The only option for municipal solid waste (MSW) treatment adopted so far in Serbia is landfilling. Similarly to other south-eastern European countries, Serbia is not recovering any energy from MSW. Fifty percent of electricity in Serbia is produced in coal-fired power plants with emission control systems dating from the 1980s. In this article, the option of MSW incineration with energy recovery is proposed and examined for the city of Novi Sad. A sustainability analysis consisting of financial, economic and sensitivity analyses was done in the form of a cost-benefit analysis following recommendations from the European Commission. Positive and negative social and environmental effects of electricity generation through incineration were valuated partly using conversion factors and shadow prices, and partly using the results of previous studies. Public aversion to MSW incineration was considered. The results showed that the incineration project would require external financial assistance, and that an increase of the electricity and/or a waste treatment fee is needed to make the project financially positive. It is also more expensive than the landfilling option. However, the economic analysis showed that society would have net benefits from an incineration project. The feed-in tariff addition of only €0.03 (KWh)(-1) to the existing electricity price, which would enable the project to make a positive contribution to economic welfare, is lower than the actual external costs of electricity generation from coal in Serbia.
Keywords: MSW; economic analysis; energy recovery; financial analysis; incineration; public aversion; sensitivity analysis.