October 11, 2004

Joint venture will promote clean process for solid waste disposal

Two Vancouver companies, Clean Energy Combustion Systems and EnEco Industries, have formed a joint venture to promote the sale or licensing of EnEco's Controlled Oxidation Reaction Environment, or "CORE," gasification system in Mexico. The technology is designed for safe, clean disposal or recycling of municipal solid wastes which would otherwise be sent to landfills, as well as other solid wastes such as medical waste, tires and selected wood wastes.

Under the joint venture agreement, Clean Energy will take the lead in procuring projects and financing, while EnEco will handle all project engineering activities. All profits from the sale or licensing of the CORE gasification system in Mexico will be split equally between the parties.

As part of the joint venture as well, Clean Energy will allow EnEco to use the former's oscillating burner technology for the secondary combustion process in the CORE gasification system. If the integration of Clean Energy's oscillating burner technology with the CORE gasification system works as anticipated, the two firms will likely expand the joint venture to other countries or will grant EnEco a licence to use Clean Energy's technology in its CORE system for solid municipal waste gasification applications.

Another goal of the joint venture is to continue discussions with senior Mexican government officials about the potential use of the CORE gasification system to gasify solid municipal wastes as an alternative to developing or expanding landfills. The Mexican government is interested in procuring technology capable of managing municipal solid waste in a cost-effective and environmentally clean manner while co-generating electricity to help the country reduce its critical power shortages.

As part of these discussions, the joint venture is proposing to begin building four CORE gasification pilot plants in four of Mexico's largest cities in 2005, and to have the facilities operating by 2006. Each pilot plant would process 600 tons per day of a combination of municipal solid wastes, hospital waste, tires and selected wood wastes. Steam generated in the heat recovery process would drive two 10 megawatt (MW) steam turbines and generators for a total electrical output of 18.8 MW.

Electrical energy from the plant would be considered "base load power," which could be relied on as a constant source of power to the local grid. All ferrous and non-ferrous metals contained in the solid waste would be recovered in their original form and sold to recycling markets. This would prevent heavy metal contamination of the ash from the process. Glass, sand, and ash recovered from the gasification process can also be used for building materials. Additional plants would be constructed upon satisfactory operation of the pilot plants.

Clean Energy and EnEco executives were scheduled to meet with senior government officials in Mexico during the first week of October to discuss the proposal.

The CORE gasification system differs from Clean Energy's proprietary Mark V ecoPhaser gasification system in design, operation and application. The Mark V system can be used to gasify a wide variety of homogenous waste materials such as pulp and wood wastes from primary industrial processes, processed agricultural residues and animal wastes. These materials are not generally considered to constitute municipal solid wastes. Consequently, Clean Energy has retained the right, under the joint venture, to market the Mark V ecoPhaser gasification system in Mexico for these applications, which are not addressed by the agreement with EnEco.

There may, however, be a number of complementary solid waste applications or subprocesses for which the ecoPhaser gasification system will be appropriate to enhance the overall process, such as the gasification of selected wood wastes to increase energy production. Such applications will be governed under the joint venture on the same basis as EnEco's CORE gasification system.

EnEco is a private company incorporated in 1991. It has installed more than a dozen municipal solid waste gasifiers, some in continuous operation since 1992.

Clean Energy is a development-stage U.S. public company based in Vancouver. Its patented oscillating combustion technology is a high-efficiency valveless combustor system based on the principles of cyclical combustion originally developed for aerospace propulsion.

This technology is designed to provide a higher level of energy efficiency, with associated fuel cost savings, as well as greater reductions in NOX and other emissions, compared to the standard, steady-state combustion technology currently used in the heat transfer industry.

More information is available from Clean Energy Combustion Systems, 604/681-9337, FAX 604/681-9354, E-mail shareinfo@clean-energy.com, Web site, www.clean-energy.com.

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