Pellets for Canadian power

Aug. 20, 2010 – The Wood
Pellet Association of Canada (WPAC) has been working hard to develop a Canadian
market for co-firing wood pellets with coal. Co-firing pellets with coal has
long been practiced by European power stations, yet none of Canada’s 19 coal
power stations do it. Canada burns 58 million tonnes of coal annually: 51
million tonnes is for power generation, and 7 million tonnes is for steel,
concrete, and other industries. WPAC wants to convince Canadian power utilities
to start co-firing with wood pellets, creating a domestic market.

Photo: Pacific BioEnergy

Many Canadian power plants use lignite or
sub-bituminous coal, which has a similar heat value to wood pellets. A Canadian
co-firing rate of just 5% would translate to a market of 2.6 million tonnes of
wood pellets annually, more than double Canada’s 2009 production. WPAC has made
substantial efforts to promote Canadian co-firing.

Letter to Ontario Power Generation
On April 16, 2010, WPAC sent a letter to Ontario Power
Generation (OPG), objecting to the “Ontario suppliers only” provision in OPG’s
request for proposals to supply wood pellets for the Atikokan Generating
Station and presenting the case that it would contravene interprovincial trade
law. In June, the government of Ontario responded, stating that no final
decision regarding pellet use had yet been taken by the government. WPAC will
continue to press on this issue.

Letter to Canadian Environment Minister
On April 30, 2010, WPAC wrote to Environment Minister Jim
Prentice, urging him to consider co-firing as an effective way to reduce
greenhouse gas emissions as Canada pursues its 17% reduction commitment and
asking to meet with him. Senior Environment Canada officials offered to meet
with WPAC on July 7 (see Meeting with Environment Canada below).

Presentation to Canadian Senate Committee
On May 6, 2010, WPAC executive director Gordon Murray and pellet
producer representative John Arsenault prepared a presentation on the benefits
of co-firing that was given by Arsenault to the Agriculture and Forestry
Committee of the Canadian Senate in Ottawa. The presentation was well received,
and the senators asked insightful questions.

Conference presentations
On May 12, 2010, Murray gave a presentation at the Northern Alberta
Bioenergy Conference. He spoke about the pellet industry, the Canadian and Alberta coal
power industry, and the benefits of co-firing. This presentation led to a
meeting with Alberta’s environment minister (see Meeting with Alberta Environment Minister below).

On June 9, 2010, Murray gave a presentation at the Prince George Bioenergy Conference. He spoke to an international
audience about EU government policies that have led to the growth of co-firing
in Europe.

Meeting with Environment Canada
On July 7, 2010, a delegation from WPAC consisting of Murray and six
pellet producer representatives met with senior Environment Canada staff in
Ottawa to discuss implementation of co-firing in Canada and the proposed new
regulations for coal power emissions whereby new plants and existing plants
older than 45 years must meet natural gas emissions standards. Environment
Canada staff acknowledged that co-firing would be an effective way to reduce
emissions and potentially extend the life of older coal plants. They agreed to
engage WPAC in official consultations as the new regulations are developed.
They recommended that WPAC also meet with other federal departments and agencies
such as Industry Canada, Natural Resources Canada, and economic development
agencies.

Meeting with New Brunswick Department of Energy
On July 9, 2010, Murray and pellet producer representative Glenn Hardie
met with officials of the New Brunswick Department of Energy to discuss
co-firing potential in that province. The Department of Energy staff suggested
that combustion tests of wood pellets are needed to demonstrate to Canadian
power producers that pellets would work as well as coal. They discussed New
Brunswick’s commitment to creating 400 MW of new renewable energy by 2016; they
have obtained 160 MW thus far. They recommended that WPAC present a business
case to NB Power, as well as join forces with the NB Woodlot Federation, which
has also been promoting biomass co-firing.

Meeting with Alberta Environment Minister
On July 29, 2010, Murray and pellet producer representative John Unger
met with Alberta Environment Minister Rob Renner and other officials to discuss
the potential for co-firing in Alberta. The group indicated that it had already
discussed co-firing with the Alberta power companies. The Alberta government is
reluctant to regulate coal emissions beyond what is proposed by the federal
government. However, the group noted the newly established carbon trading
system in Alberta and the legal requirement for large emitters to reduce
emissions by 12%. They offered to work with WPAC on developing the business
case and providing advice in presenting it to the coal power producers.

Continuing and future activities
The Canadian Clean Power Coalition (CCPC) is an
association of Canadian coal power companies that is working on ways to reduce
coal power plant emissions. It is looking at various biomass alternatives,
including hog fuel, sawdust, pellets, agricultural residues, traditional wood
pellets, and torrefied wood pellets. After a discussion with WPAC about
co-firing, the two organizations agreed to cooperate to develop the business
case for wood pellets to present to CCPC membership.

The Centre for Electrical Industry Technical
Advancement (CEATI) and the Electrical Power Research Institute (EPRI) are two
large industry-funded, nonprofit electricity industry research organizations
that have U.S., Canadian, and International power companies as members. A
proposal for a cooperative partnership on co-firing and torrefaction from WPAC
is being considered by the CEATI board. In addition, the BC Bioenergy Network
and WPAC have negotiated an understanding that allows them to cooperate in
trying to work with EPRI on torrefaction and co-firing.

Murray will be speaking on behalf of WPAC at the 7th annual
Coal Symposium in Calgary in early November, 2010, which will be attended by
many senior executives from the coal power companies. He will be making the case
for Canadian power companies to begin co-firing. CCPC will assist in preparing
the presentation.

Conclusion
Canadian wood pellet producers need federal and
provincial governments to support their industry with effective policy similar
to that in Europe. WPAC needs to convince the power industry of the business
case for co-firing so that they will try it.

One only needs to look at the success of the wind power producers and the liquid
renewable fuel producers. Canada’s wind power industry is growing rapidly with
support from governments and power utilities. And liquid fuel producers have
achieved renewable fuel standards whereby Canadian gasoline is now required to
have a minimum of 5% ethanol. Those successes came from massive lobbying
efforts and took time to achieve. The wood pellet industry must be prepared to
do the same.