When we were children and our mothers told us to “clean our plates,” who would have thought that someday a machine would help do the job—and turn our leftovers into electricity?
Blue Sphere Corporation, an Israeli company that develops, manages and owns waste-to-energy projects, has agreed to provide $7.5 million in equity financing to an environmental finance fund to build a 5.2-megawatt (MW) organics-to-energy anaerobic digester in Charlotte, N.C. This commitment, along with a recently announced debt commitment from Caterpillar Financial Services Corp., constitutes 100 percent of the financing required for the project, which will which will produce electricity from food waste.
Blue Sphere, along with its partner, Biogas Nord, AG of Germany, is acting as the integrator of the Charlotte project through its joint venture company, Bino Sphere. Biogas Nord has designed and built almost 400 waste-to-energy plants in Europe, Africa and the Middle East.
According to Blue Sphere, anaerobic digesters offer the following advantages:
- Organic waste in the U.S. contains enough energy to supply a substantial part of the U.S.'s energy demand. These millions of tons of organic waste are the “oil” fields of the 21st century.
- As opposed to fossil energy which diminishes and gets more and more expensive and will soon disappear, organic waste is here to stay as long as there are human beings on the plant.
- Methane (CH4), emitted from organic waste, is a major negative contributor to global warming and climate change. Blue Sphere converts this harmful gas into inert gas, thus making a major contribution to preventing global warming and climate change.
With full project financing now committed, Blue Sphere is in the process of completing all closing conditions—including investment tax credit monetization, feedstock supply and permits. Blue Sphere expects to break ground on the Charlotte project within the next couple of months. Upon the completion, expected in the third quarter of 2014,
Blue Sphere will continue to be associated with the initiative as project manager —and, when the fund achieves a 20 percent internal rate of return, Blue Sphere will retain a 37.5 percent ownership position in the Charlotte project.
Shlomi Palas, CEO of Blue Sphere commented, “We are required to close the equity financing by the beginning of September 2013. Commencement of construction will allow Blue Sphere to begin earning revenue pursuant to the terms of our joint venture with Biogas Nord.”
Once the project is commissioned—approximately 12 months from the start of construction—Blue Sphere will earn operating revenue from the sale of contracted electricity into the local grid owned by [the major utility] Duke Energy, Inc., tipping fees for the organic waste the project will receive, as well as ongoing management fees.
In related news, Blue Sphere also is making progress on the implementation of its second project, a 3.2 MW organics-to-energy anaerobic digester project in Rhode Island. Blue Sphere could break ground on this second project by the end of 2013.
Edited by
Rachel Ramsey
