MOUNT Gambier City Council is expected to reap both financial and environmental benefits if it pursues a proposal to have landfill gas at Caroline collected and used by a third party business.
Council has investigated options to reduce methane emissions at the Caroline site by installing a landfill gas capture system, with several companies showing interest in accessing the stored byproduct.
Landfill gas typically contains high levels of methane and due to it being a potent greenhouse gas, projects that reduce its release into the atmosphere can be eligible for government funding.
At Monday night’s Economic and Environment Committee meeting, a preferred anonymous tenderer for the project was cited in a report, which would pay council 17pc of its royalties at no capital cost.
As a result, modelling suggests the lowest return on captured gas would still net council around $82,000 over a seven-year contract or $121,000 in a 12-year contract.
Councillor Ben Hood seconded the motion, but sought brief clarification on the figures.
“So over 12 years council will make $10,000 a year with no capital outlay? Cr Hood said.
Council city infrastructure general manager Nick Serle said there was no obligation on council to spend any capital at Caroline to generate the income.
“Then I am very happy to second the motion,” Cr Hood said.
“And we actually make the area better while we do it,” Mr Serle said.
Councillor Paul Jenner questioned whether the transmission powerlines would need to be upgraded at the site.
“The contract that is discussed in this report is simply for the company to collect the gas and flare it and the income is from the carbon credits the government pay when organisations do that,” Mr Serle said.
“The draft contract does contemplate in the future there being enough gas at Caroline to not just flare it but to also use it to produce electricity.
“That’s not anticipated to be until after the seven or 12-year period that this report covers.”
Mr Serle said when that option does become available, any capital cost – such as upgrading powerlines – would still be borne by the contractor.
“Council would still receive 17pc – or in fact once the gas production gets above a certain level it goes to 21pc – of both the revenue from the carbon credits, but also from any electricity sold,” he said.
“So yes there may be a need to invest in electricity infrastructure out at Caroline, but that would be from the contractor not council and we would enjoy the fruits from the royalty.”
Cr Jenner also asked if there were opportunities for solar panels at Caroline in the future.
Mr Serle said that was something the preferred tenderer had already done at three other sites in the past.
“Once the gas recovery has reached the level where they put in power generation and then they have the connection, they have also gone and covered as many of the cap cells with solar panels,” Mr Serle said.
“So council would have the option of allowing them to do it at their cost and reap the royalty or alternatively we could install the panels and use the connection that has been made and sell the electricity ourselves.”
Mr Serle said it was also a decision for council to make in the future.
The report will be tabled again at the council meeting later this month.
