Ararat Rural City Council and Pacific Heat and Power have partnered to develop a concept for a bio-energy plant that would have the potential to transform straw and stubble into products such as renewable gas, electricity, and heat.
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About 35 farmers gathered at the Alexandra Oval Community Centre on Tuesday, April 27 to learn about the proposed Grampians Gas Bioenergy Project.
Ararat Rural City Council mayor Jo Armstrong opened the forum and said the project had great potential.
"This partnership between council, Pacific Heat and Power, and our primary producers creates an opportunity to transform the straw and stubble we produce on our farms into energy," she said.
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"In doing so, we turn farm waste into renewables, diversify farm incomes, and supply table cost-effective clean energy to industry.
"This is a win-win situation that enables us to expand our agricultural product value further beyond the farm gate, into the energy market.
"Cereal straw conversion is a proven technology elsewhere in the world and is certainly an effective way to create energy from waste. This project proposes that we bring the technology to Australia for the first time, with Ararat leading the way."
The bio-energy plant would be the first of its kind in Australia. However, other straw-fired systems similar to the one being proposed have been effectively used in countries such as Denmark, China and Spain.
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The project is in its early phases, with Pacific Heat and Power engaging farmers in the region to ascertain what quantity of cereal straw they could expect if the plant is established.
Pacific Heat and Power has stated it estimates it would receive 300,000 tonnes of straw feedstock from farmers annually.
This would include cereal straw from an area that would encompass farms in a 100-kilometre radius of Ararat.
Pacific Heat and Power managing director Dr Scott Grierson also spoke at the forum.
Dr Geirson said he was optimistic about the project's future.
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"There's no reason why it can't happen. I can't tell you today that it will but there's no reason that it can't," he said.
"The thing that will ultimately be the biggest challenge to overcome will be the economics of the project which I don't believe are insurmountable.
"It's just about can we come to an acceptable, commercially viable model for all parties that gives you fair reward and makes sure that this is not a stranded asset."
Dr Grierson said the plant could cost about $200-220 million to become operational but noted there was still a lot of information to be gathered before a more accurate estimate could be given.
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Pacific Heat and Power would fund the project with the help of private investors. They would subsequently have equity in the project.
Pacific Heat and Power estimates the project will need between $10-12 million to get it to a stage where it is fully contracted and financed, and ready to commence construction.
These funds would partially be spent on project financing and a feasibility study.
Some of the project's finer details are still being decided.
Dr Grierson said the plant could be used to generate electricity, heat, biogas, or syngas depending on which option was most financially viable.
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He also stated there was no definitive decision on the model through which farmers would be paid for contributing their cereal straw.
"Whether it's a slightly floating price or a fixed price is yet to be determined," he said.
"It's got to work for the agricultural community. If the price we give you doesn't work then the whole thing falls apart.
"I'm willing to enter into the conversation over the next three to six months to figure out what's going to be seen as fair for everybody."
Pacific Heat and Power is also intent on developing a community trust structure in Ararat if the project progresses.
This would involve a portion of the plant's profits going to the trust which would then be able to choose how to invest the funds into the Ararat community.
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Ararat Rural City Council chief executive Dr Tim Harrison said the project could have significant financial benefits for farmers in the region.
"Agriculture is the second largest employment sector in Ararat, and with recent volatility in the export market, we need to keep it strong," he said.
"A key way we can do that is to create new market opportunities to diversity farm incomes to value-add beyond the farm gate.
"By establishing a market that puts a price on straw and stubble that would otherwise be sold cheaply or burnt off, we are transforming it into a product that will supply fuel for the energy sector.
"While the project is still in the development stage, our local farmers were able to hear from Pacific Heat and Power today on the science and the modelling that indicates that this project offers fantastic opportunities to grow our economy."
For more information on the project head to https://www.grampiansgas.com.au/.
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