Where is biomass headed in Canada?

Jan. 13, 2010 – The forest industry may be suffering, but wood-based
bioenergy development is booming. In fact, bioenergy has been a mainstay of the
Canadian pulp and paper business for decades. Canadian pulp mills have the
capacity to produce more than 1,600 MW of power from wood residues and black
liquor. Independent power producers sell another 300 MW of wood biomass-derived
power to provincial utilities across Canada. In total, Canada is producing
close to 2,000 MW of power from wood residue today.

This is only the tip of the iceberg. In British
Columbia, the mountain pine beetle provides a huge opportunity for renewable
energy development. There are over one billion cubic metres of dead pine trees
that can provide fuel for new heat and power development. Even if only half of
this volume is used for renewable power development, more than 1,750 MW of new
capacity could be developed – enough to power 1,750,000 homes. In addition,
harvesting residues that were once burned as waste are now being recovered and
turned into renewable energy.

Wood-based power is cost competitive with new
renewable power alternatives like wind, run-of-river options, and solar.
Moreover, biomass power is a firm, reliable source of power, unlike other
renewables that must be backstopped by firm energy sources. For a utility like
Ontario Power Generation (OPG), which is being legislated to shut down
coal-fired power plants, reliable and lasting wood power is the logical
substitute.

Keep pellets in Canada

Another opportunity is the repatriation of offshore
sales of wood pellets. Today, the Canadian wood pellet industry sells in excess
of 800,000 tonnes of wood pellets into European markets. Most of this
production is used by utilities to produce renewable power, to satisfy
renewable requirements and greenhouse gas reduction targets. If these same
pellets were used to produce renewable power in Canada, it would add a further
one million MWh or an additional 120 MW of capacity.

Unfortunately, Canadian governments have not put in
place the same incentives as the European Union nations; as a result, we are
now well on our way to solving Europe's greenhouse gas problem. Fortunately, we
now have enlightened utilities such as OPG that have decided to adapt a portion
of their generating capacity to wood residue fuel. OPG's decision will lead to
the development of an additional one million tonnes of wood pellet capacity in
Ontario.

Wood biomass energy can provide a much-needed stimulus
to the Canadian forest industry, but only if we move now to provide government
leadership backed up by policies that will provide incentives for capital
investment in new plant and equipment. To get your voice heard, write a letter
to your MP and consider joining a bioenergy association that will push for
better policies to support the development of bioenergy and bring businesses
together to get projects off the ground now.

Brian
McCloy is a professional forester with over 40 years experience in the Canadian
forest industry and is past president of the Professional Foresters Association
of British Columbia. A Board Member for the Canadian Bioenergy Association and
independent consultant, he advises industry and government on greenhouse gas
and biomass energy opportunities. He can be contacted at bmccloy@dccnet.com.