Powerhouse Energy Group PLC (LON:PHE) Executive Chairman Keith Allaun caught up with DirectorsTalk to discuss their interim results, their G3 system, the waste-to-energy market and the opportunities for the company
Q1: Now Keith, you’ve just published your interim results, could you talk me through the operational highlights of the period?
A1: Well Giles, the most significant highlight of the period was the completion of a relatively robust testing and commissioning programme for our new G3 gasification reactor in our Brisbane engineering facility. The focus for the company over the past 18 months has really been to dedicate all of its energies and all of its resources on the redesign, really the design from first principals, from the ground up of a robust commercially viable and easy to operate gasification reactor that really positions Powerhouse Energy Group as a player in the waste energy market.
Q2: So what are the main attractions of the G3 system and its main uses?
A2: Well the main use of course is really to eliminate waste from landfills, to help divert waste from landfills, to eliminate incineration, a misnomer that many people confuse is that gasification and incineration are in some way linked and they’re not. Gasification happens in ultra-high temperature in the absence of oxygen or in a very controlled environment which we’re controlling the input of gases, the input of humidity and water in an effort to tune the synthesis gas that is produced in the gasification reactor. So in a gasification process smoke is not produced, we’re not creating smoke and soot and stuff that we are then releasing into the atmosphere as incinerators do, rather we’re effectively demolecularizing the waste feedstock that comes through the system and recombining those molecules into coherent molecules of carbon monoxide and hydrogen into methane. When that process goes through its full cycle we end up with a gas that we refer to as a synthesis gas or syngas and that syngas becomes a viable low calorific fuel for the powering of either reciprocal engines or turbines and additionally one can apply advanced technology to separate the stream of hydrogen from that synthesis gas and use that to power fuel cells.
Q3: So with the testing complete you’re now starting the commercialisation stage of G3, what are your plans for this?
A3: Powerhouse Energy Group’s plans are to focus initially on a number of key markets and there are some substantially sized markets in the world that are not being well served and really there for the elimination of hazardous waste, there for the elimination of municipal solid waste with a mechanism that reduces the amount of transport, with a mechanism that reduces the cost of landfills, of the environmental cost of landfills. One of the key components of the G3 system is that it allows us to build modularly so in units that are say 50 tonnes per day in size, we can literally connect those as though they’re Lego blocks and allow us to build a 50 tonnes, 100 tonne, a 400 tonne, a 2,000 tonne per day facility using these Lego blocks. The nice things, the really nice things about that is that at the 50 tonne level the footprint is such that it can literally be integrated into a neighbourhood facility, into a community facility, it’s not required to just be a specialised facility far from civilisation so we can eliminate the CO2 footprint of transporting this waste miles and miles to have it destroyed or have it landfilled.
I think one of the things that’s important is that our audience understand that landfill is not an innocuous process, yes it takes up land but there’s degradation that occurs when organics have been instilled into the land and that degradation produces vast amounts of methane. If that methane is not captured, in today’s waste eco system 90% of that methane is not captured, and that methane ultimately is discharged into the air, it just makes its way to the surface, it’s discharged into the air and that is a greenhouse gas that 20 times more derogatory to our atmosphere than carbon dioxide. So we eliminate that process and we allow people, a community, to engage our technology in situ, in the community where it can convert the calorific value of their waste stream into actual electrical generation that then can be sold into the grid, send back to the homes and thereby eliminating a number of hazards along the way.
Q4: Would you be able to explain a little bit more about the size of the waste-to-energy market and the opportunities that it presents to Powerhouse Energy Group?
A4: The waste-energy market is one that has been growing annually for 20 years, it’s expected to grow by another $10 billion a year over the next 9 years or so, it’s anticipated to be something in the neighbourhood of $35 billion market annually in the western world over the next 9 or 10. That $35 billion doesn’t represent the fact that in that same period of time a number of existing technologies are going to come off line, the number of incinerator facilities that are being permitted is slowing dramatically, people don’t want an incinerator facility co-located near where they live. We’re finding that councils are taking much longer to permit things like incinerators whereas our gasifier again doesn’t have a smoke stack, we’re not releasing emissions into the air, we’re converting the calorific value of the waste into a synthesis gas and then that gas is fully utilised in the creation of electric power.
So the opportunities that the growth of this market represents, it’s not just the growth of the overall market but there will be a substantial market in the replacement of equipment that is currently depreciating. Incinerators into which people have made billions of dollars of investments already are going to be coming to the end of their lives and we’re going to have the opportunity to compete for that business because Powerhouse Energy Group are now positioned to compete for business that is 2,000 tonne per day plants without significant difficulty.
