RELATED COVERAGE: End of the line: HRL announces Energy Brix closures
Tuesday’s announcement of mass redundancies and a power station closure wasn’t all bad news, according to Energy Brix complex owner HRL.
After failing to return a number of phone calls from The Express since a dispute with briquette factory operator Mecrus in June, HRL finally showed its hand on Tuesday.
In a curiously-worded media release heralding the closure of the briquette factory as ‘temporary’, HRL announced a feasibility study was “underway” into the commercial viability of re-powering the briquette factory with an alternative steam supply.
In the release, HRL Limited managing director Gordon Carter said the project, if progressed, would service “new product markets and current customers”, which were currently being explored.
The Express understands at least two alternative steam production technologies are being canvassed: a gas-fired ‘package boiler’, and ‘fluidised bed combustion’, which would use coal finings as a combustion source.
The project would involve “significant investment” in the site, create about 30 direct operational jobs, “and prospects for further job increases in the long term as markets grow”.
According to soon-to-be redundant workers at the factory, the potential ’30’ figure is not unreasonable; about five workers would be required to operate steam supply and related tasks, while five teams of briquette production shift workers would total 25.
However, with HRL having already lost more than 60 per cent of its customer base over the last year, and numerous competing briquetting operations looking to establish themselves in coal supply partnerships at the larger power stations, a recommissioned briquette factory at the Energy Brix site could face stiff competition.
A decision on future briquetting operations will be made upon completion of the feasibility study at the end of 2014.
HRL’s feasibility study into the commercial viability of an alternative steam supply for its briquette factory could be a play for funding under the Abbott Government’s ‘Direct Action’ plan, according to Energy Brix insiders.
The four year $2.55 billion Emissions Reduction Fund is the centrepiece of the Abbott government’s alternative policy to the now-repealed carbon tax, which will auction off money to projects across the country that can achieve the largest emission reductions for the lowest cost.
If it were proven cost-effective for HRL to install a gas-heated ‘package boiler’, to replace steam currently supplied by a brown coal-fired boiler in the adjacent power station, the potential emission reductions could be “substantial”, and render it a strong contender for an ERT grant.
It is unclear whether the alternative steam production technology tipped to be under consideration by HRL – ‘fluidised bed combustion’, which uses coal finings as a combustion source – would prove competitive in the ‘direct action’ ERT market place.
And as HRL has already announced the pending closure of its power station, this would avoid a clash with one of Federal Environment Minister Greg Hunt’s direct action catch phrases: “We are in the business of cleaning up, not closing down”.
Having contributed only minimal amounts of electricity to the national power grid over the past two years, a by-product of on site steam production for the briquette factory, Energy Brix could ramp up power production for a ‘last hurrah’ in the latter half of August.
Sources within the power station say the company is still working to repair a large coal supply conveyor – known as the ‘690’ – damaged in the Hazelwood open-cut mine fire in February, and is due for recommission in mid-August.
Owned by HRL, the conveyor takes coal directly from the Hazelwood open-cut into the Energy Brix complex.
It is understood “substantial” amounts of money have been spent on the conveyor’s reparation.
Since February, HRL has been forced to resort to ‘truck and shovel’ – excavators and semi-trailers – to meet its coal demand for the briquette factory and power station.
One worker says the company is keen to increase power generation now it is no longer subject to carbon tax payments.
“They are saying once they get the coal supply back through the conveyor, they will ramp up another boiler and turbine and do a little squirt of juice until the end of August.”
Two Latrobe Valley power stations say they are prepared for the possibility Morwell’s Energy Brix briquette factory will not re-open beyond 30 August.
Using briquettes as an auxiliary fuel to start boilers and support combustion during periods of low generation, the Loy Yang A and Hazelwood power stations are long term briquette factory customers.
Using approximately 12,000 tonnes of briquettes every year at AGL’s Loy Yang A, a spokesperson said the company currently had a two year supply in stockpile, in addition to a “large black coal stockpile”, which it described as a “viable alternative”.
“A number of research and development projects are currently underway that may lead to an alternative source of auxiliary fuel for Loy Yang in the future,” the spokesperson said.
Meanwhile, a spokesperson for Hazelwood power station owner-operator GDF SUEZ said the company had contingencies in place, having researched numerous start-up fuels and methods in recent years.
One of the options available to generators outside of locally processed brown coal is to truck in black coal mined from northern states, a measure which has been resorted to during past briquette shortfalls.