Reflecting on Biorefineries: Stakeholder evaluations

17 Jul 2014 Comments 0

Moving from a linear to a closed loop (Ger Bergkamp, African Utility Week keynote presentation, May 2012).

Notes from the WRC K5/2000 report, Chapter 10. In preparation for the 'social aspects / economics' article. I've kept the original figure titles for convenient crossreferencing.

 

In addition to defining the technical requirements of wastewater biorefineries as a move towards an industrial ecology approach, it is essential to understand the operational, logistic and social factors affecting their realisation.

 

The key question on which the interviews were focused was:

‘What are your views around industrial ecosystems with wastewater at the core - in our words, wastewater biorefineries?’

 

The outcome of the interviews with industry practitioners around this question can be summarized by Barry Coetzee’s (City of Cape Town) quotes:

“This is a young industry and no-one really knows where it’s going yet. Very few are willing to stick their neck out. We’re integrating systems that were not integrated previously. This represents a huge risk.”

“There is an opportunity for waste beneficiation, of viewing waste as a resource. Combined with the increased need for water reuse, and more stringent nutrient removal needs, recycling (of all sorts), already a valuable industry, becomes even more attractive.”

 

For practitioners to accept the biorefinery concept, assurance around the risk aspects and technical aspects are needed, as well as a clear value offering of the product. - BUT, this current work argues that this is not enough.

 

Donella Meadows (1999) lists 12 leverage points to intervene in a system, with the power to effect a paradigm shift the most effective one to change a system. While constants, parameters, and numbers (such as subsidies, taxes, and standards) are strong incentives to drive behaviour and can be used to influence a change in the system, they are not capable of changing the mindsets inherent in the behaviour. A big driver influencing mindset, and thereby instigating system changes, is the realization that the size of buffers and other stabilizing stocks, relative to their flows, are decreasing, pushing up raw material prices and waste treatment costs. These changes include greater awareness of the resources used, greater awareness and action on companies treating their own water, etc. However, the change is currently generated in an ad hoc way and largely in isolation to other industry players. At times, it is even done in isolation of other components operated by the same industrial player.

 

Operation of closed systems is dependent on the quality and trustworthiness of information. The internet and greater information literacy have influenced the structure of information flow (who does and does not have access to information of differing types) which is changing to benefit viable ecosystem economies. Previously, knowledge was asymmetrically distributed. The open source platform and social media platforms are increasing its symmetry, allowing a different set of competitors and different types of players to compete. This changes the operation of the system and its rules (such as incentives, punishment, constraints; implicit or explicitly) and correlates with Perez’s (2002) assertion of the lag time in institutional response to technology revolution, discussed later in this document.

 

The most powerful way to leverage change in a system is to devolve power to add, change, or evolve the components of the system to a wider base i.e. to decentralize or allow the system structure to self-organize. Such devolution has potential for chaotic outcome. In order to allow a decentralized system to move in a coherent way, the goal of the system needs to be clearly defined and communicated – in terms of a vision.

 

Carlota Perez (2002) argues, in turn, that the prevalent paradigm is inherent in the current technological revolution, and that with technological revolutions come paradigm changes, as shown in Figure 93 (below). Over the last century we have experienced the ages of oil and mass production followed by the age of information technology. She further argues that we are on the brink of a new such technological revolution (Figure 94 - not shown in this blogpost).

Figure 93: Recurring phases of each great surge in the core industries (adapted from Perez 2002)

10.4 Thinking wider: What is needed to implement an ecosystem economy

The potential of an ecosystem economy and the use of these principles in handling of wastewaters, allowing the establishment of wastewater biorefinery principles, rely on the establishment of several facilitators. These are discussed below.

 

10.4.1 Economically viable attractors

“It is suggested here that for society to veer strongly in the direction of a new set of technologies, a highly visible ‘attractor’ needs to appear, symbolizing the whole new potential and capable of sparking the technological and business imagination of a cluster of pioneers. This attractor is not only a technological breakthrough. What makes it so powerful is that it is also cheap or that it makes it clear that business based on the associated innovations will be cost-competitive.” (Perez 2002)

 

There have already been initiatives to drive development of closed systems already set up and it is valuable to address factors limiting their rapid uptake. The best known, ZERI – zero emissions research institute (www.zeri.org), works towards finding valuable products that can be produced from waste. These initiatives have seen limited reach, however.

 

10.4.2 Systems analysis

The need for the contributors to water treatment and use of water as a resource to work collectively or collaboratively is clear. To facilitate this, the differing operating premises of the municipality and private sector need clear recognition (Coetzee, 2012).

 

10.4.3 Local context – decentralisation (the argument for bottom-up impact via entrepreneurs (rather than (just) a focus on policy)

In Desrochers and Sautet (2008) the emergence of innovative practices and behaviour is supported, including the development of inter-industry linkages and new combinations of existing technologies and materials (“Jacobs externalities”). They position entrepreneurs as a key component:

“The issue is not that regional specialization policies are developed at the expense of spontaneous industrial diversity. Indeed, the two can coexist. Rather, we argue that entrepreneurial activity is at the source of regional development and that theory and evidence seem to indicate that spontaneously developed industrial and economic local diversity typically provide a better substrate for entrepreneurs to innovate.”

