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Investing green: Clear potential for waste-to-energy technologies

By Simon Kent - 11 Jan 2011 19:42:3 GMT
Investing green: Clear potential for waste-to-energy technologies

A report into the waste management and recovery industry has identified clear potential for waste-to-energy technologies within the UK and energy-hungry developing countries. But while the scarcity of metals and energy is driving the sector forward, legislation, regulations and lack of finance are still posing challenges to the sector.

Published at the end of 2010, the report from the London Environment Investment Forum, Investor Perspectives on Waste and Resource Recovery, is based on interviews with directors from international investment companies. In it they give their opinions on investing in the sector, the opportunities presented and the possible contribution these businesses make to the reduction of global warming.

According to Cédriane de Boucaud, director of Curzon Park Captial which was established specifically to invest in the clean-tech sector, municipal and personal waste-to-energy processing is still not yet an efficient enough business. "However," she says, "this is where big money is if we can get it right in the medium to long term."

Nigel Taunt, managing director of Impax Asset Management agrees with this assessment of waste-to-energy's potential: "waste-to-energy will increasingly be the story," he says. "Every non-incineration waste treatment will need an energy solution as part of the package."

The clean-tech businesses attracting investments are diverse and leading edge. They range from Secure Energy Services who specialise in the processing of oilfield waste to Ensyn, a company that uses breakthrough technology to convert biomass into pyoil, a substitute for oil in heating, power production and transport fuels.

However, investor's enthusiasm is tempered by the ongoing challenges faced by the sector as Peter van Gelderen, a general partner at ICOS Capital, explains: "There are three main risks connected to companies that are active in this area," he says. "The availability and ownership of waste and resources, consistency of government policies and the impact of strong price fluctuations – both up and down – resulting from worries over resource scarcity, which can be driven by reality and by hype."

Despite this there is no doubt that each of these organisations are making their contribution to slowing down climate change. As Nigel Taunt says: "Diversion from landfill reduces GHG [green house gas] emissions and energy recovery reduces the use of fossil fuels."

He concludes: "Small local facilities – new technologies are more suited to this than big landfill or incineration projects – will help reduce transport costs and resulting emissions."