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Energy from waste: Next moves for the UK sector

EfW is well placed to play a huge role in future projects and policies but must overcome an incentive-free environment.

The energy-from-waste industry in the UK has evolved rapidly over the last 15 years.

While it wasn’t so long ago that landfill was the usual destination for waste, regulation has driven substantial change.

We’ve seen the introduction of the EU landfill directive and a landfill tax, while PFI credits have come and gone, as has Renewable Obligation Certificates (ROC) generation incentivisation.

The upshot is that we now have mechanical biological treatment plants creating good-quality refuse derived fuel (RDF) and advanced thermal conversion technologies.

But what’s next? What does the future look like for energy from waste in the UK?

Clarity lacking

Right now there is real market uncertainty as the government shifts its focus towards offshore wind as the preferred source of renewable energy. Large-scale feed-in-tariffs and ROCs look like things of the past, while the date for the next round of Contracts for Difference remains uncertain.

The loss of an incentivised market is a hindrance, as is the further uncertainty that incentivisation may never return. As such, the industry must consider looking to itself to drive further investment, combined with the continued evolution of smaller, more efficient energy-from-waste plants.

“Community-scale energy recovery facilities with private wire connections would provide price certainty over a contractual period; it’s a model that certainly warrants further exploration”

It’s true we are seeing the progression of slow-burn opportunities where issues such as planning, grid connection and feedstock contracts have been resolved. But in reality these are long-running enterprises, re-badged as new projects.

Until the future direction of government policy becomes clearer, pushing forward new projects will be challenging. We could wait for a favourable policy shift or an RDF price change, or we could seize this opportunity to develop sustainable community-level energy-from-waste facilities.

Untapped approach

One currently under-exploited route is private wire arrangements, which offer long-term fixed-price agreements between individual parties, avoiding the use of distribution network operator infrastructure and grid connection costs.

Community-scale energy recovery facilities with private wire connections would provide price certainty over a contractual period; it’s a model that certainly warrants further exploration.

While electricity generation is lacking incentives, we must remember heat generation – an important output of energy from waste – is still incentivised. Decarbonisation of the electricity network does not mean we will import significantly less natural gas, as we will still need vast quantities for heat. However, as thermal conversion systems have become more modular and intensive, the potential for rolling them out at a local level increases.

Scandinavian dreams

There will be greater emphasis on decentralised generation as part of localised smart grids, with both electrical and heat outputs aligned to local demands. Central to this is the creation of a need for heat networks.

While we dream of developing the networks seen in Scandinavia, street-level heat networks for existing housing are likely to be unviable. Instead, we must adopt heat networks to new developments combined with the siting of small decentralised energy-from-waste facilities close to stable heat users.

The energy-from-waste sector has a valuable part to play in the UK energy mix, not only with the UK’s role in the decentralisation of power generation, but also in simple terms of energy supply. Continued investment in thermal conversion infrastructure will insulate the UK from price volatility, while also helping to reduce natural gas demand through using waste heat effectively.

We must embrace an incentive-free world and our industry can prove it has a vital role to play in it.

John Ord is business director for thermal power and energy networks at MWH

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