The Broadwater sugar mill, which may be forced to shut down its co-generation operations in coming months because of a shortage of fuel to fire up its boilers when the current cane harvest ends.
The Broadwater sugar mill, which may be forced to shut down its co-generation operations in coming months because of a shortage of fuel to fire up its boilers when the current cane harvest ends.

Running out of steam

THE Broadwater co-generation plant faces shutdowns over Christmas and beyond as the sugar milling co-operative scrambles to source suitable fuel for its hungry boilers.

The fuel problem is likely to plague the plant until at least the 2011 harvest, when newly-planted cane comes online and when it is hoped a $20 million cane trash separation plant is built.

However, NSW Sugar Milling chief executive Chris Connors said that financial support was at the heart of the current problems.

He said the solution now rested with the Federal and State governments, which had watered down the share price for tradeable Renewable Energy Certificates (RECs) through ambitious solar energy rebate schemes.

Mr Connors said the real-market effect of such schemes had nearly crushed fledgling base-load renewable energy power plants which would feed Australian industry with green power in future.

He said plants that burned green waste, like the Broadwater and Condong sugar mills, and plants that burned methane from composting garbage, like at Ipswich, were all reliant on these tradeable certificates to help ease the massive debt amassed in building them in the first place.

“If the Federal Government doesn’t do anything about REC prices then the basis of the plants being built is totally destroyed and the projects will be in a lot of trouble,” he said.

The sugar co-op owes at least $8 million – 25 per cent of last year’s crop – to growers from across the region, but is promising to pay up by February next year.

“There are a lot of reasons to be concerned,” Mr Connors said.

He said the co-generation project was currently losing more than $10 million in revenue because there had been a flood of RECs – each representing one megawatt-hour of renewable power – on to the market after the Federal Government decided to subsidise domestic solar energy programs.

The REC price had dropped from more than $50 to less than $24, he said. The solution was to increase the existing national renewable energy target, which mandates the production of 45,000 gigawatt hours of renewable energy per year by 2020.

But there does appear to be hope. A recent call by Federal Climate Change Minister Penny Wong for a Senate inquiry into the future of RECs has driven up the market price from a low of about $25 to about $35, still a long way off the $55 to $65 being hoped for by the sugar co-op.



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