Ottawa city staff are proposing granting another extension to Plasco Energy Group to allow the company to secure financing for a proposed plant that would turn garbage into energy.

The city and Plasco signed a 20-year, $180-million contract last year that could see upwards of 300 tonnes of residential waste per day diverted from landfills, converted to gas and burned to generate electricity for the city's grid.

The deal was contingent on the company securing financing by March 2013, but the company received an extension to the end of August.

In a letter dated Aug. 8, Plasco head Rod Bryden asked for another extension, saying the company had firm commitments to buy $25 million worth of equipment and services for the new plant — and that it had already paid out $4.9 million, all funded by its investors.

"The status of the project today shows very substantial investment and progress on the project, which we believe supports confidence by the city that this facility is being built," said Bryden.

Technology unproven on large scale

City staff are recommending extending the deadline to Dec. 31, 2014.

Another condition of the deal — that Plasco complete construction of its waste-processing plant by 2016 — remains in place.

Plasco's proposed plant would use a process called plasma gasification, which uses electrical energy and the high temperatures to break down waste, primarily into elemental gas and solid waste.

The technology is seen as a way to send less waste to landfills, while offering the possibility of using energy generated by the plant to add power to the electrical grid. But the technology has not been proven to work on a large scale.

Plasco's demonstration facility hasn't operated in a sustained manner and hasn't come close to processing the amounts of garbage the city's contract would require.

The city's environment committee will meet Aug. 22 to consider the staff recommendation to extend the deadline.