“Waste-to-energy had a 15-year heyday, driven in part by the 1978 Public Utility Regulatory Policies Act (PURPA). The law essentially created the non-utility generating industry.”
“Many local governments had long incinerated garbage to reduce volumes flowing to landfills, but that provoked public opposition due to air pollution. With PURPA, developers began seeing a way to incinerate garbage in a technologically and environmentally sound fashion, generate electricity, and use the new law to force electric utilities to, reluctantly, buy the output.”
Waste-to-energy (WTE) plants turn the combustible content of waste to energy, capturing and recycling metals and other noncombustible waste. The biomass (“biogenic”) component—aka garbage—is made up of paper, cardboard, food waste, grass clippings, leaves, wood, and leather. Non-biogenic waste is composed of plastics, metals, and petroleum-based materials.
According to the the U.S. Energy Information Administration (EIA), “The biogenic component of MSW makes up about 59% of total tonnage, but because of a lower heat content … it accounts for about half of the total net electricity generation.”
WTE is primarily driven by municipal solid waste management; electricity generation is secondary. According to Ted Michaels of the Energy Resource Council (ERC), the industry’s Washington-based lobbying group, about 60% of revenue from a WTE plant comes from solid waste management and 40% from electricity generation.
Wheelabrator/Baltimore WTE Plant in Peril
A tall smokestack with BALTIMORE in bold letters can be seen from a stretch of I-95 near Baltimore, Maryland. It is part of a large waste-to-energy plant, owned and operated by Wheelabrator Technologies.
The plant has been turning 2,250 tons per day of waste—material that would otherwise go to a landfill—into electricity for the local grid since 1985. It can generate 64 MW of power, which is sold to Baltimore Gas and Electric.
Wheelabrator may soon abandon the plant, perhaps demolish it. Pushed by environmental groups in the city and the Washington, D.C.-based Energy Justice Network, the city council in February passed legislation requiring continuous air monitoring at the WTE facility, and reductions in conventional air pollutants in 2020. That will increase the plant’s operating costs, part of the intent of environmentalists who want the plant to close.
Maryland’s General Assembly also has taken aim at Wheelabrator Baltimore. The state Senate in 2018 and again this April passed legislation to strip the plant of its “green energy” designation in Maryland’s renewable portfolio standard, a label which provides Wheelabrator with subsidies and counts toward the state’s renewable target of 50% by 2030. Those measures died in the House of Delegates.
DRE/Detroit WTE Plant: Shutdown Planned
As events unfolded in Baltimore this spring, Detroit Renewable Energy (DRE) announced it will shutter its Detroit Renewable Power subsidiary. That WTE project has processed 3,300 tons of municipal solid waste (MSW) per day since 1991 into a refuse-derived fuel that is burned to produce 720,000 pounds of steam per hour.
Some of that goes through steam turbine generators to make 68 MW of electricity. The remainder goes to Detroit Thermal, the city’s district heating and cooling business of more than 140 buildings in downtown and midtown Detroit. DTE Energy buys the electricity.
DRE will continue to provide steam to the district heating and cooling system, using natural gas as the fuel. DRE CEO Todd Grzech said in a statement: “Ceasing operations at the waste-to-energy plant gives us the ability to focus more on Detroit Thermal infrastructure, improving the condition of the underground steam system and the streets.”
The closure came amid pressure from Breathe Free Detroit Campaign, a local environmental justice group. The group issued a statement: “We will continue to pursue environmental justice with our goals of protections for the workers and residents and working toward serious reducing, reusing and recycling efforts to produce zero waste.”
A Wider Problem?
Are these developments in Baltimore and Detroit signaling a trend in the fortunes of the WTE business? Ted Michaels claims “They are very local phenomena.” But he admits to broader challenges.
More troubling are low prices for electricity across the U.S., driven by slow demand growth for power and low-cost natural gas, and the continuing availability of cheap landfills (which compete with WTE for the waste stream). Electric “market prices are at historic lows, and landfills are still relatively cheap,” Michaels said. “Our industry is strong. The facilities operate well; it’s a mature, not nascent, industry. But the industry is operating in difficult economic circumstances.”
A Small, Concentrated Industry
According to the U.S. Energy Information Administration (EIA), the U.S. in 2016 had 71 WTE plants generating electricity in 20 states, with a total generating capacity of 2.3 GW.
Florida was the leader, with “more than one-fifth of the nation’s WTE electricity generation capacity.” In 2015, the 95-MW Palm Beach Renewable Energy Facility 2 (a POWER Top Plant in 2016) became the first new WTE plant to come online since 1995 and the largest single WTE generator in the U.S.
Some generating capacity has been added to existing plants since Palm Beach came online, notes the EIA. WTE lobbyist Michaels said expanding existing plants is the best hope for U.S. industry growth in the short term.
WTE plants account for a tiny slice of total U.S. electricity capacity and generation, or about 0.4% of 2015 generation. Florida and four Northeastern states account for 61% of the total U.S. WTE capacity and generated 64% of total output, according to EIA.
Burning waste reduces its volume by about 87%, leaving mostly ash from air pollution control systems, and from the combustible and non-combustible materials. Based on the EPA’s 2013 figures, the U.S. produced some 254 million tons of MSW. The EIA calculates that WTE plants burned about 29 million tons of municipal waste in 2015, and 26 million tons were used to generate power. The remainder was recycled, composted, or landfilled.
The Boom is Over
WTE had a 15-year heyday, driven in part by the 1978 Public Utility Regulatory Policies Act (PURPA). The law essentially created the non-utility generating industry. Prior to that seminal law, the conventional view was that generating electricity was a natural monopoly, best left to integrated, monopoly electric utilities and public power systems. About the same time, costs of landfills began escalating, while many municipal governments faced rising protests from citizens about the environmental impacts of landfills.
Many local governments had long incinerated garbage to reduce volumes flowing to landfills, but that provoked public opposition due to air pollution. With PURPA, developers began seeing a way to incinerate garbage in a technologically and environmentally sound fashion, generate electricity, and use the new law to force electric utilities to, reluctantly, buy the output.
According to the EIA, 90% of current WTE generating capacity developed between 1980 and 1995. In the 1990s, the EIA said, “as the mercury and dioxin emissions implications associated with combusting MSW began to be recognized, most existing facilities had to install air pollution control systems or be shut down, and the construction of new MSW-fired electric generation capacity came to a halt.”
Environmental opponents of new WTE projects also raised concerns about the toxicity of the ash being produced, though the EPA demonstrated that the ash was not a health problem.
Promise or Problems?
The trade group Energy Resource Council remains positive about WTE:
Nonetheless, the WTE industry is struggling, with new plants not on the horizon and political pressure on some existing facilities.
Increasing capacity at existing plants is the short-term opportunity, Michaels noted, citing the positive performance and safety of the current plants. But new plants are unlikely, short-term. Medium term, the hope is on public policy support in place of the now largely irrelevant PURPA given wholesale competitive markets and lower energy prices.
A policy bailout could come from, for example, a national renewable portfolio standard that includes WTE, or a national CO2 emissions program. But these lifelines seem far away at present.