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"The Company uses its advanced gasification technology to generate safe, green energy from over 62 different kinds of feedstock, such as municipal, agricultural and industrial waste, biomass, and plastics. The Company collaborates with waste operators, developers, technologists, engineering, procurement, and construction (EPC) contractors and capital providers to build sustainable waste elimination and green energy infrastructure. It operates through two segments: Power Generation and Technology Sale. The Technology Sales segment is engaged in the sale of gasification technology and associated engineering and design services. The Power Generation segment is engaged in the development and operation of renewable energy electricity and heat generating plants. Its gasification projects convert waste into clean energy, hydrogen, biofuels, synthetic natural gas (SNG), and biochar from various sources. It operates across seven markets."
30-Silver - I guess like any waste to energy plant there devil is in the detail, however this doesnt stop a sorting method and some form of variable fee for processing. The cleaner and less non-useful fuel feedstocks provided by the waste company, the lower the fee charged. To be honest, this could be a business in itself. Compared to the other projects the company is involved in the RDF stream you speak about is just one part of it. "QTEC technology is at the heart of leading-edge, waste-to-energy and biofuels plants which convert waste into clean energy, hydrogen, biofuels, SNG and biochar from four sources:" https://eqtec.com/gasification-projects/
@MyIPA - thanks for the info. Unfortunately it's a story I've heard many, many times before and I've physically visited gasification plants (advanced and then some not so) in locations throughout the UK, Europe and Asia - all of them had the exact same issues - heterogeneous feedstocks (and in particular major issues with low ash-melt point plastics leading to clinker formation). Not a single one of them ran consistently at anywhere near the stated capacity (once they moved out of the safe, sterile test environment into the real world, running on genuine, mixed waste feedstock).
Gasification of clean biomass to make biochar works 100% technically, but with the prices of clean biomass nowadays, it's potential economic suicide.
You're right in that feedstock cleanup (for example to move from MSW to RDF, or from RDF to SRF) is possible, but it's expensive, which as you rightly point out results in the reduced gate fees that can be charged by the business accepting the waste. Taking SRF at £40/tonne means you need to get a LOT for the power you produce, which lends itself to very small, on-site applications predominantly focused on the displacement of diesel for power-constrained sites - I know of two such sites that have recently gone through planning and I'm eager to see their performance.
"Waste to X" applications such as hydrogen, syngas methanation, synthetic oils etc is definitely a possibility, the issue for me is on economics, in terms of can you actually get a customer for the byproduct which whilst technically very clever - might be prohibitively expensive.
30silver - very interesting and great to get an expert driven opinion on the technology! I guess he we are specifically talking about waste to gas rather than waste to energy:
When I mentioned reduced gate fees I meant that the more work the waste handler does in making sure the waste is clean, the less the W2E plant (no idea if that is a usual acronym) has to do so it can charge less money from the waste company to handle the waste.
I think it is the other way around to what you say - the waste company usually -pays- the waste facility to get rid of the waste via whichever method, and the energy is then sold. The waste company has already charged the customer (be it a dump or council or whatever) to take the waste away, part of which will be these gate fees. Otherwise, what incentive does the waste company have to not just dump the waste in a field.... or even bother to collect it in the first place? They certainly don't get paid by the energy facililty.
A) pay a dump fees to dump it and store it
b) pay a W2E facility fees to take it and create gas -> energy for it (cheaper as offset via gas (energy) generation).
Am I missing something?
@MyIPA - you're absolutely correct about the gate fee issue, I think maybe I wasn't clear. Essentially the W2E operator charges a gate fee for the material they receive, and the more fussy they are (i.e. the more work the waste processor has to do in providing the material to the W2E operator) then the gate fee falls, but this means that the W2E operator has less gate fees for their material (it also usually means it rises in CV, which means the same plant can process less tonnage, so you get hit twice if your'e the W2E operator) so they need to recover more from the sale of power / gas / oil etc.
Let's say that Eqtec are running their own plant, getting the waste from, for argument's sake, Biffa.
Biffa collect MSW from council contracts at around £140/tonne, give or take, then they have options:
- They can send this straight to large incineration (such as Wilton, Runcorn, etc) and pay £100-110/tonne.
- They can spend £20/tonne to process it to RDF, gain some revenues from recyclate sales, then sell that RDF to a W2E plant at £90/tonne.
- If Eqtec want a very clean waste, the work that has to be done might cost £40-60/tonne, as such the residual gate fee to Eqtec in that scenario is c.£40-50/tonne, which would in most cases completely break the economic model.
All of those figures are for example purposes only, I've no idea what the processing costs are as I've not seen them published, the gate fees are widely available (although I'd suggest a pinch of salt with them).
@30silver
Nope still not clear - in one breath you say that the W2E pays for the waste, and then you say depending on how clean it is the waste collector sells it to the RDF (W2E in my example - a catch all).
Waste Company +£140 from council
Waste Company pays e.g. Runcorn £100, profit excluding lorry/labour/admin costs £140-£100=£40.
