If Emera is negotiating to buy Bowater Mersey Paper Co. Ltd.’s assets, they face lots of hurdles, says an energy analyst.
Bowater’s majority owner, Resolute Forest Products Inc. of Montreal, is trying to sell the Brooklyn, Queens County, paper plant it shuttered in June and its 220,000-hectare forest, the largest private landholding in Nova Scotia.
But Tom Adams is skeptical about a report that Emera wants to gets its hands on the woodlands to make torrefied wood pellets that would feed Nova Scotia Power’s coal-fired plants.
“I am not surprised at all that they’re looking at torrefication as a possibility. I personally think it’s a long shot,” Adams, a Toronto energy analyst, said Friday.
“But whether they’re looking at the (Bowater) assets or not, that becomes a very intense regulatory question. If they had a feeling like they could recover the cost for alternative fuel experiments, then that would make them very more likely to seek out those assets. But if there’s regulatory uncertainty about how they’re going to recover those costs, if the torrefication thing doesn’t go well, now what do you do?”
Torrefaction, a French term for roasting, entails heating up wood to make a pelletized fuel that can be burned in power plants designed to take coal.
“Nobody’s yet demonstrated a way to do this on a practical commercial scale that doesn’t cost an arm and a leg,” Adams said.
Nova Scotia’s already-high electrical rates have prompted public backlash in the past, he said.
“As soon as you get into these exotic green things, there’s going to be upward rate pressure, and that’s going to make the company very nervous.”
Pending federal regulations are pushing power utilities, including Nova Scotia Power, to gradually reduce carbon dioxide emissions by weaning themselves off coal.
The provincial government wants renewable energy to account for 25 per cent of Nova Scotia’s power need by 2015, increasing to 40 per cent by 2020.
“When you look at the potential barriers that Emera or Nova Scotia Power might face in going toward forest biomass as a significant source of electricity supply in order to meet their 40 per cent objective, you can make a long list of potential barriers,” Adams said.
“Is the public prepared to accept chopping down forests and using them for fuel? A lot of people like trees.”
Another hurdle is whether the provincial regulator would be prepared to pass on the higher cost of doing so to customers, Adams said.
“If not, where does the risk lie? Is that a shareholder responsibility?”
Electricity from coal accounts for 57 per cent of Nova Scotia’s energy generation, down from 80 per cent five years ago.
Sasha Irving, who speaks for Emera, wouldn’t say Friday whether the company is negotiating to buy
Bowater Mersey’s assets.
“We won’t be making any comments.“
In Queens County, rumours abound about who is kicking the tires at Bowater, said Allan Laws, president of Local 259 of the Communications, Energy and Paperworkers Union of Canada, who represents hundreds of people who used to work at the mill.
“I’ve heard through roundabout sources that there’s some sort of big announcement coming, but I’m not sure what that is,” Laws said.
“There’s all kinds of rumblings about Irving. There are stories about an Asian company talking about (buying Bowater assets to produce pulp for rayon).”
Nova Scotia Power is one of several Canadian utilities that offered up a site for a commercial-scale test of torrefied wood pellets, said a report produced last year by Natural Resources Canada.
Torrefication involves heating wood, including pine, fir, spruce or poplar, to about 280 C in an oxygen-depleted atmosphere, Staffan Melin, who co-authored the report, said Friday.
“We take it out and grind it down to finer particles and then we pelletize it so it becomes like a bio-coal,” said Melin, a research director at the Wood Pellet Association of Canada who also teaches at the University of British Columbia.
“It’s a direct replacement for fossil coal.”
While lots of pilot plants are burning torrefied wood pellets, the process has yet to be commercialized, he said.
“The negative side of it is it is more expensive than regular coal, and I think it will be for some time to come.
“Typically, it’s probably 30 or 40 per cent higher in cost.”
(clambie@herald.ca)
http://thechronicleherald.ca/business/127576-analyst-wood-pellets-from-bowater-lands-long-shot
Bowater’s majority owner, Resolute Forest Products Inc. of Montreal, is trying to sell the Brooklyn, Queens County, paper plant it shuttered in June and its 220,000-hectare forest, the largest private landholding in Nova Scotia.
But Tom Adams is skeptical about a report that Emera wants to gets its hands on the woodlands to make torrefied wood pellets that would feed Nova Scotia Power’s coal-fired plants.
“I am not surprised at all that they’re looking at torrefication as a possibility. I personally think it’s a long shot,” Adams, a Toronto energy analyst, said Friday.
“But whether they’re looking at the (Bowater) assets or not, that becomes a very intense regulatory question. If they had a feeling like they could recover the cost for alternative fuel experiments, then that would make them very more likely to seek out those assets. But if there’s regulatory uncertainty about how they’re going to recover those costs, if the torrefication thing doesn’t go well, now what do you do?”
Torrefaction, a French term for roasting, entails heating up wood to make a pelletized fuel that can be burned in power plants designed to take coal.
“Nobody’s yet demonstrated a way to do this on a practical commercial scale that doesn’t cost an arm and a leg,” Adams said.
Nova Scotia’s already-high electrical rates have prompted public backlash in the past, he said.
“As soon as you get into these exotic green things, there’s going to be upward rate pressure, and that’s going to make the company very nervous.”
Pending federal regulations are pushing power utilities, including Nova Scotia Power, to gradually reduce carbon dioxide emissions by weaning themselves off coal.
The provincial government wants renewable energy to account for 25 per cent of Nova Scotia’s power need by 2015, increasing to 40 per cent by 2020.
“When you look at the potential barriers that Emera or Nova Scotia Power might face in going toward forest biomass as a significant source of electricity supply in order to meet their 40 per cent objective, you can make a long list of potential barriers,” Adams said.
“Is the public prepared to accept chopping down forests and using them for fuel? A lot of people like trees.”
Another hurdle is whether the provincial regulator would be prepared to pass on the higher cost of doing so to customers, Adams said.
“If not, where does the risk lie? Is that a shareholder responsibility?”
Electricity from coal accounts for 57 per cent of Nova Scotia’s energy generation, down from 80 per cent five years ago.
Sasha Irving, who speaks for Emera, wouldn’t say Friday whether the company is negotiating to buy
Bowater Mersey’s assets.
“We won’t be making any comments.“
In Queens County, rumours abound about who is kicking the tires at Bowater, said Allan Laws, president of Local 259 of the Communications, Energy and Paperworkers Union of Canada, who represents hundreds of people who used to work at the mill.
“I’ve heard through roundabout sources that there’s some sort of big announcement coming, but I’m not sure what that is,” Laws said.
“There’s all kinds of rumblings about Irving. There are stories about an Asian company talking about (buying Bowater assets to produce pulp for rayon).”
Nova Scotia Power is one of several Canadian utilities that offered up a site for a commercial-scale test of torrefied wood pellets, said a report produced last year by Natural Resources Canada.
Torrefication involves heating wood, including pine, fir, spruce or poplar, to about 280 C in an oxygen-depleted atmosphere, Staffan Melin, who co-authored the report, said Friday.
“We take it out and grind it down to finer particles and then we pelletize it so it becomes like a bio-coal,” said Melin, a research director at the Wood Pellet Association of Canada who also teaches at the University of British Columbia.
“It’s a direct replacement for fossil coal.”
While lots of pilot plants are burning torrefied wood pellets, the process has yet to be commercialized, he said.
“The negative side of it is it is more expensive than regular coal, and I think it will be for some time to come.
“Typically, it’s probably 30 or 40 per cent higher in cost.”
(clambie@herald.ca)
http://thechronicleherald.ca/business/127576-analyst-wood-pellets-from-bowater-lands-long-shot