Veolia has signed a $450 million 25-year operations and maintenance service agreement on a large-scale waste to energy facility in Kwinana, WA, capable of producing 36 megawatts of electricity – enough to power 50,000 homes.
The Clean Energy Finance Corporation (CEFC) will commit up to $90 million towards towards the $688 million and will be able to process 400,000 tonnes of household, commercial and industrial residual waste per year.
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Operations and maintenance of the facility will commence in 2021. Veolia operates 61 thermal waste to energy facilities around the world.
Macquarie Capital and Phoenix Energy Australia are co-developing the Kwinana plant, with co-investment by the Dutch Infrastructure Fund (DIF). Infrastructure company Acciona has been appointed to design and construct the facility. The project has been approved by the WA Environmental Protection Authority.
It is expected to produce cost-competitive base load power by processing household waste from local councils and contribute to grid stability in WA’s South West Interconnected System.
Technology that has been previously used in Europe will be implemented in the plant, which is expected to reduce carbon dioxide emissions by 400,000 tonnes per year – the equivalent of taking 85,000 cars off the road.
The plant will use the Keppel Seghers grate technology, which has seen use in more than 100 waste to energy plants across 18 countries. Metals recovered in the process are then able to be recycled, with the facility producing an ash byproduct that is commonly used as road base or for construction.
CEFC’s funding is part of a $400 million debt syndicate that includes SMBC, Investec, Siemens, IFM Investors and Metrics Credit Partners. The Australian Renewable Energy Agency (ARENA) is contributing a further $23 million in grant funding.
Veolia Australia and New Zealand Managing Director and CEO Danny Conlon said the project is an exciting development for Veolia in Australia.
“Adding to Veolia’s existing infrastructure in NSW and QLD, where we generate enough electricity to power 35,000 homes per year from waste, the Kwinana Project is another example where we will extract value from waste materials, delivering a clean energy source,” Mr Conlon said.
At a time when Australian businesses and households are seeing energy shortages and rising costs, Veolia is proud to be working with innovative partners to help deliver new, environmentally sustainable energy from waste”.
ARENA CEO Darren Miller said the project provides a renewable energy solution for reducing waste going to landfill.
“The use of combustion grate technology is well established in Europe and North America but has not yet been deployed in Australia,” Mr Miller said.
“More than 23 million tonnes of municipal solid waste is produced annually in Australia and this project could help to divert non-recyclable waste from landfill and recover energy in the process.”
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,” he said.
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.
“Macquarie Capital is pleased to be contributing to the supply of sustainable and secure renewable power to Australia’s overall energy mix,” Mr Voyce said.
“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,” he said.
CEFC Energy from Waste lead Henry Anning said the CEFC is pleased to play a role in demonstrating the business case for large-scale waste to energy 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,” Mr Anning said.
“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.”
With the addition of the Kwinana facility, the CEFC has now made six large scale investments to reduce waste-related emissions.