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CEFC identifies potential to double Australian bioenergy sector in five years

12 November 2015

Australia has the potential to double its bioenergy output over the next five years, developing a new energy source that will lower carbon emissions and provide an important energy from waste option for business and local government.

In a report released today, the Clean Energy Finance Corporation (CEFC) has highlighted the opportunity for Australia to close the gap when it comes to generating electricity from bioenergy sources.

While OECD countries source 2.4 per cent of their electricity output from bioenergy, this is just 0.9 per cent for Australia, according to the CEFC market report: The Australian bioenergy and energy from waste market.

"Our analysis has identified an important opportunity for Australia to source more of its electricity from bioenergy," CEFC CEO Oliver Yates said.

"We see the potential for up to 800MW of new generation from bioenergy, valued at up to $5 billion. This could potentially avoid more than 9 million tonnes of carbon emissions annually, providing a small but vital element of Australia's future energy mix."

Mr Yates said that generating electricity and heat from bioenergy and waste resources is cost competitive with other new-built energy generation. However the technologies are not yet widely deployed in Australia.

"The CEFC sees important bioenergy opportunities across the economy, including in urban waste, intensive livestock and food processing, and plantation forest residues," Mr Yates said.

"We have already committed around $150 million in bioenergy and energy from waste projects, and this has catalysed a further $280 million in private sector investment.

"Our investment pipeline includes $3.5 billion of bioenergy and energy from waste projects, including projects to produce wood pellets, convert sugar cane to ethanol and to convert municipal solid waste and animal waste to energy."

Key findings from the CEFC report include:

  • A potential investment opportunity of between $3.5 billion and $5 billion in the period to 2020 in energy from urban waste, agricultural waste and plantation forest residues.
  • New bioenergy and energy from waste projects that could avoid 9 million tonnes of carbon emissions annually, potentially contributing to 12 per cent of Australia's national carbon abatement task to 2020.
  • Bioenergy can provide baseload renewable electricity at high levels of availability, while reducing landfill waste and replacing waste disposal methods.
  • While the sugar industry currently accounts for more than half Australia's bioenergy output, with more than 400MW of installed capacity, the identified investment opportunity in energy from urban waste is between $2.2 billion and $3.3 billion.

Mr Yates said: "In the past decade we've seen a 65 per cent increase in the use of residential solar, while the growth rate for bioenergy has been just four per cent a year.

"With landfill costs rising, we think this is a very important area for local government to focus on, especially since electricity from landfill gas has one of the lowest costs of all energy sources.

"Agribusiness operators can also look to bioenergy as a means of creating onsite generation from waste. By significantly reducing energy costs, they can increase economic competitiveness."

The CEFC will discuss the report in more detail at the Bioenergy Australia Conference 2015, to be held in Launceston from 30 November to 2 December.

Read the report