SPECIAL REPORT: Almost a billion dollars worth of waste-to-energy projects are in the pipeline in WA.
Almost a billion dollars worth of waste-to-energy projects are in the pipeline in WA.
Much to their chagrin, successive national political leaders have been thwarted by the challenge of merging an emissions reduction policy with the need for stable baseload power.
That failure is largely political in nature, given the widespread support for emmissions reductions by much of the business sector.
Now, three projects in Western Australia hope to go some way to mitigating the emmissions issue using waste-to-energy technology.
Such generators take waste from local governments that might otherwise go to landfill, drawing out gases that are then set alight to release energy that drives electricity turbines.
The process produces carbon dioxide, which is less environmentally damaging than the methane released through landfill decomposition.
Macquarie Capital and Phoenix Energy started preliminary groundworks at a $400 million waste-to-energy plant in Kwinana earlier this year, with the Melbourne-based company signing a deal to take waste from a series of councils in March.
New Energy Corporation is working on two projects.
One is in Port Hedland, a $70 million project that will have capacity of six megawatts, scaled down from an initial design of $200 million and 15.5MW.
The company had secured a waste and power deal in July, but that was terminated earlier this month.
The company’s second project, in East Rockingham, is a $400 million investment in collaboration with Swiss contractor Hitachi Zosen Inova and Middle Eastern fund Tribe Infrastructure, with each party holding a third.
The Kwinana plant will have capacity of about 30MW.
The proponents are hoping to get construction under way in the March quarter of 2019, with completion in 2021.
Tribe director Raj Aggarwal said the consortium had made significant strides in the past month.
“These projects … they are actually very difficult to get off the ground, mainly because your fuel supply is effectively coming from councils and there’s many councils,” Mr Aggarwal told Business News.
“Effectively you’re taking waste, combusting that waste and generating energy, so then you’ve got environmental issues associated with that, you’re trying to aggregate 15 or 20 councils.
“And then you’ve got the electricity market challenge in WA, there’s just insufficient (demand) in the market to offtake energy.”
Combined, that means projects could sit in the pipeline for a long time, he said.
The project’s recent progress included moves towards a power purchasing agreement and a deal to offtake waste.
“We think within the next two to three weeks we’ll be able to definitively find ourselves with almost all our waste contracted, which would mean we’d have all of the fuel supply locked in,” Mr Aggarwal said.
He said about 70 per cent of revenue for a waste to energy plant came from the waste contracts themselves.
“The government has imposed a landfill levy, it’s the same thing,” Mr Aggarwal said.
“Instead of putting (their garbage) in the landfill, they’re paying you to take it and generate energy from it ... it’s a baseload facility.
“The beauty of this compared to any other baseload facility is that it’s the only facility that actually gives you renewable energy credits together with being a baseload.”
Mr Aggarwal said a recent paper by the Environmental Protection Authority had found landfill was a far worse option for greenhouse gas emissions than waste to energy, because the latter produced carbon dioxide rather than the more damaging methane.
However, he said it was still important for councils to manage waste effectively.
“(We say) from a council perspective, make sure you do absolutely everything you can, whether it’s compost or recycling, all the processing you can,” Mr Aggarwal said.
“But then there’ll be a residual stream of waste that goes either to landfill or waste to energy, and that’s the point where we say it’s better to go to waste to energy.”
The South West Interconnected System power network does not currently have any waste-to-energy facilities, although there are nine landfill gas-powered generators.
They produced about 2.5 gigawatt hours in the year to August 15, according to the Australian Energy Market Operator, about 0.7 per cent of total generation.
Facilities include Red Hill, South Cardup and Tamala Park, which are operated by Landfill Gas & Power, CleanTech Energy’s biogas plant and Waste Gas Resources’ Henderson facility.