Technical and economic feasibility of hybrid power generation from urban solid waste associated with solar energy, considering the impact of the sale of carbon credits

Abstract

In the global context of energy transition, from a model dependent on fossil fuels to a low-carbon matrix, hybrid plants, those that combine more than one energy source, prove to be an effective strategy for the increasing of the use of renewable energy sources. Furthermore, the creation of instruments that consider the environmental benefits of energy sources, such as the carbon credit market, which allows the trading of avoided CO2 emissions in the energy generation process, can contribute to the economic viability of low emission sources. In this sense, the objective of this research was to analyze the technical and economic feasibility of hybrid generation from municipal solid waste (MSW) associated with photovoltaic energy, to meet the demands of small city councils in Brazil, considering the commercialization of carbon credits. The economic indicators Net Present Value (NPV), Internal Rate of Return (IRR), Capital Payback Time (PAYBACK) and Levelized Cost of Energy (LCOE) were calculated for four different MSW management scenarios of the Intermunicipal Consortium of Municipalities of the Alto Sapucaí for Sanitary Landfill (CIMASAS, in portuguese), considering different percentages of recycling of dry and organic materials. The generation modalities Self-Production (APE, in portuguese) and Mini and Micro Distributed Generation (MMGD, in portuguese), provided for in the Brazilian regulatory framework, were considered. The results demonstrated that there are technical and economic viability in the proposed hybrid generation in all scenarios analyzed, and as the percentage of recovery of recyclable materials increases, there is an improvement in economic indicators. On average, in the APE modality, the NPV was 49.10 % higher than in MMGD, the IRR was 21.66 % higher, the payback was 51.68 % lower and the LCOE was 40.80 % lower than in MMGD. The inclusion of revenue from the sale of carbon credits promoted an average increase of 47.33 % in NPV, 24.09 % in IRR, and a decrease of, on average, 28.17 % in payback and 40.57 % in LCOE, in APE modality. In the MMGD modality, there was an average increase of 134.99 % in NPV, 39.46 % in IRR, and a decrease of, on average, 38.61 % in payback and 36.98 % in LCOE. These results demonstrate how the incorporation of environmental valuation in energy generation can contribute to increasing the economic attractiveness of hybrid generation from renewable sources.