New idea - Plantation Energy Australia
On the 3 June 2009 the Minister for Forestry Terry Redman officially opened the Plantation Energy Plant in Albany WA.
Conceived in 2003, and formed as a company in 2006, Plantation Energy’s business plan is to create value through the conversion of low grade timber products into Densified Biomass Fuel pellets.
Plantation Energy has developed a substantial market in Europe for their product as a bioenergy feedstock.
Plantation Energy’s utilisation of what was previously left over material not only produces significant value from exports, it also adds to forest sustainability and improved silvicultural practise.
Exports
In Europe, Bioenergy is seen as a green sustainable substitute to high carbon energy and consequently fits into European Union’s carbon dioxide reduction program. In Sweden, more energy is obtained from renewables than any other industrialised nation - around 40% of a total supply. Of this, biomass contributes 62.7%.
Most of Plantation Energy’s production is sold into the Benelux countries where pellets are seen to provide clean, carbon neutral energy. The green sustainable image of Australian plantation biomass is an important factor in its acceptability as an energy source.
Export of the pellets will be through Albany port. This will require a $10 million upgrade of infrastructure and handling facilities at the port.
Albany
According to Plantation Energy, the plant in Albany which has been capitalised at Aus $25 million, is a world class facility and the first of its kind in Australia. The Plant is designed as two lines or “trains” of equal capacity. The second is scheduled to be on line towards the end of 2009. Plantation Energy has plans to develop a further five plants throughout Australia, including possibly another plant in the South West of WA. In its entirety this is likely to be an investment, well in excess of $100 million.
Employment
According to Plantation Energy director Dick Allen, up to 45 people have been employed in the construction process. The plant is set to employ 15 people at various levels, on a permanent ongoing basis, as well as create up and down stream linkages for a further jobs in forestry, transport, handling and engineering.
Sales
Two off take agreements have so far been signed. The first, a $60 million AUD agreement signed with Belgium based Electrabel NV, a subsidiary of Europe’s largest power utility, CdF-Suez. And the second, a three-year $60 million AUD supply agreement with Essent Trading, an international asset-backed merchant energy trading company based in Switzerland.
Biomass supply
Supply agreements have been signed with Forest Products Commission as well as plantation companies, to guarantee the required 300,000mt per annum supply, of non commercial plantation residue and low grade wood products.
In the near future its likely dedicated energy plantations will provide biomass feedstock for these plants. However the cost of production means this is not currently viable.
The use of pellets to produce Bioenergy in Australia is not currently cost effective. Whether this changes will be determined by Federal Renewable Energy targets and the terms of anticipated CPRS legislation.
