• Vol 10, No 6 (2019)
  • Chemical Engineering

Assessment of Waste to Energy Technology in Indonesia: A Techno-economical Perspective on a 1000 ton/day Scenario

Bayu Prabowo, Fidelis Stefanus Hubertson Simanjuntak, Zaki S. Saldi, Yudi Samyudia, Ida Juda Widjojo

Corresponding email: fidelis.simanjuntak@prasetiyamulya.ac.id


Cite this article as:
Prabowo, B., Stefanus Hubertson Simanjuntak, F., Saldi, Z.S., Samyudia, Y., Widjojo, I.J., 2019. Assessment of Waste to Energy Technology in Indonesia: A Techno-economical Perspective on a 1000 ton/day Scenario. International Journal of Technology. Volume 10(6), pp. 1228-1234
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Bayu Prabowo Research and Technology Center, PT. Pertamina (Persero), Jakarta 12950, Indonesia
Fidelis Stefanus Hubertson Simanjuntak School of Applied Science, Technology, Engineering, and Mathematics, Universitas Prasetiya Mulya, Tangerang, Banten 15339, Indonesia
Zaki S. Saldi School of Applied Science, Technology, Engineering, and Mathematics, Universitas Prasetiya Mulya, Tangerang, Banten 15339, Indonesia
Yudi Samyudia School of Applied Science, Technology, Engineering, and Mathematics, Universitas Prasetiya Mulya
Ida Juda Widjojo School of Business and Economics, Universitas Prasetiya Mulya, Tangerang, Banten 15339, Indonesia
Email to Corresponding Author

Abstract
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A techno-economic assessment of the implementation of waste to energy (WTE) technology in Indonesia was performed by simulating the business model of a 1000 ton-per-day WTE facility that satisfied a set of economic parameters. Two types of municipal solid waste (MSW) quality were selected for the case study: (1) Low calorific value MSW, 6860 KJ/Kg-as received, taken from the municipal temporary waste collection station in South Tangerang city; and (2) High calorific value MSW, 8970 MJ/kg-as received, taken from a temporary waste collection point in a residential apartment in Jakarta city. For the low calorific value MSW, the base pricing set of IDR 500,000/tons for the tipping fee and IDR 1500/kwh as the electricity selling price was not economically feasible as it resulted in a negative Net Present Value (NPV), a lower Internal Rate of Return (IRR) than the applied Discount Rate (13%), and a Payback Period (PP) of over five years. It is compulsory to set pricing of either IDR 600,000/tons for the tipping fee or IDR 1750 as the electricity price. In the case of the high calorific value MSW, the base pricing set could be economically feasible as it resulted in an NPV, IRR, and PP of IDR 209.7 billion, 16.38%, and 4.8 years, respectively. Moreover, a reduction in the pricing to either IDR 400,000/tons for the tipping fee or IDR 1350 for electricity may still satisfy the minimum limits of the parameters sets. The results of this study are expected to provide a clearer picture of both the potential and challenges of bringing WTE technology to commercial application, especially in Indonesia.

Assessment; Economic; Incinerator; Municipal solid waste; Waste to energy

Introduction

An increase in human living standards leads not only to greater municipal solid waste (MSW) generated, but also to a shift in its composition toward complex and non-naturally degrading materials such as plastic, glass, metal, and chemical waste. A waste management system capable of handling such large amounts and complex types of waste is therefore important to support the progression of a society. Meanwhile, traditional waste management systems that rely on natural decomposition, e.g., landfill, should eventually be replaced. Inappropriate handling of MSW will lead to health problems and a deterioration of the environment quality. Conversely, a better MSW management system will not only help in solving health and environmental problems but will also generate economic benefits.

