waste-to-energy success factors in sweden and the united states

7/29/2019 Waste-to-energy success factors in Sweden and the United States

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WASTE-TO-ENERGY SUCCESS FACTORS INSWEDEN AND THE UNITED STATES

ANALYZING THE TRANFERABILITY OF THE SWEDISH WASTE-

TO-ENERGY MODEL TO THE UNITED STATES

Matt WilliamsDecember 2011


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CONTENTS

I. Background ........................................................................................................ 3

II. Introduction ....................................................................................................... 3

III. History of Energy and WTE in Sweden ............................................................ 3

IV. History of Waste-to-Energy in the U.S ............................................................. 5

V. Waste-to-Energy Success Factors ................................................................... 6

1. High Landfill Tipping Fees ............................................................................. 6

2. Policies Favorable to Waste-to-Energy ......................................................... 7

3. Extensive District Heating Network ............................................................. 10

4. Absence of Cheap Domestic Sources of Energy ......................................... 10

5. A High Price of Electricity ............................................................................ 11

6. Ample Supply of Waste ............................................................................... 11

7. Public Support ............................................................................................. 12

8. High Recyling Rate ...................................................................................... 12

9. Limited Land Resources .............................................................................. 13

VI. Shifting Economic Factors in the US ............................................................. 13

1. Increased Price of Electricity ....................................................................... 14

2. Higher Oil Prices Increase the Price to Ship to Landfills ............................. 14

3. Higher Metal Prices are Increasing the Revenue from Metal Recovery ...... 14

4. The Number of Permitted Landfills has Declined in the United States ........ 14

VIII. Conclusion and Recommendations ............................................................. 141. Locations in the US with the Greatest WTE Potential ................................. 15

2. Policy Opportunities for the United States ................................................... 16

3. Opportunities to Influence Public Perception ............................................... 16

IX. Appendix ....................................................................................................... 18

Figure 4 Waste-to-Energy Success Factors ................................................. 18

Figure 5 Energy Recovery Source: AvFall Svirge ..................................... 19

Figure 6 District Heat Production in Sweden ................................................ 19

Figure 8 States with RPS and/or Defining WTE as Renewable In State Law........................................................................................................................ 20

X. References: .................................................................................................... 21


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I. BACKGROUND

Earlier this year, I had the opportunity to work on a consulting project in Sweden,sponsored by the George Washington University School of Business, in which my teamlooked at the market feasibility of several Swedish clean technologies for the American

market. During our tour of Sweden, we visited several energy companies where welearned about the many fascinating things that these companies are doing to incorporaterenewable energy technologies into their energy mix specifically biomass, wind andwaste-to-energy. I was particularly intrigued by many of the innovative waste treatmentmethods that I saw. For example, in VafabMilj, we visited a facility that converts foodwaste to biogas, which is used to fuel the city buses in the city of Vsters. We alsovisited a combined heat and power (CHP) plant at Mlarenergi, which currently usesforestry waste as a feedstock, but was in the initial stages of building a second facilitythat would generate both electricity and heat from household waste for the city ofVasteras. During these visits, I wondered why the US, a country that produces massiveamounts of waste, is not using these readily available waste-to-energy technologies thathave proven so successful in Sweden to a greater degree.

This summer at the American Council on Renewable Energy (ACORE), I had theopportunity to work on a research project of my choosing. Inspired by my visit toSweden, I began to explore whether the US has the potential to replicate Swedenssuccess at harnessing waste from energy. For the project, I used ACOREs resourcesand also worked under the guidance of Professor Anna Helm at The GeorgeWashington University as part of an independent study. I discovered that althoughSweden, when compared to the US, possesses a relatively unique set of characteristicsthat have contributed to its recent waste-to-energy expansion, significant opportunitiesstill exist for growth in the US waste-to-energy market.

II. INTRODUCTION

Sweden is widely considered a waste-to-energy (WTE) success story. Internationalcomparisons show that Sweden is the global leader in recovering energy from waste[Figure 5]. In 2009, 49 percent of all household waste, or 232.6 kg per person wasconverted into energy.1 Sweden continues to add WTE capacity as it continues to weanitself off of fossil fuels. In the US you will find a much different set of circumstances.

Although WTE in the US was off to a promising start in the 1970s and 1980s, thenumber of WTE facilities in the US declined over the next few decades. In 2009, 12percent of all household waste, or 85.7 kg per person, was converted to energy. 2

This report looks at the current state of the waste-to-energy industries in Sweden andthe United States and explores at the transferability of Swedens waste-to-energy model

to the US market. Although there are several ways to generate energy from waste(gasification, etc.) this report primarily looks at energy recovery from household wastethrough incineration.

III. HISTORY OF ENERGY AND WTE IN SWEDEN

Sweden has a long history of harnessing energy from waste. The first waste incinerationplant with energy recovery opened over 100 years ago in 1904. In the late 1940s,


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following World War II, Sweden began to significantly expand its district-heating network,providing an outlet for waste-to-energy in the coming decades. In the 1970s, Swedensheavy dependency on oil left it extremely vulnerable to the oil shocks of the 1970s.During this time period Sweden introduced nuclear to its energy mix and reintroducedcoal. It was also during this period that a major expansion of waste-to-energy plantsbegan. In the 1980s coal once again started to become a major source of energy, but as

Sweden has increasingly looked to be more environmentally friendly and less dependenton foreign sources of energy, it has turned to renewable sources such as biofuels, windand waste. The use of biofuels, peat and waste in the Swedish energy system hasincreased over the years, from a little over 10 percent of total energy supply in the 1980sto over 22 percent (127 TWh) in 2009. In 1996, Swedens electricity market was de-regulated. The ensuing years were characterized by rapid restructuring through mergersand acquisitions, lower electricity prices and a search for new marketing strategies in thecompetitive market.3 It is unclear what effect, if any this has had on the adoption ofalternative fuels, such as waste-to-energy.

