BRIGHTON: Port Hawkesbury mill may shift stance on renewables

November 23, 2015

By: The Chronicle Herald

Port Hawkesbury Paper LP said this week it was “not planning to enter into the renewable-to-retail market,” despite its participation in the regulatory hearing that will pave the way for retail sales of renewable energy from companies other than Nova Scotia Power Inc.

The Cape Breton paper mill recently filed technical questions with the Nova Scotia Utility and Review Board regarding renewable-to-retail regulations. These questions indicated it might be considering a plan to enter into an arrangement with another company to supply electricity to the mill.

“We’re not at this time contemplating that,” said spokesman Marc Dube on Friday.

“We’re just trying to understand how the process is unfolding, so that it may be helpful in the future for other opportunities. And it may not be just renewable to retail, it could be another form of (an) energy solution.”

The review board is considering the utility’s application, filed in September, for a new set of tariffs and rules to allow for the sale and purchase of renewable energy between producers and retail customers, using the utility’s transmission and distribution system.

Port Hawkesbury Paper gets its electricity from the utility at a discount rate. The low power rate has triggered a countervailing duty from the United States government, which will saddle the mill with extra costs for years to come.

This week, the U.S. International Trade Commission upheld an earlier decision by the U.S. Department of Commerce to fix a duty of 20.18 per cent on paper imports from the mill in Point Tupper.

Slightly lower countervailing duties are also being levied on the J.D. Irving mill in New Brunswick and some other paper mills in Canada.

The duties are designed to retaliate against alleged public subsidies.

Port Hawkesbury Paper buys steam as well as electricity from Nova Scotia Power. The steam comes from the utility’s co-generating biomass plant adjacent to the mill.

Dube confirmed in an interview Friday that the mill needs to draw a steady amount of steam from the biomass plant. He also said it could not make up for the shortfall in steam if the biomass plant was not operated at its current output.

The mill owns a natural gas-fired boiler for generating steam to top up its supply from the utility’s boiler, but the future of the biomass plant is uncertain.

The province is using regulatory force to keep the biomass plant operating to suit the paper mill’s demand for steam.

But government is under political pressure to reduce the use of forest biomass as a fuel stock for generating electricity. It is also looking for a way to reduce the financial burden on ratepayers, who are being billed $6 million to $8 million extra a year to keep the inefficient biomass plant operating on a must-run basis to comply with provincial regulations.

If Nova Scotia Power was allowed to make a rational and economic decision about when to deploy the plant, it would only be used occasionally, due to its high cost of generation.

Dube also said this week that the mill had been reviewing gasification technology that could convert forest biomass into biogas to be used on site.

But the technological upgrades required to make use of the gasification process were too costly, he said.

Port Hawkesbury Paper may not be looking at getting into the renewable-to-retail electricity market just yet.

But there are compelling reasons why it might at some point want to source power directly from an on-site generation plant, or enter into an agreement with another company to supply some of its power needs.

The mill needs a secure supply of steam, which the biomass plant may not always be able to deliver. And finding an alternative supply of electricity outside the provincial utilities regulations could help its case with the U.S. government.

By: The Chronicle Herald

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