Effort to make power from wood waste runs into hurdles
By Gordon Hoekstra

Canfor Pulp continues to explore a new project to produce electricity from wood waste - a project meant to answer B.C. Hydro's call for green power - but company president and CEO Paul Richards said Wednesday that one of the challenges is the uncertainty around fibre supply.

The challenge stems from both a fibre supply and pricing scenario, Richards said in a conference call Wednesday to discuss the company's $43.5-million first-quarter profit.

One of the issues is what residual supply will be available from sawmills, which have reduced production in the Northern Interior because of a collapse in the U.S. housing market.

Richards said that it would also be possible to cut pine-beetle killed timber in the forest to feed a co-generation plant - so named because it produces both steam and electricity - but then there is an issue of how much that fibre would cost and what the electricity would need to be priced at to make it economical.

Richards said another issue is the increasing delay and spiralling cost of new equipment.

"Both of those pieces are making it difficult to pinpoint what the returns would be, especially on the large projects," he said. "However, we continue our analysis in response to B.C. Hydro's call for power for economically attractive projects, both large and small scale."

Large projects are considered to be 50 megawatts or more, while smaller projects run in the five- to 10-megawatt range. Richards said it is much easier to be confident on developing the smaller projects - for which fibre is available today - that has a good return.

B.C. Hydro is looking for a response in June, "so we have to have more clarity on projects we think make sense," he added.

Canfor completed a 60-megawatt capacity co-generation facility at its P.G. Pulp and Paper mill in 2006. The $130-million project was designed to replace power to the pulp mill being supplied by B.C. Hydro, whereas a new project would be designed to provide power to the provincial grid to help meet B.C.'s growing electricity demands.

Last year, the B.C. government announced that all new electricity projects developed in B.C. must have zero net greenhouse gas emissions. Energy produced from wood-fired power plants is considered clean over the cycle of forests being logged and regrown.

The provincial government also recently released its bioenergy strategy in Prince George, highlighting the opportunities from the massive amounts of pine beetle-killed pine in the Northern Interior.

One forest industry analyst has estimated that depending on the size of the Canfor Pulp power project, it could cost anywhere from $25 million to $250 million.