A financial feasibility model of gasification and anaerobic digestion waste-to-energy (WTE) plants in Saudi Arabia

Abstract

Municipal Solid Waste (MSW) generation in Saudi Arabia is increasingly growing at a fast rate, as it hurtles towards ever increasing urban development coupled with rapid developments and expanding population. Saudi Arabia’s energy demands are also rising at a faster rate. Therefore, the importance of an integrated waste management system in Saudi Arabia is increasingly rising and introducing Waste to Energy (WTE) facilities is becoming an absolute necessity. This paper analyzes the current situation of MSW management in Saudi Arabia and proposes a financial model to assess the viability of WTE investments in Saudi Arabia in order to address its waste management challenges and meet its forecasted energy demands. The research develops a financial model to investigate the financial viability of WTE plants utilizing gasification and Anaerobic Digestion (AD) conversion technologies. The financial model provides a cost estimate of establishing both gasification and anaerobic digestion WTE plants in Saudi Arabia through a set of financial indicators, i.e. net present value (NPV), internal rate of return (IRR), modified internal rate of return (MIRR), profitability index (PI), payback period, discounted payback period, Levelized Cost of Electricity (LCOE) and Levelized Cost of Waste (LCOW). Finally, the analysis of the financial model reveals the main affecting factors of the gasification plants investment decision, namely: facility generation capacity, generated electricity revenue, and the capacity factor. Similarly, the paper also identifies facility waste capacity and the capacity factor as the main affecting factors on the AD plants’ investment decision.