&EFA
United States
Environmental Protection
Agency
Municipal Environmental Research
Laboratory
Cincinnati OH 45268
Research and Development
EPA-600/S2-81-181 Oct. 1981
Project Summary
Impediments to Energy and
Materials Recovery
Facilities for Municipal
Solid Waste
John V. Klingshirn and Oscar W. Albrecht
Facilities for recovering energy
and/or materials from municipal solid
waste can contribute to reducing the
Nation's dependence on exhaustible
fossil fuels and virgin materials and,
additionally, offer an alternative to
direct landfill disposal of solid waste.
Many cities and counties have there-
fore begun to consider the feasibility
of constructing and operating resource
recovery facilities.
The study summarized here reviews
the financial operations of a selected
number of existing resource recovery
facilities and evaluates the impedi-
ments to expanded recycling activity.
The eight facilities selected reflect a
range of technologies, ownership
arrangements, geographical locations,
and recovered products. Based on
their costs and income data for the
most recently completed fiscal year at
the time of the study (generally 1978).
none of the facilities were economical
in the sense of providing the least-cost
mode of disposal. All experienced net
operating losses when capital costs
were taken into account. Improved
financial performance was projected
for the subsequent fiscal year (gen-
erally 1979). One facility was expected
to become profitable, and three other
facilities were expected to become
competitive with other waste disposal
alternatives in their areas.
The most important barrier to profit-
able operation was the lower cost of
landfill disposal; to compete with the
charges for landfill disposal, the
tipping charges by facilities were set
below their actual operating costs. To
a lesser extent, other impediments
also resulted in reduced throughput,
higher costs, and unprofitable opera-
tions. In many cases, however, the
facilities would not have been eco-
nomical even in the absence of these
impediments.
This Project Summary was devel-
oped by the EPA's Municipal Environ-
mental Research Laboratory, Cincin-
nati. OH. to announce key findings of
the research project that is fully
documented in a separate report of the
same title (see Project Report ordering
information at the back).
Introduction
Many cities and counties are presently
considering alternatives to the sanitary
landfill for disposing municipal solid
waste (MSW), including the operation of
resource recovery facilities. Processing
MSW to recover energy and/or materials
can potentially solve the land disposal
problem by greatly reducing the volume
of waste disposed of on the land.
Volume reductions of up to 50 percent
are possible with a shredding and
ferrous recovery facility, 90 percent
with an incineration and steam recovery
facility, and 80 percent with a refuse
derived fuel (RDF) production. Resource
recovery can also reduce the Nation's
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dependence on exhaustible fossil fuels
and virgin materials. Despite their
potential, however, resource recovery
facilities currently provide less than 2
percent of the Nation's disposal require-
ments and based on currently available
information, it appears that the existing
plants in full operation in the United
States have generally not been con-
sistently successful financially, includ-
ing the 8 facilities in this study.
The primary objective of this study
was to identify and evaluate the
impediments to profitable resource
recovery facilities for MSW. To accom-
plish this, the financial data were
evaluated for eight selected operational
resource recovery facilities. The selected
facilities encompassed a wide range of
technical processes, ownership ar-
rangements, sizes, products, and geo-
graphical locations. To enable com-
parisons with alternative modes of
disposal, a "net disposal cost per ton"
was computed for each facility. Thiscost
was calculated as the total cost of
operation (including annualized capital
costs) less any revenues from the sale of
recovered energy or materials. Thus,
the net disposal cost per ton can be
thought of as the tipping fee needed to
break even.
For resource recovery facilities con-
structed some years ago, their financial
performance when evaluated on a
replacement cost basis can be quite
different than when capital costs are
included on a historical cost basis.
Communities now contemplating a
resource recovery facility would need to
consider current construction or re-
placement cost of facilities. Therefore,
to evaluate the present merit of recycling
MSW, the net disposal cost per ton was
also calculated for each facility on a
capital replacement cost basis.
The study assumed that existing
resource recovery facilities were de-
signed and built to provide an economi-
cal (i.e., the least cost) disposal mode.
Each facility's performance was there-
fore compared with its anticipated
performance to identify the differences
and determine the causes of these
differences.
Descriptions Of Eight
Specific Facilities
The city of Harrisburg, Pennsylvania,
owns and operates a mass-burning
water wall incinerator with a design
capacity of 720 tons per day (tpd). The
incinerator processes all MSW collected
in the city as well as some waste from
surrounding communities. Recently, it
began to produce steam for use in a
district heating system owned and
operated by Pennsylvania Power and
Light Company. Competition from
landfill disposal and overly optimistic
estimates of the waste volumes avail-
able from within the city were identified
as impediments that resulted in opera-
tion of the facility well below capacity.
Throughput of waste is increasing,
however, and the facility may become
economical in the near future.
