By Ben Cubby
A deal to provide low-emissions ''green energy'' for Sydney's massive new Green Square development has collapsed, in a setback for lord mayor Clover Moore's plan to take the city off the coal-fired energy grid.
The City of Sydney said on Tuesday its agreement with Cogent Energy to develop the Green Square plan - which included several ''trigeneration'' power plants sprinkled around the inner-city suburb - had been dissolved.
Illustration: Rocco Fazzari
The trigeneration plants, which burn gas but capture extra heat for warming and cooling and are more efficient than standard fossil-fuelled power plants, have now been deferred indefinitely.
Buildings and infrastructure will still be built to house future power plants at Green Square, but they will stand partially empty until the economics stack up.
The council will still push forward with trigeneration for some sites outside Green Square, including the Sydney Town Hall and the Queen Victoria Building, and said the termination of the Cogent deal would not stop its long-term plans to tackle climate change.
The change would not affect the council's long-term plan to cut emissions to 70 per cent below its 2000 level by 2030, and meet all electricity demand from renewable sources by 2030, Cr Moore said.
The Green Square deal was scotched by changes to the regulatory environment, which prevent building owners from making a profit by sharing low-emissions power with their neighbours, and uncertainty around the future price of carbon and gas.
There was also uncertainty around the timing of development within Green Square, with apartment blocks being constructed to different time frames by several different developers.
Cogent, a subsidiary of Origin Energy, had been unable to provide a plan for Green Square that was remotely close to the council's cost ceiling of paying about $25 per tonne of CO2 saved, the council said.
A Cogent spokeswoman said trigeneration remained cost-competitive. ''Every potential trigeneration site has different factors that will impact the economics of precinct trigeneration, which can include the thermal energy density, and the type of customers and the timing for take up of energy demand in the area," she said.
The council's general manager, Monica Barone, refused to say how far the cost estimate for trigeneration had blown out, but said it was ''way over'' the council's target.
''This changed environment, while unfortunate, is only a small roadblock,'' Ms Barone said.
''The economics of trigeneration don't stack up now, but we will do everything we can to lobby the state and federal governments for regulatory reform.
''We still believe a future trigeneration network in Green Square is viable and we will ensure the development is ready for trigen, as it progresses.''