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

Alessandro Nunes Costa, Giordani Pacífico Medeiros, Wesley Calixto Pacheco, Aylton José Alves, Daywes Pinheiro Neto and Elder Geraldo Domingues

2016/5/20

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.

Published in: Renewable Energy & Power Quality Journal (RE&PQJ),Vol. 1, Nº. 14
Pages:811-816 Date of Publication: 2016/5/20
ISSN: 2172-038X Date of Current Version:2016/5/4
REF:472-16 Issue Date: May 2016
DOI:10.24084/repqj14.472 Publisher: EA4EPQ

Authors and affiliations

Alessandro Nunes Costa, Giordani Pacífico Medeiros, Wesley Calixto Pacheco, Aylton José Alves, Daywes Pinheiro Neto and Elder Geraldo Domingues
Nucleus of Experimental and Technological Studies (NExT). Federal Institute of Goias (IFG). Brazil

Key words

Certified Emission Reductions, landfill biogas, Monte Carlo simulation, risk analysis, Stochastic Process.

References

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