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Cost Model - Infrastructure & Industry - 0410

Energy from Waste: Cost Model April 2010

Category Cost Model

Published April 2010

Author Simon Rawlinson and Matthew Hicks

There are almost as many treatment solutions as sources of waste. Simon Rawlinson and Matthew Hicks of Davis Langdon weigh up the costs and the risks of options, including incineration, in this Cost Model.

The UK produces over 300 million tonnes of waste a year, 24% of which is derived from household or commercial sources. Historically, most domestic waste has been directed to landfill, and on current disposal rates, the UK has less than 10 years’ supply of landfill left.

Challenging EU targets for the reduction of disposal of domestic waste to landfill have belatedly triggered a PFI market in waste recycling and treatment. Commercial waste producers have also experienced rising costs
due to landfill tax and higher gate prices, and are also looking for alternatives to landfill. Waste disposal authorities face fines of £150/tonne if
they miss their 2013 and 2020 landfill targets, a policy which is driving waste-related investment worth £9-11bn for the public sector alone between now and 2020. This is equivalent to an extra 500 million tonnes of treatment capacity per year.

Government policy, articulated through the “waste hierarchy” is to
encourage reduction of waste at source and by recycling. However, there are physical and economic limits to recycling, and few waste disposal authorities (WDAs) expect to be in a position to recycle more than 65% of their solid waste stream. Unlike Europe, where incineration is well established, energy from waste is unpopular in the UK. However, with much tighter regulation, improved technology and the growing risk of a UK energy gap, waste’s potential as a resource is now being warmly embraced.