Virginia, like the rest of the world, is in the early stages of a “green” revolution that will result in the massive reordering of economic, institutional and governmental priorities to accommodate the reality of higher cost energy. While public policy sets the parameters — upholding environmental standards, designing transportation systems and influencing human settlement patterns — let there be no doubt it is the innovation and creativity flowing from the private sector that will actually make change happen.
In the future, Bacon’s Rebellion will pay more attention to the activities of private-sector players either based in Virginia or active here. There are two particular players that are worthy of attention, for they have gotten a jump on everyone else in building a track record and establishing credibility in developing renewable energy. They are AES Corp. and Intrinergy Inc.
AES, based in Arlington, provides electric generating capacity in North America and around the world, racking up more than $4 billion in revenues in the 1Q of 2008 alone. While much of this generating capacity burns fossil fuels, the company is rapidly building its holdings of renewable energy capacity. The company owns or operates 32 hydropower stations in nine countries, which collectively generate nearly 7,454 megawatts of electric power. The company owns/operates wind farms in California, Texas, the Midwest and Pennsylvania (the latter of which, in a recently announced deal will supply green energy to the Old Dominion Electrical Cooperative). The company is actively involved in developing 49.5-megawatt wind energy project in China as well.
In a new line of business, the creation, qualification and sale of Carbon Emission Reductions, AES’s Greenhouse Gas Services division works on projects to reduce greenhouse gases like carbon dioxide and methane. One current example is a project with Malaysian oil mill owners to capture and destroy the methane emissions that are a byproduct of palm oil production. The market for carbon emissions reductions is estimated at $10–15 billion annually.
Meanwhile, the company is laying the groundwork for solar energy generation as well.
Intrinergy, based in Richmond, isn’t nearly as large as AES, but it is growing fast. Formed in 2005, the company has developed an expertise in producing clean-burning gas from biomass: anything from wood chips, forest residue and yard clippings. The technology is particularly suited to industrial clients who can use the gas for cogeneration: generating electricity and using the waste steam for industrial processes.
Intrinergy doesn’t just design and build cogeneration plants. It also lines up supplies of waste byproducts to feed the cogeneration units. Currently, the company buys about 7,000 tons of waste byproducts a month for its European and domestic operations, reports Garry Kranz for Virginia Business magazine. The company also provides the financing for the projects, funding the full cost of constructing the energy generation facilities. That way, the client can share in energy savings without putting up any of its own capital.
The company has built plants in Mississippi, Ohio and Germany, and it has another 35 facilities in the pipeline in North America and Europe. Says President John Keppler: “We believe realistically that we could invest $2 billion to $3 billion in renewable energy over the next five years.”
Ironically, Intrinergy has no active clients in Virginia, although the company is in contact with a number of companies that are interested in its services.
AES and Intrinergy are just two of the more prominent companies active in Virginia. There are many more enterprises creatively laying the groundwork for a transformation of the global energy economy, not to mention a growing number of financiers, attorneys and business consultants who supply the intellectual capital to identify deals and close them. I will bring them all to the attention of Bacon’s Rebellion readers as the opportunity arises.