John Byrne, the executive chairman of Wasabi Energy, says that if you want to understand a little about the amount of energy that is wasted around the world, just put your hands on the exhaust pipe of a car.

Actually, don’t. Get too close, and you’ll burn yourself. But there are around one billion cars on the road and, on average, only 20 per cent of the energy generated by the car’s engine actually gets to the wheels. Most of the rest, according to the International Energy Agency, goes out the exhaust.

In fact, according to the IEA, more than half of the all energy that is produced in the world goes to waste. Coal plants only use around one third of the energy they produce, some as little as 25 per cent. But while capturing the waste heat emitted by cars and trucks might be difficult, capturing and using the heat generated from coal plants, cement plants, steelworks, smelters and chemical plants is not so hard.

“Increasing the efficiency in many energy conversion processes is crucial,” the IEA says. “As the demand for energy increases in all sectors, and all over the world, waste heat management will be a cost-effective way of securing the supply of energy and power while mitigating the emissions of CO2.”

Byrne clearly sees this as the next big business opportunity – an opporunity even more attractive than the coal and iron ore mining that he has most recently been associated with. It is actually an opportunity he first spotted nearly 20 years ago, when he first invested in a power technology known as the Kalina cycle. He did his money. About six years ago, after a string of other investors, including George Soros, did the same thing with the same investment, Byrne returned for a second go.

This time he is confident the time has come to make money from waste heat: the world is getting serious about reducing emissions, but more importantly it is keen on reducing energy costs, and is focused on energy efficiency.

The Kalina cycle is described as the most efficient power production technology at relatively low temperatures, and has applications in using waste heat from industrial and power plant operations and from renewables, particularly geothermal.

Small plants have already been operating at a Sumitomo steel mill and a Fuji Oil refinery in Japan, as well as a geothermal plant in Iceland. Deals have been signed for a cement plant in Pakistan with FLSmidth, the world’s biggest cement plant operator, and for geothermal plants in Germany, Turkey and Iceland. Byrne wants to add more "reference sites" – steel and petrochemicals – and within the next 18 months the company wants to establish 10MW of builder own operate (BOO) plants, growing to 100MW within three years, with more under licence.

Wasabi’s proposition is relatively simple. It can be an independent power producer through geothermal sources, or it can approach industrial groups to install additional power plants at no cost to the operator. In return for getting the waste heat for nothing, it will then cut a deal to sell electricity back to the user (or to the grid), and on revenues from credits from greenhouse gas reductions.

According to Wasabi, the capital cost for a 10MW plant is between $US15 and $20 million, kand its operating costs are 1c/Wh. With an electricity price of 11c/kWh, the company estimates it can get payback within 2.5 years and a return of capital of 39 per cent.  The NPV of each plant is calculated at $66 million.

“We’re a little company with big ambitions” he says. “If we can maintain that 100MW, then we growing company at $750 million a year. That’s totally achievable, if you believe that governments will continue to press for carbon and energy reductions. The only way to do that is through energy efficiency.”

Wasabi, a listed company with a market worth of around $70 million, also has interests in a water conservation technology group Aqua Guardian and in biofuel and feedstock producer Australian Renewable Fuels. Byrne admits he may have mistimed the exit from most of his metals and mining extraction, but there are plenty of opportunities in clean-tech. Some, like Wasabi and the Kalina cycle, are a matter of timing.

“In the green space, you have a lot of dreamers. But if you want a business you got to have cash flow. Our strategy is simple, get into this space, build cash flows and look for technologies and companies that have run out of money."

He says 90 per cent of such companies promise but fail to deliver in a listed environment. “There are a whole host of opportunities out there where they done a lot of hard yards – but they promise the world, they fail to deliver, the market hits them.” A typical example is water and air purification business Cleanteq – floated at 50c, Byrne’s group has bought more than a quarter stake at less than a tenth of a price. “Co2 and water are the biggest issues and they are going to be massive opportunities in years to come.”