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ASSESSING THE OVERALL SUCCESS OF THE WASTE-TO-ENERGY PROJECT

Johan Chua International School [email protected]

Received: 14 March 2020 Revised and Accepted: 8 July 2020

Abstract— Many years after the Payatas Waste-To-Energy plant began operations, its success has not been fully gauged. This project in Payatas was the first ever waste-to-energy project of the , becoming an internationally recognized waste-to-energy model. To allow stakeholders to fully understand the overall success of the project and for future reference for similar endeavors, the environmental, economic, and social impacts need to be assessed. This paper focuses on objectively gauging the success and the positive impacts of the plant rather than its overall sustainability which many other papers have done. It will utilize a variation of the Babu, et al Framework, and indicators which include methane emissions reduction index, energy produced, internal rate of return, local revenue, wage disparity index, and health effects to analyze each aspect of the project. The social impacts are measured using a newly devised scheme that caters to landfill sites. The scheme recognizes the presence of a trade-off between job opportunities and physical health in communities like Payatas, and accurately provides a comprehensive understanding of the overall social welfare of the residents. This research found that the overall environmental impacts were moderately successful; the economic impacts were evaluated as extremely successful, and the social impacts were evaluated as moderately successful. Overall, the plant yielded greater benefit on the economic side than on the environmental and social aspects. Ultimately, the project was deemed an overall success and a worthwhile endeavor.

Index Terms— Payatas Waste-To-Energy, Philippines, Pillars of Sustainability, Sustainable Waste Infrastructure,

I. INTRODUCTION The served as the main garbage disposal site of , the largest city in the Philippine’s . With about 500 daily truck trips a day, this landfill received 1470 tons of municipal solid waste (MSW) everyday, and sustained some 6000 waste pickers whose only source of income was to collect and resell materials from the dumpsite. Originally an open dumpsite, it was converted to a controlled disposal facility after a lack of proper oversight and management resulted in the devastating Payatas landslide of 2000 that claimed 218 lives and caused an instantaneous fire due to the overwhelming concentration of methane gas that further injured many others. This tragedy as well as the implementation of the Clean Development Mechanism (CDM) under the Kyoto Protocol, which introduced the awarding of carbon credits to developed countries who invested in renewable energy projects in developing countries, paved the way for Quezon City’s Payatas Landfill Transformation Program. In February 2007, the Quezon City Government signed a 10-year contract with Italian company Pangea Green Energy, Inc to build the infrastructure necessary to capture, process, and flare landfill gas, especially methane, for energy, thus transforming the iconic wasteland into an internationally recognized and the Philippine’s first waste-to-energy model. This paper aims to assess the success of the Quezon City Controlled Disposal Facility Biogas Emission Reduction Project, or the Payatas Waste-To-Energy project. We identified the need to measure this project’s overall success through the environmental, economic, and social impacts and their balance in order to allow stakeholders to fully understand the plant’s benefits and weaknesses, which should be considered when proceeding with similar future projects in the Philippines or any other developing country.

II. METHODOLOGY In this paper, a variation of the Babu, et al framework will be used to measure the project’s success [1]. This framework constitutes the three Pillars of Sustainability, analyzing the social, economic and environmental impacts of the project. In addition, various assessment schemes will be used within each individual pillar. For the environmental pillar, we utilized the Methane Emissions Reduction Index indicator. For the economic pillar, we employed the Energy Produced, Internal Rate of Return, and Local Revenue indicators. Lastly, for the social pillar, we applied the Wage Disparity Index, analyzed Health Effects, and included community initiatives that arose as a result of the project. To be considered truly successful, the project’s impacts should maintain balance

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by benefiting all three pillars to the same extent. After completing the computations and standardizing each indicator, analysis and interpretations of these results will be discussed, and the overall performance evaluated using the Elwakil et al Subjectivity Performance Scale [2]. This scale ranks performances on five levels: extremely unsuccessful, moderately unsuccessful, neither successful nor unsuccessful, moderately successful, and extremely successful.

III. RESULTS I. ENVIRONMENTAL IMPACTS Methane best represents the deleterious environmental effects of the landfill gases as it is the most potent and prevailing pollutant emitted from MSW decomposition. Therefore, we used the methane emissions reduction indicator to assess the environmental impacts. The plant’s annual average methane emission reduction is 116,339 CO2e metric tonnes per year [3]. According to the Philippine Environment Monitor 2001, MSW accounts for 173 gigagrams of methane each year in Metro Manila [4], which is equivalent to 4,325,000 metric tonnes of CO2e each year. Equation (1) will calculate the methane emissions reduction index, where 0 represents an ineffective project and 1 denotes a perfectly effective project.