Waste company cleans waste level 1 (e.g. mid-pedantically clean(!)) £20, Pays RDF £80, profit unchanged as RDF has to spend another £20 cleaning it to level 2 if needed
Waste company cleans waste level 2 (e.g. 3/4pedantically clean(!)) £40, Pays RDF £60, profit unchanged as RDF has to spend another £20 cleaning it to level 3 if needed
Waste company cleans waste level 2 (e.g. fully pedantically clean with a bow wrapped in gift wrap(!)) £70, Pays RDF £30, profit unchanged, RDF needs to do no extra work to process the waste.
From a governmental point of view to avoid a build up of dumped waste, there could even be incentives to offset an negative part of the economical model as converting the waste to something useful is always better than just sticking it in the ground/shipping it to another country (of which I think noone takes our rubbish anymore).
This applies to the 60+types of waste, depending on what is relevant. In addition, I would say more smaller, local facilities trump fewer larger facilities due to waste transport costs and distance users are from the gas/energy outputs.
Sorry I mis-typed when I put sell, it was meant to be "send". You're right that the profit level to the waste processor seemed to remain constant, however the idea is that each stage of "cleansing" removes material that can either be sent off at little to no cost (such as rubble / hardcore) or could be sold for recycling (such as glass, metal, plastic etc).
As such each stage would have a weight reduction also, so in your example level 1, you'd have something like:
Waste Company:
Receives 1,000 tonnes of MSW @ £140 = £140,000
Cleans 1,000 tonnes @ £20 (£20,000)
Removes 100 tonnes @ £0
Sells 100 tonnes £40 = £4,000 (plastics, glass etc for recycling) It's actually more complicated with PRN's etc.
Sends 800 tonnes to EfW @ £80 = (£64,000)
Net profit: £60,000. (140k - 20k + 4k - 64k)
30silver - no worries!
Yes reasonable route there. Everyone makes a profit - even if they have to double or triple the cleaning. Plus the EfW makes money on gas/energy outputs (obviously also has costs e.g. removing their unusable waste plus ashes).
I think most new investors are willing to give this pivot strategy a chance. I am.
Looks like we now have the trolls out trying make £5 on their CFDs.
I think you're adding a step in which isn't needed, Silver. Eqtec won't own or run any plants (save MDC's) and the model is for large waste operators to own them theirselves IRO RDF, MSW etc. Small biomass are much more locally operated, especially in California, where I believe they're essentially paid by the government for the waste for fire prevention.
In either case, although Eqtec are pursuing the large RDF plants (and insurers are willing to insure the Eqtec technology at a very high operational availability), they have said their sweet spot for the tech is the NF size plants, running on waste biomass. These can be rolled out fast and (comparatively) cheap and are already almost cookie cutter in their similarity plants, with just minor adjustments for specific feeds.
@Trytrytryagain It could be, as I said I'm familiar with the Company from quite some time ago, including a face to face meeting with the Chairman way back in 2018, I wasn't sure about the application of the technology on RDF then, and I can't find any evidence on the website (I'll admit I'm a LONG way from up to date on the RNS's etc) that they have any RDF plants up and running - the usual pre-requisite for an insurance wrap on performance. If you can point me towards the insurance company who will provide that cover, I know of a project site looking for technology and this would be a massive de-risking exercise for the developer as performance guarantees through an EPC wrap is not only nigh on impossible to find for kit other than HZI, but prohibitively expensive unless you're at massive scale (at which point you'd be using HZI anyway).
30silver - Ah I didn't pick up on that you thought the company was actually running these entities. No, the pivot from November 2023 is basically equipment and engineering designs/support so the profit margin is up to the local entity to ascertain depending on local waste needs and requirements (e.g. fire regs in california).
Might be worth revisiting the site and rereading the recent RNSs.
GLA
@MyIPA - I'm definitely well out of date, luckily I've got a bank holiday weekend to catch up.
Welcome 30silver!
Regarding the insurance mentioned previously by Trytrytryagain, fyi I've copied below some details taken from Arden's initiating coverage report, June 2020. Arden were EQTEC's broker at the time. Don't know who the insurer is though....
"Due to the commercial nature of its technology and the highly reliable operating history of its plants, EQTEC is able to offer its customers warranties on the performance of its gasification technology and an international insurance underwriter will insure these warranties.
This has material significance in providing customers with confidence around the soundness of its technology and increases accessibility and ease of securing financing from lending institutions or other providers of energy infrastructure investment.
EQTEC typically offers its customers the following warranties:
1. Commissioning Performance Test
Following the completion of construction, a plant undergoes a cold and hot commissioning process, prior to handover to the customer. A 48-hour performance test is carried out to an international set of standards. If for any reason the performance test fails to meet the necessary prescribed operating performance (for example, due to a fault with one of the equipment modules or the failure to meet a specification for plant availability, syngas composition or syngas purity), EQTEC offersto replace any parts or to adjust the system up to 15% of the total capex value of the plant. With insurance, 90% of the value of the plant is covered in the event of a failure of a commissioning performance test.
As a matter of fact, EQTEC’s equipment has never failed a commissioning performance test - but such warranties and insurance provide a high level of comfort to customers and partiers engaged in financing the plants.
