Governor announcing big energy recycling project
New facility would take plant exhaust and use it to power factory

by George Hohmann
Daily Mail Business Editor

Gov. Joe Manchin was expected to join today with executives from West Virginia Alloys Inc. and an Illinois company to announce an innovative $45 million to $55 million energy-recycling project at the Alloy Plant in Fayette County.

Manchin was to announce that West Virginia Alloys has entered into an agreement with Recycled Energy Development of Westmont, Ill., to recycle hot exhaust from the Alloy Plant.
The project is expected to generate 40 to 44 megawatts of electricity, offsetting about one-third of the Alloy Plant's electric consumption. The project will burn no fossil fuel, will emit no pollutants and will eliminate 290,000 metric tons of annual greenhouse gas emissions, Recycled Energy Development said in a prepared statement.

Thomas Casten, chairman of Recycled Energy Development, said the project will employ about 50 construction workers over two years and, when finished, the project will have seven or eight permanent employees.

Casten said the project will enable the Alloy Plant to expand by about 20 percent, "and that's going to add 16 to 20 full-time jobs for the mill itself."

Arden Sims, president of West Virginia Alloys, confirmed Casten's statement. Sims said the plant currently has about 200 employees.

The energy-recycling project is expected to go online in 2010.

Manchin said in remarks prepared for delivery at a press conference in the Governor's Reception Room at the Capitol, "This substantial investment is a step forward for West Virginia's economy and our environment. This project shows that our state is leading the way in showing that economic growth and environmental stewardship can and must go hand in hand."

The Alloys Plant is on the Kanawha River about 30 miles east of Charleston. It uses five electric arc furnaces to produce nearly pure silicon. Recycled Energy Development, also known as RED, said its project will allow the plant to capture energy from the furnaces that is typically vented.
RED said it will install waste heat recovery boilers that convert exhaust heat into steam. The steam will drive a generator to produce electricity. RED said it will supply all of the capital and energy expertise for the project, receive a return on its capital and split all remaining financial benefits with West Virginia Alloys, "thereby helping to maintain the competitiveness of the silicon facility."

Sims said in a prepared statement, "Our company is focused on doing right by the environment through initiatives such as this one. We are improving our energy profile and associated emissions. Our goal is to look for ways to benefit the environment in a way that will also provide benefits to our customers, community and employees."

Casten said in prepared remarks, "This project validates RED's mission of profitably reducing greenhouse gas emissions. The cost savings help preserve and grow local manufacturing and the pollution savings reduce health and environmental expenses while mitigating climate change. Everybody wins."

RED said this is its first deal under a recently announced partnership with private equity firm Denham Capital Management to invest $1.5 billion in energy recycling projects.

The Alloys Plant has a capacity to produce 75,000 tons of silicon a year. Chemical, aluminum and steel manufacturers, auto companies, ductile iron foundries, manufacturers of photovoltaic solar cells and computer chips, and concrete producers use the silicon.

West Virginia Alloys is a unit of Globe Metallurgical Inc. of Beverly, Ohio, which is in turn a unit of Globe Specialty Metals Inc., which is headquartered in New York. Globe's stock is traded on the London Stock Exchange.

Globe bought the Alloy Plant in 2005 from Norway's Orkla ASK, the corporate parent of Elkem Metals Inc. Elkem had purchased the Alloy Plant from Union Carbide Corp. in 1981.

At the same time Orkla sold the Alloy Plant, it signed an option to sell its Hawks Nest hydropower plant to the D.E. Shaw investment fund of New York. The Hawks Nest hydropower plant supplies electricity to the Alloy Plant. Brookfield Power Corp. bought the hydro plant in 2006.