REQUIRED FRAMEWORK AND POLICY CONDITIONS FOR

ENERGY AND WASTE MANAGEMENT TOWARDS

SUSTAINABLE DEVELOPMENT IN ECUADOR

by

Angel Daniel Avad Tapia

ID: 51207667

September 2009

Thesis Presented to the Higher Degree Committee of

Ritsumeikan Asia Pacific University

in Partial Fulfilment of the Requirements for the Degree of

Master of Science in International Cooperation Policy

In the context of the Dual German-Japanese Degree

Master of International Material Flow Management

ii

Acknowledgements

To Michael Knaus, for unmercifully

criticising my work and thus helping me to

improve it.

To Prof. Dr. Peter Heck, for enlighten me

with the supreme vision of sustainable

development.

To others who believe in me.

iii

Certification

I hereby certify this document to be the original and authentic output of the authors

master thesis research work. All sources are duly listed, and mostly consist on published

scientific papers, international organisations reports and published books.

Angel D. Avad Tapia

Birkenfeld, Germany

June 2009

iv

Table of Contents

Abbreviations ...........................................................................................................................vi

Figures ..................................................................................................................................... vii

Boxes ...................................................................................................................................... viii

Executive summary .................................................................................................................. ix

Section I: Introduction and literature review on Energy and Waste ..................................... 10

1. Introduction ................................................................................................................... 11

2. Objectives and structure of the report .......................................................................... 13

3. Energy policy and implementation ................................................................................ 15

3.1. Energy in the world: sources, economics and projections .................................... 15

3.2. Energy policy: efficiency and renewables .............................................................. 21

3.3. Renewable energies: world status and trends ....................................................... 27

3.3.1. A shift towards low-carbon energy systems: technology and financing ....... 34

4. Waste policy and implementation ................................................................................. 38

4.1. State of the art of waste management .................................................................. 38

4.2. Waste management in developing countries ........................................................ 40

Section II: Energy and Waste management in Ecuador: diagnosis and outlook .................... 44

5. Introduction to Ecuador ................................................................................................. 45

6. Current energy situation ................................................................................................ 47

6.1. Current energy policy ............................................................................................. 51

7. Potential for renewable and other sources ................................................................... 57

7.1. Biomass, excluding municipal solid waste ............................................................. 57

7.2. MSW and other waste streams .............................................................................. 58

7.3. Photovoltaic and solar thermal .............................................................................. 60

7.4. Hydroelectric .......................................................................................................... 61

7.5. Wind ....................................................................................................................... 61

7.6. Geothermal ............................................................................................................ 62

7.7. Oil industry gas flaring reduction ........................................................................... 63

8. The need for a National Energy Strategy in Ecuador ..................................................... 65

9. A Framework for a National Energy Strategy in Ecuador .............................................. 68

9.1. Regional/local initiatives under the NES ................................................................ 74

Current waste management situation and policy .................................................................. 77

v

9.2. Sector structure and policy .................................................................................... 77

9.3. Characteristics of waste services ........................................................................... 80

9.4. The need for a National Waste Strategy in Ecuador .............................................. 81

10. Suggestions for a National Waste Strategy in Ecuador .............................................. 83

10.1. Guidelines for IWMS under the NWS ................................................................. 86

10.1.1. Financing ........................................................................................................ 87

10.1.2. Management of different waste fractions ..................................................... 88

10.1.3. Social issues: integration of informal actors .................................................. 90

10.2. Potential for material and energy recovery from waste streams ...................... 92

11. Conclusions ................................................................................................................ 95

Section III: Appendixes and References ................................................................................. 98

12. Appendixes ................................................................................................................. 99

12.1. Status of renewable energy technologies: characteristics and costs ................ 99

12.2. Alternatives to fossil fuels for heating and cooling .......................................... 100

12.3. Kyoto Protocol and carbon markets, emphasis on developing countries ....... 101

12.3.1. Carbon strategies under the Kyoto Protocol ............................................... 101

12.3.2. World carbon trading and carbon funds ...................................................... 102

12.4. Nature of policy instruments ........................................................................... 106

12.5. Biomass to fuels conversion routes ................................................................. 108

12.6. Approach for Regional Material Flow Management initiatives ....................... 109

12.7. A timeline for renewable energies development under the NES .................... 113

12.8. Case Study: Suggested approach for waste management in Guayaquil .......... 120

12.8.1. General information ..................................................................................... 120

12.8.2. Landfill .......................................................................................................... 121

12.8.3. Waste collection ........................................................................................... 125

12.8.4. Waste separation and recycling ................................................................... 126

12.8.5. Special wastes .............................................................................................. 127

12.8.6. Improvement potential for the waste management in Guayaquil .............. 128

13. References ................................................................................................................ 133

13.1. Internet references .......................................................................................... 138

vi

Abbreviations

BCF Billion Cubic Feet

CCS Carbon Capture and Storage

CDM Clean Development Mechanism

(Kyoto Protocol)

CER Certified Emission Reduction

CIS Commonwealth of Independent

States

CMM Coal Mine Methane

CSR Corporate Social Responsibility

CTL Coal-to-liquids

EEG German Renewable Energy Act

EPC Energy Performance

Contracting

ESCOs Energy Service Companies

GDP Gross Domestic Product

GTZ German Technical Cooperation

IEA International Energy Agency

IGCC Integrated Gasification

Combined Cycle

IPO Initial Public Offering

IWMS Integrated Waste Management

System

JI Joint Implementation (Kyoto

Protocol)

LNG Liquefied Natural Gas

LPG Liquefied Petroleum Gas

MFA Material Flow Analysis

MFM Material Flow Management

MSW Municipal Solid Waste

NES National Energy Strategy

NGO Non-Governmental

Organisation

OECD Organization for Economic

Cooperation and Development

OPEC Organization of the Petroleum

Exporting Countries

OTEC Ocean Thermal Energy Conversion

PE Private Equity

PET Polyethylene Terephthalate

POPs Persistent Organic Pollutants

PPP Public-Private Partnerships

PTS Persistent Toxic Substances

PV Photovoltaics

RDF Refuse-Derived Fuel

TOE Tons of oil equivalent

UCG Underground Coal Gasification

UNDP United Nations Development

Programme

UNEP United Nations Environment

Programme

VC Venture Capital

WHO World Health Organisation

vii

Figures

Figure 3-1: World electricity generation by fuel (left); World marketed energy use by fuel

type (right) ............................................................................................................................. 16

Figure 3-2: Power plant performance (mostly coal-fired) ..................................................... 16

Figure 3-3: World energy use in 2005 and annual renewable energy potentials (with current

technologies) .......................................................................................................................... 17

Figure 3-4: Fuel as proportion of the total generation cost .................................................. 18

Figure 3-5: Pros and cons of different electricity sources ..................................................... 19

Figure 3-6: A solar power-intense future energy mix ............................................................ 20

Figure 3-7: Alternative primary energy consumption scenario ............................................. 21

Figure 3-8: Final energy intensity and GDP per capita, 2006 ................................................. 24

Figure 3-9: Renewable energy share of global final energy consumption, 2006 (left) and

Share of global electricity from renewable energy, 2006 (right) ........................................... 29

Figure 3-10: Intensity of primary energy inputs and GHG emissions of gasoline Vs.

bioethanol .............................................................................................................................. 34

Figure 3-11: Global Investment in Sustainable Energy, by Type and Region, 2006 ............... 36

Figure 4-1: Solid waste management hierarchy .................................................................... 38

Figure 6-1: Effective capacity by type of generation, July 2008 ............................................ 47

Figure 6-2: Ecuadorian Energy Grid in 2007........................................................................... 49

Figure 6-3: National electric demand, first semester of 2008 ............................................... 51

Figure 6-4: Structure of the power market in Ecuador .......................................................... 53

Figure 6-5: Prices for renewable energies in Ecuador ........................................................... 54

Figure 7-1: Solar insolation in Ecuador (annual averages) ..................................................... 60

