This document discusses the opportunity for councils to maximize the value of municipal solid waste (MSW) rather than selling waste management rights to private interests. It provides the example of the Hepburn Shire council which is developing an energy-from-waste model to convert organic waste into gas, electricity, and soil conditioner. Their collaborative model with other councils could yield $9 million in annual profits while cutting greenhouse gas emissions. The author urges councils to recognize MSW as a valuable resource and develop their own infrastructure and business models to ensure local communities receive the greatest benefits from converting waste into energy.

1. This is an article I’ve written to help Councils value their waste streams before they
get snapped up by private interests at a fraction of their value.
Please disseminate it to the relevant people now!
I facilitated a session on waste at the Alliance of Alliance conference and it was tense
and uncomfortable because private sector interests didn’t like my message.
The opportunity is fleeting and now. Would you mind helping me protect the common
weal and the public valuation of rights and send this to people in waste!
Sonny Neale
sonnyneale@gmail.com
Don’t sell your waste!
Municipal Strategic Waste (MSW) has traditionally been seen by local government’s as a liability to
be managed, not a resource to be maximised.
It is now a resource to be maximised. Within the next decade it is highly likely that all organic waste
in Victoria will be being converted into energy in one form or another.
What has for many years been a slow-moving vacuum is rapidly becoming a space where substantial
sums will (and are) being spent by governments and the private sector to convert organic waste into
gas and electricity.
The question is not will it happen, but who will benefit?
I am committed that it is local governments, and through them local communities.
After decades collecting and diverting waste and managing landfills when no-one else wanted to,
waste is suddenly much more valuable than most Council officers realise. How do I know this?
Firstly, because so many people suddenly want to buy the rights to your waste streams and
secondly, because we’ve costed it for Hepburn Shire under a collaborative Council-controlled model
and the numbers are nothing short of spectacular.
A number of private sector interests are very keen on ‘taking the waste off your hands’, often by
effectively covering the gate fee Council would otherwise have to pay (sometimes with the transport
cost thrown in).
From a cost minimisation perspective, this is a very good deal!
From a resource maximisation perspective, in an era where whoever controls the waste stream
controls the model under which it will be utilised, this is a very poor deal for Councils.
I believe that local governments who currently control these waste streams should develop their
own business and governance models, models that are aimed at maximising the policy outcomes
that are important to them and their communities. We are way beyond simply offsetting an
operational cost, the opportunity is simply to substantial.
Policy outcomes a properly calibrated business model could encompass include:

2. • Direct financial return to Council
• Long-terms economic development in the municipality
• Waste diversion requirements
• Greenhouse Gas Emissions abatement (that is directly related to Council initiative, and not
third-party offsets)
Now these waste streams are valuable the push is on to transfer these public rights into private
hands quickly and cheaply before local governments realise the value of the resource they control.
A third-party business model is unlikely to maximise benefit in these four areas to the extent that is
possible. For that to occur, it must be the Council (probably with the support of their Greenhouse
alliance is they want to aggregated multiple waste streams across municipal boundaries) which must
develop and own the model. In most cases it is likely that, at least initially, this would include direct
ownership of the infrastructure also.
If you sell the opportunity to others because it’s easier, you really can’t complain if you only get the
crumbs-off-the-table at the end!
The Hepburn Shire Model – one example of what Councils can accomplish
Developing a model that maximises all four policy outcomes is not a theoretical undertaking.
Hepburn Shire with the coordination support of their Greenhouse Alliance (Central Victoria
Greenhouse Alliance, the CVGA) is well advanced on this path to the point where:
• the technology mix has been determined
• the methane gas quality has been tested (and found more-then-sufficient) and,
• the market is currently being tested for construction of the first pilot power-plant (the first
of up to 70 x 35 – 70kw plants across six municipalities)
The CVGA is in the process of finalising a collaborative business and governance model that responds
to Sustainability Victoria’s request for a full funding application for $900,000 on the back of the
recent successful Expression of Interest process.
The benefits of the shared-services model being coordinated by the CVGA are impressive. Fully
implemented, this approach could divert all 43,000 tonnes of MSW in the 6 participating shires and
convert it into the equivalent of:
• 5.4 MW micro power-station network that also produces
• 6 MW of heat
• 10,000m3 of class A water
• 3000 tonnes of nutrient rich ‘soil conditioner’ and;
• cut GHG emissions for these Councils by 80,000 tonnes p.a.
The economics promise to be just as good with an ROI hovering around 20% and a simple payback of
under 5 years. The $33 million Capital Expenditure for full implementation could return an absolute
‘profit’ to the participating Councils somewhere in the vicinity of $9 million per year by the fifth
year!

3. The moral of the story
As simple and attractive as it may sound, selling Council’s rights to MSW for the cost of the gate fee
will probably never compare favourably with the full range of benefits that could be available if
Councils developed and manage their own infrastructure in this space.
Whoever controls the waste stream controls the business model.
As Councils currently control substantial rights to waste streams, they should determine the most
appropriate mechanism that maximises the collective and Public Benefit from what is a public right.
Municipalities and the communities they serve should be in the drivers-seat when determining the
appropriate mix of benefits that accrue from converting waste into energy.
The Hepburn Shire model is one example. It is well-advanced and replicable, but it will certainly not
be the only model available.
The key is that Councils recognise the value of their MSW because other sections of the market-
place have already made the transition.
There is some time pressure because state and federal governments will remain interested in
funding energy-from-waste projects while they are innovative and exciting, then that interest will
wane.
Councils have a window of opportunity of one or two election cycles in which to maximise the
benefit of the MSW streams they have been so assiduously managing for so long. My advice…. Get
cracking!
Sonny Neale
14th
June 2017