The waste-to-energy (WtE) segment in India has failed to take off in the way it was envisaged.A key reason for this is the inadequate availability of quality waste for power generation. The country generates 55 million tonnes of MSW per annum. Of this, only about 15 per cent can be classified as non-biodegradable, non-recyclable, high-calorific value waste, which translates into about 30,000 tonnes per day (TPD) of waste that can be fed to WTE plants. The total waste treatment capacity of the 48 existing, under-construction and proposed WTE plants is over 37,000 TPD.
Another reason for the slow growth is that the cost of electricity produced from these plants is the most expensive among various sources of power. Compared to Rs 3-Rs 4 per kWh from coal and solar power plants, WtE plants sell electricity at about Rs 7 per kWh. Hence, discoms are not interested in buying such expensive electricity when cheaper sources are available. In fact, if subsidies are removed, the electricity produced from these plants would simply not be affordable.
But is it fair to treat these plants as mere energy generation platforms and compare their tariffs with other renewable and conventional sources of energy? After all, power is only a byproduct of waste management and treatment, not the raison d’etre. In fact, managing and treating waste are a major challenge in today’s world and the lack of waste management is what has led to an increasing number of landfills. These waste piles emit gases, which, if left untreated, can leach into the soil, resulting in the contamination of water sources, plants and food. Also, is it fair to compel discoms to purchase this power at such high tariffs? These utilities are already facing significant financial issues.
If these questions cannot be answered or resolved, it is certainly not fair to expect the industry to be able to successfully implement these projects. In order to resolve this conundrum, several policy and regulatory initiatives have recently been taken at the central, state and municipal levels. Urban development schemes such as the Smart Cities Mission, AMRUT, Swachh Bharat Mission, HRIDAY and PMAY-U have been received well, leading to an improvement in waste handling and treatment.
On the regulatory front, the remunerative tariffs set by the CERC have helped increase investor interest in the segment. A number of states have adopted the CERC’s guidelines to determine state-specific tariffs. Some states have also adopted project-specific norms to determine tariffs, a strategy that has worked in favour of the segment. Interestingly, in 2018, the Supreme Court also intervened to issue a ban on construction activity in several states, stating that they had not come up with any policy for waste management.
This prompted more states to come up with dedicated waste management policies. Further, the Solid Waste Management Rules, 2016, have clearly stated that only segregated non-recyclable, high-calorific waste fractions such as used rubber tyres, multi-layer plastics, discarded textiles and paper are sent to WtE plants.
All these initiatives augur well for the WtE segment. There are already early signs of success with a number of new plants being set up. The challenge now is to build on this momentum.