The economic model for gasification plants has changed. A decade ago, with society square in the gunsights of $100-per-barrel oil, gasification was seen as an answer to skyrocketing energy costs.
Today, the scenario has totally flipped. The U.S. Energy Information Administration (EIA) puts current and near-future oil prices at $50 a barrel.
These circumstances are causing some gasification technology companies to look at more specialty fuel products or to position themselves as a landfill alternative for communities that need one.
Alison Kerester, executive director of the Gasification & Syngas Technologies Council (GSTC), Arlington, Virginia says “Methanol is a huge market.”
So big is the potential that GSTC has formed a strategic partnership with the Methanol Institute in Washington. The institute’s executive director, Greg Dolan, was among the highlighted speakers at GSTC’s 2016 Gasification and Syngas Technologies Conference in October in Vancouver, British Columbia.
Gasification technology is so new that getting regulatory protocols up to date has been an issue. Despite those obstacles, several key players are moving forward with gasification projects. The Ineos shuttered plant in South Florida is a glaring exception to the rule.
The rest of the industry picture, however, remains bullish on the long-term future of gasification.
“I firmly believe that the next decade will see thousands of gasification systems installed globally,” says Michael G. Hart, president and CEO of Sierra Energy, Davis, California. “Our belief is that if gasification were implemented broadly and used to offset the only other real baseload power sources (coal, oil and gas), we could see a global reduction in greenhouse gases (GHG) of between 10 to 20 percent.”
Sierra’s first commercial system is being installed now in Monterey County, California. Sierra expects to commission it by the end of 2016. Its partners are the U.S. Army, PG&E, the Defense Logistics Agency and the California Energy Commission.
The Monterey County system will take postrecycled municipal solid waste (MSW) and turn it into energy. “We will be making power, renewable diesel and hydrogen,” Hart says.
He adds that Sierra has received thousands of inquiries. “Particular interest outside of the U.S. is in Europe and Asia at this point,” though he notes the company has received requests from “almost every country on earth.” Others are finding success, too.
PHG Energy (PHGE), Nashville, Tennessee, commissioned its new gasification plant in Lebanon, Tennessee, in the third quarter of 2016, the first commercial installation of its large-format down-draft gasifier. Following an October ribbon cutting, PHGE planned a gradual ramp-up of the plant. The goal is to have the plant operating at full capacity by the end of 2016. In the meantime, the company will coordinate waste streams to ensure it has sufficient feedstock.
PHGE’s corporate strategy focuses on community-size operations. With a population of 32,000, Lebanon fits right into its business plan. PHGE initially will provide a 32-ton-per-day plant. Its initial feedstock will include 80 percent dry wood, 10 percent tires and 10 percent sludge.
The wood will come from local manufacturing waste like packaging, crates and pallets. Tires will be drawn from a county-wide area. Sludge comes from the nearby wastewater treatment plant, and all will be used as feedstock.
For PHGE the community market as a hot one. “Our niche is community plants serving regional areas,” Koczaja says.
“Our goal is not big mega-projects but more regionally based,” Koczaja says. “Our goal is to take these small-to-medium municipalities and empower them with a facility where they can start to manage their waste stream.”
Benefits of a regionally based project include local manufacturers and citizens embracing waste diversion, green industries getting closer to zero waste and, with a smaller geography to serve, transportation costs minimizing, notes Koczaja.
“Lebanon is a good example of pulling those pieces together,” he adds. PHGE has formed a partnership with a local waste hauler to do the material preparation.
The revenue for the project is based on the material coming through, so the suppliers will be paid to take the waste. As a bonus, the energy produced will be used by the regional wastewater treatment facility.
“With the right pieces coming together for the Lebanon project, the core assumptions of that project can go to the East or West Coast,” Koczaja says. “The revenue drivers get better.”
He believes that if a relatively remote area like Lebanon can cost-justify gasification technology—based either on avoiding tipping fees or on energy savings—the impact the technology would have on either coast, where tipping fees are incrementally steeper and energy costs are much higher, would be even more significant. “The higher tip fees mean the business case is easier,” he says. “There will be a higher energy value.”
