Trigen Plant at Coca-Cola Place

4 April 2012  – City of Sydney and Origin’s Cogent Energy have overcome some of major barriers to ambitious plans for a low carbon emissions trigeneration energy network in Sydney and signed a heads of agreement for the first tranche of the rollout.

The agreement, signed on Tuesday, is a 40-50 page document that paves the way for final sign-off expected mid year.

It is for delivery of $100 million of work over the next 10 years, as part of the $440 million first stage of the program.

It will include trigeneration at four sites at Town Hall, Prince Alfred Park, Green Square and UTS/Central Park Broadway.

Cogent Energy manager Blair Healy told The Fifth Estate on Tuesday that just two of these sites, at Town Hall and Prince Alfred Park could by 2014 supply enough energy to meet the needs of the City’s 250 building portfolio.

He said that agreement essentially meant that most of the major issues that hampered the early development of the plan and caused a tender to be halted last year, have now been largely ironed out.

These included how to contain the mono nitrogen oxides gasses, or NOx, produced at trigen sites to limits set by the Environment Protection Authority.

Mr Healy said, “we have a solution for that and we will continue to talk to the EPA to target correct approvals in terms of management.”

The solution revolved around “cost and space” and the additional cost involved in providing the correctly designed site [with ample open space] had been factored into initial pricing, he said.

Electricity and gas grid owners Ausgrid and Jemena had also been working to enhance the capacity and quality of ageing energy grids to deal with the additional gas fired energy generation.

Elsewhere Origin is also installing a trigen plant at Dandenong that Mr Healy says is in many ways the “trailblazer” for Sydney.

The agreement this week is a key achievement for Lord Mayor Clover Moore who made a 70 per cent reduction of greenhouse gasses in the city by 2030 a central plank of strategic plans for the city.

It will also be a coup for Allan Jones who Ms Moore brought from the UK to deliver the program, and for Kinesis which developed the original concept for the trigeneration plan.

Ms Moore said the network had the potential to save $1.5 billion by 2030 in avoided or delayed spending on grid upgrades and new power stations.

“It will help us deliver on our target to cut carbon emissions across the City of Sydney by 70 per cent by 2030 (on 2006 levels) – one of the most ambitious of any Australian government,” Ms Moore said.

Kinesis managing director Bruce Taper said the agreement was a global first.

“This historic agreement amounts to the most significant intervention of city governance relating to energy and climate change of any city in the world,” Mr Taper said.

Origin general manager retail markets, Jim Galvin, was also optimistic for future trigen opportunities. He  said that on 2011, Origin worked with Investa Property Group to develop Australia’s first open commercial trigeneration precinct in Sydney and was also building a “groundbreaking trigeneration precinct in Melbourne,” [at Dandenong].

Key points from a City of Sydney statement include:

This network could save NSW electricity consumers as much as $1.5 billion by 2030 in avoided or delayed spending on grid upgrades and new power stations and cut carbon emissions by 70 per cent by 2030 (on 2006 levels).

Under the agreement, Cogent, which is a fully owned subsidiary of Origin, will install a trigeneration network to supply low-carbon electricity, heating and airconditioning to council and privately owned buildings in four low-carbon-zones across central Sydney: CBD North (Martin Place/George Street); CBD South (Town Hall Precinct), Pyrmont/Broadway, Green Square

The City’s interim trigeneration master plan included a total of 360 MW by 2030 at a cost of $440 million (2010 dollars), to provide 70 per cent of the Local Government Area’s electricity requirements. This week’s agreement with Origin covers the initial stages of this plan and involves a portion of the total 360 MW as projected in the City of Sydney’s Interim Trigeneration Master Plan which extends to 2030.

Trigeneration plants are already being used in individual buildings by companies in Sydney, including GPT Group, Stockland, Investa, Westfield and the Rooty Hill RSL.

The City’s plan to connect multiple buildings to a trigeneration network significantly improves the energy efficiency of the system – such networks are already operating in Europe, the USA and Asia.

As the City of Sydney and further customers come on board, Cogent will begin installing the low-carbon energy network next year, after a final contract is signed in June 2012.

A University of Technology study found that network charges – the cost of transporting electricity – are set to rise from 40 to 60 per cent of the average electricity bill over the five years to 2013-14.

Two new power stations are planned for NSW with a capacity of 4,000 MW, costing from $4.6 billion to $7 billion. If these proposed power stations were to use coal they would emit 23 million tonnes of carbon dioxide per year or 15 per cent of NSW’s total greenhouse gas emissions and four per cent of Australia’s emissions.

The study showed that a Sydney trigeneration network could save NSW electricity consumers up to $1.5 billion in avoided or delayed spending on grid upgrades and new power stations by 2030.

Electricity prices increased by 43 per cent in NSW over the three years to 2010 and are expected to by about this much again over the next 3 years, according to the NSW government’s Electricity Network and Prices inquiry. Last year average NSW electricity prices rose by an average of 17.1 per cent.

Key points in an announcement by Origin to the Australian Stock Exchange said:

Trigeneration involves using natural gas-powered engines to generate on-site electricity. It is a highly efficient process, as the waste heat from the engine is captured and re-used to provide heating, or for conversion to chilled water for cooling through an absorption chiller. Using gas as the fuel source offers the potential for a significant reduction in carbon emissions.

Commercial buildings account for approximately 10 per cent of Australia’s greenhouse gas emissions, according to Climateworks’ Low Carbon Growth Plan for Australia. The success of this initiative and the proliferation of similar initiatives in Australia’s central business districts could help drive material reductions in greenhouse gas emissions.

Precincts and customers for the first stage of the trigeneration project are currently being negotiated, including City of Sydney’s own sites. It is expected that the plants will be constructed from 2013, as customers are identified and secured. Origin will be responsible for the ongoing operation and maintenance of the plants.