Waste-to-energy conversion can help India deal with not only the increasing garbage disposal problem, but also address health and economic issues. It provides a largely unexplored potential for the country´s development.
The humongous amounts of garbage generated in India can very well entitle the waste management sector to claim being an industry. Add to this, people´s ´Not In My Backyard´ syndrome and lack of initiative from civic authorities, which have exacer¡bated the garbage disposal problem, and we´re left with an ever increasing and undealt with stink.
But, what if the very cause of the problem could be the solution as well? What if the mountains of garbage we generate could enlighten the path to our country´s development?
Waste-to-energy or refuse driven energy is the process of generating energy in the form of electricity and or heat from the incineration of waste. It is a form of energy recovery that the European countries are utilising very successfully, as are Japan, Korea and Singapore.
In fact, Japan is an almost ´zero´ waste producing and ´zero´ landfill using country, where 90 per cent of the electricity produced is clean and green. What this means is that Japan has successfully incorporated waste segregation at the root and then diverted the various kinds of waste towards appropriate uses, resulting in high adoption of re-use, re-cycle and waste-to-energy practices.
Meanwhile, Norway even imports garbage from other European countries to feed their waste-to-energy generation plants. The ´Eurotrash Business´ has been flourishing and how! While it may sound like an unpromising enterprise, it is indeed increasingly profitable. Case in point: the UK paid to send 45,000 tonnes of household waste from Bristol and Leeds to Norway between October 2012 and April 2013 alone.
And Norway is not alone. Waste-to-energy has become a preferred method of rubbish disposal in the EU, and there are now 420 plants in Europe equipped to provide heat and electricity to more than 20 million people. Imagine this replicated in India! While people talk about investment in other renewable energy sectors, one major advantage in favour of waste-to-energy is the fact that it does not need to be connected to the grid.
India and Waste-to-energy
According to the Ministry of Urban Development, urban India alone generates around 70 million tonnes of municipal solid waste each year, which does not include either wastes picked up by kabadiwalas from households and from the streets by rag pickers or biomedical, biochemical, agricultural and industrial wastes. There is no public concept of segregation and almost all waste is either dumped in land or water.
Veritably, landfills account for an overwhelming 94 per cent of garbage disposal. This, despite early school education, extolling the monetary and environmental benefits of biogas. Further, efforts into turning these gasses into electricity, which can be distributed for use while tackling the garbage problem and providing employment and revenue, remains largely unapproached and unheard of.
According to Pricewaterhouse Cooper, it is estimated that the Urban Local Bodies (ULB) spend about Rs 500 to Rs 1,500 per tonne on solid waste for collection, transportation, treatment and disposal. However, ULBs spend less than five per cent on final disposal of waste, which shows clear negligence. (Refer to estimated waste to energy conversion on pg 70)
Landfill sites are exhausted and such ULBs do not have resources to acquire new land. Due to lack of disposal sites, even the collection efficiency gets affected. Further, these local bodies lack technical, managerial, administrative, and financial resources and adequate institutional arrangements.
There is a potential to recover 2,556 MW of power from solid waste, of which only about 250 MW has been exploited, according to the Ministry of New and Renewable Energy (MNRE). Since, the urban sector in India requires huge investments in developing infrastructure for solid waste management; it requires new management models that promote efficient, effective and good quality basic waste management services on a sustainable basis. (refer Growth of Biomass Installed Capacity 2006-14 on page 69) Such twin objectives can be achieved through well-conceived, structured and transparently-executed public-private partnership (PPP) arrangements.
Amitabh Tandon, Managing Director, Transtech Green Power P Ltd (TGPL), and Secretary, Indian Biomass Power Association (IBPA), however, has had mixed experiences in this area.
´We had signed an MoU with the Gujarat government and registered 30 MW capacity for a biomass power plant in 2010, but have been unable to start it due to uncertain regulatory conditions and challenges faced in providing a proper environment. Unfortunately, this still persists, thus resulting in no investment for biomass in the state,´ he informed, while citing how policy and regulations have got in the way of waste-to-energy development.
