Putting Canada on track for a bioenergy-rich future requires some government action
Written by Douglas Bradley
This year, bioenergy projects in Canada are on fast-forward. Fighting a strong loonie, a declining US housing market, rising oil prices, and high fibre and energy costs, biomass rich-communities, entrepreneurs, sawmills, harvesters, power companies, and pulp and paper mills have been exploring and implementing new bioenergy projects. The goal is either to bolster a conventional forestry operation or to start up a new, energy-based one. You may not have heard much about it, because the bulk of the projects are small to medium-scale, and attract little press attention. But a look at recent progress in biomass forestry projects in the Maritimes, Ontario, BC, and Quebec shows a hive of activity.
and bush chippers have been flying off the shelves and into a forest
near you as the industry adapts to changing market realities.
Like the rest of the heavily forested parts of the country, a lot of new cogeneration projects are springing up in woody regions of Canada’s Mari-time provinces. Nova Scotia’s Minas Basin Pulp and Power announced a new cogeneration plant requiring 165,000 tonnes of green biomass annually. The collapse of Nova Scotia’s lumber industry and resulting fall in sawmill residues has driven the New Page, Neenah and Abitibi-Bowater pulp mills to take up to 150,000 tonnes of round wood for biomass fuel production. New Brunswick’s Irving Paper is increasing consumption of biomass from harvesting debris across all its mills.
All this action means the Maritimes are demanding new harvesting and production equipment: at least four industrial, horizontal grinders and chippers were purchased in the last 10 months and at least five more will are expected in the next year. Biomass heat and power projects in Quebec and Ontario are also on the rise. As this article went to print, a new project for a 10-megawatt CHP project was about to be announced for a pulp and paper mill in Northern Ontario, and Hydro Quebec was about to issue a highly anticipated call for 100 megawatts for power using forest biomass.
Another hotbed of activity is the growth of the wood pellet industry. Quebec boasts six pellet plants, but interest from project developers is high and more are expected to come online in the next year. In the Maritimes, Enligna, the new owners of the Mactara pellet plant, have announced a plan to expand production, requiring an extra 100,000 to 200,000 tonnes of biomass per year. Nova Scotia has three plants with at least three more in the works, and two proposals for new pellet plants from major forestry companies. New Brunswick has three pellet plants, with another three under construction, and close to a dozen plants being proposed.
Prince Edward Island is about to join the ranks, with plans underway for its first pellet plant. Paul Smallman, a woodlot owner from PEI, recently returned from Sweden’s World Bioenergy 2008, the biggest bioenergy conference in the world. Smallman was part of a 42-strong delegation organized by the Canadian Bioenergy Association that went to Sweden with a mission: to learn from the best, network and turn the experience into a viable renewable energy business back home. “The wood and forestry sector is going broke by relying on conventional markets. I want to set up a small pellet plant, and use large wood burning furnaces to make renewable heat and power and sell it here, in PEI, to local people,” Smallman said after the trip.
While Smallman is relying on local markets, many Canadian companies interested in developing pellet plants are relying initially on a guaranteed EU market as a driver. However, in future I expect sales will increasingly go to domestic users. One of the initiatives we’re taking is GoPellets, a combined project of CANBIO and the Wood Pellet Association of Canada, which we expect to announce at our annual conference Oct. 6-8. The initiative aims to develop the domestic pellet markets by lobbying for the right incentives and working with government to bring down barriers. Heating with wood pellets offers substantial cost-savings – and replacing a conventional boiler with a pellet or wood chip boiler in a large, centrally heated facility like a hospital or university, is a no-brainer. The La Sarre Hospital in the Abitibi region of Quebec has been using a biomass boiler for over 50 years – and it estimates cost savings of $12,000,000 in energy costs compared to conventional fuels during that time.
Even in situations requiring an infrastructure overhaul, there is plenty of opportunity to introduce biomass heating. District heating can be installed quickly via a central heat source connected to a mini-grid that encompasses a small local area, like a hospital, some houses and an industrial application. Common in Scandinavia, district heating is a bigger job here because it requires new infrastructure. However if a community is re-paving its streets or laying new pipes for water, it’s a perfect opportunity to lay the piping for district heating. CANBIO is encouraging communities to consider district heating as part of their infrastructure renewal process. Piping infrastructure already exists in many places, such as Queen’s University in Kingston, which heats university buildings and Kingston General Hospital from a central source.
