Waste to Energy

  • Date25 October, 2022
  • Author Karl Ehlert
  • Location USA

What is Waste to Energy?

Waste to energy refers to the process of converting municipal solid waste (MSW), otherwise known as trash, into usable heat, electricity, or fuel. The three main MSW categories include:

  • Biomass or biogenic (plant or animal products) materials such as paper, cardboard, food waste, grass clippings, leaves, wood, and leather products
  • Non-biomass combustible materials such as plastics and other synthetic materials made from petroleum
  • Non-combustible materials such as glass and metals.

There are a variety of processes used to convert MSW into energy, but the most common method utilized in the United States is a mass burn system. This system burns MSW in a combustion chamber to produce steam in a boiler that is used to power turbine generators that produce electricity.  In 2020, waste to energy plants in the United States generated approximately 13.5 billion kWh of electricity and burned about 25 million tons of MSW.

Many countries in Asia and Europe use waste to energy plants to create energy and minimize landfill waste.  As of 2020, Japan burns more than 80% of its MSW in waste to energy facilities and is considered one of the world leaders in waste to energy conversion with approximately 380 plants. In Europe, Sweden leads the EU in burning around 52% of its MSW to generate heat. Sweden even imports trash from Britain and Norway to keep up with their plants’ needs. Other EU countries that rely heavily on waste to energy plants include Germany, Demark, Netherlands, and Belgium.

Biomass Failure – Business Income Loss or Extra Expense?

Biomass MSW conversion involves using plant or animal waste material and converting it into biomethane gas that is used to power electrical generators. Biomethane gas is created through anaerobic degradation that naturally occurs to biogenic waste stored in landfills, wastewater treatment plants and anaerobic digesters fueled by cattle waste. The gas is then collected and transported via pipelines to off-site customers for use as an alternative energy source replacing fossil fuels, most commonly natural gas.

When measuring generation and revenue for biomass plant losses there are many factors to consider. These include seasonality in projected electricity generation, electricity generation adjustments for transmission and distribution factors, electricity generation valued at contract price or a combination of contract and spot prices, planned maintenance brought forward and carried out during the loss period, business rates savings and waste revenue savings and overtime costs for staff.

An insured that operated a biomass powered electrical plant captured biomethane gas from a wastewater treatment facility to run its generators and sell electricity to a local municipality and university. The biogas powered a 2.8 MW fuel cell plant and a 1.4 MW fuel cell plant that collectively had the capacity to power roughly 4,200 homes. Due to a fire at the facility, the insured was unable to convert the biogas into energy and instead had to purchase natural gas to run its generators.  Unlike biogas, natural gas is a non-renewable source of energy and a form of fossil fuel. Natural gas is also more expensive. The insured paid four times more for a MMBTU of natural gas versus the biogas.  In this case, the insured was able to avoid a business income loss and possible penalties by incurring extra expenses to burn natural gas.  However, if the fire had damaged the generators, the insured most likely would have experienced a business income loss.

Converting waste to energy will continue to develop and become more common as the world begins to shift towards renewable energy sources.  Not only is it a way to provide electricity, it is also a way to minimize landfill and water treatment waste.  As its presence grows, so will property and business income losses stemming from interruptions to the operations of these facilities.


The statements or comments contained within this article are based on the author’s own knowledge and experience and do not necessarily represent those of the firm, other partners, our clients, or other business partners.

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