He however also shared a success story, ´We have a 20 year power purchase agreement with Rajasthan state discom on tariff as set and fixed by the Rajasthan Electricity Regulatory Commission (RERC). Rajasthan is one state which has adopted majority of the CERC task force recommendations (80 per cent), and has only a few parameters left to work on (20 per cent) to provide viable environment for biomass operations. Besides this, there are certain desired policy initiatives by the state government which are also awaited.´
If promoted across the country, waste-to-energy could help turn around this problem and provide three-fold benefits in the economic, infrastructural and health fields. Ideally, the concept should not have a problem being widely promoted and adopted in a country like India, where collecting bhangar and re-using plastic bottles and bags are as innate as breathing.
So why hasn´t it caught on?
As per information available for 2012, compiled by Central Pollution Control Board (CPCB), municipal authorities have so far only set up 279 compost plants, 172 biomethanation plants, 29 RDF plants and eight waste-to-energy plants in the country. World Health Organization has observed that 22 types of diseases can be prevented or controlled in India by improving Municipal Solid Waste Management (MSWM) system. Principal reasons for the prevailing unhygienic conditions in our cities is the casual attitude of the citizens as well as the municipal authorities towards managing solid waste and lack of priority to this essential service.
Lt. Col. Suresh Rege (Retd), Executive Director, Mailhem Ikos Environment Pvt. Ltd, agrees, ´Today the problems faced are due to segregation.
If people are aware that we can take up waste segregation at the source itself, this will make it very easy for a municipality to handle the waste. Besides this, violators should be made to pay principal amount as fine. Unless this is done, the sector won´t move forward.´
He however, further asserted that people are willing to do it, but need some incentives and benefits for their effort, which he says is a small price to pay. ´Look at any big city today, there is no land. Dumping at grounds has been going on for years and there is need to reclaim these lands and deal with it and Waste-to-energy is the way forward to achieve this,´ he adds.
KK Sharma, Chief Engineer, Jaipur Municipal Corporation (JMC), however seems cautious about a ´surge´ in the sector. Sharma states, ´These plans have been in the works since 2007 and development has been very slow. This segment has been very sluggish and barely 0.5 per cent of its potential has been reached. Even in the future, I do not see the scenario changing and any concrete progress is uncertain.´ ´The sector is failing and plants that are already in existence are also running into losses.
Even the Timarpur-Okhla waste-to-energy plant in Delhi, which has been touted as the most successful and largest in India is running into losses upto Rs 50 crore, according to my colleagues there,´ he added.
Sharma´s observations make sense when you take into account that in India even if a government project gets approved, is commissioned and then successfully completed after overcoming various hurdles, maintenance and quality checks are still the stuff that legends are made of. Even other official reports concur that quite a few of the processing plants set up as mentioned earlier are currently non-operational.
Meanwhile, a report prepared by the ´Task Force´ of the Ministry of Urban Development (MoUD), which critically looked at failure or under performance of the processing facilities setup, observed that these were the major reasons: 1) lack of due diligence on the part of investors as well as public sector, 2) non supply of committed quantity and quality of waste to the plant by the municipal authority, 3) presence of inerts - dust and C and D waste in MSW delivered for processing, making the operations difficult and very expensive, 4) inadequate market for sale of compost and RDF, 5) public outcry against the location of a plant, and 6) lack of financial viability of projects.
Meanwhile, Lt. Col. Monish Ahuja, Managing Director, Bermaco Energy, outlines why corporates are hesitant, ´Developers face various problems in setting up projects due to non uniformity in norms for determination of tariff for procurement of power from biomass based power plants across various states, and lack of policy incentives for biomass power by both Central and State governments. On top of it reluctance of banks and foreign institutions (FIs) in providing debt financing to new projects also contributes to this sector´s stunted growth.´
´Lack of awareness about the possibilities of such schemes and delay in approval from either state governments or local bodies hamper these projects and cause the difficulties. But yes, the potential of waste-to-energy implementation and success in India is very high and this can be adopted across the country,´ feels Dr A Saji Das, Managing Director, BIOTECH India.
There are also plans for future plants that are in various stages of development. Although not at liberty to divulge more on the Municipal Corporation´s plans for waste-to-energy projects, Subhashish Chattopadhyay, DG, KMC says, ´We have already floated the tender for the Kolkata Solid Waste Management project for a waste-to-energy plant at Mouza Chapna and the document will be opened soon.´
Sharma from JMC adds on his part about the waste-to-energy plans in Rajasthan, ´We currently do not have any waste-to-energy power generation projects. However, there are plans for such projects in the future at Kota, Jaipur and Jodhpur. Among these feasibility reports for Kota and Jaipur are going on and the RDF is also being produced, but no tenders have been given or allotted as yet. Some progress may be expected by another month or so.´
Besides this, the Brihanmumbai Municipal Corporation has been deliberating over waste-to-energy plants at the Deonar and Gorai Dumping grounds, Pune has been at the forefront in Maharashtra when it comes to waste-to-energy initiatives, and Nashik and Nagpur municipalities also have plans to invest in the sector. Kerala´s Bramhapuram project too seems to be in stages of deliberation and many municipal corporations in Tamil Nadu too are looking at the sector in a positive light. There are also many such projects in various stages of deli¡beration in other states of the country that may see some concrete progress in the days to come. The developers too have good things to say on the sector´s potential for growth.
Lt. Col. Ahuja was positive about growth opportunities, ´While it is true that not many developers are taking interest in the biomass sector, many big players such as Tata Power, Reliance Industries Ltd etc., are now planning to enter biomass sector as it has great potential as well as high socio-economic impact particularly on rural economy.´ Waste-to-energy = Cash from Trash
According to Cédric Philibert, senior analyst in the Renewable Energy Division of the International Energy Agency (IEA), traditional energy alternatives pose a threat to power plant operators and end users due to volatility and insecurity of price, while renewable energy prices on the contrary have been continually decreasing.
´Renewables are an infinite source of power with long-term certainty. While majority of oil & gas sources are concentrated in certain regions, many are getting more technically challenging and expensive to reach. Renewables are domestic and provide security of supply, helping a nation reduce its dependence on imported sources in favour of clean and reliable home-grown electricity with the added bonus of fantastic local economic opportunities.
Biomass power in the country has been growing at CAGR of about 19 per cent since 2006. Out of the total biomass power installed capacity of 4,000 MW, about 1,365 MW is power generated from various agri-residues while about 2,648 MW has been generated from bagasse based cogeneration in the country.
With revision of tariff in many states such as Bihar, Haryana, Punjab, Rajasthan, Maharashtra etc., many developers are finding it attractive to go ahead with setting up of biomass based power plants in various states.
Lt. Col. Ahuja explained while elaborating on how Bermaco through waste-to-energy has helped rural employment and revenue generation, ´In order to develop biomass supply chain to power plants, we do identification and training of rural youth to develop them as ´Village Level Entrepreneurs´ (VLEs). These VLEs are then provided with the necessary machinery and given the responsibility of collecting cotton stalk from individual farmers, shredding and transporting these to the power plants. They are paid at pre-determined rates for the biomass supplied. This leads to rural income and employment generation to whole rural chain involving VLEs, farmers and rural youth.´
(see Bermaco case study 1 on page 69 and case study 2 on page 70)
Concurs Tandon, ´The sector has the biggest potential in helping India´s rural growth as it utilises rural logistics and manpower for its operation and can be a big employment provider to villagers. A 1 MW plant provides direct employment to 50 rural people in the fuel and logistic management fields alone, while many others are also employed indirectly. It also provides additional income to farmers, who get value for their agricultural waste.´
Power Today suggestions:
So what can be done? After careful considerations of the views expressed by the subject experts and the observations made during the field visits, the MoUD task force recommended:
- Integrated approach towards management (segregation of waste for efficient utilisation, participation of civil society, integration of kabadiwalas and rag pickers, common landfills),
- Centralised and decentralised processing of waste,
- Selection of appropriate technologies for processing waste (bio-chemical conversion of biodegradable MSW v/s thermal processing of MSW, SWOT analysis of existing waste-to-energy technologies),
- PPP model, financial support for the sustainability of MSW management and processing and disposal facilities (performance based viability gap funding and proper cost estimates),
- Proposed support for capital investments and O&M costs, support to existing defunct/partially functional plants, construction & demolition waste plants,
- Tipping fee to developers as incentive, research and development in MSW sector,
- MoUD should come out with legislation, and national policy and strategy to deal with the problems.
´Our projects do not need to be connected to the grid to operate´
Dr. A Saji Das, Managing Director, BIOTECH India
Tell us about your company and the waste-to-energy generation it deals with? The main activities of BIOTECH from its inception in 1994 include promotion, implementation, training, R&D, and creation of awareness among people about conservation of renewable energy through waste management.
