18 October, 2018
The CEFC is committing up to $90 million towards Australia’s first large-scale energy from waste (EfW) project – a state-of-the-art plant at Kwinana in Western Australia capable of producing 36MW of electricity, enough to power up to 50,000 homes.
When built, the $700 million project will be able to process around 400,000 tonnes of household ‘red bin’ and commercial and industrial residual waste a year.
The Kwinana plant has been co-developed by Macquarie Capital and Phoenix Energy Australia, with co-investment by the Dutch Infrastructure Fund (DIF).
By processing household waste from local councils, it will produce cost-competitive baseload renewable energy and contribute to grid stability in WA’s South West Interconnected System (SWIS).
The plant will use technology that already has a strong track record in Europe and meets strict environmental requirements. It is expected to reduce CO2-e emissions by 400,000 tonnes per year, the equivalent to taking 85,000 cars off the road.
CEFC CEO Ian Learmonth said the landmark project was the CEFC’s largest investment in WA to date.
“Creating energy from waste is an exciting and practical way to reduce the amount of waste going to landfill, while also delivering cleaner low carbon electricity,” Mr Learmonth said.
“The average red lid wheelie bin contains enough waste to produce up to 14 per cent of a household’s weekly power needs. This investment is about harnessing that energy potential, while safely diverting waste from landfill.
“We are pleased to be working alongside Phoenix Energy Australia, Macquarie Capital and DIF in bringing this state-of-the art technology to Australia. We congratulate the Western Australian government and the participating councils in embracing this 21st century approach to waste management.”
Macquarie Capital Executive Director Chris Voyce, said the Kwinana plant is expected to employ around 800 workers, including apprentices, during its three-year construction phase, and some 60 operations staff on an ongoing basis.
The plant has secured long-term supply contracts for the majority of its waste requirements from the Rivers Regional Council and the City of Kwinana.
The Kwinana plant will be the first in Australia to use the Keppel Seghers grate technology, which has been used in more than 100 energy-from-waste plants in 18 countries. The thermally-treated waste heats water into steam to produce electricity. Metals recovered for recycling and other by-product materials are suitable for reuse in the construction industry.
Mr Voyce, said: “Macquarie Capital is pleased to be contributing to the supply of sustainable and secure renewable power to Australia’s overall energy mix. As an adviser to, investor in and developer of renewable energy projects around the world, we see waste-to-energy as an effective example of adaptive reuse: reducing the pressures on landfill by diverting it toward the generation of clean energy.
“The technology is a proven one, used in more than 100 plants around the world. We look forward to working with our project team and engaging with the local community to deliver a facility that will deliver multiple benefits for years to come.”
The CEFC finance is part of a $400 million debt syndicate that also includes SMBC, Investec, Siemens, IFM Investors and Metrics Credit Partners, some of which have prior experience in banking EfW projects globally. The Australian Renewable Energy Agency (ARENA) is contributing a further $23 million in grant funding.
CEFC Energy from Waste lead Henry Anning said: “This is a large and complex project, requiring significant development capital and support from all levels of government. The CEFC is pleased to play an important role in demonstrating the business case for large-scale energy from waste investments in Australia in the future.
“Australians produce almost three tonnes of waste per person per year. While the priority is always a strong focus on recycling and organic waste management, there is still a considerable amount of household waste from red-lidded bins ending up as landfill, where it produces a large amount of emissions.
“Energy from waste investments such as the Kwinana plant are about creating new clean energy opportunities for Australia, while offering councils and households a practical and innovative way to manage waste. Just as importantly, they can significantly cut methane emissions produced by landfill.”
The new facility is in the Kwinana Industrial Area, 40 kilometres south of Perth. Acciona has been appointed to design and construct the facility, and a 25-year operations and maintenance service agreement has been signed with Veolia, which currently operates more than 60 waste-to-energy facilities around the world.
With the Kwinana project, the CEFC has now made six large-scale investments to address waste-related emissions. These include:
The CEFC finance is part of its Sustainable Cities Investment Program.