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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ContentsPreface....................................................................................................................................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 SolidWaste 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.

UrbanWastes from households, commercial activities etc. (excluding waste

Waste arising from mining, construction or demolition processes etc.).

IndustrialSolid, semi-solid, liquid, or gaseous or residual materials (excluding

Waste hazardous or biodegradable wastes from industrial operations)

BiomassBiomass residue is defined as biomass by-products, residues and waste

Waste streams from agriculture, forestry, and related industries.

Bio-Waste materials generated at health care facilities, such as hospitals,

medical blood banks as well as medical research facilities and laboratories.Waste

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 Plastic CarbonAgro-waste Paper paperVegetable Old cloth Thermowaste Syringes coalGarden waste Tin can SandCattle dung Metals

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/ Recovery Potential State/ Recovery PotentialUnion Territory (MW) Union Territory (MW)Andhra Pradesh 107.0 Maharashtra 250.0

Assam 6.0 Manipur 1.5Bihar 67.0 Meghalaya 1.5

Chandigarh 5.0 Mizoram 1.0Chhattisgarh 22.0 Orissa 19.0

Delhi 111.0 Pondicherry 2.0Gujarat 98.0 Punjab 39.0Haryana 18.0 Rajasthan 53.0

Himachal Pradesh 1.0 Tamil Nadu 137.0Jharkhand 8.0 Tripura 1.0Karnataka 125.0 Uttar Pradesh 154.0

Kerala 32.0 Uttaranchal 4.0Madhya Pradesh 68.0 West Bengal 126.0Potential 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 End ProductsThermal Conversion

Incineration – Complete oxidation of waste matter Steam, Purified flue gas, Ash, Heat andunder high temperature and oxygenated conditions electricity

Thermochemical ConversionA. Pyrolysis - Elevated temperature driven Pyrolytic gas, Pyrolytic oil, Heat,decomposition of organic mass fraction in wastes in Electricitythe absence of air or oxygenB. Gasification - Transformation of organic masssimilar to pyrolysis but under limited supply of Syngas, Electricity, Heat , Synfuel andoxygen Hydrocarbons via FT synthesis.

Biochemical ConversionBiomethanation - Microbial digestion of complex Methane (Biogas), Compost, Powerorganics in moisture rich wastes to methane underanaerobic conditions

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.

1.6Key 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

Environmental Technological

The increasing awareness The ability of technology toand concern among support SWM is still limited.

public and government for Development of new and moreprotection of environment effective waste-to-energy

is one of the key drivers for technologies will act as keySWM. drivers and will play an important

role in the progress of solid wastemanagement industry.

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.

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

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.

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 DetailsNo storage and segregation of Source storage and segregation of waste basedwaste at source on degradability and hazards and recyclables

separation is rarely done in India.

Operational inefficiencies in Collection of waste only from street collectionprimary collection of waste at the points and poor door-to-door collection.doorstep

Irregular street sweeping and No proper planning and specific benchmarks forgarbage collection street sweeping.

Inappropriate system ofVery poor waste depot sites for secondary storage

secondary storage of waste of waste.

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Irregular transport of waste in Open trucks for transportation and manualopen vehicles loading.

Inappropriate disposal of waste at No proper engineered landfills for waste disposal.open dumping grounds

Other Deficiencies 1.High moisture content and a large proportion of

1. Waste composition inerts make the waste dense and cause2. Access to waste transportation and treatment problems

2. Many sources of waste such as thosegenerated 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 Collection and Dump Waste Disposal toStorage and Transportation Sites Transportation LandfillsSegregation

Processing forRecyclable Energy RecoveryMaterialsSeparated

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 sub-components 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 project‟s 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 Headquarters Highlights

Biomethanation

M/S Asia Bio- energy Chennai Follows “Biogas induced mixing

Pvt Ltd (ABIL)arrangement-(BIMA)” technology for a 5.1MW Lucknow MSW to energy project

Cicon Environment Bhopal Upflow Anaerobic Sludge Blanket (UASB)Technologies technology and activated sludge process

are followed in installations

Bermaco/WM Power Navi Mumbai Completed 11 MW biogas plant inLtd Mumbai using WABIO process.

Sound craft Industries Mumbai Installing 12.8 MW plant at Mumbai withtechnology from Ericsons, USA

Hydroair Tectonics Navi Mumbai Adopting aerated and UASB technologiesLimited for the treatment of waste sludges and

biogas generation respectively.

Ramky Enviro Engineers Hyderabad Undertaking comprehensiveLtd biomethanation projects coupled to

secure composting and landfills. Alsoinvolved in incineration and presentlyoperating India's largest waste incineratorat Taloja, Maharashtra.

Combustion /Incineration

A2Z Group of Gurgaon RDF based combustion technology withCompanies scope for cogeneration of heat and

power.

Hanjer Biotech Energies Mumbai Developing 15 MW combustion powerplant in Surat District with MSW based RDFpellets as fuel.

SELCO International Hyderabad SELCO setup the first commercial

LimitedMunicipal Solid Waste-processing unit inIndia in 1999. They have currently installed6.6 MW grid connected power plant inMahboob Nagar, AP with RDF pellets asenergy source.

East Delhi Waste New Delhi Implementing 10 MW incineration powerProcessing Company

plant with MSW derived RDF pellets as fuel.

Pvt Ltd

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Gasification

Zanders Engineers Mohali Has a collaborative gasification

Limitedtechnology to process multiple feedstocksincluding MSW for power

UPL Environmental Vadodara Advanced gasification technology withEngineers Pvt Ltd destruction efficiency of 99.9% and

emissions well below thresholds.

*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

EAI‟s 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:

Anaerobic Digestion / Composting Gasification

Pyrolysis / Thermal Depolymerization

Fermentation

Combustion / Incineration

Clients

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

Bhavik India GroupReliance

Industries Green Concretex GlobalVedanta Resources

Agarwal GroupWorld Bank

Jivanlal and Sons GroupMinda Group

Indo-ItalianChamberofiPLON GmbHCommerce

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EAI Services for the Waste Management Sector

Market Intelligence Techno Commercial Feasibility Financial and BusinessConsulting Advisory Services

Market and region specific

Feasibility analysis for Development of uniquepotential analysis and different process/technology business plans to attractforecasting for waste to routes sources of finance.energy sector in India.

Identification of technology Development of

Intelligence on all the transfer / joint venture differentiated waste tocurrent and emerging partners for implementation energy business modelstechnology / process routes with highest value to all thefor waste to energy

Financial modeling andstakeholders

Inputs on all the techno economic valuations Investment structuring andto assess the viability ofgovernment regulations / financing support for wastedifferent waste to energyincentives and approvals to energy projectstechnologiesrelating to waste

management and waste to Leveraging CDM, REC andenergy projects other benefits toincrease

the attractiveness of waste Intelligence on current to energy projects

incumbents andstakeholders in the Indianwaste management andwaste to energy projects

Key success factors and bottlenecks that critically influence the waste to energy industry in India.

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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 with chemical and biochemical technology professionals ensures that our recommendations will always come with a seal of

scientific approval.

Our management team comprising professionals from IIT‟s and IIM‟s ensure that our recommendations, blue prints and business models are powerful and state-

of- the - art.

To know more on how EAI can assist you, contact

Badri Narayanan

Mob: +91 9042329344

Email: badri@eai.in

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