With the rapid growth of municipal solidwaste (MSW) generation, waste-to-energy (WTE) incineration has gained popularity due to its potential for electricity generation and swiftly reducing the volume and mass of MSW. Recognizing the urgency of MSW management, Beijing's government launched the "MSW Source Separation Regulation" on May 1, 2020. This paper attempts to take into account the different levels of MSW source separation as well as the impact of different MSW compositions on energy recovery potential from incineration. We assume that the MSW management level in Beijing in 2025 will reach that of developed countries (e.g., Australia), which have abundant experience and mature MSW management systems. The amount of MSW generation is predicted by a first-order and one-variable grey differential equation model, GM (1,1), and a kernel-based nonlinear multivariate grey model, KGM (1,n). We establish six scenarios and distinguish them by the composition and lowerheating values (LHV) of MSW, considered with and without recycling and source separation to varying degrees. The predicted amount of MSW generation in 2025 is 11,505,400 tons with 2.255% mean absolute percentage error (MAPE). With increasing source separation and removal of food waste, the volume of electricity generated per ton of waste ranges from 0.336 to 1.114 MWh/ton. At its lowest, the cost of electricity generation is 977.60 yuan/MWh. The results not only provide implications for balancing the benefits and costs of implementing WTE incineration strategies but also shed light on government management of MSW source separation.