 

A key aspect of decentralisation is the move away from central control which adds the challenge of insuring that regulations are met while at the same time facilitating innovation. Interesting aspects influencing this approach are reflected in the following quotes:

  • “[a wastewater biorefinery concept] more focused on facilitation than object creation, on transitioning from consumption to participation. The consumer moves from being a passive receiver to an active participant” (Botsmans & Rogers, 2010).
  • “The convergence of social networks, a renewed belief in the importance of community, pressing environmental concerns and cost consciousness are moving us away from top-heavy, centralized and controlled forms of consumerism towards one of sharing, aggregation, openness and cooperation” (Botsman & Rogers, 2011).
  • “With the advent of computers, and the internet, large pyramids now appears rigid and clumsy. In its place, the decentralised flexible network structure, with a strategic core and a rapid communication system, has shown its capacity for accommodating much larger and more complex global organizations as well as smaller ones” (Perez, 2002).
  • “One of the most interesting stories in social change today is how much creative problem-solving is emerging from citizens scattered far and wide who are taking it upon themselves to fix things and who, in many cases, are outperforming traditional organizations or making systems work better” (Fidelman, 2012)

The technology that enables wastewater biorefineries is a necessary prerequisite, but is not sufficient. In order to promote this, it is necessary to take note and develop the underlying principles that allow individuals to engage in complex behaviour in a coordinated way. Ideally, a wastewater biorefinery can achieve appropriate systems-wide value, simultaneously with appropriate decentralisation.

 

10.4.4 Knowledge diffusion for small scale and large scale plants

While the discussion above has focussed on small scale wastewater treatment works, works of any size are expected to gain from being on a web-based database, both in terms of monitoring the performance and maintenance of these plants as well as obtaining information about them for accreditation, for example (Keyser, 2013). There was also agreement that the building of works is less of an issue than the continued involvement in maintenance, and stakeholder engagement once the project is running. Improved knowledge diffusion would not only improve the potential of industrial partnerships to move towards an ecosystem economy by allowing identification of opportunities for combined treatment and product formation, but also allow faster and more effective action to respond when there is a disruption in the system. Van Berkel also concludes that

“...facilitation and promotion instruments are approximately four times more effective in achieving resource synergies than planning approaches.” (van Berkel, 2006).

 

10.4.5 Communication of benefits

 

10.4.6 Regulations and Risks

 

“The irruption of a set of powerful and dynamic new industries accompanied by a facilitating infrastructure will obviously have enormous consequences both in the industrial structure and in the preferred direction of investment in that period. But the old organizational models cannot cope with or take full advantage of the new potential. The new possibilities and their requirements also unleash a profound transformation in 'the way of doing things' across the whole economy and beyond. Thus each technological revolution inevitable induces a paradigm shift.” Perez (2002):

 

Note about wastewater treatment works (WWTW: [I]t is difficult to implement income generating secondary industries on state owned operations (e.g. municipal WWTP), because motivating for and realising the additional investment and manpower required from existing budget allocations are challenging (WRC 400/09). From discussions with Brett Keyser (Stellenbosch Municipality) and Barry Coetzee (City of Cape Town), the regulations around these processes are adequate, but the interpretations are not done adequately.

 

In the case of wastewater biorefineries, a clearer definition of the public facility’s mandate can be explored and areas that fall outside this can be sold to entrepreneurs. Providing effluent compliant wastewater is a public mandate. Generating value from resources in transition (waste) and the infrastructure around that is a private sector activity. As Barry Coetzee notes, the private sector cannot expect local government to fund what is essentially a private sector activity. Communicating with public utilities to facilitate this activity in return for better infrastructure overall, better service delivery and a better industrial ecosystem can be facilitated by independent industry bodies (like Water Regulators), and needs the cooperation of public utilities, but as it is to further a private activity, the onus is on the private sector to promote this.

Relevant references:

  • Botsman R, Rogers R, 2011, What's mine is yours: how collaborativeconsumption is changing the way we live,Collins Publishers, London.
  • Desrochers P and Sautet F 2008, Entrepreneurial Policy: The Case of Regional Specialization vs. Spontaneous Industrial Diversity, Entrepreneurship Theory and Practice, 813-832.

  • Fidelman 2012 (Misattributed??) found phrase in ‘The Rise of the Social Entrepreneur’, David Bornstein, 13 November2013 http://opinionator.blogs.nytimes.com/2012/11/13/the-rise-of-social-entrepreneur/ (accessed17 July 2014)
  • Meadows D, 1999, Leverage Points: Places to intervene in a system, The Sustainability Institute.
  • Perez C, 2002, Technological revolutions and financial capital : the dynamics of bubbles and golden ages, Cheltenham Publishers

  • Perez C, 2011, Finance and Technical Change: A Long-term View, African Journal of Science, Technology, Innovation and Development 3(1) 10-35.

  • van Berkel R, 2006, Regional resource synergies for sustainabledevelopment in heavy industrial areas: an overview of opportunities andexperiences. Centre of Excellence in Cleaner Production. CurtinUniversity of Technology, Australia.

     

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