Waste to Energy (WTE) Finance & Investment Summit

Converting Municipal Solid Waste to Power, Steam and Fuels

Jesse MillerEnvironmental Protection AgencyOffice of Resource Conservation

and Recovery

Outline of Presentation• Municipal Solid Waste (MSW) national

trends• Discussion of EPA’s Waste Management

Hierarchy• Waste Management in the United States• Renewable Energy• Federal subsidies • What’s Next?

MSW National TrendsTotal MSW Vs. Year

050

100150

200250300

1985 1990 1995 2000 2005 2010

Year

Mill

ion

Tons

MSW

Series1

• 250 million tons of MSW generated in 2008

• Total MSW has increased every year from 1990 – 2007

• 2008 Breakdown:

• 54.2% MSW landfilled

• 33.2% Recycled

• 12.6% Combustion with Energy Recovery

MSW Management National Trends

• The biggest change in waste management over the past 20 years has been the increase in recycling

• Landfilling is still the most dominant waste management option

• Combustion with energy recovery has decreased from 16.3% of the total stream in 1990 to 12.6% in 2008.

MSW Management Trends Vs. Year

010203040506070

1985 1990 1995 2000 2005 2010

Year

Per

cent

age

LandfillRecyclingCombustion w/ ER

“Flow Control” and WTE• Part of the reason for the decrease in the percentage of MSW

going to WTE facilities is due to a Supreme Court decision regarding “flow control”

• “Flow Control” is when MSW is specifically sent to WTE facilities in the hopes of establishing a consistent, low price feed

• The 1994 Carbone Decision found that “flow control” violated the interstate Commerce Clause

• No new WTE facility has been built since Carbone• In 2007, the Oneida-Herkimer Decision essentially reversed

the Carbone Decision. It ruled that “flow control” ordinances neither discriminate against nor unduly burden interstate commerce– New WTE facilities are currently in the permitting phase

EPA’s Waste Management Hierarchy

Waste Management• Municipal Solid Waste (MSW) does not stop

accumulating• Waste management practices in the U.S. do not

correlate with the EPA’s Hierarchy• In the past, most municipalities have been

primarily concerned with selecting the most economically favorable waste management option

• Some cities have resorted to long haul transport of waste to regional landfills

EIA’s Gas Prices• Long haul transport is subject to the fluctuations in prices of fuel• The average weekly price for all retail gasoline has increased from

99.2 cents per gallon in 1994 to 277.9 cents per gallon in 2010• When observed more closely, the price of oil was relatively constant

from 1994 to 2002• From 2002 to 2010, the price of gasoline increased from 115.1 cents

per gallon to 277.9 cents per gallon

Landfills• Landfills, on average, are the cheapest option for waste

disposal• Some landfills are engineered to collect methane gas

– Methane gas is a very potent greenhouse gas• EPA’s Landfill Methane Outreach Program reports:

– 518 operational projects (landfills with methane capture systems)– 520 candidate landfills (landfills with the potential to have

methane capture systems)– Over 50% of targeted landfills are releasing methane to the

environment

A Changing World

• Waste Management decision making for municipalities has expanded in that it is no longer solely influenced on economics

• Two Evolving Factors– Climate Change– National Security and Energy Independence

Climate Change: WTE and Landfilling

• EPA’s Office of Research and Development published a paper titled, “Is It Better to Burn or Bury Waste for Clean Energy Generation”

• The paper compared the climate change signatures of energy generated from WTE facilities and from landfills with gas collection systems

• The paper concluded that the greenhouse gas emissions for WTE ranges from 0.4 to 1.5 MTCO2E/MWh, whereas the most aggressive landfill gas to energy system results in 2.3 MTCO2E/MWh

Renewable Resources

• The EPA fully supports any effort to commercialize avenues to produce energy from renewable resources

• Biomass is typically considered a renewable resource

MSW and Renewable• MSW is comprised of a biogenic and non-biogenic portion

– Biomass and biogenic are synonymous

• It has been debated whether or not MSW should be considered a renewable resource

• An EIA study titled, “Methodology for Allocating Municipal Solid Waste to Biogenic and Non-Biogenic Energy” concluded that “sufficient information does exist to reasonably estimate the split of energy produced from biogenic and non-biogenic components of MSW”

• The study found that the biogenic portion of MSW decreased from a value of 67% in 1989 to a value of 56% in 2005

Where has MSW been defined as a renewable?