Kerester says that PHGE’s success in this area runs somewhat counter to general trends. “We are seeing a move away from dealing with cities and municipalities,” she says.
The reason is simple: elections. “You may have a (sympathetic) mayor or city council head who is not re-elected,” she explains. “Or, you’ll encounter environmental groups that are not well informed and equate gasification with other forms of incineration.”
PHGE also has a second operation on the drawing boards. Similar in concept to the Lebanon plant, this one will be located at Sevier Solid Waste, Pigeon Forge, Tennessee. It’s currently winding its way through an extended regulatory review.
When designing a plant, Koczaja says PHGE tries to limit outside factors that may have an impact. It likes to stick to its community-scale projects and to locate those projects “behind the meter,” avoiding the necessity for power purchase agreements. Rather it uses the electricity directly and reduces its utility bills.
“It makes a clean installation and makes the project implementation easier because you are not trying to put together a larger power purchase agreement,” Koczaja explains.
building on success
In Canada, Montreal-based Enerkem is leveraging the expertise acquired with building and for the last year, operating its commercial facility in Edmonton, Alberta, to develop similar biorefineries in North America, Europe and China.
“We plan to build our next facility in Varennes, near Montreal,” says Marie-Helene Labrie, Enerkem vice president, government affairs and communications.
She notes the company recently obtained the necessary environmental permit and expects to start construction in 2017.
“In Europe, we are working with [Amsterdam-based] AkzoNobel’s waste-to-chemicals consortium to develop an Enerkem waste-to-chemicals facility in the Netherlands,” Labrie adds.
Enerkem’s technology converts nonrecyclable mixed waste into a pure synthesis gas which then interacts with catalysts to produce low carbon transportation fuels and renewable chemicals.
“Our integrated thermochemical technology combines our state-of-the-art low severity gasification with our catalytic conversion process,” Labrie says. In less than five minutes, waste destined to landfill becomes a high-value product like methanol or ethanol.
Labrie says communities around the world are looking for alternatives to landfilling and incineration and want to increase their diversion rate.
“Gasification technologies that are capable of taking mixed waste as a feedstock to cost effectively produce energy or products are an attractive solution,” Labrie says.
Enerkem is not overly concerned about oil prices. “Our business model is designed to be profitable, even at the current oil prices,” Labrie says. “We generate revenues both upstream, from the fee we charge to take the waste, and downstream, from the sale of our high-value products. Challenges associated with managing waste more sustainably are encountered across the world and demand for ethanol and methanol is global,” Labrie says.
Enerkem’s Alberta Biofuels in Edmonton, Canada, is the world’s first commercial facility dedicated to the production of fuels and chemicals from nonrecyclable residential waste.
“We signed a 25-year agreement with the city of Edmonton to take their nonrecyclable and noncompostable garbage and turn them into methanol and ethanol. This facility will help them increase their waste diversion rate from above 50 percent today to 90 percent,” Labrie says.
Labrie says the Edmonton facility is currently expanding its product offering by adding a biomethanol-to-ethanol conversion module which will allow the system to start producing ethanol in 2017.
The facility also has recently obtained certification from the International Sustainability and Carbon Certification (ISCC). This proves that the facility complies with stringent criteria in terms of greenhouse gas savings, sustainability and traceability of the entire supply chain and is compliant with the European Renewable Energy Directive (RED).
Enerkem already sells its biomethanol as a renewable chemical in North America, and with the ISCC certification, has the option to export it as a biofuel in Europe.
gasification on display
Sierra Energy’s system requires a modified blast furnace. The company injects oxygen and steam to turn it into a robust and inexpensive gasifier that Hart says can take just about any waste stream and turn it into a medium British thermal unit (Btu) syngas (hydrogen and carbon monoxide).
“There is no waste left over from our process,” Hart says. “Everything introduced to the system is recycled at 4,000 degrees Fahrenheit.”
Sierra also is building a Zero Waste Innovation Park (ZWIP) outside of Sacramento, California.
