Decisions Under Uncertainty in Municipal Solid Waste Cogeneration Investments

  • Athanasios Tolis
  • Athanasios Rentizelas
  • Konstantin Aravossis
  • Ilias Tatsiopoulos
Part of the Green Energy and Technology book series (GREEN)


The issue of Municipal Solid Waste (MSW) management is an ever increasing problem for all countries. Developed countries face the problem of dealing with very large amounts of MSW per capita, forcing them to develop new technologies and systems. On the other hand, countries with developing or transitional economies may generate lower amounts of MSW per capita, but the rate of increase is high and the current practices of MSW management are not as advanced as those of developed countries. Therefore, countries with developing or transitional economies may benefit from adopting MSW management technologies used by developed economies. One aspect of MSW management in developed economies is the energy recovery from MSW. The advantages of this type of technologies are mainly the significantly reduced waste volume for landfilling, the reduction of total greenhouse gas emissions, the potential for generating electricity or co-generation of electricity and heat. In this work, a comparative study of the most prominent co-generation technologies using MSW as a fuel source is presented, focusing on the evolution of their economical performance over time. An algorithm based on real-options has been applied for four technologies of MSW energy recovery: (1) incineration, (2) gasification, (3) landfill biogas exploitation using a pipeline system and (4) anaerobic digestion facilities. The financial contributors are identified and the impact of greenhouse gas trading is analyzed in terms of financial yields, considering landfilling as the baseline scenario. The greenhouse gas trading system presents an opportunity for investing in environmentally friendly technologies for MSW energy recovery, through the Clean Development Mechanism (CDM), in most developing countries. The results of this work indicate an advantage of combined heat and power over solely electricity generation. The most attractive technology among the ones examined proves to be incineration, mainly due to its higher power production efficiency, lower investment costs and lower emission rates. Despite the fact that these characteristics may not drastically change over time, either immediate or irreversible investment decisions might be reconsidered under the current selling prices of heat, power and CO2 allowances.


Municipal Solid Waste Clean Development Mechanism Electricity Price Municipal Solid Waste Incineration Clean Development Mechanism Project 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer-Verlag London Limited 2012

Authors and Affiliations

  • Athanasios Tolis
    • 1
  • Athanasios Rentizelas
    • 1
  • Konstantin Aravossis
    • 1
  • Ilias Tatsiopoulos
    • 1
  1. 1.School of Mechanical Engineering, Industrial Engineering LaboratoryNational Technical University of AthensAthensGreece

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