Another way companies are getting projects online faster is by partnering with advanced technology companies either in Canada or in Europe, where the bioenergy market and industry has been thriving for the last two decades. Europeans see only opportunity when they look at Canada’s rich biomass supply – and interest in buying Canadian biomass or partnering with Canadians in joint ventures, consultancy or technology-supply is high.
Recently, VisionPower, a bioenergy project developer from Austria, partnered with an Ontario-based consultancy, Suthey Holler Associates, to create VisionPower Canada and has started marketing its solutions across Canada. And a Canada side-event at the World Bioenergy Conference in Sweden last month attracted almost 90 participants from 17 different countries including Russia, Finland, Sweden, Germany, Spain, the Netherlands, Brazil and Colombia.
Jamie Bakos, CEO of Titan Clean Energy Projects in Saskatchewan, attended the event. He sees teaming up with either Canadian or Scandinavian business partners as the only way to ensure bioenergy takes off. “We need to look at bioenergy as a worldwide industry. We’re up against a long-entrenched fossil fuel industry and chemical giants, and if we think of ourselves as independent competitors, we’ll all lose. We need to think of the biomass industry as one big market and work together to make impacts.”
The Canadian Bioenergy Association’s annual conference is organized around creating bioenergy business opportunities. “Bioenergy: From Words to Action,” a two-day conference and one-day study tour, is taking place in Ottawa on Oct. 6-8 and promises to bring developers, investors, municipalities, entrepreneurs and industry from around the world together to develop new bioenergy projects. It’s the biggest bioenergy event in central Canada and one of the main aims is to find package solutions for communities to use biomass for energy and strengthen their economies. A trade show will showcase the latest technologies from Finland, Austria and Canada and other biomass equipment and project developers. Following the two-day conference, a field tour is planned to visit the world’s longest-running fast pyrolysis plant, (a 100 tonne-per day facility in Renfrew, ON), a biomass co-generation plant at Abitibi-Bowater’s pulp mill in Gatineau and Les Broyeurs à Bois harvest waste operation. For more on the conference, visit, www.canbio.ca/events.html .
But for Canadian bioenergy to catch up with its Scandinavian and Austrian counterparts – and for the Canadian forest industry to profit – a number of key barriers warrant removal. One of the most visible problems facing small and medium-scale biomass heating projects is the requirement that any steam installation have a steam engineer on site 24 hours per day. The high staffing cost simply craters the economics of most projects under 17 megawatts in Canada.
In Europe, different guidelines exist for smaller power plants, and this has helped small and medium-scale biomass heating to thrive. Other barriers that exist for small and medium-scale projects are high capital equipment costs, where a government subsidy of around 25% is sorely needed to make a strong business case for potential investors. Such an incentive would help government achieve GHG emission targets. CANBIO is creating an alternative proposal to the 24-hour-a-day requirement, and working with governments to propose better solutions.
Finally, the Ontario and Quebec Government’s announcement of an emission cap and trade system is a step in the right direction, but only a strong, nation-wide carbon-trading system can have a real impact on bioenergy development.
All of these actions are part of CANBIO’s nine-point mandate, where we work for our members to lobby government on:
Bioenergy can provide lucrative solutions to our current forest crisis, but clearly there is much work to be done to develop favourable market conditions in Canada. This is CANBIO’s mandate, so watch this space, and please consider joining our association – there is power in numbers as well as wood.
- Favourable bioenergy-specific policies and mandates nationally and provincially.
- A strong, rapidly-developing domestic bioenergy market.
- Implementation of Canada-wide carbon trading system.
- Economically viable and sustainable biomass supply chains.
- Removal of regulatory barriers to bioenergy development.
- More favourable tax treatment and incentives for bioenergy and biofuels.
- Clear and simple access to bioenergy feedstocks on public lands.
- Easier, fair access to the provincial electricity grids with stronger pricing incentives.
- Biomass co-firing in power plants.
Douglas Bradley is president of the Canadian Bioenergy Association, and was recently nominated to the board of the newly formed World Bioenergy Association.