paired with 150 percent of the market gas price or $4.10/MMBtu. Step 3: Evaluate Cost-Effectiveness. For direct use projects, EPA estimates the break-even WIP for each gas price by interpolation; as shown in Exhibit 2-9. The analysis categorizes a landfill as implementing a direct gas use project when its methaneproducing WIP is equal to or greater than the breakeven WIP for a given gas price. Emission reductions from direct gas use projects equal the gas that is collected and combusted. EPA assumes that only 75 percent of these cost-effective direct gas use projects are implemented to account for the uncertainty in identifying an energy end-user. As energy prices increase, the break-even WIP declines allowing smaller landfills to cost-effectively invest in direct gas use projects. This trend is important because while the Landfill Rule is reducing emissions from larger U.S. landfills, many small landfills exist where cost-effective reductions also can be achieved. 2.3 Achievable Emission Reductions and Marginal Abatement Curve The result of this analysis is an assessment of the costeffectiveness of two types of landfill gas recovery and use projects: electricity generation and direct gas use. For 2010, EPA estimates that U.S. landfills could reduce methane emissions by up to 10.5 MMTCE (1.8 Tg) through implementing these types of cost-effective projects at energy market prices (1996 US$). These potential reductions are without any additional value for abated methane in terms of $/TCE. If emission reduction values are added to the energy market prices, greater methane reductions are achieved. For example, EPA's analysis indicates that with a value of $20/TCE for abated methane added to the energy market price, U.S. reductions could reach 20.2 MMTCE (3.5 Tg) in 2010. Exhibit 2-10 shows the amounts of abated methane incremental to the Landfill Rule that can be costeffectively achieved for a range of comparable values of abated methane through $200/TCE. For some landfills, both electricity and direct gas use projects are costeffective. However, for modeling purposes, EPA assumes that these landfills implement an electricity generation project. Consequently, the eligible landfills for direct use projects indicated in Exhibit 2-10 represent Exhibit 2-10: Schedule of Emission Reductions Over and Above the Landfill Rule by Price in 2010 • Includes emission reductions for landfills at which either a gas or an electricity project is modeled as cost-effective. By default, the analy sis selects electricity projects over gas projects where both are cost-effective. ▸ Point on marginal abatement curve (see Exhibit 2-11) indicating minimum break-even WIP for electricity and direct gas use projects. Although cost-effective reductions at landfills of this size exist, they are subject to the Landfill Rule (over 2.5 MMT WIP), and thus, are not counted as emission reductions in this analysis. • The potential emission reductions associated with the modeled prices of $2.05/MMBtu or -$6/TCE are "below the line" reductions in carton equivalent terms. • Negative incremental reductions indicate that emission reductions attributed to gas projects at lower prices are modeled as electricity projects at higher prices because electricity projects become cost-effective as values increase above $0/TCE. those landfills that find only direct gas use projects cost-effective. As indicated in the exhibit, above $20/TCE, no landfills find only direct gas use costeffective. The negative incremental reductions under the direct gas option indicate the direct use projects for which electricity production also becomes cost-effective at the higher methane values. Exhibit 2-11 illustrates the MAC for landfill electricity generation and direct gas use projects not subject to the Landfill Rule for 2010. Exhibit 2-12 presents the cumulative emission reductions for selected values of carbon equivalent in 2000, 2010, and 2020. The MAC can similarly be called a cost or supply curve since it shows the marginal cost per emission reduction amount. Energy market prices are aligned with $0/TCE given that this price represents no additional values for abated methane and where all price signals come only from the respective energy mar kets. The "below-the-line" reduction amounts, with respect to $0/TCE, illustrate this dual price-signal market, i.e., energy market prices and emission reduction values. Each point on the MAC represents the quantity of methane that is cost-effectively abated at a given energy price combination and emission reduction value. In addition, each point on the graph reflects the minimum break-even WIP between electricity projects and direct gas use proj. ects. The minimum break-even WIP for electricity generation and direct gas use projects determines the size of the smallest landfill for which a landfill gas-to-energy project is cost-effective. As shown in the exhibit, emis Exhibit 2-11: Marginal Abatement Curve for Methane Emissions from Landfills in 2010 sion reductions approach their maximum at approximately $36/TCE which is comparable to $0.08/kWh and $6.69/MMBtu. The analysis indicates that at and below energy market prices, only direct gas use projects are costeffective and electricity production projects do not contribute