The Role of Renewables

Renewable energy has played a major role in Swedens push to become independentfrom fossil fuels. In 2005, Swedens government set a target of producing 50 percent ofits energy from renewable sources by 2020 and achieving complete carbon neutrality by2050.4 Currently Sweden produces 45 percent of its energy from renewable sources.5 Itsupplies almost all its electricity from nuclear and hydroelectric power, but is increasinglymoving towards biomass and waste-to-energy.6 Thus far, Sweden has beenextraordinarily successful at weaning itself off of oil. In 1970, oil accounted for over 75percent of Swedish energy supply. By 2009, the figure was just 32 percent, chiefly dueto the declining use of residential heating oil. Sweden has also substantially decreasedits coal consumption. Peaking at over 5 trillion tons of coal consumed in 1986, it nowconsumes a third of that at 1.8 trillion tons.

One of the main drivers of this increase has been biomass and biofuels. In 2010,Sweden hit a major landmark when Svebio reported that 32 percent ofSwedens totalenergy production is generated from biomass. The total energy consumption generatedfrom biomass in Sweden grew from 88 TWh to 115 TWh between 2000 and 2009. Inrecent years, the increase in demand for woody biomass has resulted in higher priceswhich rose 36 percent from 2000 to 2010.7 As a result, household waste is becoming amuch more attractive feedstock option.

The Expansion of WTE In Sweden

In the last decade, WTE has expanded at a rapid rate. From 1999 to 2010, wasteincineration with energy recovery increased from 39 percent to account for 49 percent of

the countrys waste treatment methods. In 2009, 2,173,000 tons of household waste and2,497,830 tons of industrial or other waste were treated by incineration, with energyrecovery at roughly 32 Swedish waste-to-energy facilities. 13.9 TWh of energy wasproduced through incineration, of which the equivalent of 12.3 TWh was used for heatingand 1.6 TWh for electricity. This amounted to 15 percent of Swedens district heatingneeds and 2.45 percent of all of Swedens total energy needs (including transportation,aviation, etc.). Due to a confluence of factors, which will be explored later, waste-to-energy now has the lowest energy production cost of all known and proven technologies


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in Sweden. WTE installed capacity is therefore expected to continue to expand for theforeseeable future.

IV. HISTORY OF WASTE-TO-ENERGY IN THE U.S

The first waste-to energy facilities in the US emerged in the early 20th century. Thesebasic facilities generated steam from incineration of waste, but were typically quite dirty.In the 1970s and 80s, the US waste-to-energy industry appeared to be taking off. Thiswas spurred in part by regulation and incentives that were enacted in response to theenergy shortage of the 1970s. One instrumental policy was congress passage of thePublic Utility Regulatory Policies Act (PURPA) in 1978. This mandated that the pricepaid for electricity to Qualifying Facilities, which included waste-to-energy plants, mustbe equal to the utility's avoided cost of energy and capacity. As a result, WTE plantsreceived a higher price for their power than they likely would have otherwise.8

Stagnation and Decline

By the 1990s, more than 15 percent of all US household waste was burned for energyrecovery and nearly all non-hazardous waste incinerators were recovering energy. Thistime period however was the peak of the industry in the US. The number of WTE plantsthereafter began to decrease as several factors began to their profitability. First, between1990 and 2004, production tax credits for production of energy from waste wererescinded. In addition, even though most of the facilities had installed pollution controlequipment, they did not have adequate controls to address the newly recognized threatsposed by mercury and dioxin emissions. In the 1990s, this lead to the enactment by EPAof Maximum Achievable Control Technology (MACT) regulations that resulted in theretrofit of the Air Pollution Control (APC) systems of most facilities. Several smaller unitsthat could not afford the costly retrofits were forced to shut down. Furthermore, thedevelopment of large environmentally-sound Subtitle D landfills made landfill disposalmore plentiful and less expensive. The confluence of these factors affected theprofitability of the most WTE plants in the US and many were forced to shut down.

In the mid 2000s, there was evidence that the WTE might again be ready forresurgence. The American Jobs Creation Act of 2004 expanded the federal productiontax credit for renewables to include energy from waste. In 2005, the Energy Policy Act of2005 defined Municipal Solid Waste as a renewable energy, thus making it eligible forloan guarantees.9 Despite these new incentives, there have only been modest signs thatWTE is poised to make a comeback in the US and the industry continues to fightnegative public perceptions. Although passage of the American Recovery andReinvestment Act in 2009 extended the 1.1/kWh tax credit until 2013, there isuncertainty about whether these tax credits will again be extended.10

US WTE Today

Currently, The United States has 87 waste-to-energy plants that generate approximately2,720 megawatts, or about 0.4 percent of total US power generation.11 In 2009, theUnited States combusted about 29 million tons for energy recovery (about 12 percent ofall waste). The first new WTE capacity in almost 2 decades was recently added in FortMeyers, Florida and other new capacity is being added in Maryland, Minnesota andHawaii.12 In addition, the first new greenfield WTE facility in over a decade is currently


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being planned and is estimated to be completed in 2014. These developments howeverare relatively modest considering the size of the US and its energy needs.

V. WASTE-TO-ENERGY SUCCESS FACTORS

This section identifies success factors that can help drive successful deployment ofwaste-to-energy capacities. Additionally, it analyzes the degree to which these factorshave played a role in Sweden and the US. These factors are summarized in Figure 4ofthe Appendix.

1. HIGH LANDFILL TIPPING FEES

Perhaps the largest driver of waste-to-energy has been the gate fees or tipping feeslevied by landfills for receiving a quantity of waste (typically per ton). High gate fees canmake landfills cost prohibitive and energy recovery a more economical alternativemeans to dispose of waste.

Although Sweden has an abundance of land relative to its population, its landfills areexpensive. As of 2005, average tipping fees equivalent to 135 perton or approximately$175.13 In the United States, although tipping fees have risen in recent years, theaverage fees remain relatively inexpensive at $44.14 In the United States, waste-to-energy plants are most common where landfill tipping fees are highest, most notably theNortheast and Mid-Atlantic [Figure 2 and Figure 3].

