PPPs Tap into Landfill Gas for Power Generation

PPP UkraineUkraine inherited a highly inefficient and polluting solid waste management system upon independence in 1991. It has been struggling with its garbage ever since. A recent World Bank study reports that Ukraine generates over 17 million tons of waste per year. Its waste recovery rate is alarmingly low — about 5 percent. The rest ends up landfills or illegal dumps near cities, posing health and environmental risks. Regardless of future government actions and potential changes in consumer behavior, Ukraine needs to significantly expand its landfill capacity.

The Ukrainian government has taken some important steps to foster a legislative environment that will improve the processing and recycling of waste. Encouragingly, cities have recognized that tapping landfill gas for power generation is an effective part of comprehensive solid waste management system. The USAID funded Public Private Partnership Development Program (P3DP) is in the forefront of this movement, helping two cities — Vinnytsia and Ivano Frankivsk — introduce biogas technology as part of their comprehensive solid waste management systems through public-private partnerships (PPPs).

Value in Vinnytsia

Vinnystia, a city of 370,000 in south-western Ukraine, plans to decommission its existing landfill and generate electricity from its landfill gas, which mostly consists of methane — a greenhouse gas with over 21 times the impact of CO2. The project will generate and sell electricity using biogas that is currently flared. The proceeds will be used to recultivate and close down the landfill once its capacity expires.

The municipality has completed feasibility studies and expects to be ready for tender in 2014. An independent study showed that the project could attract up to $3 million in private sector investment, generate $5 million in tax revenues, and reduce gas emissions of nearly 460,000 tons of CO2.

The idea is catching on. After visiting the site in Vinnytsia, the Governor of Ivano-Frankivsk, championed the initiating of a similar PPP in his own region. A feasibility study is underway and is expected to be completed in late 2014.

The Demonstration Effect

With approximately 100 landfills in Ukraine suitable for extraction and utilization of landfill gas, the demonstration effect has the potential to be replicated across the country. If this becomes an ingrained aspect of Ukraine’s solid waste management system, Ukraine’s landfill gas utilization will ultimately contribute to more efficient and environmentally friendly use of the country’s resources.

Other benefits include:

  • Lower costs. The high cost of gas in Ukraine is a drain on local budgets. Business is uncompetitive and municipalities do not have the necessary funds to address infrastructure needs.
  • Greater energy independence. Ukraine imports most of its natural gas from Russia, making it vulnerable to geopolitical pressure. Harnessing landfill gas will reduce the need for imports.
  • Opportunities for small business. Local Ukrainian businesses will have greater opportunities to participate in the solid waste and energy sectors.
  • Reduced greenhouse gas emissions. Ukraine is a leading contributor to carbon emissions on a per capita basis. A study by Bio, an engineering firm, estimates Ukraine could save the equivalent of 6 million tons of CO2 annually by using landfill gas.

With improving solid waste management as a top priority for the Ukrainian government, this is a good time to demonstrate how PPPs can improve the collection, processing and disposal of solid waste throughout the country. PPPs bring private sector investment for infrastructure and public services, as well as new technologies and managerial skills that play a major role in increasing energy efficiency and mitigating climate change. Landfill gas PPPs could lead the way, forming an integral component of a sustainable solid waste management program.

This article was originally published in Handshake: Waste & PPPs.

Solid Waste Tariffs: Encouraging Sustainable Investments in Landfills

SWM PPP Ukraine

Ukraine generates 17 million tons of waste per day, but only recycles 4 percent of it. More than half its 6,000 dumpsites are uncontrolled, posing environmental and health risks such as groundwater contamination, rodents, disease, and emissions of methane – a potent greenhouse gas. An improved tariff system is needed to encourage private sector investments in solid waste services and through public-private partnerships. P3DP is working with the National Commission on Regulation of Public Utilities to develop a rational, clear and consistent tariff methodology for landfills.

Ukraine has the potential to significantly reduce greenhouse gas emissions, increase waste recovery rates, and contain environmental and health risks by reforming its solid waste management sector.  A good place to start is tariffs: under the current system, landfill operators have little incentive to invest in needed improvements.

P3DP’s international SWM experts, Chris Shugart and Peter Faircloth, presented a proposed Solid Waste Disposal Tariff Methodology at a roundtable discussion organized by the National Commission for the Regulation of Public Utilities on November 12. Once finalized, the methodology will become a key strategic pillar for better regulation of the SWM sector in Ukraine. This work complements efforts of the World Bank and other international agencies to support low-emission development strategies in the sector.

A national tariff methodology opens the door wider for public-private partnerships, which can attract private sector funding, technology and expertise to the sector. This will lead to improved landfills that adhere to global best practices, support Ukraine’s efforts to transition to lower greenhouse emissions, and ensure that landfill post-closure care protects the environment and public health.

Valeriy Saratov, Head of the National Commission, opened the roundtable by stressing the importance of solid waste management in Ukraine’s development.  He noted the importance of USAID’s support in general and P3DP specifically. In addition to P3DP’s contributions to improving legislation, policy and regulation, two of P3DP’s pilot PPP projects, in Vinnystia and Ivano-Frankisk, focus on the SWM sector.

Knowledge Sharing in Action: Ivano-Frankivsk Governor Visits P3DP Biogas Project in Vinnytsia

Landfill GasGovernor Mykhailo Vyshyvaniuk of the Ivano-Frankivsk Region visited Vinnytsia this week for a first-hand look at P3DP’s pilot PPP landfill biogas extraction project. The project aims to generate power from landfill gas at a municipal landfill. The energy produced will reduce the need for power from more polluting sources, reducing carbon emissions by an estimated 20,000 tons and increasing Ukraine’s energy independence.

This municipal cross-learning study tour is an excellent example of how P3DP facilitates knowledge sharing on the role of PPPs in energy efficiency and renewable energy in Ukraine. P3DP’s Tatiana Korotka, Nelia Makary, and Alexandra Chalaya facilitated the event.

The idea for the study tour came up in September, when the Governor visited P3DP’s offices in Kyiv to discuss a biogas extraction project in Ivano-Frankivsk. P3DP-supported tests indicated that there are sufficient gas emissions at a municipal landfill in Ivano-Frankivsk to generate electricity.  Under a PPP, the city plans construct power lines from the site to the grid and enter into a PPP with a private operator to build and operate a power generating facility. The total investment could reach $3 million and generate 10 new jobs.

P3DP, as transaction advisor to both projects, presented key topics during the visit. These included information on best-practices in landfill management, including biogas extraction; social, economic, financial, and legal implications of the project, and environmental issues such as the Kyoto Protocol, green tariffs, energy-efficiency and related taxes. The roles and responsibilities of private operators  in such PPPs were also discussed.