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Reconsidering Waste-to-Energy

Technology and regulation changes the outlook for garbage burners.

Fortnightly Magazine - March 2012

market for greenhouse gases and could provide the foundation for other regions or a national regime to follow. Compared to other renewable energy technologies, energy from waste sources can have a more significant impact on carbon reductions. While other renewable energy sources offset greenhouse gas emissions by the avoidance of fossil-fuel based generation, energy from waste sources provides the added benefit of destroying methane that otherwise would be emitted into the air (see “Major Prospects in Carbon Markets”) . In fact, landfill gas energy production is already a common source for the voluntary carbon offset market.

Significant coal-power capacity likely will be phased out with new EPA regulations on air emissions. Although forecasts of expected retirements range from 20 to 100 GW, the need for reliable power that will be removed from the system remains. Although wind and solar will continue to be important renewables, the intermittency of these resources won’t solve the grid’s need for enough baseload power generation for reliability. In comparison, energy from waste can provide continuous power every hour of every day.

The costs for energy from waste sources are very competitive with other clean energy technologies (see Figure 3) . Much like other renewable energy technologies, the upfront capital expenses make up the majority of the cost. While cost input varies based on location, project size, and materials costs, energy from waste sources undoubtedly offers a cost-competitive renewable option.

Consolidating Resources

Although technologies have existed for quite some time to extract the energy potential from waste sources, significant potential still hasn’t been tapped. Several factors indicate that these markets are poised for growth, and participation from mature energy players can help unleash the potential for these technologies.

According to the EPA Landfill Methane Outreach Program, 558 landfills in the U.S. capture landfill gas and utilize it as an energy fuel. While landfill gas is predominately used to produce electricity on-site, it also can be used for heating applications or cleaned and injected directly into natural gas pipelines.

Yet significant landfill resources aren’t being exploited. More than 150 landfills remain to be developed with a combined potential to provide over 900 MW of power. There’s also significant potential to expand projects already in production. Operating projects might be located on landfills that are increasing in size as more waste is disposed or if projects were undersized to begin with.

Potential for expanding landfill gas projects in the United States exceeds 1,700 MW. California, in particular, has significant potential (see “California Potential”).

Unfortunately, LFG projects are small, with the average project producing about 5 MW, as compared to the average coal plant at over 200 MW and wind farms with 50 to 100 MW. The industry is extremely fragmented, with the top 10 players owning only 50 percent of the market. Small players developing small projects create several challenges that can be mitigated by consolidation. Smaller size increases the transaction costs for utilities to enter into power purchase agreements for renewable energy, and smaller players must be vetted and project risk examined more closely. Large market leaders would mitigate