Figure 2 - Landfill Tipping Fees in the United States

Figure 3 Operating WTE Plants in the United States By State15


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2. POLICIES FAVORABLE TO WASTE-TO-ENERGY

Government policies can play a major role in creating incentives for waste-to-energy. InSweden there have been a number of Government and EU policies designed to helpmove Sweden and Europe away from dependency on fossil fuels, and which haveencouraged utilities to develop increased waste-to-energy capacity. The following list,while not all-inclusive, demonstrates policies that can be instrumental in helping to spurWTE development.

A. Price on Carbon/Carbon Tax

Placing a price on greenhouse gas emissions, provided the price is high enough,incentivizes emitters to reduce emissions. A price on carbon typically comes in the formof a cap and trade system, or a carbon tax.

Swedish energy companies are currently under the influence of both a carbon tax andthe European Union Emissions Trading Scheme (EU ETS). However, waste-to-energy isnot included in the Emission Trading System and therefore does not require carboncredits. In 1991, Sweden enacted a CO2 tax of 0.25 SEK/kg (about $100 per ton) on theuse of oil, coal, natural gas, liquefied petroleum gas, petrol, and aviation fuel used indomestic travel. In 2007, the tax was SEK 930 ($140) per ton of CO2. In Sweden thecarbon content for household waste is assumed to be 12.6 percent by weight, which isfar less than fossil fuels. Therefore, although household waste in Sweden is in facttaxed, the rate that it is taxed is significantly less than fossil fuels. Currently coal is taxedat a rate of 0.41 SEK/kWh while household waste is taxed at 0.16 SEK/kWh. InCombined Heat and Power (CHP) plants, coal is taxed at a rate of 0.093 SEK/kWh whilehousehold waste is taxed at .032 SEK/kWh.

Source: Ted Michaels, Integrated Waste Services Association, June 2007.

California (3)

New Hampshire

(2)

Massachusetts (7)

States with operating plants (number of plants in state)

Washington (1)

Oregon (1)

Alaska (1)

Utah (1)

Iowa (1)

Georgia

(1)

S. Carolina

(1)

N. Carolina (1)

Virginia (5)

Michigan

(3)

Wisconsin

(2)

Minnesota

(9)

New York

(10)

Pennsylvania

(6)

Maine

(4)

Florida

(11)

Hawaii (1)

Connecticut (6)

New Jersey (5)

Maryland (3)

Indiana

(1)

Alabama

(1)


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Swedens carbon tax made it much more costly to burn coal and oil for energy and leadmany power plants to convert to using biomass as a feedstock.16 Today biomassgenerates 20 percent of all energy consumption in Sweden, and as of 2010 wood-fireddistrict heating systems satisfies more than half of the residential heat demand.17 Thecarbon tax has also proven to be a significant source of revenue for the Swedish

government, bringing in 28,289 million SEK. Energy taxes in general have brought inapproximately 73,492 million SEK or 9.3 percent of all state revenue.

Unlike Sweden, which has both a country-level carbon tax and also participates in theEUs cap and trade system, the United States does not currently have a price on carbon.Several localities have passed carbon taxes, such as San Francisco, which in 2008passed a 4.4 cent/kWh tax and Montgomery County Maryland, which passed a 5cent/kWh tax in 2010. These localities however represent a relatively small portion of theUnited States population. The short-term prospects for a national price on carbon in theform of a carbon tax or a cap and trade system seem unlikely in the current politicalclimate. In the survey of the US power industry, only 40 percent believe that a price oncarbon will be set in the next 5 years.18

B. High Landfill Taxes and Fees / Bans on Landfilling

High landfill taxes drive-up gate/tipping fees paid to landfills and help encouragerecycling and waste-to-energy. In Europe, these have proven to be extremely effective atdiverting wastes from landfills and encouraging growth in the WTE industry.19 InSweden, since 2006, the tax alone on waste sent to landfills has been 435 SEK a ton(currently equivalent to $72.5) ton. This has made it expensive to dispose of waste oflandfills and is one of the primary reasons that Sweden has such a high recycling rate.20In 2007, a similar tax was introduced on the incineration of waste for energy. However,this was subsequently removed in 2010 in an effort to compete with WTE plants inNorway.21 While the lack of an incineration tax remains controversial, no tax on burning

MSW for energy currently exists. Other Policies that have helped divert trash away fromSwedens landfills include the 1999 EU landfill directive, the 2002 Swedish ban onlandfilling of combustible waste, the 2005 Swedish ban on landfilling of organic wasteand the 2008 new EU Waste Framework Directive.

In the United States there is currently no national landfill tax or fee, although some feescurrently exist at the local or state level. Currently the highest landfill tax in the UnitedStates is in San Jose, California, where the tax is $13 per ton, well below any taxes inSweden.

C. Recognition of Waste-to-Energy as a Renewable Resource

When governments recognize waste-to-energy as renewable, WTE projects can beeligible for incentives and programs that they otherwise would have been. In Swedenand the rest of the EU, the organic portion of waste-to-energy is recognized as arenewable resource.22

The United States EPA states that waste-to-energy facilities are clean reliablerenewable sources of energy with less environmental impact than almost any othersource of energy. However, only 24 states and the District of Columbia recognize it asrenewable.


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D. Preference to Waste-to-Energy in the Solid Waste Management Hierarchy

Both Sweden and the United States prefer waste prevention, reuse and materialrecycling to energy recover. Both countries also prefer energy recovery to landfilling, orincineration without energy recovery. In the 2008 EU Waste Framework Directive, the

five stages of the waste hierarchy are introduced as (1) waste prevention, (2) reuse, (3)material recycling, (4) other recycling e.g. energy recovery and finally disposal.

