NOVA SCOTIA POWER is hoping it will have more success the second time around in getting approval to spend $200 million to fire up a new biomass generation facility with papermaker NewPage Port Hawkesbury, it announced Monday.
The biomass-fuelled plant at the Cape Breton mill could supply Nova Scotians with approximately three per cent of the province’s total electricity requirement, enough for about 50,000 homes annually.
"We are working with one of our largest customers to sustainably displace imported fossil fuels, a project that will benefit the environment and economy in Nova Scotia," Robin McAdam, vice-president of sustainability for Nova Scotia Power, said Monday.
The proposed project is targeting an in-service date of late 2012 and must get regulatory approval from the Utility and Review Board, which rejected a similar bid.
Last July, the board said it lacked the authority to approve in advance Nova Scotia Power’s untendered $60-million plan to buy electricity from NewPage.
The board also criticized the controversial application as incomplete and poorly documented.
"We think the economics are a bit better than last time and the impact to ratepayers is favourable," said McAdam. "Nova Scotia Power is the investor in this version of the project, and it will go forward to the URB as a capital work order application."
The previous application was a power purchase agreement whereby NewPage and Strait Bio-Gen proposed to generate electricity at Port Hawkesbury and sell it to Nova Scotia Power.
"There are a few things different. It is not structured as a power purchase agreement anymore," said McAdam.
Also, the proposed project has received the blessing of Nova Scotia Power’s board of directors in advance of regulatory hearings, he said. In the previous application, the utility’s board had not sanctioned the project before it went before government regulators.
Nova Scotia Power will pay NewPage an undisclosed amount for fuel supply and operating services over the 40-year life of the project, said McAdam.
As the key investor, Nova Scotia Power wants to spend $93 million in construction costs for new facilities, $80 million to purchase assets from NewPage, and other related costs. NewPage will be responsible for the construction and operation of the plant.
The energy project is expected to create an estimated 150 jobs in northern Nova Scotia, primarily in the forestry sector, in addition to maintaining the Port Hawkesbury mill’s existing workforce of about 550 employees, said Bill Stewart, NewPage director of woodlands and strategic initiatives.
"Clearly it is sustainable," said Stewart. "We’re confident that we probably have twice the biomass that we need. So, we very definitely believe there is a very secure, long-term supply."
As a co-generation energy project, NewPage will get the steam coming from the boiler that’s generating electricity and is used in manufacturing paper.
Only "stem wood" will be used in the project’s biomass energy generation. Tree stumps, tops and branches will not be removed from the forest floor, as they are necessary in restoring nutrients to the soil so new trees can grow.
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