Waste2Energy, Inc. (OTC: WTEZE.OB) designs, builds and installs waste-to-energy (W2e) plants that generate a source of clean and renewable energy by converting biomass or other solid waste that typically heads to the landfill. W2e is the process of creating energy in the form of electricity or heat from the incineration of waste source and represents a form of energy recovery. Most W2e processes produce electricity directly through combustion or produce a combustible fuel such as methane, methanol, ethanol or synthetic fuels. Once processed, the energy by product is electricity (from heat) and steam (also from heat generated during processing.
Below is an overview of the Company’s core technology platforms based on its proprietary gasification technology, which offer end-users the flexibility of being modular, scalable, upgradeable, and expandable. In addition, W2e typically outsources manufacturing of the large, bulky equipment and systems outlined below on a partnered, regional basis since it would not be practical to transport these over long distances.
1.) Standard Batch Oxidation System (sBOS) is designed for on?site waste destruction and the optional conversion to intermittent energy of facility?generated waste streams from mines, oil fields, military, medical, hospitality, commercial, industrial or other installations.
2.) Continuous Batch Oxidation System (cBOS) is designed for the continuous, uninterrupted production of energy from batch loading of unsorted, mixed waste feed stocks such as municipal solid waste, tires, commercial wastes, construction debris, etc. that offers 24 / 7 cycling and intermittent loading features.
3.) Continuous Oxidation Reactor (COR) is designed for conversion to energy of consistent feed stocks such as sorted municipal solid wastes or biomass agricultural waste, rice straw, wood chips, energy crops, etc. COR has the capability to process up to 500 tons per day in a single unit with the flexibility to expand with additional units for greater capacity and process a variety of feed stock sources.
There is a growing need on a worldwide basis to shift away from the landfill model of waste disposal due to the unsustainable growth rates (landfill creep) combined with rapidly growing populations, urbanization, and limited real estate / land availability in densely populated cities. The initial market opportunity for Waste2Energy lies in Europe, which is an estimated 2-3 years ahead of the U.S. in terms of dealing with waste disposal in an environmentally friendly manner on a local basis.
In addition, multiple business models exist for end-user operators of W2e’s proprietary gasification technology systems, including: tipping fees, the generation of carbon / renewable energy credits, ash sale (for use in concrete, roads, etc.), the generation of electricity that can be sold and desalinization to produce a source of clean water. According to Frost & Sullivan studies in this sector, the waste to energy market in Europe is growing and will continue to do so for at least 10 years. Europe's waste to energy capacity is expected to increase by around 13 million tons and it is estimated that 100 new plants will come on line by 2012.
According to BCC Research , the statistics outlined below apply to the global W2e market through 2014 with an estimated breakdown by region that includes 48% Europe, 31% Asia / Pacific, 11% North America, and 10% rest-of-world.
1.) The global market for W2e technologies was $19.9 billion in 2008 and is expected to increase to $26.2 billion in 2014.
2.) Thermal W2e technologies have the largest share of the market at $18.5 billion in 2008, which is expected to grow to $23.7 billion in 2014.
3.) The biological W2e segment generated $1.4 billion in 2008 and is expected to increase to $2.4 billion in 2014.
The landfill model is limited and nearing end of life cycle with little incentive for innovation due to high tipping fees from distant cities that may send their trash via rail / truck transport for remote disposal, resulting in the waste of energy for transport, expanding landfills, and the generation of greenhouse gas emissions. W2e offers a local, community-based solution for waste with useful by-products in the form of steam to generate electricity, clean water (desalinization), and local jobs while simultaneously solving the problem of waste disposal.
Other commercial opportunities lie in developing countries, desalinization for clean water, islands / cruise ship waste disposal, military camps, oil / gas exploration, metals / mining sites, and hospitals (this a near-term opportunity in the U.S. market). W2e offers a scalable, community-based solution that is customizable and easier to implement from the budgetary / financing perspective for local governments since it offers the flexibility to start out on a small scale.
W2e’s units are currently used at a number of locations such as the Ronald Reagan Strategic Missile Base, Kwajalein Atoll for mixed and hazmat wastes, Husavik, Iceland-mixed municipal wastes, BP/ARCO – Alaska for drilling camp wastes, Pogo Gold Mine, Philippines for mining camp wastes, Cayman Islands - hospital wastes and Conoco-Philips for use in Alaskan drilling camp waste disposal. In addition, W2e designed, built, and installed a cBOS system in Scotland for Scotgen, which represents a $35 million facility that will officially open after commissioning and will continuously produce 6 megabytes of electric grid power from both unsorted municipal and hazardous waste sources.
From an investment standpoint, Waste2Energy is appropriate for investors with a long-term horizon who recognize the need for an alternative, disruptive technology platform that provides a local solution for waste disposal in an environmentally beneficial manner. It is appropriate to view W2e as a venture capital opportunity with the flexibility of being able to purchase the stock on the OTCBB market at price that is currently hovering around the $1 per share level with little trading volume, a market cap of approximately $50 million, and the need to raise capital in order to execute upon its strategic business plan.
Larger players in the space such as
<font> Covanta (NYSE: CVA) </font> are not focused on the highly customizable, small-scale installations that W2e plans to offer, providing a large market niche on a global basis that has the potential to become very profitable for W2e once it secures funding. Covanta estimates that 14% (37 million people) of municipal solid waste in the U.S. is processed at waste-to-energy facilities, which produces enough electricity for 2.8 million homes. In addition, waste-to-energy facilities are more widespread in Europe (where W2e will focus its initial efforts) and Covanta estimates a total of 600 such facilities worldwide.
W2e offers the combination of potential long-term gains associated with speculative venture capital investments that is accessible to retail investors who are comfortable with the risk / reward proposition. It is important to note that W2e differentiates itself from competitors in the space by having systems in use (including the pending official opening of the $35 million Scotland facility), which are required for validating the technology through field testing, monitoring, and data analysis.
Disclosure: No positions
$17.37 (11/13/09)
