Meeting the Greenhouse Challenge
Driving our business
Melbourne Water's operations generate greenhouse gases, which can be harnessed for use as a green energy source. We are working to reduce our greenhouse gas emissions by 35% by 2005/06, and we are committed to producing enough green energy to fully compensate for our use of imported electricity. Meeting our greenhouse gas targets will deliver significant environmental benefits and provide a financial benefit of $6 million a year.
Currently, Melbourne Water uses electricity, natural gas, diesel, petrol, LPG, solar and biogas (methane and other gases) to meet energy needs at our sites. We use energy for pumping and treating water and sewage, for transport, construction and other works, and in our offices.
We can obtain this energy by buying it from the electricity grid or by using fuels, or we can generate our own "green" or renewable energy in association with two of our key activities - supplying water and treating sewage.
We use water flow and pressure to create energy in hydro-electricity plants, and we capture and use biogas - a byproduct of the sewage treatment process - to help power our sewage treatment plants. Melbourne Water's two major sewage treatment plants, at Bangholme and Werribee, treat more than 90% of Melbourne's sewage.
Our main greenhouse gases are methane directly emitted from sewage treatment and livestock operations, and carbon dioxide indirectly emitted through electricity we buy to pump and treat water and sewage.
Our greenhouse emissions are influenced significantly by external factors such as climatic conditions (for example, during drought we use more energy to pump water due to higher consumer demands) and regulatory requirements for sewage treatment.
Creating our own energy future
As community expectations and regulatory requirements become increasingly rigorous, so too are our requirements to minimise our impact on the environment. These higher environmental standards (together with population growth) require increased energy usage, generally for pumping and operations of the most modern and effective sewage treatment processes.
We are meeting this demand for increased energy from our own green sources as we upgrade our sewage treatment plants to protect the marine environment, improve effluent quality, reduce odour and increase efficiencies.
Generating our own renewable energy has environmental, social and financial advantages - for example, reductions in greenhouse gas emissions, income from electricity generation, lower costs through efficient practices, and potential commercial benefits from emissions trading and renewable energy certificates.
Our baseline
In 2000/01, energy represented more than 8 % of our operating expenses, with electricity alone costing more than $14 million.
That year, we used 330 GWh of energy to run our business - including 230 GWh that we imported from the electricity grid and other energy sources.
We produced 129 GWh of energy from our own renewable sources. Of this 129 GWh, we used 100 GWh to power our business. We exported the remaining 29 GWh to the grid, helping Victoria reduce its dependence on non-renewable energy sources such as brown coal. (We could not use this 29 GWh in our operations because it was generated at hydro-electricity plants remote from our energy-using facilities).
One gigawatt hour (GWh) is enough energy to run an average Melbourne household for 100 years.
In 2000/01, our greenhouse gas emissions were about 600,000 tonnes of carbon dioxide equivalent. This is comparable to annual greenhouse emissions from about 120,000 cars based on average use of a typical car in suburban areas.
How we will achieve our targets
We are undertaking green energy and energy-reduction projects that will dramatically reduce our annual greenhouse gas emissions, increase operating efficiencies, and meet most of our increased energy requirements.
Upgrading the Western Treatment Plant
Our Western Treatment Plant at Werribee discharges treated effluent to Port Phillip Bay under an EPA Victoria licence. In 2000, we began work on a $160 million upgrade of the plant to protect the long-term health of the Bay.
This major environmental upgrade is reducing nitrogen levels by enhancing the modern lagoon system with "activated sludge" processes. This is increasing energy requirements at the plant.
At the same time, we are reducing greenhouse gas emissions (and odour) by capturing increasing quantities of biogas collected from the covered lagoons. We have constructed power-generating facilities under a partnership with AGL Ltd to produce electricity from this biogas, enabling us to meet our increased energy needs from our own green sources.
We are planning to expand power generation facilities, and by 2005/06, the plant is expected to produce about 80% of its energy needs and generate more than 60 GWh a year of green energy that would otherwise have to be imported.
We are also modifying treatment processes at the plant and will stop applying raw sewage to land. We have discontinued traditional grass filtration and will cease land filtration processes by 2005/06. This will eliminate direct emissions of methane and nitrous oxide from these traditional processes, and result in reductions in our annual greenhouse gas emissions of 170,000 tonnes (80% of our overall target) and a net financial benefit to the organisation of about $1 million a year.
The Eastern Green Energy Project
This is a major upgrade of the power station and outfall pumping station at our Eastern Treatment Plant at Bangholme.
Under this project, biogas will be used to generate electricity at the plant. This green or renewable energy source will reduce greenhouse gas emissions by replacing imported electricity and by minimising the use of diesel fuel at the plant.
The project has the potential to provide about half the power needed to run the plant and all its heating and cooling requirements, as well as reduce electricity costs. Seven new generators that can run solely on biogas, supplemented by natural gas as needed, will help power the plant. New electric motors that run on biogas, natural gas and diesel will power the outfall pumping station.
