Santos bid lights up coal seam gas sector

The SMH reports that the new carbon tax is accelerating interest in coal seam gas, with Santos moving to acquire the rest of Eastern Star Gas - Carbon tax not the end of fossil fuels, just ask Santos.

HYDROCARBONS have been copping some bad press lately.

What with all the flak over emissions and how best to reduce them, you could be forgiven for thinking the end of the industry is nigh. But the past few days has seen a flurry of takeover activity, starting last Monday with Peabodys $4.7 billion bid for Macarthur Coal and ending the week with BHP Billitons $14 billion tilt for American gas producer Petrohawk.

Then, before the market even opened yesterday, Santos jumped in with an agreed mop-up of pubescent coal seam gas outfit Eastern Star Gas, valuing the group at just shy of $1 billion. At a nominal 90¢ a share, the deal delivers Eastern Star shareholders a whopping 51 per cent premium to last Fridays closing price.

Rather than spelling the death knell for fossil fuels, it would appear the carbon price arrangements announced last week have partially eliminated the uncertainty that has caused energy and power companies to continually delay long-term investment decisions.

BHPs expansion of its American energy portfolio obviously falls outside the Australian carbon tax proposal but gives a clear indication the mining giant sees a future in lower emissions energy sources as carbon pricing becomes a global inevitability.

It was BHPs chief executive Marius Kloppers who last year reignited calls for carbon pricing while power suppliers like Origin Energys Grant King have roundly criticised the inordinate length of time it has taken successive Australian governments to implement a carbon pricing policy.
It takes up to eight years to get a power station from the drawing board to the paddock and in the policy vacuum that has existed here for most of the past decade, operators like Origin have been unable to decide whether to build old-style, low-tech operations belching out coal fumes or something a little more modern.

That has left a worrying dearth of investment in power generation, particularly in the eastern states.

It therefore is no coincidence that the junior partner in Santoss latest coal seam gas expansion is the Hong Kong-based TRUenergy which, along with Origin, snapped up the NSW state government-owned electricity distribution companies last year. TRUenergy also owns the Yallourn brown-coal-fired power station in the Latrobe Valley, one of the worlds dirtiest.

Under the terms of the friendly deal announced yesterday, Eastern Star Gas shareholders will swap their shares for Santos scrip, giving the Adelaide-based oil and gas group full control. But a second leg of the deal will see Santos emerge with 80 per cent of Eastern Stars gas permits with TRUenergy accounting for the remaining 20 per cent.

Eastern Star has extensive reserves in the Gunnedah Basin but, as a corporate minnow, was always constrained by a lack of capital in developing the resource. Crunch time was approaching, either to joint venture with a much bigger partner for a smaller slice of the future, or merge. ....

Santos will now have a major presence in every eastern Australian onshore gas basin from Moomba in South Australia near the Queensland border to the giant fields of the Bowen and Surat basins inland from Gladstone and in the Otway basin in Victoria.

Just how and where it will ship the gas from the Gunnedah Basin has yet to be decided. It may decide to pipe it up to its new $18 billion Gladstone liquefied natural gas plant, currently under construction. Or it could opt for another port facility at Newcastle.

The SMH has another article looking at the supposedly tight east coast gas supply once the CSG LNG terminals are operational - Santos bid lights up coal seam gas sector.

The $730 million bid by Santos for NSW coal seam gas (CSG) group Eastern Star Gas was a welcome relief from the investor gloom that has characterised the CSG sector in the last 12 months.

Share prices of the CSG companies not yet swept up by the big boys of the industry, with their gas export plans, are popping again, regardless of the on-going environmental campaign against the industry.

Investors are again playing a who-is-next game, driving up CSG share prices across the board. Bow Energy and Metgasco have led the pack, with Dart Energy and Comet Ridge also receiving some new attention.

