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Preface
With growing public awareness about sanitation, and with increasing pressure on the government and urban local bodies to manage waste more efficiently, the Indian Solid Waste to Energy sector is poised to grow at a rapid pace in the years to come, opening up attractive avenues for investment for businesses. As the industry is relatively new in India, a better understanding of the trends and opportunities in the Indian waste to energy sector is essential before making investment decisions. The objective of this white paper is to provide inputs on the potential and opportunities of the Indian municipal solid waste to energy industry. The white paper has a special emphasis on practical and actionable intelligence for Indian entrepreneurs and businesses. The white paper has been developed by Energy Alternatives India (EAI) as part of the 2nd RenewCon India 2011 Conference by UBM, held at Mumbai in September 2011. I hope you find this guide useful in your efforts to venture into the attractive Indian solid waste to energy industry.

Narasimhan Santhanam Cofounder and Director Energy Alternatives India (EAI) www.eai.in narsi@eai.in

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Contents
Preface ................................................................................................................................ 1 Key Takeaways from the White Paper .............................................................................. 6 1. Potential for Municipal Solid Waste to Energy .............................................................. 7 1.1 Introduction to Waste and MSW .............................................................................. 7 1.2 Municipal Solid Waste (MSW) ................................................................................... 7 1.3 Municipal Solid Waste Management Scenario in India ......................................... 8 1.4 Potential for MSW to energy in India ...................................................................... 8 1.5 Technological Routes and Potential End Products from MSW ............................ 10 1.6 Key Drivers and Challenges Enhancing Solid Waste Management and Solid Waste to Energy ............................................................................................................ 12 2. What are the Opportunities in MSW to Energy for Your Business? ............................. 15 2.1 Business Opportunities along the MSW to energy value chain ........................... 15 2.2 Strategic and Financial Benefits from Waste to Energy Business ......................... 16 2.3 Potential Risks and Barriers in the MSW to Energy Business .................................. 17 3. Is Waste to Energy the Right Opportunity for Your Business? ..................................... 18 3.1 Companies Could Benefit from the Waste to Energy Sector .............................. 18 3.2 Key Success Factors and Competencies for W2E Business.................................. 18 3.3 Key Indian players in the MSW to Energy Sector .................................................. 19 Summary ........................................................................................................................... 20 Waste to Energy Support from EAI ................................................................................... 22

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Key Takeaways from the White Paper

About 115000 tons of solid waste is generated per day in the country. By some estimates, this figure could be twice as much by 2020. There exists a potential for generating about 1500 MW of power from municipal solid wastes in the country. The potential is likely to increase further with economic development. Currently, biomethanation / anaerobic digestion and Incineration are the most prevalent and mature technologies for MSW to energy in India. Gasification and pyrolysis are emerging, and currently economically less viable than biomethanation. Lack of proper segregation at source, inadequate treatment facilities and sub-optimal technologies are some of the key challenges in this sector. Business opportunities in waste to energy exist in all three stages of waste to energy Waste Transportation, Waste Management Facilities, and Waste Processing for Energy Recovery. Companies especially in the following industries could benefit from opportunities in the waste to energy domain Energy/Renewable Energy, EPC, Transportation, Sanitation and Facilities Management. Key success factors in waste to energy include Optimal Technology, Efficient Operations, Focus on Costs and Emphasis on Environmental Protection. Some of the prominent companies working in the Indian waste to energy sector include: Ramky Enviro Engineers, A2Z, Hanjer Biotech Energies and SELCO International.

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1. Potential for Municipal Solid Waste to Energy

1.1 Introduction to Wastes and MSW (I feel MSW is not needed here as we are explaining that in the following sec)
Growth of population, increasing urbanization, rising standards of living due to technological innovations have contributed to an increase both in the quantity and variety of wastes generated by various activities. Broadly, waste can be classified as urban wastes, industrial wastes, biomass wastes and biomedical wastes. Urban Waste Industrial Waste Biomass Waste Biomedical Waste Wastes from households, commercial activities etc. (excluding waste arising from mining, construction or demolition processes etc.). Solid, semi-solid, liquid, or gaseous or residual materials (excluding hazardous or biodegradable wastes from industrial operations) Biomass residue is defined as biomass by-products, residues and waste streams from agriculture, forestry, and related industries. Waste materials generated at health care facilities, such as hospitals, blood banks as well as medical research facilities and laboratories.

