The hidden value of waste in the renewable energy ecosystem

In early April, a Financial Times (FT.com) article garnered some traction across various media platforms when it highlighted that the world was awash with low-cost solar panels - with supply now comfortably outstripping demand. As a highly respected name in business media, this gave pause for thought when it comes to the role of waste in the renewable energy ecosystem.

As the clean energy transition gathers momentum, there are in essence two “dirty” areas where business opportunities are emerging.

The first is the management of waste in the form of solar panels and wind turbines – both of which have become major issues for the proponents of these new energy sources. We have now reached a situation where the number of solar panels being manufactured is comfortably outstripping demand while fibreglass wind turbine blades are not recyclable. While there may be some tongue-in-cheek references to being utilised for fencing, there are concerns about what will happen with early generations of panels, turbines, and batteries which have boomed in the last decade.

The management of “e-Waste” – where many of these items fall – is expected to play an increasingly important role as these new technologies move into the mainstream. In 2021, the Extended Producer Responsibility (EPR) regulations came into effect in South Africa, and this required that manufacturers, importers, and brand owners be responsible for the full lifecycle of their products from conception to post-consumer waste disposal.

With over R17.5bn worth of solar panels imported into South Africa in 2023, this represents a significant market with major players such as The Reclamation Group developing solutions to tackle the recycling of input materials such as aluminium, copper, and glass for example.

The second consideration are the projects aimed at turning waste into energy. Biomass projects in South Africa have been gaining traction – particularly amongst industrial businesses. Sappi South Africa has invested in a 25MW biomass plant that utilises biomass recovered from surrounding plantations and screened waste materials including saw dust and bark which are converted into clean burning wood pellets which can be used for the generation of electricity and steam.

With significant woodland, forestry, and agriculture operations across the country, biomass related projects have the potential to be contributors to the SA energy mix. Apart from job creation opportunities, this reduction in wood waste will further reduce methane released into the atmosphere during the decomposition process.

Another area where biomass waste to energy solutions could unlock value is around landfills. Many of the landfill sites in Africa are unregulated and are poorly managed resulting, in environmental challenges related to the release of methane and greenhouse gas emissions.

The Council for Scientific and Industrial Research in South Africa (CSIR) has estimated that South Africa loses R17bn per year to inefficient landfills and waste management processes. As a sector, they estimate its value at R15bn per year with “the potential to grow to at least twice this size, through strong government and private sector investment.”

New technologies are allowing for the capture of harmful gases which in turn can be converted into biogas – which ultimately allows for conversion into electricity. With the right thinking about carbon capture, we could turn these landfills into sources of energy, but also dispose of waste which would enhance the livelihoods of those living in affected communities.

Innovative business models such as these will provide opportunities throughout the value chain from employment through to the support of small businesses and larger industrial generation opportunities. As the market matures, this may further translate into opportunities in the carbon credit ecosystem.

Solar and wind energy solutions have captured the imagination of stakeholders – from consumers to investors; there has been a huge amount of interest in the rollout of these solutions and as a banking group, we have been proud to be associated with many of the landmark deals in this sector.

While these clean technologies are fundamentally changing the energy mix in Africa, there are large markets for us to explore in the waste-to-energy space and we anticipate working on some exciting deals in this space in the years to come.