Investment Risk Analysis in the Use of Landfill Biogas for Electricity Generation

Abstract

The objective of this paper is to apply the risk analysis tools for power plants that use biogas produced in landfills to generate electricity. A stochastic modeling was developed for random variables that affect the cash flow of the project. The synthetic time series of the random variables were modeled by using the Mean Reversion Stochastic Processes (Geometric Ornstein-Uhlenbeck) associated with the Monte Carlo simulation method. This type of project fits on the Clean Development Mechanism (CDM) of the Kyoto Protocol. In order to quantify the baseline emissions, the carbon credits generated (Certified Emission Reductions-CER) and the potential of electricity generation, it was used the version 15 of the ACM-0001 methodology, approved and consolidated by the Intergovernmental Panel on Climate Change (IPCC). In this context, it will become possible to make a more accurate study of the economic feasibility of this type of venture. In order to verify the applicability of this methodology, a case study was presented to a landfill located in the Midwest region of Brazil. The results showed that the project is economically viable.

Geographic Information Systems based approach for assessing the locational feasibility for biomethane production from landfill gas and injection in pipelines in Brazil

“…such as population density(DALMO et al, 2019), economic attractiveness(TIAGO FILHO & SILVA, 2014;COSTA et al, 2016; MAMBELI BARROS, SANTOS et al, 2019), and environmental indicators(LEME et al, 2014) have been analyzed, but few studies have considered the production of biomethane or the distribution of landfills in the territory. An exception is the research conducted by Lima et al (2018), which estimated the potential for landfill biogas production to generate electricity for different regions of the country applying a GIS-based approach.…”