January 2, 2013, Ottawa - Congratulations to Ottawa mayor Jim Watson and the city's council for one of the boldest renewable energy moves in 2012. By signing a long-term waste supply contract with Plasco Energy Group, they have made a solid win-win move for company and community.
By Scott Jamieson
In explaining the city's support for the project in a blog back in late 2011, Watson did not mince words. "No one wants the next landfill anywhere near their neighbourhood. Nor
does anyone around this table want to think about where they will find
the quarter of a billion dollars required to locate and build the next
landfill facility in our city."
So what is the risk to the city? Short term, there appears to be no risk. Plasco developed the technology and tested it at the commercial pilot scale without direct investment from the city. They will scale up to full commercial, consuming almost 110,000 tonnes of MSW annually, without direct city investment. Should the project launch successfully as planned in 2015, the city will pay Plasco $83.25 per tonne of garbage used.
The high negative value paid for the feedstock is obviously a major factor in Plasco's business model, providing the company with over $9 million annually before a single kilowatt of power is generated. In essence, Ottawa is "renting" landfill space for $763,000 a month. Yet the city also sees substantial benefits as Watson explains in his blog.
"The city will benefit by sharing in Plasco revenue, it will benefit by
increasing the life of our landfill, and it will benefit directly
through increased economic diversification. And let me tell you I have
seen my share of divisive and never-ending debates about where to locate
“the next landfill” in our community."
Ottawa also benefits by taking the high road when it comes to waste management, GHG reduction, and renewable energy development. But there is a business case as well. NIMBY issues aside, by delaying the need to build a new landfill by up to 28 years, Ottawa avoids the estimated $250 million in capital required to build a modern landfill (read the original news item here).
If Plasco's and other technologies prove out, we can hope that this landfill expansion is postponed indefinitely. In that case, this bold move will have been paid for simply by avoiding the debt charges on a new landfill.