Friday, December 16, 2011

Gasification: Definition, Please!


One of the themes that is becoming increasingly obvious to us at the Better BTU is that there is a lack of standardization of terminology in our emerging industry. This makes it difficult to classify different kinds of technology and creates barriers in communication with each other and the larger audience outside the renewable energy field.

A prime example of this involves the term ‘gasification.’ Merriam-Webster defines gasification as “a conversion into gas; especially: conversion of coal into natural gas.”

This overly simplistic definition by the dictionary leaves plenty of questions. Under this definition, you can argue that the fire pit you have in your backyard is a gasifier simply because the solid wood is converted into a gas as a result of being burned. Of course, because this isn’t an environmentally sound process, most in our industry today wouldn’t acknowledge your homemade gasifier.

Because it does fall under the broad definition, however, you will find all manner of waste-to-energy projects claiming the coveted gasifier status. A quick google search on gasification will bring up projects using fluidized bed boilers, plasma gasifiers and partial-oxidation gasifiers.

While some would classify all these projects under the broad spectrum of gasifiers and organize them along a line of stoichiometric combustion, others would insist that incinerators and fluidized bed boilers don’t belong there. This lack of definition leads to confusion and makes the unknowledgeable consumer vulnerable to marketing propoganda.

Vendors using older technology are re-branding themselves as gasifiers in order to appear current; and they aren’t wrong. Under the broad definition, they are indeed gasifiers. However, today’s industry has assigned a fluid and different meaning to the term intended to relay the idea of a cleaner process that produces significantly fewer emissions.

Before we can expect the rest of the world to jump on the clean air bandwagon, we must first clean up our language. We’ve got to define and categorize our technologies based on emissions output and not the process used to get there. 

Thursday, December 15, 2011

What's In A Name?

For those of you who have been steadily following Better BTU, you know we have three different blogs:
  1. Better BTU Technologies - where we review and compare different technologies in the industry
  2. Better BTU Projects - where we survey projects in the industry and continue to bring you updates on their progress
  3. Waste Conversion Congress Blog - where we brought you updates and reflections on the Waste Conversion Congress on the West Coast that took place in San Jose on Dec. 6-7


Even though we've still got a few more blog entries in the future that will relate to the Waste Conversion Congress, we've decided to change its name to Better BTU Blog. This blog will act as a homepage of sorts where we'll discuss various topics that relate to the industry but do not fall under the categories of projects or technologies. 

We appreciate all the wonderful feedback we've been receiving about the blogs and we decided that we had so much more to say that we wanted to have a "home base" to discuss philosophies, trends, obstacles, etc. Our very next blog entry will be on the need for cleaner definitions of terminology in our industry. The sky's the limit (and one we hope to keep clean) for what we'll talk about here!

If you have any suggestions for topics you want to see covered by Better BTU or projects or technologies you think might have an impact on our industry, please drop us a note! You can comment on our blog, tweet us (@BetterBTU) or send us a message on LinkedIn. We look forward to hearing from you!

Friday, December 9, 2011

Waste Conversion Congress on the West Coast: What We’ve Learned



Back on the East Coast, we’ve had some time to digest all the information we received at the Waste Conversion Congress and reflect on some of the thought-provoking debates and conversations we were a part of. Here’s what has been on our minds as a result of the conference:

Ø   The amount of waste we deposit in landfills is absolutely staggering.  The energy    value we bury is equivalent to the amount of energy 31 million cars consume annually.
Ø   The general population has been taught to think of incineration when they hear the term “waste-to-energy.” Incineration conjures up images of massive power plants spewing pollution into the air and is an incorrect visual for the latter term.
Ø   Regulation of these projects and technologies is politically based when it should be scientifically based. California is the toughest state to permit, even when experts agree on the net positive environmental benefit of a project.
Ø   Financing is difficult given the current economic climate and many of the tax incentives that are set to expire at the end of the calendar year are not likely to be renewed. There are other ways to get financed, but developers need to be doing more research earlier on to determine how the project will be funded. The fewer projects that get scrapped midway, the better it is for our industry.
Ø   Facing a passionate, schooled and well-politicized opposition, it’s important that these initial projects are successful to avoid making projects down the pike more difficult. At Better BTU, we do our best to present both sides of an issue so we will be spending some time in later entries dissecting their arguments. Afterall, the best way to strengthen your product is to examine the areas receiving criticism.
Ø   The sheer number of projects using a variety of technologies and processes is encouraging. Although most will fail, the few that make it into production will create the inflection point for our industry.
Just because the conference is over doesn’t mean this blog is! Stay tuned as we continue to bring you a deeper look at some of the people, places and philosophies discussed at the Waste Conversion Congress on the West Coast.

Wednesday, December 7, 2011

Day Two: Case Studies - Putting Theory into Practice


The second day of the conference brought a number of presentations that made up the Waste Conversion Technology Showcase. Two case studies in particular excited the audience.

Flex Energy generator. Photo by Martin LaMonica/CNET
Marketing Manager of Landfills Su Ann Huang discussed a novel approach to conversion that Flex Energy is working on. The California-based company has been working on a thermal-oxidizer front ending turbine and the emissions profile is absolutely stunning. Currently, the technology is in the first commercial installation phase at Fort Benning, Ga.

By far the best thing about this technology is that it is a viable solution for low-BTU syngas with an excellent emissions profile. The downside is the cost, coming in at $4,000 per kilowatt for just for the component. This means one needs essentially free fuel to offset the high price in order to make this work in the United States. Despite the price tag, this technology is worth considering for existing digester gasification projects and is one to watch for in thermal gasification.

