The Australian sugar industry produces around 1 million MW hours of collective (biomass) co-generated electricity, which is approximately 27% Queensland’s total renewable energy production (For more information read our factsheet here.)
The steam generated is used mainly for heating and to make electricity for internal raw sugar production processes. Surplus electricity – currently enough to power 138,000 homes – is exported to the national electricity market (NEM).
Biomass electricity has distinct benefits
Biomass is renewable, produces almost no greenhouse gases (GHGs) and is highly reliable (dispatchable). This means it can be relied upon to meet Australia’s GHG abatement obligations (Paris Agreement) and to stabilise electricity networks to offset the intermittency problems of solar and wind supply (See the December 2019 edition of Sugar Policy Insights).
The predominant biomass consumed is the fibrous bagasse from the sugarcane crushing process. Coal, dry wood, agricultural residue, green waste, diesel, gas and oil can also be utilised from time to time based on (cane) availability and relative costs. Energy consumption increases when gasoline and diesel oil are consumed in the transportation of cane to and raw sugar from the mills to export ports and domestic destinations.
While the predominant source of revenue for a milling operation is the sale of raw sugar on export markets, some revenue comes from the sale of biomass electricity to the NEM The funds generated maintain milling viability and help to achieve returns on capital.
With the right policies and incentives, co-generation capacity can grow
The Australian sugar industry produces enough cane and bagasse to build another 1,000 MW of biomass co-generation at a capital cost of around $3 billion. To achieve the Queensland government’s objective of 50% renewable energy capacity by 2030, an additional 7,000 MW will be required. With the right policies and incentives, the Australian sugar industry can meet around 14% of this requirement.
ASMC supports consistent and bi-partisan national and state policies that allows the market to provide least cost, reliable and low greenhouse gas emission generating electricity. The Renewable Energy Target, which required high-energy users to purchase large-scale generation certificates from renewable energy suppliers, was successful in facilitating growth in Australia’s renewable supplies and driving down costs of production.
Uncertain policy settings make it difficult to estimate means revenues, costs and potential returns of new biomass co-generation projects.
Potential exists for distributed networks to supply canegrowers or host communities directly with power
The ability of the sugar sector to develop distributed networks to supply canegrowers or host communities directly with power is of particular interest. Similarly, the competition for sugarcane land and network capacity and the true costs of ‘firming up’ the network to ensure the grid is secure and reliable when large scale solar farms are built needs to be more closely considered when granting development approvals.
Milling Sector Bio-Energy Agenda June 2022 Report