According to the directive efficient energy recovery now counts as recycling. TheUnited States EPAs Solid Waste Management Hierarchy is almost identical and can befound in Figure 7.

Figure 7 The EPA Solid Waste Management Hierarchy

E. Renewable Portfolio Standards

Renewable portfolio standards (RPS) are standards that obligate retail sellers ofelectricity to supply retail customers a certain amount from renewable energy sources.

As stated earlier, Sweden has set a target of generating 50 percent of its energy fromrenewable sources by 2020. In the United States, no such target exists. There arecurrently 33 states in the United States that have renewable portfolio standards, of which5 have voluntary standards instead of binding targets [Figure 8].

F. Direct Subsidies / Tax Credits

Subsidies can come in many forms such as production grants and tax credits, feed-in-

tariffs, low interest / preferential loans to producers, or accelerated depreciationallowances.

Sweden currently offers production tax credits for renewables such as wind energy, butdoes not currently have production tax credits for waste-to-energy. Long-term productiontax credits can be an extremely effective tool for incentivizing renewable energyindustries, due to the high capital costs.


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In the United States, production tax credits have proven to be an effective policymeasure for incentivizing renewable industries. The American Jobs Creation Act of 2004expanded the federal production tax credit for renewables to include energy from waste.

Although passage of the American Recovery and Reinvestment Act in 2009 extendedthe 1.1/kWh tax credit until 2013, there is uncertainty about whether these tax creditswill again be extended.23

3. EXTENSIVE DISTRICT HEATING NETWORK

Waste incineration is much more efficient at producing heat than it is electricity.Furthermore, district-heating plants can provide higher efficiencies and better pollutioncontrol than localized boilers. Therefore, when a district-heating infrastructure exists,WTE plants become more effective source of energy.

In a district heating system, thermal energy is distributed to individual buildings orhouses from a central plant by means of steam or hot water lines. The thermal energy istypically produced from either a boiler or a combined heat and power plant (CHP) aplant that incinerates fuel to produce electricity and transfer excess heat through a heat

exchanger to supply hot water or steam to the district-heating network. When usingmunicipal solid waste for electricity generation alone, it can only achieve efficiencies of20-30 percent. However, when used for combined heat and power (CHP) applications,waste-to-energy plants can achieve efficiencies of 85-90 percent. At Swedish WTEplants with cogeneration, the sale of heat for district heating can be the largest and mostdependable revenue stream and provide 40-50 percent of total annual revenues. Gatefees and sale of electricity to the grid both typically provide the rest of the revenuestream, each representing approximately 25 percent of revenues.24

Sweden has a long tradition of using district heating for urban areas. The first district-heating network was introduced in 1948. The district-heating network in Sweden wasexpanded considerably during the late 1940s after World War 2, creating an outlet for

energy from waste incineration.25 Now, district heating can be found in every Swedishcity. Currently 15 percent of the district heating production in Sweden originates fromwaste-to-energy production, and 90 percent is produced from renewable sources.26

In the United States, natural gas is the primary heating fuel (52 percent) and districtheating is much less common. Furthermore the relatively warmer climate means thatmost regions of the United States have lower potential revenue from district heatingsales, thus making it unlikely that district heating will be a viable option in warmer partsof the US. As a result, waste-to-energy plants in the US are not typically used for districtheating purposes. They therefore have fewer revenue streams and cannot achieve thesame efficiencies that CHP plants do. As of 2008, there were 5,800 districtheating/cooling systems in the United States, which provide 320,000 GWh or roughly 5

percent of US heating/cooling. Of this, approximately 14,000 GWh came from WTEenergy.27 Of the 87 WTE plants in the United States, only 28 sell steam for districtheating (21 of these co-generate electricity and steam, while the other 7 produce steamonly).28

4. ABSENCE OF CHEAP DOMESTIC SOURCES OF ENERGY


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Abundant sources of cheap traditional energy sources can put WTE at economicdisadvantage for both power generation and heating. Sweden lacks an abundantdomestic supply of the fossil energy resources such as coal, oil or natural gas. It doeshowever have rich, natural supplies of coniferous forests, hydropower and the potentialfor wind generation (the technical wind-power potential, according to the Swedish WindEnergy Association, is 540 TWH/year). Before 1945, domestic biomass and imported

coal were the two primary sources of energy. Then, between 1945-1975, the countrybecame highly dependent on imported oil for electricity production. The oil shock of the1970s lead to decreased use of oil between 1975 and 1985, with the revival of coal andthe introduction of nuclear. Since 1985, a focus on the environment and a search forrenewable resources has lead to an increase in the use of biomass as an energy sourceand has helped encourage the proliferation of waste-to-energy plants.

The United States has long benefited from abundant domestic fossil-fuel reserves tosupply its massive electricity, heating and transportation needs. Although it relies heavilyon oil imports to meet gasoline demand, and is thus highly exposed to fluctuations in theworld price of oil, vast quantities of coal, and recently discovered supplies of natural gascould potentially provide cheap electricity and heating to Americans in the foreseeable

future.29 Additionally, the US oil and coal industries havebenefited from a century ofsubsidies and supporting infrastructure, which provides these fuels with a competitiveadvantage over newer and less-established technologies like waste-to-energy.30

5. A HIGH PRICE OF ELECTRICITY

When electricity prices are higher, waste-to-energy power producers receive a higherprice for the energy they produce. In Sweden, the price of electricity has beenconsiderably higher than it has in the US. In September 2011, the price of electricity inSweden was approximately0.20 ($0.36) per kilowatt-hour. Of this, about 4 cents is aconsumer electricity tax.

In the United States, the price of electricity in real terms peaked in the early 1980s andhas been hovering around 10 cents per kWh ever since.31 This price has remainedrelatively low due largely to abundant and inexpensive coal and natural gas supplies.

