We believe that our current products provide a superior value proposition for
two customer types: (i) open and closed existing landfills and (ii) industrial
facilities that could benefit from on-site CHP generation coupled with waste
gas pollution abatement, or collectively CHP+A. We also believe that larger
sized Power Oxidizer turbines of 5 MW and above, once developed, will likely
be met with demand from large industrial facilities such as oil and gas refineries
and petrochemical plants. We also see the integration of third party equipment
utilizing heat (boilers, chillers, ovens and dryers) and equipment providing
additional fuel sources (digesters and rotary concentrators) as central to our
strategy to provide superior CHP+A customer solutions.
Landfills
When solid waste is deposited in landfills, the organic materials within the
waste decompose slowly over time, resulting in the generation and emissions
of methane-based waste gases. Historically, the quality of gases that has been
emitted by landfills during their open phase (i.e., while trash is still being
added) has been high enough for the generation of power through the installation
and operation of reciprocating engines. However, the increasing prevalence of
recycling and the diversion of organic materials are resulting in a reduction
in the quality of the gas that is emitted from newer landfills. In addition,
as landfills reach their maximum allowable size, they are eventually closed
and deemed inactive. Once a landfill becomes inactive, and trash is no longer
being added, the quality of the emitted gas typically falls to levels that are
well below the quality thresholds (~30% methane) that are required as an inlet
fuel for combustion-based power generating equipment such as reciprocating engines
or standard gas turbines. For this reason, the viable power generation phase
of a landfill’s life-cycle is typically limited to the years of operation
when the landfill is active, and then for a few years after the landfill is
closed. However, even after a landfill is closed, methane gas continues to be
emitted for an additional 50 to 70 years, just at lower concentration levels
than required to run combustion-based power generating equipment.
Industrial Target Markets (excluding landfills)
Most industrial processes use heat energy in the form of heat, steam, or electricity
for their operation. Many of these processes also generate by-product waste
gases with many embedded contaminants and impurities that are then either vented
directly into the atmosphere or put through a pollution abatement or treatment
process prior to release into the atmosphere. For industries in which pollution
abatement is mandated by applicable air pollution regulations, the facility
typically purchases abatement equipment (scrubbers, thermal abatement, carbon
absorber, etc.) separately from power production equipment, and such equipment
destroys the waste gases, but does not utilize or monetize them. Our Power Oxidizers
provide both functions in one unit and typically use waste gases as a partial
or complete replacement of purchased commercial-grade gases. In applications
where the waste gases have extremely low usable hydrocarbon content (or relatively
low volumes of waste gases), significant values may still exist resulting from
the coupling of power generation and pollution abatement that the Power Oxidizer
provides (i.e., our CHP+A solution).
Fuel-grade and beverage ethanol/alcohol distilleries and related products production
Ethanol or beverage alcohol production represents over 500 facilities across
the United States, including Pacific Ethanol’s fuel grade ethanol plant
in Stockton, California that purchased the first two KG2/PO units from Dresser-Rand.
Both fuel grade and beverage alcohol distilleries use electricity and steam
and produce a steady stream of waste hydrocarbons that can be used with our
Power Oxidizer to reduce the amount of natural gas that is purchased as a fuel
source, as well as reduce the amount of electricity purchased to run the industrial
plants. Although the details of Pacific Ethanol’s breakdown of savings
are confidential, we believe that Pacific Ethanol selected our Power Oxidizer
solution based on an economic return that consisted of the avoidance of power
purchases and improved pollution abatement. In this regard, Pacific Ethanol
has publicly stated that it expects to achieve annual savings of $3–$4
million per year after the on-site combined heat and power plant becomes operational.
Rendering and animal processing by-products
Meat rendering plants process animal by-product materials for the production
of tallow, grease and high-protein meat and bone meal used primarily in pet
food. Rendering operations produce VOCs as air pollutants. Although some greenhouse
gases are produced, the primary issues related to the emissions of VOCs is the
foul odor nuisance when these facilities are in proximity to residential areas.
Typically, the emissions control technologies that are used for rendering plants
are waste heat boilers (incinerators) and multi-stage wet scrubbers. Boiler
incinerators are a common technology because boilers can be used not only as
odor control devices, but also to generate steam for cooking and drying operations.
The waste heat boilers convert the waste gases to steam by combusting the waste
gases, but this process often faces resistance from air quality authorities.
Multi-stage wet scrubbers are equally as effective as incineration for high
intensity odor control, but they only serve to destroy the waste gas and do
not actually convert it into useful energy.
We believe our Power Oxidizers provide a superior abatement function as compared
to such emission control technologies, as our products also provide power generation.
We believe that the combination of the abatement function and power generation
results in a superior economic alternative for many rendering plants, to which
we have actively begun to market our Powerstations.
Wastewater and sewage treatment facilities, anaerobic digestion
Wastewater and sewage treatment facilities use anaerobic digester units to treat
raw sewage with both methane gas generation and water intensive bio-solids by-products.
Typically, the methane gas is eliminated by a thermal oxidizer and the bio-solids
are either dried on-site with an industrial dryer or, in certain cases, the
water heavy bio-solids are transported to another facility, often long distances
from the treatment facility, which results in significant tipping fees and transportation
costs to the facility, which is often a municipality.
Aerospace and defense instruments and materials manufacturing and semiconductor
and electronics manufacturing
Manufacturers in the aerospace and defense instruments and materials industry
and the semiconductor and electronics industry represent in excess of 2,200
facilities in the U.S., including nearly 600 in California. Many of these high
tech manufacturers are well-capitalized and often represent industries with
an increased focus on being “carbon neutral” or “green friendly.”
The underlying economics are similar to the CHP+A economics of ethanol production,
as described above, namely the extraction of heat energy from hydrocarbon by-product
gases, the elimination of other waste gases and the avoidance of other abatement
costs. To date, we have not had commercial success in the high-tech manufacturing
market, but we have begun to market the solution to these manufacturers, with
positive reception from some of the manufacturers with whom we have held discussions.
Petroleum gas and related petrochemical production
There has been a strong, worldwide trend toward the reduction of venting, flaring,
and waste of associated petroleum gas, also known as flared gas, due to concerns
about its contribution to global warming. Associated petroleum gas is a form
of natural gas that is commonly found within deposits of petroleum and is produced
as an undesirable by-product during the extraction of the petroleum. Our technology
not only destroys the harmful pollutants that reside within the associated petroleum
gas, but it can also be installed to produce on-site electricity and/or steam,
creating significant cost savings for oil and gas producers. We see multiple
opportunities in the petroleum market sector, primarily in locations where low
quality gas is permanently flared as unusable, such as tank farms, or in locations
using industrial steam to produce and distill petroleum related products.