Drivers of Waste-to-Energy

development in Thailand
Biogas & Waste-to-Energy Indonesia Forum
March 15, 2017
Overview of WTE in Southeast Asia
Singapore:
● Largest WTE capacity in Southeast Asia with four Installed
facilities that process all solid waste remaining after Country # WTE Plants
Capacity (MW)
recycling
Thailand 26 151
● All four plants use combustion and steam turbine
technology
Singapore 4 168
● Three plants owned by the National Environment
Agency (NEA), one by Keppel Seghers Philippines 4 25

Thailand: Indonesia 2 8
● Highest private sector involvement
● Technologies include combustion (7 plants), landfill
gas (16), and gasification (1) Philippines
● Besides grid-connected WTE plants, industries use ● Four landfill gas projects
solid waste to co-fire with coal in boilers and kilns,
in particular at cement factories ● No separate target or FIT for WTE, but
WTE projects are eligible for a general
Indonesia biomass FIT of PHP 6.63 per kWh
● Five landfill gas projects built under CDM, 3 ● The Clean Air Act of 1999 bans all
discontinued, 2 remaining, operated by Navigat forms of mass incineration of waste
Organic

This presentation is largely based on an Independent Market Report by AWR Lloyd for the pending IPO of TPI Polene Power 2
Dynamic WTE sector in Thailand
● 151 MW of WTE installed at the end of 2016, Trend of WTE development
up from only 26 MW in 2010 180 30

● Additional 280 MW under development, 218

150 25
MW expected to come online in 2017
120 20
● Most operational projects (19) under the VSPP
program (<10MW)

MW
90 15

● High diversity in asset ownership, 24 60 10

companies operating 26 plants
30 5
● More than $500M invested in WTE since 2011
● TPI Polene Power (TPIPP), the largest WTE 0
2010 2011 2012 2013 2014 2015 2016
0

company in Southeast Asia has a total capacity

Installed Capacity # Projects (RHS)
of 80 MW with 70 MW under construction
● Development partially driven by RE adder on Energy from MSW 2011 2012 2013 2014 2015
top of the base tariff for the first 7 years of
operation (US$0.07/kWh for landfill, Electricity generation (GWh) 5 223 293 317 520
$0.10/kWh for combustion)
Heat consumption (ktoe) 2 78 85 98 88
● Adder was replaced in 2014 by Feed-In Tariff
(FIT) of US$0.14-0.17.8/kWh, plus an Investment ($M) 69 149 4 270 50
additional $ 0.02/kWh for the first 8 years
Source: ERC, DEDE
3
Tariffs are Baht denominated, US$ figures here are conversions
Thailand faces a worsening waste-disposal problem
● MSW generation is increasing, MSW per capita Annual MSW Generation
increased by 8% during 2008-2014
30
● Less than half of the waste is properly managed,
25% of total MSW is uncollected and untreated 25

● Industrial waste largely goes unreported

Million tonnes
20
(estimated at 75% in 2014), and hazardous and
15
infectious waste is illegally dumped
10
● 2,500 open dump sites throughout the country,
of which only a fifth are properly managed 5

● Frequent fires at disposal sites and landfills, 15 in 0

2014 2008 2009 2010 2011 2012 2013 2014
Source: Pollution Control Department
MSW Composition (%)
0.4
1.6
2.0 Organics
3.6 Thai MSW Characteristics
1.6 Paper
2.4
Plastic
● High organic content (>50%)
Glass
15.2 Metal
● High moisture content (>50%)
Wood ● High amount of small plastic bags
6.8
66.4 Rubber/Leather ● Low content of recyclable materials
Textile ● Low calorific value (3-4 MJ/kg)
Other

4
Economics supportive of WTE development
Energy security is driving Thai policy Forecast Thai LNG imports
MTPA
● Thailand is a large net importer of energy with a Thai LNG import volume will depend primarily on decline rate
in Gulf of Thailand gas fields. This chart shows forecasts at
huge dependence on natural gas for power 30
zero and 10% decline rate
● Increasingly this gas will be supplied by imported
LNG as Thai gas fields decline 20
10% decline
● Thailand consumed 2 MTPA of LNG in 2014 but
demand has been forecast to increase to 7-15 times 10
that size within 10 years Zero decline
● Renewable energy currently provides 8% of power 0
2016 2017 2018 2019 2020 2021 2022
capacity and is expected to grow significantly
Source: Macquarie Bank