We have developed different models of plants for treating waste according to the consumer´s requirement and the nature of waste, and cater to the needs of beneficiaries such as domestic households, hospitals, schools, hostels, convents and local body establishments like panchayats, municipalities.
Additionally, we render consultancy services for the preparation of projects, conduct feasibility studies and undertake project implementation.
In recognition of our services, we were conferred with the prestigious International Ashden Award ´GREEN OSCAR 2007´.
How difficult is implementing this process and what is its potential in India?
Lack of awareness about the possibilities of such schemes and delay in approval from either state governments or local bodies hamper these projects and cause the difficulties. But yes, the potential of waste-to-energy implementation and success in India is very high.
Most proven technologies in this field are imported, but many international players are interested in collaborating locally to provide indigenous machinery to bring down costs. What is your take on this?
Ours is purely indigenous technology. The specialty of BIOTECH waste-to-electricity projects is that there is no need of grid electricity for the regular operation of the plant. A part of the power generated from the plant is utilizing to meet the in-house requirement of the plant, which does not need much moving parts or complicated machineries, and this brings down costs.
Additionally, we promote adoption of cost effective and environmental friendly technologies like Biogas Technology (Biomethanisation), which has no recurring costs. Also as wastes are treated at the source itself, the collection, transportation and segregation costs can be avoided.
What is your current capacity and number of plants? Do you have any plans for expansions or building of new plants? Which Municipal Corporations/Urban Local Bodies have you partnered with for the same?
BIOTECH has successfully installed around 52 waste to electricity projects, 260 institutional plants and more than 30,000 family size kitchen waste treatment biogas plants with financial assistance from MNRE, Govt of India, and with the active co-operation of local bodies.
For example, the installation of Kerala´s first bio-waste treatment power generation plant at Pathanapuragm gram panchayat in Kollam district was done by us 10 years back. This plant treats 500 kg of organic waste and generates 40 KW of power, daily. After the successful completion of the Pathanapuragm project, 52 other gram panchayats in Kerala came forward for the installation of such plants.
BIOTECH has completed installation of these power generation projects using market/slaughter house waste with power generation capacities ranging between 3 KW to 20 KW, and the power generated from these projects is being utilized for energy requirements of the concerned markets and to meet in-house requirement of the plants. We also have plans to further expand our activities to different parts of the nation with the active cooperation of local self government institutions.
Waste generation poses major health and infrastructure problems and state governments are looking to tackle this. How can companies can take advantage of the same and implement waste to energy?
In accordance with the fast growing population, the demand for energy and the discharge of waste are increasing day by day. To overcome the energy crisis, alternative energy sources are the only remedy. Generation of energy from waste is beneficial in many ways. It is most suitable for eco-friendly waste disposal and also for energy generation.
With a view to finding permanent solutions to contagious diseases caused by accumulation of waste that is being increased day by day it is quite necessary that we have to extend the scheme of implementation of decentralized waste treatment programmes all over the country.
Biogas technology enables one to produce bio-energy in households by treating wastes generated from within. This technology is also applicable in treating waste produced at public places like markets, slaughter houses, hotels, convents and generating electricity without causing pollution.
´State revisions in tariff have attracted developers to the sector´
Lt. Col. Monish Ahuja, Managing Director, Bermaco Energy
Tell us about your company and the waste-to-energy generation it deals with?
Punjab Renewable Energy Systems Pvt. Ltd. (PRESPL) was formed under aegis of Bermaco Group in March, 2011 and is a well established player in the clean energy space. We perform various activities relating to the development and maintenance of ´Energy Plantation´, biomass aggregation and supply chain management for IPPs and process industries that are involved in captive power generation and extraction of bio-fuels.
Being one of the largest biomass aggregation and supply company in India, PRESPL currently handles nearly 1000 MT per day of various biomasses such paddy straw, cane trash, maize cob, bagasse, cotton stalk, mustard residue, soya husk, juliflora and biomass briquettes in Maharashtra, Punjab and Karnataka.
In merely four years, PRESPL has served over 15 biomass power plants and supplied over 300,000 MT of various biomasses, offsetting about 1,720,000 tonnes of CO2 generation.
Waste-to-energy has barely reached 1,365 MW of its potential. How much growth do you expect in the sector?
Biomass power in the country has been growing at CAGR of about 19 per cent since 2006. Out of total biomass power installed capacity of 4,000 MW, about 1,365 MW is power generated from various agri-residues while 2,648 MW is generated from bagasse based cogeneration in the country.
