Investing in waste-to-energy

Justice Litle - Wed 19 Jul, 2006

...Companies in the waste-to-energy industry enjoy a unique advantage over traditional energy companies: The world's supply of oil will run out long before its supply of garbage...

  
  
- Remember the classic '80s movie Back to the Future, in which Marty McFly (Michael J. Fox) travelled to 1955 in a time machine built by Doc Brown (Christopher Lloyd)?

- The initial version of the time machine, a souped-up DeLorean, was fuelled by plutonium. At the end of the movie, Doc Brown returns from the future with a new-and-improved version that runs on garbage.

- Getting a nuclear reaction from coffee grinds and banana peels seems a bit of a stretch. In fact, turning the contents of your garbage can into any form of clean energy sounds like a pipe dream. But companies in the waste-to-energy industry, such as Covanta Holdings Corp. do just that. They turn garbage into electricity, in a process known as waste-to-energy.

Investing in waste-to-energy: The process

- So how does the waste-to-energy process work? In a nutshell, safety-inspected garbage is fed into a feeder chute by an overhead crane.

- The feeder chute delivers the garbage into a giant furnace, where it is forced onto a downward-sloping grate. A churning action is created by the moving bars of the grate, mixing burning garbage with incoming garbage to help it ignite. This furnace runs hot — roughly 1,800–2,000 degrees Fahrenheit. The walls of the furnace are lined with steel tubes; heat from the combustion process turns water in these tubes to steam.

- The steam then drives a turbine generator, which produces electricity. After the garbage is burned, ash and gas are left over. The gas is filtered through a "baghouse," a system of hundreds of fabric filter bags that captures more than 99% of all particulates.

Investing in waste-to-energy: Pollution control

- The gas is also run through a high-tech pollution control system, and potentially acidic gases are neutralized by a lime slurry sprayed into the exhaust. The physical ash is then taken to a contamination- proof landfill, if not first processed for extraction of recoverable scrap metal.

- The Environmental Protection Agency has declared that the waste-to energy process has "less environmental impact than almost any other source of electricity." A combination of strict regulations and mature technology have made waste-to-energy plants both green and efficient.

- The United States turns roughly 12–15% of its solid waste into electricity each year — that's more than 100,000 tons per day — and generates enough energy to serve 2.8 million homes.

- So if the process works so well, why do we burn just a fraction of our trash? Why not all of it, or at least most of it? It comes down to economics.

- Waste-to-energy makes more sense in some geographic locations than others. Dollar for dollar, coal, hydropower and nuclear power are still cheaper ways to generate electricity. But waste-to-energy has other advantages, like the reduction of landfill usage.

- In densely populated areas of the United States, such as the Northeast, lack of landfill space is becoming a real problem. Existing landfills are getting full, and negotiations for new landfill space are typically squashed by NIMBY politics ("not in my back yard").

- There is plenty of open space elsewhere in the US, but it doesn't make economic sense to transport garbage any great distance. There is just too much of it.

- Burning the garbage, on the other hand, goes a long way toward solving the landfill problem. The ash left over from the waste-to- energy process takes up just 10% of the space that unburned refuse requires. The practical considerations of large cities and dense population distributions thus make waste-to-energy a winning solution.

- The waste-to-energy process is also a winner in the global warming department. Conventional landfills emit methane, a smelly greenhouse gas, while burned ash does not.

- On top of that, not only do waste-to-energy facilities produce zero net greenhouse gas emissions, they help cut down on fuel usage and truck emissions by reducing long-distance waste transportation. As the cost of fossil fuels rises and global warming concerns escalate, these advantages will only become more pronounced.

- Environmental sceptics fear that waste-to-energy harms recycling efforts, but this fear is largely unfounded. Waste-to-energy plants have an economic incentive to pre-sort the garbage they burn and set aside the recyclable materials.

Investing in waste-to-energy: Energy source

- Certain types of waste make good sense to salvage and recycle, while the rest is best viewed as an energy source. According to wte.org, "Waste-to-energy annually removes for recycling more than 700,000 tons of ferrous metals and more than 3 million tons of glass, metal, plastics, batteries, ash and yard waste at recycling centres located on site."

- Opportunities for future growth come from overseas markets, new opportunities in US markets. As fossil fuels become more expensive, the economics of waste-to-energy technologies become increasingly attractive, both at home and abroad.

- Companies in the waste-to-energy industry enjoy a unique advantage over traditional energy companies: The world's supply of oil will run out long before its supply of garbage.


Regards,

Justice Litle
for The Daily Reckoning
 

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