Canadian Pulp and Paper Mills Investing in Power Plant Projects

Researched by Industrial Info Resources (Sugar Land, Texas)--Canada's Green Transformation Program recently announced the amount of funds for which participating companies will qualify. The announcement has signaled the start of the development and construction of $1 billion in capital projects. The program provides funds for green energy and environmental projects based on a credit of $0.16 per liter for black liquor produced at pulp and paper mills between January 1, 2009, and December 31, 2009. Canadian firms have until March 31, 2012, to complete projects and draw on funding for approved projects. A majority of the early project-planning studies show that mill owners are pursing investments in steam- and electrical-generating projects.

Industrial Info has identified more than $500 million in capital expenditures that are targeted to power plant projects at mills across the country. Projects include boiler rebuilds and additions, installations of new turbine generators, and general improvements to auxiliary equipment and systems. To date, spending plans are tied to nearly 350 megawatts (MW) of additional generating capacity. Projects with generating capacity range in size from 10 MW to 60 MW. Most of the projects are mills that already generate electricity, although a handful will build new power plants.

Notable projects include Celgar's plan to resume construction of a 48-MW expansion at a mill in British Columbia. Another Canadian firm also plans to increase generating capacity by 30-40 MW at a mill in Alberta that currently generates 100 MW. In New Brunswick, Irving Paper Limited is developing plans for two new biomass boilers and a new steam turbine generator.

According to Randy Godet, VP Pulp & Paper at Industrial Info, over the next several months, an increase in the number of project proposals is expected, now that companies know their budgetary limits. Interestingly, most of these projects will not be ready for construction before the end of 2010 because of weather and permitting constraints, and project construction will roll into 2011. This will place a tremendous amount of stress on companies and the country's skilled labor pool, particularly boilermakers, to have the projects completed by the program's March 2012 deadline.

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