With revision of tariff in many states such as Bihar, Haryana, Punjab, Rajasthan, Maharashtra etc., many developers are finding it attractive to go ahead with setting up of biomass based power plants in various states.
The recent RE Invest summit saw private players pledge investment to the renewable sector. Do you think the waste-to-energy segment is behind wind or solar in terms of attracting investors?
Yes, due to practical difficulties as discussed above, not many developers are taking interest in the biomass sector. But nevertheless, many big players such as Tata Power, Reliance Industries Ltd. etc. are planning to enter biomass sector as it has great potential as well as high socio-economic impact particularly on rural economy.
What according to you is the potential of this field in India? How successfully can it be adopted here? What policies are needed to give this sector a push?
Potential of power generation from various agri-residues is about 17,000 MW in the country. GoI has to provide following incentives or do policy modifications to bring significant investment in the biomass sector:
Interest rate sub-vention by 2-3 per cent to bring the cost of debt funding to about 10 per cent or less in order which will make projects feasible in long term.
Higher subsidy in form of generation based incentive (GBI) which will incentivize the project on achieving high PLF and improve project returns significantly.
Debt restructuring of old projects, particularly those who have been declared as NPAs or are on verge on becoming one.
Providing wastelands to biomass power plants to develop captive energy plantation so that projects can meet at-least 20-30 per cent of their fuel requirement from captive plantation.
What are the difficulties you face in implementing this process? What solutions would you advise?
The various difficulties faced by the developers in setting up the project are as following:
Non uniform norms for determination of tariff for procurement of power from biomass based power plants across various states. CERC has announced new tariff determination regulations for biomass power plants in May, 2014. However, many SERCs still do not follow CERC norms and follow their own norms which result in low tariff and unviable operations of biomass power plants. Also, irregular tariff revision particularly of variable component has also worsened the situation.
There are policy incentives for biomass power by both Central and State Governments. However, due to highly bureaucratic and lengthy procedures, the benefits of incentives such as capital subsidy or providing land for dedicated energy plantation are not actually available to the biomass power plants.
Due to default by many operating biomass power plants, banks/ FIs are reluctant to provide debt financing to the new projects. Even if banks/FIs are ready to finance some projects, interest rate charged are exorbitant in the range of 13-15 per cent resulting in stressed financials of any biomass power plant.
Before setting up any biomass power plant, a detailed biomass resource assessment in done in catchment area around proposed site. Once the plant´s operations start and biomass drawl begins, local farmers/ traders realize the true value of biomass resulting in hoarding and price escalation of biomass leading to unviable plant´s operations. Also, there is requirement of separate manpower and machinery to collect, process and transport biomass to the power plant. This can be only overcome by either going for dedicated energy plantation in waste land or entering into long term fuel supply agreements with specialized biomass supply and processing companies such as Punjab Renewable Energy Systems Pvt. Ltd. (PRESPL).
PRESPL has proposed to develop alternate source of Biomass Fuel to biomass based IPPs/CPPs. We have made strategic tie-ups with Biotech companies to develop special plant species that can be grown in ´Cultivable Waste Land´ and ´Fallow Land´ and have done Energy Plantation for Punjab Biomass Power Ltd., Oleander Farms Pvt. Ltd. and Tata Power Ltd.
PRESPL is optimizing fuel purchasing through analysis, processes, technology and integrated networking. We have been investing regularly in people, processes and technology to solve fuel management challenges of biomass based power plants. PRESPL is supplying about 1,000 MT of various biomasses such as paddy straw, cotton stalk, maize cob, cane trash, mustard residue etc. on daily basis to various power plants in Maharashtra, Karnataka and Punjab.
What is your order book and order backlog? Do you have plans for expansions?
In a short span of four years, we have grown from a start up to a Rs 1.80 crore turnover company, having closed our first round of PE investment from Zurich based Impact PE- responsAbility. This is a big force multiplier to support biomass IPPs, process industry boilers, cogeneration plants and other industry using biomass as a feedstock.
Additionally, the volume of feedstock supplied to biomass power plants and process plants in increasing year-on-year. Last financial year, PRESPL aggregated and supplied biomass to over 15 operating biomass power plants and process industries.
We are now expanding into other national and international territories such as Gujarat, Bihar, Andhra Pradesh, Indonesia, Mozambique and Tanzania, and manufacturing value added biomass products such as briquettes and pellets.