Figure 7-2: Geothermal sites and potentials in Ecuador........................................................ 62

Figure 9-1: Suggested National Energy Strategy for Ecuador ................................................ 74

Figure 10-1: Modalities of waste separation ......................................................................... 89

Figure 12-1: Global Carbon Credit Trading Volume, 2004-2008, US$ billions ..................... 103

viii

Figure 12-2: Examples of barriers and obstacles to the deployment of renewable energy

programs .............................................................................................................................. 110

Figure 12-3: Location of Guayaquil: satellite picture (left) and map (right) ........................ 120

Figure 12-4: Waste expectation at the landfill (1995-2020) ................................................ 121

Figure 12-5: Waste Composition at the Las Iguanas landfill of Guayaquil ....................... 122

Figure 12-6: Filter and pipe system for drainage ................................................................. 123

Figure 12-7: Gas flaring facility at the landfill of Guayaquil ................................................. 124

Figure 12-8: Catchment area of the landfill ...................................................................... 126

Figure 12-9: Purchase prices paid for materials REIPA ........................................................ 127

Figure 12-10: Recycling rate and value for waste picker organisation ................................ 129

Figure 12-11: Flowchart of the Recycling Centre Las Iguanas ............................................. 130

Figure 12-12: Earnings and Mass flows from the combined project in 2012 ...................... 131

Figure 12-13: Fermentation of 60% of the organic fraction of the Mechanical Separation 132

Boxes

Box 3-1: The international financial crisis and renewable energies ..................................... 20

Box 3-2: Technologies for cleaner conventional energy generation ..................................... 28

Box 3-3: Tidal and wave energy ............................................................................................. 31

Box 3-4: Controversy surrounding USA ethanol energy balance ........................................... 33

Box 3-5: Cellulosic ethanol or the future of ethanol production ........................................... 34

Box 3-6: Smart grids ............................................................................................................... 35

ix

Executive summary

The struggle for conventional development of emerging countries like Ecuador can be

replaced by the construction of a sustainable development oriented society. Two of the

main issues to be addressed by a country engaged in that path are the rationalisation of

energy and waste management, by means of a coherent body of policy instruments leading

to the creation of enabling conditions for the market to support sustainable practices.

This paper includes an extensive literature review on the current state of affairs of energy

and waste, including projections of future developments. It also describes the state of the

art of policy and practice of energy efficiency, renewable energies and waste management.

Then it analyses the Ecuadorian energy model and waste situation. It suggests policy

measures for its improvement towards sustainable development, via the creation of a

framework for the development of a National Energy Strategy, with emphasis on renewable

energies. An energy development model from 2009-2020 is also included to illustrate the

possibility of relying on renewable energies in the long term. It also suggests elements for a

National Waste Strategy, as well as for municipal integrated waste management systems; in

tune with the Ecuadorian reality and possibilities. A case study featuring an Integrated

Waste Management System for the city of Guayaquil is included.

Suggested policy measures and energy and waste approaches are based on the literature

review. Energy policy recommendations are based to a large extent on the set of policy

recommendations produced by the 2004 Bonn International Conference on Renewable

Energies, as well as on successful implementations in several countries; including: creation

of enabling institutions and conditions for diversification towards renewable energies,

integration of all policy instruments into a coherent body, exploitation of the Kyoto

Protocol mechanisms, etc. Waste policy recommendations are based on best practice

examples of other countries in the region and the world, nevertheless taking into account

the particularities of the Ecuadorian society; and including: application of the Waste

Hierarchy, material and energy recovery from waste streams, integration of scavengers and

kerbside pickers into new schemes, etc.

10

Section I:

Introduction and literature

review on Energy and Waste

11

1. Introduction

Sustainability, or better sustainable development (definable as the theory and practice of

economic, social and environmentally sound anthropogenic systems), has been a

worldwide concern since at least 1972, when the desirability of its achievement was stated

as a principle by the UNs Stockholm Conference, and ratified in 1992 at the Rios World

Conference on Environment and Development.

Policy is considered one of the main pillars of sustainability, as well as technology and

activities aimed at integrating socio-economic principles with environmental concerns so

as to simultaneously;

maintain or enhance production/services (Productivity)

reduce the level of production risk (Security)

protect the potential of natural resources and prevent degradation of soil and water

quality (Protection)

be economically viable (Viability)

and socially acceptable (Acceptability) (FAO, 1993)

Sustainable development relies on several sustainability-related concepts: sustainable

energy, sustainable agriculture and sustainable consumption and production are among the

most representative, yet other concepts involved are sustainable building, sustainable

waste and water management, sustainable procurement, sustainable technologies and

sustainable transport, etc. In developing countries, energy, waste, agriculture and water

management are among the most critical aspects for development.

Energy security and especially electric independence is a priority for most governments.

Development based upon Gross Domestic Product (GDP) relies commonly on fossil fuels-

driven energy generation, frequently as a state monopoly 1 , whereas sustainable

development relies heavily on distributed, diversified and market-driven sustainable energy

generation schemes.

Waste constitutes, along with energy, water and raw materials; one of the main issues

every country should manage properly in order to develop in a sustainable way. Waste

1 For instance, in Ecuador and other Latin-American countries transmission infrastructure

belongs to the state, as well as large generation projects.

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disposal is considered as a cost centre by governments, but waste could and should be

turned into a resource to generate business opportunities, materials, energy, employment

and other social improvements. Proper waste management is a matter of strategy and

righteous execution. Developing countries face institutional, legal, policy and economic

drawbacks resulting in poor waste management. Nevertheless, economic drawbacks can be

overcome in developing countries by means of policy-instruments, economic incentives,

business initiatives and social inclusion. Municipalities, usually in charge of the local waste,

must develop integrated waste management systems as to deal with waste collection,

treatment, valorisation, disposal, etc; in an economic, social and environmental way.

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2. Objectives and structure of the report

The objectives of this report are: to propose policy-related suggestions for energy and

waste management in Ecuador and to describe suitable state-of-the-art policies,

technologies and potentials in those areas. The boundaries of the study are determined by

the country-specific potentials, the existing and intended technological capability and the

existing financial mechanisms available for Ecuador under the current geopolitical state of

affairs.

Methodologically, the report is based on literature review (secondary sources) and, where

applicable to specific topics, discussions with experts.

The report is structured as follows:

Literature review: state of the art of energy and waste policy and implementation

Energy management in Ecuador: diagnosis and suggestions

o Description of current energy policy and practice

o Description of potentials for renewable and alternative (i.e. associated gas

use instead of flaring) energy development

o Structural suggestions for energy policy in Ecuador: introduction of a

framework for the creation of a National Energy Strategy and description of

regional/local energy initiatives under the suggested National Energy

Strategy

Waste management in Ecuador: diagnosis and suggestions

o Description of current waste policy and practice

o Structural suggestions for waste policy in Ecuador: introduction of a

suggested National Waste Strategy and description of Integrated Waste

Management Systems under the suggested National Waste Strategy

o Description of the potentials for materials and energy recovery from waste

streams

Appendixes, featuring two case studies and assuming realisation of the suggested

national strategies

o A timeline for energy efficiency and renewable energies development until

2020

o A suggested approach for waste management in Guayaquil

14

The ultimate goal of this report is to show the possibilities for Ecuador to work towards a

Circular Economy2 by starting a reorganisation of two of the main economic, social and

environmental-impacting sectors of the society: energy and waste.

2 See Appendixes: 12.6 Approach for Regional Material Flow Management initiatives for a

definition.

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3. Energy policy and implementation

3.1. Energy in the world: sources, economics and projections

According to the International Energy Outlook 2008, the worlds electricity consumption is

expected to increase 50 % between 2005 and 20303. Also, oil prices are expected to steadily

rise, after the temporary peak that took place in 2007-2008. That increasing demand is

expected to be satisfied mainly by liquid fuels (including biofuels), coal and natural gas (EIA,

2008). Those estimations are supported by the reports World Energy Outlook 2007: China

and India insights (IEA, 2007a); and World Energy Outlook 2008 (IEA, 2008)4.

