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Biomass generating station closure shortsighted, union says

OPG announced the closure of the Thunder Bay plant in July after finding corrosion damage to the boiler. The organization also said that demand in the region was too low.

“It will ultimately lead to the disappearance of the region’s established biomass innovation cluster, and most importantly, the significant economic, environmental and social benefits it provides,” states PWU president Mel Hyatt. “We believe it’s time to grow these benefits, not kill them.”

Over the last decade, Ontario invested about $200 million in the region’s biomass innovation cluster, most of it for the conversion of the publicly owned Thunder Bay and Atikokan stations to biomass. Millions of dollars were also invested in innovative biomass research at Confederation College, Lakehead University and the Centre for Research and Innovation in the Bio-economy.

About 230 jobs are supported in local communities: 124 in electricity production; 50 in wood pellet manufacturing, and the rest in forestry, transportation and research and development. Taxes paid to local communities for Atikokan Generating Station approximate $2 million a year and about $4 million a year for the Thunder Bay Generating Station.

With a contract that expires in 2024, Atikokan Generating Station is North America’s largest generating station to be converted from coal to 100 per cent carbon-neutral white pellet biomass. Unfortunately, the PWU says heat output at both stations is wasted.

Power contracts with Ontario’s Independent Electricity Operator (IESO) govern the operations of the two stations. While both can provide reliable base (24/7) and rapidly meet peak electricity demand, their capacity is underused, reducing purchases of locally-produced wood pellets.

“We support the northern stakeholders who believe a strong business case can be made for strategic investments in this cluster that will provide greater benefits to the region,” says Hyatt. “It starts with better power contracts for both stations.”

Sustaining these local resources ensures regional energy security for meeting forecast demand growth from remote grid connected communities, the Ring of Fire, and other mining projects in the region.

OPG claims closing Thunder Bay GS will save about $40M annually. This saving does not include the substantial costs for decommissioning the facility or the lost revenue from this ratepayer/taxpayer owned asset.

An independent analysis indicates that any peak capacity supply gap would likely be supplied by import-dependent, natural gas generation plants in southern Ontario, at a cost of $7M to $24M more a year.

In the short-term, the PWU and others in the community are calling for the IESO contracts for both stations to be expanded and include utilization of the waste heat. Thunder Bay GS waste heat could be used in an adjacent greenhouse complex to supply fresh local produce year-round. The wasted heat could also help make wood pellets and or heat buildings. The same could be done at Atikokan.

“Take a look at Europe and Asia and the rapidly growing global marketplace for high-value biomass-based products and services,” stated Hyatt. “We have vast renewable, carbon-neutral biomass resources, we have the people and expertise to make this region a leader in world-class biomass innovation.”

Investing in biomass generation and the dependent cluster economy is supportive of what local leaders want for the north. Such investments are also consistent with Ontario’s forestry strategy to create jobs and economic prosperity for the North and the federal government’s Prosperity and Growth Strategy for Northern Ontario.

Now is the time to reverse the closure decision and move forward with a business case that secures regional energy security and economic growth while maintaining jobs in the north.