Levelized Cost of Energy (LCOE) in Thailand by source

WTE makes commercial sense for Thailand Illustrative
Baht/kWh LCOE FIT
● Imported LNG as marginal cost of power means 8.00
waste-to-energy should be cost competitive High
● Thailand is likely to pay similar prices for power 6.00
from waste as from imported LNG Low
4.00 High
● WTE economics are likely to improve in the future
Low
● WTE also provides other benefits including waste 2.00
reduction, balance of payments and risk mitigation
-
Biomass Biogas from Solar Waste to Gas-fired Gas-fired
combustion energy crops Energy (Piped) (LNG)

5
Government policies create platform for WTE development
Waste Management:
● Municipal Waste and Hazardous Waste Management Roadmap (2014): Aims to impose standards
for waste management, improve or close improperly managed disposal sites, and improve overall
waste management practices
● Draft Masterplan for Solid Waste Management (2015): Identified 90 locations with the potential for
setting up RDF production plants and 53 localities with potential for WTE power plants
Renewable Energy:
● Alternative Energy Development Plan (2015): Prioritizes power generation from waste, biomass and
biogas in the near-term, with a target of 500 MW by 2036
● Bidding for WTE from industrial waste (2016): awarded 7 projects with a total contracted capacity of
31 MW, with PPAs to be signed in February 2017 and SCOD by December 2019

Unit: MW 2016 2036 Target

Capacity Share Capacity Share
Solar 2,688 17% 6,000 31%
Biomass 2,690 34% 5,570 28%
Hydro 3,478 41% 3,282 17%
Wind 502 3% 3,002 15%
Energy crops 0 0% 680 3%
Biogas 348 4% 600 3%
Waste 151 1% 500 3%
Total 7,490 100% 19,634 100%
Source: AEDP 2015
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Thai WTE Opportunities and Challenges
Opportunities Challenges
● Thailand is highly dependent on natural gas for ● Waste characteristics make WTE challenging (high
power generation (>60%), LNG imports are organic and moisture content, low calorific value)
expected to increase drastically ● Regulatory regime for renewables currently facing
● MSW is increasing and leading to growing waste uncertainties
management problems ● Increased competition for MSW as fuel may lead to
● Government has put in place measures and price increases and logistical challenges
regulations to improve waste management and ● Public opposition may affect WTE project
stimulate WTE development development, similar to coal and biomass

Estimated WTE Potential in Thailand

Short-term Scenario Long-term Scenario
(1-5 years) (20 years)
MSW Generation 25 million tonnes/year 35-40 million tonnes/year

MSW used for WTE 25-35% 35-50%

Average Lower Heating Value 1,793 kcal/kg 1,972 - 2,151 kcal/kg

Power Generation Efficiency 20-25% 20-25%

Potential Generation 2,600 – 4,560 GWh 5,600 – 12,500 GWh

Load Factor 65-75% 70-75%

Potential WTE Capacity 400 – 800 MW 850 – 2,000 MW

Source: AWR Lloyd analysis

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Cement industries can drive initial WTE development
MSW use by cement industry and landfilling in Poland
● RDF is commonly used as 100%
complimentary fuel by the European MSW landfilled
cement industry, accounting for over 80% as % of waste
generated
40% of RDF use in Europe. 60%

● Co-firing of RDF in cement kilns has 40%

been conducive in kick-starting landfill Use of waste as
20%
% of fuel by
diversion in markets where stand- cement kiln
alone WTE was initially too expensive, 0%
e.g. Poland 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: World Business Council for Sustainable Development
● Cement companies are the largest
users of MSW as fuel for fossil fuel RDF substitution in European cement industry
substitution 80%

61%
● With a substantial cement industry, 60% 54%
Indonesian cement factories can 45% 44%

provide a similar entry to WTE 40%

30%
development, with some cement
20%
companies already co-firing MSW for
operating their kilns 0%
Germany Czech Republic Poland UK France

Source: Ricerca Sistema Energetico