EfW & The Hierarchy: - Sustainability Live

EfW & The Hierarchy:Perceptions, Circularity &Economic RealitiesChris JonasHead of Strategic Development

AgendaIntroducing ViridorEfW in a circular economyEfW and the waste hierarchyEconomics of EfWInvestment in EfWCase Studies:Runcorn, Cardiff, OxfordUK EfW capacityExport of energyConclusions

About ViridorAt Viridor we sift, sort andsegregate waste to transformit into valuable commodities;whether that’s quality materialsthat can be recycled into newproducts or energy for theNational Grid. Part of the FTSE 250 Pennon Group Supporting 100 UK local authorities and over 20,000customers through a network of 327 facilities Responsibly managing 8m tonnes of waste each year Over 2.4m tonnes recycled or recovered each year Generating 136MW of renewable energy each year 3,200 employees with a turnover of c.£761 million Accredited to ISO14001, ISO 9001 & OHSAS18001environmental, quality and health & safety standards

Whenever we canwe put waste backinto action.

The Viridor network fortransforming waste 43 Transfer stations 37 Collection Services Depots 25 Materials Recycling Facilities 22 Operational Landfills 15 Composting/organics recycling facilities 4 Anaerobic Digestion Facilities 3 Energy from waste facilities operational 9 Energy from waste facilitiesin development or consented

Viridor: EfW Network Lakeside Operational. 410K tpa. 34 MW power + heat soon. (JV with Grundon) Bolton Operational. 100K tpa. 8 MW. Runcorn Under construction. 800K tpa; 70 MW power; 50 MW heat (JV) Ardley Under construction. 300K tpa; 24 MW Cardiff Under construction. 350K tpa; 30MW + 20MW heat Exeter Under construction. 60K tpa; 3MW Peterbourgh Planning approved & EPC contract agreed. 85K tpa; 7MW Glasgow Planning approved & EPC contract agreed. 200K tpa; 15MW Dunbar Planning approved. 300K tpa; 25MW Avonmouth Planning approved. 350K tpa; 30MW Beddington Planning recommended & EPC contract agreed. 300K tpa; 26MW

EfW in a Circular EconomyIn an ideal world all wastewould be prevented. Wewould inhabit a genuinelyzero waste society.But in our real world, for abroad range of political, social,economic and practicalreasons we all generatesurplus waste resources.How we deal with this realityis the waste hierarchy – wasteprevention, reuse, recycling,recovery and disposal.

EfW in a Circular EconomyThe waste hierarchy isboth a guide tosustainable wastemanagement and a legalrequirement of the EUWaste FrameworkDirective.Enshrined in law through the Waste(England and Wales) Regulations2011 and lays down a priority orderof what constitutes the bestenvironmental option for managingwaste.Whilst it is important that EfW doesnot become a barrier to capturingthese elements in future, it isequally important that wherecurrent barriers exist, EfW should beutilised to recover low carbonenergy.

EfW in a Circular EconomyThe combustion of waste washistorically used primarily asa tool for reducing thevolume of solid wasterequiring disposal. As suchcombustion was traditionallyconsidered on par withlandfill.Why do we view this sodifferently today?

EfW in a Circular EconomyThe answer lies in the environmental impact of the carbon containedwithin the waste and the energy produced by the process. The Climate Change Act established legally binding targets to reduceUK greenhouse gas emissions by 80%. In 2007 direct greenhouse gas emissions from waste amounted to 4%of total UK emissions – with circa 90% of those emissions being fromlandfill. Whilst landfill produces CO2 and methane, EfW produces CO2 alone.With methane being 25x more damaging to the environment, theroute which produces the lower volume of greenhouse gas emissions isplaced higher in the waste hierarchy.

EfW in a Circular EconomyIn addition to landfill diversion and moving materials up the wastehierarchy, EfW also provides valuable low carbon energy EfW can play an important role in domestic energy security. EfW can contribute to our renewable energy targets aimed atdecarbonising energy generation. EfW has the added advantage that it is non-intermittent and so cancomplement other renewable energy sources such as wind and solar. EfW is particularly effective when combined with commercial and /ordistrict heating schemes.

EfW and the waste hierarchyEfW is – a central component – in our waste hierarchy.Modern EfW facilities, working in conjunction with materials recycling andanaerobic digestion technologies, operate today, and every day, across theglobe.They operate across Europe in countries which combine some of thehighest rates of recycling with well-developed energy from wasteinfrastructure (like Denmark and the Netherlands).They operate to stringent environmental standards even in locations likeShetland which SEPA rates as ‘Excellent’ and where the sensitivelydesigned facility feeds a district heating scheme serving 1,000 properties.

