#1eew Energy from Waste People first: PPP-WtE Projects and the Circular Economy Thomas Obermeier, Head of Business Development EEW Energy from Waste GmbH Hon President German Waste Association DGAW Publicly appointed and sworn expert assessor for waste management Digital 2020-12-01#2About EEW Energy from Waste eew 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 2#3Our core business and our new growth market eew Leading in waste recycling Groundbreaking in sewage sludge recycling Further development of conventional waste incineration to a highly efficient process Disinfection and reduction of waste hazards Recycling of waste (metals, agglomerates CO2) Recovery of energy (industrial steam, district heating, power) + Sewage sludge full of contaminants was used for decades in agriculture as a fertilizer The legislator has now prepared the ground for a much more environmentally friendly disposal of sewage sludge As a partner of the municipalities we are on hand to develop resource-sparing solutions for thermal sewage sludge recycling 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 3#4EEW - Network of 18 plants EEW ownership NIEDERLANDE Delfzijl Nordrhein-Westfalen Knapsack Rheinland-Pfalz Schleswig-Holstein Stapelfeld Stavenhagen⚫ Hamburg Mecklenburg-Vorpommern eew 85% Schwedt Premnitz (2) Berlin Andernach Delfzijl (NL) Göppingen Großräschen Hannover Hanover Berlin Helmstedt Rothensee Brandenburg Heringen Thüringen Hessen Andernach LUXEMBURG Leudelange arland Neunkirchen Pirmasens Headquarters Site of plant Office Berlin Bayern Göppingen Baden-Württemberg Eschbach Großräschen Sachsen Helmstedt 51% wwwer Heringen Neunkirchen Premnitz 1 Premnitz 2 Rothensee Stapelfeld THER Eschbach 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models Stavenhagen EEW operatorship Knapsack Leudelange (LU) Pirmasens Schwedt 4#5EEW key data KA 18 plants in Germany and neighbouring states 1,150 employees approx. 5,000,000 tonnes of energy-generating recycling capacity eew eew Approx. 4,200,000 megawatt hours of process steam and district heat generating with low use of resources Generation of electricity for an equivalent of approx. 740,000 households Reference: the quantities of electricity, district heat and process steam generated in 2019 from the current 18 EEW plants. Assumed average annual requirements per household: 3,500 kWh. 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models As at: 06/2020 5#6We create power, steam, and heat + Environmentally sustainable power from waste: eew Power for over 900,000 premiere league football matches under floodlights. District heat for heating for cooling (adsorption refrigerators) District heat to supply more than 95,000 homes. Steam for industrial processes: Steam for the production of paper, steel, fibres, salts, plastics, etc. 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 9#7The benefits of waste incineration Volume reduction by more than 90% Recovery of all residual materials Generation of power and heat Renewable energy source Saving natural resources Pollutant reduction Reduction of climate-relevant CO2 emissions Low total emission values Taking the lead for the purity law of the air. eew 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 7#8PPP Models eew 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 80#9eew Advantages of a PPP model for building and operation of a WtE plant ■ PPP models allow spreading of risks among partners with each party contributing their specific expertise and resources EEW Expertise in operations Inhomogeneous fuel High environmental standards Disposal security Reliability regarding energy supply Synergies in maintenance and revision Flexibility regarding recruiting and training Experience in increasing public Public Partner Guarantee of waste supply (obligation to dispose) Distribution of energy (electricity and heat) acceptance 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 6#10Allocation of risks of Public Private Partnership eew Risk Utilisation (waste supply) Construction Private partner (EEW) X Public partner (municipality) X Operation and maintenance X Residues disposal X Financing X Public entity ensures waste supply 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 10 10#11Risk-price-function (in a PPP model) Bid price max. risk of bidder 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models max. budget of municipality eew Objective: Balanced price-risk allocation Risk 11#12Project delivery methods Design-Build (DB) Design-Build-Operate (DBO) Design-Build-Finance-Operate (DBFO) eew 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 12#13Typical PPP project structure (simplified DBFO) eew Municipality Subsidies PPP contract Waste supply Service payment Equity EPC EPC