Financial close has been reached on Australia’s first thermal waste-to-energy facility. Construction of the 36 MWe plant in Kwinana, Western Australia will start this month and is scheduled to open by the end of 2021. Being co-developed by Macquarie Capital and Phoenix Energy Australia Pty Ltd (Phoenix Energy), the facility will divert around 400 000 tonnes of household, commercial, and industrial waste from landfill annually – a quarter of Perth’s post-recycling waste.
According to a statement, the facility will use the residual waste to generate energy, recover and recycle metals, and re-use the remaining ash residue as construction materials. Once operational, the facility will also export electricity to the local grid sufficient to power more than 50 000 households.
This project supports Perth communities by providing a practical, long-term solution for waste management. We are pleased to have contributed our global infrastructure and renewable energy expertise. Our support for the creation of lower carbon-intensive energy sources is underscored by the expansion of our participation in this project over the past three years; we originally came on board as a financial adviser and have since taken on the responsibilities of co-developer and investor, said Chris Voyce, Executive Director, Macquarie Capital.
Macquarie Capital and Dutch Infrastructure Fund (DIF) will provide AU$275 million of equity finance, and Macquarie Capital will also continue to be responsible for delivery of the facility. A group of financial institutions and the Clean Energy Finance Corporation (CEFC) will provide AU$400 million debt finance.
The CEFC will commit up to AU$90 million whereas the Australian Renewable Energy Agency (ARENA), will provide a grant of AU$23 million.
The facility will be located in the Kwinana Industrial Area, 40 km south of Perth. Support from the Western Australian Government includes the provision of the land for the facility through a long-term lease from its land and development agency, LandCorp.
Acciona has been appointed to design and construct the facility, and a 25-year operations and maintenance service agreement has been signed with Veolia. Veolia currently operates more than 60 waste-to-energy facilities around the world.
The Kwinana facility will use Keppel Seghers moving grate technology, which thermally treats the waste and converts the recovered energy into steam to produce electricity. Metallic materials will be recovered and recycled, while other byproducts will be reused as construction materials.
Moving grate technology is used in approximately 2 000 facilities globally, with Keppel Seghers providing its technology to more than 100 waste-to-energy plants in 18 countries.
During the construction phase, more than 800 jobs will be created including apprenticeships and a range of sub-contracting and supply opportunities for local businesses. Approximately 60 full-time positions will be created once the facility is operational.
The project is supported by 20-year waste supply agreements with Rivers Regional Council, which represents seven Local Government Authorities, and the City of Kwinana. The project also has a five-year waste supply agreement with Veolia.
The Western Australia Local Government Association (WALGA) has appointed the Kwinana Waste to Energy facility as a preferred supplier of baseload renewable energy, representing a reliable source of baseload power to WALGA members.
This project has been several years in the making and undergone an appropriately rigorous approvals process. I am delighted that the project has met all requirements and we can now move to deliver a first for Australia: an energy source that is one of the cleanest in the world, said Peter Dyson, Managing Director, Phoenix Energy.
Contractual terms remain confidential. The facility has received all the necessary environmental and development approvals to commence construction.
