Clean Waste Disposal Facility in Denmark

Industry

Infrastructure/ Industrial Manufacturing

Company Type

Waste Management/ Clean Energy

Location

Denmark

Investment Type

Equity/Debt
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Contact: Tina Vital, Managing Director

tvital@castleplacement.com

HUGHES ENERGY

Overview

Hughes Energy, LLC is seeking $161.70 million (excluding sponsor-contributed $12.3 million in equity) to construct a clean waste disposal (waste-to-value) facility in Stigsnaes, Denmark (75 miles from Copenhagen) – converts low-valued organic Municipal Solid Waste (MSW) into higher-valued green fuel pellets for biomass electricity generation and other end-products.

Stigsnaes Project – plans to convert 370,000 tons of waste per annum into sanitized recoverable recyclables and green fuel pellets for use in biomass electric power generation

  • Patented/proprietary green solution to increased waste volumes with “no place to go” – virtually no emissions and no incineration
  • Local and federal government – supportive of international businesses looking to invest
  • Land purchase agreement – in-process
  • Feedstock supply contract –  in-place
  • Product offtake contracts – in-place
  • Expansion potential – pipeline of five European projects with feedstock and offtake contracts in-place

Management team has extensive experience in the waste and renewable energy technology and international business management and development – global experts in steam autoclaving engineering technologies

HUGHES ENERGY

Opportunity

Climate change is an existential threat – and an enormous investment opportunity

Greenhouse gas (GHG – including carbon dioxide CO2, methane, nitrous oxide NOx and fluorinated gases) emissions have increased since the beginning of the industrial era – building up in the atmosphere and warming the earth’s climate

  • Methane is 84 times more damaging as a GHG than CO2

Air pollution has led to millions of deaths per year and increases respiratory diseases such as COVID-19

European Economic Area (EEA) estimated climate-related economic losses totaled EUR 446 billion between 1980-2019

  • Cumulative deflated losses are near 3 % of the GDP of these European countries

Denmark is politically stable and developed with a high-income economy and a AAA credit rating

HUGHES ENERGY

Waste Disposal – Outdated and Limited

Little has changed in how waste is disposed

World generated about 2 billion tonnes of MSW per annum in 2018

Unchecked, may surge to 3.4 billion tonnes by 2050

Cost of disposal rising in the European Union (EU) – waste volumes and tipping prices increasing

Landfills and incineration – common option in developed countries

  • Landfill sites – organic MSW are major sources of methane emissions
  • Waste incineration – historically, dominated in the waste-to-energy sector
  • Waste management – range from advanced to basic uses

Ground, water, and oceans – common option in undeveloped countries

HUGHES ENERGY

Green Energy – Waste-to-Value

Green energy technologies promise environmental solutions – estimated market potential near $400 billion

Global biomass electric power generation market is over $4 billion per year and expanding

Global demand for wood pellets as a green fuel is growing rapidly as a substitute for traditional fossil fuels

  • Currently rely on use supplies or fell valuable timber forests
  • Global demand in 2020 was 27 million tons, growing 7% per year
  • U.S. produced over 15 million tons of wood pellets per annum in 2019
  • U.K. imported nearly 7 million tons of wood pellets per annum at prices near $190 per ton in 2019
  • Denmark is EU’s second largest importer of wood pellets

HUGHES ENERGY

Waste-to-Value – Emerging Technologies

Waste-to-value” technology is a virgin market with emerging technologies

Anaerobic digestion is widely used in Denmark and Europe

  • Denmark challenges – most are agricultural facilities which are manure-based and produce biogas
  • European challenges – closing digestors in certain countries because of the inability to dispose of increased volumes

Pyrolysis is early stage and expensive

  • Struggles with non-homogenous nature of MSW feedstock
  • Significant cost and effort required to pre-treat MSW before use

Gasification has not yet been built with scale or consistency

  • Struggles with non-homogenous nature of MSW feedstock
  • Significant cost required to pre-treatment of incoming feedstock
  • Inconsistent quality of gas product

HUGHES ENERGY

Solution/Strategy

Hughes clean waste disposal (“waste-to-value”) facilities use Wilson System® technology to convert low-valued organic MSW into green fuel pellets for biomass electricity generation and other higher-valued end-products

Cuts waste destined for landfill by 85% -95% depending upon MSW – drastically reducing the production of methane from organic MSW

  • Diverts over 350,000 tons of waste from landfill sites per facility per annum
  • Eliminates up to 400,000 tons of CO2 emissions per facility per annum – apply for carbon credits

Reduces risks of uncertainty related to organic MSW disposal to municipalities and waste companies

  • Limits disposal costs – Hughes can lock-in tipping fees for up to 10 years
  • Scalable expansion capacity – newbuilds are affordable and efficient

Unique revenue generation – from both raw material and end-products

Raw material – paid to take organic MSW

  • 57% of revenues – collection of gate fees from waste feedstock providers
  • 31% of revenues – sale of Wilson Fibre® for green fuel pellets or other bio-products
  • 12% of revenues – sale of sanitized recyclables such as aluminum, plastic, glass, and ferrous metals

End-product – sale of sanitized recovered recyclables and Wilson Fibre® converted into green fuel pellets and other bio-products

