Biofuel industry on cusp of change

The State Government's obsession with gas is at the expense of regional communities and famers, according to Upper Great Southern Oil Mallee Growers Association regional manager David McFall.

"One wonders why logical people will go down this track? All our energy can be gained from above the ground, we do not have to go below the ground," he said.

Mr McFall said a pilot biofuel plant in Narrogin, while reaching a proof-of-concept stage, had not received the necessary government attention or private industry investment needed to become a commercial operation.

He said it was his understanding that Verve Energy had been unsuccessful in applying for a Royalties for Regions grant to assist in underwriting a commercial project, but the energy service provider had maintained a research and development interest in the oil-mallee sector.

"There is the capacity for Verve to re-enter this market, but it has all become too hard," he said. "Where is the political will to do this?"

Mr McFall said the plant, using oil-mallee biomass, could have easily powered the town of Narrogin.

"5000ha of oil mallees could comfortably provide enough energy for a town like Narrogin," he said.

"It is disappointing for growers because biomass does not get a lot of air time or political consideration. Whenever there is reference to renewable energy, it is all about wind or solar."

However, Mr McFall believed the biggest capacity of all of them was biomass.

"Solar and wind are very intermittent, they have to use a lot of gas to make them reliable and that is very expensive," he said.

"Gas is not a renewable resource - just because it is readily available does not mean it is renewable.

"Biomass is just another form of solar energy, it is embodied energy from the sun."

Mr McFall said that biomass was exactly what was needed in the regions. "It provides a good environmental dividend, controls salinity, stops wind erosion and the root portion is continually locking up carbon, which suits the national agenda," he said.

Energy Minister Mike Nahan said the Government aimed to achieve a diverse mix of fuel sources to meet energy supply requirements, including the use of a range of renewable energy technologies.

"The State Government provided 75 per cent of the funding for the $14.5 million integrated wood processing demonstration project at Narrogin," he said.

"The State Government also lobbied the Commonwealth Government to successfully attract the remaining funding for this demonstration plant."

Dr Nahan said Verve successfully operated the pilot plant in 2006, producing electricity, activated carbon and eucalyptus oil from oil mallee feedstock, but said the plant was unable to progress to commercial operations.

"Challenges associated with such projects included the absence of a well-developed fuel supply chain for use of mallee feedstock in commercial operations, including harvesting capabilities and industrial scale supply availability," he said.

"While wind and solar technologies are the more commercial forms of renewable energy, the Government is also aware of the potential contribution from other technologies, such as bioenergy, and has supported the development of this technology."

_Dr Nahan said the independent market operator had progressed changes to the Wholesale Electricity Market arrangements so payments for intermittent generators more accurately reflected the amount of generation output provided to the market by these facilities. _

Verve has indicated it considered there was currently no conversion technology available to support a commercial scale operation.