Economics of Distributed Power Generation via Gasification of Biomass and Municipal Solid Waste
Natarianto Indrawan, Betty J. Simkins, Ajay Kumar, Raymond L. Huhnke
Abstract
More than one billion people worldwide still lack access to electricity. Rural electrification via gasification has the potential to satisfy electricity access and demand. This study conducts an economic evaluation of rural electrification through gasification of biomass and municipal solid waste (MSW) using a 60 kW downdraft gasifier, developed at Oklahoma State University. The effects of feedstock cost, electricity selling price, feed-in-tariff, tipping fee, tax rate, and the output power are evaluated using major financial parameters: the net present value, internal rate of return, modified internal rate of return, simple payback period, and discounted payback period, and sensitivity analysis. Results show that the downdraft gasification power system offers a payback period of 7.7 years, while generating an internal rate of return, modified internal rate of return, and net present value of 10.9%, 7.7%, and $84,550, respectively. Results from a sensitivity analysis indicate that the feed-in-tariff has the greatest positive contribution to the project’s net present value. Using MSW, the gasification power system potentially reduces carbon dioxide, nitrogen oxides, and sulfur dioxide emissions as compared to direct combustion and landfill. The technology provides a promising future for rural electrification utilizing biomass and MSW whilst offering economic and environmental benefits for local communities.