Let’s Talk About Electricity ⚡️💥
Electricity and trash may not seem related, but in fact, the price of electricity drives the price of waste materials much more than we may think… … Largely because the price of electricity is dictated by the cost of oil!
The basics!
Public utilities both generate & purchase energy from a variety of sources to generate the electricity needed for their municipality. The Seattle-specific breakdown: 88% hydroelectric (publicly owned), 5% nuclear, 4% wind, 1% coal, 1% natural gas, 1% biogas.
Each state designates a per unit price for energy (in WA State, this happens at the Utilities and Transportation Commission). This cost (called avoided cost) is the marginal cost for a public utility to produce one more unit of power. When a public utility pays an external provider for energy, that energy is priced at avoided cost.
The avoided cost has two cost components, energy & capacity. Energy: If a public utility buys energy from an external provider (such as oil), they would then reduce ops at their most expensive facility (like their oldest hydroelectric plant). Capacity: To delay building new power plants to serve demand as a city grows, a public utility might buy more energy from external providers.
A quick example: The Waste-to-Energy (WtE) plant in Spokane, WA generates 18 kilowatts of energy per day, from about 800 tons of trash. The plant requires 3 kilowatts / day to operate. Technically the plant sells the rest to its public utility, however, Spokane's public utilities only purchase when oil costs are high. The Spokane WtE generates $6M / year from sale of electricity, but has an annual operating budget of $32M. The rest of the electricity generated by the plant that is not sold becomes a lost resource, while demand for electricity remains the same.
So. What does this all mean?
When the cost of oil is high, public utilities might buy more electricity from WtE until the cost of oil goes down. Burning trash isn’t renewable energy though, because trash isn’t a renewable resource. Technically, buying electricity from WtE could be said to generate MORE CO2 since it drives the price of oil down. 😱