24/04/2014 - 15:48

Waste to energy plants edge closer

24/04/2014 - 15:48

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Two Western Australian companies pushing waste to energy projects worth more than $710 million are planning to start construction within the next year.

Waste to energy plants edge closer
TIMING: Jason Pugh says New Energy has been pleasantly surprised by the level of interest in its waste to energy plant plans. Photo: Attila Csaszar

Two Western Australian companies pushing waste to energy projects worth more than $710 million are planning to start construction within the next year.

New Energy Corporation has targeted September as the deadline for a final investment decision on its two waste to energy plants after contracting Kiewit for front-end engineering and design.

Kiewit was announced as the winner of a competitive tender in mid-April, which New Energy general manager Jason Pugh told Business News drew interest from both Australian and global engineering companies.

“It probably says a bit about the engineering market right now that we got such a high level of interest,” Mr Pugh said.

“I think it means that it’s a really good point in time for us to be rolling out a project of this nature.”

Mr Pugh said Kiewit would take about four months to complete detailed design of the plants planned for Port Hedland and Rockingham, which are expected to cost a combined total of $334 million to build and be similar in specification.

Once the design phase was completed New Energy’s financiers would decide whether to proceed with both plants, one plant, or none at all.

Mr Pugh said discussions with potential debt and equity financiers both within Australia and internationally had been positive and buoyed by the fact that New Energy had done significant groundwork.

“There’s no doubt that waste to energy is an emerging market here in Australia and what the financiers like is that our directors have invested a lot of time and money into the project to a point that we’re almost bankable,” Mr Pugh said.

“So we’re not after seed capital per se to float an idea – we’re at the stage that we’re looking for capital to kick off a viable project.”

New Energy was co-founded by Global Construction Services’ founder, Enzo Gullotti, who remains as chair of the New Energy board of directors.

Mr Pugh said that also gave potential investors confidence.

“The people that we’re speaking to know (Mr Gullotti) and our other directors and know that they’re going to follow through on what they say they’re going to do … they are successful business people in their own right and success breeds success,” he said.

“Having that credibility attached to the company and the project has been very, very positive.”

The Environmental Protection Authority has approved the company’s plans for a plant in Port Hedland, which is expected to cost $184 million – more than the $150 million estimated for the Rockingham plant, largely due to the increased cost of doing business in the Pilbara.

Mr Pugh said the Pilbara’s waste situation was much more dire than in metropolitan Perth. 

“In the Pilbara waste management is really an abomination – it’s just miles behind where it should be and it looks like something out of Africa,” he said.

“The issue is that we have local councils up there that don’t have many ratepayers but the amount of waste that’s coming on to their landfill is equal to a metropolitan-sized landfill, so there’s not the funding to establish best-practice infrastructure.”

Mr Pugh said the Town of Port Hedland was supportive of New Energy’s plans for private investment and had expressed an interest in running the town’s lighting on electricity generated from the plant. 

The proposed plants will be designed to process 225,000 tonnes of waste per year, with 100,000 of that being used to generate electricity.

Meanwhile another Perth-based company, Phoenix Energy, is awaiting approval from the Environmental Protection Authority before kicking off its $380 million project at Kwinana.

Phoenix Energy says it’s already sorted funding for the project and John Holland has completed front-end engineering and design of the facility.

Its plant, planned for completion in 2016, would be able to process 300,000 tonnes of municipal solid waste per year.

The City of Kwinana demonstrated its support for the facility in December last year by signing a 20-year waste supply agreement in which 100 per cent of its municipal solid waste would be sent to the waste to energy facility.

The Eastern Metropolitan Regional Council has also been working since 2000 to progress a ‘resource recovery facility’ at Red Hill, which would include a waste to energy plant.

It received approval from the Environmental Protection Authority in mid-2013 on condition it abides by strict conditions.

The waste to energy component is expected to cost between $50 million and $100 million and convert between 150,000 and 200,000 tonnes of waste annually. 

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