Coal is and it is expected to continue being the main source of primary energy in countries

like China and USA, in the absence of national policies and/or binding international

agreements that would limit or reduce greenhouse gas emissions (EIA, 2008).

Nuclear energy generation is also expected to rise, as a reaction to the fossil fuel prices rise,

GHG emissions concerns and energy security topics (EIA, 2008). Besides, proven reserves of

uranium are estimated to be large enough to sustain nuclear energy for the next three

decades or more (IR59). Several European OECD countries, nevertheless, reject the

proliferation of nuclear energy, mostly due to its lack of sustainability (there is still no

proven solution for the proper disposal of radioactive waste) and negative popular opinion.

Such approach, combined with support for renewable and energy efficiency measures,

contributes to the OECD countries decoupling of growth and energy consumption.

Those reports, as depicted in Figure 3-1, do not foresee a dramatic increase of renewable

energies to the world energy generation (despite, for instance, the European Union targets

of achieving 20 % of renewable energies until 2020). They also predict poor investment in

biofuels and other renewable by country members of the Organization of the Petroleum

Exporting Countries (OPEC).

3 Demand increase is expected especially in countries outside the Organization for Economic

Cooperation and Development (OECD). China and India will be the main contributors to the

demand increase. South American countries are expected a 2 % annual increase (EIA, 2008). 4 Some observers consider the publisher of the International Energy Agency (IEA, the OECD

governments advisor in energy matters) to be partial and, while systematically underestimating

the potentials of some renewable sources of energy, promoting coal, oil and nuclear generation

as irreplaceable (IR51). For instance, the IEA estimates the share of renewable energies to the

total USA energy mix to keep below 13 % until 2030 (Worldwatch, 2009).

16

Figure 3-1: World electricity generation by fuel (left); World marketed energy use by fuel type (right)

Source: (EIA, 2008)

Other sources, like the World Energy Councils 2007 Survey of Energy Resources, agree with

the OECD official forecasts. The report states for instance that fossil fuels (especially coal)

will continue to provide more than 80 % of the total energy demand well into the future,

while predicting increasing importance of so-called clean coal technologies5 (see Figure 3-2)

and Carbon Capture and Storage (CCS) technologies.

Figure 3-2: Power plant performance (mostly coal-fired)

Source (WEC, 2007)

There is a wide range of estimations regarding the scope and speed of renewable sources

contribution to the global energy mix. The IEA estimates a 29 % share of renewable

energies in the global energy mix by 2030, while the Intergovernmental Panel on Climate

Change (IPCC) projects a 30-35 % share by 20306.

5 Like the Integrated Gasification Combined Cycle (IGCC) technology, explained in 3.3.

6 In combination with a carbon price of US$ 50/ton CO2eq.

17

The IEA also estimates that in order to cut the worlds dependency on oil and cut down CO2

emissions by half, US$ 45 trillion (1 % of annual global economic output) would have to be

invested in energy efficiency and renewable energy between today and 2050. That figure is

consequent with the generalised opinion that the transition from a fossil fuels-based

economy towards a sustainable, renewable-based economy involves a strategy that must

include two main aspects: energy efficiency (at the behavioural and technical levels) and a

shift to renewable energy sources (Worldwatch, 2009).

Currently, renewable energies contribute a significant and growing share of the worlds

energy generation. In 2007 renewable energy, including large hydro, generated more than

18 % of global electricity. At least 50 million households use the sun to heat water.

Renewable resources are universally distributed, as are the technologies. While much of the

current capacity is in the industrial world, developing countries account for about 40 % of

renewable power capacity and 70 % of existing solar water heating (Worldwatch, 2009).

Figure 3-3 depicts the potentials of renewable energies.

Figure 3-3: World energy use in 2005 and annual renewable energy potentials (with current

technologies)

Source: (Worldwatch, 2009)

Fossil sources of primary energy are still used (to a large extent and usually in a centralised

fashion) despite the potentials and technological development of renewable energies due

to several factors, including but not limited to the following:

Some renewable energy sources cannot compete in economic terms with coal, gas

and oil because infrastructure for conventional fossil-based generation is more

18

mature, is supported by historical reasons, is perceived as cheaper (when

environmental costs are not internalised) and profits out of economies of scale;

In some biomass applications, as well as in conventional generation technologies,

the input substrate itself contributes largely to the total cost of generation (Figure

3-4 lists the contribution of inputs to the total electricity generation costs of various

energy sources);

Figure 3-4: Fuel as proportion of the total generation cost

Source: (RAB, 2006)

Energy security, economies of scale and availability of inputs are perceived as more

reliable for fossil fuels-based generation;

There are great economic interests tied to conventional fossil fuels-based

generation.

Despite those facts, renewable energies are promising, environmentally sound, and can be

economically competitive and even better than fossil-based energies. See Figure 3-5 for an

assessment of various electricity sources.

19

Figure 3-5: Pros and cons of different electricity sources

Source: (Worldwatch, 2009)

Will ever renewable energies be considered as cheaper, advantages of decentralised

generation based on renewables acknowledged, or sustainability considerations deemed

decisive as for an energy revolution towards clean energy? Perhaps rising oil prices, rising

pro-environmental public opinion, spreading of sustainability practices, new technological

developments and economic events (i.e. the ongoing financial crisis, see Box 3-1) will

contribute for a shift from the current fossils-dominated global energy mix towards a low-

carbon one.

As of March 2009, and since September 2008 (bankruptcy of Lehman Brothers), a process that

started in early 2007 with the mortgage crisis in USA7 has affected all economies in the world.

Nowadays it is called the Financial Crisis, and its impact on energy markets, renewable

energies and other energy-related aspects is subject to controversy. For instance, one

business education service to the gas and electric industry suggests once the markets re-

settle, the financial crisis might benefit the energy business, because of consolidation

opportunities and cheaper assets, governmental invests and the generalised opinion that the

7 A comprehensive timeline can be found in http://timeline.stlouisfed.org/index.cfm?p=timeline.

20

energy business is more secure for private investors (IE52).

Regarding renewable energies, many international sources agree that the financial crisis could

have a positive impact on the development and deployment of new initiatives. Nevertheless,

some sources consider the crisis will reduce energy research and in general favour cheaper yet

emissions-intensive energy (IE53). The immediate effect of the crisis in renewable energies is a

contraction of investment. A recent press release states that investment in renewable

energies in the 1st

quarter of 2009 is at least 44 % lower than the 4th

quarter of 2008 and 53 %

below the 1st

quarter of 2008 and, therefore, recession and credit crunch finally reached

investment in renewable energies, low-carbon technologies and energy efficiency (IE57).

Box 3-1: The international financial crisis and renewable energies

It is foreseen by several sources that in future (post 2050) renewable energies will increase

in importance, due to fossil fuels availability and prices and to technological development

and increasing environmental awareness and pro-sustainability public opinion. For instance,

Figure 3-6 depicts a possible and interesting (yet not ideal) evolution of the global energy

mix until 2100.

Figure 3-6: A solar power-intense future energy mix

Source: (WEC, 2007)

21

Some sources of energy outlooks are more optimistic, for instance, the energy [r]evolution:

A Sustainable World Energy Outlook report suggest a far more sustainable energy future

than the mainstream projections, as depicted in Figure 3-7. For such a scenario to be

possible, a number of assumptions would have to be fulfilled (EREC, 2007):

internalisation of external costs of fossil fuel-based electricity generation;

re-focusing of subsidies from fossil fuels and nuclear energy to renewable energies,

and lowering the market barriers for renewable;

guarantee (priority) access to electricity grids to renewable-based generation, and

implementing renewable quotas;

engage (all countries) in either domestic emission-curbing policies or international

legally-binding emissions limiting agreements;

apply stricter efficiency standards for industrial and household consumption,

buildings and vehicles.

