07.0 Case studies in Solid Waste Management

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7 – Case studies in Solid Waste Management

Introduction to Climate Change

Wim Maaskant

Wim Maaskant

BGP Engineers – The Netherlands

BGP Engineers – The Netherlands www.bgpengineers.com

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7 – Case studies in Solid Waste Management

Financial assessment of E

mission

Reduction

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Financing instruments

Carbon Credits enhance the finances of your project Carbon Credits enhance the finances of your project: :

Carbon credits:

•

It is new since approx.7 years when some European Governments It is new since approx.7 years when some European Governments

have started to buy with purpose of meeting their Kyoto targets

•

The start of the European Emissions Trading Scheme in 2005 has The start of the European Emissions Trading Scheme in 2005 has

accelerated the carbon market

•

Clean Development Mechanism (CDM) combines Clean Development Mechanism (CDM) combines financial support financial support

with

with sustainable development sustainable development and and technology transfertechnology transfer

•

Reducing Emissions from Deforestation and Degradation (REDD) Reducing Emissions from Deforestation and Degradation (REDD)

is new mechanism, but still under development, with particular

interest for countries with tropical forests (Indonesia, Cameroun,

Brazil etc.) and with possibilities for generating income

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7 – Case studies in Solid Waste Management

Carbon Credits and credit cash flow, some key issues Carbon Credits and credit cash flow, some key issues: :

heat

equity

CO

CO₂₂ reductions reductions

•

carbon credits:carbon credits:

– enhancing return on equityenhancing return on equity

– reducing debt leverage_{reducing debt leverage}

•

comfort for lenders (investors, banks)comfort for lenders (investors, banks)

– supporting debt service with carbon cash flowssupporting debt service with carbon cash flows

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7 – Case studies in Solid Waste Management

Financial assessment: the basics (1) Financial assessment: the basics (1)

The purpose of financial assessment is to obtain

1)

1)insight and understanding insight and understanding about your budget;about your budget;

2)

2)Information about the Information about the profitabilityprofitability of your investment; of your investment;

3)

3)Insight into the Insight into the financial risks financial risks of the projectof the project

Key parameter is the Internal Rate of Return (IRR).

We need to understand the

We need to understand the time-valuetime-value of money = a Rupia today is not the of money = a Rupia today is not the

same as a Rupia after 10 years

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7 – Case studies in Solid Waste Management

Time-value of money

Financial assessment: the basics (2) Financial assessment: the basics (2)

One barrel of oil = 70 Euo = 110 Dollar = 1 million Rupia

year 1 2 3 4 5 6 7 8 9 10

Invest 1.000.000

If real price remains the same: how much money do you need now to buy one barrel

after 10 years? Interest 15%

385.54

3424.098 466.507 513.158 564.474 620.921 683.013 751.315 826.446 909.091 1.000.000

If real price increases by X% per year: how much money do need now to buy one

barrel after 10 years? 15%

Money: 1.000.000 1.150.000 1.322.500 1.520.875 1.749.006 2.011.357 2.313.061 2.660.020 3.059.023 3.517.876 4.045.558

If real price increases by X% per year: how much money do need now to buy one

barrel after 10 years? 5%

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7 – Case studies in Solid Waste Management

Case studies Case studies

Case study 1: Renewable energy in agricultural company (Cyprus)

Case study 2: Energy efficiency in Textile industry (Macedonia)

Case study 3: Landfill Gas Capture and Energy Generation (Indonesia)

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7 – Case studies in Solid Waste Management

Case 1: Renewable energy from waste Case 1: Renewable energy from waste

Basic information:

The company is a

The company is a animal farmanimal farm

Its main production activities are

(i)

(i)BreedingBreeding

(ii)

(ii)Waste managementWaste management

(iii)

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7 – Case studies in Solid Waste Management

Case 1: Renewable energy from waste Case 1: Renewable energy from waste

Biogas and electricity:

(i)

(i)Biogas is produced in digesterBiogas is produced in digester

(ii)

(ii)Biogas is used in gas engine / Biogas is used in gas engine /

CHP-installation

(iii)

(iii)CHP-installation produces CHP-installation produces

electricity and heat

(iv)

(iv)Heat is used for climate control Heat is used for climate control

in breeding farm

(v)

(v)Electricity is supplied to public Electricity is supplied to public

network network digester digester CHP CHP farm farm

Public electricity network

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7 – Case studies in Solid Waste Management

