Energy Emerges from Waste

The Sudokwon Landfill Management Corporation (SLMC) put in Korea’s first bid for a Mechanical Biological Treatment (MBT) contract last month.

The corporation employees were surprised to find that major Korean construction companies such as Daewoo, Hanwha, Lotte, and Halla participated in the bid, though it was only an exploratory project led by the government. After fierce competition, the bid went to a consortium that included Taeyoung, Posco, and SK Construction.

MBT is a new treatment system that picks out burnable waste amid municipal solid waste to make refuse-derived fuel (RDF) to extract “biogases” from food waste.

Kim Jeong-shik, the head of the resource business team of SLMC, said, “RDF and biogases can be used as a source of energy. The government plans to expand the MBT project. That is why big corporations are interested in the area as a new business item.”

Waste is now emerging as a second source of energy. High oil prices and numerous environmental regulations are encouraging the solid waste energy business.

The Reincarnation of Waste-

The solid waste energy business involves turning domestic and industry waste that used to be sent to incinerators or landfills into energy sources such as coal or oil.

RDF, which Korea produced for the first time last year, is a typical example of solid waste energy. Heatable materials like plastics or wood are lightly processed to produce RDF and it is used as fuel at electric and cement plants. Some experts say that its maximum heat output is equivalent to that of coal.

Kim Byeong-hun, an official of the Environmental Ministry, said, “The government plans to increase its MBT capability from the current 80 tons a day to 1,200 tons by 2012. By doing so, we can save a maximum of 150 billion won a year.”

Europe and Japan have already been using the MBT facility. Since 1999, when EU curbed burying burnable waste at landfills under landfill burial guidelines, it saw a dramatic increase in the production of MBT, from 1.38 million tons in 2000 to 13 million in 2005.

Selling electricity or hot water generated by waste heat coming from incinerators is now a new, robust business.

“The sales of electricity and heat from municipal solid waste incinerators increased 7.7 billion won in 2001 to 60 billion last year,” said Lee Yong-hyeon, the board member of Kolon Construction. “Waste heat steam used to be dumped due to higher production costs as opposed to electric prices. Soaring oil prices have made waste heat profitable.”

Waste Is Money, Say Businesses-

Domestic companies are eager to dominate the environment-related market, such as waste or water treatment facilities. The Environment Ministry built the first MBT in a landfill in the metropolitan area recently, and plans to construct more than eight facilities by 2012.

Taeyoung Construction said, “The domestic construction market is now saturated, but the environment market has vast opportunities.”

Posco also began a new business that generates electricity from RDF in Busan last month. Experts say that it will make electricity that about 40,000 households can use.

Posco said that it expects to receive 20 billion won a year from Busan City government in waste treatment fees and make 17 billion won per year by generating energy.

International environmental regulations are also forcing businesses to focus on the waste energy sector.

South Korea is likely to be forced to cut greenhouse gas emissions starting 2013 under the Kyoto Protocol. So businesses can secure carbon credits by investing in the environment businesses.

SK Energy has built and run a methane (a kind of greenhouse gases) retrieval facility in Ulsan and gained carbon credits of 40,000-50,000 tons.

Posco has also earned an expected 125,000 tons of carbon credits thanks to the Busan waste treatment project.

Local governments can no longer dump organic sludge to nearby sea between August 2008 and 2011 under the London Treaty.

Lee Yong-hyeon of Kolon Construction said, “Many local governments are planning to build facilities that turn organic sludge into biogases. Lots of businesses are participating in facility replacement projects.”

Kim Byeong-hun at the Environmental Ministry said, “There is little demand in RDF because of prejudices against waste. Maintaining the equal quality of waste energy is important as well.”