Indonesia, with the world’s fourth-largest population (260 million people in 2017) faces a state of emergency with regard to its municipal waste problem. About 64 million tons of MSW are produced annually in Indonesia, more than two-thirds of which is disposed of in landfill sites (Rawlins et al., 2014). The remainder is either composted, open-burned, or left completely unmanaged. Bantargebang, as the main disposal site for MSW from the capital city of Jakarta, accepts 6,561.99 tons/day and is predicted to be overcapacity in 2021 (Dinas Lingkungan Hidup DKI Jakarta, 2019). Various methods can be used to convert waste into energy, such as anaerobic digestion for biogas production (Ariyanto et al., 2017) and pyrolysis of waste rubber tires for fuel oil production (Yang, 2016). Waste can also be converted into valuable products, such as compost materials (Hartono et al., 2015).

To accelerate the application of more sustainable waste management, Presidential Decree no.35 regarding the development of waste to energy (WTE) facilities was announced in 2018 (Presidential Decree of the Republic of Indonesia, 2018). In this regulation, 12 big cities, including Jakarta, Bandung, Surabaya, Makassar, and Bali, are expected to immediately establish environmentally friendly WTE facilities. The regulation also established the cost of a feed-in tariff at USD 13.35 cents and a subsidy from the state budget (APBN) of IDR 500,000 per ton of waste toward the waste management fee (tipping fee).

Currently, there are no commercial WTE facilities in operation in Indonesia, with the exception of a 100 ton/day pilot project WTE facility in Bantargebang (Pebrianto, 2019) and the development of a 2,200 ton/day incinerator in Sunter as the country’s first commercial WTE plant (Dinas Lingkungan Hidup DKI Jakarta, 2018). The establishment of a WTE facility in Indonesia has been held back by various challenges. Of these, economic challenges usually relate to an inadequate electricity feed-in tariff and the tipping fee. Moreover, the characteristics of Indonesia’s waste, which has a high moisture content of up to 60%, may lead to the requirement for an additional pre-treatment facility, thus further raising the costs. The existence of illegal dumpsites as a cheap option for waste disposal (Wisnubro, 2019) serves to make WTE technologies unattractive by comparison. There are also social challenges in the form of opposition from a public concerned about the potential negative impacts of polluting emissions on their health and environment. Such opposition can result in uncertainty around the construction approval process.

In this study, a techno-economic assessment of the implementation of WTE technology in Indonesia was performed by simulating the business model of a 1000 ton-per-day WTE facility. The economic performance of the WTE plant with feeds of low calorific value MSW and high calorific value MSW was analyzed. Moreover, the need to adjust the variables in order to make the technology economically feasible was investigated. The results of this study are expected to provide a clearer picture of both the potential and challenges of bringing WTE technologies to commercial application, especially in Indonesia.

Conclusion

A techno-economic assessment of the 1000 ton-per-day WTE facility was conducted with low calorific value MSW, 6860 KJ/Kg-as received, and high calorific value MSW, 8970 MJ/kg-as received. For the low calorific value MSW, the base pricing set of IDR 500,000/tons for the tipping fee and IDR 1500/kwh for the electricity tariff was not economically feasible as it resulted in a negative NPV, a lower IRR than the applied discount rate (13%), and a PP of over five years. A pricing adjustment to either a tipping fee of IDR 600,000/tons or an electricity price of IDR 1750 is thus essential. With regard to the high calorific value MSW, the base pricing set could be economically feasible as it produced an NPV, IRR, and PP of IDR 209.7 billion, 16.38%, and 4.8 years, respectively. Moreover, a reduction in the pricing to either IDR 400,000/tons for the tipping fee or IDR 1350 for electricity may still satisfy the minimum limit of the parameter set. However, a big challenge lies in maintaining the calorific value of MSW by ensuring the plastic component remains in the waste matrix until it is fed to the WTE plant. These results provide a clearer picture of both the potential and challenges involved in commercially applying WTE technology, especially in Indonesia.

Acknowledgement

The authors gratefully acknowledge the Ministry of Research, Technology and Higher Education of the Republic of Indonesia for its research grant award through PTUPT, Grant No. 493/UN2.R3.1/HKP05.00/2018. 

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