Profitability analysis of biogas recovery in Municipal Solid Waste landfills

Nowadays European and Spanish law requires the biogas generated in Municipal Solid Waste to be collected and treated, either by flaring or for the generation of electricity. However, in general, this law is not complied with either in the region of Andalusia or in the rest of Spain. The aim of this paper is to evaluate the profitability of electricity production from landfill biogas. For that purpose, taking measurements from all the existing 34 landfills in Andalusia and the definition of a standard cogeneration plant as a basis, we have estimated the Net Present Value, the Internal Return Rate, the Payback, and the Profitability as Return/Investment Ratio for each landfill. As a result of our research, we have obtained a Net Present Value of (sic) 37,864,985, a Return on Investment of 116%, an Internal Return Ratio of 32.59% and a Payback of 3.07 years. Disaggregated figures reveal that in only in 6 of the 34 landfills is the investment is not profitable. In addition, given that the compulsory biogas collection equipment requires an investment of (sic) 7,849,294 out of the (sic) 25,375,659 envisaged as total investment costs, a quarter of the proposed investment should already have taken place. (c) 2012 Elsevier Ltd. All rights reserved.