Nova Scotia Power and NewPage Corporation to Develop $200 Million Biomass Cogeneration Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Proposals have been unveiled for a 60-megawatt (MW) biomass-fired cogeneration project to be built in Nova Scotia. The plans were announced by Nova Scotia Power Incorporated (NSPI) (Halifax, Nova Scotia), a wholly owned subsidiary of Emira Incorporated (TSX:EMA) (Halifax), and paper company NewPage Corporation (Miamisburg, Ohio).

The proposal calls for an investment of $200 million by NSPI. The sum includes $80 million to purchase an existing generating asset from NewPage, $93 million for construction of new assets, and other connected costs. Although the plant will be owned by NSPI, NewPage will be responsible for the construction and subsequent operation of the plant, including the supply of fuel, over the expected 40-year life of the plant.

However, the plan still has to gain regulatory approval from the Nova Scotia Utility and Review Board, which rejected a similar proposal last year. The two companies are more confident this time, as the project is expected to create an additional 150 jobs in the area.

The regulatory board rejected the previous proposal as it felt that it lacked the necessary authority to approve the project, which included an untendered $60 million plan to buy electricity from a biomass generator. This time, the two companies have structured the proposal in the form of a capital work order for NSPI to make a direct investment in the plant.

Currently NewPage uses expensive fuel oil to generate the steam necessary for the papermaking process at the Port Hawkesbury paper mill in Point Tupper, Richmond County. The biomass cogeneration plant is expected to generate about 400 gigawatt-hours of power each year, which is about 3% of the total requirement for the province and enough to serve 50,000 households.

NewPage and NPSI hope to have the proposal before the regulatory board as soon as possible. If the approval is granted quickly, then the project is expected to be operational by late 2012.

The previously rejected proposal also caused concerns among environmentalists who were critical of the amount of forest that would need to be cut down. However, NewPage is confident that these concerns are ill-founded, as the proposal calls for only stem wood to be used. Under this scheme, the stumps, tops and branches of the felled trees will be left behind to in the forest floor, providing nutrients for new growth.

NewPage is the only company in the world to have obtained three forest management certifications in Canada: from the Forest Stewardship Council, the Sustainable Forestry Initiative and the Canadian Standards Association. The company has been working sustainably with biomass since the 1980s.

The Port Hawkesbury mill, which has been in operation since the early 1960s, has a production capacity of 190,000 tons per year of standard and improved newsprint, together with 360,000 tons per year of specialized paper for the catalogue and magazine paper markets. NewPage owns about 20,020 hectares of land in the area and manages about 600,000 hectares of Crown Land.

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