Peruvian Power Plant Turns Garbage into Electricity

A power plant outside Peru’s sprawling capital of Lima is transforming the city’s garbage into clean electricity.

The plant, owned by Petramas, a private locally-owned company, captures methane—a greenhouse gas—from millions of tons of rotting trash in the nearby Huaycoloro landfill site. The methane, which was previously simply burned off, is now producing four megawatts of electricity. The power produced is pumped into the national grid, providing clean electricity to the equivalent of 9,000 households.

By capturing the methane, the plant is delivering climate change benefits. And because the clean energy displaces the use of fossil fuels, the project is earning carbon credits under the Clean Development Mechanism of the United Nations Framework Convention on Climate Change (UNFCCC).

As trustee of the Netherlands Clean Development Mechanism Facility, the World Bank purchases the carbon credits from Petramas which, in turn, uses the revenue to sustain the project.

To date, nearly 235,000 carbon credits — or Certified Emissions Reductions — have been issued by the UNFCCC for the project, representing the equivalent tons of carbon dioxide emissions it has avoided. The total avoided CO2 is expected to reach a million tons by 2014, generating millions of dollars for maintenance of the plant.

“The project is unusual in that it was conceived through the visionary leadership of a private company which paved the way for a successful public-private partnership with the municipal government,” said John Morton, a senior urban environment specialist with the World Bank. “The same leadership also pushed Petramas to be the first in Peru to produce energy from a landfill.”

Ousmane Dione, an environmental sector leader based in the World Bank’s Peru office, sees the mobilization of private domestic capital — despite perceptions of risk — as a key accomplishment of the project. He also points to its tapping of renewable energy through adoption of a technology appropriate to the Peruvian reality and developed by national engineering experts, as evidence of groundbreaking progress.

The site’s location amid uninhabited dusty dunes east of Lima ensures minimal social and environmental impacts. With ground water deeper than 200 meters, the contamination risk is relatively easy to eliminate, and abundant soil is freely available to cover new waste arriving each day.

These low associated costs, combined with the carbon credits, enabled Petramas to win a renewable energy auction administered by the Peruvian government, paving the way to a 20-year contract to supply power to the grid, said David Reinstein, senior energy specialist in the World Bank’s Latin America Vice Presidency.

The Petramas project is not the first World Bank-supported project capturing methane from landfills and earning carbon credits in the region. A similar project powers the city lights and metro transit system in Monterrey, Mexico.

In Uruguay, a project is currently being developed with the Montevideo municipality (in Spanish) to capture and flare the methane from the city’s landfill. And in Brazil, clean electricity is moving from projects to programs across the country to reduce greenhouse gas emissions on a greater scale. The World Bank is working with CAIXA to develop the first ever Programme of Activity for landfills, where as many as 30 garbage dumps will be modernized to capture methane that today is being emitted, and turning it into electricity for cities such as Rio de Janeiro.