The City of Sydney will use trigeneration as a low-carbon energy network to cut greenhouse gas emissions.
Final negotiations will take place with Cogent Energy, a subsidiary of Origin, to power central Sydney after a tender process and negotiations with several other companies.
According to a University of Technology Sydney study, the project could save up to $1.5 billion in avoided capital investment in coal-fired power stations and grid upgrades.
Mayor Clover Moore said the taking most, if not all, of city buildings off the coal fired grid is part of a 2030 goal to cut carbon emissions by 70 per cent.
â€œTrigeneration runs on natural gas and produces low carbon electricity, heating and air-conditioning for clusters of surrounding buildings,â€ Ms Moore said.
She said trigeneration is nearly three times more energy efficient than coal-fired power stations and can reduce greenhouse gas emissions by 40 to 60 per cent.
According to Ms Moore, it will reduce energy costs because it avoids part of the â€˜network chargesâ€™ which currently make up 50 per cent of the average electricity bill.
â€œThese charges are set to rise to 60 per cent in the next two years as network companies upgrade the poles, wires and substations of the electricity grid,â€ she said.
Sydney already has stand alone trigeneration plants used by locally based companies including GPT Group, Stockland, Investa and Westfield, although the councilâ€™s plan includes precincts and city blocks not limited to council buildings.
Instead of only council buildings, the first of four â€˜low-carbon zonesâ€™ are a part of the package being negotiated by the council and Cogent Energy.
These city locations are Martin Place and George Street in the CBD North; Town Hall Precinct in the CBD South; Pyrmont, Ultimo and Green Square.
The plan is targeted to deliver the systemâ€™s 360-megawatts-or-more target to supply energy the entire local government by 2030, with initial plans for council buildings and privately owned buildings in the cityâ€™s low-carbon zones.
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