Our society produces a lot of waste.
Over 2 billion tons
per year, in fact.
A number that's expected to grow
by 70 percent by 2050.
That's a line of garbage trucks stretching
from San Francisco to New York
City every single day.
Organic materials in
landfills decompose.
They produce methane, a
very potent greenhouse gas.
Solid waste, plastics,
paper, cardboard.
There's a lot of energy within
those - carbon and hydrogen.
Why don't you do
something useful with it?
Converting waste into energy is
not a new idea.
Usually, though, this has meant incineration
- that is, burning our trash
to recover some energy.
But that has major drawbacks.
Incineration creates toxic ash and
hazardous chemicals called dioxins.
And heat and electricity are pretty
much the only usable outputs.
A better solution may lie in
gasification, an old technology which has
only recently been repurposed as a
way to deal with our waste.
Gasification companies don't
burn trash.
Instead, they turn it into a gas, in
a process that they say is both
economical and eco-friendly.
The focus is on producing a good
quality syngas that can be converted into
higher value energy products on the
back end, be it electricity, hydrogen,
diesel fuel, possibly even
chemicals, fertilizer, etc.,
in the future. It's an exciting
idea, and some major players, including
the Bill Gates-led fund Breakthrough
Energy Ventures, have thrown their
weight behind it. While in the
past, gasification companies have struggled
to scale up and meet their
energy production targets, now companies like
Sierra Energy, Enerkem and Plasco say
they're ready to commercialize and
expand. I think we have over
9,000 interested parties from around the
world who've contacted us already.
The question is how quickly
can we get one?
The answer is soon.
The world's first municipal waste incinerator
was built in 1874 in
Nottingham, England, and like incinerators
of today, it converted trash
into ash, gas and
heat via combustion.
Initially, the purpose was just
to shrink our waste.
Eventually though, Great Britain and
Germany did start recovering energy
from the process. But the idea didn't
really catch on i n the U.S.
Domestic electricity prices were already
low, and as emission standards
tightened, incineration got even more
expensive as compared to
landfilling. It wasn't until the oil
embargo and resulting energy crisis
in the 1970s that the U.S.
really took an interest
in waste-to-energy tech.
Over 100 waste-to-energy incineration plants
were built, but when fuel
prices dropped, interest waned.
You see a lot of interest in
this waste conversion or biomass conversion
when the fuel price
is really expensive.
And then when the fuel
price drops, nobody really cares.
Today, there are about 70
waste-to-energy plants in the U.S.,
and the number is declining.
But globally, many European countries
still rely heavily on incineration.
And Japan and China have been
building waste-to-energy incinerators at a
rapid clip. But many environmentalists say
we need a better solution.
Incinerators still emit harmful pollutants,
especially in countries with
lax environmental regulations.
So burning waste to get rid of it
may appear to be cheap, but the
long-term health consequences for
the community is terrible.
So companies like Hart's Sierra
Energy are looking towards gasification,
an old technology that proponents hope to
repurpose as a cleaner and more
economical waste-to-energy solution.
In the gasification process,
materials aren't combusted.
No toxic ash or dioxins are produced.
Instead, a highly controlled amount of
oxygen or steam reacts with the
waste, turning it into a gaseous
mixture of carbon monoxide, hydrogen and
other elements. This synthetic gas
has applications beyond electricity
generation. It can be converted into
high value products like diesel fuel,
hydrogen fuel or ethanol.
So even if electricity prices stay low,
there'll be a market for these
outputs. We seen much more
value in chemicals and biofuels.
Methanol is an important building
block in the chemical industry.
Ethanol is, of course as you
know, can be blended and fuels.
In this way, w aste-to-energy gasification
plants have both upstream and
downstream revenue potential.
On one side, you're being paid to
take garbage that normally would be
dumped into a landfill.
So that's one source of revenue.
You then take that waste and
you turn it into recycled products.
Those products have very high value.
And so from a business model
perspective, you're getting paid on both
ends. But a main challenge facing
companies like Sierra Energy, Enerkem
and Plasco is dealing with the
unpredictability of using municipal solid
waste as the fuel. Globally, there
are hundreds of gasification plants
that generate electricity from fossil
fuels like coal, but waste-to-energy
gasification is a
whole different game.
