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Sugar cane largest non-hydro renewable energy source.



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7.30 Report Sugar cane largest non-hydro renewable energy source

02/12/2008

Sugar cane largest non-hydro renewable energy source

Broadcast: 02/12/2008

Transcript

KERRY O'BRIEN, PRESENTER: The Rudd Government says it wants to double the market share of renewable energy to 20 per cent of the country's electricity supply by the year 2020. This will increase or require a huge increase in investment in alternative sources of energy like wind and solar power.

But Australia's biggest non-hydro renewable energy project to date harnesses the power of sugar cane. A sugar mill co-generation project, which was officially opened in northern NSW last week, provides round-the-clock electricity to more than 60,000 households.

Peter McCutcheon reports.

GRAHAM MARTIN, CANE GROWER: It's brilliant in this valley how they light up the sky when you have a fire at night. They were a bit disappointed that we're phasing them out.

PETER MCCUTCHEON, REPORTER: It's the end of an era.

GRAHAM MARTIN: It's the end of an era, yeah.

PETER MCCUTCHEON: For more than 125 years, farmers in northern NSW have been burning the sugar cane crop prior to harvest. But this season, the practice has all but died out. All this wasted energy is now being harvested for electricity.

CHRIS CONNORS, NSW SUGAR MILLING CO-OP: We're picking up all that energy up out there in the form of trash, putting it there and generating power.

PETER MCCUTCHEON: The opening of two co-generation plants fitted to NSW sugar mills is the beginning of a revolution for cane farmers and electricity generators.

JIM HENNESS: With greenhouse emissions, there is no silver bullet. There are a lot of things that contribute to the outcome, and this is just one of them.

PETER MCCUTCHEON: It's leap of faith, isn't it, to make this sort of change?

GRAHAM MARTIN: It is, yeah. And there's still a few around that haven't leapt as yet.

PETER MCCUTCHEON: 10 years ago, farmers in this region started talking to Delta Electricity about ways of making extra money out of the cane crop. Instead of burning all the leftover material known as "trash", why not shift it all to a power plant?

GRAHAM MARTIN: A lot of them said it couldn't be done, that the costs would blow out dramatically - the farmers’ costs in harvesting and all that.

PETER MCCUTCHEON: President of the NSW Cane Growers Association, Graham Martin, says farmers eventually decided on a scheme which meant investing in new harvestings and transport equipment.

What's in it for cane farmers?

GRAHAM MARTIN: Well, once we get this infrastructure paid off - and they expect it to be two to three years - we'll get an extra turn on the top of the price for our sugar.

PETER MCCUTCHEON: And that's great news for an industry that has struggled with depressed global prices.

CHRIS CONNORS: The sugar industry's always very cyclical and at the end of the day, these types of projects are going to take the troughs away.

PETER MCCUTCHEON: There were also huge challenges for Delta Electricity which has spent $180 million attaching power generators to sugar mills at Condong and Broadwater.

JIM HENNESS, DELTA ELECTRICITY: There was a synergy between ourselves, trying to get into the

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renewable energy business, and the sugar mills needing to expand the mills and provide for their security going forward into the future.

PETER MCCUTCHEON: Conveyor belts were constructed to shift the stockpiled material left over from sugar milling (known as "begas") into the fires of the power station. Delta's chief executive Jim Henness explains this and some waste wood will keep the 230 megawatt energy plants operating 24 hours a day throughout the year.

JIM HENNESS: The two plants together will supply 60,000 households, which is quite - very, very large and save about 400,000 tonnes of CO2 per annum.

PETER MCCUTCHEON: The cost of this electricity however is nearly double that of conventional coal fired stations. And these projects were only made possible through the federal mandatory renewable target scheme, introduced in 2001, which in effect creates a financial reward for renewable energy providers.

JIM HENNESS: To make this work, they had to spend a lot of money on the mill to upgrade it. Without this extra market - the electricity market - they couldn't have done that.

PETER MCCUTCHEON: The renewable target scheme has also encouraged investment in projects such as geothermal plants in South Australia and wind farms in Western Australia. But a recent analysis by consultants Ernst & Young has warned the scheme needs a boost.

JON DOBELL, ERNST & YOUNG: The scheme has certainly slowed to the extent that there's a little delay, if you like, where people are determining how quickly and in what sector they might like to invest going forward.

PETER MCCUTCHEON: That's why there's considerable interest in the Rudd Government's expected announcement in the new year about how it plans to achieve a 20 per cent renewable energy target by the year 2020.

JON DOBELL: That announcement and the timing of that announcement next year will be critical to looking at where that investment is made and the sub sectors in that renewable energy space.

PETER MCCUTCHEON: Northern NSW cane farmers have made an investment in renewable energy, partly out of necessity. It has created a new market for a troubled commodity.

CHRIS CONNORS: This sugar cane crop is one of the most exciting crops you could have when it comes down to looking for the future and alternative income streams, alternative products.

PETER MCCUTCHEON: But it's also meant radical changes to farming practices that most growers are keen to embrace.

GRAHAM MARTIN: It's just like the neighbour over the fence when he does another practice in his operation: you watch with great interest. And next year, if it's been a success, well, gee, I might try that too.

KERRY O'BRIEN: Peter McCutcheon with that report.

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