By Douglas Bradley
President of the Canadian Bioenergy Association
This year, bioenergy projects in Canada's forestry communities 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, 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 shows a hive of activity.
New cogeneration projects are cranking up in Northern Ontario and Quebec. 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 ten megawatt combined heat and power production (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. Plants are springing up across Ontario, Quebec, BC and the Maritimes, either as stand-alone operations or to supplement existing pulp and paper facilities.
Many Canadian companies interested in developing pellet plants are relying initially on a guaranteed European Union (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. La Sarre Hospital in the Aurores-Boréales region of Quebec has been using a biomass boiler for over 50 years and it estimates cost savings of $12 million 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.
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 have 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 Nipissing-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 Columbia.
Roland Kilpatrick, Industrial Technology Advisor for the National Research Council in North Bay, was part of the trade mission to Sweden. Field tours were a highlight for him allowing him to see state-of-the-art wood pellets and chippers, powering everything from a small farm to the town of Mullsö, which has a three pellet boilers at three megawatts providing heating to 8,000 people.
But while the technologies for bioenergy are readily available, Kilpatrick says the roadblocks to technology transfer from Scandanavia can be found on the cultural and regulatory side. In Sweden, about 80 per cent of forests are privately owned, and here in Ontario, it's the reverse. Swedish tree farming goes back generations. In Canada, we face greater transportation distances, and therefore economic challenges.
For the short-term, Kilpatrick sees partnering with Scandinavian companies to buy technologies and consultancy services as the quickest way to market.
Jamie Bakos, CEO of Titan Clean Energy Projects in Saskatchewan, who also attended the Swedish conference, agrees. "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."
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 per cent 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.