Economics of EfWEfW, along with the waste hierarchy, can respond to economic realities.With over 20 plants in the UK and 400 across Europe, EfW provides asecure, proven, financially viable and cost effective solution for moving upthe waste hierarchy.DEFRA itself concedes that “the waste hierarchy is not inflexible. Where aclearly better environmental outcome can be shown, it is possible todepart from the waste hierarchy.”EfW suffers today from its poor historical image. That image is persistentbut outdated.

Investment in EfW£3.8bn investment in UK EfW over the last five years.More than 50% of this investment made by a few operators.£6.8bn investment in UK EfW required over the next six years.[ENDS Report March 2013].Of that, Viridor will invest over £1bn in UK ‘next generation’energy generation infrastructure.

Case Study: RuncornBuilt in two phases, combined plantwill be one of the largest and mostefficient in Europe producing 70MWof electricity and 51MW of heat.800,000 tonne fuel input EnergyRecovery FacilityPhase I supports Viridor’spartnership with the GreaterManchester Waste DisposalAuthority (GMWDA),.Phase II will support otherauthorities wishing to move wasteinto energy by rail

Case Study: Cardiff30MW of renewable energy andpartnership with E.ON and CardiffCouncil for 20MW of heat output.350,000 tonne fuel input Energyfrom Waste facility with CombinedHeat and Power.Supporting Viridor’s preferredbidder status on Prosiect Gwyrddwith additional capacity.

Case Study: Oxfordshire£200m, 300,000 tonne Energy fromWaste facility.24MW of renewable energy withCHP capacity.Supporting Viridor’s contract withOxfordshire County Council withadditional commercial capacity.

EfW capacity - nowThe UK has a predominantly market-led approach to infrastructure whichin DEFRA’s view “should help avoid the development of too much, or toolittle, energy from waste capacity.”The proportion of all local authority managed waste in England treated byEfW was 19.1% in November 2012.[DEFRA Energy from Waste Report, Feb 2013].A 2010 survey found only 2% of commercial and industrial waste wastreated by EfW in England.[DEFRA Energy from Waste Report, Feb 2013].In 2012, 25 facilities were operating in the UK processing MSW and similarwastes using some form of thermal treatment, many of these export someform of energy.

EfW capacity - futureViridor’s internal analysis points toover 130 new projects involvingthermal treatment of MSW typewastes to generate energy(excluding AD, biomass, MBT,autoclave).The facilities have a nominalcapacity of 25 million input tonnesof fuel.It is likely that a significantnumber of these projects will notbe delivered by 2020.140120100806040200ADDITIONAL EFW FACILITIES BY2020PROPOSED ADDITIONALFACITITIESDEVELOPED ADDITIONALFACILITIES

EfW capacity - futureWhen combined with currentplants these will require anominal feedstock of circa 13mtonnes per annum of fuel.Of this Viridor will havedeveloped 9 new plants, on topof existing plants, and will beusing over 2m tonnes of fuel togenerate over 170MW ofrenewable energy, realising CHPpotential.252015105Additional fuel inputcapacity by 2020, mt0PROPOSED ADDITIONAL MWCAPACITYDEVELOPED ADDITIONAL MWCAPACITY

Export of residual wastesDEFRA guidance states that “the UK has a long-standing policy of selfsufficiencyfor waste disposal and the UK plan for shipments of wasteprohibits the export of waste for disposal.”Paradoxically, DEFRA also states that “waste may be exported for recovery,which can have advantages over managing it within the UK.”The Environment Agency has permittedover 2m tonnes of waste-derived fuelsto be lost from the UK economyannuallyIn 2012 nearly 1m tonnes of fuel wasexported to northern Europe

Export of residual wastesThis is frankly madness – a Jekyll and Hyde policy framework whichsupports the export of UK PLC resources capable of powering growth inour economy, providing energy security and helping tackle fuel poverty.Consider that each lorry of waste exported could power 5 to 6 UK homesfor a whole year.What’s more, we not only export UK resources, but then we purchaseEuros to send 30 days after we send the lorry load.“The Government is keen to support domestic RDF and SRF markets, wherethey can provide better environmental outcomes, to ensure that the UKbenefits from the energy generated from UK waste.” – DEFRA Feb 13This is a short-term position which has to change.

ConclusionsEfW is a “key enabler” for the circular economy.EfW is at the heart – a central component – in our waste hierarchy.EfW provides a constant source of valuable low carbon energy, aidingenergy security and the UK’s renewable energy targets.Whilst EfW continues to suffer from its poor historical image it’s importantwe challenge that perception.Challenge too we must the perception of EfW crowding out recycling andthat of a tidal wave of UK over capacity fast approaching our shore.We must end the madness of a Jekyll and Hyde policy framework whichsupports the export of UK PLC resources then pays for the privilege.EfW reflects well the economic realities of our generation and workingtogether we can, we must, change perceptions of this dynamic industry.

Some see waste.We see renewable energy.Head OfficeViridor HousePriory Bridge RoadTauntonSomersetTA1 1APTel: 01823 721 400www.viridor.co.uk