Julia Gillard has also helped fuel the renewed interest in the CSG sector, with the proposed carbon tax set to drive a shift away from coal-fired power generation to gas-fired power with its 60 per cent lower emissions

But the reality is that with or without the Santos bid and the carbon tax, the CSG sector was due for a return of investor interest on the simple premise that Australia’s eastern seaboard faces a gas shortage, one in which domestic gas prices will have to about double to pull back gas that would otherwise head offshore to higher priced markets.

It is a theme that Morgan Stanley zeroed in on in the wake of the Gillard minority government unveiling its carbon tax plan on July 10. “The era of cheap and plentiful gas in eastern Australia is over,’’ the broker declared. ‘’Steady demand growth and depletion of historical conventional production is leading to a shortage evident after 2014, with CSG and other unconventional gas required to meet the gap.’’

The broker said that it was generally accepted that the carbon tax would increase the use of gas as a ``transition’’ fuel for power generation.

Assume that will increase demand for gas, and a case can be built that annual eastern state gas demand is set to grow from around 720 petajoules in 2011 to more than 1350 petajoules by 2020.

But there isn’t enough gas to meet that sort of growth. Morgan Stanley reckons that existing conventional gas supply (mainly Bass Strait and the Cooper Basin) will be largely depleted within 10 years.

The build-up in CSG resources was meant to flood the market. But there isn’t enough of that either as the multiple gas export projects being built at Gladstone in Queensland will soak it all up to chase the much higher export prices.

Morgan Stanley says the end result of all that is obvious – domestic gas prices are ``likely to escalate sharply to divert high-cost unconventional gas earmarked for export markets back to the domestic market’’.

``We believe this will take effect after 2014 as existing long term contracts wind down and need to be replaced. A gap-up to export parity (about $7.50 a gigajoule) is the likely first step,’’ Morgan Stanley said.

That means those that own gas resources on the eastern seaboard are heading towards a golden era. It also means that we have not seen anything yet in home energy bill shocks.

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The battery storage system that could close down coal power

ReNew Economy has an article on a German energy storage technology company - The battery storage system that could close down coal power.

You don’t have to go far inside the headquarters of German battery storage company Younicos, or even their website for that matter, to find out what they are about. “Let the fossils rest in peace,” the logo suggests. Another sign at their technology centre east of Berlin proclaims: “You are now leaving the CO2 producing sector of the world.”

This sign is designed to mimic those which adorned the checkpoints that separated the various sectors of east and west Berlin before the wall was torn down. Younicos believe they have a technology that is equally disruptive, and can break down one of the last barriers to 100 per cent renewable energy: the need to run fossil fuel generation to control the “frequency” of the grid, and the other system services such as voltage control.

The company, based in Berlin Adlershof, on the eastern outskirts of the capital, is developing 10MW-sized battery parks, using battery systems that it says can stabilise the grid faster, cheaper and with greater precision that conventional generation.

It says that these systems can substitute 10 times the capacity from conventional generation – coal, nuclear and gas – and at a fraction of the cost. According to Younicos spokesman Philip Hiersemenzel, each battery park can be installed at around € 15 million, which means that for an investment of €3 billion, conventional generation in Germany’s 80GW would no longer be needed – at least for frequency and stability purposes.

This is critical is Germany. The sheer scale of their solar PV installations – it has more than 35GW – means that on some days it already produces more than half the country’s electricity needs. But baseload generators have to keep running for the sake of frequency control and system stability, this has caused spot prices to plunge well below zero.

For an 80GW grid, it needs about 20GW and 25GW of “must run” balancing to maintain frequency and keep the grid stable. Younicos says 2GW of its battery parks would render this need redundant. Around 200 of it battery parks could be installed around the country at a total cost of around €3 billion.

(Of course, that is not the only impediment to 100 per cent renewables – enough solar and wind power needs to be built, and other storage is needed, battery storage to respond to variations in load on a minute by minute and hour by hour basis, and longer-term or “seasonal” storage, which can take excess production and store it – synthetic diesel, hydrogen etc.).

