LANDFILL-GAS-TO-ENERGY PROJECTS: AN ANALYSIS OF NET PRIVATE AND SOCIAL BENEFITS By: Paulina...

LANDFILL-GAS-TO-ENERGY PROJECTS: AN ANALYSIS OF NET PRIVATE AND

SOCIAL BENEFITS

By:

Paulina Jaramillo

In addition to preventing the emission of landfill gas to the atmosphere, landfill-gas-to-energy projects could indirectly reduce air pollution from fossil fuel combustion by offsetting the use of these fuels to generate electricity.

OBJECTIVE

To evaluate total private and social benefits of landfill-gas-to-energy projects.

U.S. Landfills:As of 2004, Total Active Landfills = 2300

100

282

25

630

1263

Direct Use Projects

Electricity GenerationProjectsEnergy Project UnderConstructionEnergy ProjectCandidate Landfills No Energy Project

LANDFILL-GAS COLLECTION SYSTEM

Landfill-gas is collected by a system of wells and pipes installed throughout the landfill

Gas Flow (cf/day) Initial Capital Costs

(1996$) Annual O&M Costs

(1996$/yr) 642,000 $628,000 $89,000

2,988,000 $2,088,000 $152,000 5,266,000 $3,599,000 $218,000

Source: U.S Environmental Protection Agency. Turning a Liability into an Asset. Landfill Methane Outreach Program. Washington, DC 1996. EPA 430-B-96-0004.

Collection System

• Will need to compare collection system capacities given with estimated gas generation– May need to adjust/scale systems.– How?

LANDFILL GAS PRODUCTION

- Amount of gas produced in year T by waste deposited in year x

Where - T is the current year- 2 is the Ratio of landfill gas to methane.

- Rx is the amount of waste disposed in year x (lbs).

- Lo is the total methane generation potential of the waste = 2 cf/lb- k is the rate of methane generation = 0.04/yr- x is the year of waste input.

)(,2 xTkoxxT eLkRLFG−−=

LFGT = ∑LFGT,x

Where

- LFGT = Total landfill gas generation in year T.

- LFGT,x = Annual landfill gas generation from waste deposited in year x.

x

CASE STUDY LANDFILLS

Landfill Name West County West Lake Modern Year Landfill Opened 1975 1976 1958 Year Landfill Closing 2008 2003 1997 Current WIP (1999, tons) 6,000,000 10,615,857 8,750,000 Acceptance Rate (ton/ Year) 264,000 950,000 187,500 Design Landfill Depth (ft) 100 300 120 Design Area of Landfill 110 52 128

Three landfills located in St. Louis, Missouri

Source: Morgan, Susan M. and Yang, Qing. Use of Landfill Gas for Electricity Generation. Practice Periodical of Hazardous, Toxic, and Radioactive Waste Management. January 2001.

CHOOSING THE SYSTEM SET-UP

- Average net power generation potential during the lifetime of the project divided by the nominal capacity of each system type.

- Determine how many engines/turbines are required and the associated capital costs.

- The equipment with the lowest capital costs is chosen for the analysis.

AIR EMISSIONS

- Methane emission from landfills are reduced by generating electricity.

- Electricity generating equipment produces CO2 emissions and emissions of criteria air pollutants.

- Emission valuation was used to calculate total emission savings obtained using the equipment.

- The AP-42 Emission factors were used.

UNCONTROLLED GREENHOUSE GAS EMISSIONS()()()TCO LFGU112.05.02=()()()TCH LFGU041.05.04=

Where 0.5 is the assumed percentage of landfill gas that is CO2/CH4; 0.112 are the lbs of CO2 per cf of landfill gas; 0.041 are lb of CH4 per cf of landfill gas; and LFGT is the total amount of landfill gas generated in current year T (cf).

CONTROLLED GREENHOUSE GAS EMISSIONS

Where collection efficiency is assumed to be 85% and 2.75 is the ratio of the molecular weight of CO2 to the molecular weight of CH4

Similar method for other pollutants (SO2, etc)

()()441CHcolCHUCη−=()()()75.2422 CHcolCOCO UUCη+=

EMISSION OFFSETS

Calculated using the average emission factors (based on all energy sources) for the region of St. Louis - MO, as given by the EPA’s E-GRID program.

- 1,237 lb/MWh for CO2

- 5.2 lb/MWh for SO2

- 2.7 lb/MWh for NOX

RESULTS FOR WEST LAKE LANDFILL

Note: Values are in thousand dollars

WEST LAKE IC Engine Gas Turbine Steam TurbinePrivate Net Present Value of Project $5,695 $6,300 $10,900Emission Savings Compared to Flare Emissions -$3,120 $635 $2,410Net Present Value Without Emission Offsets $2,575 $6,935 $13,310Net Present Value of Emission Offsets $11,005 $11,240 $10,170Total Social Net Present Value $13,580 $18,175 $23,480

Sensitivity Analysis

• What is most important question?– Under what scenarios is NPV positive!!

– “Spider diagram” not useful itself

BREAKEVEN PRICE OF ELECTRICITY

- The price of electricity at which the projects would breakeven (have NPV =0)

- Calculated for - Private NPV.- Social NPV without emission offsets.- Social NPV with emission offset.

BREAKEVEN PRICE OF ELECTRICITY¢/kWh

Private Social, Without Emission Offset

Social, With Emission Offsets

IC Engine < 3.8 < 4.55 < 1.8

Gas Turbine < 4 < 3.9 < 1.15

Steam Turbine < 2.2 < 1.5 0

OPTIMUM SUBSIDIES METHOD 1

Divide the emission savings NPV by the electricity generated during the operating life of the project.

WEST COUNTY IC Engine Gas Turbine Steam TurbinePrivate Net Present Value of Project $3,190 $2,735 $5,090Emission Savings Compared to Flare Emissions -$1,665 $340 $1,285Net Present Value Without Emission Offsets $1,525 $3,075 $6,375Net Present Value of Emission Offsets $7,200 $5,965 $5,620Total Social Net Present Value $8,725 $9,040 $11,995

OPTIMUM SUBSIDIESMETHOD 1, ¢/kWh

Without Emission Offset

With Emission Offsets

IC Engine 0 < 0.5

Gas Turbine 0 < 0.75

Steam Turbine < 0.2 < 0.85

OPTIMUM SUBSIDIES METHOD 2

Subtract the private NPV from the emission savings NPV, and divide by the electricity generated during the operating life of the project.

WEST COUNTY IC Engine Gas Turbine Steam TurbinePrivate Net Present Value of Project $3,190 $2,735 $5,090Emission Savings Compared to Flare Emissions -$1,665 $340 $1,285Net Present Value Without Emission Offsets $1,525 $3,075 $6,375Net Present Value of Emission Offsets $7,200 $5,965 $5,620Total Social Net Present Value $8,725 $9,040 $11,995

OPTIMUM SUBSIDYMETHOD 2, ¢/kWh

Without Emission Offset

With Emission Offsets

IC Engine 0 < 0.3

Gas Turbine 0 < 0.65

Steam Turbine 0 < 0.3

CONCLUSIONS

- LFGE projects can have positive private benefits, and should be established in more landfills

- Steam turbines provide best results, but rarely used.

- Measuring only greenhouse gas emission reductions doesn’t tell the whole story. Criteria air pollutant emissions must be included.

- Social benefits are substantial, especially if emission offsets are included

- Breakeven prices of electricity for these projects are competitive.

- Optimum subsidies are much lower than available subsidies.