Kindly name few clients and give us a case study of your supply chain mechanism. We have entered long term fuel supply agreements with prestigious clients like Shendra Green Energy Ltd (13 MW plant in Aurangabad, Maharashtra); Punjab Biomass Power Ltd (12 MW plant in Patiala, Punjab); Haveri Bioenergy Pvt. Ltd (10 MW plant in Haveri, Karnataka); Sinewave Biomass Power Pvt. Ltd (10 MW plant in Sangli, Maharashtra); Shree Renuka Sugar Ltd (four cogeneration power plants in Karnataka and Maharashtra); Mazalgaon Sahakari Sakhar Karkhana Ltd plant in Maharashtra; Pepsico India Ltd plant in Paitan, Maharashtra; Radico NV Distilleries Ltd plant in Aurangabad, Maharashtra.
In order to develop biomass supply chain to power plants, identification and training of rural youth is done to develop them as ´Village Level Entrepreneurs´ (VLEs). VLEs are provided with necessary machinery like shredders and given responsibility of collecting cotton stalk from individual farmers, shredding and transporting these to the power plant. They are paid at pre-determined rates for the biomass supplied. This leads to rural income and employment generation to whole rural chain involving VLEs, farmers and rural youth.
The supply chain for biomass (shredded cotton stalk) to 13 MW Shendra Green Energy Limited, an operating biomass based power plant at Aurangabad, is one such case study.
The plant here needs about 1,30,000 MT of biomass annually. On account of biomass logistics the plant runs at about 80 per cent PLF, there is employment generation potential of about 5,20,000 mandays in rural economy on annual basis for biomass based power plant (with 120 shredders).
Considering average wage of about Rs 300 per manday in the region, biomass collection operations, processing and transportation has the potential to generate about Rs 16 crore of income for rural population.
Furthermore, a farmer saves about Rs 300 per acre due to harvesting operations carried out by the company. Considering the biomass generation of about 1.0 MT/ acre, farmers in the catchment area can save about Rs 4 crore annually.
There is therefore, an overall annual income generation potential of about Rs 20 crore due to biomass logistics operations of the company in the region.
Your company is also into energy plantation. Kindly explain as it is not a very commonly known field of energy generation.
In order to develop captive energy plantation for any biomass power plant or process industry, it is necessary to understand the end use of the product, its market and availability of suitable land. In fact, availability of suitable land/land patches with desired soil properties, soil depth and water availability are most important criteria for selection of energy plantation species.
A detailed pre-feasibility study is done in order to choose suitable species and estimate the development cost of the plantation. PRESPL has done pilot plantation of various species such as Acacia Mangium, Beema Bamboo, Melia Dubia etc. on farm of about 200 acres size in Karjat (outskirts of Mumbai) and studied growth and yields of various species.
PRESPL undertakes both feasibility study of energy plantation as well as turnkey development of energy plantation under different business models- as pure plantation Development Company providing services to the client on fees basis or taking equity partnership in the project along with development activities.
PRESPL in partnership with Signature Group & IGEPE (The Instituto De Gestpo Das Participat)es Do Estado), a Govt. undertaking in Mozambique is developing captive energy plantation on 567 Ha of land and biomass pelletization plant in Chowke, Gaza Province, Mozambique.
The project is unique as it aims to develop biomass pelletization plant based on dedicated energy plantation for sourcing raw material (wood) for the plant and pellets produced will be exported to various parts of world including Europe and Asia. This project will not only generate foreign exchange earnings but will also lead to rural income and employment generation in Mozambique.
Do you think that government promises and policies are in tandem when it comes to enabling this segment?
Only few states like Rajasthan and Madhya Pradesh have policies for allocation of Govt. waste lands for captive energy plantation for operating biomass power plants. Inspite of having policy, none of the projects in these states have been able to develop energy plantation. There are lot of policy and bureaucratic hurdles such as identification of suitable wasteland, getting no objection certificate from local community (which is biggest hurdle) and long and tedious procedure for allocation of land which considerably delays the project.
Even for projects where land is allocated, the development work can only be done by Gram Panchayat/ joint forest management (JFM) committees with funding from MNREGA scheme. Unfortunately, Gram Panchayat/ JFMs are unwilling to work for any private developer. Banks/ FIs do not provide debt for these projects as there is no precedence and they view it as highly risky business. Until & unless the Central and State Governments provide required policy and financial incentives for this sector, energy plantation cannot reach a significant quantum in the country.
