clean coal investment adds power to victoria

The Age
Chris Hammer, Canberra
May 3, 2008

VICTORIA'S brown coal industry will benefit from a multimillion-dollar investment flowing into clean-coal technology company Exergen.

Indian multinational company Tata Power and Australian engineering services company Sedgman yesterday announced their investment at Beaconsfield, Tasmania, the site of Exergen's pilot plant. They join foundation investor Thiess.

The size and conditions of the investment are being kept confidential, but the money will help fund a $20 million engineering study to be conducted over the next eight to nine months.

Exergen is developing technology to remove 80% of the moisture from brown coal, effectively upgrading it to the equivalent of sub-bituminous black coal.

"The beauty of the technology is that it's so elegantly simple that it's highly efficient," Exergen general manager Greg Kukla said. "It uses very little energy, it's almost energy neutral."

Mr Kukla praised Resources and Energy Minister Martin Ferguson for helping broker the deal with Tata Power.

"If Exergen's brown coal drying technology succeeds, it will be a huge breakthrough in reducing greenhouse emissions, not only guaranteeing energy security for Victoria, but also creating export opportunities for brown coal in the future," Mr Ferguson said.

Tata Power has extensive holdings of brown coal in Indonesia and is interested in using the technology to upgrade coal for export to its Indian power stations.

Exergen's engineering study will include testing the suitability of the process for Indonesian "mulia" coal.

Once the engineering study is completed, it is anticipated building will begin on a demonstration-scale plant, lasting between 12 and 18 months, at a site in the Latrobe Valley.

"The same site will then be expanded into a commercial-scale facility," Mr Kukla said. "Once we get to that stage, we're talking about a $600 million facility." It is anticipated that the plant will supply coal to Latrobe Valley power stations and to export markets.

Exergen will be competing with other companies, such as HRL, which are also developing brown coal technologies.

But Mark Wakeham, from Environment Victoria, said using coal in any form to generate electricity was no longer viable. "It may bring the rate of pollution down a fraction, but we need to move to zero or low-emissions energy," Mr Wakeham said.