Landfill-gas-to-Energy projects: analysis of net private and social benefits

Methane emissions from municipal landfills represent 3% of the total United States greenhouse gas emissions that contribute to climate change. These methane emissions can be released to the air or collected and flared. This landfill gas also has the potential to be used to generate electricity. In 1994,the Environmental Protection Agency(EPA) created the Landfill Methane Outreach Program, with the objective of promoting the development of landfill-gas-to-energy projects around the country. There are currently 2,300 active landfills in the United States. Although there are already 382 operational projects, there are many more landfills with the potential to use the gas. EPA has identified at least 630 candidate landfills for energy projects, and many more have still not been identified. The objective of this paper is to evaluate total private and social benefits of landfill-gas-to-energy projects, taking into consideration not only the costs of installing and maintaining the necessary equipment and the revenues obtained from selling the electricity but also a valuation of the greenhouse gas emissions that would be prevented and the emissions of criteria pollutants created by the electricity generating equipment. It also evaluates the breakeven government subsidies that would be required to make such projects economically viable from private and social perspectives in comparison to current subsidies. It was found that the private breakeven price of electricity for these projects is lower than dollar 0.04/kWh. Moreover, the optimum social subsidywas found to be less than dollar 0.0085/ kWh, which is about 40% lower than the currently available federal tax break of dollar 0.015/kWh. The method developed for this paper can be applied to other renewable energy technologies, to show their relative social costs and benefits.