MARCH 2008

European waste-to-energy market thriving, 100 new plants planned by 2012

Waste management in Europe is no longer a haulage and disposal business. The legislative shifts of the past decade have seen major moves towards the implementation of advanced technology and innovative recycling solutions.

In spite of the importance of waste minimization schemes, as well as recycling and bisological waste treatment, many local and regional authorities currently view waste to energy (thermal waste incineration with energy recovery) as the only viable large scale alternative to landfilling.

According to Frost & Sullivan studies in this sector, the waste-to-energy market in Europe is growing and will continue to do so for at least 10 years. Europe’s waste-to-energy capacity is expected to increase by around 13 million tons. Almost 100 new plants will come on line by 2012.

“Across Europe, the public sector is the traditional owner of waste-to-energy facilities,” explains John Raspin, Energy and Environment Practice Director at Frost & Sullivan. “This is changing, as large-scale investment is required to construct newer, environmentally friendly facilities. It is equally true that the importance of being able to sell profitably the electricity/heat generated from such plants is driving the attractiveness of investment and favoring partnerships with utility companies. Waste-to-energy facilities are increasingly becoming profitable cash generators in their own right.”

The result is that private sector companies are taking a greater responsibility in the sector, although to date investors have been mainly from a background in utilities, engineering and/or technology. At the same time, public sector outsourcing is also on the increase and private sector capital is increasingly being sought.

The waste-to-energy services market supported about 200 to 250 players in 2007. Much of the reason behind this low number (low compared to other waste management service segments) is the use of large centralized facilities in many parts of Western Europe for the incineration of municipal solid waste (MSW). However, the number of companies is growing as the network of thermal units in many countries is expanded.

“The ongoing move away from landfill” concludes John Raspin “is continuing to attract technological innovation and the current leaning towards waste to energy in many parts of Europe is attracting major capital investment with improving opportunities for returns. It is inevitable that we will see further consolidation of the market and that investors from a whole range of backgrounds will continue to be drawn to this sustainable growth market.”