Municipal Urban Waste-to-Energy Business Model in Mexico: A Study of Three Companies

Municipal Urban Waste-to-Energy Business Model in Mexico: A Study of Three Companies

José G. Vargas-Hernández
DOI: 10.4018/978-1-7998-0031-6.ch013
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The major objective of this research is to identify the main aspects presented in three companies of energy generation from biogas produced by landfills in three Mexican cities. Analyzing these companies, their way of operating and business environment, it is possible to detect the existence of business opportunities in this area. It is concluded that there is a great potential of wasted businesses that works through market mechanisms in strategic alliance with public entities as a more viable option for the reduction of investment risk and the viability of the projects. The use of high technologies, composition of city waste, and available infrastructure are key factors. The study of three companies in operation allows the identification of factors that can help in the implementation of more companies of energy generation based on urban solid waste in more areas of the country and elsewhere with successful and profitable results for both private capital and social interest.
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Background Of The Problem

The supply of energy has been a problem that has preoccupied interest groups for decades, not only if it could satisfy the demand but also the harmful impact of its production and use on the environment through Greenhouse gases (GHG). The enormous level of consumption of hydrocarbons in the world has led to the change of paradigms to obtain the energy necessary for the operation of the economy. According to data from the World Bank (Banco Mundial, 2017), in 2014, 81% of the total energy consumed in the world came from hydrocarbons while alternative energy only had a share of around 10% globally.

In the broader definitions, alternative energies are all sources of energy no based on the combustion of the hydrocarbons and do not involve the burning of fossil fuels such as coal, gas and oil. In the most restrictive concept, and alternative energy would be equivalent to the concept of sources of renewable energy or green energy, such as wind, solar, geothermal, bioenergy and tidal. According to Masera Cerutti and others (2011), bioenergy, which is the energy obtained from biomass, represents 77% of the total renewable energy, estimating that by 2035 this type of energy source would represent 25% of the total energy required by the world.

According to Cerdá, Caparrós and Ovando (2008), renewable energy can be used for electricity generation, thermal use and biofuel production. Bioenergy is capable of being used for all three things, unlike wind and solar energy that cannot be converted into biofuel. Biomass, for its part, is a constituent part of living beings, can be divided according to its source (Monreal, 2008):

  • Food source: it comes from grains or other crops, which is also used for human and animal consumption;

  • Non-food source: it originates from manure, crop and forest, and food and municipal solid waste.

Key Terms in this Chapter

Business model: It is a tool prior to the business plan that will allow you to clearly define what you are going to offer to the market, how you are going to do it, to whom you are going to sell it, how are you going to sell it and how are you going to generate income.

Energy: Capacity that has the matter of producing work in the form of movement, light, heat, etc.

Urban Waste: Solid waste constitutes those materials discarded after their useful life, and that usually do not have economic value alone. They consist mainly of waste from materials used in the manufacture, processing, or use of consumer goods.

Mexico: Country that is located in the Southern part of North America. Its full name is United States of Mexico. Its capital is Mexico City, and it is a democratic, representative and federal republic. It comes from the Náhuat language, where Metztli means moon and Xictli means navel.

Municipal: Territorial administrative division in which a state is organized, which is governed by a municipality.

Vertederos: It is called landfill space in which you can pour things. This verb (to pour), on the other hand, alludes to spilling a liquid or to throwing some type of element. The most common use of a landfill is linked to the final deposit of garbage; That is why landfills are also known as garbage dumps.

Biogas: Gas produced by the decomposition of organic matter.

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