“We hope to demonstrate not only our technology there, but provide a setting for cutting-edge recycling, gasification from us as well as anyone else who wishes to demonstrate, composting, anaerobic digestion and other technologies that can take any form of waste and turn it to higher value products,” Hart says.
The only requirement at ZWIP is that all technologies’ books be open—all emissions monitored and all metrics published under the auspices of the University of California-Davis, adds Hart.
“We want to provide a place where civic leaders from anywhere in the world can see where the industry is going in a single visit,” Hart says. Thegasifier there would handle at least 100 metric tons of MSW per day.
Nobody wants to upset the regulators. However, just as there have been with other innovative practices, regulators may need more time to catch up with the technology’s advancements.
“It can be difficult. On paper, [gasification] looks like the right thing to do,” Koczaja says. “The question is how to do it within a regulatory framework.”
The Pigeon Forge plant is on a temporary hold until regulatory issues are ironed out. Koczaja notes Tennessee state regulators are working with the federal agencies to clear the way for the plant to move forward. “There are regulatory ambiguities to resolve,” Koczaja says.
Hart says that, at a recent tradeshow, Sierra received signed orders for more than a dozen of its Pathfinder systems. These units process 25 metric tons per day of waste to produce about 1 megawatt (MW) of baseload, carbon-negative power at $6.95 million each. The contracts are contingent on the success of the company’s first commercial system.
“We have not done any advertising for this system yet as we are investigating how we would ramp up production enough to fill these initial orders,” Hart says.
Kerester says she sees two major areas for potential growth in the market sector. One is syngas for solid oxide fuel cells. This is done for the hydrogen component.
Companies like the Swedish outfit Cortus are looking at ultra-clean syngas production. Kerester says that the system can use anything with a hydrocarbon base as fuel.
Not every company is booming. As mentioned previously, Ineos, a Swiss firm, closed its much-heralded operation in Vero Beach, Florida, in late summer.
The Indian River BioEnergy Center, which opened in 2013, was a joint venture with New Planet Energy Florida. The facility had been developing waste-to-ethanol technology.
The plant reported it had successfully converted several types of waste into bioethanol, including vegetative and yard waste, citrus, oak, pine and pallet wood waste, but throughout its three-year history, had experienced a host of issues.
In a January 2014 article on REWmag.com, site director David King said, “Bringing the facility online and up to capacity has taken longer than planned due to several unexpected start-up issues at the center. These efforts have highlighted some needed modifications and upgrades.”
Several months later, the company announced it had completed a major turn-around that included upgrades to the technology as well as completion of annual safety inspections. The company also was installing equipment to remove impurities from one of its process streams that it said had been negatively impacting operations.
Millions of dollars were invested in the Indian River plant. The facility, permitted to use MSW, was planned to produce 8 million gallons of cellulosic ethanol and 6 MW (gross) of power.
Labrie says Enerkem is not concerned about the Ineos situation. “Taking disrupting technologies to market is not an easy task and unfortunately not everyone succeeds,” she says. “We are confident we will see more success stories in our sector in the future.”
Koczaja is equally encouraged. “We definitely see the market demand going to MSW with landfills filling up. There have to be better ways to deal with MSW.”
A key challenge is figuring how to phase in the materials handled. A good starting point, he says, is easier-to-transform material like wood—thus the 80 percent wood load at Lebanon.
“Ten to 15 years out, MSW-to-energy will be the market,” Koczaja says. “It’s a great market, but complicated.” At Pigeon Forge, PHGE plans to mix compost derived from MSW with wood and will move down that road.
Hart goes much further. The first hurdle, he says, is gasification has a reputation for being “crap.”
“There have been so many flimsy, fraudulent, intermittent, temporary or completely misleading technologies that gasification is only a notch about perpetual motion machines in the eyes of many experienced engineers,” Hart explains.
He continues, “We hope that our technology, as well as others who are now demonstrating gasification 2.0 will be able to roll-back that history. There is no other technology that can do what gasification can do.”