Gibson Energy, Varme Energy secure funding for waste-to-energy project

The Canada Growth Fund has issued a carbon price backstop contract to Gibson Energy Inc., a Calgary, Alberta-based company proposing to use carbon capture and storage technology to create clean electricity from landfill waste.

The proposed technology would be Canada’s first waste-to-energy facility with carbon capture technology.

As reported by The Hamilton Spectator, the Alberta facility would divert solid waste otherwise headed to the city of Edmonton’s landfill and incinerate it to create electricity. Carbon capture technology at the site would trap the greenhouse gas emissions produced as part of the process, ensuring none enters the atmosphere.

If successful, the project will be located on Gibson land in the Heartland area and will have the capability to process 200,000 tons per annum of municipal solid waste.

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Gibson announced June 11 that it reached a deal with the $15-billion federal Canada Growth Fund that will help it accelerate the development of the project.

Under the terms of the deal, Gibson would own 50 percent of the project, while the Canada Growth Fund would have a 40 percent stake. Varme Energy, a Canadian subsidiary of Norwegian-based Varme Energy AS, will be involved in the development and construction of the project and will own the remaining 10 percent stake.

In addition, the Canada Growth Fund would provide a carbon price assurance mechanism in the form of a carbon credit offtake to purchase up to 200,000 tons per year of compliance-grade carbon credits generated by the project at an initial price of $85 per ton for a term of 15 years.

A front-end engineering and design study is underway, and a final investment decision by the partnership is planned in early 2025, with commissioning targeted in 2027.