1.2 Municipal Solid Waste (MSW)

Municipal Solid Waste (MSW) includes commercial and residential wastes generated in municipal or notified areas in either solid or semi-solid form. It consists of household waste, construction and demolition debris, sanitation residue, and waste from streets and so forth. Some of the examples of MSW include: paper, glass, metals, synthetic polymers, inerts (stones, sand, pebbles etc), hides and leather discards, pharmaceuticals wastes (tablets, ointments, lotion etc), kitchen wastes (fruit and vegetable peels, raw and processed food ingredients) Municipal Solid Waste

Organics

Recyclables

Inerts

Kitchen waste Agro-waste Vegetable waste Garden waste Cattle dung

Plastic Paper Old cloth Syringes Tin can Metals Glass

Carbon paper Thermo coal Sand

Classification of Municipal Solid Waste

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1.3 Municipal Solid Waste Management Scenario in India

Management of MSW continues to remain one of the most neglected areas of urban development in India. As per estimates, 115000 tons of solid waste is generated per day in the country. Even small regions within cities could be the source of large amounts of MSW. For example, a slum in Dharavi in Mumbai generates about 80 tons of MSW per day, which is almost the same as the waste generation of the entire state of Tripura (which generates 100 tons per day). MSW management in India involves interplay of six functional elements - generation of waste, storage, collection, transfer and transport, processing and recovery and disposal. Most of the MSW generated is dumped into land or on the outskirts of the city without any treatment. Municipal agencies spend about 5-25% of their budget on MSW management, but less than 5% of the total amount is spent on final disposal of waste, which shows that hardly any attention is given to scientific disposal of waste. In spite of such a heavy expenditure, the present level of service in many urban areas is so low that there is a threat to the public health in particular and the environmental quality in general.

1.4 Potential for MSW to Energy in India

There exists a potential for generating an estimated 1500 MW of power from the municipal solid wastes in the country. The potential is likely to increase further with economic development. The state-wise break-up of MSW generation and potential for power production is presented in the following table:

State/ Union Territory Andhra Pradesh Assam Bihar Chandigarh Chhattisgarh Delhi Gujarat Haryana Himachal Pradesh Jharkhand Karnataka Kerala Madhya Pradesh

Recovery Potential (MW) 107.0 6.0 67.0 5.0 22.0 111.0 98.0 18.0 1.0 8.0 125.0 32.0 68.0

State/ Union Territory Maharashtra Manipur Meghalaya Mizoram Orissa Pondicherry Punjab Rajasthan Tamil Nadu Tripura Uttar Pradesh Uttaranchal West Bengal

Recovery Potential (MW) 250.0 1.5 1.5 1.0 19.0 2.0 39.0 53.0 137.0 1.0 154.0 4.0 126.0

Potential for Recovery of Electrical Energy (MW) from Municipal Solid Wastes by Indian States Source: TERI and MNRE; MT Million Tonnes

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1.5 Technological Routes and Potential End Products from MSW

Energy can be recovered from the organic fraction of waste (biodegradable as well as non- biodegradable) through thermal, thermo-chemical and biochemical methods. The table below highlights the basic principles of the technology and the potential end product that can be obtained from them.

Technology Thermal Conversion Incineration Complete oxidation of waste matter under high temperature and oxygenated conditions Thermochemical Conversion A. Pyrolysis - Elevated temperature driven decomposition of organic mass fraction in wastes in the absence of air or oxygen B. Gasification - Transformation of organic mass similar to pyrolysis but under limited supply of oxygen Biochemical Conversion Biomethanation - Microbial digestion of complex organics in moisture rich wastes to methane under anaerobic conditions

End Products Steam, Purified flue gas, Ash, Heat and electricity

Pyrolytic gas, Pyrolytic oil, Heat, Electricity

Syngas, Electricity, Heat , Synfuel and Hydrocarbons via FT synthesis. Methane (Biogas), Compost, Power

The pathways illustrating the major MSW to energy technologies are highlighted below:

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Highlights Gasification and pyrolysis are thermochemical decomposition processes that are conceptually similar to each other. Both have the advantage of providing a valuable product as a co-product along with the main fuel synthesis/producer gas. Charcoal, which is produced as a co-product, commands a high value in the market. While incineration is the simplest and currently the least costly method, it has two disadvantages it is relatively more polluting than gasification, pyrolysis or anaerobic digestion, and it also produces lesser overall value, as the only by-product is ash, which commands a very low value in the market. Biomethanation (anaerobic digestion) produces methane gas as a major end product, which can consequently be used for heat and power production. The left over activated sludge serves as excellent compost.