contractor contract Guarantees Project sponsor(s) Project Co (SPV) Private Partner Shareholder agreement O&M contractor O&M contract Subord. loan Investor(s) Bank loan Banks(s) PPA Energy off-take 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models EU 13#14PPP project structure Pirmasens (simplified DBFO) PPP contract Waste supply Service payment Energy purchase EPC contractor EPC contract Municipality Project co (SPV) Private partner O&M contractor O&M contract 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models eew Subord. loan Investor(s) Bank loan Banks(s) 14#15Pirmasens EfW PPP (DBO) Public sector: ■ Waste supply Energy sale Guarantee for financing Private partner: Asset owner Design & construction Operation & maintenance Financing Permit existent, change risk eew 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 15#16PPP project structure Leudelange (simplified DBO) EPC contractor EPC contract Municipality PPP contract Waste supply Service payment Project Co (SPV) Private partner O&M contractor PPA Energy off-take 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models eew 16#17Leudelange EfW PPP (DBO) Public sector: Private partner: Financing Asset owner ■ Waste supply Permit application Design & construction Operation & maintenance Energy sale 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models eew 17#18PPP project structure Gdansk (simplified DBO) eew PPP Contract Waste supply Service payment Energy purchase Financing EPC EPC contractor contract Municipality Project Co (SPV) Private partner O&M contractor O&M contract 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models Subsidies EU 18#19eew Gdansk EfW PPP (DBO) Public sector: ■ Permit application Financing ■ Asset owner Waste supply Energy sale Private partner: Design & construction Operation & maintenance 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 19 19#20The European WtE Gap eew 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 20 20#2190% 60% 50% 40% 28% 28% 80% 42% 40% 47% 46% 44% 44% 50% 50% 56% 55% 70% 58% 67% 50% 52% 59% 0% 2% EU 28 Sweden 30% 57% 53% 44% 49% 43% 43% 39% 20% 31% 23% 10% 41% 35% 39% 32% Finland Denmark Belgium Germany Netherlands Austria Luxembourg 6% ited Kingdom France Ireland* Estonia 19% 13% 10% 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models Slovenia Italy Lithuania Poland Czechia 61% 10% 49% 55% 49% 50% 51% 25% 21% 22% 42% 23% 15% 21% 21% 9% 10% 10% 5% 2% 7% 18% 8% 17% 13% 13% 24% Even in the EU more than 20% on landfill 100% ili Municipal waste treatment in 2018 EU 28 + Switzerland, Norway and Iceland eew 6% 11% 16% 19% 25% 25% 5% 29% 34% 35% 37% 36% 36% 31% 1% 2% 26% 41% 52% 4% 86% 74% 76% 59% 66% 80% Graph by CEWEP, Source: EUROSTAT Last update August 2020 64% 51% Hungary Spain Portugal Slovakia Bulgaria Latvia Croatia Greece* Cyprus* Romania Malta 14% 3% 11% 8% 8% 8% 5% 5% 7% 48% Landfill Waste-to-Energy Recycling +Composting Missing data Switzerland Norway Iceland* country *: 2017 data (last available) EWEP Percentages are calculated based on the municipal waste reported as generated in the 21#22Waste arising and WtE gap if Circular Economy goals EU are achieved now and 2035 2019 Total waste 549,0 (mt) Direct Landfilling 6,7% 16,6 MSW pre-treatment 130,3 Waste landfilled 141,7 2035 Total waste 37,7% 113,7 C&I W 8,0% 19,8 MSW 40,4% 121,9 C&I W 610,1 (mt) 45,0% 247,3 MSW 55,0 % 301,7 C&I W Recycling & Composting 27,9% 69,0 MSW 18,5% 55,7 C&I W 65,4% 161,7 MSW 294,0 43,9% 132,3 C&I W 5,5% 8,9 MSW 124,7 32,5 Secondary waste 17,9% 23,7 C&I W Waste potential for incineration 31,5% 77,8 MSW 26,3% 79,3 C&I W 1,8 German 157,2 saldo Secondary waste 11,4 2,0% 3,2 MSW 6,2% 8,2 C&I W 41,7% 254,4 MSW 58,3% 355,7 C&I W Waste recycled & composted 250,1 Direct Landfilling 6,7% 16,9 MSW 37,9% 134,8 C&I W Recycling & Composting pre-treatment 151,7 60,5% 149,6 MSW 33,3% 100,5 C&I W 65,4% 166,4 MSW 321,1 43,5% 154,7 C&I W 28,0% 71,1 MSW 18,6% 66,2 C&I W 5,5% 9,1 MSW 137,3 35,7 Secondary waste 17,2% 26,6 C&I W 90,9 Thermal capacity 158,9 12,4 Co-incineration 8,1 Projects 7,5 Other incineration Waste potential for incineration 118,9 Sum (mt) 40,0 capacity gap 31,5% 80,2 MSW 26,1% 92,8 C&I W 1,8 German 173,0 saldo 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models eew Waste landfilled 164,8 8,0% 20,3 MSW 40,7% 144,6 C&I W Secondary waste 2,0% 3,3 MSW 13,1 6,3% 9,8 C&I W Waste recycled & composted 272,3 60,5% 154,0 MSW 33,3% 118,3 C&I W 174,8 90,9 Thermal capacity 12,4 Co-incineration 118,9 Sum (mt) 8,1 Projects 7,5 Other incineration 55,8 capacity gap 22#23eew GHG emissions and WtE 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 23#24EU CO2 emissions reduction plan 2030 GHG emissions EU-27+UK by sector (in Mio. Tons CO2-equivalent) GHG emissions