Tailoring your gasification when your fuel
changes over time is the Holy
Grail. And if they can consistently
gasify and produce their natural gas
from these waste materials, even if
the content changes, that's an
exciting option. Here are some of
the main players taking that plunge.
Davis, California based Sierra Energy
was founded in 2004.
Back then, CEO Mike Hart, who is
also the CEO of Sierra Railroad Company,
was seeking to improve the fuel
efficiency of his locomotive fleet.
We were trying to figure out a
way to make our own fuel.
We wanted to do
something better than diesel.
He was judging a
business competition at U.C.
Davis when he heard about how
blast furnaces, one of mankind's oldest
technologies, could be used to convert
any mixture of materials into a
usable synthetic gas.
Hart bought the patents to this
technology and Sierra Energy was born.
Over time, its mission expanded
far beyond its initial reach.
People are realizing that climate change
is a very real problem.
When you throw away one ton of
garbage, every ton is about 6.2
tons of CO2 equivalent goes into the
atmosphere in the form of methane.
Methane is 86 times more potent a climate
change gas than CO2 over a 20
year period. Our technology provides one
way of trying to address that
problem. Last July, Sierra Energy closed
its $33 million dollar Series A
funding round, led by Breakthrough Energy
Ventures, the Bill Gates led
investor fund that also includes Marc
Benioff, Jeff Bezos and Richard
Branson. Now, the company has partnered
with the Department of Defense to
develop its first small-scale commercial
facility at Fort Hunter Liggett
in Monterey County, California.
This demo facility can handle 20 tons of
waste per day, and if all goes
according to plan, it will begin
processing trash in early 2020.
Ultimately, Sierra Energy says what sets them
apart is their use of the
blast furnace, a centuries old technology
in the iron and steel industry.
Here's how it works.
A blast furnace, which is the
technology platform that Sierra Energy uses,
is a high temperature vessel.
Solid materials go in at the top.
Injecting gases are placed
in at the bottom.
And you have a
big countercurrent heat exchanger.
We're injecting oxygen and steam at
the base instead of hot air.
And at the top, we're placing in
solid waste materials instead of those
mined materials from the ground.
And instead of the focus being
producing good quality metal out the
bottom, our focus is on making a
good qualit y syngas, synthesis gas, out
the top of the vessel. Once the
syngas is produced, the local community or
developer will decide what
to do with it.
The company lists electricity, hydrogen,
renewable diesel fuel and ammonia
as likely end products.
About 10 percent of the waste material can't
be converted to gas and so is
instead turned into a stone that
can be used as construction material.
Because of this wide variety of use
cases, it's hard to say for sure
exactly how clean the
end-to-end process will be.
It really depends on the
specifics of the project.
How far waste is having to
be brought to the location.
Some of the configuration
of the plant itself.
Hart is confident though, that in almost
every case, it will be carbon
negative. Because even if you're making
electricity or diesel for a
vehicle, the amount of pollution that
comes out of the tailpipe or
smokestack is less than the amount
of emissions that you're offsetting in
the first place. Furthermore, Sierra
Energy's plant doesn't rely on
external energy to operate.
Instead, Hart says that about 20 percent
of the energy created is used to
run the plant itself.
And so by some people's analysis, you
can make this carbon negative or
carbon neutral. By other analyses, y ou
can't quite get there, but it's
certainly cleaner than
fossil natural gas.
Over the next few years, Hart says
the company plans to build out
community-scale systems that can handle about
50 tons of waste per day,
the equivalent of approximately
50,000 people's trash.
If we want to have
an impact on that 13.2
billion tons a year of greenhouse gas,
we need to have thousands of these
systems around the world
as quickly as possible.
That's our goal as a company.
While Sierra Energy's most recent funding
round has put it in the
spotlight, there are a number of
other veterans in this space.
Two of the biggest are Plasco
Conversion Technologies, f ounded in 2005,
and Enerkem, founded in 2000.
Like Sierra Energy, both aim to
turn municipal solid waste into valuable
end products through gasification.
But unlike Sierra Energy, these
two companies have actually accumulated
years of firsthand experience
operating full-scale gasification plants,
dealing with their fair share of
delays and setbacks along the way.
Plasco Conversion Technologies uses plasma
to refine the waste from
gasification into a clean syngas.
The company operated a large demonstration
facility in Ottawa from January
2008 to January 2015, capable of accepting
135 tons of waste per day.
