The phrase “renewable energy” typically conjures images of wind, water and sunlight. But one New Jersey company is using a very different resource — garbage — to generate sustainable, environmentally friendly power.
Morristown-based Covanta Energy has built a $1.7 billion business turning municipal solid waste into base load electricity. The company has 3,500 employees worldwide, about 530 of which are based in the Garden State.
Covanta collects about 20 million tons of municipal solid waste each year, most of it processed at the firm's 40 North American waste-to-energy plants, including three in New Jersey. The waste is combusted, and the resulting steam either sold directly or used to generate power on-site.
The company's Newark facility, for instance, processes some 2,800 tons of municipal solid waste each day from 22 Essex County towns and New York City. The result is electricity to power 45,000 homes.
Anthony Orlando, Covanta's CEO, said his firm's renewable power has a key advantage.
"One of the things we do is complement the other renewables, because we're on 100 percent of the time," he said. "Versus wind and solar, which obviously are intermittent based on the wind and the sun."
The company equips its plants with emissions control technology to keep the plants well below federal and state emissions caps.
Bill Dressel, executive director at the New Jersey League of Municipalities, said waste management is a serious headache for local governments.
"It's a major budgetary expense, and what Covanta has done is to make waste removal a win-win situation for the town," he said.
Still, that win-win situation comes with a cost: "At the end of the day, it's pretty cheap to bury garbage in the landfill," Orlando said.
That's especially true further west, where land is cheap and widely available. That's why many of Covanta's clients don't consider waste-to-energy until their landfills are nearing capacity and there aren't good, local sites for new landfills. It's also why most of Covanta's plants are in the Northeast.
The company is also gaining ground overseas in places like China and Europe, where governments tax landfills or subsidize renewable power using incentives such as feed-in tariffs.
Orlando said U.S. energy prices, which have been falling in recent years, are about $45 per megawatt hour of electricity.
"We're getting the equivalent of $100 (per) megawatt hour in China, based on the feed-in tariff," he said.
The major cause of low U.S. electricity prices is the surging supply of natural gas, which "is great for the economy, and it's great for the country, but it is challenging for a renewable energy company," Orlando said.
That's one reason domestic new plant construction has slowed down for Covanta. The company is responding in part by expanding existing plants and by diversifying and increasing the value it gleans from the waste it's already collecting.
Covanta also makes about 4 percent of its annual revenue from metal recycling, using magnets and eddy currents to isolate metal after the incineration process. It also offers bundled specialty services to commercial clients looking to boost their green reputation.
The company is also investing in research and development, including creating a new gasification technology. Orlando said the long-term goal is to figure out how to convert waste to gas that's clean enough to be turned into liquefied fuel, which is more lucrative in part because it can be transported more easily.
"We convert it to gas, but it's not the cleanest gas at this point," Orlando said.
David Specca, assistant director for bio-energy and controlled-environment agriculture at the Rutgers University EcoComplex, said the cost of energy from waste is likely to fall over time.
"Over time, you'll see more and more restrictions on what's allowed to go to a landfill, which might make some of these other technologies more attractive," he said.
Specca said that's already happening in Massachusetts, which restricts organic waste. He said there's also revenue to be made in selling the waste heat from these plants.
Orlando said it's hard to imagine any kind of landfill tax or feed-in tariff being enacted at a national level here in the near future, but he hopes that if it does happen, energy from waste is treated the same as other renewables.
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