An integrated analytical framework for quantifying the LCOE of waste-to-energy facilities for a range of greenhouse gas emissions policy and technical factors

Abstract

This study presents a novel integrated method for considering the economics of waste-to-energy (WTE) facilities with priced greenhouse gas (GHG) emissions based upon technical and economic characteristics of the WTE facility, MSW stream, landfill alternative, and GHG emissions policy. The study demonstrates use of the formulation for six different policy scenarios and explores sensitivity of the results to ranges of certain technical parameters as found in existing literature. The study shows that details of the GHG emissions regulations have large impact on the levelized cost of energy (LCOE) of WTE and that GHG regulations can either increase or decrease the LCOE of WTE depending on policy choices regarding biogenic fractions from combusted waste and emissions from landfills. Important policy considerations are the fraction of the carbon emissions that are priced (i.e. all emissions versus only non-biogenic emissions), whether emissions credits are allowed due to reducing fugitive landfill gas emissions, whether biogenic carbon sequestration in landfills is credited against landfill emissions, and the effectiveness of the landfill gas recovery system where waste would otherwise have been buried. The default landfill gas recovery system effectiveness assumed by much of the industry yields GHG offsets that are very close to the direct non-biogenic GHG emissions from a WTE facility, meaning that small changes in the recovery effectiveness cause relatively larger changes in the emissions factor of the WTE facility. Finally, the economics of WTE are dependent on the MSW stream composition, with paper and wood being advantageous, metal and glass being disadvantageous, and plastics, food, and yard waste being either advantageous or disadvantageous depending upon the avoided tipping fee and the GHG emissions price.