In this article I will share the secret of achieving profitability of landfill energy from waste projects in the industrialising nations, and explain it as well as I can. I know that on the internet these days a lot of authors like to call things secrets and when you find out what they are you think that in truth they were things that others have written about, and that are actually quite well known already.
Well, I hope that you won’t be disappointed in this secret. OK. It is not a secret in the truest sense of something that has been purposely been hidden from you, or the public in general. Nevertheless, this secret is something that is not well known within the waste management industry entrepreneurs seeking to invest in landfill gas energy from waste (EfW) schemes, worldwide and yet it is an important aspect of achieving profitability of landfill energy from waste projects in the industrialising nations. And, most of those people who work in the area of landfill gas EfW schemes in the industrialised nations quite often take this for granted, and as a result, forget to mention it. Plus, this “secret” is not as far as I am aware often taught in courses on the subject of landfill gas technology.
So, let’s not spend any more of your time, and let me say that my secret is that:
“It is far harder to achieve a profitable landfill gas EfW scheme in developing nations where the landfill gas operators don’t already have to extract and flare-off their landfill gas, than it is within the industrialised nations where the waste regulatory authority is required by the government to ensure that greenhouse gas emissions from landfill are kept to a minimum.”
In those nations flaring is required by statute to help the nation comply with national carbon emissions reduction targets. Such regulations exist, for example, throughout Europe and are being implemented in some US states, as well, now, and mean that all landfills must already have landfill gas extraction systems installed, before the LFG EfW scheme contractor is asked to price the provision of an EfW scheme for the site.
This fact is not widely known, especially amongst waste management industry entrepreneurs seeking to invest in landfill gas energy from waste (EfW) schemes and many investors seeking “green” investment opportunities and CDM funded schemes.
However, this “secret” is important because where flaring is required already, by statute, the cost of landfill gas EfW projects, starts at the flare and does not include the LFG extraction system. This is because the LFG extraction system has already been paid for within the landfill site gate fee, in the industrialised nations which have carbon emissions reduction targets.
If people do not appreciate the importance of this accounting difference whereby the landfill gas EfW project developer in the industrialising nations must also pay to install the landfill gas extraction system which does not otherwise exist. The cost of the extraction system is a high cost and may double the cost of the EfW power generating engine installation in the industrialised nations. That’s why it is so much harder to make a profit from EfW schemes in the industrialising nations.
If the engineers and accountants assessing installation costs for new EfW schemes do not appreciate this point, they can make the mistake of under estimating the capital cost of the proposed EfW project, and not achieving profitability, and that can be unfortunate, because landfill gas EfW schemes in the industrialising nations can be very good value in terms of their ability to avoid many thousands of tons of greenhouse gas emissions.
They also bring technology transfer to the local people who will operate and maintain them, and that means good local jobs too.
I am sharing this secret with you because this fact should be emphasised to the politicians in the industrialising nations who are maybe wondering why landfill energy from waste projects are not, (even where CDM funding has been available), nearly as common as they could be, or many would say ought to be.
So, to summarise what I have said so far: My secret is that, waste management industry entrepreneurs seeking to invest in landfill gas energy from waste (EfW) schemes, need to be aware that although everyone in the west says that these schemes are highly profitable. When they try to set these schemes up at home in an industrialising nation they may be surprised how hard it is to make them profitable And, very few people know about this “secret” within the teams of investor advisors seeking “green” investment opportunities for their clients, nor even amongst many would-be developers of these schemes trying to set them up as a profitable business.
However, now that I have shared this with you, we hope that you will agree that you now know a little bit more about the secret of profitability of landfill energy from waste projects in the industrialising nations, and will benefit from that information one day.