The Good, Bad, and Ugly about Renewable Energy in Developing Countries

Economic development depends on energy. Access to it, the quality of it, and the stability of it are things we often take for granted. Renewable energy (RE) has been touted as the cure-all for climate change and the technology we need to be investing in to balance projected climate impacts with our ever-growing energy needs. By 2050, nearly 85 percent of global energy generation is projected to come from renewables (IRENA, 2018).

Developing countries built more clean energy than fossil-fueled, power-generating capacity for the second year in a row, as reported by Bloomberg New Energy Finance (BNEF). This momentum, however, is being challenged by a growing and potentially toxic waste problem.

The amount of solar panel waste alone is projected to be 78 million metric tons in 30 years (IRENA, 2016). That doesn’t include waste from wind turbines, battery storage units, and off-grid products with shorter lifetimes.

The constituent materials of RE technologies are similar to those in many electronics—cadmium byproducts, copper byproducts, lead, hexafluoroethane, polyvinyl fluoride, tin, lithium, and silicon tetrachloride—which can be highly toxic to humans and the environment. While the jury is still out on the leaching potential and impact of toxic materials, anything disposed of in an open dump or landfill is likely to be crushed in some way as the weight of bulldozers and other material is placed upon it (Robinson, Meindl, 2019). Toxic materials will leach into the environment; it’s just a matter of how much and the potential of exposure to nearby communities.

In addition to the potential impacts to human health and the environment, landfilling renewables removes valuable materials from the economy. Because the RE market is growing so rapidly, demand for constituent materials, such as rare earth metals, is growing exponentially. Reserves are limited and are often sourced from countries lacking the appropriate environmental and social safeguards. Extracting these valuable materials for reuse in other products maximizes their lifetime and promotes a circular economy.

A circular economy attempts to

• Retain as much value as possible from source materials, parts, and products;
• Mitigate the climate and environmental impacts associated with the mining of source materials and the amount of energy and waste created through the manufacturing of these products; and
• Truly make renewable energy a clean and sustainable option.

What’s Currently Happening with EOL Renewables?   

Renewables that reach their end of life (EOL) can be reused (through parts extraction or refurbishment), recycled, disposed of in a landfill, or incinerated. In a circular economy, the preference is reuse and recycling. While recycling is commercially available, most products in developing countries are slated for landfill disposal because recycling is challenging in both the complexity of extracting the valuable materials and the cost to do so. Many RE technologies are built to withstand the elements for decades, and they weren’t built to come apart easily. This is a design problem: one that has been well covered with respect to other types of electronic materials (e.g., laptops, smart phones) and one that has yet to be solved.

The main challenge in solar panel recycling is the difficulty in extracting the glass such that it does not become contaminated by antimony and plastic debris from the backsheet and encapsulant. GreenMatch summarized the solar panel recycling process and challenges nicely here. Innovations are in progress, and we may have a cost-effective solution one day.

Recycling batteries, from battery energy storage systems for example, requires a thorough disassembly of the battery packs to extract the valuable materials from the cathode (cobalt, nickel, lithium, manganese). These materials are not as easy to extract as the large metal plate in a lead-acid battery, and utility-sized battery storage units are large—up to 250 metric tons worth of batteries. Details on the recycling process and cost for batteries can be found here.

Wind energy is a whole different story. The turbines are enormous and require logistical feats just to transport them to and from the installation site. Turbines are typically being burned or landfilled.

How are Countries Preparing to Handle the Projected Amount of RE Waste?

Most countries have no comprehensive EOL management plan for RE waste, but countries are trending toward extended producer responsibility (EPR). In general, EPR may take the form of a reuse/refurbishment, buyback, or recycling program and is intended to incentivize design improvements for easier disassembly for recycling and to reduce the burden of EOL management on local governments.

The European Union (EU) established the Waste of Electrical and Electronic Equipment (WEEE) Directive, which incorporates EPR. Solar panel manufacturers supplying photovoltaic (PV) panels to the EU market, for example, are required to finance the cost of collecting and recycling EOL panels in Europe.

Japan has two laws for personal and household electronics where payment for EOL management is borne either by the consumer or retailer. In South Korea, the Producer Recycling System increases the obligation of e-waste recycling on the manufacturing side. South Korea also recently classified PV waste as an industrial waste (versus hazardous). Hazardous waste requires more stringent management and stymies cross-border shipments of EOL renewables under the Basel Convention.

The Basel Convention is an international treaty designed to reduce the movement of hazardous waste between nations, specifically to prevent hazardous waste going from a developed to a less developed country where environmental health and safety protocols are less well-defined and regulated. While the intent is sound, how the Basel Convention legally defines electronic and some RE waste in a country, as “waste” (hazardous or not) or as a material destined for reuse, may pose significant barriers to recycling. This challenges the circular economy framework.

Less efficient technologies can be sold to other cities/countries after their peak lifetime. The expected lifetimes of RE technologies are geared toward peak performance. A solar panel’s efficiency decreases to 80 percent at the end of its peak lifetime (25 to 30 years) and can still power a few household appliances at 50 percent capacity. This is sufficient for households in the developing world. The Middle East presents a unique opportunity because land and sunshine are plentiful enough to install more PV panels that are less efficient.

Some countries are playing matchmaker. In Japan, a joint venture between a solar panel manufacturer, who developed a method to quickly separate the solar panel glass from the electric cell, and an industrial waste processing facility was established in 2016. These companies are leveraging each other’s skills and capacities to extract high-selling materials to make recycling cost-effective.

Most developing countries have neither the infrastructure, nor the funds, to manage EOL renewables. Markets for recycling are emerging, but they are faced with challenges including low or no cost for disposal, cost to collect and transport to recycling facilities, competition from the informal waste sector and businesses that store electronics for parts mining, and a general lack of incentives or enforcement mechanisms to promote reuse and recycling over landfilling and open burning.

Kenya and Rwanda are leading the way in Africa through their draft e-waste legislation; yet to be passed, but it’s a start. They are planning to incorporate EPR and promote recycling, and several e-waste recycling companies already exist. The legislation will strengthen the market.

Leasing or pay-as-you-go programs internalize the EOL management costs. Here, a provider leases the technology to the consumer and provides regular maintenance to increase the forecasted lifetime. This, in turn, allows for better planning around EOL management in terms of what will need to be retired and when, and ensures proper removal, reuse where feasible, and EOL management. Pay-as-you-go solar programs have been successful in Africa for the off-grid market with companies such as Mobisol and d.light in the off-grid sector. 

What’s the Role of Development Agencies?

More funding goes into growing the RE sector than into managing its growing waste problem. Key findings from Climatescope 2019 note the following:

• “The vast majority of clean energy capital deployed in emerging markets continues to come from local sources. This is largely due to the heavy influence of domestic development banks and credit agencies in China and Brazil.
• Foreign direct investment supporting clean energy set a new record in 2018. It jumped from $22.4 billion in 2017 to $24.4 billion in 2018. EU-based organizations remain the key foreign capital provider.
• Development banks represent the largest single foreign investor group and deployed a record volume of capital for clean energy in 2018. These institutions, which include the World Bank and others, invested $6.5 billion, up from $4.5 billion in 2017.”

Development agencies are providing important investments and need to also mainstream circular economy concepts and build capacity for developing countries to handle the projected RE waste. Efforts are growing with initiatives such as the Global LEAP Solar e-Waste Challenge (supported by USAID), the USAID SURE II (Scaling Up Renewable Energy) project (scheduled to begin in the next year), and market assessment studies funded by others, including DFID, for off-grid materials.

What’s a Developing Country to Do?

There is no silver bullet, but here are six ways a country, working with the private sector, can promote a circular economy for EOL renewables:  

1. Create a task force and develop an e-waste management framework. Before any policies or legislation are put in place, a country must
   • Understand the current and future projected waste streams (type and quantity).
   • Define what type of waste RE technologies are. RE technology often falls under the category of e-waste because of the constituent materials. Governments should consider what is and isn’t categroized as e-waste (e.g., can some products be considered industrial waste?); whether composite products versus individual components should be treated differently; whether solar panels will be defined as hazardous waste; and other questions that ultimately impact how waste can be managed. Include cross-border importing and exporting in the discussion. 
   • Identify locations for collection, storage, and transfer centers, considering density (using Census sectors, GIS, socioeconomics, demographics), to route waste material from low generating areas and rural areas to a recycling center or facility that can repair or refurbish products.
2. Promote public-private partnerships (PPP) and identify partnerships and market solutions. Efforts should go into developing viable markets and business models (such as the Japanese joint venture example and pay-as-you-go business schemes in Africa). The informal waste sector and cross-border opportunities should be considered.
3. Reform cross-border regulations. Specifically, reform how EOL renewables are legally defined (as hazardous or not) and market opportunities for reuse and recycling. E-waste is included under an ASEAN working group, and the topic is important to the East African Community (comprising the governments of Burundi, Kenya, Rwanda, South Sudan, Uganda, and Tanzania), however, a regional plan has not yet been developed.
4. Incentivize reuse of waste materials and recycling through tax reform and EPR. Often, recycling costs more than the economic value of the materials recovered, which is why most products end up in landfills. One example of incentivizing reuse is a lower sales tax for products made with waste materials. Another example is adopting an EPR policy (if the country has the capacity to enforce it). There are pros (e.g., allocates part of financial burden to the producer versus local government) and cons (e.g., does not address complexity to recycle products or cost to transport to recycling facility) to EPR that need to be carefully weighed.  
5. Establish an EOL management fee. An EOL management fee internalizes the cost into the purchase price instead of externalizing the cost onto future taxpayers. This fee is different from EPR in that it would cover the removal, storage, reuse, and/or recycling of EOL waste in the country in which the RE technology is installed, covers EOL management for products where the producer dissolves or goes bankrupt, and covers secondhand materials, or those older than the date the EPR policy becomes effective. This fee could directly apply to on-grid, utility-managed projects and off-grid purchases made directly by the consumer. The funds could be dispersed to local governments to pay for the removal, reuse, or recycling of RE technology waste when the time comes and could provide more flexibility in how funds are used.
6. Improve consumer awareness. Consumer awareness is essential for promoting reuse and recycling. If consumers are not aware of the problems, they cannot create or contribute to the solutions.

Now is the time to develop EOL management frameworks to prevent a massive build-up of thousands of tons of potentially hazardous waste in developing countries.