ELK RIVER, Minn.—A garbage-to-energy plant in Elk River in eastern Minnesota could be going out of business, a victim of low prices for electricity.
Officials of the Elk River Resource Recovery Project announced this week it would shut the plant down in March 2019, if it could not find a buyer. The project, owned by the Great River Energy co-op, removes recyclable metals from garbage, shreds it, and then burns it to generate power.
If the plant closes, it will leave only one similar waste-to-energy facility in the state — the Washington-Ramsey Recycling and Energy Center in Newport, a Twin Cities suburb.
It is not known if falling electricity prices will have any effect on that facility, and plant officials did not respond to email and phone messages.
Elk River Project manager Tim Steinbeck said he hopes nearby counties will buy the plant and keep it operating. The estimated selling price is $37 million, which is the value of the remaining debt on the facility.
The Elk River co-op has owned the garbage-burning plant since 1989. In 2010 it bought the garbage processing plant and a landfill — which together comprise the Resource Recovery Project.
The project diverts about 280,000 tons of garbage a year away from landfills, and recycles about 200 million aluminum cans and 12,000 tons of steel annually.
But Steinbeck said Monday that Elk River can no longer sell electricity at a price that will cover its costs. He said that prices have dropped because of low-cost natural gas used to fuel power plants, and renewable generation from wind and solar sources.
Another problem is the supply of garbage.
Steinbeck said Elk River must now negotiate with garbage haulers and cities to get them to supply garbage to the plant. But not all of them cooperate.
“We have been disappointed with the volume of solid waste we are getting,” said Steinbeck.
That problem could be solved, he said, if counties bought the plant.
Any publicly-owned facility can require that all garbage in the area be brought to the plant, which increases the volume and lowers the cost.
That’s what happened with the Newport plant. Ramsey and Washington counties bought the Newport plant in 2016 for $24 million — and immediately declared that all garbage collected in the counties be funneled into the plant.
Like the Elk River plant, the Newport plant removes recyclable material. Then, the shredded garbage from Newport is trucked to power-producing incinerators in Red Wing and Mankato.
Steinbeck mentioned another advantage of public ownership. If counties do not buy the plant, they will not be able to adopt future refinements in recycling technology. Several techniques for processing garbage are “maturing,” he said, and may be available soon.
For now, however, the value of garbage-generated electricity is too low for the Elk River co-op.
“It is better suited as a waste management facility than as a power plant,” said Rick Lancaster, Great River vice president and chief generation officer. “The project is no longer a competitively priced renewable energy resource.”
Elk River’s revenue was not hurt by a recent decline in the price of recycled material. That’s because Elk River only reclaims and recycles metals — and the market for metals is stable, said Steinbeck.
For years, the plant has not recycled plastic or paper, two materials that have recently experienced dramatic price drops.
The revenue from the sales of recycled metals is about 10 percent of the project’s total income, said Steinbeck.