Stephen J. Jones: Taking the Helm at Covanta

As jobs in the waste industry go, they don't come much bigger than being president and CEO of New Jersey based waste to energy giant, Covanta. In March this year Stephen J. Jones stepped into the breach as the company's new boss. Here he talks to WMW about gasification plans and diversifying into materials recycling. By Ben Messenger Choosing a new CEO and president at a company the size of Covanta is about as critical a decision as the Board will ever make. With some 46 waste to energy facilities across the globe, as well as new plants under construction, and numerous waste transfer stations, an e-waste processing subsidiary and biowaste plants, it's safe to say the company is one of the waste industry's major players. Having spent the past 23 years in the industrial gases industry, most recently as senior vice president of the Tonnage Gases Segment and the Equipment and Energy Segment at Air Products, Jones is no stranger to the waste to energy business. "Much like the energy from waste industry, it's an industry with large plant operations, long-term contracts and selling industrial products to customers - so it's a very similar business model to the energy from waste model," Jones tells WMW. "I was also involved in the energy from waste business from time to time throughout my career. So I think when the board of Covanta was looking for a new CEO they liked the fact that I'm familiar with the business." As part of his role running Air Products' energy business, Jones was responsible for the Tees Valley 1 and 2 plasma gasification facilities currently under construction in the North of England. With a waste processing capacity of 350,000 tonnes per plant and a generating capacity of 50 MW the facilities are largest of their kind anywhere in the world. North American Waste to Energy Market Home to the vast majority of its 46 operational waste to energy plants, the U.S. is Covanta's core market, but it's one that Jones sees as offering only limited room for growth in terms of developing new facilities. The biggest challenges he sees to developing new capacity in the U.S. are policy, regulations and energy pricing. "If you look at it from a public policy standpoint there are probably not going to be many development projects that are done in the U.S. Energy from waste continues to be an important part of the sustainable waste disposal infrastructure in the U.S., but I think there's more favourable public policy and regulations in places like the EU," he says. "But if you look at the U.S. we're still seeing lots of industries and communities that are choosing energy from waste over landfill," continues Jones. "Companies are really leading the way towards more sustainable waste management and we're a core part of the puzzle. If you talk to companies in the U.S. they are focused on zero landfill initiatives and if you're looking at alternatives to landfill, energy from waste is a pretty good alternative." While Jones sees only limited scope for new waste to energy facilities to be developed in the U.S., the company has had recent success in neighbouring Canada. Back in 2011 Covanta was given notice to proceed on a 140,000 tonne plant under a design, build operate deal with both the Durham and York Regions. That facility is now nearing completion. The plant is the company's second in Canada and will process residual MSW. Once operational it will complement the region's material recycling initiative. With waste to energy increasingly being considered as an alternative to landfill in Canada, Jones is hopeful that more developments will follow. Overseas Opportunities Further afield from its home market, the CEO is bullish about the company's ability to capitalise on its expertise overseas. "We have six operational waste to energy plants outside of the U.S.," he explains. "We have two in Canada, three in China and one in Italy." In China, where he also gained experience in his previous role at Air Products, Jones sees potential for Covanta to add to its existing three facilities. "We have a development office in Shanghai because of the projects we have in China. That's been a good investment for us and for our shareholders," he explains. According to the new CEO the key factors in successfully developing waste to energy plants are power prices, waste fees, facility size, location, technology used and government policy and regulations. "If you look at the China market it's a little bit more driven by the power contracts than the waste contracts," says Jones. "We have three facilities there now which we operate as a joint venture, but if you look at the 12th five year plan as it goes into the 13th five year plan I think you're going to see a continued call for energy from waste, particularly as it is relates to the benefits from a greenhouse gas standpoint." "My experience of China, and I've spent time there developing projects, is that if you have good technology and you're a safe and reliable operator, even if you're not a Chinese company you can be successful. And we've seen that from the projects we already have there," he continues." But it's not just in the potentially huge Chinese market where Covanta has been spreading its wings. In Dublin, Ireland the company has executed an agreement with the City Council to build, own and operate the 58 MW net Poolbeg waste to energy facility. Following numerous delays the project is now under construction. Once complete the facility will process around 600,000 tonnes of residual waste each year. Covanta's agreement with the City of Dublin covers 45 years of facility operations, after which facility ownership will revert to Dublin. During the first 15 years of operations, Dublin will share in any upside or downside in facility waste revenue relative to a baseline projection. Dublin will also share in energy revenue generated by the project for the full 45 year term of the contract. "It provides the Dublin region with a long-term sustainable waste management solution that diverts post recycled waste from landfill and into energy production. It'll