TOKYO – Japanese trading house Itochu and engineering firm Hitachi Zosen have won an order to build and operate one of the largest waste-to-energy plants in Dubai, tapping new demand at the heart of one of the world’s largest oil-producing regions. .

The facility, which is expected to cost around 120 billion yen ($ 1.16 billion), will generate electricity by burning household waste in the city of the United Arab Emirates. It will be able to process around 6,000 tonnes per day, with an annual capacity of 1.9 million tonnes, or about half of the city’s waste.

The 200 megawatt plant will produce enough electricity for 140,000 homes, with an efficiency of around 30%, among the highest in the world for this type of installation. Itochu and Hitachi Zosen will have a 35-year contract to operate the plant, which is scheduled to come into service in 2024.

The project brings together the know-how of two companies with solid experience in the field for their first joint foray into the Middle East. The region has long relied primarily on cheap natural gas and oil for electricity, but has recently started to embrace solar and other renewable energy sources for sustainable development.

Waste-to-energy plants are considered a more stable source of energy than wind and solar, which depend on weather conditions. The UAE, where most household waste ends up in landfills, is a particularly promising market for this technology.

A new company will be established there for the project, with Itochu owning 20% ​​and Hitachi Zosen Inova, a Swiss subsidiary of Hitachi Zosen, owning 10%. The state-linked Dubai Holding will control 31%, with the rest split between three companies.

Itochu operates four waste-to-energy plants in the UK alongside its French partner Suez, and the two companies are working on a 30 MW facility in Serbia. Hitachi Zosen has delivered around 500 such installations worldwide, mainly to Japan and Europe.

Hitachi Zosen, in particular, has a major global presence in the waste to energy market. He is among the best players in Japan, alongside JFE Holdings and Takuma, with a share of around 20%. In Europe, the Middle East and Africa, Hitachi Zosen ranks second behind France-based CNIM with 29% of the market, according to a survey by a Swiss consulting firm.

The estate is particularly important to Itochu, one of the few trading houses to make a full-fledged foray into energy production from waste. The company has accumulated valuable expertise through its early partnership with Suez and is now looking to tap demand outside of Europe, where competition is intense, and Japan, where demand is likely to stagnate as population increases. decreases.

Itochu and Hitachi Zosen are looking to Australia, which produces much of its energy from carbon-intensive coal. Hitachi Zosen announced a plan last January for a waste-to-energy plant in Western Australia, the first the company will build and operate overseas.

Japan’s steel and shipbuilding industries, pressured by competition from China and South Korea as well as the coronavirus pandemic, are turning to waste technology for energy in a growing world focused on sustainability. While Chinese rivals are also on the rise in this area, Japanese players aim to use their technological advantage to quickly take a lead in fast-growing markets.

Nippon Steel Engineering is working on a facility in Taiwan with a capacity of 660 tonnes of waste per day, while JFE Engineering has received an order for a plant in Germany capable of processing 1,080 tonnes per day.

These two companies and Hitachi Zosen had a combined total of 84 open orders for waste-to-energy plants at the end of fiscal 2019, more than double the figure five years earlier. They control just over half of the market covering Europe, the Middle East and Africa.