New Horizons Energy – Hitting the Gas

Brochure

Brochure

New Horizons Energy is a subdivision of Clean Energy Africa, a large group of companies that seek to provide environmentally friendly solutions to the continent’s growing energy demands. New Horizons is developing Africa’s first and largest waste-to-energy plant in Cape Town in partnership with Waste-Mart. EBM spoke to CEO Egmont Ottermann about the challenges of developing this new technology.

 New Horizon’s waste and landfill processing plant is designed to exploit Cape Town’s overflowing landfills and convert municipal, commercial and industrial waste into an alternative energy resource via biogas generator systems.

Ultimately, the company plans to achieve a 100% diversion of waste from landfills into its generators, and supply liquefied petroleum gas (LPG) and liquefied CO2 to the area’s industrial markets. The system is also able to produce high-quality methane, although this is only being produced in a stop-gap capacity to alleviate the Western Cape’s current gas shortage.

Ottermann has been with Clean Energy Africa for just over a year, and was hired to work on the Cape Town project thanks to his experience as a group energy manager at PPC South African Cement. His previous focus was on processing alternative fuels for the cement industry, developing strategies for providing energy to isolated communities including biofuels.

Thanks to the unique nature of the project, he tells us that Waste-Mart’s role is more than just providing the money for the development – it’s providing the fuel for the entire facility. “Waste-Mart is committed to supply all the waste to the plant,” he added. “There are other companies that do supply to the plant but not necessarily on long term contracts because you can’t build a facility like the plant and then not make it available to the market.”

On the up

 Currently, biogas is an industry very much in its infancy in South Africa, especially when compared to other renewable fuels such as solar or wind. However, Ottoman continues, the scope for successful implementation is enormous.

“I think in the long term – long term meaning the next 20 years – there is massive potential, but I’d like to warn against an isolated approach, simply because this is just a part of a larger waste management solution. If you really want to achieve high-level diversion rates of material from landfills you need to put the infrastructure in place.

“If you look at the waste hierarchy the most important part is of course reuse, then you get the recycling part. Somewhere in the middle, before you start throwing stuff away and burning it, you have energy recovery. That’s what we’re doing here, we’re recovering the organic energy out of the waste and selling it as gas.

“But once you start doing that, where do you go with it? At the moment there aren’t many places with high enough gas prices and high enough landfill for this to be practical. That’s why we chose Cape Town, which has high landfill prices and a gas shortage. In other parts of the country landfill prices are low and gas prices are lower at the moment – but we’re confident that South Africa is starting a growth curve for waste energy because the economic conditions are getting closer to reality.”

It’s already a reality in Cape Town, and Ottermann believes that other parts of South Africa will be proposing new plants within 5-10 years and rolling this technology out in full in the next 20. As he points out, the plants are using known and proven technology – a recycling facility and a gas upgrading plant, and that means that the glitches have been ironed out and construction costs are reasonable.

Demand

At the same time, demand for land is increasing. The environmental pressures on landfilling are rising too, and landfilling is becoming more expensive because the sites are being built to higher standards and their true costs are being taken into account.

“People start realising the cost of it,” says Ottermann, “and soon as that happens that brings along some costing models and then suddenly the realisation that hey, clean energy is actually competitive dawns, because it already incorporates all those extraneous details.”

Regardless, the future looks bright.  “Of course, the publicity we have received from the current project has brought a number of other projects to the table,” Ottermann continues. “But we are not in advanced status with any other project at the moment, because we have to focus on getting this one to work and learning from the mistakes we made. The main plan for next year is to make sure this project operates well and becomes profitable as soon as possible from a shareholder perspective.”

“As it is a recent financed project we have a lot of debt, so the quicker we can pay that back the quicker the shareholders will see some return. It’s difficult to say when we’ll see a proper return depending on price inflation, particularly gas prices, but we’re looking at typically 7-8 years.”