With Canada celebrating 150 years as an independent nation 2017, this year’s edition of Wood Pellet Association of Canada (WPAC) Annual Conference was both memorable and a milestone event. Partly because it was held in downtown Ottawa, the Canadian capital that straddles the Provincial borders of Ontario and Québec, in a venue almost within earshot of Parliament. And partly because this year’s theme was “Contributing to Canada’s Low-Carbon Future” thus the main focus was on domestic development.
It seems a most opportune time to do so. The Province of Ontario was the first jurisdiction in North America, if not the world when it in 2014 banned the use of coal for power generation essentially making it illegal, prompting utility major Ontario Power Generation (OPG) to convert two of its coal-fired generating facilities, Atikokan and Thunder Bay to run on white wood pellets and black wood pellets respectively.
All of our focus, being here in Ottawa, has been to educate not only the producers, but the regulators, government people, and the power utilities who did show up in good numbers, about the benefits of biomass here in Canada, remarked a notably pleased Gordon Murray, WPAC’s Executive Director during conference.
Conductive Canadian climate strategy
Last year the Canadian federal government announced its intention to phase out the use of coal in power generation by 2030 as part of its clean-energy strategy and Paris Accord commitment.
This year, as Rene Landry, Director of Wood Pellet Operations, Shaw Resources and President of WPAC pointed out, the federal government and provinces agreed to the Pan Canadian Climate Framework leaving “no question that Canada is committed to reducing greenhouse gas (GHG) emissions from power and heat”.
Furthermore, this year WPAC partnered with IEA Bioenergy Task 32 “to ensure government understands the important role wood pellets can play” in this overall strategy. The partnership included a pre-conference business meeting and post-conference tour to OPG’s converted facilities on top of a full conference day dedicated to co-firing and full conversions both in Canada and elsewhere.
Co-firing with Capital Power
Speaking on the former, Sandy Fleming, Director of Business Development Capital Power, an Alberta-headed power utility, shared insights on economic and policy conditions to incentivize Canadian biomass conversions.
Under the Climate Leadership Plan, Alberta will completely phase out coal emissions by 2030, affecting 2.5 GW of coal-fired generation that would have otherwise operated after 2030. In addition, all fossil fuel power generators are subject to a carbon price targeted to be CA$50 per tonne by 2022 for emissions above a “performance threshold.”
Fleming revealed that his company has carried out some co-firing tests with sawdust at its Genesee Generating Station, a 1.2 GW capacity pulverized coal (PC) power plant. The tests verified that it would be technically feasible to implement a biomass fuel co-firing system for sustained, long-term operation at Genesee 1.
Being a coal-mouth facility one challenge for the 430 MW Genesee 1 is securing affordable local biomass in sufficient quantities – additional transport costs prevent trucking or railing wood pellets from neighbouring Provinces like BC being an alternative (although Pinnacle is building the first pellet plant in Alberta, the impending production volume is already spoken for).
After conducting an Alberta wide inventory, Capital Power concluded that processing and co-firing these materials at Genesee is the most feasible solution and, as Fleming put it, is “building a pellet plant without the pelletising stage” at Genesee 1 to feed the dried ground wood fibre into the boiler using waste heat from the power plant to dry the feedstock. Subject to receiving policy support, the 15 percent biomass co-fring project could be up and running by early 2019.
2016 lowest global y-o-y growth
On the subject of pellets, though buoyant in BC, according to Fiona Matthews, Research Manager with Hawkins Wright, pellet production on a global scale saw its lowest ever year-on-year growth in 2016 – up 6 percent to reach 28.6 million tonnes.
With global production capacity pegged by Matthews at 41.2 million tonnes this represents about 69 percent of global capacity and has resulted in production curtailments and closures at many plants, Rentech’s operations in both the US and Canada a case in point.
That said Matthews pointed out that demand growth has shifted from Europe to South East Asia, especially to South Korea and Japan. She also highlighted that 3.4 million tonnes of new capacity under commissioning/construction is expected to be online late by 2018.
Apart from new plants such as Enviva’s Hamlet (≈ 600 ktpa) and Pinnacle’s Entwistle (≈ 300 ktpa) others include capacity expansions at Drax’s US operations, Graanul Invest’s Baltic facilities and An Viet Phat facilities in Vietnam as well as restart of existing plants such as Plantation Energy (≈ 250 ktpa) in Australia.
Another ≈ 200 ktpa can most likely be added to the list for Pinnacle as, Scott Bax, Senior Vice President Operations, clarified reference made to an Argus media statement from the same morning (September 19) – the company is in advanced discussions regarding revamping a shuttered panel mill in BC, though dotted lines on a number of documents remain to be signed before any firm commitments can be made.
According to Matthews, the European heat and industrial markets have rebalanced. Colder weather in late 2016 and early 2017 increased pellet demand for heating. Though “persistently low but volatile” oil prices weakened the economic argument for pellet heating and reduced consumer confidence in 2015-16, this has improved over the past year, she said citing that pellets were on average 8 percent cheaper than heating oil in Germany over the last 12 months.
Part of the forest sector
From an outside’s perspective, one of the perhaps most notable remarks was made by Rory Gilsenan, acting Director-General for Natural Resources Canada when he told delegates that the Canadian wood pellet industry “is part of a transformation of the forest sector”.
His remark suggests a better understanding and acceptance of the industry and its symbiotic role within the forest sector, at least on a governmental level. Whilst this role is pretty self-evident for integrated companies and those with strong partnerships, it seems not always to have been the case judging from discussions at previous WPAC conferences.
Of the CA$60 billion forest products annual revenue, pellets make up about 0.5 percent or CA$ 300 million. But this is CA$ 300 million more in Canadian forest products value from essentially the same volume of forest resource harvested to generate the CA$60 billion, given that primarily wood processing residues such as sawdust are used.
Safety – ethos, pathos, logos and kairos
As ever, and as it should be, operational safety was a key topic discussed. This year, “ethos” and “logos” were joined by “pathos” and “kairos”. Representing the former pair, Budd Phillips, Regional Prevention Manager, WorkSafe BC and Scott Bax Pinnacle shared a “different approach” to workplace safety compliance using Pinnacle’s safety culture journey as an example, aptly described by Bax as a “paradigm shift”.
What we’ve done is nothing special. Safety matters because we need our people to go home safe. Safety is good business for everyone, said Bax.
Without belittling the enthusiasm and sincerity of Bax, it was keynote speaker Candace Carnahan who with pathos and kairos really drove home the “safety is everyone’s business and responsibility” irrespective of when and where.
She recounted in vivid detail a string of seemingly benign workplace cultural behaviours that ultimately led to an entirely preventable forest industry accident in which, luckily, “only” a limb was lost – it was her left leg that had to be amputated below the knee.
Carnahan acknowledged that she was lucky in her misfortune, she could just as easily have lost her life when her foot got caught under a moving paper roll conveyor she was not supposed to be walking on.
Fires can’t be part of the job. Losing fingers and limbs can’t be part of the job. Zero injuries. Zero fatalities. This is the only number that is acceptable, Carnahan said.
She is of course entirely right.
