Somersby
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Distinguished guests, ladies and gentlemen
It is a pleasure to be here today in Somersby to officially open Ignite Energy’s Licella biofuels Commercial Demonstration Facility.
I was fortunate to be here in Somersby back in 2009 to announce the Australian Government's $2.3 million funding commitment to support this project as part of our Second Generation Biofuels Research and Development Program.
It gives me great pleasure to return today to see a grant recipient move beyond research and development and take their technology to the next stage towards a fully functioning commercial demonstration facility.
The challenges facing the development of clean technology should not be underestimated.
This point is made quite clearly in the draft Energy White Paper which I released yesterday.
It is extremely difficult to get clean energy technology to the stage not only where it is fully operational, but can be commercially deployed.
But equally, we should not underestimate the opportunities clean energy technologies also present.
And I congratulate Licella on taking another important step forward to seizing just such an opportunity.
The reality is that in all sectors and industries, new technologies are risky and this risk often makes them difficult to finance.
The Australian Government recognises this and the role it has to play in assisting clean energy technologies develop, where the risks are too great for the private sector alone to finance.
The Australian Government is committed to testing all available clean energy technologies that have the potential to one day deliver a breakthrough.
However, as a Government we must always ensure this assistance is administered prudently and under strict conditions to ensure value for money to taxpayers.
To this end, the Government has put in place a very supportive framework to bring clean energy technologies out of the lab and integrated into our energy markets, energy systems and energy supply chains.
This includes the passing of legislation to give effect to a carbon price from 1 July 2012 and the establishment of the $3.2 billion Australian Renewable Energy Agency (ARENA).
In addition, the Australian Government will establish the $10 billion Clean Energy Finance Corporation in 2013/14.
I am confident this framework will give Australian clean energy technologies every chance at success.
What impresses me most about Licella’s technology is to the broad interest it has attracted from a variety of industry sectors.
I am pleased to announce today that Licella and its parent company Ignite Energy are advancing their opportunities for the future deployment of their technology and have entered into agreements with joint venture partners TRU Energy and Norske Skog and a memorandum of understanding with Virgin Australia.
In addition to the activities in Australia, Licella and Norske Skog have also been working closely with New Zealand Trade and Enterprise and Air New Zealand for opportunities for the technology in New Zealand.
The agreement reached between TRU Energy and Ignite Energy is to locate a Commercial Demonstration plant at Yallourn Power Station, in the Latrobe Valley in Victoria in mid 2012.
Trials of the technology will assess its potential to add significant value to Victoria's brown coal resource by producing quality liquid fuels and solid coal products, while also testing its capacity to reduce CO2 and other greenhouse gas emissions from burning brown coal.
As the Minister for Energy can I just say that I am delighted by the prospect of this venture which demonstrates that the opportunities for the Latrobe Valley are very much alive.
Next, Licella and Norske Skog Australasia have formed a new joint venture company called Licella Fibre Fuels.
This new joint venture company will hold the exclusive global license to Licella's CAT-HTR technology to transform multiple biomass feedstocks, including forestry residues, agricultural waste and energy crops into bio-crude oil.
This exciting joint venture could lead to the construction of a large-scale ‘second generation’ bio-crude oil production plant in either Australia or New Zealand and planned continual expansion globally.
The benefit of second generation biofuels, such as this proposed bio-crude, is they do not rely upon food crops as production feedstock and could be a viable supplement to petrochemical refineries use of fossil fuel products.
This type of venture represents a first step towards the type of activities that a low carbon economy can offer regional communities through new regional employment opportunities.
But that is not all.
Virgin Australia have also entered into a memorandum of understanding with Licella to support the commercialisation of a process to converts biomass into sustainable aviation fuel.
Under the MoU, Virgin Australia and Licella will jointly explore the potential of the CAT-HTR technology through further testing the aviation fuel the technology produces, with the aim of supporting its certification and reaching a commercial off-take agreement.
If this technology could provide for a competitively-priced, sustainable aviation fuel, the potential for the aviation industry, which faces rising aviation fuel costs, could be significant.
I note this partnership with interest as the Minister for Tourism, as it represents one of a number of possibilities that clean energy technology development holds.
The potential of this technology across different sectors is impressive.
I am very keen to hear how these proposals progress and once more it is good to see so many private corporations take an interest in developing new technology.
After all, it is this type of clean technology that the Government wants to see commercialised.
As the White Paper states, the clean energy technologies most likely to succeed are those that not only have the potential to reduce emissions, but those that can provide a cost effective and reliable supply of energy – and that includes biofuels.
Biofuels have the potential to play a significant role in Australia's energy mix, as an alternative to oil, and a contributor to our energy security.
In recognition of the growing importance of biofuels, I am pleased to release today the Advanced Biofuels Study by LEK Consulting.
This report was commissioned by my Department and has been an input into the Government’s Energy White Paper.
The Advanced Biofuels Study outlines Australia’s potential competitive advantage in the biofuels sector and the need to recognise the challenges in introducing new fuels such as biofuels, into established, distribution supply-chains.
The study also identifies the potential opportunities to further develop Australia's biofuels industry and a pathway to getting there.
The report is available on my department's website and I encourage those interested in seeing the biofuels industry develop in Australia to take a look.
Furthermore the Government is considering advice from the Biofuels Establishment Council on how best to allocate the remaining $15 million - on a competitive merit basis - to second generation biofuels as part of its commitment to a Biofuels Institute.
The Government intends to make an announcement on high level parameters around this $15 million funding early in 2012.
Ultimately it is the incoming ARENA Board that will be responsible for overseeing this funding allocation to support next generation liquid fuel technologies.
I thank Bruce Godfrey and the members of the Biofuels Establishment Council for the contributions they have made to this process.
Through the implementation of the Australian Government's policy framework to develop clean energy technologies, I am confident there is growth ahead for the biofuels sector.
There is no doubt that biofuels has the potential to be an important fuel as we move towards a low emission economy.
The opening of the Licella Commercial Demonstration Facility today is only the beginning and I look forward to the continued development and commercialisation of the technology in the near future.
Thank you