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4 million bucks buys low end demonstrator pyrolysis units. It would not buy land and then bring services for multiple plants. It would not normally cover permits and engineering. It would not cover the cost to upgrade pyrolysis oil into a tank ready fuel.
As for tipping fees, it varies my market. If the market is high regulated and has the ability to pay then there are bucks there but you need to get rhe material away from the big collectors and landfill operators. In third world countries, waste gets dumps curbside. Where there is a fee, it is often so low that it is not relevant to the business investment decision. Ten dollars per ton is typically the high end for tipping fees in these countries and the share that you could extract from say WMI in the US.
I have done reasonably well on my holding. I will start selling down a little to take some of my gains off the table. I am still sold on waste to energy as a win - win solution for the environment and our energy needs.
Again, show me the money to build and operate the equipment. You could have a billion tons of feedstock but without capital to process it, the contracts are worthless.
Without funding, expressions of interest for feedstock supply and offtakes become worthless.
Many local governments continue to support clean incinerators over pyrolysis as they understand the former quite well. The all in cost to install a properly built pyrolysis plant with land, building, storage areas, spares, provision for contingencies, working capital and pre startup costs in millions of dollars should be about 500k per ton per day of nameplate capacity. So, a 200 TPD plant should cost about 100 million.
So, assuming you can get 200 TPD of the ideal mix of clean inputs, you could get about 32000 gallons of pyrolysis fuel. Unless money is invested to upgrade the fuel to ASTM standards, the fuel will sell at a discount to wholesale prices. You could exchange the production of fuel for hydrogen and get maybe 6 tons of hydrogen per day assuming a clean mix.
Local markets dictate if a pyrolysis plant will earn sufficient after tax profits to pay down debts and offer a return to shareholders. No one solution works everywhere.
Most pyrolysis based systems prefer only a couple types of plastics for conversion. You need a more robust (read expensive) system to deal with ABS plastics for example. There is a trade off between investing a lot of capital to handle the entire plastic waste stream or go the minimalist route and obtain presorted plastics. These plastics can be consumer sorted - usually poorly done or invest in mechanical sorting equipment at the plant. Our company has chosen to go the low end which limits the feedstock supply.
It would be very interesting if we get any performance data on any operating plant.
A plant running at 100 tons per day of MSW input would normally include paper, glass, tin cans, broken ceramics, fabrics, kleenex, plastics, food scraps, human and animal wastes and so forth. Unless there is a regime to have home owner sorted wastes or we invest in front end sorting, it is hard to say what you could get out. A clean input free of glass, metals, stone, dirt and the like has an optimal humidity range. Most household waste even after the removal of metals and glass still needs to be dried. Unusable materials can represent 20 percent of the inbound weight.
Look at about 80 gallons per ton of input based on no sorting and typical moisture. Getting 120 gallons per ton is possible with sorting and ideal moisture. It can go higher if the inputs have a high percentage of plastics and tires.
If hydrogen is the desired output then look at 50 pounds per ton on input.
In looking up Spartan and assuming it is the correct NYC firm, most of their tombstone ads indicate a propensity for very small deal size. They are not a principal but an agent who would sell shares to the inhouse punters.
If memory serves me correctly this is the third or perhaps the fourth capital finder we have used in two years. Why did the others not deliver?
One phrase in the press release caught me off guard. There was a reference to buying out the Moroccan project which suggest that while it is operating we can only claim a portion of the net profits or loss and likely cannot consolidate the results until the deal closes. So goes the argument for "revenue".
While the company may be old, the projects are brand new.
It is common for start ups to have tonnage but have no margins as the productivity is not quite there. Once the bugs are worked out, there is a question of local taxes and the cost of capital (principal and interest payments). CLNV has not put up any significant amount of cash yet so another party would want to see some return. Depending on the nature of the deal, we could see negative net cash flows for a year or so.
Depending on the degree of disclosure within the notes and the MD & A, will we learn more about the revenue and the net cash flows from India and Morocco. It would also be good to know if the company accrued development costs for Ecuador, Cape Cod, Cameroons and the DRC or they have expensed them as incurred.
The ASU account does not say who is providing the capital for such a facility. What ASU appears to be providing is the access to hundreds of scientists and researchers.
We will see when the audited statements are issued. The interesting question will be if revenue is sufficient to cover the operating costs and debt service costs. I would expect the net cash flow to be negative for a start up.
I used to be a JV partners with an OTC company. The OTC partner had a great story of matching cash to cleantech, solar power and water purification. You could always count on regular announcements of new projects, new countries and new funders. The endless litany of press releases, IR statements paid for using a supply of diluted shares and vanity social media helped to run the stock price up. The OTC company filed audited statements and had a cadre of offshore banks. Things fell apart quickly when the so called audited statements could not be tested. The bankers and the OTC company used po boxes and by the hour rental offices. The lesson is clear, without hard money, the company is only a dream.