The town of Braintree, Massachusetts,
owns and operates a mass-burning
waterwall incinerator with a 240 tpd
capacity. Difficulty in establishing
regional cooperation with other munici-
palities, problems with meeting air
pollution standards, and lack of suf-
ficient demand for the steam that the
incinerator produces contributed to
making the facility a high-cost operation
during its early years. Rising landfill
costs are beginning to make the cost of
incineration more competitive with the
landfill disposal method.
The city of North Little Rock, Arkansas,
owns a modular incinerator plant with a
capacity of 100 tpd. Until recently, the
plant, operated by the city, burned all of
the city's refuse and generated steam
for sale to a nearby factory. During the
first 21 months of operation, the plant's
level of throughput averaged over 80
percent of rated capacity and it ex-
perienced no sustained shutdowns for
repairs. Problems with labor and man-
agement turnover, however, led to a
rapid deterioration of the plant in the
period immediately following this site
study. A new city administration closed
the facility in September 1979, and the
city is currently negotiating with the
incinerator manufacturer to operate the
plant under contract.
Monmouth County, New Jersey,
owns and operates a reclamation center
that shreds MSW and recovers ferrous
metal before proceeding with sanitary
landfilling. It was originally hoped that
capability for producing refuse derived
fuel (RDF) could be added to the facility
at some future date, but the lack of a
viable market has thus far prevented
this. The county was apparently en-
couraged by both state and federal
authorities to believe that high tech-
nology resource recovery operations
would be cost-effective, but the results
have been disappointing.
AENCO, formerly the Ail-American
Environmental Control Corp., of New
Castle, Delaware, built and operates the
facility owned by New Castle County for
shredding mixed municipal waste and
recovering materials. The facility was
constructed to extend the life of the
county landfill and to provide the future
center for resource recovery. New
Castle County has received some
benefit from the extended landfill life,
but the monetary value of this benefit
has not been quantified.
The city of Ames, Iowa, operates the
first municipally-owned solid waste
recovery system in the country for
producing RDF. The net cost of waste
disposal based on RDF production has
been much higher than expected, but
the city's expectations for the future
remain optimistic. If fuel costs continue
to rise as in recent years and throughput
can be increased, revenues from the
sales of RDF and recovered material are
expected to cover all operating and
capital costs by the mid-1980's.
Milwaukee, Wisconsin, is the largest
U.S. city to dispose of its MSW at a
resource recovery facility. The facility,
owned and operated by the Americology
Division of American Can Company,
sells RDF to the Wisconsin Electric
Power Company. The operation involves
a cooperative effort between the city, a
private corporation, and a public utility.
High initial costs and operating dif-
ficulties with the complex recovery
system made the facility unprofitable in
its early years of operation. The plant's
performance has been improving,
however, and with rising energy costs,
profitable operations are expected to
become a reality in the near future.
The Pacific Gas and Electric Company
(PG&E), a large investor-owned utility
service in northern and central California,
owns and operates a methane gas
recovery system at the Mountain View,
California, landfill. Although the project
was only in its demonstration phase at
the time of the site study, it was
projected to be economically successful
upon becoming operational. Questions
concerning the optimum technology for
landfill gas recovery remain, but at
locations where feasible, it appears to
be a promising method of energy
recovery.
Are The Resource Recovery
Facilities Economical?
In the accounting sense of producing
revenues exceeding costs, none of the
eight facilities was economical at the
time of the study. Losses ranged from
$0.60 to over $36.00 on a per ton basis.
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Direct comparisons among facilities are
cautioned, however, because of dif-
ferences in accounting systems,
financing arrangements, and circum-
stances specific to each site. Computing
a net disposal cost per ton for each
facility, however, helped to rectify some
of these differences and permits general
comparisons.
Each of the facilities charged a tipping
fee that was less than their net cost of
disposal by way of recycling. This was
generally necessary to remain competi-
tive with disposal alternatives (i.e.,
sanitary landfills). Projections of net
disposal costs indicated that costs at
four facilities—Harrisburg, New Castle
County, Ames, and Mountain View—
were likely to decrease to the point
where they would be comparable to the
tipping fee charged (and thus competi-
tive with sanitary landfills in the area).
These four facilities employ different
recovery technologies: incineration,
shredding, RDF production, and landfill
gas recovery. The products and revenues
derived from energy recovery from
MSW—steam, RDF, and landfill gas-
are more profitable than materials
recovery.
Impediments to Economical
Operation
Resource recovery was generally not
successful (profitable) at the facilities
studied because the costs for landfill
disposal were less. Prevailing landfill
costs probably do not fully reflect the
true social cost of such disposal,
however. The costs of disposal at
sanitary landfills may increase sub-
stantially in some areas under regula-
tions now being promulgated under the
Resource Conservation and Recovery
Act of 1976(RCRA).
