By Viviana Ávalos Araya

Research supported by the Chilean National Commission for Scientific and Technological Research (CONICYT) and the Chilean Ministry of Energy.

Advisors: Prof. A.C. (Thanos) Bourtsalas and Prof. Nickolas J. Themelis

Department of Earth and Environmental Engineering
Fu Foundation School of Engineering & Applied Science
Columbia University

November 26, 2019

The term Waste-to-Energy (WTE) is used to refer to highly technical engineering processes that use municipal solid waste (MSW) as a fuel, to produce electricity and heat. These facilities are different and significantly more advanced as compared to the traditional incinerators that were used to incinerate household or medical waste without energy recovery and without advanced Air Pollution Control Systems, as is the case of the WTE plants.

At present time in Chile, a private waste management enterprise cannot afford to implement WTE in Santiago, for non-recyclable wastes unless the gate fee is increased from US $20/ton of MSW at landfills to US $45/ton at a WTE facility. However, the external environmental costs of landfilling are not factored in a fully private investment.

The first part of the study provides a summary of a pre-feasibility study on the development of a WTE plant with annual waste capacity of 330,000 tons per year and capital cost of US $615/annual ton of capacity; it was conducted by the Ministry of Energy and the Metropolitan Regional Government in 2018. Results showed that the gate fee would have to be US $43.6/ton (selling electricity only), which is 2.5 times higher than the average gate fee of US $17/ton of waste, paid on average by the municipalities in the Metropolitan Region.

Considering a realistic scenario with an electricity price of < US $50/MWh by 2040, the gate fee to the WTE plant would have to be US $66.7/ton, as there would be less revenues from the sales of electricity. Therefore, the shortfall needed to be covered to advocate WTE deployments instead of landfilling is between $25/ton to US $50/ton of waste.

The second part of this study described the status of Chinese WTE market, in order to asses if lower investment costs from Chinese developers could decrease the gate fee in a WTE facility in Chile. Results showed that the capital cost for Chinese facilities is much lower than in other countries, with an average of US $250/ton of annual capacity. However, it is expected that in Chile, capital cost will not be as low, considering other factors that affect the capital required, such as permitting time, land, development and civil works, and social opposition; a reasonable estimate would be US $450/ton of annual capacity, less than the estimations provided by the Ministry of Energy and the Metropolitan Regional Government.

The third part of the study briefly assessed the limits of recycling and the role of WTE in circular economy. Recycling does not compete with WTE. The Lock in effect and the 3-R Trade off mostly occurs in countries with high WTE capacity, but also were high recycling rates have been accomplished.

Recycling has many limitations that relate to the quality of the recovered products, the markets and, also, the understanding and compliance of citizens to source-separate recyclables. Even in European countries who have achieved high recycling rates and represent the most successful paradigms of sustainable waste management, by 2035 there will be at least 35% of post-recycling waste materials that, following the Waste Hierarchy, should go to WTE instead of landfilling.

The last and part of this study evaluated the environmental costs and benefits of landfill sites and WTE facilities in order to determine a “social cost” that was defined by considering costs and benefits that are not factored in the capital and operating costs required for sustainable infrastructure. The ‘social cost’ considered the cost of land consumed in landfilling, the direct CO 2eq emissions from each waste management method, the benefits from indirect CO 2eq savings, e.g. from the diversion of MSW from landfills, energy contribution to the national grid and metals recovered for recycling. The cost of air emissions and health risks were reviewed, but not fully quantified due to lack of time and data availability.

Results showed that the net carbon from landfilling is 0.5 and 1 ton CO2 /ton MSW higher than WTE. The ‘social cost’ of both alternatives is mainly determined by the social cost of carbon. This study used a price of CO 2 equivalent to US $ 5/ton, which is a CO2 tax regulated by under Law 20.780. However, this price is too low compared to estimates of over $50 per ton.

There are clear environmental, economic, and aesthetic benefits of WTE facilities as compared to landfills. If managed and maintained properly, WTE facilities can reduce CO2eq emissions alleviate the public health effects of improper waste management, preserve valuable land, generate 10 times more energy, and recover metals and minerals for recycling.

However, WTE associates with high capital and operational costs which are not expected to decrease, considering significant factors that hinder the development in Chile, such as the lack of support from the public entities; inadequate public information; major contribution by informal recyclers, whose livelihood depends on the collection and sales of recyclables; low fees for the disposition of waste materials, and indirect advocacy of improper disposition of wastes in open dumps; institutional, and regulatory hurdles associated with permitting.

Considering the current situation of the improper landfilling of waste and the limited financial and technical capacity on WTE deployment, the Chilean Government must develop efficient collection of wastes and transform the open or improper landfills to engineered landfills with methane recovery and electricity generation as a short term solution to the challenge of waste management. A clear regulatory framework should be developed that advocates WTE, by the use of results-based financing mechanisms, as explained in detail in GPRBA, 2018; that will be the long and secure solution. In addition, pre-treatment systems should be developed to ensure minimum loss of quality of the waste materials.

For the future, value-based economic, financial and environmental life cycle models should be considered, by taking into account the resource productivity. For example economic output and materials input; and the environmental impact of the several waste management options, e.g. reusing, recycling/composting, energy recovery; in order to optimize the contribution of the waste products to the market, the economy, and the environment. I will also need to provide the tools to the stakeholders to deploy integrated sustainable waste management systems that recover materials through recycling and energy from the residual waste.