(1)

This emissions reduction index of 0.027 may initially seem low and inefficient, but taking into account that this plant is saving 2.7% of the MSW methane emissions from the entirety of the Metro Manila region, its contributions to methane reduction efforts can be considered significant. However, the potential for increased efficiency is revealed through a Pangea representative who disclosed that only 20% of the methane extracted from the dumpsite is actually used to fuel the electricity generator due to plant operation limitations from a low generator capacity [5]. As the remaining 80% is simply converted to carbon dioxide, this not only wastes the methane resource, but also risks increasing the carbon dioxide pollutant in the area. But even without maximizing this potential, the plant is already reducing overall methane emissions, meaning that this unused potential will only benefit future operations. Thus, it is determined that the environmental aspect of the project is moderately successful.

II. ECONOMIC IMPACTS The economic impact of the project can be assessed through the indicators of energy produced, internal rate of return, and local revenue. Due to the many stakeholders involved, it is important to consider the project’s economic impacts on each partner. Pangea wants this project to produce electricity to sell and maximize their profits⁠—hence the first two indicators⁠—and the Quezon City government is benefiting from a share in profits⁠—hence the latter indicator. A. Energy Produced Table 1: Energy Produced Data [6] Year Capacit Power Gross Energy Net y Used Plant Electricit Utilized Electricity (MW) Operation y by Project Delivered to (hours/ye Produced (Kwh) Grid (Kwh) ar) (Kwh) 2007 1.00 8,000 8,000,000 69,456 7,930,544 2008 1.00 8,000 8,000,000 69,456 7,930,544 2009 0.96 8,000 7,656,640 69,456 7,587,185 2010 0.71 8,000 5,674,644 69,456 5,605,188 2011 0.52 8,000 4,199,944 69,456 4,130,489 2012 0.39 8,000 3,114,566 69,456 3,045,110 2013 0.29 8,000 2,312,329 69,456 2,242,873 2014 0.21 8,000 1,710,652 69,456 1,641,196 Averag - 8,000 5,600,000 69,456 - e

Table 1 shows that the power plant produces an average of 5,600,000 Kwh annually. However, upon closer inspection, we observed a declining gross electricity produced within the last 10 years due to a diminishing

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capacity used. We modelled this decline using (2): the exponential decay function

(2) where is the number of years after 2008. We determined the absolute minimum capacity used (M.C.U) for this plant is the capacity value when the gross electricity produced (G.E.P) is equivalent to the constant electricity utilized by project (E.U.P), or when the plant’s net electricity production is zero. This minimum can be calculated using (3), where P.P.O. is the power plant operation.

(3)

Substituting 0.008682 into (2) yields a time of 16.58565 years, or the year 2024, until the plant contributes absolutely nothing to the Metro Manila powergrid, assuming no repairs or enhancements are made to the plant. The 5,600,000 Kwh annual electricity output is substantial for the community, covering the demand of the facility, surrounding street lights, and basic power needs of nearby residential areas [7]. The concern is the productivity of the project in the long-run, as the plant won’t be able to sustain the demand it has previously met during its peak production. However, this should not disadvantage the evaluation of the project as the official Project Design Document form [6] already reported that the expected operational lifetime of the project is 10 years, far shorter than the calculated 16.5 years until termination. Therefore, the energy produced can be concluded as extremely successful due to the quantity and relatively long duration of production that will sustain the community.

B. Internal Rate of Return Table 2: Internal Rate of Return Data [3] IRR IRR with without CER CER Revenue Revenue Parameters Units Value Value Investment costs € 1,386,000 1,386,000 Operation & Maintenance €/Year 95,670 95,670 costs (first 2 years) Operation & Maintenance €/Year 180,670 180,670 costs (from 3rd year) Electricity exported (10 years) MWh 42,000 42,000 Electricity exported (x year) MWh 5,250 5,250 Exchange Rate EUR/P 0.01618 0.01618 HP Electricity price MWh PHP 4,867 4,867 Electricity price MWh EUR 78.75 78.75 Project Life Year 10 10

Annual expected emission tCO2 N/A 116,339 reductions (CERs) Predictable CER price €/CER N/A 10 Average Annual CERs € N/A 1,116,339 revenues PROJECT IRR N/A -6.11% 59.8%

Internal Rate of Return (IRR), as shown in Table 2, is calculated to determine the attractiveness of a long-term investment. A project can be considered a good investment if the IRR is greater than the rate of interest that might be earned from alternative investments. To standardize this indicator, the 7.10% yield of The Philippines

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10 Years Government Bond during the year 2006, when the project was being conceived, is used as a benchmark. Without the Certified Emission Reductions (CER) revenue, this project achieves an IRR of -6.11%, well below the 7.10% minimum, meaning that the investment costs far outweigh the returns generated through electricity sales. Thus the project is deemed not viable. However, including CER revenue increased the IRR to 59.8%, making this project a worthy investment. Therefore, the project IRR can be evaluated as extremely successful.