Figure 3-7: Alternative primary energy consumption scenario

Source: (EREC, 2007)

3.2. Energy policy: efficiency and renewables

Energy efficiency is an issue to be taken into account at the micro and macroeconomic

levels due to several reasons: Kyoto protocol objectives8, energy prices and constraints in

energy supply. Developed countries are driven towards efficiency by a combination of

factors such as environmental and supply constraints, cost competitiveness, consumer

awareness, etc. Developing countries, in the other hand, are generally driven in the same

8 Namely, emissions reductions mainly via international investment in GHG emissions-curbing

projects. See Appendixes: 12.3 Kyoto Protocol and carbon markets, emphasis on developing

countries.

22

direction mainly by economic reasons (dependency on oil imports, use of existing supply,

etc). Energy efficiency measures, for instance regarding electricity, would yield the

following main benefits: supply more consumers with the same capacity, avoid peak-

related need for generating capacity increase and reduce the growth speed of electricity

demand and its related required investment (WEC, 2008).

Several aspects intervene in energy efficiency (understood as a reduction in the amount of

energy used for a particular task, service, level of activity), being some technological and

others non-technological: organisational, management, education-related, etc. It is

considered that certain market conditions are to be present for energy efficiency to be

voluntarily sought by consumers. Such conditions include availability of efficient

technologies and appliances, information about those artefacts and commercial plus

financial services related to them. When the information is missing or partial, overall costs

of energy services are not transparent to the consumers, and financial constraints by

consumer prioritise immediate costs of hardware; then implementation of policy measures

is justified (WEC, 2008).

Since the industrial sector represents over 1/3 of both global primary energy use and

energy-related CO2 emissions (for instance, the portion of the energy supply consumed by

the industrial sector is often superior to 50 % in developing countries), industrial energy

efficiency is a main concern worldwide. The list below is representative of the reasons for

industries to engage in energy efficiency (UNIDO, 2007):

Cost reduction;

Improved operational reliability and control;

Improved product quality;

Reduced waste stream;

Ability to increase production without requiring additional, and possibly constrained,

energy supply;

Avoidance of capital expenditures through greater utilization of existing equipment

assets;

Recognition as a green company; and

Access to investor capital through demonstration of effective management

practices.

23

The most common policy instruments used towards energy efficiency are the following

(WEC, 2008):

Labelling and energy standards for electrical appliances (i.e. Energy Star).

Price signals to induce consumers to change behaviour or purchase energy efficient

hardware.

Establishment of energy efficiency agencies, aimed to deliver technical advice to

consumers and policy evaluations to policy makers.

Building codes, including retro-active requirements for existing buildings. Also, for

instance, regulations imposing the use of solar energy on new buildings.

Financial incentives; more focused on tax exemptions (i.e. tax credits, tax

reductions and accelerated depreciation) than on direct subsidies (which are useful,

for instance, as tools to create preliminary conditions for the market to adapt

smoothly to upcoming policies).

Information tools, such as general information campaigns, labelling of appliances,

dwellings rating by energy performance, audits, local information centres,

comparative information (benchmarking), etc. Audits are becoming increasingly

mandatory for buildings and industrial energy consumers.

Energy efficiency obligations, to change the utilities business model from energy

sellers to energy services sellers.

Energy Service Companies (ESCOs) and Energy Performance Contracting (EPC) are

very attractive mechanisms to capture cost-effective energy-efficiency potential

worldwide, mainly because they do not involve either public expenditure or market

intervention.

Transportation-aimed measures, such as car purchase taxes, fuel taxation, road

pricing, CO2/energy efficiency labelling; car Inspection, maintenance and scrapping

programs; support or mandating for biofuels consumption,

Policy instruments for industrial energy optimisation, under the Industrial

Standards Framework9 (UNIDO, 2007). Such instruments would stimulate energy

initiatives involving: by-products and excess heat synergies between processes;

9 The Industrial Standards Framework introduces a standardized and transparent methodology

into industrial energy efficiency projects and practices including: system optimization, process

improvements, waste heat recovery and the installation of on-site power generation. The

Framework builds on existing knowledge of best practices using commercially available

technologies and well-tested engineering principles (UNIDO, 2007).

24

optimisation of pump, compressed air and heat systems; exploitation of plant

design constraints (i.e. maintain limiting machines working close to 100 %, to

minimise unused capacity and maximise plant output), etc.

European countries lead the implementation of energy efficiency measures, while the

former Soviet Union countries10, the Middle East and Africa feature the worst energy

intensity11 ratios (WEC, 2008). It is also observable that both oil imports dependant

developing countries and oil exports dependant countries in general feature high energy

intensity, as shown in Figure 3-8.

Figure 3-8: Final energy intensity and GDP per capita, 2006

Source (WEC, 2008)

Industrial energy efficiency faces specific barriers, namely: systems optimisation for energy

efficiency is mostly learned through case-specific experience; plant engineering initiatives

often lack management support; and industrial optimisation must be a continuous process,

since achieved efficiency gains usually diminish over time. Those considerations lead to at

least two conclusions (UNIDO, 2007):

10

Currently known as the Commonwealth of Independent States (CIS). 11

Energy intensity is a measure of a countrys energy productivity, and is calculated on the base

of national statistics, to show the amount of energy required to create one unit of GDP.

25

Energy efficiency should be integrated within existing management systems, for

instance, linking ISO 9000/14000 quality and environmental management systems

and industrial energy efficiency.

Energy-related target-setting agreements for an industrial sector or the national

industry in general should be made. The most effective agreements are those that

are legally binding, set realistic targets, include sufficient government support

often as part of a larger environmental policy package, and include a real threat of

increased government regulation or energy/GHG taxes if targets are not achieved.

Overall, international experience shows that target-setting agreements are an

innovative and effective means to motivate industry to improve energy efficiency

and reduce related emissions, if implemented within a comprehensive and

transparent framework (UNIDO, 2007).

A number of market and policy mechanisms have been developed over time to make

renewable interesting for investment. The top approach is the promotion mechanism

practiced by Germany and Europe in general, based on feed-in laws and renewable energy

acts. Those mechanisms basically guarantee grid access and competitive prices for

renewable energy generators, and those initiatives-derived CO2 avoidances are counted

towards the national targets. For instance, in Germany, [] approximately 60 million tons

of CO2-equivalents, more than 7 % of Germanys total CO2-emissions, were avoided through

Renewable Energy Act (EEG) installations in 2007 (Langni, 2008).

For certain regions and applications, decentralised renewable generation units based on

locally-available resources are the best choice, while in others large-scale centralised

renewable generation initiatives yield better results12. Policy tools should support both

approaches in such a way that the opportunities are exploited by institutional and private

investors. Countries which have achieved a growing renewable sector usually feature a

national energy strategy, and develop policy instruments in compliance and support of such

strategy.

In developing countries, renewable energies promotion and development is pursued or

should be pursued in the context of an overall energy sector reform, aiming to overcome

12

For instance, credit and electrical infrastructure conditions have historically determined in

Ecuador that large hydropower projects can be only undertaken by the state, while in Germany

distributed smaller-scale biogas-fueled electricity generation is widespread.

26

several structural traits. For instance, goals of energy sector reforms in Latin America are to

(HERA, 2002):

Improve energy efficiency and lower costs,

encourage private investment and abolish states monopoly of the sector,

extend coverage of electric services,

protect the environment,

maximise government revenues (as opposite to the extended practice of

subsidising energy at loss),

improve service quality,

improve consumer-side energy efficiency, etc.

A number of technical, institutional and political constraints curb those initiatives. Best

practice examples in the region suggest that in order to improve the energy sector, a logical

sequence of steps should be followed: establish a sound regulatory framework, restructure

government assets, and organize market rules before privatization occurs and private

investments are encouraged. Also it is recognised that when reforming aspects of the

national energy structure, distribution should be addressed before generation, and once

distribution is commercially viable, competitive wholesale electric markets can be

organised. The underlying idea of that sequence is to provide clear signals for investors to

trust the reforms and engage in initiatives. At the same time, it is considered to allow a

better definition of the governments role in the creation of an enabling environment and

protecting the national interests (HERA, 2002).

