Economic Feasibility of Waste to Energy

One key aspect to consider is the economic feasibility of anaerobic digesters and incinerators/gasifiers
A viable waste to energy (WTE) system to process municipal solid waste and wastewater can be costly, so producers
who are considering adopting this type of technologies need to examine all aspects of it. One key aspect to consider
is the economic feasibility of the technology.
Background
Kenya has many Cities and Towns(urban communities with population>40,000 for the AD & at least 250,000
households for incinerator) that generate volumes of municipal solid waste and wastewater. These wastes require
proper handling to reduce pollution and contamination.
Using anaerobic digesters (Biosolids) appears to be an attractive option since the AD process can stabilize most
agricultural (market vegetable waste), domestic and industrial organic wastes, wastewater and produce biogas, a
renewable energy. Biogas can be used as a fuel source to produce electricity and heat, just like natural gas. MSW can
be incinerated or gasified to generate electricity and/or heat (cogeneration).
The total capital costs of anaerobic digester plants are high and may range from a few hundred thousand to a few
million dollars. However, most of the other waste processing technologies, which may also require a high capital
investment, do not generate revenue like a biogas digester plant does. Some of the feasibility studies in North
America on anaerobic digesters concluded that the payback period ranges from 5 to 16 years when operated under
optimum and worst conditions, incentives for producing green energy can potentially reduce the payback period
significantly.
Annual Energy Revenue from 100 kWh Anaerobic Processing of Wastewater Plant 1:Beneficial community characteristics (Urban communities with population >40,000 ; Existing wastewater treatment
plant with biogas capture)
Urban Communities with Population

= >40,000

Average cost of electricity

= $0.06/ kWh

Average cost of heat

= $5.5/GJ

Annual electricity potential

= 804,000 kWh(30 days/y-downtime)

Annual heating potential

= 2,000 GJ

Savings from electricity

= 804,000 x 0.06 = $48,240

Savings from gas

= 2,000 x 5.5 = $11,000

Total annual savings from energy or the energy potential for exporting into the grid

= $59,240

Approximate Estimation of Capital Cost

Typically, the capital costs of a biogas electricity generating plant are $3,700 to $15,000/kWh , installed for the
cogeneration equipment. Estimation of the approximate capital cost assuming a period of 30 days/year as a shutdown
period for maintenance:Total electricity production from 100 kWh AD wastewater plant

= 100 * 24 * 335 = 804,000 kWh

Assumptions
30 days/year for maintenance shut down, number of operating days/year

= 335

A 24h/d operation, the capacity of the electricity generator/d

= 100 * 24 = 2,400 kWh

Capital cost of $7,500/kWh,

Total cost of the system

= 100 * 7,500 = $750,000

Simple Payback Period

Typically, the running cost of a biogas electricity generating plant is $0.02/kWh. Estimation of the approximate
simple payback period:Capital cost - Total Capital Investment (TCI)

= $750,000

Operating cost assumed

= $0.02/kWh

Total electricity production from 100 kWh AD wastewater plant

= 804,000 kWh

Operating cost/year

= 0.02 x 804,000 = $16,080

Yearly energy revenue

= $59,240

Subtracting operating cost from the yearly revenue

= $59,240 - $16,080 = $43,160

Government incentives for renewable energy production (2010-2030)

= $0.06/kWh

Total incentives

= 0.06 x 804,000 = 48,240

Total yearly revenue

= 43,160 + 48,240 = $91,400

The simple payback period

= 750,000/91,400 = 8.2 years

Annual Energy Revenue from 100 kWh Incineration/Gasification of MSW Plant 2:Beneficial community characteristics (WTE facilities may be better suited to larger communities or regional districts,
with at least 250,000 households; High heat demand (potential to sell heat to other users). For an approximate idea of
energy output, a standard MSW combustion plant produces approximately 470 kWh of electricity and 760 kWh of
heat per tonne of MSW.
Urban Communities with Population

= >250,000 households

Average cost of electricity

= $0.06/ kWh

Average cost of heat

= $5.5/GJ

Annual electricity potential

= 804,000 kWh(30 days/y-downtime)

Annual heating potential

= 2,894 GJ

Savings from electricity

= 804,000 x 0.06 = $48,240

Savings from gas

= 2,894 x 5.5 = $15,919

Total annual savings from energy or the energy potential for exporting into the grid

= $64,159

Approximate Estimation of Capital Cost

Typically, the capital costs of an incineration/gasification electricity generating plant are $3,700 to $15,000/kWh ,
installed for the cogeneration equipment. Estimation of the approximate capital cost assuming a period of 30
days/year as a shutdown period for maintenance:Total electricity production from 100 kWh incineration/gasification plant

= 100 * 24 * 335 = 804,000 kWh

Assumptions
30 days/year for maintenance shut down, number of operating days/year

= 335

A 24h/d operation, the capacity of the electricity generator/d

= 100 * 24 = 2,400 kWh

Capital cost of $7,500/kWh,

Total cost of the system

= 100 * 7,500 = $750,000

Simple Payback Period

Typically, the running cost of a biogas electricity generating plant is $0.02/kWh. Estimation of the approximate
simple payback period:Capital cost - Total Capital Investment (TCI)

= $750,000

Operating cost assumed

= $0.02/kWh

Total electricity production from 100 kWh incineration/gasification plant

= 804,000 kWh

Operating cost/year

= 0.02 x 804,000 = $16,080

Yearly energy revenue

= $64,159

Subtracting operating cost from the yearly revenue

= $64,159 - $16,080 = $48,079

Government incentives for renewable energy production (2010-2030)

= $0.06/kWh

Total incentives

= 0.06 x 804,000 = 48,240

Total yearly revenue

= 48,079 + 48,240 = $96,319

The simple payback period

= 750,000/96,319 = 7.8 years