Industrial gas giant Air Products and Chemicals Inc. (APD) said that it will construct a major renewable energy plant in the UK, using advanced gasification energy-from-waste (EfW) technology. The facility, sited near Billingham, Teesside, in northeast England will be the largest of its kind globally with a capacity of roughly 50 megawatts (MW).
The plant will produce abundant renewable electricity to provide power to up to 50,000 homes in the UK. It will divert up to 350,000 metric tons of non-recyclable trash from the landfill disposal facilities annually, thereby helping to meet the UK’s waste diversion goals.
Air Products noted that it has received the necessary environmental and planning approvals, and full-scale construction activities will commence in the coming weeks. The renewable energy facility is expected to create hundreds of jobs once it comes online (expected in 2014), providing a boost to the local economy.
Alternative and renewable energy solutions provider AlterNRG is offering its Westinghouse advanced gasification technology for the new facility. Advanced gasification is a more effective energy-from-waste process than incineration and has a lower environmental impact. Increasing energy demand coupled with environmental concerns is leading to a global transition towards waste-to-energy technologies.
The next-generation gasification technology, which has been successfully deployed in other countries including Japan, offers a more efficient, cleaner conversion of waste-to-power than conventional EfW technologies and can generate a broad range of useful outputs from waste, including heat, renewable hydrogen, chemicals and fuels.
Air Products offers industrial gases as well as a variety of polymer and performance chemicals and serves technology, energy, industrial and health care customers globally. It has a long-running track record in building and operating large-scale industrial gas and energy-related projects.
Air Products benefits from a long-term take-or-pay contract, a consolidated industry structure, diverse customer base and sustained pricing power. The company’s healthy project backlog strongly positions it to achieve its long-term growth target.
Given its leading position in the gases business, the company is well positioned to capitalize on the cyclical recovery in its core industrial end markets. New business deals are expected to support profit in 2012. However, soaring energy and raw material costs pose a threat to margin expansion.
We currently have a long-term Neutral recommendation on Air Products. The company, which competes with Praxair Inc. (PX), holds a short-term Zacks #3 Rank (Hold).
To read this article on Zacks.com click here.
Zacks Investment Research