Volume 7: Proceedings of Applied Energy Symposium: CUE2019, China, 2019

Economic Feasibility of Waste-To-Energy Project in the Philippines Using Real Option Approach Casper Agaton*, Charmaine Guno, Resy Villanueva, Riza Villanueva

Abstract

This paper proposes an investment model to analyze the economic feasibility of WtE projects in the Philippines. Applying the real options approach (ROA) under uncertainty, we compare the option values of investing in WtE technologies over continue dumping waste into the landfill. The optimization results find that incineration is the best option followed by gasification and pyrolysis considering the energy production, investment costs, and emission rates. At the current price of electricity, it is more optimal to postpone investment in pyrolysis, otherwise, the tipping should be increased to make pyrolysis a more viable option than continue the landfill. On the other hand, it is a more optimal decision to invest immediately in either incineration or gasification as waiting to invest incurs opportunity losses from generating electricity from these technologies. The paper suggests that the government must support WtE program as it will significantly contribute in solving the problems of the environment, particularly air quality, waste management, and energy security and sustainability.

Keywords waste to energy, investment under uncertainty, incineration, gasification, pyrolysis, real options

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