Additionally, the absence of electricity taxes or a true accounting for the externalities thatresult from the production of electricity from dirty sources the pollution and carbonemissions created keeps the electricity costs in the US much lower than in otherEuropean Countries. Finally, many argue that fossil fuel companies benefit from directand indirect subsidies, which helps keep the price of fuel down.

6. AMPLE SUPPLY OF WASTE

To state the obvious, for waste-to-energy to be a viable energy source, there must be anadequate supply of waste to use as feedstock. Just as in the rest of the world, Swedishconsumers are producing much more waste than they did decades ago. This can largelybe attributed to economic growth, which is highly correlated with consumption and theresulting waste. Although Swedes are recycling more, solid waste in Sweden has tripledsince 1960s. As landfills have become increasingly cost prohibitive, more waste is nowbeing funneled to waste-to-energy plants.


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The average Swede produces 512 kg32 and Sweden as a whole produces 4.7 billion kgof waste per year. Although the amount of waste that the average Swede produces hasbeen steadily climbing, it appears to have reached a peak. In 2009, waste decreased by5 percent, although this was likely a result of the recession.

In the US, there is no shortage of waste from which energy could be recovered.

According to the EPA, in 2009, the United States produced over 243 million tons (220billion kilograms) of municipal solid waste (MSW) per year.33 This works out to 2kilograms (4.3 pounds) per person per day or 712 kg per year. In the US, MSW peakedin 2007 at 255 million tons and then decreased in 2008 and 2009.

Despite Swedens growing supply of waste, in stark contrast to the United States, it nowhas more WTE capacity than it does waste. As a result, Sweden is importing waste fromother countries such as Great Britain and Norway. In 2009, Sweden imported 36,480tons of household waste for incineration. The United States, on the other hand, is a netexporter of trash, with most of its cast-offs going to China in the form of scrap metal,waste paper and e-waste.34

7. PUBLIC SUPPORT

Swedes are famous for their commitment to the environmental and their knowledge ofenvironmental issues. In a 2008 poll, 87 percent of Swedes said they had personallytaken action to reduce their C02 emissions the highest percentage among Europeancountries.35 Although most Swedes prefer recycling to waste-to-energy, they aregenerally supportive of WTE as a waste disposal method as the number of plants hasgrown oven, and as regulations and technological advancements have decreased theemissions of Swedish WTE plants by over 90 percent since the 1980s.

In the United States, the commitment to the environment and climate change is notnearly as prevalent. This year, a Gallup poll found that only 51 percent of Americans

said they worry a great deal or fair amount about climate change.36 This combination ofless awareness and less environmental commitment means less public support forpolicies than you see in Sweden and other western European countries. Furthermore,the earlier, dirtier days of waste-to-energy in the United States created a negativeperception of the WTE industry. Most Americans are relatively unaware of theenvironmental benefits that waste-to-energy offers, which creates and additional barrierfor WTE proponents in the US to overcome.

8. HIGH RECYLING RATE

Although recycling and waste-to-energy might at first seem to be in direct competitionwith one another, this is not the case. In fact, throughout Europe and the United Statesthere is a positive correlation in communities between WTE usage and recycling.37 Manyrecyclable materials, such as metal and glass, provide no energy potential. It is thereforebetter that these materials are recycled and not sent to WTE plants. Although one mightargue that recycling may not directly lead to waste-to-energy, it is clear that communitiesthat tend to be better at recycling tend to also be better at recovering energy from waste.

Sweden has one of the best recycling rates in the world, with an almost 50 percentmaterial recycling rate (13 percent of waste is composted and 35 percent is recycled)38


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The result is that less than 2 percent of waste ends up in landfills, and the remaining 48percent is converted into energy. Conversely, in the United States, the majority of waste(54 percent) is landfilled and only 34 percent is recycled. As Sweden has demonstrated,there is clearly room to increase both recycling rates and the WTE capacity by reducingthe amount of waste sent to landfills.

Figure 1

Waste Management Method Comparison

9. LIMITED LAND RESOURCES

WTE often makes greater sense for densely populated areas or areas with high landprices because real estate prices drives up the fees at landfills making it more expensiveto ship waste to less densely-populated areas. This is one of the reasons that WTE hassucceeded in countries like Denmark and Japan, where land is scarce and real estate

prices are high.

In Sweden, the cost of land has been less of a factor than it has in other countries.Sweden has a considerable amount of land relative to its population although 85percent of Swedes live in urban areas. Still, although Sweden is famous for its high costof living, real estate prices remain relatively inexpensive.

Although the United States has abundant land, real estate prices can vary considerably.You will find many of the waste-to-energy plants in densely populated areas like LongIsland and Cape Cod. Thus, land prices do appear to be a driver for US waste-to-energy.

VI. SHIFTING ECONOMIC FACTORS IN THE US

Although WTE growth has been stagnant in recent years, there are several reasons foroptimism for the US WTE energy industry. The increasing price of electricity,transportation fuels, and metals, coupled with a decrease in landfill capacity, is creatingeconomic pressures that could lead to a resurgence for the WTE industry.

54%

3%

12%

49%

34%48%

0%

10%20%

30%

40%

50%

60%

70%

80%

90%

100%

United States Sweden

Recycling /Composting

Waste to Energy

Landfill


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1. INCREASED PRICE OF ELECTRICITY

If the price of electricity increases, it will become more profitable for a WTE plant to sellelectricity to the grid. While no one knows for sure what will happen to electricity prices,a recent survey of executives and managers in the utility sector found that more than 70percent of all respondents agree or strongly agree with the statement energy andcommodity prices will rise significantly in the next five years.39

2. HIGHER OIL PRICES INCREASE THE PRICE TO SHIP TOLANDFILLS

Waste-to-energy plants, unlike landfills, can be located on small plots of land close tourban centers. As the price of oil increases, which most experts expect that it eventuallywill, it will become more expensive to ship waste to landfills that are not near citycenters. WTE facilities will thus become a more economical option for manycommunities.