EU-27+UK total (in M tons CO2 equivalents) Greenhouse gas sources and sinks 1990 2018 Change since 1990 6000 Energy 4.346 3.279 -24.6% 5000 Industrial processes 515 372 -27.8% 4000 Agriculture 546 435 20.2% 3000 Land use, land use change and forestry (LULUCF) -255 -273 Waste 241 138 -42.7% 2000 Others* 4 2 61.7% 1000 Total (incl. LULUCF) Total (w/o LULUCF) 5,397 3,953 -26.8% 0 5,652 4,226 -25.2% Source: European Environmental Agency, EEA eew 1990 2018 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models target 2,701 Mt 2030 24#25EEW fleet is at least net zero regarding GHG emissions IBA metal recycling | -273 Kt District heating -195 Kt Balance -248 Kt Industrial steam -853 Kt Power -1,038 Kt Balance Emissions Avoidance eew Landfill residues 6 Kt Chemicals FGC 86 Kt Incineration 1,988 Kt Oil, gas power 43 Kt GHG emission in Kt CO2 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 25 25#26Q & A UNECE eew 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 26#27eew Q & A UNECE (1/3) 1. How feasible is moving the waste to energy industry into a circular economy direction?.... Of course the whole issue is the circular economy and the feasibility of the concept of a waste free society. A waste free society is an illusion and an undesirable fiction. Please keep in mind, the first task of a sustainable waste management is to preserve the health of people, and the environment. Waste incineration was started after the cholera epidemic in European metropolitans like London and Hamburg. Uncontrolled composting or landfilling of putrescibles are emitting methane, a much more severe GHG than Carbon Dioxide. Only metals and glass can be recycled on and on. Paper fibres are shorter after each recycling loop and the physical performance of recycled plastic is getting worse after each melting and the additives will accumulate. Some waste fractions are not recyclable. As long as we consume and our products are not 100% made out of organic compounds, we have to treat waste and we should do it in a sustainable way. WtE has already stepped into the Circular Economy and will accelerate its move. Without WtE no high quality recycling is possible. IBA and FGCR are already resources for secondary raw materials and further potential will be raised soon. CO2 can be recycled as well. And WtE will increase its role for a renewable heat transition. 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 27#28eew Q & A UNECE (2/3) 2. What is your impression of government programs on waste and waste to energy overall? Do you think they are doing enough to eradicate the use of landfills? What are the main barriers to changing their policies ? Are there ways in which the public and private sectors can work better together in order to phase out landfills more quickly? I appreciate you know Germany but I was wondering if you could say something about Eastern Europe including Central Asia and the prospects for Waste to Energy there. Gov. waste programs are mainly focussing on recycling goals. But recycling quotas do not help the Circular Economy and are often used as green washing. Only a minimum content of secondary material in products will help. WtE has not enough support by politicians. Some do not understand the interconnectivity between recycling and thermal recovery, some are misled by NGO's, others want to divert the sketchy role of agriculture and traffic concerning GHG emission by blaming WtE. The transition period for landfills is much too long and needless. Main barrier are costs. Poland has stopped landfilling but hasn`t invested enough in MRF's and WtE. Prices have exploded and nowadays they have opened them again. Asia and the Middle East are the booming areas of new WtE projects. 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models 28#29Q & A UNECE (3/3) 3. One of the proposed follow-ups for this meeting, is to elaborate an international UNECE standard on WtE projects. Such a standard would set out the best practice benchmarks on type of project, the best model, financing, technology etc.. to governments and the private sector. Such a standard will, we are confident, help to lower transaction costs and make high-quality WtE projects more mainstream. Any observations you might have on this aspiration, would be very welcome. And of course we would be delighted if you could join us in this project to develop a standard, should it go forward. This is absolute necessary and in Europe we do have the Sevilla process, which has developed BAT standards for WtE plants. The approving authorities have to follow them and the results have to transferred in national ordinances. Of course, I'm ready to support UNECE. 01/12/2020 Zeichen setzen: Realization of Waste to Energy Concepts via PPP Models eew 29