Beat the ban: Three ways that banning biodegradable waste might not wreak havoc
|Author: Travis Benn||Read time: 7 mins|
|Client type: Institutional landowners||Technology: Landfill gas|
It’s been 23 years since the Landfill Tax Escalator was first introduced, and it’s clear to see what a significant factor it’s been in preventing waste from being sent to landfill. More recently, it seems the mood has shifted: governments are now considering a move that would have been unthinkable even ten years ago—specifically, a ban on biodegradable waste being sent to landfills.
The road to net-zero
The biodegradable waste ban is one of many initiatives to keep waste out of landfills, and it’s expected to contribute to the country’s latest strategy on reducing carbon emissions.
The Climate Change Committee has called for a ban on all biodegradable waste being sent to landfills by 2025 if the UK is to reach its target of net zero emissions by 2050. Scotland went one step further, by putting legislation in place for a ban in 2021, however, this deadline was recently extended to 31 December 2025 due to the pandemic, concerns about the lack of preparedness of local authorities and commercial operators and the potential shortfall of alternative treatment capacity of residual waste that could’ve resulted in waste being transported to England for landfill.
Despite the many positive impacts that a ban would bring, Scotland is facing pressure to demonstrate that there’s enough capacity to deal with the extra waste diverted from landfills across the country, with much of that waste crossing the border for processing in England.
… it might take a while
Things can get complicated when it comes to landfill gas, mainly because gas extraction equipment operates for such long periods. The oldest known site opened to the public in 1947 and began producing electricity in 1987; the site closed in 1990 but still produces electricity today.
It takes around three to six months before biodegradable waste added to a landfill breaks down to produce landfill gas. It then continues to be productive for the next 20 years before the volume of gas starts to decline.
Bumps along the way
If the influx of material suddenly stalls, the expected renewable energy income will also decline. For the companies that have installed high tech equipment based on the projection of a reasonable return on investment, the prospect of a ban on biodegradable waste could be a daunting one.
The impact of the ban, once introduced, might take up to six months to be felt. Not only could it reduce the volume of electricity from landfill gas produced each year, but it might also limit the total number of years that the landfill site would continue to produce electricity and a financial return.
Making the best of the situation
There may be other ways in which sites can generate additional income.
1. Gain clarity with an income review
Analysing your site would be the natural first step and a good place to start is with a full site review.
This involves reviewing the income currently being generated by the site and forecasting how much landfill gas and income is remaining. However, this doesn’t have to be a formidable task as well-managed sites should already be regularly monitoring their outputs, making future projections, and will be well on top of their existing contractual agreements.
There are clear benefits for landfill site owners in having regular full site reviews: a comprehensive review will ensure that their royalty payments for hosting the landfill gas equipment on their sites is accurate and fully up-to-date. Following this, any anomalies can be put straight which could result in a cash injection.
In addition, with an impending ban, it is also sensible for landfill gas equipment operators to seek to re-negotiate their gas royalty contracts in line with the expected value of the future landfill gas reserve remaining.
2. Diversify into a different technology type
In many areas, limited electrical grid capacity remains the biggest barrier for any new energy development, so landowners with sites that meet developer requirements are likely to be in a strong negotiating position.
Landowners should actively enter discussions with their landfill gas operators to find out what opportunities exist to release the spare grid capacity (for use by other projects), which is no longer required by the landfill gas project, due to the natural depletion of landfill gases over time.
3. Take charge of income streams with battery storage
New technologies like large-scale battery storage are increasingly coming to the fore. And falling costs, for solar in particular, have helped mitigate cuts to subsidy support, keeping both developers and investors interested.
Other developers are also actively looking for sites suitable for battery storage or short-term operating reserve (STOR) standby generators for grid balancing—traditionally diesel gen-sets, but now primarily gas-powered units.
Any sites close enough to parts of the electricity grid (and the gas grid for STOR generators) with spare capacity are in solid demand, which is good news for landowners.
This is yet another reason why landfill owners should actively enter into discussions with their landfill gas operators to find out how much excess grid capacity is currently available at their site (for use in alternative projects), due to the natural depletion of landfill gas over time and therefore the lower amount of grid capacity required by the landfill gas project.
The journey isn’t a straightforward one. Yes, reducing biodegradable waste to landfill is an important step. But you could argue that where there’s landfill gas, there’s value and therefore landfill gas operators and landfill owners will need to work together to maximise the amount of value still remaining at their sites.
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