Financial and Technical Evaluation of Energy Production by Biological and Thermal Treatments of MSW in Mexico City

Abstract

This research aims to compare, from a technical and financial perspective, the application of biological (methane-capture) and thermal (incineration) treatments of waste in Mexico City in order to generate clean energy. For each alternative, pessimist (50%), realistic (80%), and optimistic (100%) scenarios were considered in terms of the efficiency collection rates of methane and the efficiency of the capacity conversion factor for incineration. For the methane project, the LandGEM model was used to evaluate the potential generation of methane. In order to calculate the electricity output that could be generated through incineration, we relied on two key factors: the total amount of heat that could be generated by burning the waste and the average level of moisture in the waste material. The evaluation resulted in an annual energy generation of 206.09 GWh for methane and 4183.39 GWh for incineration, both in the realistic scenario. Both projects reported positive financial indicators with a discount rate of 12%. Incineration resulted in a net present value of USD 706,377,303 and an internal rate of return of 23% versus USD 4,975,369 and 24% for the methane project. However, the incineration project only became feasible by omitting financing. Incineration resulted in a payback period that was lower by a ratio of 2:1 compared to methane, but the levelized cost of energy resulted in higher figures (USD 216.92). The aim of these findings is to support the decision-making process for the creation and implementation of sustainable energy strategies based on circular economy principles in Mexico and other similar regions across the globe.

Keywords

• incineration
• methane
• Mexico City
• waste-to-energy
• sustainable energy