Energy from waste
In the last part, we saw various disposal methods of waste. Our subject company, Covanta Holding Corporation (CVA), operates in a relatively small domain of energy from waste (or EfW), also known as waste to energy (or WtE). EfW is a cleaner way of waste disposal than the more popular disposal method of landfilling. The most common method of EfW is known as incineration.
Incineration is similar to the process of burning fuels in thermal power plants. In traditional thermal power plants, electricity is generated using steam. Coal or natural gas is burned inside boilers at a very high temperature. Pipes filled with water are lined up against the walls of the boilers. As the coal and natural gas burns, the water in these pipes transforms into steam. The steam spins turbines, which in turn drive electricity generation.
Similarly, in incineration, organic material such as waste is burned to generate steam inside a boiler, which in turn drives the turbine to generate electricity. Covanta (CVA) handles the entire process, from collection and transportation of waste to activities after electricity generation.
Its post-generation activities include disposal of ash from combustion, management of emissions, and recovery of metals. The company then sells these recovered metals at spot prices on the market, generating additional revenues. Not many large companies, including Waste Management (WM), Republic Services (RSG), and Waste Connections (WCN), have a large presence in incineration. CVA is part of the iShares Russell 1000 Growth ETF (IWF).
There are numerous other less popular WtE technologies such as gasification, discussed in the previous part, thermal depolymerization that produces synthetic crude oil, and anaerobic digestion that produces biogas.