WASTE-TO-ENERGY
LEB
TURNING TODAY’S WASTE TO MUCH NEEDED ENERGY
BY RICARDO YAACOUB
SUBMITTED TO THE FACULTY OF BUSINESS ADMINISTRATION AT
LEBANESE CANADIAN UNIVERSITY
DR NAHED TAHA RIZK, DEAN OF FACULTY
JUNE 24TH, 2019
WASTE TO ENERGY LEB
WASTE AS A RESOURCE
Waste-to-energy is the process of generating energy in the form
of electricity and/or heat from the primary treatment of waste, or the processing of
waste into a fuel source. In an ever-growing world of countless economies,
infrastructure, industrial plants, and most importantly human beings, the need of
resources increases exponentially to satisfy the needs of the billions. As we are all
taught in Economics 101, resources are scarce. Economics is justly the management
of resources. Today’s world relies mostly on coal, natural gas, and fuel to power up
the globe. These non-renewable resources will one day be fully exhausted. Many
countries have already started using renewable resources as substitutes for
generating energy. One such way is the waste to energy process. It is the process of
generating energy in the form of electricity and/or heat from the primary treatment
of waste, or the processing of waste into a fuel source. Most waste to energy
processes are through combustion. This process happens in specialized plants.
According to the International Solid Waste Association (ISWA) there are 431 waste
to energy plants in Europe (as of 2005) and 89 in the United States (as of 2004).
Modern waste-to-energy plants are very different from the trash incinerators that
were commonly used until a few decades ago. Unlike modern ones, those plants
usually did not remove hazardous or recyclable materials before burning. These
incinerators endangered the health of the plant workers and the nearby residents, and
most of them did not generate electricity. Waste-to-energy generation is being
increasingly looked at as a potential energy diversification strategy, especially by
Sweden, which has been a leader in waste-to-energy production over the past 20
years. The typical range of net electrical energy that can be produced is about 500 to
600 kWh of electricity per ton of waste incinerated. Thus, the incineration of about
2,200 tons per day of waste will produce about 1200 MWh of electrical energy.
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WASTE TO ENERGY LEB
Importance of Waste to Energy Plant in Lebanon
Lebanon has been in a garbage crisis since 2015. The waste crisis began when a
huge landfill site closed and government authorities failed to implement a
contingency plan in time to replace it; dumping and burning waste on the streets
became widespread. The campaign group Human Rights Watch calls it "a national
health crisis". But it’s also forced environmental organizations to find surprising
and much-needed solutions in the face of slow political change – and they’re
proving that a country that’s only the size of Connecticut might be one of Earth’s
best playgrounds for environmental innovation. The traditionally centralized
waste management system in the country has very little sorting capabilities,
meaning that the money isn’t in recycling, it’s in generating lots of waste, they
argue. In a list of 180 countries, the 2017 Corruptions Perceptions Index,
produced by the NGO Transparency International, ranked Lebanon as the 143rd
"least corrupt nation" out of 175 countries – in other words, there are only 32
countries where corruption is worse. According to its website: “Lebanon’s
confessional power-sharing arrangement” – that’s the delicate governmental
balance it’s forged between the country’s many sects – “fuels patronage networks
which undermines further the country’s governance system.” When the rubbish
crisis first started, it stimulated a civil movement; protestors rallied outside the
Lebanese government and declared “You Stink!” Gradually this evolved into
initiatives like Beirut Madinati, a new political party, and the Waste Management
Coalition which is currently campaigning against the government’s proposals to
purchase incinerators. The issue with incinerators is that it doesn’t suit our type
of waste. Around 70% of our waste is organic. It’s too wet to be processed in
incineration. Secondly – as with most waste management methods – incineration
also requires strict sorting at source. So another proposal is to build a modern
waste to energy plant to battle the garbage crisis, and also tackle another epidemic
in Lebanon, energy. Similarly to the garbage crisis, our country also suffers from
one of the poorest electricity supply in the world. A waste to energy plant will
most definitely be a make-or-break. For a country with no natural resources such
as oil and natural gas, the electricity supply depends on purchasing these
resources at enormous costs. A waste to energy plant uses the abundant waste in
our country and turns them to much needed energy and electricity.
