Successful application and challenges of the renewable obligation Presentations Brochure (PDF 1.68 MB)

Delivering solutionsThe successful development and future challenges for renewable waste to energy schemes under the Renewables ObligationRWM Exhibition – 16 September 2009Alex Young2New Earth Solutions GroupNew Earth Solutions Group brings together waste management and renewable energy in the UK • Established by local entrepreneur, Bill Riddle, out of waste management origins to pursue landfill diversion and composting operations• New Earth Solutions has three operational biological treatment plants plus two entering into construction this year with total local authority contracted tonnage in excess of three million tonnes and merchant capacity • A tendering pipeline, corporate partnerships and collaborations, and active site searches are contributing to ambitious roll-out plans • Owned by our founder and the management team, high net worth individuals, and Impax Investment Funds. Approaching £30 million of equity in total has been raised for investment in New Earth and its projects• Senior debt facility of £50million is in place with NordLB, a leading lender to UK waste and renewable energy projects• New Earth Energy created in autumn 2008 to ‘close the loop’ between waste and energy and achieve a ‘first to market’ position in the successful commercial application of advanced energy recovery technologies in the UK waste sector• New Earth Solutions Group has launched its own retail and institutional funds to provide equity funding for its projects3Existing waste treatment & renewable energy operations75,000 tpa waste treatment with existing energy plant at Canford, Dorset50,000 tpa source segregated Composting at Blaise, Kent50,000 tpa source segregated composting at Sharpness, Gloucestershire4Are we talking the same language?5The current policy position• Kyoto Protocol – Establishes requirement to reduce greenhouse gases– Sets binding targets for 37 industrialized countries and the European community for reducing greenhouse gas (GHG) emissions– Reductions amount to an average of five per cent against 1990 levels over the five-year period 2008-2012• EU climate and energy package (also known as the “20-20-20 deal”)– Cut greenhouse gas emissions by 20% below 1990 levels by 2020 (or by 30% dependent on global deal)– Source 20% of energy from renewable energy sources by 2020– Target to reduce energy consumption by 20% by 2020• Renewable Energy Directive (EU)– Sets ambitious targets for all Member States to reach 20% renewable energy target by 2020– UK allocated a mandatory 15% renewable energy target (electricity, heat & transport) by 2020• UK legislation– Energy Act (2008)– Climate Change Act (2008)– Planning Act (2008)6Progress in the UK on renewable electricity productionSource DECC – UK Renewable Energy Strategy7The future challenge8Emerging future policy framework in the UK• UK Low Carbon Transition Plan– UK Renewable Energy Strategy• Renewables Obligation (RO)– Primary long-term incentive for major renewable electricity developments which are typically large-scale, centralised electricity production.– Recently reformed to introduce differentiated support (ie technology banding) effective from 1 April 2009.– To be expanded and extended as part of the governments Renewable Energy Strategy to ensure it deliver around 30% renewable electricity by 2020.• Feed-In-Tariff (FIT)– Guaranteed payment mechanism to be introduced for households, industry, businesses and communities to use small-scale clean electricity generation.– Available to installations that will be less than 5MW of generating capacity– Expected to be available from April 2010• Renewable Heat Incentive (RHI)– Guaranteed payment mechanism for households, industry, business and communities to use renewable heat– Expected to be available from April 20119What technologies are we talking about?Electricity Generation Type ROCsElectricity generated from landfill gas ¼Electricity generated from sewage gasCo-firing of biomass ½Onshore windHydro-electricCo-firing of energy cropsEnergy from waste with CHPGeopressureCo-firing of biomass with CHPStandard gasificationStandard pyrolysis1Offshore windDedicated biomassCo-firing of energy crops with CHP1.5WaveTidal-streamAdvanced gasificationAdvanced pyrolysisAnaerobic DigestionDedicated energy cropsDedicated biomass with CHPDedicated energy crops with CHPSolar photovoltaicGeothermalTidal impoundment – tidal barrageTidal impoundment – tidal lagoon2Mature technologies with limited scope for significant future growthProven technologies?Emerging technologies in the waste to energy sector that New Earth Energy is focusing on10The emerging technologies – what do they look like?Anaerobic digestionPyrolysis unitGasification unit11Why has New Earth Solutions Group chosen this pathWaste treatment solutions• Design, Build, Finance and Operate• Experienced management and project teams• Planning permission track record• Public acceptance• Risk Profile / Performance Guarantee’s• Modular capacity delivery / Incremental CAPEX • ‘Stand Alone’ or Integrated Facility • Double Duty Capability• Robust technology (waste treatment) – will tolerate shock loading / contaminants• Future Flexibility Renewable energy solutions• Modular & scalable solutions to match waste streams and project specific circumstances• Higher efficiency• Fuel flexibility• Public acceptance12Previous developers – A poor track record of deliveryPAST PROBLEMS• Inadequate financial drivers• Over-reliance on debt• Unrealistic expectations• Planning and site assembly• Inexperienced developers• Unrealistic pricing and outlets• Security of fuel feedstock• Poor presentationNEW EARTH’S APPROACH• Timely entry• Well-funded with equity• Track record in waste, energy and property• Modular roll-out of technology• Understanding and control of waste to fuel• Leveraging synergies between waste treatment and energy business• Strong management team, well resourced with backing• Key relationships and waste supply opportunities13Some issues for renewable energy project development• Site location• Planning• Grid connection• Technology choice• Power purchase agreements• Feedstock – availability and type for waste to energy developments• Funding solutions• Eligibility under the RO (securing and maintaining accreditation)• Etc, etc14Eligibility under the RO15Fuel sampling and measurement of biomass content• Biogenic content isn’t a function of the fundamental chemical structure of a material. Furthermore:• Many biogenic materials are heterogeneous & of variable morphology – Ultimately no two portions of waste are the same• Therefore we need to use carefully conceived techniques to reduce the uncertainty and improve the accuracy and reliability of the measurement. These techniques include:– How the sample of material which is being tested is obtained– How the sample is then tested to determine its biogenic content• However we must not forget – there are no absolutes– There is no fully accurate and reliable system, but there are techniques which give a fair and reasonable representation of the material • Therefore OFGEM rightly bases it’s approach on technical standards which have been developed internationally by panels of experts16What does this mean in practice for waste to energy?• Waste materials are strongly heterogeneous, yet the dissolution sample size is very small. Small representative samples must be used to represent a month’s operation• This necessitates careful and significant sampling. For example, based on CEN 15440:– Each LOT (max 1500te) requires a minimum of 24 increments which combined comprise a sample– For a floc, each increment must be ~15kg, ie a sample of 400kg– A 360,000 te pa facility processes 1000 te/day, so each month requires min. 20 samples, ie 480 increments, ie 8000kg of material– Density of ~100kg/m3 implies nearly 100,000 litres of material from which 20 representative 5g samples (for dissolution) are taken.• This is complex and costly – we know from experience of developing and implementing an EA approved LATS monitoring and reporting regime17What does this look like?18What is the alternative?19Finding the solution....20Thank you Delivering solutions New Earth Solutions Group Existing waste treatment & renewable energy operations Are we talking the same language? The current policy position Progress in the UK on renewable electricity production The future challenge Emerging future policy framework in the UK What technologies are we talking about? The emerging technologies – what do they look like? Why has New Earth Solutions Group chosen this path Previous developers – A poor track record of delivery Some issues for renewable energy project development Eligibility under the RO Fuel sampling and measurement of biomass content What does this mean in practice for waste to energy? What does this look like? What is the alternative? Finding the solution.... Thank you