Case 1 – waste-to-energy: input data Case 1 – waste-to-energy: input data

Biogas / Energy Yield from Input

Substrate

Substrate % Org. % Org. Input t/yrInput t/yr Biogas Yield m3/tBiogas Yield m3/t Total Biogas Yield per YearTotal Biogas Yield per Year

Pig Manure 6

Pig Manure 6 51,000 51,000 22 22 1,122,000 m31,122,000 m3 Dairy manure 6

Dairy manure 6 52,560 52,560 23 23 1,208,880 m31,208,880 m3

Total

Total 103,650103,650 2,330,880 m32,330,880 m3 Total per day

Total per day 284 284 6,386 m3 6,386 m3

Notes:

1 m3 of biogas can produce 6.0 KWh of Total Energy (Electrical and Thermal)

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7 – Case studies in Solid Waste Management

Case 1 – basic information Case 1 – basic information

Combined Heat & Power principle:

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7 – Case studies in Solid Waste Management

Case 1 – basics of financial assessment Case 1 – basics of financial assessment

Financial assessment:

1)

1)Must comprise Must comprise all financial parameters all financial parameters relevant to the projectrelevant to the project

2)

2)Cost information Cost information on: equipment and civil structures, utilities (gas, water, on: equipment and civil structures, utilities (gas, water,

electricity etc.)

3)

3)Must include Must include financingfinancing parameters (“how will you pay for the investments?”) parameters (“how will you pay for the investments?”)

4)

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7 – Case studies in Solid Waste Management

Case 1 – basics of financial assessment Case 1 – basics of financial assessment

Financial assessment:

We make EXCEL sheet for financial analysis (EXERCISE)

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7 – Case studies in Solid Waste Management

Case 1 – approach of financial assessment Case 1 – approach of financial assessment

Approach:

1)

1)Collect prices of Collect prices of equipment, works and services equipment, works and services relevant to the project; validity relevant to the project; validity

of prices; payment terms

2)

2)Collect price information on input flows and output flows; make Collect price information on input flows and output flows; make price prognosisprice prognosis

3)

3)Set-up EXCEL sheetSet-up EXCEL sheet

4)

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7 – Case studies in Solid Waste Management

Case 1 – EXCEL - overview Case 1 – EXCEL - overview

Organic Waste Digester

Investment Appraisal for the installation of anaerobic digestion

Variables Exchange rate 1,60$/Euro

Discount rate 7,00% Select applicable rate CER-income 10 Euro/CER

Period (years) 10

Investment amount € 1.950.000,00 CHP Units and Anaerobic Reactor and Electrical installation and groundwork,engineering

Investment second phase € 750.000,00

Year 0 1 2 3 4 5 6 7 8 9 10

Outflows

Investment Capital (initial) (2.700.000) - - - -

Capital Cost - (189.000) (189.000) (189.000) (189.000) (189.000) (189.000) (189.000) (189.000) (189.000) (189.000) Replacement cost CHP - (47.074) (79.382) (94.613) (94.613) (94.613) (94.613) (94.613) (94.613) (94.613) (94.613) Maintenance (1) - (58.968) (140.873) (163.811) (163.811) (163.811) (163.811) (163.811) (163.811) (163.811) (163.811) Diesel Costs (2)(3) - (36.303) (86.726) (100.847) (100.847) (100.847) (100.847) (100.847) (100.847) (100.847) (100.847) Salaries - (34.200) (35.910) (37.706) (39.591) (41.570) (43.649) (45.831) (48.123) (50.529) (53.055) General - (3.420) (3.591) (3.771) (3.959) (4.157) (4.365) (4.583) (4.812) (5.053) (5.306)

Total cash outflow (2.700.000) (368.965) (535.483) (589.747) (591.821) (593.998) (596.285) (598.685) (601.206) (603.853) (606.632)

Inflows

Electricity Sales (4)(5)(6) - 279.116 666.801 775.370 775.370 775.370 775.370 775.370 775.370 775.370 775.370 Income from Heating - 43.000 45.150 47.408 49.778 52.267 54.880 57.624 60.505 63.531 66.707

CARBON CREDITS 150.000 150.000 150.000 150.000 150.000 150.000 150.000 150.000 150.000 150.000

Tax Benefit 7Years Depr - 27.000 27.000 27.000 27.000 27.000 27.000 27.000 27.000 27.000 27.000 Tax Benefit on interest payment - 18.900 18.900 18.900 18.900 18.900 18.900 18.900 18.900 18.900 18.900

Total cash inflow - 518.016 907.851 1.018.678 1.021.048 1.023.537 1.026.151 1.028.895 1.031.776 1.034.801 1.037.978