Eventually, Plasco got approval to build
a commercial scale plant, a nd
though the company raised over $300
million dollars, it ultimately wasn't
enough. The new plant was never built,
t he demo facility shut down, and
Ottowa severed ties with the company.
But Plasco kept chugging along and reemerged
with a new outlook on the
market. We put in 1.2
million man hours and a decade
of work and $407 million dollars.
We can tell you many
ways that don't work.
And what we do now does work.
In the process, w e realized
that the waste-to-electricity market, the
waste-to- energy market
was going away.
Unable to compete with the low price
of natural gas, Plasco now aims to
produce synthetic fuels for use in
internal combustion engines, which can
power cars, planes and trains.
The company no longer operates any plants,
but it says there are a number
of projects in the works.
And for these future endeavors, Plasco
has slimmed down its business
model. We aren't doing build,
own, operate, transfer anymore.
We're doing selling the
equipment and the technology.
So we restricted what we did ,
so we weren't in competition with the
entire world, but
more in cooperation.
Another player, Enerkem, developed
the world's first commercial
waste-to-biofuels facility of
its kind.
It's been operating in Edmonton, Canada
since 2014 and is currently
focusing on turning trash into
ethanol biofuel and chemicals like
methanol. It's a facility that can take
up to 100,000 tons per year of
waste, around 300 tons per day.
So this type of size would represent
a community of around half a million
to 700,000 inhabitants.
This plant uses a technology called a
fluid ized bed gasifier, in which
the trash is dropped into a bed
of hot sand, oxygen and steam.
The precise mixture causes the waste to
heat up and turn immediately into
gas. But Enerkem has also faced
challenges as it's scaled up.
The company initially predicted its first
plant would operate at full
capacity by 2012, but it
still isn't there yet.
The company won't reveal how close
it is to full-scale operation, but
Chornet says that despite the delays, he's
glad that his company is taking
the time to get it right. We're really
proud that we did not skip any
steps. However, this comes at a cost.
So we have both a patient
approach and a realistic approach for
innovations of this scale.
And also we have an enormous database
as well as operation time at
commercial level. So these three
aspects really differentiate us.
In its 20 year history,
E nerkem has raised $616.5
million dollars and now has plans
to build additional facilities in the
Netherlands, Spain, the U.K.
and Canada. It's one of the
most well-established companies in the space,
but with just one commercial facility,
there's still plenty of room for
others to play catch up and learn
from what's worked and what hasn't.
Everyone likes to be in the
race to be number two.
The idea is the first plant, the
pilot plant is more expensive, so you'd
rather learn from somebody else.
On this topic, I'm
not at all worried.
The first one at large-scale may have
some kinks in it, but it's also
likely to get some of the best
subsidies and deals from the municipality.
These potential subsidies, alongside other policy
drivers, stand to play a
major role in determining how
quickly this tech spreads.
So the future for gasifiers is, in my
view, more tied to the economics of
the climate change story, t he
prices on carbon, the prohibitions on
emitting any fossil fuels, than it is
on the technology, which we've known
about for a long time. Given
current policies, such as California's Low
Carbon Fuel Standard, S ierra Energy says
it could build many more plants,
but not on the scale that
they'd like to see eventually.
To get to hundreds is very feasible.
But to get many thousands, that will
need different regions of the world
to step up and force people
to divert waste from the landfill.
This could look like higher
landfilling fees, carbon credits, carbon
taxes, emissions regulations
or subsidies.
Any and all would be a boon, s
o long as these gasification companies can
operate as cleanly as they claim.
But as climate policies and priorities
shift in tandem with election
cycles, it can be hard for this
tech to establish a strong foothold.
Once we know, o kay, this is a
policy that we're going to stick with for
10 years, I think there will be
a lot of confidence from these investors.
But if you don't know what the policy is
going to be in every two years or
three years or four years, it's
very difficult to make any decision.
But as our landfills fill up
and the world gets hotter, companies,
investors and the public at large are
realizing that we can't wait much
longer to seek novel solutions.
People who say, we'll recycle our way
out of it using conventional means,
those people are out of their minds.
It's not happening.
If we're gonna do anything to try
to reduce climate change, those 13.2
billion tons of CO2 equivalent going
into the atmosphere from landfills is
the very first place that we
should try to address it.