To sum-up, the following main initiatives for energy efficiency and maximum exploitation of

renewable energy possibilities are recommended at the public and private levels13:

Deploy solar applications (PV, solar thermal) on every suitable building, at least

aiming to cooling and heating.

Further develop and spread to the largest possible extent of passive and active-

house types of building.

Large scale renewable-based generation, but also smaller, decentralised generation

schemes where applicable and/or no alternatives available.

Intelligent energy supply control systems and economic tools, as to reduce demand

peaks and orchestrate supply by prioritising renewable-based offer.

13

Partially based on (Worldwatch, 2009).

27

Create enabling environments (i.e. policy instruments) for renewable energies to

boom. Integrate renewable energies promotion initiatives within overall national

energy strategies and/or integrated environmental approaches, including waste,

water, energy, etc (UNEP, 2009). Practiced renewable energies promotion policies,

besides feed-in laws, include (REN21, 2007):

o Renewable portfolio standards

o Capital subsidies, grants, or rebates

o Investment or other tax credits

o Sales tax, energy tax, excise tax, or VAT reduction

o Tradable renewable energy certificates

o Energy production payments or tax credits

o Public investment, loans, or financing

o Public competitive bidding.

Some pre-conditions are considered as necessary for policy and market measures to

succeed, among them: incentive prices, an stable institutional framework, systematic set of

measures rather than isolated ones; planning, enforcement and periodical strengthening of

regulations; creation of public-private partnerships (PPP) to reinforce the effect of public

policies, public sector leading by example, integration of energy efficiency policies within

other sector policies (for instance, within a national energy strategy), etc (WEC, 2008).

3.3. Renewable energies: world status and trends

The worlds economy needs energy, as cheap as possible, but also societies have

acknowledged the need for sustainable energy to impact as few as possible the natural

systems that support societies. Therefore, while developing renewable energies,

technological improvements are also developed for conventional polluting energy

generation, as to minimise its impact on the environment (see Box 3-2).

Some developments towards reducing emissions from conventional fossil-based energy

generation (WEC, 2007):

Coal-to-liquids (CTL) industry, developed in coal-rich countries to minimise the impact

on their economies of international oil prices.

Clean coal technologies, centred in optimising plant performance and CO2 capturing,

like for instance, the Integrated Gasification Combined Cycle (IGCC), a coal power

28

advanced technology under which coal is not burnt to produce steam, as

conventionally done, but instead reacted into syngas (hydrogen and carbon

monoxide-based biomass synthesis gas). A gas turbine is then used to generate

electricity, and waste heat recycled to produce steam for a secondary steam turbine.

CCS technologies, whereby CO2 is removed from flue gases (from power generation

and some industrial activities) and injected underground, for instance, into deep

saline aquifers. The IPCC estimates a worldwide storage capacity of at least 2 000

billion tons of CO2.

o CCS technologies and better transportation technologies for natural gas,

combination with renewable technologies, as well as reduction towards

elimination of gas flaring14

are being considered and recommended for a

more sustainable use of gas.

Recovery of Coal Mine Methane (CMM), a relatively large and undeveloped resource.

Coal mines are main sources of methane emissions, and it is estimated that by 2020

CMM emissions will be in the order of 449 Mt CO2e.

Underground Coal Gasification (UCG), a technology that allows gasification in situ of

non-mined coal resources (due to economic or geological reasons) as well as CO2 re-

injection into the ground. Preliminary studies suggest UCG applications could

potentially increase world reserves by 600 billion tons.

Some experts consider oil shales (deposits of sedimentary rocks containing fossil oil

and combustible gas) to be the next source of oil once the existing reserves are

depleted. Currently, technology exists for oil shales exploitation, but environmental

impact of its industrial application would be great. Other experts consider oil sands

containing bitumen and extra heavy oil as of great potential, since the volume of oil

in such presentation seems to be of at least equivalent to the volume of original oil

existing in known conventional oil accumulations.

Box 3-2: Technologies for cleaner conventional energy generation

Renewable technologies15 often depend to a certain extent on promotion policies and

supporting market mechanisms such as voluntary or mandatory emissions constraints-

derived carbon trading, for instance, Kyoto Protocols Clean Development Mechanisms

(CDM) and Joint Implementation (JI). Also, a number of market enabling institutions and

14

Each year over 115 billion m3 are flared worldwide (about 40 billion m

3 only in Africa. Gas

flaring is considered to add about 390 million tons of CO2 emissions per year. 15

Current status of renewable energy technologies is depicted in Appendixes: 12.1 Status of

renewable energy technologies: characteristics and costs.

29

organisations worldwide, national, international, private, PPP, public, etc; contribute with

technical and financial support to the further development of renewables (REN21, 2007).

Figure 3-9 depicts the current shares of contribution of renewable energies to the worlds

consumption.

Figure 3-9: Renewable energy share of global final energy consumption, 2006 (left) and Share of global

electricity from renewable energy, 2006 (right)

Source: (REN21, 2007)

The renewable energy landscape changes continuously. In 2007, over US$ 100 billion was

invested worldwide in additional renewable energy-related capacity, manufacturing plants,

and research and development. Below, some highlights of the current trends in renewable

energies (REN21, 2007):

Renewable electricity installed capacity reached an estimated 240 GW worldwide in

2007, an increase of 50 % over 2004. Renewables represent 5 % of global power

capacity and 3,4 percent of global power generation (not considering large

hydropower, which alone represents 15 % of global power generation).

Renewable energy sources, considering large hydropower, generated in 2006 more

electricity than nuclear.

The largest individual technology contributing to renewable generation capacity is

wind power, which grew by 28 % worldwide in 2007 to reach an estimated 95 GW.

The fastest growing energy technology worldwide is grid-connected solar

photovoltaics (PV), with 50 % annual increases in cumulative installed capacity in

both 2006 and 2007, to an estimated 7,7 GW. This represents 1,5 million

households with rooftop PV grid-connected installations in the world.

Existing solar hot water/heating capacity increased by 19 % in 2006 to reach 105

GWth globally. Rooftop solar heat collectors are used for water heating in nearly 50

30

million households worldwide, and space heating to an increasing number of

homes.

Geothermal energy is increasingly being used in the world. For instance, in 2004 the

worldwide use was about 55 TWh (for electricity) and 76 TWh for direct use

(heating, bathing). Among renewable sources, geothermal competes with

windpower in terms of installed capacity and share of electricity generation. Plants

are highly reliable, reaching capacity factors of over 90 % and suitable for both

base-load and peak power plants. More than 2 million geothermal-powered heat

pumps are used in 30 countries for building heating and cooling.

Renewable energy sources provide electricity, heat, mechanic power and water

pumping for millions of people in rural areas of developing countries. Biogas alone

provides light and cooking power for 25 million households, while 2,5 million

households use PV lighting systems.

Developing countries hold over 40 % of existing renewable power capacity, more

than 70 % of existing solar hot water capacity, and 45 % of biofuels production

(mainly Brazil).

Many countries, regions and cities have introduced targets and quotas for

renewable, including CO2 emissions reductions, solar thermal and PV applications,

biodiesel blends, directives for public green energy procurement, etc.

A large percentage of energy generated is used for heating and cooling purposes,

both at industrial and household levels. Many renewable substitutes for fossil fuels

are available to address heating/cooling needs16.

The Ocean Thermal Energy Conversion (OTEC) technology exploits the temperature

difference between different layers of ocean waters, in tropical and sub-tropical

areas. A 20 C difference is considered as sufficient for OTEC. There are several

technology varieties of OTEC, and it has been estimated that certain floating OTEC

plants would actually result in net CO2 absorption. OTEC technology can be useful

for base load generation, due to the almost constants deep-sea temperature

conditions. Investment is slowly flowing towards OTEC, after some successful

demonstration projects.