to emission reductions. This modeled result, however, underestimates the potential for emission reductions since many landfills are currently implementing electricity projects. Many of these landfills take advantage of state and federal incentives that are not reflected in this analysis. Emission reductions from both landfills impacted by the Landfill Rule and "non-Rule" landfills reach approximately 65 percent of total MSW methane emissions, only 10 percent below the maximum possible given the estimated recovery efficiency of 75 percent. The analysis assumes that small and industrial landfills, which were not evaluated for purposes of the MAC, continue to emit methane. Therefore total emission reductions do not approach the 75 percent maximum. Other uncertainties involve landfill gas recovery technologies and the costs for recovering landfill gas. For both electricity and direct gas use projects, EPA estimates the costs using aggregate cost factors and a relatively simple set of landfill characteristics. Costs vary depending on the depth, area, WIP, and waste materials for each landfill. Uncertainty is associated with the electricity analysis because EPA bases costs on a representative WIP. Although the costs for direct gas use projects account for depth, area, and WIP (along with unit costs), they are only representative of average costs. The price at which landfills sell electricity also is an important driver in the analysis. At higher rates, more landfills find it cost-effective to implement electricity projects. In addition, efforts to reduce landfilling, including waste management policies that go beyond existing programs, are potentially cost-effective in further reducing future methane emissions. The costs and benefits of such alternative waste management policies are not included in this assessment. Lastly, project revenues only reflect market prices of electricity and gas and do not reflect state and federal incentives or subsidies. Incorporating these currently available incentives in the analysis would result in additional cost-effective emission reductions. 3.0 References EIA. 1997. Natural Gas Annual 1996. Office of Oil and Gas, Energy Information Administration, U.S. Department of Energy, Washington, DC, DOE/ELA-0131(96). (Available on the Internet at http://www.eia.doe.gov/ oil_gas/natural gas/nat_frame.html.) EPA. 1988. National Survey of Solid Waste (Municipal) Landfill Facilities. Office of Solid Waste, U.S. Environmental Protection Agency, Washington, DC, EPA 530-SW-88-011. EPA. 1993. Anthropogenic Methane Emissions in the United States: Estimates for 1990, Report to Congress. Atmospheric Pollution Prevention Division, Office of Air and Radiation, U.S. Environmental Protection Agency, Washington, DC, EPA 430-R-93-003. (Available on the Internet at http://www.epa.gov/ghginfo/reports.htm.) EPA. 1996. Standards of Performance for New Stationary Sources and Guidelines for Control of Existing Sources: Municipal Solid Waste Landfills: 40 CFR Part 60. Federal Register, U.S. Environmental Protection Agency, Washington. DC, EPA 61-FR-9905. (Available on the Internet at http://www.epa.gov/docs/fedrgster/ EPA-AIR/1996/March.) EPA. 1996. Turning a Liability into an Asset: A Landfill Gas To Energy Project Development Handbook. Atmospheric Pollution Prevention Division, Office of Air and Radiation, U.S. Environmental Protection Agency, Washington, DC, EPA 430-B-96-0004. (Available on the Internet at http://www.epa.gov/lmop/products.htm.) EPA. 1997a. Characterization of Municipal Solid Waste in the United States: 1996 Update. Office of Solid Waste, Municipal and Industrial Solid Waste Division, U.S. Environmental Protection Agency, Washington, DC, EPA 530-S-98-007. (Available on the Internet at http://www.epa.gov/epaoswer/non-hw/muncpl/ msw96.htm.) EPA. 1997b. Energy Project Landfill Gas Utilization Software (E-PLUS), Project Development Handbook. Atmospheric Pollution Prevention Division, Office of Air and Radiation, U.S. Environmental Protection Agency, Washington, DC, EPA 430-B-97-006. (Available on the Internet at http://www.epa.gov/lmop/products.html.) EPA. 1998. Standards of Performance for New Stationary Sources and Guidelines for Control of Existing Sources: Municipal Solid Waste Landfills: 40 CFR Subparts Cc. Federal Register, U.S. Environmental Protection Agency, Washington, DC, EPA 63-FR-32743. (Available on the Internet at http://www.epa.gov/docs/ fedrgstr/EPA-AIR/1998/June.) EPA. 1999. Inventory of Greenhouse Gas Emissions and Sinks 1990-1997. Office of Policy, Planning, and Evaluation, U.S. Environmental Protection Agency, Washington, DC, EPA 236-R-99-003. (Available on the Internet at http://www.epa.gov/globalwarming/inventory/1999-inv.html.) GAA. 1994. 1994-1995 Methane Recovery from Landfill Yearbook Government Advisory Associates, Inc., New York, NY. Glenn, Jim. 1998. "BioCycle Nationwide Survey: The State of Garbage in America." BioCycle, no. 4. Jansen, G.R. 1992. The Economics of Landfill Gas Projects in the United States. Presented at the Symposium on Landfill Gas Applications and Opportunities, Melbourne, Australia. Kruger, Dina, et al. 1999. 1999 Update of U.S. Landfill Gas-to-Energy Projects. Presented at the 22nd Annual Landfill Gas Symposium, Orlando, FL. |