International Conference Renewable Energy Asia 2017: Moving Towards ASEAN s Smart Cities

Transcription

1 International Conference Renewable Energy Asia 2017: Moving Towards ASEAN s Smart Cities Waste Management for Smart City: Waste-to-Energy Practices in Japan and the Efforts to Implement WtE Projects in Asian Countries June 7 th, 2017 Shiko Hayashi Programme Manager, Sustainable City Group

2 Waste Classifications in Japan 2

3 3 Waste Composition of Municipal Waste in Japan (FY2015) Data source:

4 4 Municipal Waste Flow in Japan Other than incineration: large article treatment (30.7%), composting (3.0%), feedstock making (0.1%), anaerobic digestion (1.0%), waste to fuels processing (11.6%), Data source: MOE (2016)

5 Breakdown of Treatment and Recycling in Japan (FY2014) 5 Data source: MOE (2016)

6 Number of facilities 施設数 Transition of facilities utilizing residual heats at incineration 余熱利用あり ( カッコ内は発電施設 facilities ) in Japan 余熱利用無し 1, ,400 1,200 1,318 1,301 1,285 1, ,243 1,221 1,211 1,189 1,172 Non utilizing residual heats 1,162 1, Utilizing residual heats (286) (293) (298) (300) (304) (306) (314) (318) (328) (338) Generating electricity 2005 H H H H H H H H H H26 Fiscal 年 year 度 Source: MOE (2016)

7 Number of facilities 施設数 7 Situation of utilizing residual heat at incineration facilities in Japan (FY2014) 余熱利用あり ( カッコ内は発電施設 ) 余熱利用無し Non utilizing residual heat (147) (0) (2) (14) (117) 1 (58) 58 ~30 トン未満 ton 30~50 トン以上 50ton トン未満 50~100 トン以上トン未満 ton 100~300 トン以上トン未満 ton ~600 トン以上トン未満 ton 600 トン以上 ton~ Capacity 処理能力 ((ton/day) トン / 日 ) Utilizing residual heat ( ): Generating electricity Source: MOE (2016)

8 Total generated 総発電電力量 electricity (GWh/ (GWh/year) 年 ) Generating 発電効率 efficiency (%) (%) Transition of total generated electricity and generating efficiency at WtE facilities in Japan 総発電電力量 Total generated 発電効率 Generating ectricity efficiency 14, , , , , ,000 7,090 7,190 7,132 6,935 6,876 7,210 7,487 7,747 7,966 7, , H H H H20 H H H23 H H H26 Fiscal year Source: MOE (2016)

9 City budget (~10%) 9 Cost Share Between National and Municipal Government for a Construction of Waste Treatment and Recycling Facilities Total cost Total construction cost of WtE facility (CAPEX) Financing an construction cost Subsidy from national government (33%) * Local gov t can issue bonds maximum 90% of the cost which is not covered by national government. Local government bond (60%) amortized by local allocation tax (30%) amortized by local government (30%) * Local gov t bares only about 10% of the total cost when it is constructed. Cost share between national and local governments Cost burden on national government (63%) Cost burden on local government (37%)

10 How to Finance Municipal Waste Management Costs (Example of the City of Kitakyushu in FY2015) 10 Data Source: City of Kitakyushu

11 Data source: Waste report of Nagoya City (2014) Average Costs of Municipal Waste Management (Example of Nagoya City) 11

12 Cooperation framework to implement WtE projects National level Philippines DeNR NSWMC The Guidelines Governing the Establishment and Operation of WtE Technologies for MSW (NSWMC Resolution No.669) in the Philippines Cooperation between two countries Cooperation Japan MOEJ Commissioned IGES Japanese experts 12 High-level dialogue Environment dialogues with vice-ministers level Provision of technical advices Japanese experts made comments on the WtE guideline development C/B Seminar Seminar on emission control at WtE facilities Study tour to Japan etc. Local level Davao City CENRO Waste reduction measures Waste-to-Energy project Strategic Environmental Partnership Agreement City of Kitakyushu JICA grassroots Environment Bureau projects Improving capacity of waste management F/S on WtE project Japanese private company conducts F/S C/B Seminar Study tour to Japan etc.

13 Background of a development of waste treatment and recycling facilities 13 Planning Design Build Operation/ Maintain (Feasibility study) City-to-city cooperation Tender stop at planning stage - Weak policy enforcement, public opposition, no financial source, no supporting regulations at national level etc. stop at designing stage (feasibility study stage) - Project proposal is not approved by a competent authority, opposition from existing waste management players, lack of budget at a city, gap between the proposed project design and the city s needs, etc. stop at tender stage - Unsuccessful tender due to the conflict of a price (tipping fee), etc. stop at operation stage - Insufficient performance of the facility, waste management policy is changed due to a change of mayor, bankruptcy of operation company, etc.

14 14 Financing Scheme of MSW Treatment Facility Publicly financed facility (Japan) Tipping fee National government subsidy Local government Special Purpose Company Waste treatment service Operation Private company construction Public Private Partnership: Project finance (other countries) Local government Tipping fee Waste treatment service Operation Special Purpose Company Private company Construction Loan/grant Financial organization/ MDBs * MDBs: Multilateral Development Banks Investors

15 15 Challenges specific to waste sector in Asian cities 1. Input is waste - unstable amount and quality 2. Local governments need to bare cost - Local governments need to pay tipping fee. However, most costs associated with waste management is currently spent for collection & transportation. 3. Longer payback period - waste treatment project is usually set longer payback period than other business model 4. Political risk - When a mayor of the city is changed, waste management policy may be changed. 5. Recognition of local governments - Some local governments regards they do not have to bare costs if recycling and waste treatment project would be conducted under a scheme of public and private partnership (PPP).

16 Risks associated with a development of MSW treatment plants under PPP scheme (project finance) Waste separation Collection & transportation Input 1,2, 3 Treatment Waste-to-energy Feedstock Composting Anaerobic digestion Output 4,5 Product sales Electricity Feedstock Compost biogas Waste amount constantly providing certain amount of waste 2. Quality of waste waste composition, calorific value, etc. 3. Tipping fee appropriate level of fee 4. Electric power selling price/power Purchase Agreement contract with an electric power company 5. Off taker reliability of national electric power corporation 6. Registration, policy, subsidy, etc. incorporation into a development plan, etc. Registration, policy, 6

17 Fund raising O&M Proper risk share between public and private for waste management project Risk Facility performance Facility durability Guarantee for waste amount Guarantee for waste quality Guarantee for electric power sales Guarantee for selection of a project site Accident out of control (Force Majeure) Price fluctuation Change of regulations Cope with the public Description Raising a fund to finance the project Operation and maintenance of the facility Performance of the facility at the end of the project period Defect for the design & construction of the facility Change of the waste amount in comparison to the planned one Change of the waste quality in comparison to the planned one Potential change of electric power sales due to a change of FIT price Defect for a selection of the site when obstruction may occur Occurrence of natural disaster/insurgency Fluctuations in prices beyond a certain level Change of regulations/taxation system related to the project Opposition campaign by the residences, lawsuit Japan Public Private Oversea Public Private 17 Source: JEFMA

18 18 Thank you. Please feel free to contact to: