Executive Summary

In higher education establishments such as, Manchester Metropolitan Business School reducing the costs associated with waste management, energy consumption and carbon emissions has been high on the agenda.

This report seeks to examine one option for the business school. The feasibility of this option is discussed in detail and a number of considerations are examined to seek to ascertain how practicable using anaerobic digestion could be for the university.

Introduction

The Manchester Metropolitan Business School is situated in the heart of Manchester and it consists of a number of campuses. To this end, managing waste on each of these is a primary concern as the business school has set its waste reduction targets as follows:

Reuse and recycle waste by 40% in 2012/13 – 2013/2014. Achieve zero waste to landfill by 2020/2021 (MMUER, 2013).

This is for a number of reasons which are:

The rising costs of sending waste to landfill sites (HMC, 2013). The carbon reduction targets stipulated by the Higher Education Funding Council for England (HEFCE) (HEFCE, 2010). The carbon reduction targets specified in the Climate Change Act 2008 (HMSO, 2008). The Waste (England and Wales) (Amendment) Regulations 2012 require all waste streams to be separated so that they can be recycled (HMSO, 2012).

The university produces many types of waste and has a duty to reduce these including those classed as bio wastes (Manfredi & Pant, 2013)by following the waste hierarchy, which is:

Reduce Recycle Recover (Glew al., 2013)

With these principals of waste management in mind one may consider managing a source of waste which is often overlooked or not managed appropriately. This is waste from food outlets. Food waste is biodegradable but it is often disposed of through the general waste stream, which costs approximately ?75 per tonne to send to landfill (HMC, 2013) with the costs applied by waste disposal contractors this become a significant sum that the university has to pay each year.

Food waste is often wet and therefore heavier than most other dry wastes that may be disposed through the general waste stream. Therefore, it costs more to dispose of than other forms of general waste. This increases the costs of disposal and the weight of the waste sent to landfill sites from the university unnecessarily, as there are other options available that may be utilised to dispose of this waste. These are:

Composting on campus. Composting by using a waste contractor. Anaerobic digestion.

Each of these options may be considered by the university to seek to reduce their costs and their environmental impacts which are linked to the disposal of food wastes.

Business strategy

This report seeks to assess the viability of the three options above which may be utilised to reduce food waste. The first of these options was composting food waste on campus. However, this is not possible due to the location and layout of the university campuses (see Appendix 1). Therefore, this option has been discounted. The second option was to pay a waste contractor to dispose of the university’s food waste and to compost it off campus. However, this will be at a cost as the waste is heavy and the campuses are located in different areas (see Appendix 1). Additionally, the collection and disposal of the waste will contribute to the university’s carbon footprint (HEFCE, 2010). Therefore, it is believed that the disadvantages of adopting this approach would far outweigh any advantages which may have been created by recycling food waste using this option. The third option, which has been identified, is disposing of food waste via anaerobic digestion. The viability of this option needs to be assessed in more detail. However, it does meet each of the principles which are highlighted in the waste management hierarchy (Glew et.al., 2013). Therefore, this business strategy shall be explored to ascertain if this is a viable option for disposing of food wastes.

Anaerobic digestion is a process by which animal, food or plant waste is broken through the process of restricting air flow through the materials which encourages micro-organisms to produce biogases and disgestate. The digest is nutrient rich compost which may be reused as a fertilizer. However, though this process is a viable way through which food waste may be disposed the process produces gases such as, methane and carbon dioxide (Murto et.al., 2013). Therefore, it is necessary to consider these to as these gases both contribute to global warming.

Operations strategy

The operation of anaerobic digestion facility requires a number of skills. For example, management, monitoring, loading and process review. Therefore, a number of factors will need to be considered by the operating strategy. In addition, to the human resources required, the siting of the facility is another key consideration, as it is imperative to ensure that the facility operates and is utilised efficiently. This will help to ensure that the benefits derived from this project will be fully achieved as often these types of renewable generation projects fail due to poor planning, so the benefits which are attributed during the feasibility and design phases of the project are not realised (Schenk & Stokes, 2013).

Due to the location of the university campuses (see Appendix 1), the best location would be central to these in between the Elizabeth Gaskell and Didsbury campuses. This would be advantageous because:

This location is away from the city centre. The site is located near several main roads, so access and egress would be easy. The location of the site is central to most of the campuses, thus waste could be easily collected and transferred to the site. The operation of the facility could be monitored by existing staff on campus, providing they received the appropriate training. This location could enable the plant to be utilised for other purposes such as, providing district heating or power to university buildings.

Therefore, each of the above factors should be considered during the operational design of the facility (Spencer et.al., 2013).

Operations design

The design of the anaerobic digestion facility needs to consider a number of factors, these are:

The existing land use in the area of the proposed site. The sensitive receptors which may be located near the site. The transport infrastructure surrounding the site. The expected lifetime of the facility. The anticipated operating hours of the facility. The waste tonnage to be treated. The building footprint and height. The storage of waste on the site. Vehicular movements to and from the site. The planning requirements. Planning conditions which may be imposed by the Local Authority.

Each of these needs to be considered during the design of the new facility as they may affect its operational capacity (Spencer et.al., 2013).

Capacity planning

The capacity of the facility will need to be carefully planned to ensure that there is an optimal return on the investment that the university is making (Spencer et.al., 2013).. According to the Estates Management Statistic 2011-2012 (EMS, 2012) Manchester Metropolitan University currently has 29, 850 full time students and the total waste produced 8746 tonnes of which 7501 tonnes is recycled and 1010 tonnes of waste is used to create energy (EMS, 2012). This means that the facility needs to have the capacity to recycle 235 tonnes of waste per annum, which is not enough to support the running of a small anaerobic digestion facility (SEPA, 2013). The minimum amount of waste required for a small plant is 417 tonnes of waste per month.

Therefore, the capacity required would not be met; however, the university could consider sending its recycled waste to this facility. If this was a viable option this would mean that 644 tonnes would be available on a monthly basis so the capacity of the plant would be met (SEPA, 2013). This would not be affected by the reduction in waste that is to be diverted from landfill, in fact this may increase the amount of material sent to the facility. This would enable the university to achieve their zero waste to landfill target by 2020/2021 (MMUER, 2013).

Resource management

Resources would have to be provided to ensure that the plant was run efficiently. However, it is believed that this may be achieved by redeployed existing staffs who work at the university. This is because a small plant would only require two workers and a manager to maintain its operations (SEPA, 2013).

Financial planning

The costs of setting up a small facility would be expensive (Spencer et.al., 2013).. A number of factors would need to be considered, such as:

The cost of the real estate. Planning and design costs. Construction costs. Maintenance costs. End of life disposal costs. The cost of the plant.

Each of these would need to be calculated, as an approximation the costs could be:

The cost of the real estate – ?500, 000 Planning and design costs – ?200,000 Construction costs – ?350, 000 Maintenance costs (over 25 years) – ?150,000 End of life disposal costs – ?200, 000 The cost of the plant – ?400, 000.

Therefore an estimation of the total cost of implementing this could be as much as ?1.8 million. Furthermore, a number of other costs would also need to be considered, such as:

Monitoring requirements (HMSO, 1993). Transportation of the waste (HMSO, 2012). Costs of waste licenses (HMSO, 2012). Training for staff. Awareness programmes for students and staff.

Therefore, the costs would be approximately ?2 million over the 25 year life span of the plant, so to make the investment viable the payback per annum needs to be more than ?80, 000.

This could be achieved by reducing the costs of waste which are sent for recycling, assuming that the rate per tonne is approximately ?5. This would generate a saving of ?37, 505 per annum. Additionally, the cost of sending all wastes to landfill may be factored into this, assuming that this costs ?7 per tonne, this could lead to savings of ?1645 per annum.

If the plant was designed to produce electricity and to communally heat some of the university premises this would also lead to further saving (Spencer et.al., 2013).. However, it is difficult to estimate these savings as the type of waste inputted into the plant would affect the energy and heat which could be reused from the plant. However, with rising energy costs, it is thought that the benefits of this may outweigh the costs as they will lead to a reduction in:

The cost of carbon permits under the Carbon Reduction Commitment (CRC) (HMSO, 2011). The university’s carbon footprint from energy used by the university. The cost of disposing of waste through contractors. The amount of waste which is sent to landfill. The amount of Climate Change Levy which is paid (HMSO, 2013). The amount paid for energy.