´Waste-to-energy is not given exemptions on par with other renewables´
Lt. Col. Suresh Rege (Retd), Executive Director, Mailhem Ikos Environment Pvt. Ltd
Tell us about your company and type of waste-to-energy generation it deals with?
Our name is very significant because in Sanskrit ´mail´ means waste and ´hem´ means gold that is we have the Midas touch of converting waste to gold.
We started this company almost 20 years back, when people didn´t even know that the biogas sector in India could grow and reach where it has today.
About two years ago French company Bukner Ikos Group (also a family-run business who will complete 100 years in 2019), wanted to piggyback into the waste management sector in India and in spite of meeting many big companies they felt that as ours is also a family-based business we have lot of synergy, and from that we formed Mailhem Ikos Environment Pvt. Ltd.
Basically, Mailhem India has an experience of almost 20 years in biogas in India and Ikos has spent 96 years in this field. Today, that is why we have combined experience legacy of almost 160 years.
As far as Mailhem is concerned we have as of now around 300 biogas plants across India, starting from Vaishnodevi in the north to Kerala in the south.
Our plants are not based only on cow dung or any other particular substance and treat canteen, leather and industrial waste. Hence, whatever the biodegradable organic waste is--domestic, industrial or municipal solid waste, we can convert that into biogas.
The recent RE Invest summit saw private players pledge investment. Do you think the waste-to-energy segment is behind wind or solar in terms of attracting investors?
Yes. Today when people talk about renewable energy they talk about solar and wind and all the big names in the country--Reliance, Kirloskar, L&T--are in these fields. But how many companies are in waste-to-energy? This is because you have to dirty your hands if you want to get into this segment and not many companies will do that. Also, there is discrimination in taxes and tariff. Before VAT, solar and biogas were not taxed, but after VAT was implemented solar was exempted but waste-to-energy has to pay the tax. There is no godfather for this sector and everybody flocks to solar and wind when talking about renewables, but what you need to keep in mind is that waste-to-energy does two things. So we should be getting a pat on the back for taking care of the waste and generating renewable energy. If you don´t harness solar or wind there are no consequences, but if waste-to-energy is not done there will be an impact.
Most proven technologies are imported and thus expensive. What is your view on this?
The basic fact remains that there are certain very good technologies that are proven and you have to import them. But there are these processes, the intellectual property rights that the foreign company can charge for. The situation should not be such that we pay for what can be easily made or is already available in India, e.g. tanks, should be utilised locally. Therefore, while they can charge for the intellectual property rights they should not insist on the things that can be made in India also being imported as that does not make sense.
But people now have understood that India can manufacture if not better than at least as good as the same quality of products you get outside and these do not need to be imported. So what foreign companies should do is come here and link with a company that can provide them with background and infrastructure while they can give the technologies and equipments which cannot be substituted. But if they insist on importing everything then the cost and tipping fees will not match.
What is your current capacity, number of plants? Which Municipal Corporations are you in PPP with?
We probably are the only company which has a bandwidth from around 100 kg to about 50 tonnes per day and with the support of Ikos we already have a 100 tonne biogas plant, we can safely say that we are probably the only company which can operate from 100 kg to almost 100 tonnes of waste per day.
Now, this in itself is a benefit for all of us as we work with Municipal Corporations for segregate municipal solid waste (MSW) and we have a concept where upto 10 tonnes is called a decentralised biogas plant, i.e. From 100 kg-10 tonne capacity. This system is catching up everywhere because today space is a constraint in all cities and these decentralised plants can be set up in every ward itself rather than collecting the whole waste and transporting it one place we can have the decentralised model and for bigger places where you have these dump yards there we can have these large plants. The problem in our country today is that big cities cannot have a mechanical recycling facility and in the absence of these people are just dumping the waste in one place, which is why we suggest a technology from Ikos wherein a cell is installed into the land, within which the waste in put for a period of six months and covered up, from which gas can be recovered over the next 2-3 years and once the recovery is over, the cell can be reused--which is the biggest advantage and this is why we started this company, because this is what is required in the future for India.
