Conifex Timber Inc. has reached a power-purchase agreement with B.C. Hydro that will allow it to build a $50-million bioenergy plant in Northern B.C.
The plant, to be built in Mackenzie where Conifex operates a sawmill, is expected to be complete by the end of 2012. It would be the first stand-alone bioenergy plant to be built in Northern B.C. following the B.C. Liberal government's launch of its bioenergy strategy more than three years ago.
"We're very excited about this opportunity not only to produce green energy, but to provide stability to our operations and to the community of Mackenzie," Conifex chief operating officer Kevin Horsnell said Friday.
The bioenergy plant will produce enough energy to power 18,000 homes as well as the electricity needs of Conifex's Mackenzie operations. The company estimates it will provide $20 million a year in revenues, a steady income that will offset the highs and lows of the global lumber markets, said Horsnell.
The deal with B.C. Hydro has two components.
Under a 20-year term, Conifex will supply a minimum of 200 megawatts each year to the B.C. Hydro grid. The Crown energy agency is also giving Conifex credit for 30 megawatts of electricity it will produce to run its own operations, similar to other agreements in the forest sector, particularly with pulp mills. "Our unique partnership with Conifex is an example of how innovation can help us meet our clean energy goals," said B.C. Hydro president and CEO Dave Cobb.
B.C. Hydro would not disclose the price it is paying for the power, but the deal will be scrutinized by the B.C. Utilities Commission, where the province is confident it will pass muster, said Jobs, Tourism and Innovation Minister Pat Bell, who joined Horsnell for the announcement.
"This deal is being done on an economic basis," said Bell, the MLA for Prince George-Mackenzie.
The new plant, which will employ 20 people full time and another 80 during construction, was welcome news to Mackenzie mayor Stephanie Killam, whose community is recovering from the impacts of a recent collapse in U.S. housing, decreasing newsprint demand in North America and a global recession.
The bioenergy plant will be contained in the former Abitibi-Bowater newsprint plant that was shut down at the end of 2007. Conifex, a new forest sector player in Northern B.C., bought the newsprint plant along with a pair of sawmills in Mackenzie in 2010. One of the sawmills is operating again on two shifts, employing 175 people. "It's not just about the jobs and the electricity, this is an investment in our community as part of our community. They are our neighbours," Killam said of Conifex's announcement.
When former-premier Gordon Campbell announced the province's bioenergy strategy 3-and-a-half years ago in Prince George, the energy production was meant to be fuelled, in part, by the vast deteriorating pine beetle-killed forests in north and central B.C.
But despite the silver-lined promise of an ample supply of wood waste from beetle-killed timber, little has happened on the bioenergy front since then.
Canfor Pulp was OK'd for a small project using its existing power facilities, but another project given the greenlight in Prince George never got off the ground. A much larger project slated for Mackenzie also fell by the wayside.
While other projects are also in the planning stages, Conifex's bioenergy plant would constitute the first new, stand-alone bioenergy plant in Northern B.C.
Conifex plans to use wood residuals from its lumber mills, as well as drawing on woody debris normally left behind after timber is logged. The company could also tap into residuals from its sawmill in nearby Fort St. James, which will be connected by an upgraded all-weather gravel road by this summer.
The $50 million will pay for a new 36-megawatt steam turbine and upgrade to an existing boiler and air pollution-control equipment.
The bioenergy plant will need more than 200,000 bone-dry tonnes of woody materials, the equivalent of about 8,000 chip truck loads. The Mackenzie sawmill, operating on two shifts, could provide more than half of that.
