Historically, it was common for landfills to burn the waste brought to the site as a way of reducing the waste volume. Since the 1980’s, waste-to-energy, an energy recovery program, has become a more common practice. The EPA recognizes waste-to-energy sites as a “clean, reliable, renewable source of energy” that produce “electricity with less environmental impact than almost any other source of electricity.” There are two ways in which waste is converted into energy. One option is incinerating the garbage to convert water to steam, which turns a turbine-generator to generate electricity. A second option is harnessing a natural byproduct of decomposing waste – methane gas.
The key “ingredient” for waste-to-energy facilities is the solid waste disposed of by residents, manufacturing and construction projects. The U.S. currently generates more than 254 million tons of solid waste each year, that number has been growing steadily, expecting to exceed 300 million tons by 2010. Approximately 12.6% of the solid waste brought to a landfill is incinerated in waste-to-energy plants and 54.3% is placed into the landfill, which over time, generates methane gas.
According to the Integrated Waste Services Association, the waste-to-energy plants that incinerate solid waste generate approximately 550 kilowatt-hours of electricity for each ton processed. There are 89 waste-to-energy plants which currently operate in 31 states. Combined, these plants generate more than 17 billion kilowatt-hours of electricity each year – the equivalent of 30 million barrels of crude oil.
There are approximately 485 landfill gas-to-energy projects currently in operation throughout the U.S. Methane gas is a natural byproduct of decomposing landfill waste. This gas is captured through an extensive piping system within the landfill and converted into a useable energy source. The landfill projects in existence currently generate approximately 11 billion kilowatt-hours of electricity each year. There is an abundant supply of methane gas available yet to be tapped. According to the EPA, there are more than 500 additional landfills that are considered suitable for converting methane gas to electricity. California and Texas currently have the highest number of landfill gas-to-energy projects nationally.
The Energy Policy Act of 2005 recognized waste-to-energy and methane gas as renewable energy sources eligible for the renewable energy production tax credit. The federal government is required to purchase an increasing percentage, year-over-year, of its electricity from renewable sources. As a recognized source of renewable energy, waste-to-energy companies are able to sell renewable energy credits to organizations within the federal government. More recently, in June 2009, the U.S. House of Representatives passed The American Clean Energy and Security Act of 2009 which establishes a renewable energy standard, defining waste-to-energy as a renewable source and requiring the federal government to purchase 6% of its electricity from a renewable source by 2012, and 20% by 2020.
The United Nations Framework Convention on Climate Change includes a commitment on the part of the U.S. to reduce greenhouse gas emissions. One benefit of converting solid waste into energy is the reduction in the greenhouse gasses generated in the process. Waste-to-energy plants emit two-thirds less gas compared to combusted coal. Generating electricity from waste is just one way of meeting this commitment. The EPA’s Landfill Methane Outreach Program assists communities, landfill owners and companies in developing methane gas projects. Currently there are more than 40 different companies being powered through converted methane gas.
According to Dr. Marco J. Castaldi, a professor in the Department of Earth and Environmental Engineering at Columbia University, waste-to-energy plants are “poised to become an important part of the U.S. electric generation industry.” For example, legislation introduced as the American Renewable Energy Act of 2009 may require utilities to obtain 25% of their generation portfolio from eligible renewable sources, one of which is waste-to-energy, by 2025. Originally, utility companies were required to obtain 2% of their electricity from a renewable source by 2010.
The waste and waste-to-energy industries are heavily influenced by environmental regulation and now, energy availability. Increasing investment in technology for managing various waste streams is crucial to future growth and development while simultaneously minimizing environmental impact. As demand for alternative energy sources continues to grow and evolve, corporations and lenders will rely on professionals with the expertise necessary to properly value changing industries. Read more about how AccuVal determined the value of other emerging, fast changing energy segments.