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Waste-to-energy (WTE) is a proven technology used globally to generate clean, renewable energy from the sustainable management of municipal solid waste (MSW). Progressive communities around the world employ strategies to reduce, reuse, recycle and recover energy from waste. Postrecycled MSW is an abundant, valuable and underutilized source of domestic energy. By processing this material, WTE facilities: produce renewable, baseload energy; reduce greenhouse gases; create good-paying, green jobs; operate with superior environmental performance; and complement recycling goals.

The 2014 Energy Recovery Council (ERC) Directory of Waste-to-Energy Plants was released in May during the 22nd Annual North American Waste-to-Energy Conference (NAWTEC) in Reston, Virginia. The directory shows 84 WTE facilities (40 of which are owned by local governments) in 23 states which have the capacity to process more than 96,000 tons of waste per day and have an electric capacity of more than 2,769 megawatt hours (MWh). Because of high operational availability, the nation’s WTE facilities process in excess of 30 million tons of trash per year, sell more than 14.5 million megawatt hours to the grid, and recover and recycle more than 730,000 tons of ferrous metals. In addition, approximately one-quarter of all WTE facilities in the U.S. sell steam directly to end users offsetting the use of fossil fuels to make that energy.

The revenues, employment and labor earnings derived from managing waste, producing energy and recycling metals are the direct economic benefits of waste-to-energy. In addition, these activities generate indirect impacts as well as induced impacts. Total 2011 sales revenues at the 84 WTE facilities was $3.2 billion, leading to a total national economic impact of $5.6 billion.

The WTE industry directly employs about 5,350 people nationwide. The WTE sector also creates an additional 8,600 jobs outside of the sector for a total of nearly 14,000 jobs. Employees at WTE plants are technically skilled and are compensated at a relatively high average wage. Employees in the WTE industry receive about $460 million in annual salary and benefits. The effect of this direct spending on employee compensation generates another $429 million of compensation for workers across various associated industries. In addition to the revenues generated by the sector, WTE facilities provide stable, long-term, well-paying jobs, while simultaneously pumping dollars into local economies through the purchase of local goods and services and the payment of fees and taxes.
 

Market outlook

In 2011, almost 390 million tons of trash were generated in the United States, and only 29 percent of it was recycled. Postrecycled waste is an abundant and readily accessible resource with inherent energy value, which can support large increases in domestic WTE capacity. The U.S. is fortunate that WTE is a proven and mature technology with a track record of operational success, high availability and overall reliability. However, these facilities must still compete in extremely difficult market conditions, not only for energy but for waste management. These market conditions present challenges for all renewable technologies, but the recognized need for sustainable waste management tools and a diverse electric generating mix make WTE attractive.

In the past seven years, six WTE facilities in the U.S. have expanded their existing capacity to increase the amount of waste they can process and increase the amount of energy they produce. These expansions added 2,540 tons per day of additional waste capacity and 54 MW of electric capacity, as well as additional steam exports to end users.

The industry expects further opportunities to expand existing facilities in the next five years. In addition, development of greenfield facilities is occurring for the first time since the 1990s. Palm Beach County in Florida is constructing a new 3,000-ton-per-day (TPD) WTE facility which will have an electric generating capacity of 96 MW. Furthermore, Maryland has issued permits for new WTE facilities in Baltimore and Frederick. Many other municipalities are in discussions with technology developers to provide new WTE capacity locally although the lead times for developing and constructing facilities are generally very time consuming.

The development of new facilities is closely tied to the energy markets in which they participate, which are currently heavily influenced by the availability and price of natural gas. Wholesale electricity prices have been extremely challenging in recent years, which drives down revenues from renewable electric generation. However, WTE is in a unique position, in that electricity revenues are typically less than half of the total revenue earned by a WTE facility.