reduce greenhouse gases and it's a €500 million investment that will create about 500 construction jobs and about one hundred permanent jobs when in full operation," says Jones. "There's policies and regulatory schemes around the world that are pretty favourable to energy from waste. The UK and the EU are some of the better places for energy from waste projects," he adds. Gasification Like all major waste to energy firm's Covanta has historically opted for traditional thermal combustion technologies supplied by third parties. But over the past few years the firm has been working on an alternative technology of its own – its CLEERGAS, or Covanta Low Emission Energy Recovery Gasification system. According to Jones one of the big advantages of the system is that unlike some gasification technologies it does not require that the waste be pre-treated. The high temperature gasification process converts unprocessed MSW into a syngas, which is then processed for energy recovery with very low emissions. Building on the knowledge from a successful 350 ton per day commercial demonstration unit in Tulsa, Oklahoma, Covanta is now developing an advanced gasification system. A 10 ton per day pilot plant is in its second year of testing with very good result and the company is currently developing their first 300 ton per day modular CLEERGAS system that will be collocated at one of their EfW facilities in China. "We're not marketing it aggressively at this point," says Jones. "But we're working through commercialising it. There are a lot of different technologies out on the market right now for gasification and most of them are going through this scale-up process, and that's where the magic lies." Recycling While Covanta may have made its name in the waste to energy business, it's also been diversifying into materials recycling of late. In Indianapolis the company is building a $45 million facility that it says will increase the city's recycling rate by as much as 500%. The Covanta Advanced Recycling Center, announced by Mayor Greg Ballard as part of his plan to bring recycling to all single family homes in Indianapolis, is to be built adjacent to Covanta's existing waste to energy facility. It is designed to recover recyclables from mixed municipal solid waste using the latest mechanical and sensor-based technologies - supported by skilled operators. Covanta Indianapolis where the new advanced recycling centre will built "We're advocates of the three Rs. You really need to reduce waste, reuse what you can and recycle. But there's still going to be a waste stream after those steps, and it needs to be dealt with," he says. "We're in the permitting stage now, but when it's in operation it will recover 80% to 90% of the paper, plastics and metal. It makes sense for a place like Indianapolis because Indianapolis has a pretty low recycling rate and participation, so the City was looking for a no cost option for recycling. Once it's on stream our projections are that it will increase recycling by 500% at no cost to the City," says Jones. "We're investing approximately $45 million to design, build operate and own the facility. It's also not far from our existing energy from waste facility, so it works in tandem. After we do the recycling whatever's left over we'll take to the energy from waste facility, which provides about 50% of the steam needs for downtown Indianapolis," he adds. Once operational the facility will enable Covanta, which already processes all of the waste collected in the city, to recover materials as well as energy. The company is also looking at the potential of separating organics to treat separately in the future. E-Waste Recycling In addition to recycling municipal waste, over recent years Covanta has also moved into e-waste recycling. "We have a facility located in Philadelphia, Pennsylvania," explains Jones. "It's one of the only e-waste recyclers in the U.S. that has both the R2 Certification and the e-Stewards Certification. It serves customers up and down the north east and also in the mid-Atlantic United States. We think it's an important service to provide and it's one that a lot of our customers ask for." In 2011 Covanta proceeded with its 140,000 tpa plant to deal with both the Durham and York regions "This is our first facility and it covers territory where we have some of our biggest customers," he continues. "Customers are looking for it and it's also good for the environment. When the confluence of those things comes together it usually makes for a good business opportunity. We'll continue to run this facility and look at other opportunities in this space." According to Jones, Covanta's extensive experience handling various waste streams has helped it move into the e-waste recycling business and as opportunities arise it's another arm of the company, which could expand beyond the U.S. borders. The Future As incoming CEO and president, Jones sees a bright future for Covanta, both in its traditional U.S. waste to energy market and as it expands into other areas of waste management, both at home and overseas. "There's a desire out in the market to divert waste from landfills, and because we have such a big footprint around the world and we're focused on safe and reliable operations, that gives us an advantage. There are opportunities around the world to continue to develop this business," says the CEO. "Even if you look at the U.S., depending on how many plants are built, there are acquisition opportunities around providing solutions for waste issues that we have the capabilities to play in," he continues. "We're providing solutions to some of the more difficult challenges the world faces, waste management, energy, climate change and that's really what I'm focused on. "There are seven billion people on the Earth right now. By 2050 there will be nine billion. This isn't going away," concludes Covanta's new president and CEO. For more information on this article, email: tomf@pennwell.com and visit www.waste-management-world.com More Waste Management World Articles Waste Management World Issue Archives