VIABLE FIBRE SUPPLY NECESSARY FOR CARBON-NEUTRAL PRODUCING POWER PLANTS IN BC (2024)

Issue

Many biomass-fired power plants in the province face closures due to the shortage of economically viable fibre supply. The root cause of this predicament lies in the diminished forest activity, making it impossible for the power plants to provide the contracted power at a profitable margin, resulting in their closure.

Biomass-fired power plants provide sustainable, low-GHG-emitting, reliable power to British Columbians while simultaneously improving the air quality of communities by eliminating the need to operate beehive burning of forest waste.

Recently, electricity demand has surged, prompting a call for increased power supply and the importation of non-clean electricity from outside of British Columbia. BC Hydro should first work with local BC producers to meet our electricity needs.

Background

Due to growing energy needs and reliance on clean energy sources, hydroelectric power has become a focal point for meeting the escalating electricity requirements. However, the impacts of climate change, such as changing rainfall patterns, drought, and wildfires, create the risk of overly relying on any one resource. The need for a diverse and reliable power supply has created a sense of urgency in the industry, prompting an increased need to secure additional carbon-neutral energy sources such as biomass-fired generation. However, a reduction in logging and forestry operations has led to a scarcity of available fibre resources, intensifying the competition among energy producers for this essential raw material and driving up costs for power producers.

The 66 MW Atlantic Power Plant in Williams Lake is one of those biomass plants that faces the risk of closure as early as January 2025. It was originally developed to improve air quality in Williams Lake by providing an alternative means to the ecologically damaging practice of beehive burning of mill waste disposal, while simultaneously providing a clean base-load energy source. Now, due to the lack of economically available fibre supply, it has been forced to provide BC Hydro with notice of its intent to terminate the power purchase agreement if alternative solutions cannot be found. 

Existing biomass power plants stand as invaluable assets in the pursuit of clean energy, leveraging established transmission lines and infrastructure. By utilizing renewable sources and efficient technologies, they contribute significantly to sustainable development while conforming with provincial renewable energy targets. They also play a pivotal role in meeting the escalating energy needs of British Columbia residents. With the demand for dependable carbon-neutral electricity steadily rising, the presence of these well-established power plants diminishes reliance on underdeveloped resources, ensures a robust, stable energy supply for the future, and aids in securing the welfare of communities.

Power plants are vital for small communities, not only for contributing to a reliable provincial power source, but also for the socioeconomic benefits they provide. For example, the Williams Lake Power Plant creates more than 100 direct and indirect jobs and boosts the economy with $5 to $8 million spent annually in operations and maintenance costs. These plants are often significant contributors to the tax base, crucial for local government stability, especially in areas dealing with other struggling industries. Safeguarding their operations is essential for community economic health and resilience. Biomass-fired plants further support industries by utilizing waste materials for energy production, reducing waste, and bolstering sustainability.

In the summer of 2023, during drought conditions, the province of BC had to purchase 45,000 MWh of electricity from other provinces and the United States because there was not enough hydroelectric generation to support the province’s requirements. As it was generated outside the province, this power is not required to be clean or renewable under the Clean Energy Act.

Demand growth is also being driven by the electrification of LNG and natural gas transportation and production facilities, as well as the growth of industries such as hydrogen production, the adoption of more electric vehicles, and a continued push for home heating to move away from natural gas options. It is essential that BC and its communities have clean and reliable sources of power to meet these needs and not miss out on potential economic growth opportunities.

THE CHAMBER RECOMMENDS

That the Provincial Government:

1. Support the revision of contracts with biomass Independent Power Producers (IPPs) to ensure economically viable rates to produce the renewable energy and capacity they supply.
2. Negotiate a sustainable fibre supply for affected biomass facilities and a favourable power purchase agreement that includes the cost related to transporting available fibre to the power plants.
3. Prioritize the utilization of local resources to meet the energy needs of our province’s residents.