The majority of revenues are derived from waste tipping fees, so there is some insulation from energy prices. However, waste markets are extremely competitive given the vast amount of land in the United States in which it is possible to site price-competitive landfills. As a result, WTE facilities actively manage their processes to maximize the profitability of the enterprise. Many owners and operators of WTE facilities are undertaking projects to increase metal recovery, process ash for beneficial reuse and market capacity to companies seeking zero-waste-to-landfill strategies.

In addition, many companies and local governments are working to deliver technologies based on other thermal conversion processes, such as gasification or pyrolysis. While all 84 U.S. municipal WTE facilities use combustion technology, conversion technologies offer the potential to produce an array of end-use products, such as electricity, steam, fuels, chemicals or other products. While these technologies do not operate commercially utilizing MSW in the U.S., companies and local governments are now exploring opportunities to do this.

Historically, the economic model of WTE technology works best in areas with high population density, because waste is generated in large volumes locally (minimizing transport) and the prospect of siting additional landfill space is more difficult. While densely populated areas will continue to be a prime target for WTE deployment, communities interested in sustainable waste management options will continue to pursue WTE technology. In addition, regions with limited transmission may seek WTE because the electricity can be generated where it will be consumed.

Supportive policy will be necessary to ensure the deployment of any recovery technology (recycling or WTE), otherwise the market will continue to be dominated by the low-cost disposal option (landfilling). As we have seen, the success (or failure) of federal policy can have tremendous influence on energy technologies.

The Public Utility Regulatory Policies Act of 1978 had an enduring effect on the WTE industry. However, the production tax credit (PTC) failed to provide the same stimulus, given that the duration of the PTC has been less than the typical WTE project development window.

In addition, state renewable portfolio standards have blossomed over the last decade, but the vast discrepancy of renewable credit market values among states and renewable technologies often provide less assistance than is necessary. While meaningful congressional action on energy issues has been arguably absent in recent years, the Obama administration’s Clean Power Plan (the 111(d) rule) offers an opportunity for renewable technologies, including WTE, to benefit from reducing greenhouse gas emissions. While still a long way from being finalized and implemented, the 111(d) rule is likely to be one of the most significant energy policy initiatives to come out of Washington, D.C., during this decade.

Key WTE messages

MSW continues to be generated in vast quantities, and there is inherent valuable energy that can be extracted through WTE technology. While WTE technology is proven and mature, innovations are continually being developed to increase efficiency, reduce emissions, enhance energy extraction, reduce costs and foster sustainability. However, U.S. market signals are set almost entirely by the lowest cost methods of energy generation and solid waste management.

To increase the likelihood that pro-WTE policies will be adopted and will drive deployment, policymakers must understand the benefits and challenges of WTE technologies and set policies accordingly. Compelling and effective messaging in today’s political environment include:

• Jobs – WTE facilities are known for their high-paying, skilled labor jobs and positive economic benefits to the communities in which they operate. The WTE supply chain is large and the jobs associated with delivering goods and services to the facility must not be overlooked.
• Greenhouse Gases – The benefits of using WTE to avoid carbon dioxide from the power sector and methane from the landfill sector are compelling. WTE can make a significant contribution to states’ compliance with future 111(d) GHG targets.
• Sustainability – As more companies adopt zero-waste-to-landfill initiatives, WTE is a critical tool for managing waste that cannot be recycled. Some of the nation’s largest and most respected companies utilize WTE to complement their recycling efforts.
• Innovation – WTE is sophisticated energy recovery technology that is constantly evolving. Enhanced metal recovery and a continuously improving emissions profile are examples of the benefits of this innovation.

The WTE sector has remained steady in challenging times, but the opportunity for growth is real. With supportive policies and positive messaging, the market will unleash technology innovation to extract the maximum value inherent in waste. A conducive policy environment for WTE will breed a viable business environment, which will put this country on a similar path that has made WTE so successful in Europe.

The author is president of Energy Recovery Council and partner at AJW, Inc. He can be reached at [email protected]. The article information was first presented at the 2014 North American Waste-to-Energy Conference (NAWTEC).