C. Local Revenue In addition to the economic impacts on Pangea Green Energy, the power plant’s effects on the Quezon City government should be considered too. As part of the agreement for using Quezon City resources to fulfil foreign carbon credits under the Kyoto Protocol, Quezon City is receiving a share of Pangea’s CER profits [5].

Table 3: CER Price Range Data [5] CER Price Range (In Euro Donation to Quezon City (in per Tonne) percentage) 6.00 – 7.00 15 7.01 – 8.00 16 8.01 – 9.00 17 9.01 – 11.00 19 11.01 – 13.00 21 13.01 – 15.00 23 15.01 – 17.00 25 17.01 – 20.00 28 20.01 - up 32

Since information on Pangea’s CER price was limited, the €10 CER price estimation from Table 2 was used. According to Table 3, with a CER price of €10, Quezon City would earn 19% of Pangea’s profits. This is highly beneficial to Quezon City as these shares in profit are completely free. In addition to this donation, Pangea Green Energy is also consuming the local government’s unwanted resource of MSW methane. Thus, this local revenue can be considered extremely successful.

III. SOCIAL IMPACTS Due to the lack of a social welfare framework that fully encompasses the unique situation and conditions of life on a landfill, we devised a new system. In this paper, social welfare is composed of the trade-off between financial stability and physical health, which were deemed the two most influential determinants for living locations in the landfill community. For Payatas residents, this decision is a tradeoff between 1) choosing to live in a healthier environment away from the dumpsite but lacking a source of income or 2) be more financially stable but live in harmful conditions. The two indicators of wage disparity index and health effects will be used to measure the social effects.

A. Job Opportunity and Income Analysis The Payatas dumpsite serves as a major source of livelihood for more than 5000 individuals who make a living by collecting and selling recyclable materials from the dumpsite [8]. The power-plant has generated job opportunities with higher salaries that have prioritized Payatas residents in the hiring process. To measure this improvement, 1) the average wages of waste pickers before the plant was introduced and 2) the increased wages of residents employed by the plant will be compared to the average minimum wage of the Philippines between 2005 to 2014 of 435 pesos [9] using (4):

(4)

Table 4: Wage Disparity Index Explained Wage Meaning Explanation for the average Disparity income in Payatas: According Index to the Payatas Poverty Alleviation Foundation, 0 insufficient

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income nearly half the residents earn less than 4,000 Philippine pesos a month (Kote, 2013). 0.3 bottom half in This translates to income in 131.506705198 pesos a day Payatas assuming there are 30.4167 days in a month. Using Equation 4, this yields a wage 1 acceptable disparity index of 0.30231426482. 1 > relatively well- off

Waste-pickers earn an average of 200 pesos per day [10], thus using (4):

(4)

With this project, those who continue scavenging can expect to earn the same income. However, those who are hired by Pangea for low level jobs will receive higher salaries. We used the salary of a Pangea security guard for the average improved wage because it best represented the type of work scavengers would be hired for. A security guard at the dumpsite earns around $200 a month, which amounts to 333.67 pesos a day, assuming the US to PHP conversion rate is 50.75 and there are 30.4167 days in a month, thus using (4):

(4)

Although those employed by Pangea will still earn salaries that are below minimum wage, this increase of 0.31 points on the wage disparity index from 0.46 to 0.77 is a very significant improvement in income for these scavengers. However, Pangea realistically won’t have the capacity to hire all 5000 scavengers, and can only employ a portion of the scavenging community. Thus, due to the lack of quantity in jobs provided, the job opportunities and increased incomes arising from this project can be considered moderately successful.

B. Health Effects Since Payatas has disproportionate levels of methane from the decomposition of MSW, the physical health effects on residents due to the excess methane is important to consider. To measure this, the typical composition of landfill gas in Payatas [8] will be compared to the baseline composition of the average composition on Earth according to data from the University Corporation for Atmospheric Research [11].

Table 5: Percent Composition of Earth and Payatas Percent Percent Difference in Component Composition Composition Percentage in Payatas on Earth Points 44.99983 – Methane 45 – 60 0.00017 59.99983 Carbon 39.965 – 40 – 60 0.0350 Dioxide 59.965 73.084 – Nitrogen 2 – 5 78.084 76.084 19.947 – Oxygen 0.1 – 1.0 20.947 20.847 Sulfides, Disulfides, 0 – 1.0 Negligible N/A Mercaptans, etc Ammonia 0.1 – 1.0 Negligible N/A Hydrogen 0 – 0.2 0.00005 0.00005 –

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0.19995 Carbon 0 – 0.2 Negligible N/A Monoxide

From Table 5, the most noticable differences between the atmospheric compositions of Earth and Payatas is that the methane and carbon dioxide levels in Payatas are 45 to 60% and 40 to 60% percentage points, respectively, higher than they should be. Long-term exposure to methane has been proven to cause cardiovascular, respiratory and neurological problems such as epilepsy, pneumonia, and heart problems [12]; and too much CO2 exposure is known to cause disorientation, convulsions, unconsciousness, coma, and death [13]. As the plant contributes to restoring a more normal composition, the risk of suffering these negative health effects are slightly reduced, but not fully alleviated. Therefore, due to the prevailing health concerns, the project’s impacts on physical health can be considered moderately successful.

