Mobile Edition
Print
Get the Mag
Weekly UpdatesHow the province will make use of its abundant forestry biomass is one of the most intriguing and critical issues in the future development of Northern Ontario.
[ILLUSTRATION OMITTED]
One thing is certain, the investor demand is there.
The Ministry of Natural Resource (MNR) and Ontario Power Generation (OPG) have received more than 200 proposals to access the wealth of unused biomass roughly estimated by the MNR to be 5-million cubic metres.
How this biomass will be allocated and what the pricing structure will be has yet to be determined or made public.
But no doubt, the biggest potential user could be Ontario Power Generation.
The McGuinty government is under the gun to make good on long-standing commitment to be off coal at OPG-s generating stations at Lambton, Nanticoke, Thunder Bay and Atikokan by 2014.
Wood pellets appear to be the preferred replacement with power plant test trials being carried out or scheduled for this summer.
Last winter, the two organizations simultaneously launched two procurement processes, issuing a "request for expressions of interest" to invite potential suppliers to make their best pitch.
The biomass focus is on tree tops, limbs and all the leftover forest residue that historically woodland contractors have left behind on Crown bush lots. Where once this was regarded as waste to be burned or buried, it suddenly has an incalculable use as feedstock for a wide range of emerging green fuel technologies.
This spring, the MNR recorded 131 submissions, while OPG received more than 80 submissions from Canadian and international proponents covering all of the Northern and south-central Ontario.
The MNR wants to determine a definitive calculation of available biomass supply while OPG is interested in the energy possibilities. Both processes are designed to support each other.
"We were really pleased with the volume and quality of the responses that we got from forestry, industry and agricultural organizations," said MNR spokesman Brady Irwin. "It's a wide range of proponents interested in investing and creating green jobs in Northern Ontario."
Though he wouldn't provide specifics by category, industry or community groups, the "broad spectrum" of submissions include several value-added projects in bio-chemicals, bio-fuels, co-generation and "many, many" wood pellet proposals.
"We're sifting through the proposals and sometime around the end of June we'll determine next steps in the procurement process for biomass fuels," said OPG spokesman Bob Osborne. "We'll probably come to some conclusion as to how proceed at that time."
To extend conditional offers to a short list of the most promising proposals would require launching a formal request for proposals.
"We've probably got one of the most dynamic markets for green energy in North America," said Bill Kissick, the MNR's director of the Forest Sector Competitiveness Secretariat.
He said the MNR's evaluations in separating the contenders from the pretenders will be based on credentials, experience, financing and demonstrating that they can be environmentally-sound operators.
The MNR is reviewing the proposals and is working with industry licence holders in Ontario's 47 forest management units to determine how much biomass is available for harvest.
North Bay forestry consultant Chris Rees isn't convinced Ontario's generating stations will ever be totally reliant on biomass as feedstock.
"OPG is thinking of going that route I don't believe they ever will. I think it's a smokescreen," said Rees, business manager of VisionPower Canada, a North Bay-based supplier of European pellet equipment and biomass inventory software.
[ILLUSTRATION OMITTED]
"I think this is basically a fishing trip. They'll find they can't get the supply of pellets and so that's going to be an argument to extend the life of coal and then move to nuclear."
Rees, who is a director of the Canadian Bioenergy Association, wants to promote the domestic use of energy from biomass.
Canada's is one of world's leading makers of wood pellets with a good chunk, about 85 per cent, going overseas.
"Why use biomass to produce electricity and then use that electricity to produce heat? Better off to produce heat directly from the biomass. Don't go through the electricity grid."
European-style district heating plans and localized pellet furnaces are the best way to go.
"We're in this Catch-22 situation in North America where governments believe the electricity utilities are the be-all and end-all. We need to focus their attention away from the electricity people and get them focused on heat production from biomass."
There is emerging technology being developed in British Columbia for a 'super pellet' that is waterproof and can be kept in storage for years. However, governments are not keen to offer any incentives to promote this kind of R & D.
Rees doesn't believe the forest industry can morph into the energy field and the MNR's approach to entice companies to come forward for biomass is wrong.
The best way to supply biomass is to have the MNR directly harvest Crown wood through contractors, he said.
"Put it on the market and tell us how much you're willing to pay. And the market will decide what the price is."
With so many Northern communities eager to get into the biomass gold rush, Rees is fielding inquiries and providing quotes to interested parties looking at acquiring pellet mill technology Vision Power is even considering starting their own pellet mill at an undisclosed Ontario location.
One business that has taken a step down the pellet path is Quality Hardwoods of Powassan, south of North Bay.
When heating oil peaked at $1.10-per litre last summer and it-was costing them $500,000-a year to heat their 10 wood drying kilns, ownership decided to make a change.
They made a $1 million investment in two Decker boilers and a heating system using pellets that was just fired up in December.
Sales representative Peter Van Amelsfoort estimates they've saved $45,000 over the same four-month period last year when they used oil.
At $170-per tonne for pellets, a trailer arrives every two' to three weeks to load their 60 tonne silo. Each boiler is rated for 3.5 million BTU-per hour for the kilns with the excess fed into the main-building.
"What we've built here with our operation, you could heat a subdivision of 100 homes and that's being done all over Europe."
Though district heating plans are common in Europe, Amelsfoort said it's slow to take hold in Canada because the politicians and the big forestry players are resisting it.
Laurentian University economic professor David Robinson said Queen's Park's "yard sale" of biomass represents short-term thinking instead of long-term planning. It means going down a slippery slope beyond using tree tops to eventually cutting down trees to feed Ontario's generating stations.
He believes OPG is "bullying" MNR to get control of that fibre allocation.
What could follow is a series of bad decisions that will see fibre exported south out of North Ontario without using this resource to create more energy self-sufficient towns and cities and keep heating dollars within these communities.
"I don't believe they've done the research that they need to do."
Making biomass available before the McGuinty government's Northern Growth Plan is tabled is akin to putting the cart before the horse, he said.
"You have to be insane to be talking about allocating fibre before your Northern Growth Plan comes out. Do you sell off the resources first and plan after?
"What's the most striking feature of Northern Ontario? Huge resources and it's an under-developed region. It has almost no value-added production developing here."
He favours the creation of Northern Ontario industrial development ministry encompassing mining, forestry municipalities and First Nations to develop a future plan that works.
www.opg.com/power/fossil/biomass.asp
www.mnr.gov.on.ca/en/Business/Forests
www.qualityhardwoodsltd.com
www.visionpower.ca
By IAN ROSS
Northern Ontario Business
FEED