Waste Management In Action

Yarra Valley Water future-proofing Melbourne

Yarra Valley Water’s Pat McCafferty explains how the company’s waste to energy facility in Melbourne is helping divert waste from landfill, fight climate change and reduce costs for consumers.

The year was 1851 and gold-seekers from across the globe were arriving to Australia in droves – changing the course of the nation’s history.

As Australia began to expand its population and economy, Melbourne became one of the most richest cities on Earth.

By the 1880s, half a million people populated Melbourne, making it the nation’s largest city.

But managing exponential growth came with challenges and it wasn’t long before the city earned the title of Marvellous ‘Smellbourne’ in the absence of a sewerage system. According to Melbourne Water, in those days a majority of waste from homes, including kitchen bathroom and laundry wastes, were emptied into open drains that flowed onto street channels, local rivers and creeks.

With rising concerns about the spread of disease, authorities orchestrated a Royal Commission in 1888 to develop a solution. The solution was the construction of an underground system to carry sewage from homes and factories to a sewage treatment farm. After a treatment farm was built at Werribee, the first Melbourne homes were connected to the sewage system in 1897.

While not the same magnitude, Pat McCafferty, Managing Director of Yarra Valley Water, sees the direction of Australia’s sustainability as equally important.

“If we want to positon our water systems to be sustainable in the future we need to invest in them and also do things differently,” Pat explains.

“If you go back in time, our forebears did a great job for Melbourne setting aside protected water catchments, building dams and the Werribee Sewerage Farm. I think it’s our responsibility to do the same thing, not only for our current customers, but for future generations.”


Last year, Yarra Valley Water, Melbourne’s largest retail water utility, began operating its first waste to energy (WtE) facility in the city’s north. It uses anaerobic digestion, a form of biological processing, to break down and convert commercial food waste into energy. Waste producers, including markets and food manufacturers, deliver the equivalent of 33,000 tonnes of commercial food waste to the facility each year. The facility is located next to Yarra Valley Water’s Aurora sewage treatment plant, generating enough energy to power the facility and the adjacent plant. Currently, 25 per cent of its output goes to its two facilities, while the remaining 75 per cent is exported into the grid.

The need for the facility, according to Yarra Valley Water, was borne out of the need for water utilities to respond to climate change and Melbourne’s growing population.

Melbourne’s Water Plan highlights that Victoria’s population is projected to reach 10.1 million by 2051. Population growth increases demand for water, which in turn boosts energy use for treatment and pumping.

Australian temperatures are projected to rise with more extreme weather events. As oceans warm, they expand and sea levels rise, according to State of the Climate 2016. Greenhouse gases in the atmosphere make it harder for the Earth to radiate its heat mostly due to the burning of fossil fuels.

“The impact is right across Australia, but certainly in places like WA, SA and Victoria we’re seeing a long-term decline of stream flow into water catchments and that’s been happening for a while now,” Pat says.

“CSIRO and the Bureau of Meteorology are predicting that to continue. We used to rely on rainfall falling into dams now we can’t rely on that to the same extent.

“So, as a sector, water utilities such as Yarra Valley Water are impacted by a drying climate. We’ve got a responsibility to help address that.”

Melbourne Markets organics ready for processing.

Pat says that around about 2011-12, Yarra Valley Water began investigating a WtE facility after seeing its success overseas in Europe. In addition, Pat had a spent a period working for East Bay Municipal Utility District in Oakland, California and was aware of the challenges facing public water companies overseas. He says rising energy costs in Australia meant the conditions were finally right in Australia to investigate this option.

Pat says Yarra Valley Water sent one of its team members to Scotland and Germany to look at WtE plants over there. The biggest consideration for the company, as the technology was already proven effective, was will there be enough organic and food waste coming in to make the plant viable?

“In the Australian context, no one had done it successfully on the scale we were considering. We also looked at ourselves in a different light, because we are a sewerage company that is already processing a significant amount of the city’s liquid waste, so we were already into waste management from that perspective.

“We wanted to try and reduce the burden of our energy costs and the unpredictability of rising prices, and there was a solution staring us in the face in the form of our sewage treatment process and food waste, which would have otherwise gone to landfill.”

From 2013-14 the tendering process occurred, which was followed by an 18-month process of obtaining planning and environmental regulatory approvals. Wastewater treatment technology provider Aquatec Maxcon won the tender to build and construct the facility, and was subsequently awarded the operations and maintenance contract. Yarra Valley Water will decide, once the two-year operations contract elapses, whether it chooses to take operational management of the facility or renew it. The construction of the facility commenced in October 2015 and post commissioning, the facility launched in 2017.


Yarra Valley Water’s demand has continued to grow since that time, increasing its scope of waste to new areas not identified in the original business case.

“We’re learning a lot as time goes on. Different waste streams that come to us have different calorific values to generate biogas. Some wastes, such as milk and yoghurt, have a different effect than manufacturing waste from food processing facilities, for example.

“You might want more of one waste one day and less of it another day, so you have to manage that dynamically.”

As a result of these findings, Yarra Valley Water is now starting to find its feet and adjust its substrate inputs in accordance with market availability, site needs and opportunities presented by electricity market pricing.


Not only does the facility provide energy and reduce waste to landfill, but it has also resulted in lower energy costs for the company, which in the long term, helps keep water bills for consumers lower. Added to this is the company’s eligibility for large-scale generation certificates, a government subsidy provided for carbon abatement. These reduced costs also help safeguard Yarra Valley Water against a volatile energy market, Pat says, which has faced more than a decade of legislative uncertainty surrounding carbon pricing mechanisms. The Federal Government is currently implementing recommendations made by its chief scientist Alan Finkel in his independent review, which the Department of the Environment and Energy says will see retailers secure power from a variety of sources, including coal, gas, wind, solar, batteries and hydro.

The facility also aligns with the Victorian Government’s commitment to receive 25 per cent of its energy by renewable sources by 2020 and 40 per cent by 2025.

“For Yarra Valley Water it’s one of our key platforms for achieving our pledge to this commitment. Within the government’s policy objective, the water sector was seen as the highest government-related energy user.

“In the Water for Victoria policy released last year, they recognised the responsibility and leadership by water utilities to reduce greenhouse gases and we all put in pledges to what we think we can achieve.”

The facility has been so successful that Yarra Valley Water is now looking at a business case for a second facility, currently under review.

Once this facility is established, Pat says around 50 per cent of Yarra Valley Water’s energy will be produced through renewables, including some of its other small-scale solar projects by 2020.

Yarra Valley Water is also looking at investing in another generator at its existing Wollert facility, in order to scale up its current operation, which currently produces 8000 megawatts of energy per annum, enough to power about 2000 homes.

Ultimately the aim is to contribute towards helping tackle climate change and population growth – under threat from urban encroachment.

“At the end of the day, projects like this are important if we are to say we’ve supported the community, we’ve looked after our service now and we’ve positioned our water and sanitation to be sustainable for the future.”

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