Toowoomba Council to make cash out of methane as biogas project comes online

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A waste facility on Toowoomba’s outskirts is set to become an environmental powerhouse, with a newly installed engine to convert methane into electricity.

The biogas project, built by Brisbane-based LGI Energy, will be used on the town’s main landfill site on Hermitage Road, with nearby tips feeding into it.

While landfill biogas technology is not new, the Toowoomba site has been touted as a Queensland first as it will provide electricity that will bypass the national power grid.

The Toowoomba Regional Council will receive royalties on the sale of power back to the grid and the sale of carbon credits, but ratepayers may never know how much due to confidentiality clauses.

In its first stage, the machine has been selected to power the Wetalla water reclamation facility, which is next to the landfill.

LGI Energy chief executive Adam Bloomer saysthe facility would run at a one-megawatt capacity when it switches on in September.

“We capture the methane, which has 28-times the global warming of carbon dioxide, and combust it,” Mr Bloomer said.

Mr Bloomer said as the project develops, a battery and other devices may be added for different uses.

“This size engine produces enough energy to supply about 1,500 houses,” he said.

“Roughly, we’re capturing about 70 to 80 per cent of the gas the site produces.

What is a carbon credit?
An ACCU is a credit allocated by the federal government for each tonne of carbon, or its equivalent, that is sequestered from the atmosphere.

Credits can then be sold for money.

In the case of Toowoomba’s waste, the credits are for the site’s methane capture.

As of late August 2022, the price of ACCUs was sitting at $29 to $27.

“[The plant] is capturing between 500 to 600 cubic metres of methane per hour,” Mr Bloomer said.

“As long as the landfill is open, our gas flow will increase … plus 20 to 50 years after a landfill closes.”

Over its lifetime, the machine will cost LGI Energy between $5 million to $10 million.

LGI Energy’s executive director Jessica North said the project would create revenue through three ways: selling power to the grid, large-scale generation certificates under the renewable energy target, and ACCUs.

“The surplus power that the plant produces we will also be selling to the grid, which is volatile pricing,” Dr North said.

“We’ve just put in a claim for carbon credits, and we will do so every six months.”

Details undisclosed
Toowoomba Regional Council has contributed $3 million towards the project.

In return, the council will generate revenue by receiving royalties from both the sale of power back to the grid and the sale of ACCUs.

Both the council and LGI Energy said they were unable to disclose revenue details due to commercial-in-confidence.

They also did not disclose the amount of exported power or ACCUs expected to be produced over the project’s life.

Dr North said the council’s income generation “entirely depends on the market”.

Toowoomba city councillor Nancy Sommerfield said ratepayers shouldn’t expect to see money back in their pockets anytime soon.

“If you ask if they’re going to get a rate reduction, we know [that with the] rising cost of everything at the moment that’s not going to happen,” Ms Sommerfield said.

“However, there will be a chance to save money here.”

Ms Sommerfield said the Wetalla water reclamation facility could see a saving of $500,000 per year.

“The water plant is the highest user of electricity,” she said.

“We get a 99 per cent destruction efficiency, which will give us ACCUs (Australian Carbon Credit Units).”
“We get a 99 per cent destruction efficiency, which will give us ACCUs (Australian Carbon Credit Units).”