Ze-gen Ramps Up its Waste Gasification Process: Lessons from a Clean-Energy Startup
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reduce recycling. But that’s an “illogical” fear, Davis says, since C&D waste like that used in Ze-gen’s demonstration plant has already been recycled—the company gasifies what’s left after everything recyclable has already been recovered.
Fortunately for Ze-gen, the Waxman-Markey climate and energy bill passed by the U.S. House of Representatives this summer includes a provision ensuring that C&D waste gasification would count as a form of renewable energy. Davis says two large non-governmental organizations lobbied specifically on Ze-gen’s behalf for the inclusion of that language. “I’m not allowed to mention the name of the groups that lobbied for us, but they recognize the perversion of disincentivizing advanced technology while awarding incineration and landfilling,” Davis says.
The Senate, however, has yet to come up with its own version of climate and energy legislation—so Ze-gen could still use some friends in high places.Be open to redefining your market as the economy dictates.
The main problem for U.S.-based energy entrepreneurs has always been that fossil fuels are so cheap here, meaning there’s little incentive to invest in alternatives. In 2008, when petroleum and natural gas prices shot up, it looked like the economics of cleantech might finally be changing, but the spike was short-lived. That could force Ze-gen to look outside the U.S. for its eventual commercialization partners, not to mention its customers.
“A year ago, natural gas cost around $12 per mmBTUs [million British thermal units], and today it’s $3 per mmBTU,” Davis observes. “It’s very difficult to imagine going ahead and building a plant with coventional financing, unless there are either [regulatory] incentives or higher fuel prices. That’s not an argument for giving up, but rather for looking to places that have different economics than in the U.S. We have very cheap natural gas relative to the rest of the world, other than the Middle East. It’s going to stay cheap for a while. But if you go to the U.K. or other countries dependent on natural gas, things are very different.”
So, look for Ze-gen to start exploring foreign markets soon after building its next plant. And watch this space for further developments—Davis says news about the company’s joint venture agreement is coming soon.