New facility from public-private partnership in Ireland is expected to process up to 600,000 tons of waste a year when completed

Fairfield, N.J.-based Covanta Holding (NYSE:CVA) has started construction on its first major energy-from-waste project in Europe.

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Covanta Europe President Scott Whitney told the Cleantech Group today that it marks the company’s first project in Ireland, though it has one other project in Europe where it’s a minority partner.

Covanta develops, owns, and operates large-scale infrastructure that converts waste to energy, in addition to other waste disposal and renewable energy projects in the Americas, Europe, and Asia.

Whitney said the company has started construction on a new energy-from-waste facility in Dublin, Ireland, which is being built as part of a unique public-private partnership between the Dublin City Council and Dublin Waste to Energy, of which Covanta owns the majority.

Whitney said the project originated several years ago when Dublin and three other municipal authorities were looking to meet requirements of the European Union’s Landfill Directive. The directive requires member states to reduce the amount of biodegradable waste they landfill to 35 percent of 1995 levels by 2016. This is to lower the amount of methane produced in landfills, which causes greenhouse gas emissions.

“Some countries are further behind than others,” Whitney said. “Scandinavia, Germany, and France have essentially met the requirements. The UK and Ireland are two of the countries with substantial waste generation and are further behind. Italy is also in that category.”

Dublin has also set an ambitious target for 56 percent of its municipal solid waste to be recycled by 2013, Whitney said.

The original bid for the energy-from-waste project was won by Elsam, which was acquired by Danish Oil and Natural Gas, known as Denmark’s DONG Energy. Whitney said Covanta has partnered with DONG on the project, signing the contract about a year and a half ago. DONG has a minority ownership interest in the project, and developed the initial technical design.

Covanta’s subsidiaries are expected to construct the €350 million ($510.2 million) facility. It’s expected to be able to process up to 600,000 tons of waste annually when completed in three years.

Whitney said Covanta is also responsible for financing the project. The city pays a fee for each ton of waste delivered to the facility, and the electricity it is expected to produce should help offset the cost of construction. The rest of the funds to offset construction are expected to come from commercial and industrial merchant waste.

Under the 25-year operating contract, Whitney said a minimum of 320,000 tons of waste is expected to come from the city annually, with the remainder coming from the merchant market.

When complete, the facility is expected to generate enough clean renewable electricity to power about 50,000 homes as well as district heating potential for about 60,000 homes. The facility also offsets one barrel of oil for every ton of waste processed, or 6,000 barrels a year, Whitney said.

With the proven energy-from-waste technology, the waste left over after recycling and composting is efficiently incinerated to heat water, and the resulting steam then turns a turbine to create electricity, Whitney said. Though the technology comes from Germany’s Fisia Babcock Environment, which specializes in thermal waste treatment and flue gas cleaning plants, Whitney said Covanta does its own research and development related to air pollution control.

Well-known clean energy technologies such as waste-to-energy and geothermal power are expected to receive greater attention in 2010.

Whitney said his company’s UK development office could be busy, with 15 to 20 similar facilities needed in areas such as England, Scotland, and Wales over the next five to seven years. The 40-employee office is expected to add about 15 more staff in the next year.

“The UK and Ireland is our biggest growth market for the next five to seven years,” he said.

One other company, Belgium’s Indaver, is building a 200,000 ton per year energy-from-waste facility in Ireland.

“Between ours and theirs, there will be enough energy from waste to meet Ireland’s needs for the next decade or more,” Whitney said.

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