The second presentation that captured audiences was by Ken Foldare, the director of business development at Chinook Energy. Chinook has the benefit of a proven gasification technology that works on a metals recovery business model. Partial-oxidation gasification is effective at processing waste metals because all of the non-metal components are converted to heat. Chinook has focused on the emissions and also has an excellent profile.

Foldare provided cost data from $3,500-4,000 all-in. This is in the target range Better BTU calculates is required for economic vitality.

The presentation focused mainly on European waste incineration directives. Foldare argued convincingly that the limit is tighter than U.S. standards and that the industry would do well to focus and compare technologies on this standard. We loved this idea and support it for the growth of the industry.

Chinook has several metals recovery projects, including one with Alcoa in the United States, but does not yet have any projects on MSW biomass in production. The company estimates that the first commercial installation will happen later in 2012. Better BTU is excited to watch Chinook’s growth and will continue to bring you updates to this project on our project blog

Unfortunately, Better BTU had to catch a plane and wasn't able to stay for the afternoon session but we'll be back tomorrow to bring you our thoughts on the conference as a whole. Stay tuned!

Tuesday, December 6, 2011

Evening Wrap-Up: Technology and Funding - Embrace the Risk


One thing everyone at the conference can agree on is that risky technology is a key barrier to project financing. Developers and entrepreneurs can be in denial about the risk they are assuming, technologically, as they embark on their new project. The morning panel suggested that we “don’t avoid the risk, isolate it.”

There are several different components of risk and the panel recommends that folks in the industry isolate each part and deal with it separately. They are: 

Soundness Risk: Developers working with a new technology will need to clear this first hurdle by having a well-respected, independent engineering firm evaluate the technology. The engineering firm will do an energy balance, look at the metallurgy and perform a number of tests and calculations to determine if the design is sound.

Engineering firms put their reputation on the line when they evaluate a design so you can expect it to be a thorough process. If they deem the design sound, the firm will issue a letter to that effect. A project developer won’t be able to get debt financing to fund the technology if it hasn’t first cleared the ‘soundness test hurdle.’

Scale Up Risk: Most emerging technologies work on a prototype level and there is risk whenever you attempt to take something from the lab and scale it to the size of a commercial plant. Funding for this stage of development can come in two forms. A project developer can get debt financing even if the target technology must be “scaled up” to reach a commercial level – but the engineering report must identify the scale up risk as low. The second approach is to adopt a modular strategy and fund the initial module through traditional equity sources.

Integration Risk: Defined as the risk of putting proven components together in a new configuration, this is the final of the risk components. Assuming a project developer has all the other requirements for funding lined up (feedstock agreements, buyer for the energy, etc.), he can get debt financing if integration risk is still present.

Better BTU Take: Project developers and entrepreneurs are frequently embracing three types of technology risk without understanding the impact it has on financing. In addition to following tips on financing from the previous blog entry, the industry needs to work on funding each component of the risk in a separate manner.  

Mid-Day Update: Show Me the Money!


And we’re off! After an early morning registration, the Waste Conversion Congress, presented by Renewable Waste Intelligence, officially kicked off at 8:30 am with a warm welcome by Scott Green, Clean Tech/Regional Policy Officer. This is an excellent location for the conference because Mayor Reed of San Jose has made gasification demonstration a city goal. He hopes to have created 25,000 clean tech jobs by 2022 – impressive yet feasible given the progress they are making, we think!

The first session we sat in was called Financing Your Waste Conversion Project and was presented by John May, managing director of Stern Brothers & Co., an investment banking firm in Chicago and St. Louis. May is responsible for developing the firm’s renewable energy practice. He was joined by Mark Riedy, a partner at Mintz Levin and who serves on the general counsel of the American Council on Renewable Energy (ACORE), and Jonathan Silver, executive director of the Loan Progams Office at the DOE.

It was a sobering conversation as the trio explained that federal funding is going away and that most of the government grants such as 1603, will not be renewed after they expire. The message is that this isn’t the merchant-funding environment of the past. The sooner we accept it and move on, the sooner we can focus on what can work right now.

That being said, there were some good nuggets to take away from the lecture:

Ø    Municipal solid waste bonds are working. Projects will pay a higher interest rate but there is a great appetite for this high-yield paper.

Ø    Projects in some other countries will be easier to fund than domestically. Brazil has been mentioned as an example of a country that is open to projects right now.

Ø    The DOD is a great place to focus because it is coming into new money in 2012.

Better BTU Take: Too many developers are out there scrambling for funding because they’ve spent their own risk capital getting the project partially-funded. We suggest starting with a funding model first and then working your way backwards. Try to clearly understand what it will take to get a project funded BEFORE you empty your savings. The good news is that there are ways to get things done if you’ve done your homework.

From San Jose, Calif. we’re signing off!






Sunday, December 4, 2011

Updates from The Waste Conversion Congress

The Waste Conversion Congress is this week.  The Better BTU has goosebumps.


What a great, tightly focused conference.  I hope you can go.  But if you can't, the next best thing will be our nightly recap of the day.


Enter your email in the box at the upper right side of this page and you'll get a nightly update at the end of both days.


You can also get updates through twitter or linkedIN. (See the links on the right hand side of this page).


All the key issues in our industry will be discussed -- Funding, Technology, Permitting etc.  Learn from people who are in the throws of getting this industry to the inflection point.