energy-from-waste … part of the solution october 1, 2008
TRANSCRIPT
Energy-from-Waste … part of the solution
October 1, 2008
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About Covanta
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Covanta Overview
• Covanta is the world’s largest Energy-from-Waste company– Operate in 8 countries and 15 states throughout the
U.S.– Headquarters in Fairfield, New Jersey– More than 3,000 employees worldwide
• Provider of long-term renewable energy and environmentally safe waste disposal– Recipient of numerous state and federal awards for
safety and environmental excellence
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$0.6
$2.2
$3.3
$4.3
1/1/05 1/1/06 1/1/07 1/1/08
$0.6
$2.2
$3.3
$4.3
1/1/05 1/1/06 1/1/07 1/1/08
Financial StrengthFinancial Strength
• NYSE Company (CVA)
• Enterprise value exceeds $6 billion
• Revenue exceeds $1.4 billion
• 2008 Financial Guidance(1)
● $550 - 575 million adjusted EBITDA● $380 - 420 million cash flow from operations
(1) As of April 24, 2008. This information is not being reaffirmed or updated as of the current date.
Covanta Market Capitalization ($Billion)
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Energy from Waste - Vital roll in U.S.Renewable Energy and Waste Management
Wood & Other
Biomass44%
Energy-from-Waste
18%
Geothermal17%
Wind20%
Solar1%
Recycling26%
Energy-from-Waste
8%
Landfill66%
Annual U.S Waste Generation = 388,000,000 Tons
Annual U.S Renewable Generation = 87,213,000 megawatt hrs
Source: 2004 Joint Study by Biocycle and Earth Engineering Center of Columbia University
Source: US Department of Energy, Energy Information Administration 2005 Report
• Covanta owns and/or operates 38 Energy from Waste facilities and 6 biomass to electric facilities with many more in planning and development
• Covanta produces almost 10% of America’s non-hydro renewable electricity – enough to power over a million homes
• Covanta converts over 5% of the nation’s post-recycled waste into energy
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Covanta’s Consistent PerformanceCovanta’s Consistent Performance
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Environmental Health and Safety Programs
• 24 Facilities in OSHA’s elite VPP STAR Program
– Covanta’s Alexandria facility received the VPP STAR award and our Fairfax facility has been recommended for the VPP STAR as well.
• Environmental Leadership– 23 EPA performance track facilities– First to install mercury control– New patented low NOx technology– Numerous industry, environmental,
and community awards• Virginia Environmental Excellence • Sustainable Florida Leadership• Michigan Clean Corporate Citizen
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About Energy from Waste (EfW)
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Safe, reliable waste disposal
Reduces greenhouse gas emissions
Clean, renewable electricity 24/7
Recover metal for recycling
Clean Energy from Waste
• Population growth
• Climate change
• Dependence on fossil fuels
• Resource management
Metal: 50 lbs
Power: 560 kWh
Ash: 10% of original volume
Municipal Solid Waste (MSW): 2000 lbs
EfW is a specially designed energy generation facility that uses household waste as fuel.
Waste is combusted to produce valuable energy and help solve some of society’s big challenges
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Typical EfW Facility Layout
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EfW 0.2 billion tons Recycling 0.5 billion tonsRecycling 0.5 billion tons Landfill 1.0 billion tons
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U.S.~ 90 EfW facilities ~ 30 million TPY
Western Europe~ 400 EfW facilities
~ 65 million TPY
Asia~ 325 EfW facilities
~ 55 million TPY
Landfill
Recycling/Composting
EfW
EfW roll in Global Waste Management
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Covanta in Virginia
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COVANTA FAIRFAX – Partnership/ Business Model
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The I/95 Energy/Resource Recovery Facility in Fairfax CountyThe I/95 Energy/Resource Recovery Facility in Fairfax County
• Began commercial operation in 1990
• Processes approximately 3,000 tons
of MSW each day while producing
more than 90 megawatts of renewable
energy
• Service Agreement Deal – Client
delivers waste and pays Covanta an
O&M fee to operate the facility
• In 2000, completed CAAA retrofit of the facility to lower emission and
meet new Federally enforced air emission guidelines
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The I/95 Energy/Resource Recovery Facility in Fairfax CountyThe I/95 Energy/Resource Recovery Facility in Fairfax County• All debt is paid off in 2011.
• The facility provides 13.7% of
Virginia’s Renewable Power (22%
excluding Hydro).