• The Energy Policy Act of 2005 includes MSW-derived electricity as a “renewable energy”resource

• The finalized rule (March, 2010) titled, Regulation of Fuels and Fuel Additives: Changes to Renewable Fuel Standard Programdefines the biogenic portion of MSW as renewable – This rule incorporates the biofuel mandates from the

Energy Independence and Security Act (EISA) into the Renewable Fuel Standard program

Where has MSW been defined as a renewable? (continued)

• The American Recovery and Reinvestment Act of 2009 included some production tax credits (PTC) in order to increase the use of renewables as feedstocks for energy production– MSW received a 1 cent per kWh tax credit– This only applies to new capacity for private tax

payers– This credit can be converted to a 30% investment tax

credit for new construction• All leading proposed climate change/energy

legislation define MSW as renewable

Where Does the Electricity in United States Come From?

• The sources from which electricity is generated varies throughout the different regions of the country

• Renewables currently only make up 3% of the total electricity that the U.S. consumes annually

Renewable Barriers• Barriers exist for all types of renewable

resources– Wind, solar, biomass, etc

• Transmission lines are needed to link remote areas where high potential for solar and wind energy exist to the grid

• Human hesitation to invest initial capital into technologies that haven’t necessarily been proven over time

• Substantial federal subsidies still exist that support conventional types of fuel

Federal Subsidies

• Success of new technological advancements can often be attributed to governmental assistance through subsidies and/or mandates– Biofuel mandates of EISA– The recent surge of wind power generation

• An EIA study called “Federal Financial Interventions and Subsidies in Energy Markets in 2007” gives a good overview of how federal subsidies are allocated to the various fuel types for electricity production

Federal Subsidies (Energy Specific)

• Direct Expenditures– Direct payment to producers or consumers of energy

• Tax Expenditures– Provisions in the Fed tax code that reduce the tax liability

• Research and Development– Has the potential to affect future production and prices

• Electricity programs serving targeted categories of electricity consumers in several regions of the country– Federal gov brings to market large amounts of electricity,

stipulating that the sale should be directed to public bodies and cooperatives

2007 Federal Energy Subsidies Distribution

• $16.6 billion in total energy-specific subsidies

• Renewables made up 29% of all energy 2007 subsidies– Renewables receive the largest allocation of

energy federal subsidies– This percentage has increased from 17%

(1999)

2007 Electricity Production Subsidies

• The subsidies distributed for electricity production are allocated differently than energy as a whole

• Coal and nuclear are heavily subsidized• Refined Coal, nuclear, and transmission

and distribution receive more electricity production subsidies than renewables

• Wind energy is by far the most subsidized of the renewables

2007 Electricity Production Subsidies

2007 Electricity Production Subsidies

• Wind provided the largest net generation of electricity for renewables in 2007

• The breakdown of renewable electricity subsidies show the highest unit of production ($/mW) directed to refined coal, solar, and wind

• MSW receives the lowest unit of production subsidy

2007 Electricity Production Subsidies

What Does All of This Mean?

WTE in 2010• MSW is being used as a resource• According to the Energy Recovery Council, there are 86 operating

WTE plants in the United States• There have only been recent expansions to existing WTE facilities

– Lee County, FL - Completed Expansion– Hillsborough, FL -Completed – Olmsted, MN - Construction Complete/ Final Testing– Frederick/Carrol County - Permitting process– West Palm Beach, FL - Request for Proposal Phase (RPP)– Toronto – Final Permitting (Post RPP)– Harford, MD – Vendor Selected/ Initial Planning– Honolulu, HI – Expansion under construction– Perham, MN – Expansion under construction– Pope/Douglas, MN – Expansion under construction– Hemstead, NY – Proposed Expansion

MSW and Alternative Technology

• Anaerobic Digestion– Food scraps made up 12.7% of the MSW stream in

2008– In Oakland, CA, the East Bay Municipal Utility District

(EBMUD) was the first sewage treatment facility in the nation to convert post-consumer food scraps to energy via anaerobic digestion

– California supports Anaerobic Digestion to manage MSW according to the California Integrated Waste Management Board

• Gasification• Other Technologies

MSW as a Feedstock for Biofuels

• Using MSW as a fuel for electricity production does not paint the complete picture

• MSW can be used as a feedstock to produce biofuels• EISA increased the volume of renewable fuel required to

be blended into transportation fuel from 9 billion gallons in 2008 to 36 billion gallons by 2022– Of this 36 billion gallons, a cap of 15 billion gallons

exists for production through traditional corn feedstock

– A large cap needs to be filled through “advanced biofuel” production

– MSW could provide such a feedstock

Concluding Remarks

• Does it make sense to bury 137 million tons of MSW a year?

• Will markets take advantage of this resource?

• How will future climate and energy legislation address the current allocation of federal electricity subsidies?

• If the U.S. plans to pursue electric cars, how will we support the increase in electricity demand?

Jesse MillerEnvironmental Protection Agency

Chemical Engineermiller.jesse@epa.gov

703-308-1180