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

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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

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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

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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

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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

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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:

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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

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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…

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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

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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

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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

-

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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)

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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

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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

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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

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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

www.waste2resource.org

Thank you for the attention!

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