Implementing the Integrated Resource Recovery Center

Jakarta, 13 November 2014
Implementing the Integrated Resource Recovery Center
(IRRC) model in Indonesia with the conversion of waste
into energy
João Aleluia
Project Coordinator
Sustainable Urban Development Section
Environment and Development Division
www.waste2resource.org
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
Source of Waste
Organic Waste
Organic Waste
Fish & Meat Waste
Sorting
Grinding
Composting
Mixing
Maturing
Compost
Biogas
Digester
Recyclables
Used Cooking Oil
Sorted
Recyclables
Shredded,
compacted
and baled
Processing
Unit
Waste with high
Calorific Value
Faecal Sludge
Sorting
Drying
Shredded
Cocomposting
with
municipal
organic
waste
Extruded
Biogas
Screening
Slurry
Bagging
Compost
Electricity
Compost
Plastic
Biofuel
Paper
Glycerine
Refused
Derived
Fuel
(RDF)
Compost
Glass
Metal
Source: Waste Concern
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Why the waste-to-energy conversion route?
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
… while reducing external energy requirements and contributing to enhanced energy
security
 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)
• Refuse-derived fuel
• Anaerobic Digestion
• Densification and
Peletization
• Fermentation
• Gasification
• Etc.
• Pyrolysis
• Transesterification
and esterification
(biodiesel produ.)
• Etc.
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 (5070%) and the potential for deriving significant sustainable development benefits
Anaerobic Digestion
Composting
Mechanical
Biological Treatment
 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 the
digestate 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
 Organic fraction of municipal
solid waste
 Faecal sludge
Agricultural waste
Industrial waste
 Manure
 Slaughterhouse waste
 Agro-industrial waste
 Food processing waste
 Energy crops
 Pulp and paper waste
 Algal biomass
 Biochemical waste
Plant boundary
Collection
and Transport
Additional
Sorting and
Pre-treatment
Biogas
Posttreatment
Utilization
Digestate
Posttreatment
Utilization
Anaerobic
Digestion
Process
Source: EAWAG 2014
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Objectives of the Project
The overall objectives of the waste to energy pilot are:
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
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Project Concept
Waste-to-Energy Pilot Concept
 Envisaged Capacity: 5 ton of source-separated organic waste per day
Key design
features
 Location: preferentially a small city or secondary town in Indonesia
 Technology: anaerobic digestion of the organic fraction of MSW
 Source segregation of waste will be a key component – presence of fruits and
vegetables market
Technical and
Operational
 Preference for a technology provider that is locally available
Considerations  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
Municipal
Government
Implementing
Partner
National
Government
Local Community
Plant Operator
Waste-to-Energy
Project
Technology and
Service Provider(s)
ESCAP
University/ Research
Institutions
Others (e.g. NGOs
and local partners)
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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
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…
 Sale of electricity generated from biogas
Main source of revenue
 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
Complementary source of revenue
 Carbon financing (e.g. through NAMA, CDM, voluntary standards, etc.)
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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
Scenario 1
Best case scenario,
assuming that feed-in-tariff
set by MEMR is paid to the
plant
Scenario 2
Lower-case scenario,
assuming average subsidized
electricity retail prices and a
lower capacity factor
Scenario 3
Middle-case scenario,
assuming a power tariff
above current retail prices
and below FIT is paid
- 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
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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
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Financial model of a waste-to-energy plant
Profitability scenarios of a 5 ton per day plant
Scenarios
Tariff
Capacity factor
Profit / Loss
Tipping fee
required?
How much
tipping fee to
break even?
NO
-
PROFIT
1798 IDR/ kWh
5 days per week
1. Best Case Scenario
(0.15 USD / kWh)
40 Million IDR/year
(3,300 USD/year)
LOSS
145,000 IND per ton
725 IDR/ kWh
3.5 days per week 132 Million IDR/year
2. Lower-Case Scenario
(0.06 USD / kWh)
YES
(12.1 USD per ton)
(11,000 USD/year)
LOSS
1262 IDR/ kWh
3. Middle-Case Scenario
(0.11 USD / kWh)
4.2 days per week 56 Million IDR/year
(4,700 USD/year)
51,600 IND per ton
YES
(4.3 USD per ton)
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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…
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
• 10-15 new jobs can be created to the urban poor
Sustainable development benefits
• 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
Other benefits
• 2,000 m3 of landfill space can be saved per year
• Return of nutrients to the soil with the application of compost in fields
• Savings from subsidies to energy (depending on the power tariff paid)
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
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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

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
Local government support is essential for the success of the pilot
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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
Small Biogas Plants, Chakan
Domestic Waste, Chakan
• Construction:
2011/2013
• Construction:
2013
• Input:
5 t/d of hotel waste
• Input:
0.5 t/d of kitchen waste
• Output:
400 m3/d of biogas
• Output:
40 m3/d of biogas
• Use:
Power generation
• Use:
LPG replacement
Source: Green Elephant Group, 2014
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Pictures of AD facilities
Pre-treatment of feedstock
Market level plant equipped with generator
and gas scrubber
Typical feedstock
Gas
scrubber
Household plant for kitchen waste
Biogas engine
Source: Heeb, 2009, EAWAG 2014
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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
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Thank you for the attention!
www.waste2resource.org
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