Why power generation from landfill gas and biomass is on the rise

Written by: David O'Byrne | Published:
Ortadogu’s Odayeri plant near Istanbul

With a population nudging past 80 million, of whom 75% live in towns and cities, the problem of urban waste disposal in Turkey is an increasingly serious one.

But while there may be no direct Turkish translation of the English adage ‘where there's muck, there's brass’, the idea of making money from waste has taken hold.

Turkey already leads Europe in its development of power generation from biogas and landfill gas, and with interest growing has, according to the experts, still only scraped the surface of the country's potential.

With Turkish towns and cities still expanding rapidly, and the value of suitable land for landfill sites on their fringes at a financial premium, local authorities have been obliged to look for ways to ameliorate the cost and generate revenue.

A 2015 survey by EX Research Institute on behalf of the Japan International Cooperation Agency (JICA) concluded that 40-50% of solid waste collected by Turkish municipalities in surveyed areas was organic, and recommended the development of the various forms of biogas generation.

In fact, by then the Turkish landfill biogas sector was already well under way. The first project received its power-generating licence in 2004, with the first major project – now a 25.4MW plant in Ankara – commissioned in 2006. A 34MW plant in Istanbul was built in 2008, and a steady stream of other projects have subsequently been launched.

At the root of this success has been the rapid liberalisation of the Turkish power sector over the past two decades.

Policy shake up

Regal and regulatory changes have allowed for local authorities to either develop plants themselves, or license the development of power generation facilities, and to sell the power generated.

Further, Turkey's renewable energy law of 2011 first raised guaranteed feed-in tariffs from a blanket 5.5 cents (USD) to 13.3 cents for biogas, biomass and landfill gas plants. From 2013, it added potential incremental increases for plants that use locally produced equipment.

Guaranteed feed-in tariffs for biogas, biomass and landfill gas

The result is that what began as something of a novelty, developed only by the larger, richer municipalities, has quickly become the norm, allowing local authorities across the country to turn costly landfill waste disposal into a source of revenue.

According to data produced by Turkey's Energy Regulatory Authority (EPDK), which issues licences for power generation, the country currently has 31 licensed landfill gas plants, with a total installed capacity of 173MW. A further four projects totalling 28MW hold pre-licences and are awaiting financial closure to be demonstrated.

Localised energy

In addition, the EPDK lists 21 operational above-ground biogas plants totalling 100MW, many developed by or for municipalities to handle either separated organic waste or waste from specific agricultural or industrial facilities that might otherwise have ended up in landfill. There are a further 28 such sites, totalling 155MW, at the pre-licensing stage.

This though is not the whole story. Under Turkey's continuing drive to liberalise energy production, plants of below 1MW no longer need to apply to EPDK for a licence and are allowed to sell their power directly to local distribution grids rather than the national grid.

This concession has eliminated the costly and time-consuming licensing process, making it easier for smaller municipal authorities to establish their own biogas and landfill gas projects. But with no state agency collecting data, it is impossible to establish exactly how many of these smaller plants have been developed or are in development.

As the regulatory environment has eased, so the development of the technological expertise and financial knowhow necessary to develop, fund and implement biogas and landfill gas projects has rapidly expanded.

In the mid-1990s, all Turkish power generation was developed, funded and operated by the state. That figure currently stands at 23%, with private sector companies now developing all new power plants – biogas and landfill gas included.

Municipalities have the option of opening construction tenders and operating the plant themselves, or of licensing the whole process to private sector developers, some of which have considerable experience.

Ankara-based ITC operates a large portfolio of waste management services including nine landfill gas facilities totalling 94.6MW, of which three are in the capital. Meanwhile, Istanbul-based Ortadogu Enerji operates four plants in and around the city; totalling 86.3MW, these include the 34MW Odayeri plant – the country's biggest.

Financial modelling

As with technological experience, so too has financial modelling improved. The greater financial resources and knowhow of Turkey's larger municipalities has enabled them initially to fund development of their own landfill projects. But with many smaller municipalities lacking the resources to manage complex and technical tendering processes, external help has come in the form of the Turkey Sustainable Energy Financing Facility (TurSEFF), a programme for promoting renewable energy and energy efficiency developed by the European Bank for Reconstruction and Development (EBRD) and funded by the European Union.

Established in 2010 to provide financing for sustainable energy and resource efficiency investments in the public and private sectors, TurSEFF has to date helped 17 municipalities develop landfill gas projects through accessing loans and leasing arrangements, totalling €25m in funding from two Turkish banks and the leasing subsidiaries of three other banks.

The projects generate 182GWh a year of useable power, meaning loans can be repaid within four years, with the EBRD actively promoting further development.

"Seminars are being organised for municipalities to discuss sustainable energy solutions, including investing in landfill gas projects," says Emre Oguzoncul, principal manager for climate finance at the EBRD. The EBRD gives municipalities and banks technical assistance to assess the risks, with new projects stringently analysed.

Oguzoncul adds: "All projects financed through TurSEFF will have to comply with the EBRD environmental and social requirements as well as health and safety standards.” With no shortage of interest from local authorities across Turkey, Oguzoncul confirms that the potential for more power generation from landfill gas is very strong, but its full capacity is difficult to predict.

A paper presented at the World Renewable Energy Congress in Sweden in 2011 estimated Turkey's total potential for biogas and landfill gas to be around 56,000MW – this was against the country’s then current total installed capacity of around 85,000MW.

According to Mehmet Gur, head of Ortadogu Group, any municipality with a population of more than 500,000 should be capable of establishing a landfill gas plant – a limit that with easier access to technical assistance and funding should come down.

Oguzoncul claims one of the major constraints on development is the fact that most landfill sites in Turkey are "wild”, meaning they have been designed for cheap waste disposal, leading to higher costs when they are developed for landfill gas.

This though, he explains, is changing. "Those municipalities whose projects we have financed now organise their landfill accordingly, so they can be more easily adapted for electricity generation," he says.

A progress that suggests future landfill gas development in Turkey may happen at an even faster pace than previously thought.

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