Tembec relates some of the challenges of bringing the company’s new turbine online in its quarterly report for the period ending in March 2015. Total construction cost for the cogen project at the company’s Temiscaming pulp and paper complex in Quebec had reached $272 million by the end of March 2015, versus the expected construction cost of $273 million. The cogen project is now producing green electricity for the provincial grid.
Commissioning of the turbine began in early January 2015, at which time the company generated its first electricity sales. In late January, Tembec successfully met the "commercial-in-service" test set forth in the power purchase agreement and began selling electricity at the higher "green" power rate.
During February, Tembec began the firing of pulp mill residual liquor in the new boiler, which forms part of the cogen system. The quarterly report states: “A significant amount of effort and resources were dedicated to ramping up the volume of liquor burned and optimizing the exhaust gas scrubber system and related equipment. The commissioning work occurred during a period of very cold temperatures and necessitated the purchase of a significant volume of natural gas, which offset the energy cost benefit of firing the liquor in the month of February.”
During the month of March, boiler, scrubber and turbine operating efficiency continued to improve, Tembec reports. At that time, the cogen system was approaching targeted levels of performance and provided a net energy cost benefit of $2 million in the month. Based on boiler and turbine operations to date, the company expects to attain the $28 million of projected annual energy benefits.
The company had also set a target of $7 million per year in operating and maintenance cost reductions due to the new boiler and cogen system, but notes that during the March 2015 quarter, the Temiscaming site continued to periodically operate the old boilers and was required to maintain them on operational readiness when not in operation. As such, very little of the projected operating and maintenance savings were realized in the March 2015 quarter. The ability to take the older boilers permanently "offline" will dictate the timing of these savings.