C. Community Benefits It is also worthy to note the following initiatives and benefits that arose from Pangea’s project: 1. Plantsahan Ng Bayan: residents can iron their clothes at an ironing station at no cost 2. Energy to power perimeter lights of the dumpsite to reduce crime 3. Energy to power street lamps in neighboring barangays These projects have long-lasting positive impacts on the underserved residents and thus can be determined as extremely successful.

III. CONCLUSION For the Payatas Waste-To-Energy project, improvements can still be made on the environmental and social aspects of the plant, something that companies and governments should keep in mind when engaging in these types of endeavors in the future. Specifically, future companies should focus on improving the productivity and longevity of the plants and local governments should continue to find ways to integrate the underserved residence into these projects. Ultimately, this research has proven that the Payatas Waste-to-Energy project can be deemed an overall success and a worthwhile endeavor. The lessons learned from this project should be considered when planning future waste-to-energy plants.

IV. REFERENCES [1] Babu, G. L., Lakshmikanthan, P., & Santhosh, L. G. (2016). Assessment of Landfill Sustainability. Sustainability Issues in Civil Engineering Springer Transactions in Civil and Environmental Engineering, 257- 269. doi:10.1007/978-981-10-1930-2_15 [2] C. (2018, September 17). Clean Energy in Quezon City: A Wasteland turned into a Waste-to-Energy Model. Retrieved June 05, 2020, from https://www.c40.org/case_studies/clean-energy-in-quezon-city-a- wasteland-turned-into-a-waste-to-energy-model [3] CDM, C. (2006). PROJECT DESIGN DOCUMENT FORM (CDM PDD) - Version 03.1. [PDF]. Payatas: United Nations Framework Convention on Climate Change. [4] Elwakil, E., Zayed, T., & Ammar, M. (2012). A Framework for Performance Assessment of Organizations. International Journal of Architecture, Engineering and Construction, 1(4), 199-212. doi:10.7492 [5] Endo, J. (2017, March 30). The mountain of garbage that blights the Philippine capital. Retrieved June 06, 2020, from https://asia.nikkei.com/NAR/Articles/The-mountain-of-garbage-that-blights-the-Philippine- capital [6] Frantz Law Group. (2017, January 05). Frantz Law Group, APLC. Retrieved June 05, 2020, from https://www.frantzlawgroup.com/blog/2017/january/methane-gas-an-invisible-danger/ [7] Kote, G. V. (2013, January 29). Manila's waste scavengers are integrated into the recycling chain. Retrieved June 05, 2020, from https://www.theguardian.com/world/2013/jan/29/manila-philippines-recycling- payatas [8] Mitsubishi, M. (2004). PNOC EC Payatas Landfill Gas to Energy Project in the Philippines [PDF]. Philippines: Mitsubishi Securities Clean Energy Finance Committee. [9] PANGEA. (2007). Pangea Environmental Management Plan [PDF]. Philippines: Pangea Green Energy Philippines, Inc. – Landfill Gas Energy Project. [10] Philippines Daily Minimum Wages 1989-2019 Data: 2020-2022 Forecast: Historical. (2010). Retrieved June 05, 2020, from https://tradingeconomics.com/philippines/minimum-wages [11] Renewable Fuels Association. (2015). CARBON DIOXIDE EXPOSURE EFFECTS – FACT SHEET. Retrieved June 05, 2020, from https://ethanolrfa.org/wp-content/uploads/2016/02/Module-2-Handout-CO2- Adverse-Health-Effects-Fact-Sheet.pdf

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[12] Serrona, K. B., & Yu, J. (2006). Waste-to-Energy Development in Metro Manila, Philippines: The Case of Payatas Landfill Gas Recovery Project. Graduate School of International Cultural Studies, Tohoku University, Sendai, Japan, 67-69. [13] Tumamao-Guittap, G., Ramos, L. V., & Corsame, M. E. (2017). Methane Recovery Facility in Payatas: A Partnership between the Quezon City Government and Pangea Green Energy, Inc. doi:10.13140 [14] UCAR. (2015). Earth's Atmosphere. Retrieved June 05, 2020, from https://scied.ucar.edu/shortcontent/earths-atmosphere [15] World Bank, W. (2001). Philippines Environmental Monitor 2001 [PDF]. Philippines: World Bank.

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