1.6 Key Drivers and Challenges Enhancing Solid Waste Management and Solid Waste to Energy
1.6.1 Potential Drivers Enhancing Waste to Energy
Stringent legislative procedures and environmental consciousness drive the technological upgradation for effective management of MSW to rescue the large socio-economic mass in the nation from hazards of municipal waste. Some of the key drivers for enhancing solid waste management in India are represented below:

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Legal The laws and regulations in India at the municipal and city levels are becoming stricter than they were earlier. The consequent threat of penalties could act as an important driver for solid waste management Socio Economic The poorer sections of the society get affected most by the harmful consequences of unmanaged waste. With Indian cities comprising large populations under poverty level, this results in significant health problems and societal trauma.

Environmental The increasing awareness and concern among public and government for protection of environment is one of the key drivers for SWM.

Technological The ability of technology to support SWM is still limited. Development of new and more effective waste-to-energy technologies will act as key drivers and will play an important role in the progress of solid waste management industry. Developmental and Competitive Where there is an absence of strong legislation, competition between cities to provide a clean city with good municipal environmental infrastructure, in order to attract (often foreign) investment can be a key driver. This appears to be particularly important in India where competition for foreign information technology investment is strong.

Incentives A number of current and emerging incentives CDM/carbon credits, capital subsidies, high feed in tariffs and other fiscal incentives such as tax holidays can accelerate adoption of waste to energy

1.6.2 Prevalent Deficiencies in the Solid Waste Management System in India

Some of the deficiencies in the SWM system in India include the following:

Deficiency
No storage and segregation of waste at source Operational inefficiencies in primary collection of waste at the doorstep Irregular street sweeping and garbage collection Inappropriate system of secondary storage of waste

Details
Source storage and segregation of waste based on degradability and hazards and recyclables separation is rarely done in India. Collection of waste only from street collection points and poor door-to-door collection. No proper planning and specific benchmarks for street sweeping. Very poor waste depot sites for secondary storage of waste.

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Irregular transport of waste in open vehicles Inappropriate disposal of waste at open dumping grounds Other Deficiencies 1. Waste composition 2. Access to waste

Open trucks for transportation and manual loading. No proper engineered landfills for waste disposal.

1. High moisture content and a large proportion of inerts make the waste dense and cause transportation and treatment problems 2. Many sources of waste such as those generated in slums are inaccessible

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2. What are the Opportunities in MSW to Energy for Your Business?

2.1 Business Opportunities along the MSW to energy value chain
The schematic sketch below illustrates the steps carried out in managing the solid wastes in India. In most of the Indian cities, the MSW collection, segregation, transportation, processing and disposal is carried out by the respective municipal corporations and the state governments enforce regulatory policies.
Source Storage and Segregation Collection and Transportation Dump Sites Waste Transportation Disposal to Landfills

Recyclable Materials Separated

Processing for Energy Recovery

MSW Collection to Energy Value Chain

2.1.1 Waste Handling Logistics and Transportation This section of the value chain represents the stage from the doorstep until the landfill. This section comprises the largest opportunity by value, and can be further divided into: Collection Transportation Storage Handling

A typical waste handling system in a country like India includes the following elements: Waste generation and storage Segregation, reuse, and recycling at the household level Primary waste collection and transport to a transfer station or community bin Street sweeping and cleaning of public places Management of the transfer station or community bin Secondary collection and transport to the waste disposal site (or) energy recovery facility Waste disposal in landfills (or) processing for energy recovery

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2.1.2 Owing and Operating Solid Waste Management Facilities Once the solid waste has reached its destination, the key role is to ensure that the waste is managed and handled in an optimal manner. This is usually done at landfills. Landfill management comprises two steps: Operations and maintenance to ensure that the appropriate environmental and safety guidelines are followed for the landfill Where applicable, coordinate the collection of landfill gas. 2.1.3 Waste to Energy Conversion Facilities Where the waste is not diverted to the landfill, the waste is transported to the energy recovery plant. Here, the following activities take place: Waste pre-treatment (mechanical or thermal pre-treatment) Conversion to energy through thermal or biochemical processes (includes combustion system/anaerobic system, boiler/gas engine design, energy recovery, flue gas cleaning etc.) Waste post-treatment (residue treatment, land-filling of selected residues) Business opportunities are present in each and every component mentioned above. In practice however, each of the three main stages of the value chain 2.1.1 through 2.1.3 - comes across as a single business opportunity, with all the subcomponents within each of the three being handled by a single business entity.

