Local farmers will own and operate a new cooperative-style biomass business that will supply feedstock for Australia’s first straw-fuelled power company on South Australia’s Yorke Peninsula.

The $100 million Yorke Biomass Energy project, launched in September 2015, has announced the cooperative-style business model that will see local biomass suppliers own and operate a new company called Yorke Biomass Supply (YBS).

 

YBS, and the individual farmers and straw aggregators who make up the company, will have an exclusive 20-year contract with Yorke Biomass Energy for the supply of suitable biomass at a base price of $85 per tonne maintained in real terms.

 

According to the Yorke Biomass Energy project, the initiative could also allow local Yorke Peninsula residents to connect to a hybrid microgrid and receive electricity discounts of at least 15 per cent. <br/> <br/>Yorke Biomass Energy Chairman Terry Kallis said the co-operative style business model will “turn the local electricity market on its head”.

 

Our aim is to shake up the state and national electricity market and provide greener, cheaper power to homes and businesses,” said Mr Kallis.

 

Our business model has clear and compelling benefits, including providing local farmers with a new and diversified source of income that in itself will inject around $6 million per annum into the local community. In fact, our economic modelling estimates that total local spin-offs of around $27 million per annum will be generated.

 

Ultimately, this project has the potential to significantly reduce the power costs to Yorke Peninsula residents.”

 

The biomass facility will be located near the Ardrossan West substation and will be based on a 25 MW straw-fuelled power station run by Spanish infrastructure, Acciona near Pamplona in Spain.

 

/>According to the project, up to 40 long-term jobs will be created through the plant’s operation, as well as through the ongoing collection and transportation of straw.

 

“The project is well advanced having secured the necessary land and garnered extensive interest from local biomass suppliers on the Yorke Peninsula,” said Mr Kallis.

 

“We’ll also be employing an open profit-sharing arrangement between Yorke Biomass Energy, YBS and local electricity customers. Profits achieved above the 12 per cent internal rate of return being sought will be shared by Yorke Biomass Energy with suppliers and customers in the form of higher dollar per tonne prices and lower electricity charges respectively.”

 

Yorke Biomass Energy is currently in discussions SA Power Networks, operator of the South Australian electricity distribution network – regarding how the existing electricity grid network could be used to facilitate lower-cost power.

 

“We’re really excited at the prospect of delivering significantly cheaper electricity to people and are already attracting strong interest from potential partners and investors nationally to expand our project,” Mr Kallis said.

 

We’re also really excited about the longer term environmental benefits, including potential improvements to sustainable local farming in terms of soil health, crop rotation and weed management, in addition to reduced greenhouse gases and improved energy security.”

 

Yorke Biomass Energy is aiming for the Ardrossan power plant to be operational by 2017.