Slow uptake of landfill gas to energy projects in South Africa
Submitted by: Amanda Botes, Monday, July 16, 2012
South Africa currently has only five landfill gas (LFG) to energy projects registered with the Clean Development Mechanism (CDM). However, eight more are in the process of applying, says Lindiwe Chauke from the Department of Energy.
Landfill sites release LFG as a result of refuse decomposition. LFG to energy projects work by capturing LFG at landfill sites and burning the gas to generate electricity. LFG is composed mostly of methane gas (50-60%). The other components include carbon dioxide (40-50%) and a small amount of other organic compounds. Since methane is a high energy clean burning gas it is suitable for generating electricity.
Landfill gas to energy projects provide an opportunity for land fill owners, particularly municipalities, to generate small amounts of electricity while at the same time decreasing their carbon emissions and generating income through the sale of carbon credits.
Of the existing registered projects only two sites based in eThekwini Municipality: Mariannhill (1MW) and Bisasar Road (6.5MW) and the private Alton site currently generate electricity. While Ekurhuleni Municipality has installed LFG to energy systems on four landfill sites, at this stage the units are only used for flaring of methane gas. However the Municipality will soon be running a pilot project to test feasibility of electricity generation and will also be looking into other possibilities for the use of captured methane as an energy source says Shaazia Bhailall from Ekurhuleni.
Benefits of LFG to energy projects
The main benefits of implementing LFG projects are:
Reduced greenhouse gas emissions: Landfills are a significant source of Methane which is a gas with a global warming potential of twenty-one times that of Carbon Dioxide. LFG projects burn landfill methane and convert it to carbon dioxide and water.
Potential to earn carbon credits: LFG to energy projects can be registered with the CDM and if approved can earn carbon credits by reducing the amount of methane entering the atmosphere. These credits can be sold on the mandatory or voluntary carbon markets. Credits can be earned from flaring LFG in the early stages of the LFG project and from converting the LFG into energy later on.
Reduced odours: The extraction process prevents landfill gases from being released into the atmosphere and so reduces landfill odours.
Electricity Revenue: The process of burning methane generates energy which can be converted to electricity and then sold.
Challenges to implementing LFG to energy projects
Some of the main challenges to the implementation of LFG to energy projects are:
Lack of technical expertise: As the LFG to energy field is relatively new in South Africa; there is a lack of skills in the country to execute LFG to energy projects says John Parkin, who oversees the eThekwini Municipality LFG projects. However, the skills base is growing as more projects are being implemented.
Expensive equipment and access to funding: The technology needed for LFG to energy installations is expensive and has to be imported. The maintenance costs are high because spare parts are not available locally says Parkin of eThekwini Municipality.
Lengthy CDM process: The process of registering LFG to energy projects with the CDM is lengthy and challenging. In addition, funding is needed for the registration of projects and for the verification of the carbon that has been saved before credits can be issued.
Fluctuations in the price of carbon: The prices offered for carbon credits have decreased in Europe because of the recession. As a result, says Parkin, many projects are not earning the amounts that they projected when the projects were first conceptualised.
Harmful Toxins: Muna Lakhani from EarthLife Africa warns that compounds containing mercury, cadmium and arsenic as well as benzene, dioxin and furan derivatives have been found in LFG. Lakhani adds that the burning and release of these toxins can lead to a range of impacts including cancers, endocrine disruption and heavy metal poisoning. Lakhani states that it is possible to “scrub” the LFG prior to combustion to filter harmful compounds out of the LFG. But he is unaware of any LFG to energy projects in South Africa that employ this technology.
Financing LFG to energy projects
There are a number of ways of financing LFG projects such as:
Project Partner: Landfill owners that can’t access the capital finance required can bring in a project partner to implement the project in exchange for a share of the revenue. For instance EnerG Systems provided the funds for the implementation of LFG to energy projects on five of the City of Johannesburg’s landfills that will have a combined generation capacity of 19MW. The revenue from the carbon credits and electricity generated will then be shared between the City of Johannesburg and EnerG Systems.
Renewable Energy Integrated Power Producer Procurement Programme: The South African government has included LFG to energy as one of the renewable technologies in its Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). In total the programme has allocated 25 MW of generation capacity to LFG to energy projects. Since the REIPPPP is focussed on private entities, municipalities who are the owners of most landfill sites in the country would need to partner with private companies to access this funding. David Cornish, general manager of EnerG Systems, says that they have submitted a bid on behalf of the City of Johannesburg. The next REIPPPP bidding window closes on the 1 October 2012.
Selling carbon credits: LFG to energy projects that are registered with the CDM and that are able to verify the amount of carbon savings made from their projects can sell carbon credits (known as Certified Emission Reduction certificates- CER’s). eThekwini Municipality which has two projects registered with CDM have accumulated 65 711 credits to date and has another 600 000 credits undergoing the verification process say Parkin of eThekwini Municipality. LFG to energy projects can also be registered on a voluntary carbon market and earn voluntary carbon credits (Voluntary Emission Reduction certificates- VER’s). These generally fetch lower prices than CERs. Prior to the registration of the projects with the CDM eThekwini Municipality earned 124 884 credits on the voluntary carbon market which were sold to Nedbank for R3,3 million says Parkin.
Selling electricity: To date eThekwini Municipality has generated R65 million worth of electricity from its two LFG to energy projects says Parkin. Parkin anticipates that the financial feasibility of LFG to energy projects will improve as electricity prices continue to rise.
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