Mills need to concentrate on cogeneration
Published Wednesday September 3rd, 2008
Self-sufficiency | Expert says companies will have to make major investments in cogeneration facilities in order to stay globally competitive
New Brunswick's forestry industry will need to move towards energy self-sufficiency if it is to remain globally competitive, says an international expert.
According to a report on the future of the forestry industry authored by CIBC World Market's forestry expert Don Roberts, the province's "forest industry, and the energy-intensive ground wood pulp and paper mills in particular, need to place an emphasis on becoming self-sufficient in energy."
The ultimate goal for mills would be to become net exporters of green electricity, the report argues.
"It's especially the paper mills more so than the pulp mills, who we need to get self-reliant here because they are more energy intensive," said Roberts in an interview Tuesday.
In order for the industry to become energy self-sufficient, companies would have to make major investments in so-called cogeneration facilities. Cogeneration plants burn forestry waste by-products to create steam and heat for the use in the production process or to generate electricity.
Fraser Papers Inc. spent more than $35 million a decade ago to build a 44 megawatt cogeneration plant in Edmundston.
Both AV Nackawic and AV Cell in Atholville, owned by the Aditya Birla Group, use cogeneration to meet some of their electricity needs.
J.D. Irving, Limited, generates about 2.5 megawatts of power from a hydroelectric dam in St. George for its Lake Utopia mill.
Some forestry firms are reluctant to make further multi-million dollar cogeneration investments without an increased provincial wood supply and without a clear government policy on biomass.
Roberts's report has recommended that the province move quickly to create such a policy and that the government should consider giving forestry firms the first right of refusal for biomass.
Mark Arsenault, president and chief executive officer of the New Brunswick Forest Products Association, said the provincial forestry industry is working with NB Power to examine energy policies that would support cogeneration and green energy.
Arsenault said a committee from the association has discussed challenges and barriers to cogeneration development with both NB Power and the provincial government.
Roberts said the provincial forestry industry could be energy self-sufficient within a few years, if the proper policies are put in place.
"This is one of those things that even though it may be good from a public policy point of view to have these guys self-sufficient, good for the forest industry, it's not necessarily in the interest of NB Power." said Roberts.
A spokeswoman for NB Power said the loss of pulp and paper mill customers would leave the utility with excess capacity, a situation it could deal better with over the long-term rather than the short-term.
While Roberts' report recommended that the forestry industry get the first right of refusal to biomass, some are arguing that communities should get a share of the resource as well.
"The Roberts' report puts together a strategy that is understandable.
He's looking at using biomass, for all intents and purposes, to lower the energy costs of the large industrial forestry users," said Louis-Philippe Gauthier, chairman of the Conseil Économique du Nouveau-Brunswick Inc.
But, Gauthier said, giving the forestry industry first right of refusal for biomass would tie the province's hands when it comes to the use of the resource as a tool to help diversify the economy.
Gauthier said while the provincial government should look to provide a long-term biomass supply for forestry firms, it should also set some biomass aside for economic development projects.
"By keeping a reserve of that biomass, we would be to make sure that it is available for entrepreneurs or communities that have projects that need components of the biomass to be able to make their projects a reality."
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