Net Cash Flow (2.700.000) 149.051 372.368 428.931 429.227 429.539 429.866 430.209 430.570 430.948 431.346 Discount factor 1,00000 0,93458 0,87344 0,81630 0,76290 0,71299 0,66634 0,62275 0,58201 0,54393 0,50835

Discounted Value 7.014 (2.700.000) 139.300 325.240 350.135 327.456 306.255 286.438 267.913 250.595 234.407 219.274

(NPV=Total discounted values)

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7 – Case studies in Solid Waste Management

Case 1 – EXCEL – input data Case 1 – EXCEL – input data

1)

1) Biogas production dataBiogas production data

2)

2) Performance data from CHP-installation (IN: gas, OUT: heat, electricity)Performance data from CHP-installation (IN: gas, OUT: heat, electricity)

3)

3) Life time of projectLife time of project

4)

4) Cost of money (interest rate, non-islamic banking)Cost of money (interest rate, non-islamic banking)

5)

5) Currency (import or domestic equipment)Currency (import or domestic equipment)

6)

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7 – Case studies in Solid Waste Management

Case 1 – exercise Case 1 – exercise

Analysis of optimization of investment (GROUP WORK + PRESENTATION):

1)

1)Which are the Which are the key factors key factors to increase the profitability of the investment project? to increase the profitability of the investment project?

-on input side_{on input side}

-on operational side_{on operational side}

-on output sideon output side

2) Which (additional) risks can you identify if:

-the project life time is 6 years instead of 10 years?_{the project life time is 6 years instead of 10 years?}

-the project life time is 15 years instead of 10 years?_{the project life time is 15 years instead of 10 years?}

(please look for internal risks (= inside of project) and external risks (= cannot be

influenced by project)

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7 – Case studies in Solid Waste Management

Case 2: Energy Efficiency in industry Case 2: Energy Efficiency in industry

Basic information:

Project Title: Energy Conservation Program at Tetex Textile Mill in Tetovo

Teteks (est. 1951) is a large, vertically integrated, wool textile manufacturer in

Tetovo, Macedonia. It employs 3,200 employees

Its main production processes are

Its main production processes are 1,030 tons of yarn, 800,000 meters of fabric, 1,030 tons of yarn, 800,000 meters of fabric,

700,000

pieces for ready-made garments and 330,000 pieces for knitted apparel.

The plant has

The plant has two steam boilers and generates large quantities of steam for two steam boilers and generates large quantities of steam for

both process and heating purposes (approximately 83,000 tons/year). The

Company paid approximately $1.37 million for heat and approximately

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7 – Case studies in Solid Waste Management

Case 2: continued… Case 2: continued…

Energy case:

Purpose: to

Purpose: to reduce costsreduce costs

Main object:

Main object: two operating boilers two operating boilers that generate steamthat generate steam

EE option: t

EE option: the coal-fired boiler has the capacity to generate 40 tons of steam he coal-fired boiler has the capacity to generate 40 tons of steam

per hour (25-bar). The heavy oil-fired boiler has the capacity to generate 10-15

tons of steam per hour (7-bar). According to a past survey, however, both

boilers were

boilers were operating at a much lower capacity operating at a much lower capacity and generated only 18 tons of and generated only 18 tons of

steam per hour (7-bar) in total.

Heat consumption was 2.5 times higher in the winter than during the rest

of the year.

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7 – Case studies in Solid Waste Management

Case 2: continued… Case 2: continued…

Approach:

1) Feasibility study with assessment of options

2) “Quick fix” measures (short pay-back period)

3) More advanced measures (medium or long pay-back period)

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7 – Case studies in Solid Waste Management

Case 2: continued… Case 2: continued…

Collect real data:

•

Boiler combustion measurements were taken using a combustion analyzer.Boiler combustion measurements were taken using a combustion analyzer.

•

A thorough survey of the arrangement, sizing and insulation of the steamA thorough survey of the arrangement, sizing and insulation of the steam

distribution system was conducted to identify potential improvements.

•

A steam trap survey was conducted to identify and quantify failures and leaks A steam trap survey was conducted to identify and quantify failures and leaks

and explore how condensation recovery and heat transfer efficiency could be

optimized.

•

Hot water systems were inspected to evaluate heat recovery opportunities and Hot water systems were inspected to evaluate heat recovery opportunities and

identify physical requirements for making improvements.

•

Plant equipment was inspected to assess energy efficiency. Opportunities for Plant equipment was inspected to assess energy efficiency. Opportunities for

consolidation to improve efficiency were identified and discussed with

production managers.

