SC gets $14m energy centre

Construction of the first stage of a $14 million steam energy centre should begin in Washdyke by July 2010.

Stage one will cost $9m and the plant will be capable of producing 10 megawatts of steam initially. It will help boost the area's economy and reduce air emissions, say its backers.

That will double to 20 megawatts with a further investment of $5m once demand increases.

The proposal would see existing and future businesses in the area supplied steam from a centralised energy plant and steam distribution network built, owned and operated by Energy for Industry (EFI), a business unit of Meridian Energy.

Washdyke Energy Centre project manager Jerome Parkinson said industries in the area faced challenging energy supply conditions and needed to reduce their air emissions, in line with national air quality standards.

"These changes are causing significant increases in operating costs and are a potential barrier to new industries establishing at Washdyke," he said.

"Our proposal is a way of addressing these challenges and substantially reducing their cost implications and emissions."

The proposal is similar to EFI's existing Dunedin energy cluster.

Following an initial $14m investment by EFI there is potential to expand the Washdyke Energy Centre later as additional customers join the distribution network.

"With a focus on partnerships, EFI's involvement results in positive environmental outcomes of lower greenhouse gas intensities and reduced environmental impacts," Mr Parkinson said.

"This proposal will mean lower heat costs and lower carbon intensities for Washdyke industries and enables them to avoid capital expenditure otherwise required for environmental compliance.

It's a win-win." The project is expected to increase commercial activity and employment in the Washdyke area, improve competitiveness for existing industries, provide significant improvements in the Washdyke area air shed quality and enhance the Washdyke industrial area as an attractive option for new industries.

Four jobs will be created by EFI in the operation of the centre, which is in the Meadows Rd/Sheffield St area.

EFI has support for the proposal from energy-intensive businesses in the Washdyke area and has also consulted and gained support from a range of local stakeholders.

Mr Parkinson said they could name the businesses involved but discussions were at the advanced stage.

As well as burning coal the boiler would also blend in construction and demolition materials, forestry residue, and would have the latest technology in filtering emissions, he said.

Mr Parkinson said the building of the plant would be put out for tender to local contractors, which would boost the South Canterbury economy.