Navigant Research Blog

Rise of Megacities Brings Waste-to-Energy Opportunities

Mackinnon Lawrence — March 1, 2012

In a recent article in the Guardian profiling the rapid rise in the number of cities home to more than 10 million people, Paul Webster and Jason Burke explain that the scale and speed of urbanization worldwide have reached unprecedented levels.  Estimates to be published in Pike Research’s forthcoming waste-to-energy (WTE) report indicate that the global population living in urban areas will reach 4.5 billion in 2022 – nearly one billion more than in 2011. 

According to some experts, the number of such “megacities” will double over the next 10 to 20 years.  Less well-known cities, particularly in south and east Asia, will see the biggest growth.

China is in the midst of a well-documented urbanization stampede.  Visiting Beijing five straight years in the early 2000s, I observed the scale of construction and expansion firsthand.  Highways were laid down in weeks and a forest of construction cranes dominated the skyline.  During that time, Beijing’s famous ring roads (now numbering 7) rippled outward, swallowing up the surrounding areas and transforming hastily-built residential settlements into massive steel, glass, and concrete multi-use high-rises. 

Last month, Chinese authorities announced that for the first time more than half of the country’s population lives in cities.  Current estimates put the total urban population at 691 million, more than double the entire U.S. population.  This number is projected to reach at least 800 million by 2022, according to Pike Research estimates, or enough people to populate 80 megacities.  In 2011, there were just 27 megacities worldwide. 

An inevitable byproduct of urbanization, and the corresponding consumerism that accompanies it, solid waste generation is projected to increase in lockstep with megacity growth over the next decade.  Again, China leads the way.  Pike Research analysis shows that municipal solid waste (MSW) in China will reach 472 million tons annually by 2022, or 17% of global estimates. 

As in most of the world, most of this waste ends up in landfills.  Globally, some 73% of all MSW is either landfilled or dumped in open pits.  Without landfill gas capture, these sites are notorious producers of methane gas (CH4), a greenhouse gas nearly 64 times more potent than carbon dioxide (CO2).

Waste-to-Energy (WTE) technology, which can extract the valuable energy contained in waste streams for the production of electricity and heat, offers an attractive alternative.  WTE facilities, the bulk of which are combustion plants, currently treat an estimated 205 million tons of MSW a year in urban areas worldwide.  This represents just 11% of the MSW treated around the world in 2011.  Nearly 40% of global WTE capacity is currently concentrated in the EU, which has been the outright leader in waste management and landfill diversion.

The growth of megacities in China and elsewhere presents an important opportunity for the bioenergy industry, which, as I discussed in an earlier post, is on the hunt for low-cost feedstocks for renewable power and oils.  As a number of advanced thermal early stage companies have recognized – Plasco Energy and Greenlight Energy Solutions on the power side; Enerkem, Fulcrum Bioenergy, and Solena Group for fuels – MSW is a vastly underutilized resource and low-hanging fruit option in the advanced feedstock pool.  Available at negative cost – companies get paid to process the waste – MSW can address many of the challenging obstacles associated with bioenergy feedstocks, including high cost, aggregation, and proximity to end markets. 

Facing an avalanche of garbage, China is on the march to expand installed WTE capacity, and could be followed by Brazil, India, and other developing countries if sufficient political and economic will materializes.  Already proving to be particularly adept at large-scale infrastructure build-outs, China is projected to increase its existing capacity base by at least 250% over the next decade.  The country already accounts for 14% of global WTE capacity today.  That number could grow significantly over the coming decade.

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