From Trash to Renewable Energy

King George, Va.— As train cars loaded with trash roll in to the King George Landfill, they aren’t just delivering waste. They are also carrying the goods that could help the state inch towards Obama administration’s carbon emissions standards.

It’s counterintuitive, but from this trash comes renewable energy. Underground pipes at the landfill are pumping methane gas up through several layers of decomposing waste, which stretch across 400 acres at the landfill. That gas is filtered, chilled and heated several times before getting pushed through one of four turbines to create about 12.5 megawatts of electricity, enough to power 12,000 average homes.

Electricity produced from sites like this has nearly doubled in the last decade, according to the Energy Information Administration.  More and more landfills that are required to collect pollutants like methane have started using it to make steam or power, which can be sold directly to nearby manufacturing plants or fed into the electric grid.

Landfill gas-to-energy projects have plenty of easy-to-see bonuses: They make use of America’s trash, keep a potent greenhouse gas out of the atmosphere and produce energy from a fuel that burns cleaner than coal. So why isn’t it more prevalent?

Like many renewable energy endeavors, starting it up is expensive. And despite the quick growth of the industry, landfill gas still represents just a fraction, about 2 percent, of the renewable energy generated in the country, according to federal data. Waste-to-energy, a related practice that burns trash and biomass and uses the heat to generate power, represents about another 2 percent of renewable energy. But it has seen no growth in the last decade.

“Obviously (landfill gas generators) are not going to jump into a major role in generating electricity in the United States,” said Chris Tornow, an energy data analyst for Ventyx. Still, Tornow says large landfills are taking advantage of the practice, especially in states with renewable portfolio standards.

For landfill gas to really take off though, there would likely have to be some sort of state or federal tax incentive, he said. Unless that happens, it’s likely that only the bigger facilities will use the methane they collect to create power.

Ventyx predicts most future growth will come from expansions at existing projects. It’s difficult to track those expansions, but Ventyx says landfill gas makes up less than 1 percent of the electric capacity that generators are planning for the next few years. The EPA predicts that among the landfills that are candidates for landfill gas projects, there are 885 megawatts of power available.  That’s enough to power about 800,000 homes.

In Virginia, the King George Landfill is considering adding an additional turbine to generate even more electricity because large landfills that don’t use all their methane for power are forced by federal environmental regulations to collect and flare it.

“Just burning it off on flare breaks my heart because it’s just money going up in flames,” says Thomas Cue, senior district manager for Waste Management.


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A Clouded Crystal Ball

The future of both industries depends on a web of federal regulations and tax incentives, chief among them the EPA’s proposal to reduce carbon emissions, the expired renewable energy Production Tax Credit and standards for landfill methane emissions.

If the EPA’s carbon proposal makes electricity more expensive, these facilities will be able to earn more from the power they sell, so it will make more economic sense to build them.  It has been increasingly difficult for landfill gas and waste-to-energy projects to compete with cheap natural gas, so they are always watching the price of electricity.

The draft rule could also make the Renewable Energy Certificates that these plants can sell more valuable.

Ted Michaels, president of the group that represents the waste-to-energy industry, says he’s hoping the proposal will drive renewable energy and waste energy growth.

Not all fans of the carbon emissions rule see landfill gas power as a good thing.

“Providing an incentive for energy production from landfill gas is better than venting that gas, but you don’t want to encourage landfills,” says Nathanael Green, the Natural Resources Defense Council’s director of renewable energy policy.  “What we really should be arguing is not whether we provide an energy incentive to landfills, but how do we avoid landfills altogether.”

Opposition to landfills has grown, and that means new ones are less likely to come online, Tornow said. That could also stunt landfill gas growth.


Tax Policy in Limbo

The federal government’s Production Tax Credit is meant to spur development of cleaner energy, including from waste. But Congress has allowed the credit to lapse so many times that the industry says it hasn’t been able to rely on it to obtain financing.

The credit, which mainly supports wind power, provides a smaller incentive for landfill gas and electricity from waste. It expired about eight months ago and could be extended in a concurrent resolution to fund the federal government after the elections in November, but trade lobbyists aren’t holding their breath.

“It’s created business uncertainty for developers of these sites because they had been planned based on a certain tax structure,” said David Biderman, vice president of government affairs for the National Waste and Recycling Association.

Without that certainty, it’s harder to get upfront financing, Biderman said.

Michaels says waste-to-energy plants by and large have not been able to use the PTC at all because of the way it is structured. It takes five to eight years to bring a plant online, and for years the PTC only doled out credits once a plant was operating.

While the industry awaits those policy changes, it’s also watching as the EPA considers revising emissions standards for landfills, which fall under the New Source Performance Standards (NSPS).

The National Waste and Recycling Association is asking the EPA to get rid of temperature and other requirements for the methane wellheads, arguing they offer no environmental benefits and increase costs.

There’s also a possibility that smaller, municipally-run landfills that are not currently required to collect methane will have to in the future, said Patrick Riley, an environmental program specialist with the Oklahoma Department of Environmental Quality.

Oklahoma’s DEQ is arguing that would be a big burden for those sites that don’t have access to capital or financing to fund methane capture systems that can cost $500,000 or $750,000, depending on the size of a landfill.

Bigger landfills can attract third-party investors but smaller, rural ones can’t generate as much electricity so they don’t look as attractive to those investors, Riley said.

“The amount of effort to collect the smaller amount of gas may not be warranted,” Riley says. “We have facilities now that are collecting and flaring only because there is no other option.”

If the EPA required more landfills to collect methane, they’ll likely want to find a use for the gas to recoup some of the costs. But the methane power plants are also expensive and it’s hard to tell if they’re worth the price when it’s unclear how much electricity will cost over the next decade.

“The cost would have to come down in some of the areas to make it cheaper to even build a project before it would really start to take off or even if it was going to pick up these remaining 885 megawatts,” Tornow said.

At the end of the day the markets will have to determine how big a role America’s trash plays in the electric world.

Morning Consult