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Some small forestry-related companies are banding together to make a case to the Ontario Power Authority (OPA) to offer greater incentives to get the bio-economy off the ground.
The McGuinty government has created a great inducement to lure international solar and wind energy developers to Ontario with strong feed-in tariff (FIT) rates.
But potential biomass harvesters and suppliers are feeling left out in the cold.
After a meeting of more than 20 companies in Renfrew in late November, the Ontario Biomass Energy Association has been formed.
The current FIT rate for biomass projects is 13.8 cents per kilowatt hour for renewable energy projects of 10 megawatts.
Harvesters and storers of wood waste want to see the FIT rates boosted to contract prices of 20 cents.
Paul Allaire, a special project coordinator for Villeneuve Construction in Hearst, said the group is still in the fledgling stages with no president and no website, but intends to grow in numbers in the months to come.
“Definitely we’re trying to unite the group throughout Ontario to promote biomass and get proper feed- in tariff rates for projects.”
Allaire said energy in Northern Ontario is a key issue for business to remain cost competitive and long-term solutions are needed.
This means communities need to make their own fuel, like biodiesel, from wood fibre.
“We need to have that vision or we’re not going to advance. We need subsidies somehow to get there.”
In comparison, Ontario’s feed-in tariff prices for on-shore wind projects is 13.5 cents, while offshore is 19 cents. Solar photovoltaics range from 44.3 cents to 80.2 cents depending on the scale of the development, and whether it’s ground- or roof-top-mounted.
Allaire said companies like Villeneuve already know the cost of harvesting and transporting biomass, but the association needs to pool their data before they make their case to the OPA to review the rates.
“At 13.8 cents, it’s not profitable to go out in the province and get the biomass.”
Allaire said a higher FIT rate would help attract investors and help revive the struggling forestry industry by finding local and regional markets for wood residuals like chips, bark and sawdust.
Allaire’s company, Villeneuve Construction, along with the Town of Hearst, has long been investigating the economics of converting wood waste into new value-added energy opportunities.
Villeneuve and the town are considering at a combined heat and power district plan for the community. “Natural gas is pretty cheap but if the intention is to displace fossil fuels in the future, we really need to look at those numbers,” said Allaire.
To build their case, the association is using an Eastern Ontario study as a foundation for their lobbying efforts.
The County of Renfrew has commissioned a report examining opportunities and costs in wood biomass. The report was drawn up as a result of the collapse of markets in the Ottawa Valley for pulpwood quality logs and residues.
The report concludes the renewable energy market is their only alternative to replace the loss of traditional pulp and wood panel markets.
And within this market, wood pellets are the best option to move large volumes and find established users.
The report said more regional consumers of wood pellets and chips for renewable heat and power production must be developed to cut transportation costs and maximize the local economic benefits.
Alastair Baird, a Renfrew County business development officer who doubles as the association’s secretary, said the study conducted by their local industry group came up with an 18- to 20-cent FIT range to attract investment for biomass projects.
“All we are trying to do is catch up at this opportunity in front of us to get the FIT rate changed for woody biomass to the level that will attract investment.”
Allaire said the group plans to stage meetings across Northern Ontario in the coming months, including some in Hearst and North Bay, and is even considering hiring a lobbyist.
So far, Villeneuve is the only Northern Ontario company involved, something Allaire wants to see changed.
“We definitely want the group to get bigger with more representation form different areas of Ontario.”