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7 – Case studies in Solid Waste Management

Case 2: continued… Case 2: continued…

•

The condition and thickness of building insulation and weatherproofing were The condition and thickness of building insulation and weatherproofing were

inspected. A general lack of building insulation was

inspected. A general lack of building insulation was noted. Numerous noted. Numerous

openings in doors and windows were also observed.

•

Steam, air and water leak detection and maintenance practices were Steam, air and water leak detection and maintenance practices were

assessed.

•

The tracking and management system by which Teteks monitors and The tracking and management system by which Teteks monitors and

controls

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7 – Case studies in Solid Waste Management

Case 2: continued… Case 2: continued…

Key information from study: Teteks consumes 83,143 tons of steam per

year and 9,271 MWh of electricity in 2001. Steam represented approximately

60% of the total energy consumption per year while electricity consumption

amounted to 35%. Compressed air made up the remaining five percent.

(-> set priorities!)

Based on the results, it were recommended several

Based on the results, it were recommended several low and medium cost low and medium cost

measures, as well as a few high cost measures. These measures required a

total investment outlay of $1,587,000 with a simple

total investment outlay of $1,587,000 with a simple payback period payback period of of

approximately 24 months generating an annual cost savings of $772,683.

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7 – Case studies in Solid Waste Management

Case 2: continued… Case 2: continued…

Results: see paper

•

Awareness increasedAwareness increased

•

All management levels involvedAll management levels involved

•

Reduction of operational roomReduction of operational room

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7 – Case studies in Solid Waste Management

Case 2: continued… Case 2: continued…

CO2-reduction:

In

In addition addition to these cost savings, environmental benefits were also generated.to these cost savings, environmental benefits were also generated.

Implementation of the improvement measures reduce carbon dioxide emissions

by

by 20,000 tons per year20,000 tons per year

•

Kyoto-period (2008-2012) allows trading of Carbon CreditsKyoto-period (2008-2012) allows trading of Carbon Credits

•

If all measures are implemented in 2008, 4 years of Carbon Credits can be If all measures are implemented in 2008, 4 years of Carbon Credits can be

produced, approx. 80,000 credits

•

Price of Price of Carbon Credits is approx.12-15 eurosCarbon Credits is approx.12-15 euros

Therefore, the value of the emissions reduction equals to approx. 1 million euro

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7 – Case studies in Solid Waste Management

Case 3: Landfill gas capture and energy generation Case 3: Landfill gas capture and energy generation

Basic information:

The landfill is an existing one with some parts not in operation and some parts

where waste is disposed

•

The landfill was started 8 years agoThe landfill was started 8 years ago

•

The landfill needs re-structuring (by shape and by organisation)The landfill needs re-structuring (by shape and by organisation)

•

Waste amounts are expected to increase during 2008-2012Waste amounts are expected to increase during 2008-2012

•

The upgrading plan foresees the construction of gas wells, flare, processing The upgrading plan foresees the construction of gas wells, flare, processing

unit and generation of electricity

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Case 3: Methane (1) Case 3: Methane (1)

Methane Sources are:

•

Oil & gas industry (45%)Oil & gas industry (45%)

•

Waste sector (25%)Waste sector (25%)

•

Agriculture (20%)Agriculture (20%)

•

Natural sources (10%)Natural sources (10%)

Molecular structure

Chemical formula

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7 – Case studies in Solid Waste Management

Case 3: Methane (2) Case 3: Methane (2)

Methane characteristics:

•

Odourless gasOdourless gas

•

Invisible gasInvisible gas

•

Very explosive (@ 5-15 vol% with air)Very explosive (@ 5-15 vol% with air)

•

High energy content (38 MJ/NmHigh energy content (38 MJ/Nm33)₎

•

Non toxicNon toxic

•

Pure, no contaminantsPure, no contaminants

•

Global warming potential = 21Global warming potential = 21

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7 – Case studies in Solid Waste Management

Case 3: Methane (3) Case 3: Methane (3)

Methane is very important reason for Global Warming

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7 – Case studies in Solid Waste Management

Case 3: Global Warming Potential Case 3: Global Warming Potential

Global warming potential

Global warming potential (GWP) is a measure of how much a (GWP) is a measure of how much a given mass of greenhouse gas is estimated to contribute to

given mass of greenhouse gas is estimated to contribute to

global warming. It is a relative scale which compares the gas

in question to that of the same mass of carbon dioxide (whose

GWP is by definition 1).

A GWP is calculated over a specific time interval and the value of

this must be stated whenever a GWP is quoted or else the

value is meaningless.

Carbon dioxide has a GWP of exactly 1 (since it is the baseline

unit to which all other greenhouse gases are compared).

