Steering the ship

When Stephen Jones took over as president and CEO of Morristown, New Jersey-based Covanta Holding Corp., he was well qualified to lead the energy-from-waste (EFW) firm. He led EFW and gas tonnage divisions during his 23 years with his previous employer Air Products, Allentown, Pennsylvania.

In March, Jones succeeded Anthony Orlando, a 25 year veteran of Covanta, who served as president and CEO for the last 10 years and is now on the board.

Lower energy prices and soft markets for recyclables have created a challenging environment in 2015, but Jones and Covanta management see opportunities to develop end markets, to expand existing facilities, to adapt its power purchase agreements and to grow in other parts of the world. In an interview with Renewable Energy from Waste Editor Kristin Smith, Jones shares how his experience and the strategies Covanta has adopted are helping Covanta remain a leader in providing sustainable waste and energy solutions to its customers.
 

Renewable Energy from Waste (REW): How does your previous experience help you in your new position as CEO of Covanta?

Steven Jones (SJ): I was in the industrial gas industry for 23 years with Air Products. I had a lot of different jobs along the way, but the business I ran for the last five years was the Tonnage Gases business—large hydrogen, oxygen and nitrogen plants. I was handling long-term contracts with customers, and managing large plants, which required a lot of maintenance, very similar to the energy-from-waste model. We had a number of clients that worked with us for 20-plus years so I am very used to that. When you are in a relationship for that long, you have to be fair. That is the mindset I bring to Covanta, and Covanta has a similar mindset.

Covanta is also a very good engineering and operating company, similar to Air Products. Covanta has a lot of very good engineers and operators at our core, and it is that reputation that Covanta brings to the 45 plants that we operate. It is the reason people bring us in to operate their plants.

Air Products was also in the energy-from-waste industry in the 1990s. In the 2010-2012, timeframe the company got back into it, and it was also part of the business I was running.
 

REW: Is Covanta involved with any emerging waste conversion technologies, such as gasification?

SJ: We have a technology called CLEERGas (Covanta Low Emissions Energy Recovery Gasification) and that technology is in the process of being commercialized. We are working in China with Chengdu University and some local partners on going to the next step toward commercialization. We want to build a 300-ton-per-day plant and bring that technology further and further along.
 

REW: How does Covanta’s approach to business differ in the U.S. from other parts of the world?

SJ: There is not a lot of public policy support in the U.S. for energy-from-waste facilities. If you are an energy- from-waste company, you have to start to look to Canada or the E.U.—such as the 600,000 metric ton per year EFW facility in Dublin, Ireland we are constructing—or in Australia or in China.

In North America, we have 41 plants that form this backbone of energy-from-waste capabilities. A lot of companies want to go to zero-waste-to-landfill, so they are looking for an alternative. The best alternative after recycling is an energy-from-waste facility. So in the U.S., public policy support is lacking, but there is a lot of business support. Business is starting to frame the agenda here versus other places where it is the government that is framing the agenda.
 

REW: What is Covanta doing to affect policy change in the U.S.?

SJ: This is an area where we spend a lot of our time. For years we have worked at the federal level and now see some opportunities with the new Clean Power Plan. The plan allows the states to utilize a number of technologies and solutions and EfW is included.

We’ve often worked at the state level to talk to them about how energy-from-waste—because it is a renewable energy source and reduces greenhouse gases—can help meet goals for carbon reduction and renewable energy so we’re pleased to see some movement in this area.
 

REW: What are the drivers behind your work with the city of Indianapolis and the development of the Indianapolis Advanced Recycling Center?

SJ: Indianapolis had some very low recycling rates, and the city wanted to do something more around recycling. We saw an opportunity to provide them with sustainable services and solutions. We also have an energy-from-waste plant at the site where we are going to build the recycling facility. It was a nice way to tie the two together.

Like I’ve said, we have the backbone of energy-from-waste facilities out there, so we can do more around recycling, and then whatever can’t be recycled, reused or recovered will go into an energy-from-waste facility instead of a landfill. We are looking at a green park concept in Indianapolis where waste comes in and we will recycle everything that we can—plastics, metal and paper—and take whatever is left over to the energy-from-waste facility. The new program will be a one-bin program.
 

REW: What other opportunities are you pursuing?

SJ: Recycling more metal material is a great opportunity for us. We do a lot of metal recovery at our facilities. We recover enough ferrous metal to make five Golden Gate Bridges every year. We are making more investments in metals recovery and using more technology to recover metal from the ash that comes out of the back of the facility.

There is also a number of ash monofills from years ago when people didn’t recover the metal, they just buried it. We are looking now at technologies to go back into these landfills and recover the metal. We also have an electronics recovery facility in Philadelphia. Electronics have a low recovery rate in the U.S., so this creates an opportunity.
 

REW: How are market conditions for power and recycling affecting business?

SJ: There are lot of headwinds right now on power pricing. Shale gas is creating a great economic environment in the U.S. It is pushing down power prices. It is going to take some time for the demand side of natural gas to start pulling power prices back up. The other headwind right now is metals pricing. A lot of that has been driven by activity China. It will come back up just like any cyclical commodity.

We have also had a lot of resets over the last four or five years where prices we were getting from our power from previous power purchase agreements have come down. It is harder get new power purchase agreements, so we have had to sell our power in different ways.

We are looking at other ways to sell our power, which is also a renewable power source. We think that it is important to our customers.
 

REW: What does the future hold for Covanta?

SJ: We have a number of good growth opportunities, whether it’s the 20-year contract with the New York City Department of Sanitation, Dublin, the new Durham York Energy Centre in Canada, and others. All this growth is in our immediate future. We are looking at how we can continue to build on that.

Stephen Jones is president and CEO of Covanta Holdings Corp., based in Morristown, New Jersey.