“Australian-first” big waste-to-energy plant reaches financial close in W.A.

Construction of an “Australian-first” energy-from-waste plant in Western Australia is set to go ahead, after winning the backing of both the Australian Renewable Energy Agency and the Clean Energy Finance Corp.

The $668 million facility, which is being co-developed by Macquarie Capital and Phoenix Energy Australia – and will be owned by a consortium including Macquarie and the Dutch Infrastructure Fund (DIF) – will be located in the Kwinana Industrial Area around 40km south of Perth.

Once completed, it will convert up to 400,000 tonnes of non-recyclable waste into 36MW of “baseload electricity” – the federal government’s very favourite sort – enough to power 50,000 households, says ARENA.

The plant will also be capable of processing commercial and industrial waste and construction and demolition waste, from a range of sources including local councils in the Perth metropolitan area.

The project, which has the approval of the WA Environmental Protection Authority, has no reached financial close after securing $23 million in funding from ARENA, and up to $90 million in debt finance from the CEFC, it was revealed on Thursday.

It will also be able to generate large-scale generation certificates (LGCs) for eligible feedstock, in line with Clean Energy Regulator requirements.

According to various joint and separate announcements, the facility will be built by Acciona – with construction expected to begin this month and be completed by the end of 2021 – and operated by Veolia.

The moving grate technology behind the plant comes from Belgian company Keppel Seghers, which has not been seen in Australia before, but has been deployed in 100 waste-to-energy plants in 18 countries.

The project is expected to generate more than 800 jobs during construction and 60 full-time jobs once operational.

But not everyone is convinced that the technology – which offers a dual solution of baseload electricity from a low emissions intensity source, while addressing waste management issues – is all that environmentally sound.

In NSW, the Independent Planning Commission rejected plans for an energy-from-waste facility in Sydney’s west, citing ‘uncertainty’ over human health and environmental impacts.

Next Generation had sought approval to build and operate the 24/7 facility at Eastern Creek – combusting 552,500 tonnes of the city’s non-recyclable waste every year, generating enough electricity for 100,000 homes.

Opponents of the energy from waste technology have argued that it produces air pollution, while also concentrating waste into toxic ash.

According to ARENA, the sort of ash that will be produced by the Kwinana facility is commonly used as road base or in building and construction in Europe.

The CEFC expressed its confidence in the technology, too – and noted that the plant was the green bank’s largest investment in WA to date.

“The plant will use technology that already has a strong track record in Europe and meets strict environmental requirements,” a CEFC statement said.

“It is expected to reduce CO2-e emissions by 400,000 tonnes per year.”

ARENA said it would carry out life cycle analysis on the plant, as it does on all bioenergy projects, to ensure it delivered a net benefit in terms of emissions reduction.

“The use of combustion grate technology is well established in Europe and North America but has not yet been deployed in Australia,” said ARENA CEO Darren Miller.

“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.”

Macquarie Capital executive director Chris Voyce described the project as an example of the public and private sectors coming together to deliver a long-term solution to dual issues: “the ever-growing pressures on landfill and generating low-carbon energies that are sustainable and reliable.”

“We look forward to working with our team of financiers, and design, construction and operation specialists as we deliver this significant project for the community,” Voyce said.