Clean Energy Technologies Inc. (CETY), Costa Mesa, California, has entered into a memorandum of understanding (MOU) with Ashfield Ag Resources to co-develop its initial biomass renewable energy processing facility.
Located in Massachusetts, the project will use a high temperature ablative fast pyrolysis reactor (HTAP biomass reactor) to convert forest biomass waste products to renewably generated electricity and biochar fertilizer. The parties agreed in principle to the critical components, which are expected to annually deliver up to 14,600 megawatt-hours (MWh) of renewable electricity and 1,500 tons of biochar by Q1 2022.
The MOU, which is subject to the execution of definitive agreements, provides the CETY project with rights to feedstock, site control, approved grid interconnection and power purchase agreement revenues. CETY management forecasts up to a 35 percent net present value (over a 10-year horizon) on the $15 million project and internal rates of return of up to 12 percent.
CETY anticipates its existing organic Rankine cycle (ORC) business will also capitalize on each biomass project with the opportunity to deliver heat recovery solutions. Such synergies can increase energy value by 12 percent to 14 percent for the biomass project.
CETY’s portfolio of biomass projects will thus also “drive top line and bottom line growth elsewhere in the company creating long term predictable income streams with high IRR cash flows,” the company says.
More importantly, CETY says it provides a footprint for future projects utilizing HTAP biomass reactor technology in the rapidly growing biomass renewable energy sector. The HTAP biomass reactor is a proprietary process that transforms organic waste by using ultra-high temperatures to produce renewable electrical power, biochar fertilizer and high heating value fuel gas in addition to other commercially valuable chemicals.
CETY management believes it can secure additional biomass resources to deliver additional projects ten times larger in the future. The biomass renewable energy project will be operated from within a newly formed company and is expected to be funded through a special purpose vehicle with equity and debt secured by the project’s revenues.
“This project is the first of four anticipated renewable biomass projects, and is expected to serve as a model for developing new projects to capture market share in this highly profitable and growing industry,” said Kam Mahdi, CEO of CETY. “By vertically integrating the biomass projects into our business, we are also able to grow our heat recovery business horizontally. We hope that our future projects will be large by orders of magnitude and have a profound impact on the environment while bringing us new sources of income. Our new renewable energy biomass projects are expected to further expand our goal of becoming a complete solution for industrial and municipal scale projects in the strategic markets we are targeting.”