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WASTE TO ENERGY LEB
INTRODUCTION
Most waste-to-energy plants burn municipal solid waste, but some burn industrial
waste or hazardous waste. A modern, properly run waste-to-energy plant sorts
material before burning it and can co-exist with recycling. The only items that are
burned are not recyclable, and are not hazardous. Waste-to-energy plants are similar
in their design and equipment with other steam-electric power plants, particularly
biomass plants. First, the waste is brought to the facility. Then, the waste is sorted
to remove recyclable and hazardous materials. The waste is then stored until it is
time for burning. Then the plant combusts the waste directly because it is a mature,
efficient technology. The waste can be added to the boiler continuously or in batches,
depending on the design of the plant. In terms of volume, waste-to-energy plants
incinerate 80 to 90 percent of waste. Sometimes, the residue ash is clean enough to
be used for some purposes such as raw materials for use in manufacturing cinder
blocks or for road construction. In addition, the metals that may be burned are
collected from the bottom of the furnace and sold to foundries. Some waste-toenergy plants convert salt water to potable fresh water as a by-product of cooling
processes. The method of incineration to convert municipal solid waste (MSW) is a
relatively old method of waste to energy generation. Incineration generally entails
burning waste (residual MSW, commercial, industrial) to boil water which powers
steam generators that generate electric energy and heat to be used in homes,
businesses, institutions and industries. One problem associated is the potential for
pollutants to enter the atmosphere with the flue gases from the boiler. These
pollutants can be acidic and in the 1980s were reported to cause environmental
degradation by turning rain into acid rain. Modern incinerators incorporate carefully
engineered primary and secondary burn chambers, and controlled burners designed
to burn completely with the lowest possible emissions.
Fig 1. Waste Management Hierarchy
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WASTE TO ENERGY LEB
Overall goal
Waste management that is sustainable in the long term, with the most extensive
recovery of materials and energy possible and the least possible landfill.
Vision
Waste-to Energy LEB contributes to creating the world’s most sustainable region,
for the present and future generations alike.
Core values
Customer satisfaction through quality and service.
Waste-to-Energy LEB handles industrial and commercial waste, as well as
combustible household waste from municipalities and areas in and around Beirut.
Waste-to-Energy LEB considers waste to be a resource that should, as far as
possible, be reused and recycled.
Waste-to-Energy LEB applies an eco-cycle perspective and the operations are based
on know-how and expertise, and combine several methods in order to treat each type
of waste in the most environment-friendly and sustainable way possible.
Waste is a resource and should, as far as possible, be reused and recycled. Waste-toEnergy LEB strongly encourages waste sorting at the source. The waste is either
reused, recycled into new materials or energy or biologically treated. Only a very
small fraction is landfilled.
Located on the outskirts of Beirut, Waste-to-Energy LEB enjoys a strategic location
that is a center point for all regions. It has an easy access from the north, south, and
east sides of the Mount Lebanon governate.
Waste-to-Energy LEB is responsible for the waste from the region’s households
being dealt with, recycled and treated optimally. Waste-to-Energy LEB also handles
waste from companies as well as other regions. Our core operation and our training
and information initiatives make Waste-to-Energy LEB a strong player on the
market, contributing to a more sustainable society.
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WASTE TO ENERGY LEB
Business development is the department at Waste-to-Energy LEB that acts as a
support and management function for the company’s operations within the area of
the environment.
The Environmental management unit is responsible for the company’s
environmental coordination and operations systems. This means that the unit
develops and maintains procedures and resources with the aim of supporting the
operational business in respect of environmental management, environmental
coordination and risk analyses. This responsibility includes investigations, analyses
and monitoring laws, as well as coordination of the company’s handling of referrals.
Fig 2. Waste to Energy Plant Diagram
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WASTE TO ENERGY LEB
Board of Directors
Marketing
Department
Finance
Department
Environmental
Management
Department
Human Resources
and Training
Department
Business
Development
Department
Factory
Operations Unit
Logistics
Department
Research and
Development
Unit
Fig 3. Organizational Chart
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Truck and Pickup
Unit
Storage Facility
WASTE TO ENERGY LEB
Fig 4. Diagram showing different environmental controls during waste treatment process.
ENVIRONMENTAL ISSUES AND OPPORTUNITIES
Waste-to-Energy LEB encompasses a number of environmental considerations that
range from emission controls to the potential generation of greenhouse gas offset
credits. Potential air emission issues from waste to energy plants include the
discharge of a range of contaminants including dioxins and furans, heavy metals,
particulates, sulphur dioxide and nitrogen oxides.
