The ground has been broken on Atikokan's 10 megawatt clean electricity cogeneration plant despite the fact that its main source of fuel is in receivership.
The $50 million plant, which will create 40 well-paying jobs once it's in operation, is being financed and built by Delta Energy Co. Ltd. of Thunder Bay.
Site preparation work began in the last week of April, and construction will be completed in eight to 12 months. The plant will be up and running shortly after construction is completed.
Electricity will be generated by gasifying waste wood such as sawdust or bark, or alternatively, trees that have been destroyed by forest fires or insect infestations, said Larry Hebert, Delta's chief administrative officer.
Delta was originally planning to purchase waste wood from Fibratech Manufacturing Inc. in Atikokan in exchange for giving the company a break on their power bills, but the fibreboard plant went into receivership late last year, said Hebert.
In fact, Delta had wanted to build an additional five megawatt energy plant in Atikokan based on a relationship with Fibratech, but that won't happen unless the sawmill is able to pull itself out of debt, he said.
Even though it is not currently in operation, Fibratech still has enough waste wood sitting on its property to feed the electricity plant for three years, Hebert said. Delta is still looking into purchasing the waste wood from Fibratech's creditors, he said.
If that isn't possible, waste wood will be purchased from other sawmills. Because very few sawmills are operating in the region, it may be necessary to hire private contractors to go into the bush and haul trees destroyed by forest fires and insect infestations, said Hebert.
“We take a solid wood chip and expose it to very high temperatures - 2,400 degrees Fahrenheit - and it turns into synthetic natural gas,” he said.
“The synthetic natural gas can be taken and turned into several different kinds of energy. We can leave it as synthetic natural gas, which is a replacement natural gas. We can turn it into electricity. We can turn it into high, medium and low pressure steam. We can turn it into air pressure.”
Atikokan is already home to a coal-powered electricity generation plant run by Ontario Power Generation. About 90 people work there.
The new plant is being supported by the Ontario Power Authority's Renewable Energy Standard Offer Program, which provides a market for small-scale plants producing energy through water, wind, solar and biomass.
The Ontario Power Authority signed a 20-year contract last summer to buy electricity from the Delta plant, said Hebert.
“The contract we have with the government is a good one, because they'll back-stop the plant. We always sell to the grid. We always have a customer,” he said. “That's why one of the financing company people we had in today is so happy with the Ontario program.”
The plant will have very few carbon dioxide and sulphur dioxide emissions, he said. The small amount of waste from its processes will be sold to cement manufacturers as a binder.
Delta is also looking at building similar electricity generation plants in various locations across the northwest, including Thunder Bay, Red Lake, Long Lac and Red Rock.
In a time when forestry is on the rocks in Northwestern Ontario, green power generation could produce a lot of well-paying jobs in small communities, said Hebert.
“There's a limit on how much wood there is, of course, and you don't want to be wasting good wood just to produce electricity, because you can produce value-added products with that,” he said.
“But there will always be residual wood, even if you are making furniture or something like that. We can use all of that.”
Atikokan mayor Dennis Brown said the plant is a “great initiative” which is especially important given the impact of recent mill closures in his town. More than 400 jobs have been lost between the shutdown of Fibratech and another local mill, Atikokan Forest Products.
He is hopeful that Fibratech will soon have new owners, and Delta Energy will be able to procure waste wood from the mill as originally planned.
“As I understand it, there will be more jobs created from the cogeneration plant. This is good news. We need every job that can be created here in Atikokan.”