The project will produce 30GWh a year of green energy from biogas, reducing imported electricity needs and cutting greenhouse emissions by about 25,000 tonnes a year (12% of our overall target).
Building hydro-electricity plants
We generate about 50 GWh a year of hydro-electricity from plants on the pipeline to Cardinia Reservoir and at Thomson Reservoir. Financial and environmental benefits include electricity sales to the grid and reduced greenhouse gas emissions.
We are exploring opportunities to expand our hydro-electricity program to increase our renewable energy supplies and reduce our reliance on non-renewable sources. Turbines and generators would convert energy from available pressure and water flow into electricity, which would be sold back to the grid. All water passing through the plants would be returned to the transfer system, ensuring none is wasted.
Cutting energy and costs
We are implementing a range of projects to reduce our energy use and improve the efficiency of our operations. Significant projects include:
- Introducing and using an energy and greenhouse gas data management and reporting system. This system is a database that holds all energy consumption, site production and other data necessary to calculate greenhouse gas production and energy use at one site, groups of sites and across the whole organisation. It can also store energy use and greenhouse gas emissions forecasts, targets and performance indicators.
- Optimising energy use in lagoons at Western Treatment Plant by recirculating water to minimise the use of aerators.
- Improving the aeration process to reduce ammonia in effluent and reduce electricity use at Eastern Treatment Plant.
- Maximising availability of water in Maroondah Aqueduct to reduce pumping from the Yarra River into Sugarloaf Reservoir.
- Joining the Greener Motoring Program run by the Australian Fleet Managers' Association as part of a commitment to reduce fuel consumption and greenhouse gas emissions of our fleet. In 2002, some 5% of our vehicles used LPG. We have a target to increase this to 15% by 2005 as more manufactured gas-powered vehicles come on to the market
- Replacing 24 fleet cars with hybrid petrol-electric vehicles. Melbourne Water now drives the second largest fleet of low-emission Toyota Prius cars of any Government-owned body in Australia. The hybrid vehicles use about 50% less fuel compared with similar-sized vehicles and produce 46% of the emissions. Each is expected to achieve a saving of 4.5 tonnes of carbon dioxide equivalent a year. Melbourne Water will introduce other hybrid or fuel cell technology vehicles (such as hydrogen) into the fleet as opportunities arise.
- Reducing energy use and greenhouse emissions by co-locating most of our people into one building in East Melbourne and closing offices at Dandenong, Doncaster, Melbourne, Mt Waverley and Richmond. This was achieved in 2003.
These projects will reduce imported electricity, cut our annual greenhouse gas emissions by 17,000 tonnes (8% of our overall target), and provide cost savings of about $500,000 a year.
How we rate with our peers
Several measures are used to compare the energy performance of organisations. These measures are based on energy consumption, electricity use and green energy generated. We are among the leading organisations in the Australian water industry in creating renewable electricity, and we compare well with international benchmarks.
For example, in Britain, the water industry average for green or renewable electricity produced as a proportion of electricity consumed is 6.3%. Melbourne Water's comparable figure was 17% in 2000/01, and is due to increase over time.
The anticipated reduction in greenhouse gas emissions since Melbourne Water was established in its current form (as a water wholesaler) in 1995 to the level forecast for 2005/06 is 40%. This compares with an 8% annual increase allowed to Australia and a 6% annual decrease for Europe under the Kyoto protocol.
Renewable energy program
The Federal Government's Mandated Renewable Energy Target requires electricity retailers to gain accreditation for a proportion of renewable energy they sell.
Melbourne Water is registered in the Australian Government's Renewable Energy Certificates program as a generator of renewable energy through our hydro-electricity and biogas plants.
Under this program, organisations generating renewable energy receive certificates for each megawatt-hour they produce, enabling them to sell surplus certificates.
Demand for these certificates will increase over time, as the Federal Government requires electricity retailers to have an additional 9500 GWh of energy accredited as renewable by 2009. We estimate that the sale of renewable energy certificates will deliver a net financial benefit to the organisation of about $3 million a year.
The Australian Greenhouse Challenge
Melbourne Water's awareness of our greenhouse responsibilities has been emerging as global concern with climate change has increased. We believe it is important to do whatever we can to reduce our greenhouse gas emissions.
In 2000, we established an inventory of our emissions and developed a Greenhouse Strategy that included joining the Australian Greenhouse Challenge. The strategy was developed with input from our people and endorsed by the Melbourne Water Board.
We joined the Australian Greenhouse Challenge in September 2002 to achieve recognition of our emission reductions and to be in a good position to capitalise on future emissions trading programs.
The Greenhouse Challenge is a voluntary partnership between Government and industry to reduce greenhouse gas emissions.
Useful links and other sources
Australian Greenhouse Office - www.greenhouse.gov.au
EPA Victoria - www.epa.vic.gov.au
Essential Services Commission - www.reggen.vic.gov.au
Renewable Energy Regulator - www.orer.gov.au
Sustainable Energy Authority Victoria - www.seav.vic.gov.au
Sustainable Energy Industry Association - www.seia.com.au