• Since 1990, the facility has:● Produced 10 million MWhs for the region—
enough to power 75,000 homes each year● Safely disposed of approximately 19M tons of MSW, avoiding the use of
19M barrels of oil● Recycled 375,000 tons of Ferrous metal and 3,500 tons of Non-Ferrous
metals
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The Alexandria/Arlington Resource Recovery FacilityThe Alexandria/Arlington Resource Recovery Facility• Began commercial operation in 1988
• Processes 975 tons of MSW a day while generating up to 23 megawatts of renewable energy
• Tip Fee Deal – Client pays a tip fee ($/ton) on all jurisdiction tonnage (2/3 of plant volume)
• In 2000, Covanta completed a $40M CAAA retrofit of the facility to lower emission and meet new Federally enforced air emission guidelines
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The Alexandria/Arlington Resource Recovery FacilityThe Alexandria/Arlington Resource Recovery Facility• In 2007, installed a new ferrous
separation system for metal recycling
• All debt is paid off in 2013
• Provides enough energy to power 20,000 homes each year
• Since 1988, the facility has:– Produced 4 million MWhs for the region- enough to power
20,000 homes each year
– Safely disposed of approximately 7,000,000 tons of MSW, avoiding the use of 7,000,000 Barrels of oil
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PermitLimit/Unit
2004 – 2006Actual Results
% Below Limit
Particulate (mg/dscm) 27 1.9812/Unit (avg) 92.7%
Dioxin/Furan (ng/dscm) 30 1.1466/Unit (avg) 96.2%
Mercury (mg/dscm) 0.080 0.0006/Unit (avg) 99.3%
Lead (mg/dscm) 0.44 0.0061/Unit (avg) 98.7%
Cadmium (mg/dscm) 0.040 0.0002/Unit (avg) 99.5%
SO2 (ppm) 29 1.78/Unit (avg) 93.9%
HCl (ppm) 29 1.08/Unit (avg) 96.3%
Actual vs. Allowable Emissions
Alexandria Upgrade Stellar Emission Results
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EfW - Benefits to the Local VA Host Communities
• Long Term Stable Waste Disposal Pricing• Clean Renewable Power – Less Demand for Fossil Fuel Power (Oil
& Coal)• Recycling:
– Recycling Credits: Ferrous and Non-Ferrous Metals Recovery– NOx Credits
• Reduces - Landfill Usage and Greenhouse Gases• Minimize Truck Traffic• Community Relations Programs / Charitable Contributions• Provides Local Employment – approximately 135 jobs• More than $3M spent on local businesses annually
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Recycling Rates
• EfW plants work together with community’s recycling program.
– Fairfax County - 35%– Alexandria - 29% (5% inc. in 07 – Fe Metal)
– Arlington - 42.7%
– Commonwealth of Virginia – 32.2%*
* 2005 data
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EfW Regulatory & Policy Landscape
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The Best Option After Recycling—Energy-from-Waste
250 million tons of garbage
dumped in landfills
Renewable energy generated from landfills - 6 billion kWh
30 million tons of
garbage is processed into
renewable energy
Renewable energy generated from EfW facilities - 15 billion kWh
Preserves land; offsets greenhouse gases; provides energy recovery five times greater
than landfill gas to energy
Energy-from-Waste
Landfills
A misuse of valuable land; generates methane gas – a leading contributor to
global warming; inefficient energy recovery
For every ton of waste processed in an Energy-from-Waste facility, we offset one ton of carbon dioxide equivalent by reducing the amount of methane generated by landfills
and decreasing our dependence on fossil fuels.
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• Adopting environmentally sustainable waste disposal practices– EfW is the most attractive, sustainable solution for waste disposal after recycling
• Generating clean energy from renewable fuels
– U.S. Environmental Protection Agency states EfW “produces electricity with less environmental impact than almost any other source”
– Baseload power – 24 hours a day, 7 days a week
– EfW can be important contributor to overall renewable portfolio
• Potential to produce about 5% of U.S. electricity needs
• Home grown electricity benefits energy security
• Reducing greenhouse gas emissions to combat global warming– Offsets up to one ton of carbon dioxide equivalent for each ton of waste processed
– Reduces need for landfills, which generate methane, a potent greenhouse gas
– Reduces dependence on fossil fuel power: one ton of waste ~ ¼ ton of coal
Environmental Benefits of Energy-from-WasteOne solution helps address 3 challenges
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United States• Recognized as renewable in 23 states and current Federal policy
• Federal legislation – outcome uncertain– Renewable electricity tax credits currently included – likely extension
– Renewable Portfolio Standard (RPS) and Climate Change being debated
– Whether or not EfW should benefit from these policies is specifically being debated
Europe• EU Landfill Directive –
– 65% reduction in landfilling of biodegradable Municipal Solid Waste– Significant Landfill taxes & other incentives to recycle and recover energy
• Not subject to CO2 emission caps
China• Preferential electricity tariff • Target 30% EfW by 2030
EfW Regulatory & Policy Landscape
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• One billion tons/yr of waste buried in landfills EfW Opportunity
• U.S. and Canada
– EfW re-emerging with higher fossil fuel prices
– Pending regulation on renewable energy and climate change will be the driver
• Europe
– EU Landfill Directive – significant impact on the U.K. in particular
– Increasing demand for renewable power generation
– Significant focus on Climate Change
• China
– Growing middle class and urbanization – increasing waste generation
– Land at a premium, making landfills less attractive
– Regulatory incentives for renewable power generation benefit EfW
Global Growth Opportunity in Energy-from-Waste
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