  • Inert materials (about 12% of MSW processed) not processed represents a nominal cost for disposal
  • Base case includes disposal costs at landfill; operating plan is to explore reuse and/or recycle

HUGHES ENERGY

Solution/Strategy – continued

Hughes is the commercial arm for the Wilson System®

System sales, annual maintenance contracts, annual royalty fees (CleanTech franchise model)

Sole license holder for the Wilson System® in North America

  • 10-year term with right to renew for a second term
  • Other geographic locations by exclusive license agreement with Wilson Bio-Chemical (WBC)
  • Hughes owner is a major shareholder of WBC

Hughes partners

  • Project planning and permitting – contract in-place (Combineering RCZI ApS)
  • Architecture, design engineers – LOIs in-process
  • EPC/construction management – LOIs in-process
  • Process engineering consultants – LOIs in-process
  • Project management – LOIs in-process

HUGHES ENERGY

Stigsnaes Project – Problem

PROBLEM – Waste volumes are increasing, but disposal options are declining and limited

  • Location – Stigsnaes, Denmark (75 miles from Copenhagen)
  • Landfilling ban – all waste is currently incinerated

HUGHES ENERGY

Stigsnaes Project – Solution

SOLUTION – Hughes / Wilson System®

Sigsnaes facility – converts 370,000 tons of waste per annum into sanitized recoverable recyclables and Wilson Fibre® transformed into green fuel pellets for use in biomass electric power generation

Hughes facility uses green technology with virtually no emissions – not incineration

  • Cuts waste volumes destined for landfill by 87% – after recovering recyclables and production of Wilson Fibre®
  • Reduces GHG emissions – cuts production of methane from organic MSW from landfill sites

FEED project development – gap between design conception and detailed engineering design/EPC execution

Land purchase – contract in -process for 123-acre site

Organic MSW feedstock – long-term contract in-place (Combineering RCZ1 ApS)

Off-take/product contracts – long-term contract in-place (Combineering RCZ1 ApS)

Permits and zoning

  • Operating permit – in-process
  • Site approval permit – in-process
  • Zoning – zoned as a heavy industry site and an Eco-Park is being constructed (not a greenfield site)

HUGHES ENERGY

Management

Brendan Hughes

Chairman and Founder

Over 30 years of experience in the construction industry. In 1988, founded Hughes and Hughes Contracting Corporation which served corporate, commercial, and residential markets within New York City and the Tristate Area. In 2005, turned attention to the waste and renewable energy sector. Major shareholder in Wilson Bio-Chemicals, the parent company to the Wilson System®.  In 2014, founded Hughes Energy as the exclusive distribution channel for the Wilson System® technology in North America.

Dane McSpedon

Chief Executive Officer

Over 25 years in international business management and strategic sales expertise – successfully building companies with complex technologies. Joined Hughes Energy in 2013, raised Series A funding and attracted key members of the team. Started career in Russia establishing and managing the local affiliates for IBM, Honeywell and Kelly Services. Managed 18 country affiliates and established sales distributors in over 65 countries while running Global Sales and Services at De La Rue. Established new operations in Central and South America for AVA (an international secure logistics company). BA (Magna Cum Laude) from Colgate University. Leningrad State University (Russia). Executive Education in Advanced Corporate Leadership, Leading Change and Organizational Renewal from Harvard Business School.

Jatish Shah

Chief Financial Officer

Over 30 years of international finance and operational experience in emerging and developed markets – developing early-stage companies and bringing new technology to market. Joined Hughes Energy in 2014. Previously, Finance Director and CFO in a variety of industries for over 15 years. Extensive experience within multinational organizations and SME businesses – developing companies, executing business projects, raising capital and working with Venture Capital and Private Equity investors. Qualified Chartered Management Accountant (ACMA -UK). BA (Honors) in Business Studies from the London Metropolitan University (formerly – City Of London Polytechnic).

Saira Nazneen

European Business Development Director

Over 25 years of business management experience in international sales, service, consultancy and project management in banking, manufacturing and Government. Joined Hughes Energy in 2018 – attracted by the opportunity to support the global effort to realize a “zero carbon world”. Prior Service Manager at Barclays Bank and led a team of site-based engineers.  Account Director, De La Rue, working with Central Banks around the world. PRINCE2® Practitioner, trained in the Miller- Heiman Strategic Selling. Higher National Diploma (HND) in Business Studies from Coventry University.

Tom Wilson

Non-Executive Director

Wilson System® designer, investor and chief steam autoclave engineer. Over 50 years of engineering experience within the steam industry and a recognized international expert in steam storage. Lead steam process design engineer for international companies – including British Gas and the British nuclear industry – within steel, textiles, plastics, food and biotechnology. For the past 10 years, focused within the waste management sector – validating steam autoclaving municipal solid waste as a viable solution to environmental problems.  Higher National Diploma (HND) in Mechanical Engineering from Sheffield Hallam University (formerly Sheffield Polytechnic).

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Ken Margolis | Managing Partner Castle Placement, LLC
1460 Broadway Street, Rte 400
New York, New York 10036
(212) 418-1188 | C: (516) 712-7784
kmargolis@castleplacement.com

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