The waste-to-energy market has long been associated with incineration and, more recently, the process of anaerobic digestion. However, when it comes to turning waste into electricity, there is a new kid on the block: gasification.

Gasification is the process of heating a fuel to the point at which fixed carbon in the fuel reacts with carbon dioxide, water and hydrogen to produce a synthetic gas, or “syngas.” This syngas is then oxidised in a separate oxidiser to release additional energy that can be captured in the heat recovery steam generator (HRSG). This produces a superheated steam that is used by a steam turbine to produce power.

Whilst gasification is a process with a long history and proven track record of extracting energy from fuels such as coal, its application in extracting energy from waste is something that has only begun to occur in the UK over the past few years.

The main driver of this development is the UK government’s decision to award higher levels of support to Advanced Conversion Technologies (ACTs) of gasification under its Contract for Difference (CfD) subsidy scheme for renewable energy.

Peter Hughes, Black & Veatch`s Business Development Director for Europe, said the financial incentives now on offer have prompted investors to re-evaluate a previous reluctance to support gasification as a means of converting waste into energy.

“We have seen the funding community start to become comfortable with the process and the technology, whereas previously there had been a nervousness around gasification,” Hughes said. “However, the incentives on offer have encouraged them to take another look, and now things are moving quite quickly.”

High Strike Prices Provide Better Returns

It is easy to see why a substantial pipeline of waste-to-energy gasification plants is building up in the UK. When the Department for Energy and Climate Change (DECC) announced the first round of projects to successfully secure CfDs in early 2015, five contracts went to waste-to-energy plants – two traditional incineration plants and three ACT plants using gasification.

As part of the CfD award, a “strike price” for the electricity generated by the project is set. If the wholesale electricity price is lower than the agreed strike price for a project, then the government pays the generator the difference. Conversely, if the wholesale electricity price rises above this level, then the plant operator must pay the difference back to the government.

Traditional incinerators that secured CfDs last year received a strike price of £80 per megawatt hour (MWh) – still much higher than the current wholesale price of electricity, which is around £35 per MWh. However, the three gasification plants at Walsall, Hull and Aberdare each received strike prices of between £114 and £119 per MWh.

These high strike prices are unlikely to be one-offs. The government has classified advanced conversion technologies as “less established” technologies, alongside the likes of offshore wind, to which it has allocated a far larger budget for CfD price support than the so-called “established” renewable energy technologies like onshore wind and traditional energy from waste solutions.

The high strike prices, combined with an income in the form of a waste “gate fee” (paid by waste companies in order to avoid landfill and the associated taxes), provides for a healthy commercial return. At the same time, they also generate much-needed baseload power for the UK`s electricity grid.

Building Gasification Plants

Responding to this momentum in the market, Black & Veatch last year announced the formation of its 50/50 joint venture with MWH – MBV Energy Recovery – that will provide engineering, procurement and construction (EPC) services to developers of gasification projects.

MBV secured its first EPC contract in October 2015 when it was hired by developer CoGen UK to build its £87 million Ince Park project in Cheshire. The plant will export 21.5 MW of clean, affordable power, utilising over 150,000 tonnes of material that would otherwise go to landfills.

Hughes said the MBV joint venture is a perfect combination of MWH’s local experience of gasification, together with Black & Veatch’s vast experience in the power generation sector, which extends to its involvement in over 200,000 MW of installed capacity.

With combined revenues in excess of £3 billion, and a track record of working together on many UK projects – including the current ESD joint venture delivering a £560 million programme for Scottish Water – Hughes said MBV Energy Recovery can deliver both the technical expertise and financial strength that investors crave.

“These are the qualities that can minimise the risks and add value to projects,” Hughes said.

“We often provide a commercial ‘wrap’ guarantee for these projects, underwriting the power output and availability of the plant, and we do this because we have confidence in our technical solutions, and it provides investors with the confidence in their investment,” he said. “We have considerable capacity to build plants in the UK, therefore we lower their risk of delayed construction due to potential capacity shortfalls. And we are able to leverage our global relationships with key equipment suppliers to offer the best available prices, to lower the capital cost of our clients’ projects.”

Hughes said MBV will only propose gasification technology that is “bankable” – in other words, it has a proven waste-to-energy application that has been assessed and approved by Black & Veatch.

Market Conditions Are Ripe for More Gasification Plants

Gasification is a precise chemical process, and just as MBV will select the feedstocks and technologies capable of producing the optimum conditions for efficient electricity generation, so too it seems, the market has found the perfect conditions for the technology to flourish.

The greater understanding of the technology and the attractive incentives on offer mean that Hughes is confident Ince Park will be the first of many waste gasification plants to be built by MBV Energy Recovery.

Published originally on Black & Veatch Solutions.