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China consumes nearly as much coal as the rest of the world combined

Stuart at Early Warning points to this article on Chinese coal consumption - good for Australian coal miners (other than when they get flooded each year), bad for everyone else - China consumes nearly as much coal as the rest of the world combined

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Peak Coal Will the US Run Out of Coal in 20 Years or 200 Years

Greentech Media has an article arguing "peak coal" is occurring in the US as cheap to extract resources run out - Peak Coal: Will the US Run Out of Coal in 20 Years or 200 Years?. My understanding has been that coal use in the US has declined as natural gas has taken market share away from it, so Im not so sure I buy this (most early peak arguments seem to be more wishful thinking than reality based) but I havent looked at the data so maybe the two events are coinciding...

U.S. coal production has peaked, and the miscalculations that have led to estimates of a 200-year supply could create a serious electricity deficit for the nation, according to a new report from advocacy group Clean Energy Action.

“The belief that the U.S. has a ‘200-year’ supply of coal is based on faulty reporting by the EIA,” concludes the report, Warning: Faulty Reporting of U.S. Coal Reserves. “Most U.S. coal is buried too deeply to be mined at a profit and should not be categorized as reserves, but rather as ‘resources.’” “The U.S. Energy Information Administration’s estimate of the nation’s coal is ‘a faulty fuel gauge’ because the U.S. is rapidly approaching the end of economically recoverable coal,” explained report co-author Leslie Glustrom of Clean Energy Action. “We’re acting like we have a full tank. No one knows exactly when empty will come, but we should be prepared.”

The economic viability of the U.S. coal resource is compromised because “it is buried too deeply and costs too much to mine it,” Glustrom said. Peabody Coal CEO Greg Boyce’s Q3 2013 earnings report call remarks about reduced capital expenditures in Wyoming’s Powder River Basin seem to confirm that coal is becoming “too expensive to mine,” according to Glustrom. “Nationally, coal production appears to have peaked in 2008 at 1.171 billion tons,” the report states. “U.S. coal production in 2012 had fallen by about 155 million tons to 1.016 billion tons.”

EIA data puts production for the first half of 2013 at 488 million tons, Glustrom added. “We are not even on track to get to a billion tons. That would be back to 1993 levels.”

Think Progress has a post highlighting one of the drivers behind the "peak coal consumption in China argument, new restrictions on coal use in Shanghai and Beijing - Shanghai To Forbid Coal Burning As China Decides To Monitor Smog’s Effects.

On Friday, Shanghai released its Clean Air Action Plan in an effort to rapidly and substantially improve the air quality in China’s most populous city of nearly 24 million residents. The primary focus is to reduce the concentration of PM2.5 (particulate matter of 2.5 microns or less) by around 20 percent from 2012 levels by 2017.

The plan, which broadly targets six areas — energy, industry, transportation, construction, agriculture, and social life — will completely ban coal burning in 2017. This entails closing down more than 2,500 boilers and 300 industrial furnaces that use coal, or shifting them to clean energy by 2015. ...

Earlier this year a study found that severe pollution has slashed an average of five-and-a-half years from the life expectancy in northern China as toxic air has led to higher rates of stroke, heart disease, and cancer.

China has been making a very public push to confront growing concern over air pollution, including publishing a list of its 10 worst — and best — cities for air pollution each month.

China also released a new $817 billion plan to fight air pollution in September, with a strong focus on Beijing. According to a Greenpeace analysis, up to seventy percent of Beijing’s pollution comes from coal-burning factories and power plants surrounding the city.

China is also currently in the early stages of testing pilot carbon markets in seven cities, including Shanghai and Beijing. The pilot programs will help the government make a decision about setting up a national carbon market in the near future.

the Guardian reports that Al Gore and David Blood are warning about stranded investments in fossil fuel assets in coming years - Al Gore: world is on brink of carbon bubble.

