An EfW plant dedicated to burning unprocessed MSW is most likely to export its surplus heat by fixed pipe to an adjacent heat user. The heat user could be a public or private sector entity with a substantial heat load. Heat can be exported from the EfW plant in the form of steam or hot water, whilst the generated electricity will be exported to the grid.
While there are a number of EfW with CHP plants operating in this mode, the approach suffers from certain rigidities, in particular the difficulty of securing adjacent sites for heat production and heat use, the captive nature of the heat use (via fixed pipe) which can cause financial difficulty in the event of failure of the heat taker and securing planning consent at the outset.
Many of the principal costs arising in relation to delivery of a fixed pipe CHP scheme are the same as an electricity only EfW scheme. However, there are certain additional costs associated with the simultaneous supply of power and heat, including costs relating to:-
• the extra turbine;
• the distribution of heat (pipe work and heat exchangers); and
• any requirement to have stand-by heat supply in place.
Any capital costs relating to the heat distribution network which are incurred during the construction of the EfW will feed into the initial funding requirement and hence the subsequent debt service obligation. As a result these capital costs will be amortised over the loan life and the EfW gate fee will reflect this level of debt service.
In other cases, the installation of the heat network may well proceed after the construction of the EfW plant in which event these costs would need to be financed separately against the covenant of the heat taker/user.
The production and distribution of heat will necessarily reduce the level of electricity generated and hence the income receivable from the electricity off-taker. However, there will be a new income stream from heat users and via the forthcoming Renewable Heat Incentive, and whilst certain aspects of the incentive are yet to be finalised it is expected that this will provide a means of offsetting any fall-off in electrical efficiency associated with heat extracted from the steam turbine for export to a heat customer.
The practicality of building new heat infrastructure while at the same time delivering an EfW plant will need to be considered case-by-case in terms of cost, timing and financeability. Examples of projects configured for CHP using unprocessed MSW include Sheffield and Nottingham.