Co-generation is electricity generated from by-products, such as waste and heat from industrial processes, that can feed into the national grid or provide electricity to host sites.

Many of these projects have the added benefit that they are more efficient and produce electricity that is cleaner than Eskom-generated power.

BioTherm has already tied up eight co-generation projects with a total generating capacity of 120MW.

These include projects located at PetroSA, which was commissioned last year , Engen, glass manufacturer PFG, Hernic Ferrochrome, and pharmaceutical group Adcock Ingram.

Banks typically require 25% in equity to give financial backing for projects, and with the $150m from Denham and an additional $50m secured from empowerment partners, the company has enough equity to finance co-generation projects worth $800m, BioTherm CE Charles Liebenberg says.

The company is already exploring more options with other major industrial and agricultural operations, which could push the total generating capacity under development to a sizable 400MW in the medium term.

The global downturn has done little to damp the company’s prospects and Liebenberg expects a recovery in the global economy and electricity demand over the next two to three years.

While this will give capacity-constrained Eskom respite in the medium term, the actual generation capacity shortage will not abate for many years , which means prospects for the company are rosy .

“There are liquidity constraints in the domestic lending market but the nature of our business is long-term contractual revenue production and banks are generally keen on this asset class,” he says.

But a transparent policy framework to give guidance to independent power producers in SA remains sorely absent.

“Eskom, the National Energy Regulator of SA and the minerals and energy department are supportive of independent power producers but that needs to manifest rapidly in realistic legislation, policy and an enabling environment,” says Liebenberg.

Waste energy conversion to electricity has been occurring for more than a decade in the European Union (EU) and its implementation has been successful where regulators provide clear and consistent mechanisms, he says, citing the examples of Germany and Spain, which respectively derive 14% and 20% of their total electricity output from renewable sources — the result of a clear energy policy framework.

“SA has an electricity deficit and can draw on the EU’s experience without engaging in lengthy and costly consultation exercises. The models are there, they work and can easily be transferred and implemented here,” he says.

Even more compelling is the greater efficiency that comes with co-generation and reduced carbon output . Converting waste energy, such as flared gas, thermal energy and biomass can produce more than 3000MW of electricity, which is almost 10% of Eskom’s generating capacity.

It can help displace one ton of carbon dioxide for every megawatt hour produced by Eskom and this capacity can be rolled out in a fraction of the time it takes any utility to build a coal-fired power station of similar size, Liebenberg says.

Still bedeviling the viability of co-generation projects is Eskom’s tariff structure, which does not reflect the cost of production and therefore presents a formidable barrier to independent power producers.

Taking into consideration the cost of Eskom’s gargantuan build programme, its generating costs are estimated to rise to 85c/kWh. But tariff increases are not commensurate with these rising costs.

“ Nowhere in the world can waste energy conversion or renewables compete head-on with base-load fossil fuel.

“But the life-cycle cost, including the cost of carbon emissions, is hardly ever computed and therefore the basis of comparison is completely skewed,” Liebenberg says.

NRG Energy, a Fortune 500 company, owns and operates 48 plants across North America that provide approximately 24,000 megawatts of generation capacity, enough to power nearly 20 million homes, the company said. Its share was mostly unchanged from Tuesday’s close, at $23.40 in early trading.

Using CHP today, the United States already avoids more than 1.9 quadrillion Btu of fuel consumption and annual CO2 emissions equivalent to removing more than 45 million cars from the road.

The report Combined Heat and Power: Effective Energy Solutions for a Sustainable Future asks "What if 20% of generating capacity came from CHP?"

If the United States attained this goal by 2030, benefits would include:

• A 60% reduction of the projected increase in carbon dioxide (CO2) emissions by 2030--the equivalent of removing 154 million cars from the road
• Fuel savings of 5.3 quadrillion British thermal units (Btu) annually--the equivalent of nearly half the total energy currently consumed by U.S. households
• Economically viable application throughout the nation in large and small industrial facilities, commercial buildings, multi-family and single-family housing, institutional facilities, and campuses
• The creation of 1 million new highly-skilled, competitive "green-collar" jobs through 2030 and $234 billion in new investments throughout the United States.

