Executive Summary
Advanced Energy Strategies (AES) presented a report to the Alameda Public Utilities Board
(PUB) in May, 2002 (the 2002 Final Report) that made recommendations for procurement of
additional generating resources for Alameda Power and Telecom (Alameda P&T). Following a
recommendation in that report, the PUB authorized AES to investigate an emerging technology,
generating electricity by gasifying municipal solid waste (MSW). This report presents the results
of that investigation. The investigation was conducted by AES, with the engineering expertise on
gasification and MSW management provided by URS Corporation.
The objectives the Generation Team developed as part of the 2002 Final Report are:
- Provide Local Reliability;
- Maintain an Economic Resource Portfolio;
- Ensure Stable Electric Cost and Power Supply;
- Facilitate Economic Development in the City of Alameda;
- Maintain Power Content Label in Alameda P&T's Portfolio; and
- Meet Future Supply Needs in a Timely Fashion.
Three technologies for gasification were found with the potential for meeting all six of the
objectives. The individual technologies investigated - pyrolysis, conventional gasification, and
plasma gasification - all gasify MSW at elevated temperatures. They are referred to collectively
as thermal MSW gasification. Thermal MSW gasification is very different from the incineration
technology Alameda P&T investigated and discarded during the 1980s. The chemical reactions
in gasification reduce MSW into simpler molecules whereas incineration creates more complex
substances, including dioxins and furans whereas these substances are generally destroyed in
gasification.
This study is based on the issuance and evaluation of Request for Qualifications (RFQs) from
existing vendors of MSW gasification and energy production vendors. It was completed in three
phases. Two rounds of RFQs were issued to insure that technologies with promise were covered.
Thirteen vendors responded to the RFQs with a total of 15 proposals. Thirteen of the proposals
were found worthy of evaluation, and six of those were evaluated more closely through a third
phase of the RFQ, which was based on extended interviews with the vendors.
The primary finding of the investigation is that electric generation using thermal MSW
gasification is a viable technology. The technology uses three processing stages to produce
electricity from MSW. Each of these sub-processes has been used for decades in applications
similar to an MSW gasification and energy production. Combining them into a single integrated
process to gasify MSW for power is new and viable, but it is not completely mature. Therefore,
early commercial developments need to incorporate appropriate risk mitigation strategies. The
most effective risk mitigation measure for a municipal utility is to contract for power from a
project without taking on the risk of ownership unless and until a project has demonstrated its
reliability.
Preliminary economic assessments were also conducted as part of this study. The economics of
thermal MSW gasification are highly dependent on the costs for alternative base load power, the
cost of disposing of MSW in landfills, and the imposition or non-imposition of fees normally
associated with disposal of MSW into landfills. The results of the RFQ indicate that costs on
conventional electric generation and disposing of MSW in landfills may now be reaching levels at
which thermal MSW gasification becomes economic. Definitive conclusions about economics
require specification of an actual project, including the site and arrangements for the MSW.
The review of institutional issues associated with MSW gasification for power production
revealed that regulations and legislation are lagging behind the development of the technologies.
There are concerns by responsible state agencies that existing methods for handling MSW cannot
sufficiently reduce dependence on landfills beyond current levels of diversion in California.
Technologies for converting MSW into useful products and for electricity are now being
investigated by the state of California as a solution to this problem. California legislation passed
in 2002 recognized thermal MSW gasification as a renewable resource and distinct from
incineration. However, that legislation defined gasification in a manner that needs revision, and
the legislation did not define how gasification fits into the pre-existing hierarchy of methods for
handling MSW. The California Integrated Waste Management Board is now overseeing studies
of MSW conversion technologies, including thermal MSW gasification, which will form the basis
of a report to the legislature. That report is expected to lead to additional legislation. The waste
board is also developing regulations for conversion facilities.
The current Alameda County Integrated Waste Management Plan Countywide Element does not
include MSW gasification. An MSW gasification facility in Alameda County will need to be
included in the next revised plan, due by 2008 before it can be built.
Another form of MSW gasification, called "bio-gasification," is also being offered by vendors.
Bio-gasification uses the biological processes of accelerated anaerobic digestion. These
processes are less efficient in extracting electric power from MSW than thermal MSW
gasification, so bio-gasification did not meet the requirements of the RFQ and was not evaluated
in this study. However, acquisitions of energy resources by Alameda P&T made during the
course of the RFQ, and additional acquisitions currently under negotiation, defer the date when a
new resource is required until approximately 2010. Those acquisitions also reduce the amount of
new power required during for the first few years after that. Bio-gasification may be able to
supply enough electricity to meet some of Alameda P&T's evolving needs. Bio-gasification does
not depend on new legislation and regulations to the degree that thermal MSW gasification does,
and it may require less public education since its differences from incineration are easier to
understand than the differences between thermal MSW gasification and incineration. Since the
RFQ did not evaluate bio-gasification, its viability has not been established.
A conventional natural gas-fired combined cycle plant does not meet the power content label
objective and it is too large for Alameda P&T to pursue without partners to share its output.
Because a natural gas-fired plant would cost more in or near Alameda than in an area with higher
gas pressures and lower overall costs, finding partners interested in a combined cycle plant local
to Alameda P&T is likely to be difficult. By contrast, it is most economic to convert MSW into
electricity near the source of the MSW, not at remote sites. MSW gasification is a better longterm
fit for Alameda P&T than a combined cycle plant by virtue of the proximity of MSW, the
scale of MSW based power plants, and the recognition of MSW as a renewable resource. We
believe there is an opportunity to meet all of Alameda P&T's objectives using MSW gasification,
and that there is sufficient lead time to work out the institutional issues associated with doing so.
AES recommends the following actions to Alameda P&T:
- Assess the Status of Bio-Gasification
Undertake an assessment of bio-gasification of MSW to determine if it can meet
Alameda P&T's energy requirements as they have evolved.
- Participate in Developing Laws and Regulations Relating to Gasification of MSW
Participate in developing the legislation and regulations that will affect MSW availability
for gasification and the requirements for siting a plant. By sharing information it has
gained through the RFQ, Alameda P&T can help to expedite the resolution of these
institutional issues, thereby improving its future options. Additional participation in the
institutional arena can maximize Alameda P&T's options for local and renewable power.
- Promote Development of a Reduced Scope MSW Project
Promote development of a local MSW gasification project by taking long-term power
from a project. Alameda P&T does not need to be the project developer; it can work with
other interested parties to formulate a project that meets Alameda's energy needs.
Interested parties include vendors seeking to develop a project, generators of MSW,
MSW agencies, and government agencies seeking to reduce landfill and promote
renewable power. Alameda P&T can employ expertise developed through the RFQ to
shape a project constructively and facilitate financing for an early commercial facility.
Even though bio-gasification produces less power than sought in the RFQ, it can meet
Alameda P&T's needs for a few years, and may be an alternative to thermal MSW
gasification. A reduced scope project, with options for future expansion could be a good
fit with Alameda P&T's requirements.
Download
the final draft Investigation into Municipal Solid Waste (MSW) Gasification
for Power Generation.
Download Part
1 and Part 2 of
Addendum Appendix 3 to the complete final draft Investigation into Municipal
Solid Waste (MSW) Gasification for Power Generation (Public Comment to
Alameda P&T).
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