Environmental Clean Technologies (ASX: ESI) will apply for part of a $90 million government funding package announced last Friday, which has been designed to accelerate new lignite upgrading technologies in the Latrobe Valley.
Under the terms of the Advanced Lignite Demonstration Program (ALDP), funds will be allocated to companies, which can demonstrate pre-commercial coal upgrading technologies with the potential to deliver environmental and economic benefits.
Accessing funds under this program will help fast track commercialisation plans for selected technologies and the companies progressing them.
Announcing the joint State-Federal funding plan, Victorian Energy Minister Michael O’Brien said the brown coal resource has underpinned economic growth and provided Victoria with a strong competitive advantage. “There is a long term viable future for the Latrobe Valley based on the sustainable use of brown coal,” he said.
Federal Energy Minister Martin Ferguson said the program would ensure continued opportunities for economic growth, employment in the Latrobe Valley region and a sustainable source of energy for Victorian industries and households. He added: “There is also potential for brown coal to develop into a valuable export, which would not be possible without the technological innovation that may also assist in meeting the Government’s emissions reductions targets of five per cent fewer emissions than 2000 levels by 2020.”
ECT believes its Coldry lignite drying technology is a worthy contender for funding support under this assistance program. Not only do we have a technology that is a more environmentally friendly means of transforming raw lignite into a ‘black coal equivalent’ for energy supply, we have already commenced our detailed engineering designs for both a commercial demonstration plant and a commercial-scale (2 million tonnes per annum) plant tender and targeted 2014 as our completion timeframe.
While we have applied for government funding in the past, the narrow selection criteria that previously applied often prevented our Coldry technology from complying. This grant program comes at a very opportune time for your company.
We believe we meet all the required criteria for this program and will vigorously pursue this funding to accelerate our plans and maximise use of the Victoria’s vast lignite reserves.
Commercialising a first of a kind technology like Coldry would benefit greatly from the support of such a program. There is always scale-up risk in any new process and it often presents a major investment hurdle to an otherwise financially compelling project.
If successful, we believe government funding will provide added confidence to potential investors, accelerating the investment process.
At a community level, our technology has the potential to provide initial construction jobs in the Latrobe Valley as well as substantial, permanent long -term employment opportunities in a region that has recently suffered from serious economic hardship. Coldry is a means to provide a significant new industry for the Latrobe Valley and Victoria.
Industry modelling clearly indicates coal drying can significantly reduce carbon emissions – by as much as 40% in our own projections for Coldry – providing an economical carbon dioxide abatement solution compared to alternative base load capable solutions.
We were pleased to be invited by the government to participate in the launch event for the Advanced Lignite Demonstration Program package.
To participate in the program, we must submit a formal Expression of Interest (EOI). An independent government assessment panel will assess this EOI. Short listed proponents will be required to submit a fully detailed proposal.
We are confident we meet all criteria set out at this stage and look forward to keeping shareholders updated as this innovative government provided funding program progresses.