Beauty in biomass

Thornton Group Asia took its first Chinese business steps in infrastructure. Now the strategic investment and advisory company has taken strides in the field of renewable energy.

Cooperating with the United States-based Caletta Renewable Energy, Thornton is prepared to partner with local Chinese governments to develop renewable biomass energy power plants.

That could be good news for Chinese businessmen who want funds to build biomass incineration power plants - they can provide local documents that an incineration power plants needs, while Thornton and Caletta help will help acquire funding and provide their management experience.

Thornton Group, established 20 years ago in the US, arrived in Asia in 2000. It was successful in building roads in Qinghai Province in Northwest China last year.

To establish renewable power at competitive prices processing biomass, renewable energy credits and tipping fees weigh heavily, and vary from city to city. A waste incineration power plant receives $11 a ton for garbage from the Hangzhou municipal government, while in Shanghai it receives around $30 per ton. Michale Lin, CEO of Thornton, says it is where the plant is located that counts.

"Long-term feed contracts and land agreements are the paramount factors that an applicant should consider," Lin says. "We also need that they have a power purchase agreement from the government. In America, 20-year feed contracts and power purchase agreements are usually needed, but in China, we can negotiate the years of contracts."

"We have cooperated with Caletta for many years in America. Caletta usually makes the preparations, choosing land and equipment, and then we render assistance in building government relationships and seeking financing. We assist Chinese partners in financing, while Caletta can offer technology and management experience," he says.

"We need local partners to work together to build government relationships to get land permits, feed contracts and power purchase agreements."

Over 200 forms of biomass have been processed and more than 90 installations has been built worldwide by Caletta, according to a speech James J. Bulger, the Chairman of Thornton at a energy saving forum.

Currently they have four projects in the US that use materials ranging from tires, wood and refuse to generate electricity.

Caletta acquires financing from mainly from three sources, Bank of America, Lehman Brothers and The Hartford.

According to Caletta, renewable biomass energy power plants, which convert such material as municipal solid waste, wood and other organic resources into electricity, is the most widely used renewable energy source and the fourth-largest global energy source after the fossil fuels coal, oil and natural gas.

Such plants are credited with the reducing material in landfills and lowering greenhouse gas emissions, resulting in saving landfill space and slowing global warming and climate change. Caletta says those are the main reasons it focuses in particular on the development of biomass-generated power for electricity and heat.

Thornton covers wider fields. It is involved in industries that include infrastructure, transportation, energy and real estate in the US. Lin says they have a proprietary network of affiliates that includes senior US government officials, Fortune 500 CEO's, contacts in global banking, private equity and Chinese government organizations.

"Caletta only does business in the biomass in renewable energy field, but we do more. With our network, we can assist in financing and advising in other renewable energies, such as wind and solar. " he adds.

(China Daily 10/08/2007 page3)