With a half-dozen new mines expected to go into production over the next two years, a delegation from northwestern Ontario wants face time with Energy Minister Greg Rickford to make its case to keep the Thunder Bay Generating Station operational.
The recent discovery of corrosion on a boiler at the power plant and the prospect of a $5 million repair bill, six months of downtime, at a point when the facility’s fuel contract with the province expires in 2020, Ontario’s Independent Electricity System Operator (IESO) decided to jettison the plant.
“We still think the Thunder Bay Generating Station will be needed in the not-too-distant future,” said Iain Angus, a Thunder Bay city councillor and co-chair of Common Voice Northwest’s Energy Task Force, a regional advocacy group.
The plant, which was converted from burning coal to imported specialty wood pellets in 2014, had barely been producing power.
It was positioned as a peaking plant, a kind of emergency backup generator to the provincial grid.
According to Ontario Power Generation, the plant runs only for 2.5 days a year, but Angus questions where the power will come with a slate of new mines moving into production this year and into 2026?
The City of Thunder Bay and the Northwestern Ontario Municipal Association have requested a meeting with Rickford at the Association of Municipalities of Ontario’s annual conference in Ottawa in August.
“We still believe that the plant is necessary,” said Angus. “It would be a good investment for the future of the northwest, in particular, the mining industry.”
The northwest is heavily reliant on hydroelectric generation, but drought conditions are becoming more common every four to five years, said Angus. And there are no alternative sources of power.
With the expansion of the East-West transmission corridor to 220 kilovolts far from complete, and the northwest’s remaining thermal generating station at Atikokan only contracted to operate at half of its 200-megawatt capacity, “we’re in trouble,” said Angus. “Things will shut down.”
Construction of the East-West tie is mired in project hiccups with Hydro One trying to wrestle the project away from NextBridge, leaving it up to the Ontario Energy Board to mediate. The 450-kilometre line is supposed to be in service by 2020.
Angus forecasts the northwest could be short 117 megawatts by 2019, and 258 megawatts by 2020 should drought conditions occur and electrical storms hamper transmission.
Manitoba can’t be relied upon as backstop, he said, having committed its current and future power generation elsewhere until at least 2025 through long-term contracts.
On top of the existing base of industrial consumers, the northwest is looking at a slew of mineral exploration projects moving from the advanced stage to commercial production very shortly.
Harte Gold’s Sugar Zone deposit, north of White River, goes into production later this year, followed by three more in 2019 with Goldcorp’s Cochenour Deposit and Pure Gold’s Madsen Mine in Red Lake, and Zenyatta Ventures’ Albany graphite project, west of Hearst.
Starting production in 2020 are New Gold’s Intrepid Zone, northwest of Fort Frances, and Treasury Metals’ Goliath open-pit gold mine, east of Dryden.
A recent Fraser Institute study didn’t cast Ontario in a very good light among international mining jurisdictions because of its lengthy permitting process.
“But if you don’t have power, all the planning and investment in the world will come to nought,” said Angus.
For years, there’s been a gulf of opinion between the IESO and Common Voice on the region’s forecasted power needs.
“All along we said, not only we do need the East-West tie coming online in 2020, but we need two thermal plants operating at capacity, plus we need additional generation,” said Angus.
The province’s response was that a new and improved East-West Tie will be the cure-all, he said.
“We’re still not confident that that is going to be the case.”
The city learned only a few weeks ago that a closure of the plant was a real possibility.
Thunder Bay Mayor Keith Hobbs called the IESO to hold off on any decision until they could make their case to Rickford.
But with the Thunder Bay plant’s fuel contract scheduled to run out in 2020 and the station facing a hefty repair bill, Angus understands the Crown agency’s logic in making the decision.
The previous Wynne government gave no indication of the plant’s future before the election, nor the Ford government after.
“They were working on the assumption that their licence would not be renewed so did it make sense to invest $5 million on a plant that, in their estimation, would run for a couple of hours a day?”
In late 2015, the Thunder Bay Generating Station came under sharp criticism by the provincial auditor general for its $1,600-per-megawatt operating costs, 25 times higher than the cost of other biomass-burning plants.
The Thunder Bay plant is fed with a specialty black pellet imported from Norway.
Angus said if both the Atikokan and Thunder Bay facilities were burning these advanced biomass pellets, he suspects as many as five production facilities would pop up in the northwest.
But without a long-term fuel contract from Ontario Power Generation, nobody was going to invest on pure speculation.
The Thunder Bay Community Economic Development Commission had entertained some companies interested in making these pellets, with one going so far as to do the engineering and costing of building a plant in the city.
“It could be made here (instead of importing), and we just couldn’t get the IESO to bite on that,” said Doug Murray, the commission’s CEO. “It wasn’t from a lack of effort on our part to find opportunities for supply.”
Now with the Ford government’s elimination of the cap-and-trade scheme, the Green Ontario and the Feed-in Tariff programs, Murray is wondering what is Queen’s Park’s position on renewables?
“Here we are shutting down the generating station so what is the path forward?
“Where are solar farms in northwestern Ontario on their contract lives, and will they be renewed?”
Power generation is one challenge, he said, delivery is another.
Economic growth is being stunted by old radial lines serving the mining camps of Red Lake, Musselwhite and in Geraldton where Greenstone Gold looks to go into production by 2021 and is making plans for gas-fired generation.
“We are still forecasting increases in power, and some mining projects take longer than we think they should,” said Murray.
Watay Power is already carving out a transmission corridor to begin hooking up remote First Nation communities to the grid, Murray said, and there remains no provincial plan to power the Ring of Fire and the communities closest to the deposits.
He sees no quick fixes. Building more hydroelectric dams takes a long time to work through the environmental and regulatory framework.
“We looked at the Thunder Bay Generating Station as something that could fill the gap. As economic development occurs, is there enough power to make that happen?
“It comes down to when we look at the loads in the future, where are we going to get the power from?”
The generating station was included in the city’s bid package to convince Noront Resources to place a ferrochrome processing plant on McKellar Island, right next to the power plant on neighbouring Mission Island.
Murray said there was the potential for heat recovery from the smelter that could’ve been recaptured and converted to electricity. “There were a whole lot of things that were a nice fit.”
As a peaking plant, Murray said Thunder Bay was a reliable source of backup generation that kicked in during deep-freeze conditions or emergency situations.
“So how much are you willing to pay for that when transformers got into trouble, or there were other line issues? What is the plan to replace that?”