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Economics

Determining project costs

Determining your projects’ economic feasibility is likely to be the most critical part of developing your project and should be considered as early in the planning stages as possible.
The main project costs are likely to include:

  • Development costs associated with feasibility studies, planning and design, community consultation, development applications and approvals, and environmental impact assessments.
  • Capital expenditure on the procurement of a site, plus construction of the BCF and its associated infrastructure, such as powerline upgrades and grid connection costs.
  • Procurement of feedstocks. In some cases, feedstocks can provide a source of revenue where there's an existing or future cost put on alternative disposal options for waste feedstocks, such as transport and disposal at a landfill.
  • Feedstock delivery — work out the maximum delivery distance, and hence area, that will be viable, (both now and in the future) and determine if ongoing biomass can be sustainably supplied to the BCF from within that area.
  • Ongoing operations including administration, maintenance and licensing.

Determining project revenue

Sources of revenue may include:

  • Sale of electricity. If electricity is to be sold off site, find out if your project is eligible for Renewable Energy Certificates, (RECs).
  • Sale of thermal energy for heating and cooling - thermal energy produced from bioenergy isn't currently eligible for RECs.
  • If some or all of the electricity and/or heat is to be utilised on site, then you need to determine the avoided energy purchase costs compared to the current energy system in use and/or other alternative energy systems that could be deployed.
  • Savings on waste disposal costs such as landfill.
  • Sale of bi-products such as liquid and solid fertilisers.
  • Grants and incentives may be available that will help improve your projects profitability, or in some instances grants for other renewable energy options e.g. solar hot water or heat exchange systems may make them more cost effective than bioenergy.
  • Potential future revenue when a price is put on carbon in Australia.

Government grants and other incentives

Eligibility for government grants and incentive programs can help improve your project’s financial viability. This can be very helpful when demonstrating viability to potential investors.

Funding and incentives for bioenergy projects that encourage the production and use of renewable energy from biomass in Victoria are available through various sources and schemes, including federal and state Government agencies, and some non-government organisations. These programs often focus on regional and industry development, energy efficiency, climate change mitigation and renewable energy generation.

These programs change frequently, so before applying for financial help, contact the administering department or organisation to find out if the funding criteria are relevant to your proposal, and that funding is still available. You can find a list of many of the grants and incentives available for Victorian bioenergy projects in _“Incentives, funding and other opportunities for bioenergy projects, developments and research in Victoria” , also available