Costs and funding for energy from waste
This page explains the cost, payback periods, and available funding for energy from waste technologies.
There are many costs to consider:
- the technology chosen (different waste treatment methods have different contributing costs)
- the scale of the facility (economies of scale can be very important to the financially viability of plants)
- planning and assessment costs
- fuel required and the ability to secure supply contracts
- gate fees (the cost charged by waste treatment facilities per tonne of waste accepted)
- the treatment of exhaust gases or waste by-products to minimise environmental damage
- removal of any by-products (this can be a revenue stream or cost)
- mitigating the perceived impacts of the facility to the community (often a considerable cost, but necessary for operational/planning consent).
Capital costs can range from approximately £7,747 per kWth for incineration and £8,750 per kWth for anaerobic digestion. Maintenance costs could range from approximately £775 per kWth for incineration and £517 per kWth for anaerobic digestion. (From WRAP report in 2008).
Careful planning and design of a plant is essential to ensure that a scheme is as cost effective as possible.
The WRAP website publishes gate fees reports annually which give more information on costs for energy from waste technologies.
Gate fees reports - on the WRAP website
Payback periods and savings
Payback periods vary widely for the different technologies and sizes of the energy from waste scheme. The payback periods described below give a range based from real case studies.
While capital cost for anaerobic digesters is high, payback times are generally short because of the costs avoided in waste disposal.
Knill Farm Biomass-Combined Heat and Power Project, Powys
A 2.7MWe Biomass CHP plant is due to become operational in 2010. The plant will be fuelled with dried poultry litter produced on site and from local farms. The estimated capital costs are £10 million and the estimated payback period is between 5.7 and 10 years.
Lowbrook Farm Anaerobic Digester Project, Dorset
An on-site anaerobic digester is due to become operational in 2010. The plant will be co-fuelled with 8,000 tonnes of slurry and 3,700 tonnes of maize bio-crop, both produced onsite. The 340kWe plant will produce electricity to export to the national grid. The estimated capital costs are £650,000 and the estimated payback period is between 3.3 and 8.4 years.
Energy from waste technologies qualify for a variety of incentives. These are shown in the table below.
|Technology||Feed-in tariffs (FITs)||Renewable heat incentive (RHI)||Renewables obligation certificates (ROCs)|
|Incineration (for renewable element only)||Electricity generated is eligible||Heat generated is eligible||Eligible|
|Aerobic treatment||Eligible|| Can claim from use of a refuse |
|Can claim from use of a refuse derived fuel|
|Anaerobic digestion||Electricity generated is eligible||Can claim for bio-methane, biogas or bioliquid|| |
Eligible for two ROCs per MWh
All three technologies may be eligible for the following if CHP is used:
- exemption from the Climate Change Levy for all Good Quality CHP fuel inputs and electricity outputs
- eligibility for Enhanced Capital Allowances (ECAs) for Good Quality CHP plant and machinery
- business rates exemptions for certain Good Quality CHP energy from waste schemes.
The ‘Funding and delivering energy projects' section of this resource provides a list of all of the potential grants and loans that could be used for energy from waste.
1 May 2012