Further to these other options could be explored to ascertain if this would be costs effective such as:

Revenue generated from Feed in Tariffs (HMSO, 2012 a). Revenue generated from the Renewable Heat Incentive (HMSO, 2012 b). Revenue generated by taking waste from other businesses near the proposed site.

For this purpose of this report it has been presumed that the income and savings that will be generated from the above will be ?50,000 per annum.

Cost benefits

From the costs section above the estimated costs of the development of the facility would be approximately ? 2 million. In order, for the development to be financially viable ?80,000 per annum would need to be generated over 25 years to pay back this investment.

Based on the savings that have been outlined above, it is believed that ?50, 000 per annum could be generated through general cost reductions, ?37, 505 per annum could be saved by sending all recycled materials to the plant and ?1645 per annum could be saved by sending landfill waste (which is not already used to produce energy from waste) to the new facility.

Therefore, over the 25 year life span of the facility a potential ?2,228,750 could be saved. If this is offset against the estimated cost of the facility which is ?2,000,000 over its life span a profit of ?228, 750 could be made by implementing this project.

Therefore, it is considered that the benefits of investing in an anaerobic digestion facility are viable.

Scheduling

Based on the costs and all the benefits outlined above it is recommended that the scheduling of this project is undertaken as follows:

From May 2013- July 2013 suitable sites are investigated. From July 2013 – August 2013 feasibility of these sites is investigated. From August 2013 – October 2013 a site for the new facility is procured. From October 2013- December 2013 contractors are chosen and the design and planning for the facility are started. From December 2013 – December 2015 the facility is built. From December 2015 – March 2015 the facility is made operational.

In addition to this the schedule for the operation of the facility needs to be considered (Spencer et.al., 2013). It is suggested that there are a maximum number of four deliveries of waste per day, as this will ensure that the plant is able to be continuously supplied to waste so that it will run at its optimal capacity (SEPA, 2013).

Loading and timetabling

The operational hours of the facility will need to be 24 hours a day, 20 days of the month on weekdays from 07.00 to 17.00 (SEPA, 2013). This will help to ensure that the plant runs efficiently and that waste will not build up or need to be stored on site (Spencer et.al., 2013). In addition, this will allow the minimum throughput of 417 tonnes of waste per month to be achieved (SEPA, 2013).

Performance measurement

The performance of the plant may be measured through a number of metrics, such as;

The reduction in the costs of carbon permits under the Carbon Reduction Commitment (CRC) (HMSO, 2011). The reduction in the university’s carbon footprint. The reduction of the costs of disposing of waste through contractors. The reduction of the amount of waste which is sent to landfill. The reduction in the amount of Climate Change Levy which is paid (HMSO, 2013). The reduction of the amount paid for energy. Revenue generated from Feed in Tariffs (HMSO, 2012 a). Revenue generated from the Renewable Heat Incentive (HMSO, 2012 b) Revenue generated by taking waste from other businesses near the proposed site. The payback that the new facility generates per annum. The emissions to air from the facility. The number of complaints about the operation of the facility. The number of vehicle movements to and from the facility. The amount of time in-between collections from campus and the processing of the waste.

Each of these metrics may be utilised to measure the quality of the process and service performance of the new facility.

Procurement

The procurement process that shall be used for this project will need to be aligned with European Union procurement regulations and they will need to demonstrate best value for money.

Conclusion

In conclusion the analysis that has been undertaken in this report indicates that the third option, which is to build an anaerobic digestion facility in a centralised location,is viable. Therefore, the business strategy that was proposed should be implemented as this will enable the university to reduce its costs in relation to waste disposal and to attain its targets which are;

Reuse and recycle waste by 40% in 2012/13 – 2013/2014. Achieve zero waste to landfill by 2020/2021 (MMUER, 2013).

Therefore, it is recommended that the university should seriously consider investigating this option further as the number of benefits that have been identified in this report show that this proposal warrants serious consideration.

Appendices Appendix 1 Maps of the locations of Manchester Metropolitan University

(MMU, 2013)

References

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