Waste power needs investment spark

21/09/2015 - 11:26

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Three waste-to-energy projects have received environmental approval, while the state government has increased landfill levies.

Waste power needs investment spark
OPTIMISTIC: Jason Pugh is hopeful more waste-to-energy plants will be built. Photo: Attila Csaszar

Three waste-to-energy projects have received environmental approval, while the state government has increased landfill levies.

The proponent of two of the three waste-to-energy plants planned for Western Australia believes the sector will grow when the limitations of landfill become more apparent to investors and local governments.

New Energy Corporation chief executive Jason Pugh, whose company is developing plants in Kwinana and Port Hedland, said the economics stacked up for four waste-to-energy plants in the Perth metro region in the next decade.

Along with Phoenix Energy, which plans to develop what will be the state’s largest waste-to-energy plant in Kwinana, the plants currently being developed are estimated to produce power for 90,000 homes through two different processes – gasification and incineration (see the table of plants in development).

Mr Pugh told Business News while waste-to-energy plants could divert a considerable amount of waste that would otherwise go to landfill, developing the nascent sector remained a challenge.

 

In recent years, regional councils, which collect and manage waste for suburban councils around Perth, have been seeking new solutions in efforts to reduce waste and improve recycling.

Despite recent moves by councils to pull more recyclables out of the waste stream, including the City of Stirling’s new recycle-friendly three-bin system, landfill remains the cheapest and easiest option.

The vast majority of hard waste that goes on to bulk verge ends up in landfill, while alternative waste treatment plants, such as DiCom’s facility in Shenton Park, which has been plagued by delays and cost overruns, are considerably more expensive (see table, commercial waste fees).

Western Metropolitan Regional Council acting chief executive Günther Hoppe told Business News the state’s decision to increase landfill levies from $28 per tonne to $55/t at the beginning of this year, and locking in stepped increases to $70/t from 2019, had prompted waste-to-energy plant proponents to view the market more favourably.

“Part of the Waste Authority’s strategy is to make landfill less competitive, or to make waste energy artificially more competitive, because they’re saying philosophically they don’t want to landfill things that can be used beneficially,” Mr Hoppe said.

Mr Pugh said raising the landfill levy had helped shore up the economics for waste-to-energy plants, but had also created teething problems.

It had been argued that the levy, which only applies to the Perth metro area, has encouraged greater transfer of metro waste to regional areas (activity of this sort has grown from 2 per cent at the end of 2014 to 19 per cent in the middle of 2015).

The state environmental regulation department told Business News this increasing shift predated the landfill levy increase, and was instead due to new or expanded regional putrescibles landfill options.

Mr Pugh said while waste-to-energy plants were more expensive in the short term because of the infrastructure involved, early contracts securing tonnes of waste feed had already been signed for competitive prices relative to landfill gate fees, and proponents could also offset costs with electricity revenues.

“Waste, as we view it, is a resource; it can be turned into valuable power, so it just makes sense that we should go in that direction,” he said.

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