Tidal and wave power are ocean-based energy sources yet untapped, but under

research and demonstration stages of development (see Box 3-3).

16

See Appendixes: 12.2 Alternatives to fossil fuels for heating and cooling.

31

Tidal generation is based on the exploitation of tidal currents and the tide-induced cyclic rise

and fall of sea level (tidal range). Only certain points in the planet are suitable for such

activities, where tidal ranges are broad enough. Development of tidal barrage systems (for

tidal ranges) is constrained by high costs, and it is foreseeable that such facilities would be

combined with road and rail crossings, to optimise cost/benefit. Full-scale prototype tidal-

current systems are being deployed in several sites, and will determine the future of that

technology.

Wave generation is the harvesting of the kinetic energy of waves, originally derived from solar

radiation. Several technologies are in R&D stage, with only a fraction of them being tested.

Wave energy is still quite immature, and there is no consensus on a definitive technology.

Box 3-3: Tidal and wave energy

Biomass-to-energy and waste-to-energy are two important trends in energy

generation, given the immense availability of several biomass sources: wood, crop

residues and silage, animal husbandry residues, energy crops, organic leftover from

domestic, commercial and industrial processes; organic fraction of municipal solid

waste (MSW), sewage sludge, etc. Biomass can be used as a source of various types

of energy carriers 17 , namely wood-derived fuels, biogas, biofuels, syngas,

combustible oil, etc.

Energy recovery from biomass and waste yields several benefits: renewable energy,

soil protection (in some cases, for instance by growing Jatropha for plant oil), CO2

sinks, reduction of waste to de landfilled, etc. Biomass and waste use as energy

sources is widely practiced in the world. The top biomass using countries are USA,

Germany and Brazil, adding together more than 45 % of the total generation

(REN21, 2007). Among the most common applications, the following are practiced

worldwide:

o Anaerobic digestion of biomass for biogas production to be fed into

Combined Heat and Power (CHP) engines.

o Biomass and waste direct incineration for energy recovery via steam

generation and heat exchange.

17

See Appendixes: 12.5 Biomass to fuels conversion routes for a relation of various biomass to

fuels conversion routes.

32

o Co-firing of biomass and waste with coal, for generation and industrial

purposes.

o Gasification and pyrolysis of biomass and waste into combustible syngas.

o Distillation of sugar and starch-rich biomass into alcohols.

The global contribution of biomass sources to the worlds energy generation in

2005-2006 was as follows (REN21, 2007):

o Thermal applications of wood energy: 18 EJ of primary energy;

o Black liquor: 2,7 EJ of primary energy;

o Charcoal: 1,4 EJ of secondary or product energy;

o Ethanol: 1,1 EJ of secondary or product energy;

o Electricity: 0,65 EJ of secondary or product energy;

o Biodiesel: 0,3 EJ of secondary or product energy.

One of the main biomass-to-energy applications is production of biofuels (ethanol

and biodiesel), which exceeded an estimated 53 billion litres in 2007, a 43 %

increase against 2005. Ethanol production represented in 2007 around 4 % of the 1

300 billion litres of gasoline consumed globally. Annual biodiesel production had

increased by more than 50 % in 2006, especially in Brazil and USA (REN21, 2007).

There is a public controversy regarding the real impacts of ethanol production and

utilisation (See Box 3-5).

In general, ethanol from sugar cane, in the Brazilian context, is widely accepted to have a

positive energy balance, while ethanol from corn in the USA context is subject to ongoing

discussion regarding its energy balance (depending on the assumptions ranges between

slightly negative to slightly positive).

The majority of scientist in the United States, and from other countries discussing USAs

ethanol (i.e. Pimentel, Shapouri, Wang, etc), found out that the net energy balance of corn

ethanol ranges from negative to slightly positive, but improving over time due to the energy

credits gained from by-products, modern production facilities, normal corn yields and lower

energy use per unit of output in the fertilizer industry as well as advances in fuel conversion

technologies (USDA, 2002).

Since no clear environmental, economical and social advantages of ethanol from corn and

sugar cane can be proven and are also not considered to significantly contribute to a shift

from fossil resources, more efficient and sustainable solutions have to be developed. For

instance, one of the most promising developments in the field of ethanol production is the

33

utilization of lignocellulosic feedstock for ethanol production, currently under intensive

research to overcome the technical obstacles of lignine digestion.

Box 3-4: Controversy surrounding USA ethanol energy balance

Biofuels researchers suggest the future of ethanol lies on cellulosic ethanol,

obtainable from numerous (often waste) materials (See Box 3-5).

Since cellulosic ethanol can be obtained from lignocellulosic feedstocks such as straw, wood

residues, greenery waste, miscanthus, switchgrass, paper, or cardboard; this kind of ethanol

features several advantages as compared to conventional ethanol from corn, soybean or sugar

cane and beets (Farrel, 2006):

the possibility to use residual and waste materials offers a widespread availability

and abundance;

lignocellulosic materials do not compete with food production and no precious

agricultural land is necessary for the cultivation since no special soil qualities are

required;

intensive agriculture is not necessary;

utilization of the entire plant materials; and

low cost of raw materials.

possibility of energy recovery from lignin for the distillation process and heating

energy.

Lignocellulosic materials are composed of cellulose (C6-sugar, glucose), hemicellulose (C5-

sugar, xylose and arabinose), and lignin. Due to the fact that hemicellulose (C5-sugar) is not

directly fermentable, special production processes including a pre-treatment have to be

implemented in order to make use of the entire energy content of the specific feedstock.

After the pre-treatment which liberates the cellulose from its lignin seal and turns the

hemicellulose into individual, fermentable sugars through an acid hydrolysis, special yeast

cells are necessary to ferment the glucose, xylose and arabinose. The fermentation is followed

by a distillation process in order to separate ethanol from remaining water (Farrel, 2006).

Overall, cellulosic ethanol achieves a five times better energy balance than corn ethanol and

also offers a more realistic chance to substitute considerable amounts of fossil fuels in the

future. The main barrier for its spreading is that, up to now, no cost-effective production

process has been developed; and thus costs for pre-treatment technologies and for research

and development of the specialised yeast cells for fermentation remains high (Farrel, 2006).

34

Figure 3-10 shows the intensity of energy inputs per MJ of fuel as well as of the net GHG

emissions per MJ of fuel of standard gasoline Vs. several bio-ethanol types.

Figure 3-10: Intensity of primary energy inputs and GHG emissions of gasoline Vs.

bioethanol

Source: (Farrel, 2006)

Box 3-5: Cellulosic ethanol or the future of ethanol production

3.3.1. A shift towards low-carbon energy systems: technology and

financing

Globally, the following renewable energy sectors have been pointed to as key by the 2009

World Economic Forum at Davos: on-shore and off-shore windpower, PV, solar thermal for

electricity generation, MSW-to-energy, sugar-based ethanol, cellulosic and next generation

biofuels; and geothermal power (WEF, 2009). Those renewable energy sources are

considered to contribute to a world-wide shift from fossil fuelled, polluting energy systems

to low-carbon energy systems.

In addition, several enabling tools/approaches have been developed to facilitate the shift to

a low-carbon, more sustainable energy system worldwide: financial tools, feed-in laws and

other policy instruments, energy efficiency, smart grids, cheaper energy storage18; and CCS

technologies to reduce the environmental impact of fossil fuels-based generation (WEF,

2009).

18

Currently, the cost of storing 1 MWh of electricity ranges from US$ 50 to US$ 180, depending

on the technology used

35

Development of renewable energies should be combined with other tools, as to make the

shift possible. For instance, renewable decentralised generation is combinable with smart

grids as for peak curbing, as explained below:

One of the main issues of electric generation and distribution is the occurrence of

peaks, time or event-driven surges in demand that force electricity generators

and distributors to develop additional installed capacity.

