Geodynamics broadens involvement in Australian biogas sector

Australia-based Geodynamics Ltd. has set its sights on becoming a diversified clean energy and services company. The first step in this process was the July acquisition of Quantum Power Ltd., a biogas company focused on the growing agribusiness and municipal waste sectors in Australia. Together, Geodynamics and its wholly owned subsidiary, Quantum, are working to build a portfolio of build, own, operate and maintain (BOOM) projects in the biogas sector.

Historically, Geodynamics focused on geothermal projects, but newly appointed managing director and CEO, Chris Murray, said the company is very positive about its transformation from a geothermal specialized to a broader clean energy company. “The renewed confidence in Australia’s renewable energy sector and the current programs that we have, at federal and state government levels, to assist the development of renewable energy and carbon abatement projects, provides us with great opportunities,” Murray said. “Notwithstanding these opportunities, the commercial conditions necessary to develop the company’s geothermal projects in Australia and in the Pacific, are weak, hence the move to broaden the opportunity base.”

A strategic review Geodynamics conducted identified areas of interest including renewable energy generation, behind-the-meter electricity sales and the use of organic waste streams as fuel in the agriculture sector. “Electricity generation from agricultural biomass is a really good fit,” Murray said.

Quantum Power’s focus is on biogas energy generation in the agricultural sector, renewable energy and behind-the-meter electricity generation and sales, which were factors Geodynamics identified as positive in its strategic review. “Quantum is a very good fit with Geodynamics in terms of skills and expertise and provided us with access to a customer base and project pipeline,” Murray said.

According to Geodynamics, the Australian agribusiness sector of the economy is set to grow substantially over the coming years as both populations and incomes rise throughout the Asia-Pacific region. “Initially, we will focus on the agricultural sector, based on Quantum Power’s pipeline, and then branch into adjacent sectors,” Murray said. “Our focus will be on sectors that we believe have long-term growth, such as agriculture. The pipeline of opportunity has more than 20 identified potential projects in it, so we’re very excited about the opportunities.”

Prior to the acquisition, Quantum had built approximately 12 projects, and when Geodynamics acquired the company it had one BOOM project in its portfolio, which the companies continue to operate and maintain today. Quantum currently has three projects under development—one nearing final commissioning and two in the planning and approval stage, with construction set to commence in 2016.

The Goulburn Bioenergy Project is one of the two projects slated for construction commencement this year. On Nov. 18, Geodynamics announced Quantum and Rural Funds Management Ltd. agreed to a restructure of the project arrangements for the Goulburn Biogas Project located at the Southern Meats abattoir in New South Wales, one of Australia’s leading sheep meat exports. Under the revised arrangements, Quantum will build, own and operate the project under a 20-year power purchase agreement. The $4-million project includes the construction and commissioning of anaerobic digesters, gas treatment equipment, electrical generation and electrical interconnections to the facility. “We are currently in the process of completing environmental approvals for the construction and completing the detailed design work of the new anaerobic digester pumps,” Murray said. “We expect to have approvals in place to commence construction during the second quarter of this year.”

Once operational, the plant will have an electrical generation capacity of 1.6 MW and the methane potential of 2,100 cubed meters per day. “The project will combine biogas with natural gas in a dual-fuel generator to provide electricity in peak demand periods,” Murray said. “We are able to store the gas when generation is not required and only use it to generate when there is peak demand and electricity prices are high. The abattoir doesn’t operate on the weekend, hence providing an additional two days of biogas that is then used in these peak periods.”

The second of the projects set to commence construction in 2016 is the Mindarra Bioenergy Project, located at a large piggery in Western Australia. Like the Goulburn biogas project, the Geodynamics Quantum team will be installing a biogas digester, gas treatment and generation plant to generate in excess of 100 percent of the piggery’s power demand with surplus power exported to the grid. The project’s power capacity is 1 MW with the potential to generate 4,200 cubed meters of methane per day.

Both of these projects will employ the BOOM model. The Goulburn project is the first location of a BOOM model at an abattoir in Australia, and Murray said, it will benefit from the federal government’s Emissions Reduction Fund by generating Australian carbon credit units as well as generating energy certificates. The BOOM model is common in Australia and elsewhere in the world, but relatively new to the agribusiness sector in Australia, Murray said. “The model provides customers with savings in onsite energy costs without them having to source the expertise or provide the capital for the biogas plant,” he added. “Under the model, Quantum Power is responsible for the selection, installation, commissioning, operation and maintenance of the plant from end to end. Customers provide us with the waste stream and we provide them with energy.”

Besides the Australian agribusiness industry, the municipal waste sector may yield more biogas projects in the future, although now it’s a niche market. Projects in the space tend to be larger and rarer, according to Murray, due to the amount of waste aggregation required to make them viable and the non-homogeneous nature of the waste streams.

Overall, Murray said, Australia has experienced a resurgence of interest in the renewable energy sector in both small- and utility-scale areas, driven by a number of factors, particularly the legislative certainty due to the country’s renewable energy target and the positive sentiment toward renewables at the federal government level. “This trend is being supported by programs such as those operated by the Australian Renewable Energy Agency, Clean Energy Finance Corporation and the Emissions Reduction Fund,” Murray said. “We’re also seeing a trend towards energy storage and behind-the-meter power generation, which is driven by a decrease in technology costs, such as battery storage, and the desire for people to avoid network charges.”