The adoption of standard operating procedures and modern air pollution control
equipment effectively controls each of the contaminants listed above, ensuring that
the most stringent emissions standards can be achieved (EESI 2009).
Operation of Waste-to-Energy LEB facility can result in reduced greenhouse gas
emissions. One significant area of potential reductions is in avoided emissions
associated with landfilling of waste.
Landfilling of MSW results in the creation and emission of methane as the waste
gradually decomposes. Up to 1.6 kg of carbon dioxide equivalent emissions may be
emitted from each kg of waste landfilled, where there are no landfill gas recovery
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WASTE TO ENERGY LEB
systems in place .On this basis, a Waste-to-Energy LEB facility could result in the
reduction of over 30,000 tons of emissions per year through avoided methane
emissions at the landfill. The actual emission reductions would be somewhat less as
a result of the combustion of non-biodegradable material (ie. plastics). Additional
greenhouse gas emission reductions may result from the displacement of fossil-fuel
generated electricity emissions.
Targeting
The main target for Waste-to-Energy LEB is the Lebanese Government, industrial,
and individual customers. The company aims to develop long term agreements with
the government to be the go-to solution for the garbage crisis in the country, as well
as being a contributor for the improvement of the energy sector. Municipalities,
industrial companies, and households are also our customers. Waste-to-Energy LEB
is providing a solution for the garbage problem related to the above mentioned
targets, and in return also providing electricity from a clean source.
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WASTE TO ENERGY LEB
Place
As mentioned above, the location of the plant on the outskirts of Beirut plays a
pivotal role for accessibility. Logistically, garbage trucks can easily arrive to the
plant to dump their loads, thus gaining time in the process of waste to energy. Correct
placement is a vital activity that is focused on reaching the right target audience at
the right time. Our location provides service for Beirut and Mount Lebanon.
Price
The price set by our finance department reflects a very competitive price in
comparison with local garbage disposal and collection companies. Our pricing
strategy focuses at first on revenue maximization in order to gain the largest market
share possible, and to reduce costs for the long term future. Since the service being
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WASTE TO ENERGY LEB
provided is the first of its kind in the country, and also provides solutions for the
garbage and electricity crisis, consumers will all be willing to use our service.
Promotion
Since Waste-to-Energy LEB will be the first of its kind in the country and in the
region, many news stations, radio stations, newspapers, and TV shows will cover the
processes and operation of the company. Waste-to-Energy LEB will gain nationwide exposure and regional marketing as well. The Marketing department will be
responsible for handling all advertising and also building and maintaining
relationships with our customers. After establishing full operational level in
Lebanon, the advertising gained will help promote the expansion of the company to
nearby countries.
People
Since Waste-to-Energy LEB is a first of its kind in the region, expert knowledge and
management is needed for the startup of operations. European countries have
adopted the waste to energy business and have many experienced engineers and
scientists that will benefit our company. The top managers in the Environmental unit
and Business Development unit will be formed of foreign managers. As for their
teams, Lebanon has no shortage of skilled labor. The human resources and training
department will be responsible for the recruitment of employees to different units of
the company, and also have the task of organizing training seminars for employees.
Process
The company’s operation is to collect garbage from designated locations and drop
them in the garbage pit at the plant. The garbage are processed, then taken into the
combustion chamber. The waste is burned, releasing heat, which turns water into
steam in a boiler. The high-pressure steam turns the blades of a turbine generator to
produce electricity. An air pollution control system removes pollutants from the
combustion gas before it is released through a smoke stack. Ash is collected from
the boiler and the air pollution control system. A truck load of 2000 pounds of trash
will turn into 300 pounds of ash, an 85% reduction in the amount of trash.
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WASTE TO ENERGY LEB
Product/Service
The service provided by Waste-to-Energy LEB is the first of its kind in Lebanon.
The collection of trash and turning them into electricity will not only be useful, but
also convenient and innovative. The value of the service sky rockets in a country
like ours, which is facing seemingly unsolvable issues of garbage and electricity.
Quality of service will be ensured by the experienced foreign engineers and scientists
working at the plant.
