Huge, $800m bio-energy project in Queensland gets boost from ARENA grant

Plans to build an energy self-sufficient, off-grid bio-energy plant in Pentland, North Queensland has gained backing from the Australian Renewable Energy Agency, with a $3 million grant to go towards the $800 million project.

The company behind the project, Renewable Developments Australia (RDA), will use the early stage funding from ARENA to build the business case for the biofuel production facility, which would be Australia’s largest.

Fuel produced by the plant – which is expected to be competitive with petrol – is said to be earmarked for sale under a proposed off-take agreement with a global agriculture and energy corporation and export through the Port of Townsville.

If construction of the plant proceeds, it is expected to create 500 jobs during construction and up to 200 permanent positions after construction is complete.

ARENA CEO Ivor Frischknecht said it also had the potential to be a landmark development for Australia’s fledgling bioenergy industry.

“The plant is designed to produce up to 350 million litres of fuel grade bio-ethanol per annum, which would increase Australia’s production by 80 per cent,” Frischknecht said.

“RDA intends to grow its own sugarcane and sweet sorghum for biofuel production and will also process biomass waste with advanced and innovative processing techniques that would make the plant entirely self sufficient, renewable and independent of the grid.

“A ‘lignin’ by-product would fuel a purpose built 32MW co-generation power plant, with excess lignin sold as biofuel pellets. This approach would mean nothing is wasted and add to the plant’s commercial viability.

“Importantly, the anticipated fuel price could be competitive with petrol, making ethanol a much more viable long-term renewable fuel.”

ARENA’s funding will also support growing and irrigation trials, due diligence activities required for financial close and preliminary work to support the procurement of engineering and construction services, the Agency said on Friday.

Frischknecht said the project was expected to provide valuable knowledge on the commercial viability of second generation ethanol production technology, which would be shared with the bioenergy industry.

“RDA will identify technical, financial and regulatory developmental roadblocks affecting projects of this scale and type. The project will also provide insights on the performance of super sweet sorghum and sugar cane for biofuels,” he said.

The business case is due for completion by November 2016. ARENA can recover its funding amount if the plant proceeds.