Economic viability of biomass and MSW-fuelled district heating system: case of the city of Zagreb

The use of district heating systems is one of the ways in which the European Union is trying to reach set goals of reducing primary energy consumption and diversification of energy sources. These systems, which allow the use of different energy sources, such as thermal energy produced in waste to energy plants and fuels that are difficult to use to drive small heat boilers (biomass is classified in this group), are some of them. This paper provides economic viability assessment of technologies for usage of these two local energy sources in the district heating system in the City of Zagreb. Economic evaluation is based on regression analysis from data of existing power plants in the world, and on the locally dependent data. Some of the main parameters that are dependent of location of the plant are price and available quantity of the fuel, therefore these values are separately modelled ; biomass as a function of the location of the plant while municipal waste as a function of location and the time changes in waste quantity and composition which depend of changing socio- economic trends and waste management legislation and regulations. This methodology is applied on the case of waste and biomass powered cogeneration power plants in the City of Zagreb. For these plants internal rates of return are calculated. Results indicate that, in the case of equal production of thermal energy from all considered district heating plants, investment in biomass powered cogeneration plant in the City of Zagreb is more profitable then the investment in waste to energy plant in all considered scenarios.