Ontario Power Generation issued a call today to potential suppliers of wood pellets to the Atikokan coal plant, which the utility plans to beginning converting to 100 per cent biomass burn in 2012. OPG requests that proponents provide pricing for a minimum volume that is between 22,500 and 30,000 tonnes (a year) and pricing for the entire 90,000 tonnes (a year) requirement,” according to the company’s ” request for indicative prices.”

In other words, it expects it will need 90,000 tonnes annually but wants to break this down into three our four chunks so it can have several suppliers. The final stage of conversion will begin in June 2012 and commissioning of the new equipment will likely start in August. OPG expects full-on commercial operation will happen by December. “The wood fuel pellet supply being considered under this RFIP will have a local content requirement such that the source of the wood fibre and the location of the production facilities that will produce the wood pellets shall be within Ontario,” according to the company. “OPG will require that the wood-based fuel pellets be accompanied by Chain of Custody Certification ensuring that the wood pellets supplied to OPG are manufactured from wood fibre sourced from well managed forests.”

In the Great Lakes St. Lawrence forest region of Ontario it’s estimated that there is about 1.475 million oven dry metric tons of wood fibre available for sustainable harvesting each year, or about 1.25 million if we take into account that some of the biomass will be used as fuel to dry the biofibre. So what OPG is requesting in this initial round is roughly 6 per cent of what’s available — and let’s not forget that pellets made of grass crops are also a potential source of fuel. Let’s keep in mind these converted coal plants will be used as peakers when using biomass fuel. This means there is plenty of biomass available for several units being targeted for conversion at the massive Nanticoke coal plant.

What we’re witnessing here is the beginning of the creation of an entirely new industry in Ontario developed around the need to economically harvest, pelletize and transport biomass fuel pellets to support the province’s coal phaseout strategy. This will create many jobs in parts of the province where jobs are needed most, and will establish a made-in-Ontario biomass fuel supply chain that can support the move to more distributed forms of biomass energy generation. There is plenty of opportunity here for entrepreneurs looking to play a role.

Ontario is making solid progress with its plan to convert some of its coal-fired power plants to biomass. And not just co-firing, like what many U.S. jurisdictions are considering, but full out 100 per cent biomass burn. It will prove a key part of Ontario’s greenhouse-gas reduction strategy. A new University of Toronto study has concluded that converting coal-fired units at the Nanticoke and Atikokan plants to burning wood pellets would reduce GHGs by roughly 92 per cent, and this is based on a full lifecycle analysis. On top of that, it would create a local biomass supply chain — for harvesting, pelletization, transportation, etc. — and local jobs that simply don’t exist under a coal-only regime. OPG also plans to operate the plants as peakers, meaning they could be used to help manage renewables (i.e. there would be less natural gas required to perform this balancing act).

I have an update on Ontario Power Generation’s biomass strategy in today’s Clean Break column. OPG will likely convert Atikokan to 100 per cent biomass by 2012, with some units at Nanticoke likely to follow a year later. Lambton and Thunder Bay plants are also being considered. The OPG executive heading up the transition, Chris Young, says the company is seriously investigating a fuel pellet mixture with both wood and agricultural residues (or dedicated crops, like switchgrass). OPG figures that coal plants converted to burning biomass will likely operate for another 10 years before decommissioning, at which point the pellet supply chain will be firmly established and the move to build a distributed fleet of newer biomass-burning plants can begin.

And what is U of T’s estimated cost of supplying electricity from an existing coal plant converted to burning 100 per cent biomass? Roughly 12 cents per kilowatt-hour, which excludes the impact of carbon prices. Given that natural gas won’t stay low forever and will eventually be subject to carbon pricing, this makes the biomass option competitive (also with wind and nuclear) and at the same time is a winner when it comes to local green-collar job creation.

If OPG can pull this off, it would be another Ontario first — and something other jurisdictions can learn from.

Ontario Power Generation released its second-quarter earnings on Friday and, little surprise, the province’s largest power generator saw its output drop by 19 per cent compared to a year earlier. A similar plunge was seen in the first quarter. Some of this drop has to do with conservation, good weather, and increased supply from private supplier of wind and gas-fired generation, but a big chunk has to do with the recession and its impact on a manufacturing-heavy province like Ontario.

But there is a silver lining. Ontario Power Generation saw its fossil-fuel generation, mostly coal, fall by a whopping two-thirds. It means that during the second quarter 91 per cent of electricity generated by OPG was free of greenhouse gases and other smog-causing emissions, thanks to our hydroelectric and nuclear fleet.

Wouldn’t it be nice if we could hold the line on emissions as the economy recovers? (more…)