3. HIGHER METAL PRICES ARE INCREASING THE REVENUE FROMMETAL RECOVERY

In recent years, metal prices have been increasing. WTE plants in the United Statescurrently recover 49 percent of all ferrous metals and 8 percent of non-ferrous metalsthey process.40 As the price of metals continues to increase, there will be strongerincentives for plants to look for ways to expand ferrous and non-ferrous metal recoveryeffectiveness.

It is possible to recover a much higher percentage of metal than plants currently do. TheSEMASS WTE facility in Massachusetts is now able to recover 90 percent of the metalthat it processes. 41One 2007 study estimated that if US plants were to increase their

recovery efficiency, they could realize $162 million from the sale of recoverable metalsand savings on avoided tipping fees.42 As the potential for this additional revenue streambecomes more evident, new WTE plants may become more attractive as metal recoveryplays an increasing role in WTE capital budgeting decisions.

4. THE NUMBER OF PERMITTED LANDFILLS HAS DECLINED IN THEUNITED STATES

In 1988, there were 7,924 landfills permitted in the United States, but by 2005, thatnumber had shrunk to 1,654. Although the capacity of the average landfill wassubstantially increased, some are concerned that unless new landfills are added, theUnited States will not be able to adequately manage with its waste generation. Currently

existing landfills have a combined total of about 20 years of capacity at presentgeneration rates. If new capacity is not added in the coming years, tipping fees mayincrease, thus tilting the economics more in favor of WTE.

VIII. CONCLUSION AND RECOMMENDATIONS

Given the significantly dissimilar success factor profiles of Sweden and the UnitedStates, it is unlikely that waste-to-energy in the United States will experience the same


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level of success that it has in Sweden in the near future. However, significantopportunities still exist for companies in the US to profitably pursue waste-to-energy. Infact, some companies and governments are already finding that it is the mosteconomical option. For instance, the US Capitol recently announced that it plans todivert 90 percent of its waste to a nearby waste-to-energy facility because it was themost cost-efficient solution.43

Furthermore, as the economic factors continue to shift with an increase in electricityprices, fuel prices, metal prices, and a decrease in landfill capacity, waste-to-energyshould eventually become the most economically competitive waste disposal option inmany locations of the US. It is thus important to determine which locations provide thegreatest potential for WTE success, and explore policies and opportunities to influencepublic perception that could expedite the transition to a country that better utilizes WTEas a waste-management and energy solution.

1. LOCATIONS IN THE US WITH THE GREATEST WTE POTENTIAL

Although the US as a whole lacks many of the success factors that have helped drivewaste-to-energy in Sweden, many locations within the US can still provide ampleopportunities for waste-to-energy to thrive. Areas that meet some or all of the followingcriteria could be the best candidates for future WTE expansion.

1. Areas Close to Urban Centers:WTE plants typically make greater economic sensewhen they are located closer to urban centers. This helps keep the cost of transportingthe waste down, and allows these plants to charge higher tipping fees. Higher populationdensity is one of the contributing factors to the greater number of waste-to-energy plantsin the northeastern United States.

2. Areas with District Heating:District heating is not nearly as prevalent in the United

States as it is in Sweden. However it does exist in certain locals, such as New York Cityand Minneapolis.

3. States that have RPS Standards and Define WTE as Renewable:There are currently33 states in the United States that have renewable portfolio standards (RPS), of which 5have voluntary standards instead of binding targets. There are also currently 25 statesthat legally define waste-to-energy as a renewable resource, of which, 21 have RPSstandards. These 21 states offer potential for increased waste-to-energy [Figure 8].

4. Areas that Impose a Price on Carbon:In December 2010, California passed anextensive carbon-trading plan aimed at cutting greenhouse emissions. If the plan isimplemented, California will have the second largest carbon trading market behind

Europe and may thus be more attractive for waste-to-energy developers. Other locationsin the US that levy a carbon tax such as Boulder, Colorado; San Francisco, California; orMontgomery County, Maryland may also present more opportunities for waste-to-energydevelopment.

5. Areas with Higher Electricity Prices:In 2010 New England, the Mid Atlantic, Alaskaand Hawaii boasted the highest average electricity prices.

44


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6. Areas with High Tipping Fees:The northeast states typically have the highest tippingfees, with an average of $70.04 in 2004.45 Other states such as Wisconsin, Washingtonand Oregon have higher than average tipping fees.

2. POLICY OPPORTUNITIES FOR THE UNITED STATES

As Sweden has illustrated, policy favorable to WTE can be instrumental in encouragingits success. In the United States, the following policy opportunities have the greatestpotential to incentivize waste-management companies and energy companies to fundWTE projects:

1. States and Municipalities Can Levy Taxes on Tipping Fees:Although some USmunicipalities charge landfill taxes, most are relatively modest, at around $1 or $2 perton (a far cry from the 435 SEK tax in Sweden). This has proven to be a very effectivepolicy instrument in Sweden and the EU, yet is rarely discussed in the US.

2. The Per Kilowatt Production Tax Credit for WTE Should be Extended Past 2013: This

will help create certainty in the market of future revenue streams, and help WTEdevelopers justify the immense capital costs required to finance WTE facilities.

3. More States Should Recognize WTE as a Renewable:Although the federalgovernment officially recognized waste-to-energy as a renewable resource, currentlyonly 24 states and the District of Columbia officially do.

4. Impose a National Price on Carbon:Although this seems unlikely under the currentpolitical climate, a price on carbon could go a long way to help encourage investment inclean and less carbon intensive forms of energy such as solar, wind and waste-to-energy.

3. OPPORTUNITIES TO INFLUENCE PUBLIC PERCEPTION

Public perception holds great importance in energy policy decision-making. A public thatis better educated on the benefits of waste-to-energy will be more likely to demandaction from public officials and policy makers at the federal, state and local levels. BeforeWTE can take-off in the United States, it will be important to change any negativeperception and dispel any misconceptions that exist. It will thus be important for toemphasize the following points.