The world is on the brink of the "largest bubble ever" in finance, because of the undisclosed value of high-carbon assets on companies balance sheets, and investment managers who fail to take account of the risks are failing in their fiduciary duty to shareholders and investors, Al Gore and his investment partner, David Blood, have said.

"Stranded carbon assets" such as coal mines, fossil fuel power stations and petrol-fuelled vehicle plants represent at least $7tn on the books of publicly listed companies, and about twice as much again is owned by private companies, state governments and sovereign wealth funds.

As the danger from climate change intensifies, and as rules on carbon and the introduction of carbon pricing in many parts of the world start to bite, these assets are expected to come under threat, from regulation and from the need to transform the economy on to a low-carbon footing. The "carbon bubble" has been identified by leading thinkers on climate change in recent years, but so far the findings have had little real effect on investor behaviour.

The SMH reports Australias largest coal mine / stranded asset is to be built in Queenslands Galilee Basin - Largest coal mine approved in Queensland.

The federal government has approved a massive coal mining project in central Queensland that will be the largest in the country. Environment Minister Greg Hunt approved the 37,380 hectare Kevins Corner project on Friday.

The mine, to be operated by a joint India-Australia consortium, GVK-Hancock, is the first to be approved since the introduction of a new water trigger rule by the previous federal government. Greenpeace claims Kevins Corner will use more than nine billion litres of water a year and the Lock the Gate Alliance says more information on its impact on Galilee Basin groundwater is needed.

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From pit to port Indias 10bn coal export plan

The Australian has a look at an Indian corporations plan to vertically integrate power consumption starting from Queenslands coal fields - From pit to port: Indias $10bn coal export plan. When I read stories like this I tend to think averting serious global warming problems really isnt going to be easy...

INDIAN energy giant Adani Enterprises has moved foreign investment in Australia to a new level, with a $10 billion scheme to control every stage of its booming coal export business from mine to port.



In his first major interview, the chief executive of Adanis Australian operations, Jignesh Derasari, declared the company wanted to control "whatever component the coal touches", including a $3bn railway network to haul coal from the emergent Galilee Basin in central Queensland to two ports, one of which it purchased this year and the other which it will build at Dudgeon Point near Mackay.



From these outlets, Adani-owned bulk carriers would ship the coal to India to supply a chain of seven power stations operated by the company.



The scheme is one of the most ambitious vertically integrated resource developments ever proposed in Australia and comes after the federal government rejected bids by Chinese concerns to set up mine-to-port iron ore operations in Western Australia. It will make Adani Indias largest single investor in this country.



The massive mine is being developed in the Galilee Basin about 400km inland of Mackay, Australias new coal frontier, where Gina Rineharts Hancock Prospecting and Clive Palmers Waratah Holdings are also pursuing major developments.



Hancock Prospecting is in negotiations with Indian company GVK to sell its holdings in the area for $2bn, while Waratah has a contract to sell 30 million tonnes of coal to China over the next 20 years.



Mr Derasaris candid admission that Adani wants to control the production chain at every level from the Galilee Basin adds another dimension to the intensifying row between coal and coal-seam gas developers and farmers over land access. NSW Premier Barry OFarrell bought into this yesterday, saying he respected "the fact that there are parts of our state which should and always will be kept as agriculture".



Mr Derasari told The Weekend Australian that vertigal integration was central to the companys development plan in the Galilee. "Whatever component the coal touches, we would like to be in control of that," he said. "So that means the mine, the rail, the port where the coal is transported out of, the ship that the coal sits on until it gets to the port in India. Then it goes on a conveyer belt to the power station."

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45bn coal seam gas projects draw workers from around the world

The Australian has an article on the windfall heading Bechtel’s way as construction looms for 3 coal seam gas LNG projects in Queensland - $45bn gas plan draws workers of the world.

