Covanta reports continued progress with UK, US WtE projects

By Erin Voegele | May 11, 2020

Covanta Holding Corp. has confirmed construction is once again under way at its Earlsgate waste-to-energy (WtE) facility in the U.K. following a brief COVID-19-related delay. The company also noted that it is in the early stage of developing additional WtE capacity in the U.S  

Steve Jones, president and CEO of Covanta, made the statements during the company’s first quarter earnings call, which was held May 8.

During an April 15 conference call held to discuss the impact of the COVID-19 pandemic on Covanta’s operations, Jones reported that work was continuing on the Rookery and Newhurst WtE projects in the U.K., as the English government considered construction to be an essential activity during the pandemic. The Scottish government, however, took a different approach. As a result, construction on the Earlsgate WtE facility was temporarily halted. “The Earlsgate project in Scotland is now in the process of restarting construction activities,” Jones said on May 8. “I am proud of our success in the U.K. to-date, and excited about the opportunities ahead of us.”

Jones noted the company has several other WtE projects under development in the U.K. “New development activities in the U.S. are at an earlier stage, but as I’ve mentioned before, we’re seeing more activity,” Jones said. For example, he said the company is currently in negotiations with a client in Pasco County, Florida, to support the potential expansion of their WtE plant. “This will take time to playout, but it is a positive sign on the potential for domestic growth and our strong position in the market,” Jones continued.

Jones also discussed ongoing impacts from the COVID-19 pandemic. He said the company has felt some downward pressure on roughly 30 percent of its waste revenue, including commercial municipal solid waste and profiled waste. The company’s WtE plants are designed to run full, he said, noting that Covanta aims to procure sufficient additional waste to offset any declines in existing waste streams. “One of our first options here is to tap into our transfer stations,” Jones said. “In 2019, over 200,000 tons received at our transfer stations were sent to disposal at third-party outlet. Where appropriate, we are now internalizing some of these tons. Second, we're going back to some of our key customers and ask them for more waste. And then lastly, in some cases, we're simply casting a wider net to accept waste from additional haulers.”

Covanta reported $93 million in energy revenue for the first quarter, compared to $94 million for the same period of last year. Overall, the company reported $468 million in revenue, up from $453 million during the first quarter of 2019. Net loss was $32 million, compared to net income of $5 million. Adjusted EBITDA was $97 million, up from $84 million during the first quarter of last year.