Small Biogas Plants, Chakan
• Construction:
• Input:
• Output:
• Use:
2011/2013
5 t/d of hotel waste
400 m3/d of biogas
Power generation
• Construction:
• Input:
• Output:
• Use:
2013
0.5 t/d of kitchen waste
40 m3/d of biogas
LPG replacement
18
Pictures of AD facilities
Market level plant equipped with generator and gas scrubber
Source: Heeb, 2009, EAWAG 2014Biogas engine
Pre-treatment of feedstock
Gas scrubber
Household plant for kitchen waste
Typical feedstock
19
Conclusions and key messages
There is an enormous untapped potential in Indonesia for converting MSW into energy through the AD approach
It is possible to come up with a model for converting the organic fraction of MSW into biogas which is low-cost and financially sustainable, with many sustainable development benefits along the way
Challenges for successfully developing and implementing the proposed pilot exist, but can be overcome with the involvement and commitment of concerned stakeholders
Support of the local government will be key to the successful implementation of the pilot
If successful, the model and approach could be replicated nationwide, as well as in other countries in the region