And this is not only applicable to the Metro cities, but also the number of cities that are producing around 200-300 tonnes of garbage per day that are left high and dry. So these plants can be integrated into the existing landfill sites and dumping grounds, which can be recover, reclaim and reuse the land for proper infrastructure to be built there and their lifespan and usefulness is increased.
We are doing this with the Municipal Corporations of Pune, where we have seven decentralised plants using segregated MSW; in Tamil Nadu, where we will soon have a total of 27 plants; and even in Bangalore, Patna and Nashik. We have also applied for the tenders that have been flouted.
Decentralised plants are what are sought after because for example a 10 tonne plant just requires 30x20 sq metre area to be installed and it is a very compact plant and which you can set up anywhere. For example one of our plants in Pune which has been operating for the last 5 years, is installed behind the bus stop and there is no question of any smell or odour and that is why people are considering this type of systems. However, this solution would not be applicable for the entire city´s waste load. There has to be a judicious mix between decentralised and centralised operations that can turn this into a success.
What would you say is Municipal Corporations approach to waste to energy?Would you say they are equipped enough in terms of capital and infrastructure in order to implement this in the big cities/towns?
The problem with waste to energy today is that anytime a corporation decides to enter this field they talk about big plants and when it involves big sized plants there are problems with land acquisition-- wherein another factor is the NIBY effect, the Not in My Backyard statement that is the standard reply when anyone is asked for land or a place to set up such plants. Initially when the idea is discussed everyone will be very eager to have a waste to energy plant, but when it comes to allotting space for the same in their neighbourhood everyone will reject the proposal.
Now, this is the result of lack of awareness among the people. If you make the people aware that these plants don´t smell and eliminate the need for dumps that contribute towards health problems and the municipal corporations today are being forced to take action in this regard. Secondly, if people are aware we can take up waste segregation at the source itself, making it very easy for a municipality to handle the waste.
Another basic problem is that corporations do not have either the financial ability to build waste to energy plants, nor do they have the technical know-how for the same. But the rules we have in regard to this today, especially if you look at the SWM draft rules 2015, you an see that they are taking steps along with the efforts being made by the environment and urban development ministries to educate and guide the municipalities about the qualities of this option.
Basically, all these big sized projects have a very long gestation period, so to make this more financially viable, green price tariff and viability gap funding need to be adopted, because while there are promoters and the private sector is willing to put in money in this field, they do need a little incentive from the governments and municipalities.
For examples, earlier there used to be bonds and not agreements which were loaded in favour of the municipalities, but today things have improved and there are agreements that are appealing to both sides and this will help the sector take off. Otherwise, technology is available today and once they have an idea about the integrated concept it will become very easy to handle these projects.
Currently, the waste to energy market has barely reached its potential 17,000 MW capacity. How much growth do you expect in the sector? What are the difficulties you face in implementing this process?
Today the problems faced are due to segregation. If people are aware we can take up waste segregation at the source itself, this will make it very easy for a municipality to handle the waste. Besides this, violators should be made to pay principal amount as fine. Unless this is done, the sector won´t mover forward, but even as this is in its nascent stage in India, we may see improvement because it is the people who are driving this change today. They are willing to do it and they wasn´t the waste to be treated and have had enough of the dumping, but there needs to be some incentives for those who take the effort and penalties for those who don´t, otherwise the initial enthusiasm fizzles out, as no one wants to be doing all the work and get no benefits while the others just enjoy themselves.
Today look at any big city, Mumbai, Delhi there is no land. They have been dumping and dumping at these grounds for years and there is now a need to reclaim these lands and deal with the waste and waste to energy is the way forward to achieve this, because it reduces the volume of the waste.
Do you think that government promises and policies are in tandem when it comes to enabling this segment? What policies need to be changed or adopted to give this sector a push?
The first point is that a rule for polluters to pay principle must come into force. For example, if one society is segregating the waste and others are not, if you do not incentivise the people who are doing it after a while they will begin questioning the benefits of segregating the waste as they are not getting anything out of it. Thus, people who segregate could be given property tax rebate and the others can be penalised and automatically they will start segregating.
The policy reforms needed would be to provide aid through implementable rules and the new draft MSW rules 2015 have done a good job. So, we have the rules, but they must be implementable and failure to follow through should be punished so that there is enforcement of the rules.
Also, instead of direct subsidy, viability gap funding needs to be considered to try and promote the private sector by giving them good tariff rate and ensuring that the agreements are protected by law and not subject to change in central government.