Waste to Bio Fuel on the Clean Energy Horizon

A Canadian company started construction this week on what it says is the world’s first industrial-scale plant to turn municipal waste into biofuel. Enerkem’s C$80 million ($75 million) facility will produce enough biofuel to keep more than 400,000 cars a year running. Giles Parkinson in Climate Spectator also reports on other clean energy projects and plans.

Giles Parkinson in Climate Spectator (1 September 2010):

Perth-based biofuel company Mission NewEnergy has been forced into a massive writedown of its refining assets because US legislation prevents it from being able to deliver its major contract with a US oil company. Mission has written $73 million off the value of its assets, leading to a net loss of $93 million, because it is unable, for the moment, to deliver on its five year contract to deliver 200,000 tonnes of biodiesel a year. Mission wants to use palm oil and jatropha as feedstock for its biodiesel, but neither has been approved under the US Renewable Fuels Standard.

Jatropha, an inedible oilseed bearing plant, is being touted as an important feedstock in so-called next generation biofuels because it can grow on marginal soil without displacing land used for food – although some of these claims have been contested by environmental groups. Mission says it has 177,000 acres of jatropha plantation under contract, mostly from 120,000 farmers in India, capable of delivering 170,000 tonnes of crude jatropha oil, but for the moment its refineries in India and Malaysia have been placed on standby until it can deliver on its biodiesel contract.

All Systems go

Solar and nuclear technology group Silex Systems is forecasting more than $60 million in sales from the newly refurbished solar PV manufacturing plant that it bought from BP Solar. The Sydney plant, the only solar PV panel manufacturing facility in Australia, has been operating in its new guise for just three months and generated $3 million in sales. But Silex now anticipates sales of about 20MW of panels and around 5MW of cells in the coming year. Silex says the business should become cash-flow positive in 2011 as demand increases, and says orders from the residential sector look likely to remain strong for the foreseeable future, and it is also in discussions with other parties on several larger commercial-scale projects. The solar PV market in Australia is expected to jump to around 150MW in calendar 2010 from 80MW in 2009. The global market is also expected to double to 15,000MW, Silex noted.

Meanwhile, Silex says it is hopeful that research into advanced solar materials could provide a mechanism to drive down the cost structures of multi-junction solar cells, which can nearly double the efficiency of solar cells but have hitherto been prohibitively expensive. “The net effect would be to dramatically drive down the cost structures – thus enabling potentially a significant breakthrough in the solar photovoltaic industry,” the company says. The technology would be applicable to large-scale solar PV installations, such as that being developed at Solar Systems, the bankrupted solar developer that Silex bought last year.

Silex says it is also making progress on its unique, laser-based technology to enrich uranium for fuel used in nuclear power plants. The Tennessee Valley Authority has apparently approved a $US400 million contract for uranium enrichment from 2015 to 2025, which broking house Wilson HTM noted was not a “firm contract” but an “encouraging sign”. Silex is expected to conduct engineering design and prototype developments in 2011 before developing final design and specifications of a commercial production facility.

Losses abound

Developers of emerging energy technologies are not expected to make money, at least in their formative years, but there is merit in stemming the losses. Silex Systems net loss for the full year blew out five-fold to $19 million due to the money spent on the solar PV plant and funding research at the newly acquired Silex Systems, among its other R&D commitments. Cash was down to $40.7 million at year end from $58.6 million 12 months earlier.

Geothermal energy developer Geodynamics has declared a net loss of $14.7 million for the 2009/10 financial year, a slight improvement on last year, as it continues to spend money proving up its hot fractured rock resources in the Cooper Basin. The company received some $4.1 million in revenue from interest in its considerable cash resources, although this was down from $6.2 million the previous year. The accounts also reveal Geodynamics has written down a $2.9 million investment in an unlisted Iceland geothermal energy company called Geysir, which apparently went broke during the year. Geodynamics held a 3 per cent stake.

Meanwhile, wave energy developer Carnegie has more than halved its net loss for the year to $4.2 million, mostly as a result of a decision to capitalise development costs of its Ceto wave technology. The company is currently working on the deployment of a full-scale model of Ceto at Garden Island off Perth, and is also exploring desalination options for its technology. It says it remains in a strong financial position with cash in hand of $5.9 million, which it says is no mean feat in the current economic environment.

Take cash, not options

The emergence of new technologies and the anticipated transition to low-carbon economies is an exciting prospect for engineers and other professions. It is well known, for example, that the geothermal industry has attracted many from the oil and gas sector, many of them willing to accept lower salaries in exchange for the excitement of being involved in the development of an energy source. But how much can they expect to be paid? The annual reports are starting to give a glimpse of the salaries on offer in the sector and the principal conclusion is that, while the rewards are not negligible, incentives are best taken in cash rather than options, at least at this juncture.

At Geodynamics, the newly appointed stand-in CEO Jack Hamilton, a former Woodside executive, will receive an annualised base salary of $530,000 – about 10 per cent better than his predecessor, Gerry Grove-White, although the latter’s total package, including cash bonus and options, stood at $836,000. The company’s top eight executives, not including the CEO, shared packages totaling around $3.2 million in fiscal 2010, the annual report reveals, but around one million options lapsed, with the share price (now 45c), well short of the $1.50 exercise price last December.

It may be construed that the market price for wave energy executives is around the same as for geothermal, with Carnegie CEO Michael Ottaviano collecting a package just south of $800,000, including a $310,000 cash bonus. Which is just as well, as the 30 million options each held by Ottaviano and Ceto inventor and Carnegie founder Alan Burns will lapse later this year, with exercise prices of 20c, 30c and 40c well above current levels. Carnegie’s share price has experienced the same sinking feeling afflicting renewable energy stocks around the globe and it is currently trading around 9.5c.

Reuters report in Climate Spectator (1 September 2010):

A Canadian company started construction this week on what it says is the world’s first industrial-scale plant to turn municipal waste into biofuel.

Privately-owned Enerkem Inc said the C$80 million ($75 million) facility in Edmonton, Alberta, will produce enough biofuel to keep more than 400,000 cars a year running on a 5 percent ethanol fuel blend.

Canada, which has invested heavily in the biofuel industry as a way to reduce greenhouse gas emissions, is set to announce in September a 5 percent renewable content mandate for gasoline. Some of the country’s provinces already have such a mandate in place.

Enerkem has signed a 25-year agreement with Edmonton to convert 100,000 tonnes of the city’s solid waste into biofuels annually.

The plant, which will create 180 direct and indirect jobs, is scheduled to start operations toward the end of 2011.

Municipal waste-to-biofuels plants are on the drawing board in several U.S. states but several were halted as funds dried up during the global recession.

Montreal-based Enerkem was founded in 2000 around an in-house developed technology to produce biofuels through a heat-induced gasification process.

It operates two plants in Quebec: a pilot facility and a commercial-scale plant. The latter uses electricity poles as feedstock.

Source: www.climatespectator.com.au