Working in partnership with technology suppliers to drive the adoption of integrated solutions for EfW plant design, build and operation, can help operators maximise the future operational and financial viability of new plants as they come on stream.
We await the outcome of the next CfD (Contracts for Difference) auction scheduled for April 2017 with interest. In particular, how many applications will be made and accepted as the next raft of subsidy funding is made available by the government?
While support from the newly formed Business, Energy & Industrial Strategy (BEIS) department is set to continue for the near future, it is clear EfW subsidies are on the wane, with the gradual decrease in available funding levels reflecting the overall growing maturity of the energy from waste market.
Making the most of the market
However, operators are still keen to exploit current market opportunities and potential. The estimate that there is currently some £3bn worth of EfW schemes under construction demonstrates a willingness to satisfy an on-going demand for EfW solutions.
Continued pressure on local government to seek alternative means of waste disposal in a response to the huge increase in landfill taxes over the past decade, as well as the need to meet the on-going national carbon reduction target, ensures that energy from waste remains a popular and sustainable waste-related answer for many.
Improvements in technology also underscore the sector’s ability to tap into potential growth areas. A prime example is industrial waste and how it can be effectively handled. Enhancements to thermal technology solutions mean it is increasingly possible to successfully deal with waste from industrial markets which could not be processed previously.
Scope for growth
Currently, only a small percentage of industrial waste can be handled via the EfW market, but one only has to consider the vast quantities of waste generated by the nation’s industrial base to appreciate the scope for growth and business opportunity that exists.
Large industrial users who produce waste volumes are seeking to work with technology suppliers and EfW plants to help them deal with the energy and waste issues that confront them.
This opens the door to new, integrated business ventures that can support a sustainable financial return for plant operators.
No one believes that moving from a subsidy-based support system to one where investors can finance a fully functional, integrated and self-sufficient EfW plant will be easy. But, as the subsidy landscape becomes ever more complex, and market opportunities continue to present themselves, it is clear operators with a long-term operational vision, a belief in advanced technology solutions and an innovative approach to dealing with challenging potential waste streams, can generate a powerful business case for a successful long-term future.
Integration and long-term planning
Against this background, I welcome a growing sector trend over recent years that is seeing operators look more intently at the long-term viability of EfW plants, and not just the short-term priorities of obtaining planning consent, securing feedstock and getting finance in place. Conversations Siemens is now having with operating companies are focussing more closely on critical longer term issues, such as whole life cycle costs, improved integration of technologies and optimised daily operation.
The issues underpin the three central elements behind a successful plant development - design, build and operation - and by adopting a holistic view and taking into account the operational requirements that will stretch to 25 years, operators and technology suppliers can together deliver highly optimised and financially viable plant models going forward.
The adoption of an integrated approach to plant design and operation can help reap real benefit in terms of financial returns.
Integrated solutions and standardised strategies reduce risk with process control, plant automation, instrumentation, emissions monitoring and energy management forming an integrated plant wide portfolio of solutions. Indeed, estimates show that such an approach can deliver up to 13% operational savings.
By carefully assessing plant preparatory work from an overview standpoint, leading operators in the energy from waste market can minimise future risk and operational expenditure over the lifetime of the facility, while simultaneously optimising plant performance so they are best placed to meet growing customer and market expectations.