Renewable generation, due to its frequently distributed nature, is quite useful

to, in combination with other peak-curbing measures such as habits change,

contribute to peak demand fulfilment.

Renewable energies ideally would be used for base load demand, while

conventional generation to compensate peaks, but in practice, and by means of

intelligent grids or smart grids, renewable energies can act as buffers and

compensation resources for a regions electric supply management. See Box 3-6 for

insights on smart grids.

Intelligent grids are electric grids improved with smart metering devices, bi-directional

communication (to pulls and push telemetry data) and advanced control systems and

applications (IR56). Smart grids are sensible systems which can self-regulate and re-distribute

power from excess points to deficit points. They allow large scale and small/distributed

renewable generation facilities to be connected, and use them as peak-compensating

mechanisms. It has been described that, if electric vehicles are massively integrated within

intelligent grids, the vehicles can serve as both consumers and providers, when they sell back

to the grid (on profit) the electricity stored in their batteries, when the grid is at deficit (IR56).

Additional mechanisms can be used with smart grids and smart devices, for instance, to relate

the level of consumption to a predefined per kWh rate, and consequently turn off and on user

devices according to peak load conditions.

Box 3-6: Smart grids

Carbon markets, mainly derived from the Kyoto Protocol, constitute one of the main

financial tools for the shift. The underlying idea is to price carbon (emissions), as a way to

stimulate low-carbon technologies, strategies, projects and, ultimately, investment19.

19

For an understanding of carbon markets and Kyoto Protocol, see Appendixes: 12.3 Kyoto

Protocol and carbon markets, emphasis on developing countries.

36

Carbon markets and other mechanisms, combined with public awareness, etc; have

boosted investment in renewable and efficiency technologies and initiatives. Investment in

renewable energies was US$ 70,9 billion in 2006, which represents a 43 % increase with

respect to 2005 (UNEP, 2007). Other sources mention an overall investment of US$ 93,3

billion in 2006 and US$ 148,4 billion in 2007 (WEF, 2009). Nevertheless, investment in

renewable is still policy-driven worldwide, and many countries feature specific and selective

market supporting mechanisms (i.e. EUs feed-in laws, USAs and Brazils biofuels programs).

Energy efficiency is also a growing investment target, attracting US$ 1,1 billion in 2006

(UNEP, 2007).

From early 2009, the world financial crisis has reached the sector, and investment has

contracted (IR57). Nevertheless, as of February 2009, from the approximately US$ 2,8

trillion in stimulus packages deployed globally, more than US$ 430 billion are related to

solar, wind, energy-efficient solutions, power storage, biofuels, carbon trading, diversified

renewable, investment companies and building insulation (HSBC, 2009). Figure 3-11

indicates the global investment in sustainable energy by type and region for 2006.

Figure 3-11: Global Investment in Sustainable Energy, by Type and Region, 2006

Source: (UNEP, 2007)

37

To summarise, among the top state of the art concepts and related technologies,

approaches and policies (especially in Europe, leading region in terms of energy

management), the following contribute to an important extent to the shift to low-carbon

energy systems:

Carbon trading

Feed-in laws

Intelligent grids

Promotion of waste-to-energy, certain variations of biomass-to-energy, windpower,

geothermal, solar thermal applications and PV.

38

4. Waste policy and implementation

4.1. State of the art of waste management

Europe leads the policy and practice of waste management in the world, by demonstrating

in practice that waste management can be not only an economically productive activity, but

also that it can be performed in an environmentally sound way and that the whole society

of a region can be involved.

It is widely accepted that the best approach to waste management relies on the waste

management hierarchy (depicted in Figure 4-1; other versions mention avoidance

/prevention before source reduction or minimisation). This sustainable hierarchy suggests

waste should be addressed as a source of resources, both materials and energy, and that

the whole societys involvement is required for proper waste management.

Figure 4-1: Solid waste management hierarchy

Source: (IR35)

Among the most common state of the art concepts and related technologies, approaches

and policies practiced (especially in European and other developed countries, and in

compliance with the waste management hierarchy), the following are top notch:

Integrated environmental approaches, including waste, water, energy, etc (UNEP,

2009).

39

3R initiatives via policies and public awareness/education, resulting in: take-back

systems, implementations of the polluter-pays principle, Design for Recycling,

Extended Producer Responsibility, etc (IR55).

o Legislation and Corporate Social Responsibility (CSR) concerns had led main

companies (especially trans-nationals with presence in Europe) to engage

in more sustainable production, resource use and waste management. A

manifestation of that attitude is the theory and practice of Design for

Recycling.

o Separation at the source is achieved by a combination of legislation and

enforcement, environmental education and civic commitment.

Waste to energy, the concept of gaining energy from waste and at the same time

reducing volume before disposal. Two main implementation of such principle are

anaerobic digestion of solid waste and sewage sludge and incineration of waste

with energy recovery. Other conversion technologies for energy recovery include

pyrolysis and gasification, both aimed to obtain syngas (IR54). Those technological

approaches yield electricity and excess heat (which can and should be used for

applications, i.e. industrial purposes).

Policy (and its enforcement) is the main enabling factor for sustainable waste management.

There are many waste management programs in the world being financed and/or

promoted by main international institutions20, and reflecting those institutions policy

approaches to waste management (involving the waste management hierarchy). Among

the policy recommendations promoted by those institutions are the following (UNEP,

2009):

Supporting the 3R Initiative, adopted at the G8 Summit in 2004 and officially

launched at the 3R Ministerial Conference in Tokyo in 2005 to promote the

importance of reduce-reuse-recycle (3R) for sustainable development.

o Promoting Cleaner Production.

20

Main international institutions engaged in waste management initiatives are: Asian

Development Bank (ADB), European Bank for Reconstruction and Development (EBRD),

Organization for Economic Cooperation and Development (OECD), Secretariat for Basel

Convention (SBC), United Nations Development Programme (UNDP), United Nations

Environment Programme (UNEP), United Nations Human Settlements Programme (UN-

HABITAT), United Nations Industrial Development Organization (UNIDO), World Bank (WB), etc.

40

o Building capacity, via intensive training packages, for local governments on

development and implementation of Integrated Waste Management Plans

with focus on 3R.

Supporting policy frameworks to promote Integrated Solid Waste Management

(see 10.1 Guidelines for IWMS under the NWS).

o Encouraging the creation of National Waste Strategies, as to make possible

the enabling environment and policy situation necessary for sound waste

management systems.

o Encouraging and supporting integrated solutions for environmental issues,

such as Sustainable Materials Management (SMM), featuring integrated

material, product and waste policies and addressing environmental impacts

over the whole life-cycle of materials and products.

o Regulate trans-border transportation of waste, including harmonisation

between the OECD control system and the Basel Convention guidelines.

Supporting the creation of commercialised structures based on full cost recovery

for operations and maintenance.

o Supporting demonstration projects, especially on waste-to-energy

initiatives and methane capture systems.

o Improving urban waste management, with focus on the collection and

disposal of municipal and industrial solid wastes.

o Financing a large varied portfolio of solid waste initiatives.

4.2. Waste management in developing countries

Waste management in developing countries, and even in some economies in transition, is

characterised by four main traits: inadequate service coverage and operational inefficiency

of services, limited and usually informal recycling, final disposal without energy or material

recovery, and inadequate management of hazardous and healthcare waste (Zurbrugg,

2003).

Moreover, the main characteristics of solutions usually proposed and implemented in

developing countries are the following (Medina, 2005):

Centralized and un-diversified, because they generally try to deploy a single

solution for complex waste-generating urban environments.

41

Bureaucratic, since such solutions are usually enforced top-down, without public

consultation.

Capital-intensive approaches, because they involve advanced imported technology,

which does not reflect the existing conditions in the target region21; such as waste

compactor trucks, or final disposal via incineration.

Formal, a particularly social-impacting trait, by which conventional solutions only

consider the formal sector, while ignoring the potential contributions of the waste

informal sector (kerbside pickers, scavengers, etc).

