Australian waste-to-energy market poised for growth

Business consulting firm Frost & Sullivan has completed its report ‘Strategic Analysis of the Australian Waste-to-Energy Sector’, which is based on interviews with industry stakeholders and an extensive literature review. The report finds that the Australian waste-to-energy market is poised for significant growth.

With the first specific energy-from-waste policy to be finalised by the NSW Energy Protection Agency, municipal solid waste (MSW)-to-energy is expected to pick up pace, with a few projects in NSW and Western Australia already in the works (pending approval or funding). The MSW sector is expected to see strong growth between 2015 and 2020, with installed capacity reaching around 80 MW and MSW treatment capacity about 12 million tonnes per annum by 2020.

More mature waste-to-energy sectors, such as biomass and biogas power generation, have seen consistent activity for some time, due to the simplicity of the feedstock, energy conversion efficiency and environment impact. Currently, biomass power generation largely comprises bagasse, black liquor (at paper and pulp plants) and wood waste power generation. A supplier’s capability and operational stability are among the most critical selection criteria identified in the market by project owners.

The plant value for the biomass and biogas sector is expected to witness compound annual growth of 3.2% between 2013 and 2020. But the report says biogas power generation still needs a kick-start from the government, in the form of Renewable Energy Certificates (REC), a feed-in tariff or other forms of support, in order for it to experience strong growth. Germany, for example, has almost 2000 biogas power generation plants.

Sarah Wang, Senior Consultant, Australia and New Zealand Industrial Practice, Frost & Sullivan, said, “The main technologies for municipal solid waste-to-energy are mature. However, the Australian industry has, rightfully, a very low tolerance of technical risks associated with such projects. Only tested-and-proven technologies can be accepted.”

At the moment, the technologies that have received environmental approval for the two pilot projects in Western Australia are mass combustion (owned by Martin Technologies) and gasification (owned by New Energy Corporation). Both technologies have been deployed successfully in projects operating overseas - especially mass combustion, which has been used at over 1000 sites.

The failure of the Whytes Gully project at Wollongong in NSW has weakened industry confidence in MSW-to-energy projects. Since the closure of the project in 2004, there had been no similar project proposed in NSW for six years. However, it is expected that with effective risk minimisation and public engagement, past resistance can be overcome in time.

“In the context of the global market, the waste-to-energy sector in Australia has a lot of catching up to do,” said Wang. “Despite Australia not being constrained in terms of landfill space (which is a significant challenge in Europe), the rising cost of landfill in the main population centres offers encouraging economics for MSW-to-energy.”

It is expected that by 2024, the Asia-Pacific region will own the highest number of MSW waste-to-energy plants in the world, with a 46.7% share of the global market.

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