Waste-to-energy pressures claim Anergy

The company building the Hazelmere wood waste-to-energy project has entered administration, after work on the plant stopped around Christmas amid rising cost pressures.

Daniel Bredenkamp from Pitcher Partners was appointed to run Anergy earlier this week.

The Hazelmere project was to produce three megawatts of electricity, with Perth Airport the biggest customer.

It was to use wood pyrolysis, where wood is burned to create synthetic gas to drive turbines, a technology that led to Anergy’s project being touted as a best practice case study in clean energy systems in 2015.

The plant was a collaboration with the East Metropolitan Regional Council, and had received backing through a federal government clean energy innovation fund in 2013.

The EMRC represents five councils in waste management matters, including the City of Bayswater and City of Swan.

But development faced delays, including in securing environmental approvals, which took nearly three years.

Cost pressures also rose over the development period.

East Metropolitan Regional Council documents show work had been suspended at the site in the second quarter of 2021, when Anergy sought new capital to complete the project.

Construction recommenced in August last year with a December 31 intended date for completion.

Avora was brought on as the subcontractor in 2021 to finish the build.

The new capital was drained quickly, however, as cost pressures continued to rise.

According to an agenda briefing for an East Metropolitan Regional Council meeting in recent weeks, Avora left the site in late December.

It’s understood this was while the proponents sought to work through cash flow challenges.

Pressure

Business News revealed in February that the Avertas Energy waste-to-energy plant in Kwinana was delayed a year, with head contractor Acciona heading to court to seek an exit from the $700 million development.

Acciona is also a builder of the East Rockingham waste-to-energy project, which is expected to reach full operation in the first quarter of 2023.

EMRC is one of the organisations contracted to supply waste to the East Rockingham plant.

One industry source told Business News they anticipated that project may be delayed, with Acciona likely to experience similar issues at East Rockingham as it has in Kwinana.

But East Rockingham commercial general manager Jason Pugh told Business News in recent weeks that the project was progressing well and would be unaffected by the Avertas dispute.

Another industry source said project owners of waste-to-energy plants were underestimating the amount of work required to build them.

That was particularly the case as costs escalated in the past 18 months to two years, they said.