UPDATED: A program that will reduce electricity costs for pulp and paper producers and make the industry more economically viable was announced Thursday, July 24.
Bill Bennett, minister of energy and mines and minister responsible for core review, and Jessica McDonald, president and chief executive of BC Hydro, announced a new Power Smart program which will help producers remain globally competitive, support thousands of jobs throughout the province and reduce overall electricity demand.
Catalyst Paper Corporation’s Powell River operations have been allocated $19 million for power-saving upgrades over the next three years.
“I am very pleased that Minister Bennett and the provincial government listened to the concerns of our communities that rely on this industry as their economic backbone,” said Dave Formosa, City of Powell River mayor. “This is an important first step in dealing with the increasing power costs facing this industry and along with the rate review process, will go a long way to ensuring that the jobs in Powell River and other communities will be here for the long term.”
Formosa took part in an initial meeting with Bennett, plus Catalyst and chamber of commerce representatives, to discuss energy costs.
“I pleaded with the minister that we needed to come up with something,” Formosa said. “He said ‘it was an issue, we haven’t really looked at it and know we need to do something.’”
Formosa said he suggested the Power Smart program would be a good place to look because there was $1.2 or $1.4 billion available.
“I facilitated the meetings to start it off and kept the push on until we got to the point where we had a deal.
“Council allowed me to travel and the ability to do that and it worked out.”
The program will enable pulp and paper companies to access financial incentives to invest in power-saving equipment.
Pulp is produced using refiners to mechanically break down material. These refiners are run using high horsepower motors with high electricity consumption.
According to BC Hydro, the province’s thermo-mechanical pulp sector is the largest single industry segment and consumes approximately 10 per cent of its power supply.
Under the new program, thermo-mechanical pulp and paper producers, which have electricity costs that account for as much as 30 per cent of their operating budgets, will be eligible for increased incentives ranging from $5 million to $25 million for projects that can reduce their power consumption.
Examples of projects that could receive funding under the program include a number of different technologies including low consistency refining, inter-stage screening and refiner motor upgrades. In the final planning stages is a project to utilize the waste steam to reduce electrical load at the Powell River division. The $19 million is 75 per cent of the estimated $25 million cost for the project. When established, the project has the potential of reducing hydro costs by $5 million annually.
“This energy conservation program will improve the long-term viability of jobs at Catalyst’s mills and the mill community as a whole,” said Mike Verdiel, union president of Unifor Local 76. “A large part of Powell River’s economy relies on the pulp and paper mill. This new program created by the ministry and BC Hydro is not only good news for resource, ratepayers and Catalyst—it means job stability and opportunity in Powell River also.”
The program is expected to reduce electricity consumption by 300 gigawatt hours per year which will save pulp and paper producers $17.5 million in annual power costs. In addition, by reducing overall electricity demand by this amount, BC Hydro will avoid the need to acquire new sources of power generation, saving ratepayers up to $265 million.
According to figures from the energy company, demand for electricity in BC is expected to grow by 40 per cent over the next 20 years.
There are seven thermo-mechanical pulp and paper operations in BC operated by four companies: Canfor Corporation (Taylor), Catalyst Paper (Crofton, Port Alberni and Powell River), Paper Excellence (Chetwynd and Port Mellon) and West Fraser (Quesnel).
Joe Nemeth, president and CEO of Catalyst, said: “This is an important step forward, which combined with the rate design review currently underway, will allow us to remain competitive and continue to generate economic benefits for the province.”
with files from Paul Galinski
A program that will reduce electricity costs for pulp and paper producers and make the industry more economically viable was announced Thursday, July 24.
Bill Bennett, minister of energy and mines and minister responsible for core review, and Jessica McDonald, president and chief executive of BC Hydro, announced a new Power Smart program which will help producers remain globally competitive, support thousands of jobs throughout the province and reduce overall electricity demand.
Catalyst Paper Corporation’s Powell River operations have been allocated $19 million for power-saving upgrades over the next three years.
“I am very pleased that Minister Bennett and the provincial government listened to the concerns of our communities that rely on this industry as their economic backbone,” said Dave Formosa, City of Powell River mayor. “This is an important first step in dealing with the increasing power costs facing this industry and along with the rate review process, will go a long way to ensuring that the jobs in Powell River and other communities will be here for the long term.”
The program will enable pulp and paper companies to access financial incentives to invest in power-saving equipment.
Pulp is produced using refiners to mechanically break down material. These refiners are run using high horsepower motors with high electricity consumption.
According to BC Hydro, the province’s thermo-mechanical pulp sector is the largest single industry segment and consumes approximately 10 per cent of its power supply.
Under the new program, thermo-mechanical pulp and paper producers, which have electricity costs that account for as much as 30 per cent of their operating budgets, will be eligible for increased incentives ranging from $5 million to $25 million for projects that can reduce their power consumption.
Examples of projects that could receive funding under the program include a number of different technologies including low consistency refining, inter-stage screening and refiner motor upgrades.
“This energy conservation program will improve the long-term viability of jobs at Catalyst’s mills and the mill community as a whole,” said Mike Verdiel, union president of Unifor Local 76. “A large part of Powell River’s economy relies on the pulp and paper mill. This new program created by the ministry and BC Hydro is not only good news for resource, ratepayers and Catalyst—it means job stability and opportunity in Powell River also.”
The program is expected to reduce electricity consumption by 300 gigawatt hours per year which will save pulp and paper producers $17.5 million in annual power costs. In addition, by reducing overall electricity demand by this amount, BC Hydro will avoid the need to acquire new sources of power generation, saving ratepayers up to $265 million.
According to figures from the energy company, demand for electricity in BC is expected to grow by 40 per cent over the next 20 years.
There are seven thermo-mechanical pulp and paper operations in BC operated by four companies: Canfor (Taylor), Catalyst Paper (Crofton, Port Alberni and Powell River), Paper Excellence (Chetwynd and Port Mellon) and West Fraser (Quesnel).
Joe Nemeth, president and CEO of Catalyst, said: “This is an important step forward, which combined with the rate design review currently underway, will allow us to remain competitive and continue to generate economic benefits for the province.”