Fig 5. Waste-to-Energy LEB Design
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WASTE TO ENERGY LEB
Financial Plan
The most challenging obstacle facing the creation of the plant is financing. The
typical plant with capacity of 400GWh energy production annually costs about 420
million dollars to build. Waste-to-energy plants may have a significant cost
advantage over traditional power options, as the waste-to-energy operator may
receive revenue for receiving waste as an alternative to the cost of disposing of waste
in a landfill, typically referred to as a "tipping fee" per ton basis, versus having to
pay for the cost of fuel, whereas fuel cost can account for as much as 45 percent of
the cost to produce electricity in a coal-powered plant. Lebanon currently has a
maximum electricity-generation capacity of 15.3 billion KHW far less than
consumption of 16.4 billion KHW. Waste to Energy LEB would fill the gap between
maximum capacity and consumption. The funding needed to build the plant will be
acquired from foreign countries in aid programs such as USAid and from the
European Union. As mentioned above, the capital investment required to build the
facility was estimated at US$420 million, and the operating costs at US$22 million
per year. The WTE plant will export to the grid 0.64 MWh of electricity per ton of
waste incinerated, that is, 400 GWh of electricity per year. This electricity generation
will translate into approximately US$66 million revenues per year for the plant. The
next most important revenue source for the plant will be the gate fee, which currently
is US$130/ton, being charged by the garbage collecting company currently in
Lebanon. Other revenue sources for the WTE plant could be sale of metals
recovered, and carbon credits. The plant can charge a significantly lower gate fee of
US$60/ton to encourage business. An inflow of 2000 tons of waste per day generate
a gate fee of US$120,000, which translates to US$43,800,000 in revenues per year.
The revenue from producing 1 GWh is equivalent to US$60,000, US$24,000,000
per year.
A loan of US$430,000,000 from the government with a rate of 5%, for 20 years will
result in one yearly payment of approximately US$34,505,000. Thus, the plant
should have to process a minimum of 1,485 tons of waste per day in order to achieve
breakeven. The daily waste produced in Lebanon amounts to approximately 5,590
tons, of which 70 % is produced in Beirut and Mount Lebanon.
The loan amount represents the complete cost of building the plant, which is US$420
million, and the remaining US$10 million will be used to purchase garbage trucks
and rehabilitate the surrounding infrastructure to facilitate access to the plant.
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WASTE TO ENERGY LEB
Revenue
from gate
fee**(taking
into
consideration
2000 tons
processed
daily)
Year
Operating
Costs*
(including
salaries,
maintenance, Total
Loan
and
Annual
Repayment equipment)
Cost
2020
34,505,000
22,000,000 56,505,000
43,800,000
24,000,000
11,295,000
2021
34,505,000
22,330,000 56,835,000
44,019,000
24,240,000
11,424,000
2022
34,505,000
22,664,950 57,169,950
44,239,095
24,482,400
11,551,545
2023
34,505,000
23,004,924 57,509,924
44,460,290
24,727,224
11,677,590
2024
34,505,000
23,349,998 57,854,998
44,682,592
24,974,496
11,802,090
2025
34,505,000
23,700,248 58,205,248
44,906,005
25,224,241
11,924,998
2026
34,505,000
24,055,752 58,560,752
45,130,535
25,476,484
12,046,267
2027
34,505,000
24,416,588 58,921,588
45,356,188
25,731,248
12,165,848
2028
34,505,000
24,782,837 59,287,837
45,582,969
25,988,561
12,283,693
2029
34,505,000
25,154,579 59,659,579
45,810,883
26,248,447
12,399,750
2030
34,505,000
25,531,898 60,036,898
46,039,938
26,510,931
12,513,971
2031
34,505,000
25,914,877 60,419,877
46,270,137
26,776,040
12,626,301
2032
34,505,000
26,303,600 60,808,600
46,501,488
27,043,801
12,736,689
2033
34,505,000
26,698,154 61,203,154
46,733,996
27,314,239
12,845,081
2034
34,505,000
27,098,626 61,603,626
46,967,666
27,587,381
12,951,421
2035
34,505,000
27,505,105 62,010,105
47,202,504
27,863,255
13,055,653
2036
34,505,000
27,917,682 62,422,682
47,438,516
28,141,887
13,157,722
2037
34,505,000
28,336,447 62,841,447
47,675,709
28,423,306
13,257,568
2038
34,505,000
28,761,494 63,266,494
47,914,088
28,707,539
13,355,133
2039
34,505,000
29,192,916 63,697,916
48,153,658
28,994,615
13,450,356
2040
34,505,000
29,630,810 64,135,810
48,394,426
29,284,561
13,543,177
*Operating costs increase by 1.5% yearly
+**Gate fee increases by 0.5% yearly
***Revenue from electricity generation increases by
1% yearly
Fig.6 Table showing yearly Income Statement and Net Profit
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Revenue
from
production
of
Profit
electricity (before
***
tax)
WASTE TO ENERGY LEB
Analyzing Strengths and Weaknesses
Strengths
Weaknesses
Regular waste collection and establishment
of recycling centers.