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7 – Case studies in Solid Waste Management

Case 3: Landfill gas Case 3: Landfill gas

Landfill gas characteristics:

•

Smelly gasSmelly gas

•

Invisible gasInvisible gas

•

Very explosive (@ 10-30 vol% with air)Very explosive (@ 10-30 vol% with air)

•

High energy content (18-20 MJ/NmHigh energy content (18-20 MJ/Nm33)₎

•

Main components are CHMain components are CH₄₄, CO, CO₂₂, N, N₂₂, H, H₂₂S and organic compoundsS and organic compounds

•

ToxicToxic

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7 – Case studies in Solid Waste Management

Case 3: Landfill gas capture and energy generation, continued… Case 3: Landfill gas capture and energy generation, continued…

Basic calculation:

The landfill is an existing one with some parts not in operation and some parts

where waste is disposed

•

The landfill was started 8 years agoThe landfill was started 8 years ago

•

The landfill needs re-structuring (by shape and by organisation)The landfill needs re-structuring (by shape and by organisation)

•

Waste amounts are expected to increase during 2008-2012Waste amounts are expected to increase during 2008-2012

•

The upgrading plan foresees the construction of gas wells, flare, processing The upgrading plan foresees the construction of gas wells, flare, processing

unit and generation of electricity

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7 – Case studies in Solid Waste Management

Case 3: Landfill gas capture and energy generation Case 3: Landfill gas capture and energy generation

Basic information, more facts:

•

Release of methane (landfill gas) has been observed Release of methane (landfill gas) has been observed

•

There is insufficient structure in landfill activitiesThere is insufficient structure in landfill activities

•

Approx. 50 people live near or on top of the landfillApprox. 50 people live near or on top of the landfill

Define the immediate problems

Define the immediate problems which you have and present which you have and present approach to approach to

preparing

preparing landfill gas extraction project (SHORT GROUP WORK) landfill gas extraction project (SHORT GROUP WORK)

Make 3-4 bullet point for each question

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7 – Case studies in Solid Waste Management

Case 3: The value of landfill gas Case 3: The value of landfill gas

Basic information, key data:

•

Weight of methane: 0.72 kg/NmWeight of methane: 0.72 kg/Nm33

•

Global warming potential = 21Global warming potential = 21

•

Landfill gas: high energy content (18-20 MJ/NmLandfill gas: high energy content (18-20 MJ/Nm33_{) – 50% of landfill gas = CH4}_{) – 50% of landfill gas = CH4}

•

Calculated production of landfill gas = 50 NmCalculated production of landfill gas = 50 Nm33 p_per hour_{er hour}

•

Landfill gas equipment will be operational during 8,000 hours per yearLandfill gas equipment will be operational during 8,000 hours per year

•

Landfill gas is utilized by gas engine for producing electricity (efficiency = 35% Landfill gas is utilized by gas engine for producing electricity (efficiency = 35%

from gas to electricity)

•

Energy conversion: 1 MJ = 0.27 kWh Energy conversion: 1 MJ = 0.27 kWh

•

Value of Carbon Credit = 9 EuroValue of Carbon Credit = 9 Euro

Exercise:

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7 – Case studies in Solid Waste Management

Biogas production is calculated at 50 Nm3/h

Number of hours = 8,600 hours per year (

simplified

)

=> 50 x 8,600 = 430,000 Nm3 biogas per year

Methane content of biogas = 50% of volume

=> 0.50 x 430,000 = 215,000 Nm3 CH4/year

Weight of methane gas = 0.72 kg/Nm3

=> 0.72 x 215,000 = 154,000 kg CH4/year = 154 ton CH4/year

GWP of Methane = 21 ton CO2-equivalent per ton CH4

=> 21 x 154 = 3250.8 ton CO2-equivalent

Number of operational hours = 8,000 per year (600 hours for maintenance)

Emission Reduction = 8000 hours/8600 hours x 3250.8 = 3,024 ton

CO2-equivalent

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Electricity:

Biogas production is calculated at 50 Nm3/h

Number of operational hours = 8,000 per year

=> 50 x 8,000 = 400,000 Nm3/year => the gas goes to gas engine

Energy content of landfill gas = 20 MJ/Nm3

=> Energy production: 20 x 400,000 = 8,000,000 MJ/year

Efficiency of gas engine = 35%

=> 8,000,000 x 0.35= 2,800,000 MJ/year electricity production

Conversion factor = 0.27 kWh/MJ

=> 0.27 x 2,800,000 = 756,000 kWh/year = 756 MWh/year