With city deal signed, Plasco eyes global markets in 2013
The head of Plasco Energy Group may have accomplished a lot in 2012, but don’t expect him to sit around celebrating for too long.
Topics :
Ottawa , China , United States
He’s hoping his landmark agreement with the City of Ottawa to take residents’ garbage and turn it into energy will give him traction in reaching similar deals elsewhere.
“It’s important both as a major commercial operation for us and in the short run it probably has even more importance in helping us close and move forward with other projects that are very close to closing in other parts of the world,” said Rod Bryden, the company’s president and CEO, in an interview.
Plasco wrapped up a year’s worth of negotiations last weekend when they signed a 20-year contract with the city. The company will take the 109,500 tonnes of waste the city provides to it each year for about $9.1 million.
The two sides had been working on the deal since last December when council directed staff to try to reach a deal with the company.
Mr. Bryden said they are past that stage in negotiations with several other potential clients – which he said are mostly municipalities, but also include waste management companies – in places such as China, the United States, the United Kingdom and the Caribbean.
They still haven’t gotten to the point where they are ready to sign final contracts, but he said the Ottawa deal will be a valuable reference account that will help the company reach similar agreements elsewhere in the world.
Most of these are municipalities interested in using the technology, which Mr. Bryden said results in no emissions, to reduce their environmental footprint.
The City of Ottawa hopes Plasco will help reduce the amount of garbage it sends to landfills. Plasco, meanwhile, gets a chance to show potential new clients its “plasma gasification” technology can work on a large scale.
The company has until now been running only one unit of the technology in a demonstration plant. A new facility, constructed close to the corner of Moodie Drive and Trail Road, will have three such units.
City councillors expressed doubts about the viability of the technology, as the company had yet to sell the technology to a commercial buyer before selling it to the city. Confidence eroded further as the city repeatedly failed to live up to the deadlines they promised for signing the contract.
The city insists the deal has been structured so taxpayers will only have to pay for the service if it works. Mr. Bryden says Plasco is happy to take the risk on the project since it means they can silence all the “chatter” from people who doubt the technology can process garbage on a large scale.
“We need to take any risk that is perceived and implement the project and absorb that risk so that we can build our project now and not after it’s run for a year,” said Mr. Bryden. “Obviously the project can’t run for a year until it’s built and we don’t expect anyone to take any risk on that.”
The facility will be able to process 130,000 tonnes of waste every year, he said, which means they will be able to take an extra 21,500 tonnes. Mr. Bryden said they hope to sell the extra capacity to waste management companies if the city doesn’t pick up the option to use it.
Plasco expects construction to start later in 2013 with commercial operation getting going in the first part of 2015.
Mr. Bryden pushed for city council to approve the deal as quickly as possible last December so he could begin to get private financing for the project.
He said he has since been working with a “large, mainstream Canadian bank” which has laid out the terms under which it will provide construction financing.