Electricity and combined heat and power from municipal solid waste : theoretically optimal investment decision time and emissions trading implications

Waste management has become a great social concern for modern societies. Landfill emissions have been identified among the major contributors of global warming and climate changes with significant impact in national economies. The energy industry constitutes an additional greenhouse gas emitter, while at the same time it is characterized by significant costs and uncertain fuel prices. The above implications have triggered different policies and measures worldwide to address the management of municipal solid wastes on the one hand and the impacts from energy production on the other. Emerging methods of energy recovery from waste may address both concerns simultaneously. In this work a comparative study of co-generation investments based on municipal solid waste is presented, focusing on the evolution of their economical performance over time. A real-options algorithm has been adopted investigating different options of energy recovery from waste: incineration, gasification and landfill biogas exploitation. The financial contributors are identified and the impact of greenhouse gas trading is analysed in terms of financial yields, considering landfilling as the baseline scenario. The results indicate an advantage of combined heat and power over solely electricity production. Gasification, has failed in some European installations. Incineration on the other hand, proves to be more attractive than the competing alternatives, mainly due to its higher power production efficiency, lower investment costs and lower emission rates. Although these characteristics may not drastically change over time, either immediate or irreversible investment decisions might be reconsidered under the current selling prices of heat, power and CO2 allowances

Strategic investments for existing power plants

A model to investigate a fuel based optimality approach for strategic investments in the power sector is presented. The innovative concept of switching between the available operating fuel sources of the power plant over its lifetime is examined. More specifically, the case study examined, concerns an existing lignite power plant that may switch its fuel to natural gas, and from that point on it may either switch back to lignite or retain natural gas or routinely switch between the alternative fuels. This research concentrates on the electricity market of Greece, for the period of 2010-2030. Probabilistic models to forecast future prices are used in conjunction with a real options model to cope with alternative strategies. Depending on the economical and environmental standings of each period, the power plant can alter its input fuel to maximize profits or reduce emissions. Therefore, more options for the operating fuel emerge, thus reducing business risks and exploiting the most profitable operational option in response to markets instabilities (i.e. fuel price differences over time, emissions cost fluctuation, etc.). Strategic flexibility, security of supply, stability, and increased profits are the potential advantages of the presented model dealing with energy investments

Economic evaluation of waste management options for remote areas

Municipal solid waste management is one of the most pressing issues of today’s societies as the consequences of growing economies in waste generation have serious effects on the environment. These effects are even more difficult to tackle in remote areas such as islands or mountainous areas, both types of which are dominant in the Greek topography. More specifically, the current situation is compared financially to a municipal solid waste transportation scenario for treatment in large scale facilities. A statistical analysis of population data and waste generation in the past years will be used to predict the future waste generation in the examined regions. This research concentrates on areas where sanitary landfills are either obsolete or non-existent, and where the common practice is using open dumps. Using geographical data in conjunction with satellite information and some rough estimations for fuel cost in the future, transportation costs are calculated. Advantages of the examined scenario are not limited to monetary terms, but also include social gains for these regions along with new job opportunities. Potential benefits arising from the concentration of transported waste will be explored, and the scope for further research will be presented

Decisions under uncertainty in municipal solid waste cogeneration investments

The issue of Municipal Solid Waste (MSW) management is an ever increasing problem for all countries. Developed countries face the problem of dealing with very large amounts of MSW per capita, forcing them to develop new technologies and systems. On the other hand, countries with developing or transitional economies may generate lower amounts of MSW per capita, but the rate of increase is high and the current practices of MSW management are not as advanced as those of developed countries. Therefore, countries with developing or transitional economies may benefit from adopting MSW management technologies used by developed economies. One aspect of MSW management in developed economies is the energy recovery from MSW. The advantages of this type of technologies are mainly the significantly reduced waste volume for landfilling, the reduction of total greenhouse gas emissions, the potential for generating electricity or co-generation of electricity and heat. In this work, a comparative study of the most prominent co-generation technologies using MSW as a fuel source is presented, focusing on the evolution of their economical performance over time. An algorithm based on real-options has been applied for four technologies of MSW energy recovery: (1) incineration, (2) gasification, (3) landfill biogas exploitation using a pipeline system and (4) anaerobic digestion facilities. The financial contributors are identified and the impact of greenhouse gas trading is analysed in terms of financial yields, considering landfilling as the baseline scenario. The greenhouse gas trading system presents an opportunity for investing in environmentally friendly technologies for MSW energy recovery, through the Clean Development Mechanism (CDM), in most developing countries. The results of this work indicate an advantage of combined heat and power over solely electricity generation. The most attractive technology among the ones examined proves to be incineration, mainly due to its higher power production efficiency, lower investment costs and lower emission rates. Despite the fact that these characteristics may not drastically change over time, either immediate or irreversible investment decisions might be reconsidered under the current selling prices of heat, power and CO2 allowances