How Covanta leverages colocation services

Colocation services can benefit both waste-to-energy facilities and neighboring businesses they partner with.

Since its inception, Covanta has been dedicated to finding innovative ways to make use of waste and its byproducts. The Morristown, New Jersey-based company, formerly known as the Ogden Corporation, got its foray into waste-to-energy (WTE) through the acquisition of the North American licensing rights to the Martin GmbH system of waste combustion in 1983. Since then, Covanta has expanded to feature a global network of WTE and material processing facilities.

One of the ways Covanta has begun to better leverage its WTE offerings is through colocation agreements. Through these partnerships, Covanta supplies steam generated through its waste processes to a neighboring business and takes in nonrecyclable waste in return to add to its feedstock. Because of engineering considerations and construction costs, the majority of these partnerships are made with companies that are, or are willing to move, within 2 miles of an existing Covanta plant.

According to Dave Burke, manager of export steam sales for Covanta, these agreements are mutually beneficial.

“The reason colocation works for us is that we’re able to secure a predictable price [for exporting steam] that is potentially higher than what we would get for a wholesale energy price on the electrical grid. That is attractive to our investors.” Burke says. “From the customer side, they’re likely going to get a reduced price on their energy; they’re not going to have to focus on the staffing or operation of a boiler house, which takes a lot of time and resources; and then there are the ancillary benefits of them being able to send their waste to us and avoid landfills.”

According to Burke, the process of establishing these agreements can happen organically when a preexisting business in proximity to a Covanta WTE facility is in need of affordable steam power or can stem from an outside business building a new facility on available land close to a Covanta plant.

Burke says that the ideal candidate for colocation is one that needs industrial volumes of steam and power. He cites heavy industry, paper mills, electrochemical facilities and emerging businesses such as data centers as prime candidates with which to partner. The company also looks for businesses that are sustainably minded and that want a more conscientious process for using energy and managing their waste. For these reasons, the decision to partner was a no-brainer when Greenpac Mill LLC came to Covanta looking for solutions to help meet the energy needs at its new Niagara, New York, linerboard plant, which broke ground in 2011.

Partnering up

Founded by Quebec-based Cascades Inc. in partnership with the Caisse de dépôt et placement du Quebec (CDPQ) and Jamestown Container and Containerboard Partners, Greenpac Mill LLC opened its Niagara facility in July 2013 after 22 months of construction. The opening of the new facility marked a departure from its normal mill operation, in that the company made a concerted effort to utilize lean principles and new technologies to minimize the site’s environmental footprint.

As the largest and one of the most advanced facilities of its kind in North America, Greenpac Mill manufactures a lightweight linerboard made with 100 percent recycled fibers and has an annual production capacity of 540,000 short tons.

Greenpac Mill takes the unrecyclable parts of its waste stream generated during production to the Covanta Niagara plant. This waste is then mixed with Covanta’s incoming municipal solid waste (MSW) and metered onto the company’s grate system where the combustion process occurs. During the combustion process, water in steel boiler tubes is heated and converted into high-temperature steam. The steam is then returned to the mill through a dedicated steam line built just for Greenpac, which it uses to dry the paper it produces.

Utilizing Covanta’s energy has allowed Greenpac to operate more efficiently while expediting its processes.

“Everything in our plant is automated,” Greenpac GM Murray Hewitt says. “We rely on each stage of the process to work well. The steam gives us faster drying times for our paper so that we can continue to produce and keep up with demand.”

Although the partnership has been pivotal in helping the organizations reduce cost and cut down on waste, Covanta and Greenpac are continuously working to find new ways to improve their processes and create a more environmentally friendly operation.

“Our employees believe in it, they enjoy coming to work and most of all, they speak confidently about the company when they are outside of our buildings, which drives positivity in the community. We set out from day one to have a green presence and we continue to look for ways to be creative about it and to get better,” Hewitt says. “Today we’re only sending 11 percent of our waste to the landfill and that is mostly sludge. I know that Covanta can help us find a solution and get us to zero waste to landfill in the next couple of years.”

From left: Greenpac GM Murray Hewitt with Dave Burke, manager of export steam sales for Covanta

Branching out

In addition to Greenpac Mill, Covanta Niagara has five other collocated facilities nearby that utilize the low-cost steam generated from the 2,250 tons of MSW the facility processes per day.

The coordination between Covanta and its adjacent companies has opened communication channels and set the stage for partnerships where more than steam and waste are transferred. According to Burke, these relationships are all made possible thanks to the proximity the businesses enjoy.

“For our Niagara facility, we have adjacent businesses that are in each other’s value chain,” Burke explains. “For example, the nearby industrial gas plant that is a steam client of Covanta also sends nitrogen via pipeline to three adjacent steam clients of ours. And the electrochemical plant is providing chlorine to another industry near us. If you have customers nearby that are in complementary value chains, you can pass products back and forth without having to put these items on a tractor trailer or train. That’s a great benefit of colocation.”

Burke says that Covanta Niagara is currently looking to add to its customer base and is actively recruiting candidates that can benefit from its offerings.

“In order to talk about what kind of energy savings can be realized from one of these arrangements, it is important to talk to the company about how it’s using its energy,” Burke says. “When I go in to talk to these companies about a potential partnership, I look at all their inputs to production so I can determine if and how I can make a neighboring plant more competitive. Once I understand what their needs are, then I can look at our available solutions and we can put together a proposal from there.”

With plenty of land on-site, and New York’s incentive programs, the company is being strategically aggressive recruiting new businesses to relocate to the area.

“There are 50 acres of brownfield available around our Niagara location” Burke says. “I’m currently looking for companies with complementary offerings to give them an automatic competitive advantage. This offers a great carbon footprint solution. New York has brownfield development credits. It also has what is known as empire zones. There are incentives for businesses to come in on previously used brownfield land around our plant.”

While the value of colocation for the organizations is clear, it’s the impact that these partnering companies can have on the community that really helps solidify these agreements as a worthy strategy for WTE facilities to pursue.

“You could call us the ‘green anchor’ for this community,” Kevin O’Neil, business manager for Covanta Niagara, says. “Essentially, we are a utility for these businesses and our steam keeps these companies going so they can employ more than 600 people in good-paying manufacturing jobs. That’s something to be proud of.”

The author is the editor for Waste Today and can be contacted at

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