2.2 Strategic and Financial Benefits from Waste to Energy Business

Profitability - If the right technology is employed and with optimal processes, waste to energy could a profitable business. When government incentives are factored in, the attractiveness of the business increases even further. Government Incentives - The government of India already provides significant incentives for waste to energy projects. With concerns on climate change, waste management and sanitation on the increase (a result of this increasing concern is the newly formed ministry exclusively for Drinking Water and Sanitation), the government incentives for this sector is only set to increase in future.

Related Opportunities - Success in municipal solid waste management could lead to opportunities in other waste such as sewage waste and industrial and hazardous waste. Depending on the technology/route used for energy recovery, eco-friendly and green co-products such as charcoal, compost or nutrient rich digestate (a fertilizer) are produced. These co-product opportunities will thus

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enable the business to expand into these related products, demand for which are increasing all the time. Emerging Opportunities - With distributed waste management and waste to energy becoming important priorities, opportunities are available for companies to become turnkey solution providers

2.3 Potential Risks and Barriers in the MSW to Energy Business

Financial Barriers Most solid waste to energy projects are capital intensive. Raising significant capital for a sector that is not fully proven will not be easy in India. The attractiveness of the revenue model depends on timely receipts from sale of power generated and availability of waste at zero or near-zero costs. If these conditions do not continue owing to the poor financial standing of the state utilities or owing to policy changes by the government, the projects attractiveness could be at risk. Technological Barriers Some of the emerging technology options large scale gasification for instance are not yet fully proven. The characteristics of waste could be different for different regions and for different sources even within the same region, resulting in uncertainties with regard to optimal designs and processes. India does not have indigenously developed technology and manpower for emerging options such as megawatt-scale gasification and pyrolysis. Other Barriers Long time taken for completing all the formalities/ documentation and getting all the approvals to get the project started. Long time taken for closure of agreements especially those related to receipt of raw waste from the urban local body and the power purchase agreements. The Indian investors lack expertise /capacity to understand, develop, appraise and put in place a structured viable financial model for these projects. Shifting priorities of the urban local bodies from waste-to energy to other issues resulting in diversion of funds and other support.

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3. Is Waste to Energy the Right Opportunity for Your Business?

3.1 Companies that Could Benefit from the Waste to Energy Sector

Companies in the following domains could be ideally suited: Renewable energy domains such as solar, wind, biomass etc. Engineering, procurement and construction (EPC) Transportation and Logistics Sanitation and environmental services Small or large scale power plants Facilities management Handling solid waste or present in any segment of the waste management value chain

3.2 Key Success Factors and Competencies for Waste to Energy Business

Optimal technology Efficiency in every aspect of logistics and transportation Ensuring benefits for all the stakeholders Ensuring reliable supply of feedstock at low or no cost Clear business emphasis on benefitting all the stakeholders, especially regulators and society Special emphasis on following environmentally sound practices along the entire operational value chain

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3.3 Key Indian players in the MSW to Energy Sector *

Companies
Biomethanation

Headquarters

Highlights

M/S Asia Bio- energy Chennai Pvt Ltd (ABIL) Cicon Environment Bhopal Technologies Bermaco/WM Ltd Power Navi Mumbai Mumbai

Follows Biogas induced mixing arrangement-(BIMA) technology for a 5.1 MW Lucknow MSW to energy project Upflow Anaerobic Sludge Blanket (UASB) technology and activated sludge process are followed in installations Completed 11 MW biogas Mumbai using WABIO process. plant in

Sound craft Industries Hydroair Limited

Installing 12.8 MW plant at Mumbai with technology from Ericsons, USA Adopting aerated and UASB technologies for the treatment of waste sludges and biogas generation respectively. Undertaking comprehensive biomethanation projects coupled to secure composting and landfills. Also involved in incineration and presently operating India's largest waste incinerator at Taloja, Maharashtra.

Tectonics Navi Mumbai

Ramky Enviro Engineers Ltd

Hyderabad

Combustion /Incineration A2Z Group of Companies Hanjer Biotech Energies Gurgaon RDF based combustion technology with scope for cogeneration of heat and power. Developing 15 MW combustion power plant in Surat District with MSW based RDF pellets as fuel. SELCO setup the first commercial Municipal Solid Waste-processing unit in India in 1999. They have currently installed 6.6 MW grid connected power plant in Mahboob Nagar, AP with RDF pellets as energy source. Implementing 10 MW incineration power plant with MSW derived RDF pellets as fuel.