WORKERS from as far away as Ireland will be part of the massive fly-in, fly-out workforce needed to build the $45 billion development turning coal-seam gas into liquified natural gas on Curtis Island off Gladstone, central Queensland.
About 800 people are now working on the mangrove-fringed island on the north side of Gladstone Harbour, but this is expected to rise to at least 6000, housed in specially constructed camps, within two years. There will also be up to 2000 contractors, who will not live on site but will be ferried across from Gladstone every day to help build the three liquid natural gas plants, expected to be operating by 2015.

While protests against coal-seam gas continue in areas such as the Darling Downs, where 40,000 coal-seam wells will be constructed, the export industry is proceeding rapidly. The pipeline that carries the coal-seam gas from the Darling Downs to Gladstone is under construction, and work on the plants that will convert the gas into 38 million tonnes of liquid to be exported to Asia each year is well under way.

Three LNG plants are being built -- by the British-owned BG Group, Santos and Origin -- but all three $15bn plants are being built by US construction giant Bechtel, which owns the intellectual property rights to the technology. Bechtel, one of the worlds biggest contractors with a global workforce of 55,000, is already a big employer in Gladstone, with about 1500 people working at the expansion of Rio Tintos alumina refinery at Yarwun. …

The sheer scale of the three projects is having a debilitating effect on the central Queensland region, already suffering a skills shortage because of the mining boom. While wages for unskilled workers in mining average between $80,000 and $120,000 a year, with up to $150,000 for more skilled workers, labour hire operators estimate the short-term nature and urgency of the jobs on Curtis Island mean the pay on offer is 15-20 per cent higher than in mining industries. ... A mine worker paid $150,000 a year might be able to get $180,000 as the Curtis Island workforce increases.

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Renewables now cheaper than coal and gas in Australia

ReNew Economy has a look at a new study from BNEF showing that renewables are now cost competitive with fossil fuels in Australia - Renewables now cheaper than coal and gas in Australia.

A new analysis from research firm Bloomberg New Energy Finance has concluded that electricity from unsubsidised renewable energy is already cheaper than electricity from new-build coal and gas-fired power stations in Australia. The modeling from the BNEF team in Sydney found that new wind farms could supply electricity at a cost of $80/MWh –compared with $143/MWh for new build coal, and $116/MWh for new build gas-fired generation. These figures include the cost of carbon emissions, but BNEF said even without a carbon price, wind energy remained 14 per cent cheaper than new coal and 18 per cent cheaper than new gas.

“The perception that fossil fuels are cheap and renewables are expensive is now out of date”, said Michael Liebreich, chief executive of Bloomberg New Energy Finance. “The fact that wind power is now cheaper than coal and gas in a country with some of the world’s best fossil fuel resources shows that clean energy is a game changer which promises to turn the economics of power systems on its head,” he said.

RNE also has an article on a Greens WA proposal to move to 100% renewables, drawing on work from Sustainable Energy Now and Beyond Zero Emissions - Greens push 100pct renewables plan for W.A..

The Greens Party has unveiled an ambitious new document that outlines possible pathways to turn Western Australia – one of the most energy-intensive states in the world – into one where its stationary energy needs are powered 100 per cent by renewable energy sources in less than two decades.

The Greens offer two principal scenarios to transform the coal and gas-dependent grid known as the South West Interconnected System (SWIS), which includes the capital Perth and the most populous regions. The first involves a heavier reliance on solar thermal and storage technologies currently deployed in Spain, the US and elsewhere, while the second relies more on currently cheaper technologies such as wind energy and solar PV. Both are supported by bio-mass and pumped hydro.

According to Scott Ludlam, the WA-based Senator whose office anchored the report with the help of specialist consultants, the plan seeks to make two important points – one that it is feasible, and two, it will not cost much more than business as usual (BAU).