Fragmentation of authority in solid
waste management not only hindered
recovery operations at several sites, but
resulted in inability to organize regional
operations and uncertainty about future
government policies. High initial capital
costs adversely affected financial
operations of facilities having RDF
production; the relatively new tech-
nology at these facilities required
frequent modification or redesign.
Air quality regulations (a) increased
the cost of energy recovery by neces-
sitating expensive electrostatic pre-
cipitators and (b) discouraged the
burning of coal; thus reducing the
itential market for RDF cofiring with
oal. Local restrictions on disposing of
incinerator ash and scrubber residue
also increased costs of ultimate disposal
in several instances.
Impediments such as regulations can
restrict the market through lower
prices. At the three incineration facilities
selling steam, the sale price was based
on the average price of oil; thus, oil price
regulation has directly affected revenues
from recovered energy. The price paid
for RDF was based on the price of coal,
which is affected indirectly by oil and
gas price regulation. Price controls had
less effect on recovered gas revenues at
the Mountain View facility because the
product's customer, Pacific Gas and
Electric, owned the facility.
Public utilities are normally potential
customers for recovered energy. The
regulation of utility rates thus affects
the demand by utility customers. Afixed
rate of return on capital investments
can also discourage utilities to under-
take investments such as boiler conver-
sions to allow cofiring of RDF. Under
fuel adjustment provisions, many utili-
ties are allowed to pass along increased
fuel costs directly to their customers;
this also reduces incentive for investi-
gating the potential fuel cost savings
through the cofiring of RDF or using
steam generated from refuse incinera-
tion.
Impediments to materials recovery in
both technological and economic areas
were noted. Adequate product standards
for recovered materials are lacking
whereas tax subsidies for virgin mate-
rials discourage economical resource
recovery. Aluminum recovery has been
unfeasible primarily due to technologi-
cal difficulties.
Full capacity operations would not in
itself have been sufficient to cover total
variable and fixed costs at four of the
facilities studied, and increased'ferrous
recovery would not have resulted in
breakeven operations at any of the
facilities. At the two facilities producing
RDF, improved RDF recovery by itself
would not have been sufficient to
achieve breakdown operations, con-
sidering the prices and throughput
levels prevailing at the time of the study.
Also, extraction and recovery of alumi-
num, glassy aggregate, and bundled
paper would not have been sufficient to
eliminate operating deficits even if
these materials were recovered at the
rates originally projected.
Although the impediments discussed
above were observed to adversely affect
operations, some impediments generally
believed to hinder resource recovery
had little or no effect. Independent
source separation programs, for ex-
ample, that were in operation at half the
sites studied had little effect. Mandatory
deposits on beverage containers only
slightly affected operations at the Ames
facility. Seasonal fluctuations in waste
quantities also had little effect.
In general, the financial performance
of the eight resource recovery facilities
studied were only moderately sensitive
to changes in various operating and
price parameters. These observations
were made for order-of-magnitude
changes in single parameters, however,
and did not take into account combina-
tions of changes or additional factors
that could occur in actuality.
Conclusions
At the eight sites visited, resource
recovery was not found to be economical
in the most recently completed fiscal
year (generally 1978). This was true not
only in the accounting sense of revenues
being lower than expenditures, but also
in the broader economic context of not
being the least-cost waste disposal
method. The net cost of disposal
through resource recovery facilities
generally exceeded the disposal charges
prevailing at nearby landfills.
The impediments to successful re-
covery thus included the competition
offered by the lower cost of landfill
disposal, recovery operations at levels
below design capacity, high operating
and maintenance costs, and limited
markets for salable products.
Profitable resource recovery opera-
tions at the time of the study were more
closely related to energy recovery than
materials recovery. Future success at
most of the facilities studied appeared to
depend greatly on improved prices,
expanded markets, and increased rates
for recovery of energy.
The full report, submitted in fulfill-
ment of Contract No. 68-03-2761 by
MATHTECH Inc., Princeton, New Jersey,
under sponsorship of the U.S. Environ-
mental Protection Agency, was authored
by Ernest H. Manuel and Fritz W. Efaw.
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The EPA authors John V. Klingshirn and Oscar W. Albrecht (also the EPA
Project Officer, see below) are with the Municipal Environmental Research
Laboratory, Cincinnati, OH 45268.
The complete report, entitled "Impediments to Energy and Materials Recovery
Facilities for Municipal Solid Waste," (Order No. PB82-102 302; Cost: $ 18.50,
subject to change) will be available only from:
National Technical Information Service
5285 Port Royal Road
Springfield, VA 22161
Telephone: 703-487-4650
The EPA Project Officer can be contacted at:
Municipal Environmental Research Laboratory
U.S. Environmental Protection Agency
Cincinnati, OH 45268
U.S GOVERNMENT PRINTING OFFICE; 1981 —559-017/7387
United States
Environmental Protection
Agency
Center for Environmental Research
Information
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