In addition, conventional solutions consider waste management as a disposal

problem rather than as a materials flow management one. Those solutions aim to

maximize collection rates and upgrade facilities for final disposal, and thus ignoring

the waste management hierarchy, which emphasises 3R approaches.

Adequate, sustainable waste management involves several approaches. For instance, in

Europe, and due to policy measures such as landfill restriction directives, it is applied the

waste hierarchy (see Figure 4-1) and thus reducing, reusing and recycling (3Rs) practiced

before resource recovery, incineration for energy recovery and landfilling. In Japan,

recycling of certain fractions is mandatory and the remaining fractions are incinerated

towards volume reduction (usually without considerable energy recovery). In many

developing countries, waste management involves only joint collection, street sweeping

and dumping the waste (either in a proper sanitary landfill, but very frequently in an

uncontrolled dumpsite). Nevertheless, such a situation is changing, and developing

countries are creating strategies and policy instruments to proper manage waste. The main

obstacles are usually declared to be of economic nature, but they include political and

social-idiosyncratic factors.

Some successful initiatives, depicting the state of the art of waste management as feasible

for developing countries, are setting a benchmark for those societies that cannot afford

investment-intensive approaches; for instance22:

Neighbourhood collection systems (based on source separation, sometimes NGO-

organised, sometimes including either decentralised composting or vermi-

composting). A variation of this could involve collection of organic fractions only,

21

Nevertheless, high technology-based solutions are sometimes economically feasible. 22

Partially based on (UNEP, 2003).

42

from households and restaurants, to feed pigs (ideally after some stabilisation

process, i.e. thermal, to prevent spread of diseases).

o Practiced by the Clean-Green Project in Metro Manila and several

organisations in Bangalore and other Indian cities.

Corporate sector support to separation at source initiatives, for instance, as CSR

initiatives.

Neighbourhood or district low-tech labour intense sorting plants, requiring a

collection system in place. It could even be escalated to the municipal level, by

means of municipal manual sorting plants.

Private or Municipal composting facilities related to dumpsites23.

o Like the Cau Dien plant in Hanoi, the Karnataka Compost Development

Corporation in Bangalore and the vermi-composting private company Terra

Firma Biotechnics also in Bangalore.

Assistance to waste dealers, scavengers, kerbside pickers and recycling industries to

engage in associations, collaboration and more effective collection.

School separation and other programs for public education, which can generate

revenues for the school and spread awareness. This could include collection of

household waste oils for biodiesel production.

Municipal-driven separation at the source, which has proved difficult especially

among the most economically depressed population, but if combined with

incentives can work out.

o Initiatives in Curitiba and Goinia, Brazil.

Several best practice initiatives of combined approaches in developing countries can be

used as starting point (after careful historical performance analysis) for new initiatives, for

instance:

The Chilean Marga-Marga region, composed by several municipalities, is currently

developing an integrated waste management solution which involves mechanical

and biological treatment of MSW, a waste-to-energy solution for organic fractions

via anaerobic digestion and biogas production, a post-composting process to yield

23

Composting should be considered with extreme care, because depending on the scale and

other factors can turn out harmful (due to emissions), expensive (due to energy and

infrastructure requirements) or simply not suitable to process large amounts of MSW.

43

soil ameliorant, integration of marginalised scavengers and kerbside pickers into

the scheme as to deal with some separation stages and recycling, etc. The whole

scheme will be feasible by itself, and as of May 2009 a treatment cost of 14

euro/ton is being discussed. Innovative financing of the project involves contracting

and targeting European development aid funding, among other fundraising

approaches24.

Los Baos, Laguna, in Philippines, combines several of these approaches: from 2004

the local dumpsite was turn into an ecological waste processing center featuring

segregation at source, unloading of bio-wastes, final sorting of bio-waste,

composting, and shredding of residual wastes, specifically plastics. Besides,

informal waste collectors and kerbside pickers where officialised into a peoples

organization and their significance to the community has been recognized and the

local government conducted massive information, education, and communication

campaigns (Atienza, 2008). In practice, this system still fails to process the whole

MSW generation of its target region, but at least represents a starting point for

better waste management in the region.

Another integrated initiative featuring several approaches is the Belo Horizonte

waste management strategy and practice since 1993. The technological component

features differentiated collection systems, three materials recovery plants, two

construction debris recycling plants, a composting plant, and the conversion of the

BR-040 landfill to an anaerobic bioreactor landfill which will extend its life from 2 to

18 years. The other components of this approach are continuous modernisation

(capacity building) of the system and continuous promotion of citizen participation

(WB, 1997). Also a multidisciplinary team was formed by the municipality to engage

in mobilisation work with many social groups and waste pickers were successfully

integrated within the collection of recyclables (and their quality of life enhanced in

several ways, including education), in combination with a drop-off system (Dias,

2000).

24

From discussions with IfaS project managers involved in the Marga-Marga project, January-May

2009.

44

Section II:

Energy and Waste

management in Ecuador:

diagnosis and outlook

45

5. Introduction to Ecuador

Ecuador is a small South American country (approximately 2/3 of Germany) sharing borders

with Colombia and Peru, and encompassing (after a history of border conflicts with Peru) a

land area of 256 370 km2 (IR1). The country possesses four differentiated natural regions,

namely Coast, Andean Region (highlands), Amazonian Region, and Galapagos Islands. This

geographical variety provides diverse climates: dry, cold, temperate, tropical and tropical-

humid. Ecuador also features 2 237 km of coast line, and two main country-wide seasons:

rainy and dry.

Population was estimated as of July 2008 in more than 13 900 000 inhabitants. GDP per

capita was US$ 7 200 in 2007, and more than 58 % of GDP is derived from the services

industry (IR1). More than 60 % of population lives in urban areas, and more than 45 % of

the total population lives under the poverty line (according to United Nations standards).

Ecuador is an exporter of raw materials, mainly oil, bananas, cut flowers, cacao and shrimps.

The countrys dependence on oil exports is dramatic: i.e. oil exports accounted for 60 % of

foreign revenues in 2006 (Pelez, 2007). Nevertheless, as the country lacks refining capacity,

is a net importer of refined oil products, namely gasoline, diesel and liquefied petroleum

gas.

After the economic depression and collapse of the banking system in 1999, Ecuador

adopted the US Dollar as its national currency, somehow stabilising inflation but depriving

the country from the possibility of having its own monetary policy. The country depends

heavily on annual exports to finance its budget, and has profited from the oil prices in the

last years. The current government is intensely investing in infrastructure by using the

special government accounts that historically accumulated oil revenues.

Ecuador relies largely on hydroelectric generation for the national electricity supply and on

oil for other primary energy. Due to seasonal effects on the water reservoirs, hydropower is

complemented by conventional thermal generation and even electricity imports from

neighbouring Colombia (Pelez, 2007).

Regarding waste management, the best practice approach is sanitary landfills, but most of

the municipalities (waste management responsibility is municipal) feature only open or

46

controlled dumpsites (WHO, 2002). There is a National Water and Sanitation Policy, related

also to MSW-derived water contamination, but unsuccessfully designed and implemented.

The following chapters will describe thoroughly both the energy and waste situations in

Ecuador.

47

6. Current energy situation

In 2004 the country produced 10,73 MTOE of primary energy25, where more than 82 % was

from oil and only 14 % from renewable sources, mainly hydropower which constitutes the

second largest source of energy (Pelez, 2007). Regarding electricity generation, 45 %

(Pelez, 2007) to 46,6 % (CONELEC, 2008) of it is until today produced by hydropower,

while the difference is based mostly on oil-driven conventional thermal generation

(RECIPES 2006). Figure 6-1 depicts the effective electric capacity, by type of generation.

Figure 6-1: Effective capacity by type of generation, July 2008

Source: (CONELEC, 2008)

The countrys large hydropower generation potential is largely exploited and further

developed. The main problem is the sensibility of