Major beef processor turns to biogas to halve power bills

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CEFC co-finances development of biodigester and biogas plant at one of Australia’s largest meat processors, that will halve its electricity bills.

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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.

“Completion of the project will slash operating costs and increase profit margins, making the company better able to compete on the global market and, in turn, able to pass on benefits to the community through increased job security for employees,” Newton said.

CEFC CEO Oliver Yates said the CEFC’s non-concessional investment in the project would further develop the biogas sector, the technology behind which he said was yet to be embraced in Australia at the scale it should be.

“Bioenergy is a real business which is mainstream overseas,” Yates said. “(This) project will lead to increased market capacity and specialist skills in the biogas sector and expands on the technologies being implemented at other meat processing facilities.”

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.

It is deals such as this that have helped galvanise parliamentary support for the CEFC from crossbenchers like DLP Senator John Madigan, who in a speech to the Senate in at the end of 2013, urged the federal government to drop its plans to axe the green fund (their last attempt to do so, in June, failed) and suggested the move to abolish it was ideologically driven.

“(The CEFC) is not providing grants to fund projects,” Madigan said. “It is not giving away taxpayers’ money. It is a pro-industry development bank that is helping drive private and public investment in lower emission and cleaner energy technologies.

“It is helping our farmers and our manufacturers to reduce their costs and to use energy-efficient equipment. It requires borrowers to be responsible, to deliver on their project commitments and to repay their borrowings. It leverages private capital to invest in areas they might otherwise ignore, like energy generation using methane emissions from farms and industrial processes.”

In bioenergy alone, the CEFC’s near-term includes proposals for projects valued at over $1 billion. The majority of these represent biomass or waste to energy projects using abattoir waste streams, sugar cane bagasse, algae, municipal waste, with over $100 million directed specifically to biogas projects in the agribusiness sector.

Construction of the Brindaree Beef biogas plant – which will be capable of generating 1.2 to 1.6 MW of reliable electricity supply, with the potential to sell power back into the grid – is expected to take around two years.

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  1. RobS 5 years ago

    There are piggeries in the US which have become net energy positive through the biodigestion of their effluent streams. With the sheer scale of some agricultural operations in Australia this has huge potential here. Of course methane biodigestion provides the base load power that anti renewable folks seem to think is so vital to our entirely non base load grid demand so rightly or wrongly that ticks off one big potential criticism.

    • michael 5 years ago

      what’s surprising is with such big savings in terms of their overall energy needs that the projects aren’t self funding! would be very interesting to see the numbers. as you point out, intuitively it makes sense, so at some point the economics must fall down

      • RobS 5 years ago

        In the long run they are self funding, however as with most renewable energy projects the vast bulk of the cost is upfront whilst the payoff is over 5-10 years. That is why finance is required (the CEFC works with these companies to source finance, they don’t provide grants as such) to amortise the initial expenditure over the payback period.

  2. Zvyozdochka 5 years ago

    It would be interesting to get a reaction to this from the National Farmers’ Federation who a few days ago “welcomed” the removal of the carbon price without explaining what schedule of costs farmers had incurred.

  3. Alexander Dudley 5 years ago

    Given that Bindaree Beef is in the heart of Barnaby “don’t like renewables” Joyce’s electorate, I hope that he takes notice of this.

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