Galaxy Green Energy, Inc. – One Man’s Trash Is Another Man’s Renewable Energy

China, the world’s largest emerging economy, is continuing to experience economic maturation and urbanization of an unprecedented scale. The ballooning urban populations are causing tremendous pressure on energy producers, coupled with enormous amounts of waste. According to Chinese state-owned news outlet People’s Daily, the local government of Shenzhen recently announced plans to construct three waste-to-energy projects between now and 2019. Based on official data released by the Chinese government, the southern city located in the Guangdong province generates approximately five and half million metric tons of urban waste every year, with the number growing at six percent annually. The planned daily processing capacity of the three plants will exceed ten thousand metric tons, equivalent of about two thirds of the amount of waste the city’s residents generate.

Galaxy Green Energy, a firm at which I serve as an advisory board member, is a Shenzhen-based company that focuses on constructing and operating such type of waste-to-energy projects that convert everyday solid waste to electricity by the process of combustion. According to Waste-to-Energy Research and Technology Council, a Germany-based environmental research group, the entire combustion process occurs in various stages, whereby “incoming waste enters the combustion chamber and advances experiencing different temperatures [inside a furnace].” Through these stages, the waste is dried and then oxidized, leaving only water, carbon dioxide, ashes, and of course, heat. Heat generated in the process is used to power steam turbines which in turn generate electricity. The ashes and incombustible metals are then collected, cooled, and recycled. What is notable is that the ashes can be transformed into high-quality construction materials used for heat and noise insulation.

Much debate still remains around the net environmental impact these waste-to-energy plants have. In the case of China, however, the net impact is likely positive. According to sustainability expert Warren Karlenzig, Chinese companies, for years, have been illegally dumping their waste on the sides of dirt roads, empty fields, and waterways. Corrosion of topsoil and poisoning of drinking water are becoming ever more prevalent. Waste-to-energy plants can help alleviate the soaring energy need while offsetting the demand on coal fire energy plants. During low peaks of energy demand, the Chinese government mandates that certain types of energy producers be shut down and give priority to “clean energy producers” such as wind and solar plants. Interestingly, the waste-to-energy plants have even higher priority over wind and solar plants – thanks to its “two birds with one stone” nature.

Going forward, firms like Galaxy Green Energy will continue to face an uphill climb in terms of achieving mass adoption across China. According to Renewable Energy World, an independent online news publication, “China currently has 20 waste-to-energy plants in operation spread across 15 cities, including Zhuhai, Hangzhou, Shanghai and Shaoxing…[yet] Chinese cities identified as having a daily waste incineration capacity of more than one thousand tons are no less than several dozens.” Educating the vast addressable market in China therefore becomes the primary task. However, the key stakeholders span across government officials who are risk-averse when adopting unfamiliar practices, to local residents who lack basic information on the potential impact the plants have on their lives, and finally to potential investors who are unfamiliar with such a new type of assets. The key challenge for leaders of Galaxy Green Energy would be to build its first operational plant to demonstrate to all the key stakeholders the viability of the waste-to-energy economic model and the net positive impact on the lives of the local residents.

With every new municipality Galaxy Green Energy enters, the key question continues to repeat itself – where is the best place to start the conversation: local politicians, environmental activist groups, or investors? [619 words]

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4 thoughts on “Galaxy Green Energy, Inc. – One Man’s Trash Is Another Man’s Renewable Energy

  1. For a country and economy that is growing (albeit more slowly now) at a fast rate, waste management and reduction is a critical objective. I agree that waste-to-energy plants provide a unique solution that targets both reduction and reuse. Several factors here that I think are also important to consider:

    1) Context: Aside from economic and population growth aspects, China seems to be a unique political climate to launch these types of companies. Adoption could be simplified if top government officials identified waste-to-energy projects as a priority. The top down governing system, while more nuanced in reality, could facilitate execution and adoption at the municipal / local level. Furthermore, construction and management of the plants, along with any required infrastructure, could be completed relatively quickly. Of course, there are several challenges – the two most salient are a) convincing top government officials waste-to-energy is a priority, b) scaling the production technology and max capacity.

    2) Waste Type: The primary operations of the process are incineration and reclamation (for metals and inert particles). While this would work for the 192 million tons of solid waste China produced in 2016, the chemical waste, most notably from manufacturing smartphones and consumer electronics, are less amenable to the reclamation process. In 2009, China produced 95% of the world’s supply of rare earth metals (see: http://www.bbc.com/future/story/20150402-the-worst-place-on-earth) which resulted in tremendous amounts of toxic runoff. As demand for consumer electronics increases, so too will the by-products of manufacturing. Such run-off which is likely to become an increasingly larger part of China’s waste does not serve as a good substrate for waste-to-energy. Thus, the problem of waste management still persists.

    All things considered, the waste-to-energy programs are critical for China’s long term development. While growth rates have dropped from 7.3% to 6.9% between 2014 – 2015, the growing middle class will translate into greater consumption. Energy-to-waste provides a promising solution to handle the resulting waste production.

  2. Trash – what a great solution to clean energy. Alan, I completely agree that the notion of two birds with one stone is extremely powerful in incentivizing a shift to energy production using waste. I do think however that a major barrier for adopting this kind of technology is costs. So long as waste-to-energy won’t be cost competitive to other green technologies, increasing the percentage of electricity produced by it will be an uphill battle. As such, I see two paths forward for companies like Galaxy Green Energy, Inc.: One, focus on innovation and technological improvement with the goal to significantly reduce costs; Second, focus on lobbying for state or local incentives for waste-to-energy technology. Such incentives may be tax related, price subsidies and so on. I think that looking into how the Photovoltaic industry has grown to be widely adopted after facing similar challenges in the past, can prove to be insightful. Good luck going forward!

  3. Landfills not only add to the carbon footprint but, like you mentioned, the pollution of our environment. The waste that we generate is astronomical and something has to be done with it, rather than putting it in a dump. This concept of burning waste is not new, but its starting to become economically and environmentally feasible. Another key position these waste to energy companies advertise is that there is a carbon footprint to collecting waste and bringing it to the landfill. A local municipality, Millbury Ma, has a waste to energy company, Wheelabrator, that takes waste from the surrounding area and incinerates it to provide electricity to the local area. The citizens of Millbury are financially compensated to bring and dispose of the waste that is brought by other municipalities. This is just one of many incentives that could make this feasible not only here in the United States but other parts of the world. As the cost of waste increases, it will be fun to watch this industry grow as this has real potential around the world.

  4. Alan – great article. Waste-to-energy facilities are great sources of what I consider to be environmentally friendly energy. This energy comes from waste, diverting large land uses of landfill into energy. Typically a facility like the one described will convert trash to energy and only have to dispose of ash. Ash will be usually between 10-30% of total weight that entered into the combustion chamber. This greatly reduces the volume and need of land fill areas. ( http://www.deltawayenergy.com/wte-tools/deltaways-top/ )
    Additionally – great advances have been made in technology to clean the fumes of these facilities. Electrostatic precipitators and NOx reducers can help alleviate problems of combustion.
    In general I do believe this is a great technology that should be adopted in many areas of the world. Hopefully the CAPEX of these facilities and ongoing OPEX make them economically feasible on a $/kwh basis.

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