The insurance premium costs the equivalent of approximately 5% of the capex of the plant. 10% is deductible and insurance covers 90% of the capex value.
2. Performance warranties on the first 6-24 months of plant operations
EQTEC offers performance warranties on between 6 to 24 months of operations following commissioning, depending on a customer’s demands. Such performance guarantees are also important to parties engaged in the funding of plants.
Performance benchmarks are based on projections of a project’s financial model, and include attributes such as kilowatt hours of electricity and heat generation (which is determined by syngas output and purity), system availability and ultimately the revenue generated by the operation of the plant.
Insurance covers revenues generated from the plant and its ability to meet debt service ratios of the lender(s) that financed the plant. Debt service ratios commonly require the plant to always generate above 80% of forecasted benchmark revenues.
2. Performance warranties on the first 6-24 months of plant operations (continued)
Should the customer demand it, performance warranties can be extended beyond 2 years, and insurance cover for this can also be extended. Premiums for performance insurance after 2 years of operation fall sharply, if there has been no breach of performance benchmarks during the previous period.
3. Liquidated damages / delays (can be covered by insurance)
Liquidated damages and delays to construction and commissioning of plants can be covered by insurance."
@Rollon - thanks for this, interesting stuff and all sounds great in principle - I'll have a look into how it might work in practice and in particular what feedstocks this covers.
If they'll guarantee 80%+ output at 8,000 hours per annum on MSW in a gasifier and have an insurance company back that up (Munich RE comes to mind as one of the only two I've ever seen do it, can't recall the other) I'll eat my hat - and recommend this tech to a friend of mine who's looking for tech.
For what it's worth, Munich RE have been named in a presentation slide as one of EQTEC's (current or prospective) 'finance' partners but I'm not sure in exactly what capacity that is...
Allegedly 62 feedstocks for the pipeline of 200 and yet after 5 years in charge Palumbo has yet to deliver just 1 project up and running continuously as he admitted last week.
Over £50m squandered to date.
Any wonder the sharepice keeps tanking hitting new lows in this POS lifestyle company.
Spain plant has been running continuously for over a decade, Italian plant now running continuously, Northfork in the USA is in the final stage (hot commissioning) and will be running very soon. All coming together very nicely
Has the Spanish plant been running commercially making a profit for over a decade at the university dept?
Who's word you taking the Italian plant is now running continuously that was supposed to be up and running in November 2022 , would that be those fine purveyors of porkies Palumbo and JVDL perhaps ?
As of last weeks RNS not 1 plant was running continuously at a profit outside the uni lab.
I think you've forgotten the other Spanish plant foxy, the one at Movialsa, which stiarno is referring to...
Just to remind you it's an onsite, industrial plant at Mostos, Vinos Y Alcoholes, SA "MOVIALSA".
https://eqtec.com/the-first-olive-pomace-waste-to-energy-plant-in-the-world-using-advanced-gasification/
I'm afraid the share price begs to differ. Falling apart at the seems more like,
Hardly. Fallen in line with most other greens. We will rise with them on the next round. Probably as the market leader.
Can't disagree with the SP comments, but you can't just look at it in isolation. It is too easy to use the past SP as a benchmark but the highs were ridiculous and based on false expectations/sector hype so should be looked at in context and vs the sector.
Arguably, the company is more investable now than it was before the previous massive rise, especially at the SP now. Those invested at much higher prices will of course disagree.
Yes, lots of other things to be unhappy about here, but much of the SP decline is unrelated to actual company performance, poor as that has been.
For the record, my average is 61 having already taken an even bigger hit on my ISA position
@Roll, your correct the Mostos site has apparently been up and running for a decade thanks to one of Palumbos predecessors .
Now Like was stated yesterday Palumbo after 5 years as CEO has ceased to get one plant up and running continuously during his term since parachuted in by Alrair as of last weeks RNS.
As per the recent RNS:
"...Operational requirements centred mainly on non-EQTEC equipment that appeared to be in good condition, even according to the relevant manufacturers, but which for various reasons were unable to run consistently. ....These challenges have now largely been surpassed....The plant now finds itself in a strong position to operate continuously and is due, after some significant maintenance, to restart in April 2024".
These challenges have been overcome, and lessons learnt. Italy should be running continuously right now. In the USA, Northfork is next to go online very very soon. Blue Mountain is next on the list, with many more similar projects in the USA, all with similar feedstocks to Italy. After the Italy experience, getting these plants up and running will be a walk in the park.
Clearly doesn't now expect Verde to come through (Big Surprise there Dumbo), If they did expect Verde to actually stump up then that would make todays actions even more criminal keeping in mind the Verde conversion rate is $500K @ 2.35p and $1M @5.3p, Absolutely no way Verde are completing after seeing these gifts today, Would you ?
£500K on Feb 13
£245K on May 5
£200K on May8
Well David if this is an indication of your working capital needs, based on your revenue projections rather than reducing overheads by 20% you needed to reduce them by 80% or more !
What an absolute joke the management of this company are !!!