In the normal course of events, I would agree. However, in this era of political u certainty, I can see allocations being deferred. While the amounts allocated to a broad budget theme may be in place, have any specific allocations been made to a unique project?
What happens when the Republicans use the debt limit theatrics to defer or cancel spending on "progressive" projects?
So, there will be 20 million more shares outstanding. Dilution without any new cash into the treasury for equipment purchases.
I reviewed the video and a couple things jumped out at me. The first is the ability to ramp up the feedstock to support higher throughput. You need buffer stocks to support hiccups in the inbound materials. The second is the absence of any finishing end photos of the fuel output. Is it pyrolysis oil or a tank ready fuel? If the latter then where are the catalyst columns?
The correct answer to your question - it all depends.
Tipping fees are market driven. In areas where environmental policy is aggressive, the fee can be quite high. In other developed areas it could be half the high end price. In less developed countries, $ 10 per ton is fair game. While the gate fees may be posted, you may need to share the revenue with the collector of the wastes.
Tires in the US have varied prices for disposal for much of the same reasons. Again, you need to share the tipping fee revenue with the collector - hauler. Steel from tires is priced cleaned and delivered to the steel mill. If you deal with a broker or scrap yard, you could lose 50% of the steel mill price. Size is a big issue. Cleaned and under 4 inch in length is ideal.
Pyrolysis oil, if clean, trades at a discount to WTI as there is no established market for it yet domestically. If it dies not meet ASTM standards then the discount can be $ 20 per barrel. Tank ready pyrolysis diesel is a different story. It will get closer to the wholesale price of fuels. There can be a big gap between retail (after tax) and the wholesale (pre-tax).
Unless there is a firm industrial buyer or other captive buyer, you are often at the mercy of the power distribution monopoly.
As for carbon credits, these are more of a political creature than conventional income sources. Some credits are fungible between markets and others are not. They need to be measured and independently verified before they can be marketed. Given the typical fixed costs to verify the volumes, generators often will wait a year or so to bite the bullet. From a cash flow perspective, they should be treated as deferred revenue.
The amount of energy derived from the system depends on the type of the input, the amount of inert elements which cannot be converted, the inherent humidity of the feedstock, the size of the input and so on. If you have a single unit, you need to consider downtime for cleaning out the system, preventative maintenance and a good annual overhaul. So, in a 24 hour day, look at an average of 20 hours of productive time. So, when the supplier says you will get x tons per day, are they talking per gross hour or net hours?
I have actually increased my position in CLNV. Not much though.
As for Morocco, we need to learn more on what the capital providers are extracting before we see our true cash flow.
In responding to Nelson 2's posting, he had stated that ASU would not deal with a firm that was not a going concern. Our accountant has already expressed a concern that without revenue or capital that there would be a going concern issue. The financial statements to date have not shown enough revenue or capital to support the project af ASU. It will all come out in the wash when the financials are released. BTW, not all OTC companies have going concern issues.
Our audited statements clearly state that there is a question of a going concern due to the absence of revenue and capital to support the business. However, it is not at the point where the accountant would issue a liquidation level of financial reporting.
So, is the correct interpretation of the quoted sections to mean that Clean Seas needs to find the 50 million for the facility and ASU provides rhe brain power and networking or people connections? There is no clear statement that the Walton family or its foundations are directly putting cash into the plant.
I was only responding to your 750 million dollar claim. The hubs are designed for production and storage. However, these sites may not be near markets. Consider this for a moment. A dated cost to build a natural gas pipeline is about 8 million per mile. Inflation and the issues with hydrogen could take this to 15 million per mile. So, the entire budget using your hub number is about 500 miles. The cost to store and retrofit a gas station, not talking about building new, should be about 250k per station but it could be higher. Pressurized trucks or chilled trucks and railcars do not come cheap. We need to consider McCarthy wanting to reduce spending which could kneecap the Act.
Look at your original posting saying 750 million.
Unfortunately, there is little in the proposal for the infrastructure to transport, store and distribute hydrogen in the bill. Also, the DOE needs to continue developing differential tax credit rates for non green hydrogen production. The Biden government perceives green as taking water and cracking it with an electrolytes using solar, wind and batteries as the energy source. Using waste in a pyrolysis plant is not green as they consider the cost to haul the waste to the plant as part of the carbon intensity.
There is no connection to immigration and lost government revenue. In fact, immigration leads to economic growth through added GDP and consumption taxes. As for hydrogen reducing fossil fuels will result in lower tax revenues unless they tax hydrogen or highway usage. Now, there is some issue on how big a credit will be for hydrogen from non green sources. It will take several months for the DOE to work it out.
