Earlier in the year I took part in a panel session at Recycling and Waste Management 2016 (RWM2016) at the Birmingham NEC that discussed gasification and whether it really could be delivered successfully.
So far 2016 cannot be seen as a good year for waste gasification plants. Despite a number of projects moving into construction the year has not seen any successfully enter into operation. Instead we have seen a number of high profile projects fail to be delivered and as a result an air of nervousness has once again descended over the use of gasification as a waste treatment technology.
In conferences and shows a number of common points crop up again and again whern gasification is discussed including the suitability fo the technology to treat waste, subsidies and plant efficiciency. While each is important they are interlinked and the failure in one of these negatively impacts on the others and makes a project less likely to be successful.
Gasification as a technology is established and does work. Globally there are many, many examples of successful gasification plants. Working for Amec Foster Wheeler means that I am lucky to have access to a number of these as we have been directly respoinsible for the design and delivery into operation. However, gasification as a technology for treating municipal solid waste (MSW) is still considered to be fledging and relatively unproven.
A key critical reason for this is the consistency of the fuel. Gasification plants are most successful when fired using a consistent quality fuel. MSW is anything but!!
A number of early gasification projects suffered from a lack of robust pre-treatment to prepare manufacture of the MSW into fuel. This has been addressed on many later projects. The second aspect is the scaling up of the technology. While proven at certain sizes a number of projects have sought to really push the boundaries of the scale involved in an effort to improve commerciability. However, this means that the technology is being pushed to unproven levels on commercial projects so increasing risk – not always the most compatible factors!
To address this the technology should be delivered at a workable scale, but a consequence of this is that the cost of the project may increase as it is not at the most efficient scale. Perhaps it is here that we really need to focus and need to make sure that the risk profile is realistic and that we do not push performance to gain maximum benefit from subsidies, oeprating hours, operating efficiencies etc. as it is unlikely that they will be delivered.
It might be we have to look at how do we make the projects more efficient in other areas of design, construction and operation or reduce the expected retruns at this stage so that the project is in reality more deliverable.
In light of this how should we view the subsidies that gasification is eligible for e.g. Contracts for Difference (CfDs). Should they be the cherry on the top or an integral part of the project risk profile? Making them too integral to achieveing the financial return leads to those risk boundaries relating to realistic deliverability being stretched. However, not including them sufficiently may lead to projects being too unattractive from a financial perspective and too cautious. It’s a delicate balance to strike and one that is being evolved as new projects are developed.
As the year draws to a close not all is doom and gloom however. Perhaps Brexit and the increase cost of sending fuel abroad provides an opportunity and foundation for future growth and the recent Eunomia report also appears more positive. So perhaps after all Santa may have an unexpected gift for the gasification industry in his sack of presents…