Utilitas is a privately-owned company focussed on the emerging biogas industry in Australasia and represents an opportunity for the long-struggling Coalbank to diversify its existing portfolio.
The six-year-old Brisbane-based Utilitas scopes, designs and delivers process plants for both solid organic wastes and wastewater.
It is headed up by founder and executive director Fiona Waterhouse, and runs a biomethane potential testing facility with Griffith University.
"The equipment, method statements, training, research data base and template reports allow Utilitas to determine the energy potential of organic substrates to assess project feasibility, inform design and equipment specifications, to assist the commissioning process, manage ongoing plant health and to troubleshoot digestion issues," Coalbank said.
The junior expects biopower to take off, with the Commonwealth's Clean Energy Finance Corporation puts the investment opportunity in this sector to be between $3.5 billion and $5 billion by 2021.
Less than 1% of Australia's electricity output is being generated from biogas, well below the average of 2.4% in OECD countries, and Coalbank says the opportunity exists for Utilitas to further build Australia's under-developed market.
Opportunities in the bioenergy and energy from waste sectors vary in scale from small scale anaerobic digesters to large bio-mass fired power plants.
With over 8000 biogas plants established in Germany producing four gigawatts of installed capacity and supplying more than eight million households with clean, renewable "organic" energy each year, Utilitas sees the opportunity to develop Australia's market which has around upwards of 50 biogas plants and a number under development.
An example of Utilitas projects is a 200kWe co—digestion project in Queensland, which takes 250KL/day of pig manure and generates power for the state's energy networks.
Biogas (mostly methane) is produced from organic waste including effluents, agricultural and processing residuals to produce an odourless, carbon neutral, renewable methane-rich gas that can be used to generate electricity and heat.
Biogas can also be directly used to displace other fuels in boilers and burners or "upgraded" for natural gas grid injection (biomethane); liquefied at low temperatures (BioLNG) or compressed at high temperatures (Bio-CNG) for transport fuels.
Coalbank expects to finish its due diligence next week.
It will fund the Utilitas investment with $1 million loan from Treasure Wheel, a major shareholder in Coalbank and a company associated with chairman Anthony Chan.
Subject to shareholder approval the loan will be transformed into a convertible note.
Waterhouse said the investment will allow Utilitas to bring forward a pipeline of projects in the food, waste, water and energy sectors.
It is not Coalbank's first rodeo outside the world of coal, it is a minor player in Queensland's oil and gas space with three ATPs held by subsidiary Surat Gas.
Following completion of necessary native title processes ATP 1072 was granted in January 2013, and ATPAs 1095 and 1098 were granted in June 2015, but little work has been undertaken and Coalbank is desperate for farm-in partners.
Coalbank had just $79,000 at the end of the last quarter, and was being kept on life support by a $100,000 loan from Chan.
Over the past year it has been relinquishing tenements in areas such as the Galilee Basin, where it can see no near-term commercial potential, however it has maintained its 1.3 billion tonne Blackall coal project in the hopes that rail will eventually come inland.
Blackall, in the eastern Eromanga Basin coal province, is 130km south west of Waratah Coal's China First project and GVK-Hancock's Alpha project, and 112km from Jericho on the Blackall-Jericho rail corridor.
