An early stage funding support announced by ARENA on Friday could help an $800 million bio-energy project become reality.
ARENA CEO Ivor Frischknecht said the agency is providing $3 million support for Renewable Developments Australia (RDA) to build the business case for a renewable biofuel production facility at Pentland, in North Queensland.
He said the project had the potential to be “a landmark development” for the country’s 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. The fuel is earmarked for sale under a proposed off-take agreement with a global agriculture and energy corporation and export through the Port of Townsville,” Mr 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 32 megawatt 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.”
He said ARENA’s funding will support growing and irrigation trials, due diligence activities required for financial close and preliminary work to support the procurement of engineering and construction services.
According to him, the project would provide valuable knowledge on the commercial viability of innovative 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,” Mr Frischknecht added.
If approved, the proposed project is expected to create 500 jobs during construction and up to 200 permanent positions after construction is complete.
ARENA said the business case is due for completion by November 2016, with the agency to recover its funding amount if the plant proceeds.