Indeed, even using somewhat conservative technology cost forecasts for the various forms of solar, and to allow for a safety-first approach to capacity requirements, the study concludes that the levellised cost of electricity in the various renewable scenarios ranges from $208/MWh to $221/MWh by 2029. (We go into detail further down)

The levellised cost of electricity in the BAU case is not much cheaper – $203/MWh. While it has lower up front capital costs – $20 billion vs $60 billion, the balance of the BAU scenario bill will be paid in fuel costs, which for gas and diesel customers in WA is already proving expensive and forcing those on isolated and remote areas in particular to already consider solar alternatives. ...

The document was drawn together by Ludlam’s team, but the detailed technology scenarios were put together by an engineering team from Sustainable Energy Now, and drew on previous work by the likes of CSIRO and Beyond Zero Emissions.

RNE also has an interesting article on the impact of solar PV on peak power demand in South Australia - dramatically dropping summer peak demand from the grid - Rooftop solar reshapes energy market in South Australia.

Rooftop solar continues to have a dramatic impact on the energy market in South Australia – the Australian state with the highest penetration of rooftop solar.

As these graphs provided by Melbourne Energy Institute’s Mike Sandiford illustrate, the proliferation of solar PV is not just having an impact on overall demand in the state, it is also shaving and reshaping the peak demand curves.

The impact of solar PV in South Australia was recognised by a special study by the Australian Energy Market Operator last August. As we reported then, South Australia had some 267MW of rooftop solar as at June 30, representing one in five households. AEMO said rooftop solar was accounting for 2.4 per cent of overall demand, and more than one-third of the PV systems were operating at the time of peak demand at any one time.

These graphs deliver a further illustration of their impact, as they illustrate what happened in the latest months of December and January, traditionally the period of hottest temperatures and highest demand. (If the graphs are not easy to read we suggest you click on them to see them better).

The ones immediately below show the average demand curves in South Australia over the last five years. The pink line shows 2012/13. As Sandiford points out, midday demand in SA this summer is down 15 per cent on where it was five years ago, even though night-time demand is up, confirming the impact of solar PV.

One last article from REN, this one looking at the big picture for renewables - 100 pct renewables: it may be closer than we think.

The stunning set of data, cost profiles and market analysis produced in the first few weeks of calendar 2013 have confirmed what many had long suspected – that the global energy markets are changing faster than anyone had thought possible.

The implications for the incumbent energy industry – be they generators, network operators or retailers – couldn’t be more significant. The business models that supported the ageing infrastructure are broken, and if they can’t adapt to the new environment, they may soon be out of business. The idea of a rapid change to a largely renewable energy grid no longer seems aspirational, it could be inevitable.

Consider what we have learned this week:

- The price of wind energy (and in some isolated cases solar PV), is already cheaper than coal and gas in Australia. This gap is likely to widen considerably in the coming decade.

- By the time new baseload capacity is required in 10 years time, other technologies, including solar thermal with storage, and concentrated solar PV, will also be cheaper than coal and gas. Marine energy and geothermal could be close to parity.

- But not only do we have “grid parity” at the utility level, we also have socket parity, which means that homeowners and businesses can lower their cost of electricity by installing solar panels on their roof.

- the growing impact of large scale renewables, the self consumption market driven by rooftop solar and battery storage, and the impact of energy efficiency schemes, is reshaping the profile of the energy market and the dynamics of the industry. Sometimes in the most dramatic way. Coal and gas fired generators are getting priced out of the market.

As investment bank UBS noted last week, we are facing a “solar revolution” in the energy industry, and another is on the way with battery storage. As we suggested last year, the change is so profound that existing business models appear broken. According to Macquarie Bank, the German energy model is already “kaput”.

As we have seen in Australia, the increase in renewables is pushing down wholesale electricity prices, forcing the closure or mothballing of 3,000MW of fossil fuel capacity. In Germany, the closure rate is so rapid that the electricity authority has had to step in to slow them down.