Some helpful information to share...
I was on a hydrogen industry panel this past week. There were over 100 funders and developers attending. While it was arranged out of the EU about 60% of the topic involved US developments.
As for the Inflation Reduction Act, it was a godsend for new producers of hydrogen with the various incentives. However, the DOE still needs to come up with the pricing for non-green hydrogen. The big issue for developers is that the infrastructure to get the energy transported and stored does not match the pending demand. There appears to be a real timing gap which is not an overnight fix. The Act also put downwards pressure on hydrogen pricing as the tax credits displace market revenues.
The funders, banks, insurance companies, family offices, sovereign funds and the like said clearly that every developer will need solid offtake agreements to get funding today. The offtake buyer needs to be investment grade as the consumer level of the industry is very new. Ideally, the agreement should cover the time period needed to repay the debt. This is also true in the EU,
My observation has nothing to do with California or any other state. My comment was based on governments in general that levy taxes on gallons of gasoline or diesel purchased. So, less fuel taxes means governments must raise taxes elsewhere, become more efficient or cut spending. Since governments rarely cut services in the long run, taxes will rise to cover road and bridge repairs.
Actually, this makes sense but from a totally different perspective. if we all switch from ICE cars and light trucks to battery powered cars or cars that use hydrogen the government stands to lose tax revenue on fuel sales. In order to make up the tax revenue, you either raise sales and income taxes or use more toll roads. Taxing on mileage makes sense where there are no toll roads.
I am long CLNV. My broker does not allow short positions on OTC stocks.
I am just being objective based of verified information. Nothing more and nothing less.
If the feedstock is blended waste, then, getting any feedstock for no cost is a bonus. If it comes in as a sorted and bundled commodity then the vendor may want to sell the items elsewhere rather than giving them away for no cost. Blended feedstock has a lower btu value and by extension less revenue per ton of input.
I recently completed an assignment for a middle sized WTE operator. The debt side of the project was in the 60 to 70 percent range of the total capital cost. The funders were a group of bank managed ESG funds. The challenge for the operator was coming up the the balance as paid in cash equity. In the case of our company, if a plant costs say 30 million, we would need to find equity or sub debt for 10 million. Using the current market price, that is a lot of dilution for a single plant.
The problem that any company with a great idea has but does not have the experience as a company to roll out or has cash in the pocket to contribute to a new venture is raising capital. Even ESG funds will ask what are you bringing to the table. So, you are asking for 100 percent funding. The fund takes all of the rise for the benefit of the 300 million plus shares outstanding. The same holds true for family offices and VC firms. PE firms tend to look backwards before they will invest forward. I have had many a client in the same boat as our company. It can take several years to get anywhere. A larger WTE.plant using novel technology took close to a decade to get the capital. They had more doctorates and operational sites under their belts too. The only difference to CLNV was that the firm that I am thinking of was private.
So, it is still a question of finding the capital for the equipment purchase after the feedstock supply and permitting is complete. How many financial intermediaries have we press released so far that have delivered the needed capital? The only thing that we can see from the reported financials is we diluted the shareholders to fund a prototype plant in India. It will be interesting to see what the next quarter's results reveal.
The company has had some challenges I raising money. What did Roselle deliver? What has HTA delivered? These two had great press releases.
As for Bankers International, the no longer are registered with FINRA which means they are not a broker dealer or underwriter. Their deal size might be able to do a single CLNV plant but not several.
As for the retention of the lawyer, this brings the skills to paper the deal but not the cash to close the deal.
The range of capital costs is good for getting the best bang for the buck. However, who is putting in the cash for plants of this size? Until there is cash there is no equipment and ergo no income. Most western governments will not do full funding. They wants to see other people's money in the game. It can also be other governments as well but they still want to see real promoter cash on the table. There are also other MSW including plastics equipment providers and operators out there. While many go to make power, there are some that do tank ready fuels and some that are developing hydrogen. My concern is that the competition for the outcome are financially better off and have some street cred. This may limit our company's ability to get funding.
That sounds about right. I bought in earlier over a year ago and then watched its value fall. It has come back nicely. At least I am in the green but not enough to sell.
In order to earn revenues, either CLNV. A JV or a client needs to raise the funds to purchase a system. There is a lag between the press release of an LOI, the raising of the funds and the commissioning of a plant so acquired. To date, we have not recorded any ongoing revenue on ournown account or an equity pick up on a JV. Revenues do not necessarily translate to profits or net positive cash flow which are dependent on the funding.
Agreed
Much like the royal "we" - the company's press releases to which I am a shareholder.