The report provides an in-depth discussion of current opportunities and challenges to more widespread national CHP deployment, and sets the stage for future policy dialogue aimed at promoting this clean energy solution.

Honda (NYSE: HMC) recently released its newest residential micro combined heat and power (MCHP) unit.

To view the CHP report, go to the website below.

Website: http://www1.eere.energy.gov/industry/distributedenergy/

The Siemens scope of supply for the Cleveland County Plant encompasses four SGT6-PAC-5000F gas turbine packages, including service contracts. Each package consists of a SGT6-5000F gas turbine, air-cooled generator, auxiliaries, the innovative SPPA-T3000 control system and an option for the exhaust stack. The fast-start capability of the SGT6-5000F gas turbine will allow Southern Power to deliver power to the grid quickly, while also helping to keep per start emissions low.

 “To enhance the value and environmental compatibility of new power generation assets, the U.S. market requires power plants to provide a much higher level of operating flexibility, including low start-up emissions and fast start-up capabilities. Innovations in our gas turbine product line address these requirements and will allow our customers to better react to market opportunities,” said Randy Zwirn, president and CEO of Siemens Energy, Inc.

 “Using clean and efficient natural gas technology, this project will serve the growing electricity needs in the region for many years,“ said Ronnie Bates, president of Southern Power. “Through our focus on efficient operations, Southern Power has a proven track record of providing reliable, competitively priced energy to our customers throughout the Southeast.”

When reached for comment, Darren Jamison, President and Chief Executive Officer of Capstone Turbine Corporation said: "One of our business strategies has been to add new business partners and strengthen the relationships with our existing ones. The talented and professional management and sales force of Sobono bring to us the capabilities we have been seeking to augment our sales efforts. Sobono"s broad geographic and commercial presence enhances the opportunity for improved sales growth for Capstone microturbines."
"Our customers are driven by growing environmental concerns, needs of innovative on-site energy solutions that provide dependable and reliable power supply, as well as reduction in business costs," said Wee Khoon OH, Managing Director of Sobono Energy. "The new generation Capstone MicroTurbine® models C200, C600, C800 and C1000 come with attributes of high reliability and efficiency, modular design for easy installation, fuel flexibility, suitability for multi-MW application and adaptability for co-generation and tri-generation. These are indeed all the features that our customers are looking for. We are very pleased to be working with Capstone Turbine Corporation and look forward to a long-term successful relationship."
About Capstone Turbine
Capstone Turbine Corporation is the world's leading producer of low-emission microturbine systems, and was the first to market commercially viable microturbine energy products. Capstone Turbine has shipped over 4,000 Capstone MicroTurbine® systems to customers worldwide. These award-winning systems have logged millions of documented runtime operating hours. Capstone Turbine is a member of the U.S. Environmental Protection Agency"s Combined Heat and Power Partnership, which is committed to improving the efficiency of the nation"s energy infrastructure and reducing emissions of pollutants and greenhouse gases. A UL-Certified ISO 9001:2000 and ISO 14001:2004 certified company; Capstone Turbine is headquartered in the Los Angeles area with sales and/or service centers in New Jersey, New York, Mexico City, Milan, Nottingham, Shanghai and Tokyo.
"Capstone Turbine Corporation" and "Capstone MicroTurbine? are registered trademarks of Capstone Turbine Corporation. All other trademarks mentioned are the property of their respective owners.
This press release contains "forward-looking statements," as that term is used in the federal securities laws, about new sales opportunities for Capstone in the Asia Pacific Region, certain features of our products and a successful working relationship between Sobono Energy Private Limited and Capstone Turbine Corporation. Forward-looking statements may be identified by words such as "expects," "objective," "intend," "targeted," "plan" and similar phrases. These forward-looking statements are subject to numerous assumptions, risks and uncertainties described in Capstone's filings with the Securities and Exchange Commission that may cause Capstone's actual results to be materially different from any future results expressed or implied in such statements. Capstone cautions readers not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Capstone undertakes no obligation, and specifically disclaims any obligation, to release any revisions to any forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.