Recycled Energy Development Inks First Deal

By Jonathan Shieber
February 06, 2008

Recycled Energy Development LLC has signed its first contract and agreed to commit between $45 million and $55 million to develop a waste heat conversion facility for the silicon producer West Virginia Alloys, a subsidiary of Globe Specialty Metals Inc., the companies said.

Launched late last year with a $1.5 billion commitment from private equity firm Denham Capital Management to develop energy recycling projects worldwide, Westmont, Ill.-based Recycled Energy Development will be building a 40- to 44-megawatt heat exhaust recycling project, for the Alloy, W. Va.-based West Virginia Alloys.

Expected to go into operation in 2010, the project will annually produce more than 300,000 megawatt hours of clean energy and eliminate 290,000 metric tones of greenhouse gas emissions, according to the companies. The plant will use heat from the customer's silicon furnaces and convert that into electricity.

West Virginia Alloys will buy the power from the plant under a long-term purcahse contract. And we weill "reduce our power that we are taking off the grid," said West Virginia Alloys President Arden Sims, in an interview. "Currently we buy 60 megawatts from a hydro plant that is dedicated to this facility and the balance is purchased off the grid from American Electric Power."

At current costs, West Virginia Alloys spends approximately $10 million per year on power bought from AEP, Sims said.

"We're taking energy that we would be losing, and we're turning it into electricity that is at a competitive rate today. As energy costs continue to increase over the next 25 years it will make the plant more competitive and more efficient."

As energy costs continue to climb, the 25 year fixed rate contract that West Virginia Alloys signed with Recycled Energy Development should provide a competitive advantage, according to President and Chief Executive Sean Casten.

It's an advantage that other companies will be using to address skyrocketing costs of power in industrial regions of the country, Casten said.

"The price of power is going up everywhere in the country, and it's going up most dramatically in places where it used to be pretty cheap," Casten said. "The price of a new clean air coal-fired plant is close to the cost of a natural gas plant... [For] people who are used to power prices of 3 cents or 4 cents those numbers basically kill the economy."

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