Cogen Pioneer, Equity Firm Team On 'Energy Recycling'

The Energy Daily, Vol. 35, No. 223
December 27, 2007

Nov 21, 2007 (The Energy Daily/Access Intelligence via COMTEX) -- TGN | charts | news | PowerRating -- Recycled Energy Development, an industrial cogeneration specialist, has teamed up with Denham Capital Management, a private equity firm, with the goal of developing a $1.5 billion portfolio of "energy recycling" projects that use waste heat from factories and other industrial facilities to generate power.

The Chicago-based company, dubbed RED, is led by Thomas Casten, a pioneer in the industrial cogeneration field who founded and led several other similar companies over the past 30 years, including Trigen Energy Corp. and Primary Energy Ventures.

Casten, who is chairman of RED, said vast amounts of energy are currently wasted at factories and power plants, and that cogeneration initiatives tapping that heat could help a wide range of companies not only cut boiler fuel costs but greenhouse emissions as well.

"RED sees climate change mitigation as an enormous economic opportunity for U.S. industry," Casten said in a November 15 press release announcing the joint venture with Denham. "By recycling waste energy, RED will improve industrial competitiveness, create large quantities of clean energy, significantly reduce greenhouse gas emissions, reduce the demand for fossil fuel, and stimulate economic growth."

Casten said recent studies done for the Environmental Protection Agency and Department of Energy show recycling presently wasted energy could generate nearly 200,000 megawatts of clean power, equivalent to about 20 percent of U.S. electricity generating capacity.

Such power plants could run on a near-continuous basis, and could slash total U.S. fossil fuel use and greenhouse emissions by 20 percent, he said.

Casten said there were significant energy recycling opportunities associated with manufacturing processes in the metals, glass, chemicals, charcoal, pulp and paper, refinery, food processing and ethanol production industries, as well as natural gas pipelines.

And he said building local power-generating facilities near manufacturers using byproduct heat would displace boiler fuel and reduce consumption of power from the grid.

RED's past clients include General Motors, the U.S. Navy, Kodak, Coors Brewing, Cinergy, BP-Chemical, and Mittal Steel.

"The RED team brings an unparalleled mixture of power, industrial, environmental and regulatory experience," said Riaz Siddiqi, senior managing director at Denham Capital.

RED plans to work with North American industrial partners to develop recycled energy projects that supply electricity and thermal energy to host manufacturing facilities, with RED providing the necessary capital for the projects. RED and its partners will then share the resulting energy cost reductions, along with profits from the sale of excess energy and emission credits.

The Energy Daily, Vol. 35, No. 223

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