1. Waste-to-Energy Helps Reduce Greenhouse Emissions:Waste-to-energy helps avoidgreenhouse gases in several ways:

By reducing methane emissions that would otherwise be generated if the waste

was instead sent to a landfill and allowed to decompose By avoiding carbon dioxide emissions that would have been generated by a fossil

fuel power plant By increasing the recovery of ferrous and nonferrous metals, which is more

energy efficient than production from raw materials.

2. Waste-to-Energy Is Clean: Just as in Sweden, WTE facilities in the US have to complywith strict governmental standards on the emissions. In the last decade most WTEplants in the US have undergone expensive retrofits, and as a result have dramatically


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reduced their emissions to comply with the EPAs Maximum Achievable ControlTechnology (MACT) standards. After analyzing the inventory of waste-to-energyemissions, EPA concluded that waste-to-energy facilities produce electricity with lessenvironmental impact than almost any other source of electricity.

3. Waste-to-Energy Does NOT Compete with Recycling: Contrary to what many think,

waste-to-energy plants do not compete directly with recycling. Much of the recyclablewaste, such as a glass and metals, cannot be converted into energy. In fact,communities that rely on waste-to-energy maintain on average a higher recycling ratethan other communities. Furthermore, waste-to-energy plants offer additionalopportunities to recycle because of the increased handling of waste streams. WTEfacilities recover over 750,000 tons of ferrous metals every year that would otherwise belandfilled.

46


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IX. APPENDIX

FIGURE 4 WASTE-TO-ENERGY SUCCESS FACTORS

Success Factors

Swede

n

United

States

High Tipping / Gate Fees Yes No

Policies Favoring Waste-to-Energy: Yes No

Price on Carbon/Carbon Tax Yes No

High Landfill Taxes and Fees Yes No

Recognition of Waste-to-Energy as a Renewable Resource Partial Partial

Preference to Waste-to-Energy in the Waste Management Hierarchy Yes Yes

Renewable Portfolio Standards Partial Partial

Direct Subsidies / Tax Credts No Partial

Extensive District Heating Network Yes No

Ample Supply of Waste Yes Yes

Shortage of Cheap Domestic Sources of Energy Yes No

Lack of Cheap Land Yes No

High Price of Electricity Yes No

Public Support Yes No

High Recycling Rate Yes Partial

*Partial indicates either that the success factor may exist in certain locations within the country,or that it exists to a lesser degree.


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FIGURE 5 ENERGY RECOVERY SOURCE: AVFALL SVIRGE

FIGURE 6 DISTRICT HEAT PRODUCTION IN SWEDEN47


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FIGURE 8 STATES WITH RPS AND/OR DEFINING WTE ASRENEWABLE IN STATE LAW

State RPS Target Year WTE Defined as Renewable

Alaska N/A N/A Yes

Arkansas N/A N/A YesArizona 15% 2025 NoCalifornia 33% 2030 YesColorado 20% 2020 NoConnecticut 23% 2020 YesDistrict of Columbia 20% 2020

YesDelaware 20% 2019 NoFlorida N/A N/A YesHawaii 20% 2020 YesIowa 105 MW YesIllinois 25% 2025 NoIndiana N/A N/A YesMassachusetts 15% 2020 YesMaryland 20% 2022 YesMaine 40% 2017 YesMichigan 10% 2015 YesMinnesota 25% 2025 YesMissouri 15% 2021 NoMontana 15% 2015 YesNew Hampshire 23.80% 2025 YesNew Jersey 22.50% 2021 YesNew Mexico 20% 2020 NoNevada 20% 2015 Yes

New York 24% 2013 YesNorth Carolina 12.50% 2021

NoNorth Dakota* 10% 2015 NoOregon 25% 2025 YesPennsylvania 8% 2020

YesRhode Island 16% 2019 NoSouth Dakota* 10% 2015

YesTexas 5,880 MW 2015 NoUtah* 20% 2025 NoVermont* 10% 2013 NoVirginia* 12% 2022 Yes

Washington 15% 2020 YesWisconsin 10% 2015 Yes*Five states, North Dakota, South Dakota, Utah, Virginia, and Vermont, have set voluntary goals for adopting renewableenergy instead of portfolio standards with binding targets.


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United States. Environmental Protection Agency. Solid Waste and EmergencyResponse.Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Factsand Figures for 2009. 2009. Web. 1 Oct. 2011. 3 http://gupea.ub.gu.se/bitstream/2077/3066/1/gupea_2077_3066_1.pdf4 Yarow, Jay. "Sweden Hopes To Get 50% Of Its Energy From Renewables By 2020." BusinessInsider. Web. 01 Oct. 2011. .5 "Energy: Generating Power for a Sustainable Future - SWEDEN.SE." SWEDEN.SE - TheOfficial Gateway to Sweden Features, Facts, Music, Film. Web. 01 Oct. 2011..6 "Sweden, the Top Most Eco Friendly Country in the World." Shocking News. Web. 01 Oct.

2011. .7 "Biomass Now Generates 32% of All Energy in Sweden, Causing Increased Competition forPulpwood, Reports the Wood Resource Quarter | PressReleasePoint."PressReleasePoint | FreePress Release Distribution Website | Submit Press Release. Web. 01 Oct. 2011..8 Gibson, Lisa. Biomass Power and Thermal | Biomassmagazine.com. Web. 01 Oct. 2011..9 United States of America. Energy Policy Act of 2005. 08 Aug. 2005. Web..10DSIRE: DSIRE Home. Web. 01 Oct. 2011..11 Gies, Erica. "Waste-to-Energy Plants a Waste of Energy, Recycling Advocates Say - The New

York Times." The New York Times - Breaking News, World News & Multimedia. The New YorkTimes, 4 July 2008. Web. 01 Oct. 2011..12