Mumbai

SELCO Limited

International

Hyderabad

East Delhi Waste New Delhi Processing Company Pvt Ltd

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Gasification Zanders Limited Engineers Mohali Has a collaborative gasification technology to process multiple feedstocks including MSW for power Advanced gasification technology with destruction efficiency of 99.9% and emissions well below thresholds.

UPL Environmental Engineers Pvt Ltd

Vadodara

*The above companies could in future be using multiple technologies and process routes

Summary
The business of generating energy from solid waste (especially urban solid waste) is entering a period of rapid growth in India. The dual needs of waste management and reliable renewable energy source are having a multiplier effect and have created attractive opportunities for investors and project developers. Early movers who have identified the right technologies are already poised to grow in this promising industry.

At the same time, the yet to be commercialized technologies, high capital requirements and an evolving regulatory environment present significant industry challenges. There are unanswered questions with respect to the viability of waste to energy projects. The complexity of navigating through these challenges calls for a clear understanding of the business models and technologies behind the diverse waste-to-energy solutions. Given the need for critical knowledge on the viability of waste to energy projects before venturing into this niche sector, assistance from an advisory and research firm is imperative.

EAI has been researching the waste to energy sector in India for the past few years and we have developed an exhaustive understanding of the various technology options for waste to energy. We have worked with prestigious clients such as Bill & Melinda Gates Foundation and Pepsi Co. for waste to energy projects, and can offer actionable market intelligence and support for those keen on exploring this sector.

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Waste to Energy Support from EAI

If you are looking for business and technology support for waste to energy look no further than EAI.
Areas of Expertise in Waste Management EAIs waste to energy division can provide extensive research and consulting assistance for energy recovery from the following types of waste:

Municipal Solid Waste Industrial Solid and Liquid Waste Agro Residues and Crop Waste Sewage Waste and Fecal Sludge Hazardous Waste

Our team has excellent exposure to energy recovery using the following types of processes:

Clients

Anaerobic Digestion / Composting Gasification Pyrolysis / Thermal Depolymerization Fermentation Combustion / Incineration

EAI consulting team has been assisting several organizations in diverse renewable energy domains. The fact that a major percentage of our business comes from client referrals bears ample testimony to the quality of our research and consulting. EAI has undertaken Waste to Energy research projects for many clients including global clients such as Pepsico and Bill and Melinda Gates Foundation. Some of our other esteemed consulting clients include Reliance Industries Vedanta Resources World Bank Minda Group iPLON GmbH Bhavik India Group Green Concretex Global Agarwal Group Jivanlal and Sons Group Indo-Italian Commerce Chamber of

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EAI Services for the Waste Management Sector

Market Intelligence

Techno Commercial Feasibility Financial and Business Consulting Advisory Services

Market and region specific potential analysis and forecasting for waste to energy sector in India. Intelligence on all the current and emerging technology / process routes for waste to energy Inputs on all the government regulations / incentives and approvals relating to waste management and waste to energy projects Intelligence on current incumbents and stakeholders in the Indian waste management and waste to energy projects Key success factors and bottlenecks that critically influence the waste to energy industry in India.

Feasibility analysis for different process/technology routes Identification of technology transfer / joint venture partners for implementation

Development of unique business plans to attract sources of finance. Development of differentiated waste to energy business models with highest value to all the stakeholders Investment structuring and financing support for waste to energy projects Leveraging CDM, REC and other benefits to increase the attractiveness of waste to energy projects

Financial modeling and techno economic valuations to assess the viability of different waste to energy technologies

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Why EAI for Waste to Energy?

EAI is one of the few companies in India who have in depth knowledge of the market, technology and business aspects of waste to energy industry across its entire value chain. We have an exceptional understanding of the technology options and process routes for waste management for diverse types and scale of waste. Our past work on diverse assignments in waste to energy for global companies such as Pepsi Co., Bill & Melinda Gates Foundation etc., and our current assignments in this field has provided our team with unique perspectives and insights on all the key challenges and bottlenecks in the entire value chain. Our large network of technical contacts for waste to energy in India and globally will assist our clients get easier access to latest technological solutions. Our multi-disciplinary team scientific approval. Our management team comprising professionals from IITs and IIMs ensure that our recommendations, blue prints and business models are powerful and stateof- the - art. with chemical and biochemical technology professionals ensures that our recommendations will always come with a seal of

To know more on how EAI can assist you, contact Badri Narayanan Mob: +91 9042329344 Email: badri@eai.in

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Notes

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Notes

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Notes

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