Lack of collaboration among waste to
energy stakeholders. Lack of integrated
waste-to-energy value chain. Low
experience in the field
High research capacity and flexibility.
Globally recognized research institutions.
Company stakeholders see technical
colleges and universities as a source of
specialists.
Lack of specialized waste-to-energy
education and knowledge. Local research
institutions and private companies are new
to the subject.
Government supports waste recycling and
regeneration, including production and use
for waste-to-energy.
Low management of waste dumping and
inefficient food waste sorting.
Development of waste-to-energy plants
and recycling go hand in hand to divert
waste from landfilling.
Clearly, the strengths outshine the weaknesses. The lack of specialized knowledge
and collaboration can be solved by outsourcing such experience. Many European
countries have adopted waste to energy for decades, the experience that they
obtained can prove to be very valuable to building the first such plant in Lebanon.
The strengths that this project boasts are very beneficial for a resource-depleted
country. The benefits provided can be the solution for two of the most devastating
issues in Lebanon, garbage and electricity.
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WASTE TO ENERGY LEB
Opportunities
Threats
Good investments in research in waste-toenergy.
Current lack of stable policy
framework and elaborate national
strategy on waste treatment.
Open up new job opportunities to local.
Waste management and treatment
infrastructure is dependent on
people sorting their waste. It takes
time to change people’s habits.
Opening of the market could develop new
foreign trade and business opportunities.
Government corruption can
negatively affect the efficiency of
the plant
Since waste to energy is a new concept in Lebanon and the Middle East, it will attract
many investors as such projects can be very profitable. Many job opportunities will
be created as well. New research fields in universities and research centers will
become available. The attraction of new investors, local and foreign, will develop
new trade lines and business opportunities. Regarding the threats of the waste to
energy project, big responsibilities lie on the government’s shoulders. New
frameworks and strategies must be developed. The people, who have been used to
random waste disposal should become aware of the new waste to energy plan and
change their habits to embrace new sorting and recycling plans, all to their own
benefit. Unfortunately, corruption still plagues our country. Serious efforts and strict
actions must be deployed to avoid contaminating the waste to energy project by
needless corruption.
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WASTE TO ENERGY LEB
CONCLUSION
Building a waste to energy plant in Lebanon would help the country advance in
sustainable waste management. For decades, garbage has been viewed as a crisis and
many governments or social parties never provided a clear and long lasting solution.
With the presence of Waste to Energy LEB, the garbage crisis that has plagued the
country for years can now be solved and turned into an advantage. The waste to
energy plant will provide electricity to cover Lebanon’s shortage of electricity
supply.
The waste to energy plant will export to the grid 0.64 MWh of electricity per ton of
waste incinerated, that is, 400 GWh of electricity per year. This electricity generation
will translate into approximately US$66 million revenues per year for the plant.
The next most important revenue source for the plant will be the gate fee, which
currently is US$130/ton, being charged by the garbage collecting company currently
in Lebanon. The plant will charge a US$60/ton gate fee to attract and encourage the
country to benefit from the plant.
The plant financing is the biggest challenge of building the waste to energy plant in
Lebanon. It will depend largely on securing a loan from the government, or if
possible a loan from the IMF or World Bank, especially with the availability of funds
from Cedar Conference in Paris in April 2018.
Public opposition is a challenge that most countries face when introducing waste to
energy for the first time. Therefore, introducing a public education campaign during
the earliest stages of the project is of outmost importance.
In conclusion, Waste to Energy LEB is a recipe for success. Despite some financial
difficulties to start up, the opportunity is up for the taking. All other factors show
huge promise for the achieving unprecedented success for the project. Lebanon will
be on the verge of economic, social, and international victory, with Waste to Energy
LEB putting Lebanon on the map of innovation and success.
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