Energy Recovery Council. Web. 01 Oct. 2011. .13 http://www.forfas.ie/media/forfas060613_waste_benchmarking_report.pdf14 "US Landfill Tipping Fees Reach New Record, despite Economic Downturn | Solid Waste &Recycling Magazine." Solid Waste & Recycling Magazine - Canada's Magazine on Collection,Hauling, Processing & Disposal. 23 Aug. 2010. Web. 01 Oct. 2011..15 Michaels, Ted. Http://www.wte.org/userfiles/file/IWSA_2007_Directory.pdf. Rep. 27 Oct. 2007.Web. .16 Fouch, Gwladys. "Sweden's Carbon-tax Solution to Climate Change Puts It Top of the GreenList | Environment | Guardian.co.uk." The Guardian. 27 Apr. 2008. Web. 07 Oct. 2011..17Biomass Power and Thermal | Biomassmagazine.com. 23 Nov. 2010. Web. 01 Oct. 2011..18 Roberts, David. "What the US Power Industry Thinks about the Future of the US PowerIndustry | Grist." Grist.org. 16 June 2011. Web. 07 Oct. 2011. .19Diverting Waste from Landfill. Rep. European Environment Agency, 2009. Web. 7 Oct. 2011..


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20SWEDISH WASTE MANAGEMENT | 2010. Avfall Sverige, 2010. Web. 7 Oct. 2011.21

"Sweden and Norway in Harsh Competition for the Incineration of Waste." ASK. 14 May 2010.Web. 07 Oct. 2011. .22

Usitall AB. Rep. Web. 7 Oct. 2011..23DSIRE: DSIRE Home. Web. 01 Oct. 2011..24 "Interview with VP of Malarenergi." Telephone interview. Aug. 2012.25

http://www.presseurop.eu/en/content/article/670281-europe-s-happy-rubbish-collectors26 "RENEWABLE ENERGY IN THE US - WASTE-TO-ENERGY." Swedish Trade Council, Jan.2008. Web. 7 Oct. 2011..27 Themelis, Nickolas J., and Priscilla Ulloa. "Potential for WTE District Heating in Northern USand Canada." Http://www.metrovancouver.org/. Waste-to-Energy Research and TechnologyCouncil, 12 June 2008. Web. 7 Oct. 2011..28 Themelis, Nickolas J., and Priscilla Ulloa. "Potential for WTE District Heating in Northern USand Canada." Http://www.metrovancouver.org/. Waste-to-Energy Research and TechnologyCouncil, 12 June 2008. Web. 7 Oct. 2011..29 Behrens, Carl E., and Carol Glover. "US Fossil Fuel Resources: Terminology, Reporting, andSummary." Congressional Research Service, 30 Nov. 2010. Web. 7 Oct. 2011. .30 Roberts, David. "Fossil Fuel Subsidies Dwarf Clean Energy Subsidies; Obama Wants toEliminate Them | Grist." Grist. 23 Sept. 2009. Web. 07 Oct. 2011..31 "Average Retail Prices of Electricity, 1960-2009 (Cents per Kilowatthour, Including Taxes)." USEnergy Information Administration (EIA). Web. 07 Oct. 2011..32 "UK Achieves Average EU Municipal Recycling Rate Letsrecycle.com - Recycling andWaste Management News and Information." Letsrecycle.com. 23 Mar. 2010. Web. 07 Oct. 2011..33 United States. Environmental Protection Agency. Solid Waste and EmergencyResponse.Municipal Solid Waste Generation, Recycling, and Disposal in the United States: Factsand Figures for 2009. 2009. Web. 1 Oct. 2011. 34Allen, Jodie. "Americas Biggest Trade Export to China? Trash - Jodie Allen (usnews.com)." USNews & World Report | News & Rankings | Best Colleges, Best Hospitals, and More. 30 Mar.

2010. Web. 12 Oct. 2011. .35 "Climate Change Poll Reveals 61% Have Taken Action." European Parliament. 15 Sept. 2008.Web. 12 Oct. 2011. .36 "AFP: Fewer Americans Worry about Climate Change: Poll." AFP, 14 Mar. 2011. Web. 12 Oct.2011. .37 "Waste-to-Energy (WTE) in an Integrated Solid Waste Management System." MinnesotaPollution Control Agency, 14 June 2010. Web.


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38 "UK Achieves Average EU Municipal Recycling Rate Letsrecycle.com - Recycling andWaste Management News and Information." Home Letsrecycle.com - Recycling and WasteManagement News and Information. 23 Mar. 2010. Web. 12 Oct. 2011..39

Roberts, David. "What the US Power Industry Thinks about the Future of the US PowerIndustry | Grist." Grist. 16 June 2011. Web. 12 Oct. 2011. .40 Sunk, Werner. "Survey of Metal Recovery in the US WTE Industry." Diss. Columbia University,2007. Abstract. Web..41 "Reconsidering Municipal Solid Waste as a Renewable Energy Feedstock." Environmental andEnergy Policy Institute, July 2009. Web..42 Sunk, Werner. "Survey of Metal Recovery in the US WTE Industry." Diss. Columbia University,2007. Abstract. Web..43 "US Capitol Pens Waste-to-Energy Contract Environmental Management & Energy News Environmental Leader." Environmental Leader. 10 Oct. 2011. Web. 13 Oct. 2011..44 "Electricity Prices by State | Compare Electric Rates by State in Your Area Nation Wide."Electric Choice | Compare Electricity Prices & Electric Rates, Shop Electric Companies & Plans.Electricchoice.com. Web. 13 Oct. 2011. .45Repa, PHD, Edward W. "NSWMAs 2005 Tip Fee Survey." NATIONAL SOLID WASTESMANAGEMENT ASSOCIATION, Mar. 2005. Web.46 "Innovative Solutions for the Next Generation." Welcome to Novo Energy, LLC. Web. 13 Oct.2011. .47 http://wastebiorefining.blogspot.com/2011/08/district-heat-major-advantage-of.html

waste-to-energy success factors in sweden and the united states

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