Greenhouse gas emissions from one of Australia’s largest coal-fired power stations will be used to produce biofuels as its owner tries to reduce its carbon bill.
Biofuel company Algae.Tec has signed a deal to set up a carbon capture and biofuels production plant next to the Bayswater Power Station, in the Hunter Valley.
The agreement, with NSW government-owned power company Macquarie Generation, means waste carbon dioxide from the power station fed into an algae growth system will then be used to produce biodiesel and jet fuel.
Macquarie Generation chief executive Russell Skelton said the move would reduce the company’s carbon bill. ‘‘Carbon is now our single largest cost,’’ he said.
‘‘This technology should reduce our carbon output, reduce our carbon bill, and at the same time improve our bottom line.’’
The price of carbon rose to $24.15 a tonne on Monday following an indexed rise in the federal government’s carbon tax.
Bayswater uses about 7.5 million tonnes of coal a year and powers an area stretching from South Australia to North Queensland.
NSW Energy Minister Chris Hartcher said the algae system would provide the Hunter Valley with a local green fuel source.