Australia-based independent power producer (IPP) and energy product provider ReNu Energy Ltd has announced that it has signed a term sheet with A.J. Bush & Sons (Manufactures) Pty Ltd (AJ Bush), a long-standing customer of ReNu Energy, for the construction of a new covered anaerobic lagoon and upgrades to the existing biogas infrastructure at the AJ Bush rendering facility near Beaudesert, Queensland.
The AJ Bush Bioenergy Project was built and commissioned in 2011 and was acquired by ReNu Energy in 2015. ReNu Energy owns, operates and maintains the project, which consists of anaerobic digestion (AD) ponds at the AJ Bush rendering plant near Beaudesert, Queensland and completed an upgrade of the generation equipment in early 2017.
The installed nameplate capacity of the project is 1.1 MWe and the facility produces sufficient biogas for in excess of 3.4 GWh per annum of electricity production which is supplied to AJ Bush. The project also produces approximately 3 400 Large-scale Generation Certificates (LGC) per annum. ReNu Energy generates revenue through electricity sales and LGC sales.
Biogas for heat
According to a statement, the term sheet provides for an exclusivity period for ReNu Energy and AJ Bush to enter into a works agreement for the Project. It is proposed that the Project be constructed under a Build Own Transfer (BOT) model, whereby ReNu Energy designs, constructs and commissions the Project, transferring ownership to AJ Bush upon completion.
AJ Bush will pay for the biogas produced from the new covered anaerobic lagoon via a fixed monthly charge for a ten-year term. The biogas generated will displace fossil fuel which is currently used to heat the rendering plant’s boilers.
The new digester is eligible for Australian Carbon Credit Units (ACCUs) under the Carbon Farming Initiative. ReNu Energy has secured a contract with the Clean Energy Regulator for the delivery of 180 000 ACCUs from the new digester over a seven-year period.
The capital cost of the works is estimated to be AU$3 million and ReNu Energy is considering a number of funding sources. The term sheet is subject to several conditions including relevant approvals, completion of due diligence and funding.
The addition of the new anaerobic lagoon to AJ Bush’s existing biogas facility will reduce AJ Bush’s energy costs and carbon footprint, and provide ReNu Energy with a stable 10 year cash flow. The BOT project works well for ReNu Energy and AJ Bush, as AJ Bush already operates and maintains the existing anaerobic lagoons, and ReNu Energy can apply its expertise and experience to design and construct the Project and manage the delivery of the ACCU contract, said Chris Murray, CEO, ReNu Energy.
ReNu Energy and AJ Bush have been working together for over a decade to generate renewable energy from the waste streams of the AJ Bush rendering facility at Beaudesert. To date, this has been from existing biogas assets, which were recently upgraded to improve efficiency and increase output.
In mid-February, ReNu Energy announced a ten-year extension, to 2031, to the power purchase agreement (PPA) for this project and a solar PV PPA term sheet for an 850kW (DC) solar installation to provide further renewable energy to AJ Bush under a long-term agreement.
The announcement of this additional biogas project further expands the successful renewable energy partnership that ReNu Energy and AJ Bush have developed over the past ten years. We are pleased to again be working with AJ Bush, to provide its rendering facility with more renewable energy, increasing the plant’s self-sufficiency and decreasing its carbon footprint. Together with the recently announced solar PV project and existing biogas facility, AJ Bush is a real leader in the utilisation of renewable energy, concluded Murray.