The more retailers and network operators seek to recoup their investment in the face of lower demand, the more customers will be tempted to look after their own energy needs. Even halting all subsidies for rooftop solar will not stop it, said Macquarie. “The ever-increasing (grid) prices for domestic and commercial customers as well as rapid solar cost declines have brought on the advent of grid parity for German roofs. Thus, solar installations could continue at a torrid pace,” it notes. The same applies for Australia. ... Coal-fired power stations will not get built, for reputational and economic reasons, and gas – the much touted transition fuel – may also not get a look in. “Costs are just falling so quickly and the cost of fossil fuel are so much higher than public perception,” said Kobad Bhavnagri, head of clean energy research for BNEF in Australia. ”We could leapfrog gas as transition fuel.”

Bhavnagri said that by 2020 the “world could look quite different”. The market operator and system will be more experienced and adept at handling intermittency. “The case for gas is not as strong as people assumed a few years ago.”

The upshot of that analysis is that the plants we will be building in the 2020s will be – because they are the cheapest options – large scale solar with storage and other dispatchable renewables. The economic case for existing fossil fuel generators will be further undermined.

This explains why the fossil fuel industry in Germany, and in Australia, have been trying to halt the expanse of renewables. The primary policy goal of generators and fossil fuel industry for the past decade or more has been one of delay – to push back the build up of renewables long enough to extract maximum value from their existing assets, and even to create space so they can build more assets. The extractive industries have the same, simple plan.

All the major Australian utilities made clear in their submissions to the Climate Change Commission that allowing the renewable energy target to stand – and more wind farms and large scale solar PV to be built – would reduce the profits of their generators, quite dramatically. Yet diluting that target would allow them to build more gas-fired generation.

This is also why the utilities have also argued against the Clean Energy Finance Corporation, because it is designed to help usher in those technologies such as solar thermal and ocean energy that will be competitive in a decade’s time. But they can’t be competitive if none are built, and installation and manufacturing costs are reduced.

Many European markets are now at critical junctures with high penetration of wind and solar. This includes Germany, Italy, Denmark, Spain and Portugal. Australia, should it maintain its current renewable energy target, will follow soon enough. Germany, while reducing subsidies, is still increasing its renewables targets – 40 per cent by 2020 and 80 per cent by 2030.

Its biggest challenge is to figure out how to redefine the market rules so that it can provide enough economic incentive to prevent too many closures of fossil fuel plants, and to encourage existing gas to stay open rather than coal. It needs these gas plants to assist with the transition.

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Replacing coal with biogas

RNE has a look at some CEFC programs to increase the use of biogas in Australia - Major beef processor turns to biogas to halve power bills.

One of Australia’s largest meat processors – and a major regional employer, providing 830 jobs – is among the latest recipients of funding from the Clean Energy Finance Corporation, in a deal to co-finance a major on-site energy project at northern NSW-based Bindaree Beef.

The CEFC announced on Tuesday it would provide up to $15 million, together with additional bank finance and an Australian Government Clean Technology Investment Program grant, to fund the installation of a biodigester and energy efficient rendering facilities to improve the efficiency and competitiveness of operations at Bindaree Beef.

As well as the biodigester, the funding will go towards development of an electricity generation facility using biogas (produced by the biodigester) as fuel, and a new more energy efficient rendering plant to replace the existing coal-fired plant and eliminate the use of coal. Screen Shot 2014-07-22 at 10.37.13 AM

The new equipment is expected to halve the company’s power bills and cut its annual carbon emissions by three quarters. The biogas plant will also create a new business revenue stream through sales of organic fertiliser – a by-product of the energy conversion process.

Bindaree Beef Director John Newton said securing finance from the CEFC – a $10 billion Labor government initiative, which remains on the Abbott government’s chopping block – had been integral to securing the interest of additional private finance, which, along with the government grant, would cover the total project cost. ...

In March this year, the CEFC contributed $20 million to a funding deal with Quantum Power Limited – Australia’s leading biogas company – to catalyse up to $40 million in biogas infrastructure aimed at helping farmers and manufacturers cut costs and boost productivity in the face of rising electricity prices.

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