Sugar plants up for sale
THE biomass cogeneration plants at the Broadwater and Condong sugar mills, owned by Sunshine Electricity, a subsidiary of the NSW Sugar Milling Co-operative, are up for sale.
Sunshine Electricity has received 26 expressions ofinterest from Australian and overseas companies about taking over the operation of the plants.
“The price will be the sticking point,” Ian Causley, chairman of the co-operative’s board, said.
The sale is needed to repay loans used to pay for the construction of the plants, which have proved to be a financial failure. It was hoped that the plants, which began operating in 2008 and are fuelled bysugar cane trash, would become a profitable arm of the co-operative.
However, the plants were hit by cost overruns and fuel shortages after it was discovered the cost of building a facility to process sugar cane trash before it could be used in the plant was more than four times what had been budgeted for.
Without the processing facility the plants struggled to find suitable sources of fuel.
The crash of the Renewable Energy Certificate price also contributed to shortfalls in loan repayments.
“If RECs had stayed at $53 we might have scrambled through,” Mr Causley said.
However, the certificate price dropped to $24 and at the beginning of this year the co-operative began talks with its financers in the hope it could restructure its debts.
“It could not be done and we are now looking for a sale,” Mr Causley said.
He said the Federal Government destroyed the renewable energy industry when it flooded the market with certificates after homeowners were allowed to claim them for the installation of solar power.
Mr Causley said it was important the cogeneration plants continued to operate as the co-op owned the boilers used to generate power at both mills.
The plants are the largest renewable base load energy projects in Australia and were backed by the government-owned Delta Electricity.