At the 2022 Annual General Meeting of the Ontario Chamber of Commerce, the Thunder Bay Chamber of Commerce will present the following resolution:

Issue 

Biomass heat and power generation is a key element in the economy of Ontario, diverting waste fibre from unacceptable and detrimental usage such as landfilling. Biomass heat and power generation contributes to the reduction of greenhouse gases, creating investment & employment in communities and First Nations, and assisting in the sustainability of the forest industry in the province. To grow these economic, environmental and social benefits, the Government of Ontario must take action to implement policies and programs that support biomass generation.

Background 

The Ontario Forestry Industry is a significant element of the economy of the province. There are 47,800 Ontarians directly employed in forestry, and over $242.6 million in timber charges were paid to provincial coffers by Ontario’s forestry companies in 2020. In 2019, forest manufacturing revenues were over $17.6 billion. The industry has the potential to grow as currently only 46% of the total allowable cut is being harvested, totalling 130,837 hectares.

One key growth scenario is the utilization of waste fibre in the generation of electricity to support the Ontario electrical grid as well as the distribution of the industrial steam by-product as a means of reducing greenhouse gases produced by heating residential, industrial and institutional buildings.
According to Ontario’s Minister of Energy, the Hon. Todd Smith, in a letter to the IESO dated November 10, 2021:

“The Independent Electricity System Operator (IESO) has forecasted an emerging capacity need following the closure of the Pickering Nuclear Generating Station that grows through the latter part of the decade. Fulfilling this forecasted capacity need will require IESO to procure both existing and new resources. As demand continues to grow in response to electrification, ensuring we have a framework in place to secure capacity is critical.”

The IESO has also identified the need and opportunity for distributed generation facilities to meet the overall needs of the region and the province.
Ontario already supports a number of biomass electricity generating facilities through power purchase agreements (PPA) which are shortly due to expire in the next 2 to 3 years. These facilities will be eligible to participate in negotiations with the IESO to renew their respective PPAs including:

• Atikokan Generating Station (OPG)
• Calstock (Atlantic Power)
• GreenFirst (formerly Tembec) sawmill in Chapleau
• Hornpayne Power Inc.
• Resolute Forest Products Thunder Bay

The integrated aspect of biomass generators ensures the sustainability of their operation, and in many cases, the operation of sawmills and harvest operations associated with them across a geographic area hundreds of kilometres wide.

For example, Thunder Bay’s Resolute Forest Product’s biomass facilities draw on fibre from sawmills and lumber producers in Ignace, Atikokan, Thunder Bay, Fort Frances and Barwick in addition to the many bush contractors, who rely on grinding or chipping waste material in order to access timber stands that otherwise would be un-harvestable without a market for lower grade fibre. Similar relationships exist for the other biomass generators noted previously.

Ontario’s Fall Economic Update indicated the commitment of the government to fund the above-market cost of renewing existing biomass energy generator’s Power Purchase Agreements. However, the Minister of Energy letter of November 10, 2021 to the IESO clarified that new contracts would be for terms up to five years only, and that the agreement for the first generator would be set at a significantly reduced capacity.

While all of the generators supply electricity to the Ontario electrical grid, a few also provide electricity for their own operations which improves their viability. However, the generation of electricity is not the only benefit created by their operations. Biomass generators are a part of an integrated energy and environmental system. The primary source of the fibre is waste wood from forestry operations. Historically this waste wood was either incinerated or deposited in a variety of landfill sites which contributed to the release of carbon dioxide into the atmosphere with no value to society. Without existing facilities, Ontario could be landfilling over 1.3 million metric tonnes (equivalent to over 40,000 truckloads of waste annually). Using this biomass to generate renewable electricity and heat diverts significant waste from landfills and will also assist in moving natural gas consumers over to a district heating supply utilizing waste steam from the generator.

The existing and future biomass generators have a broad economic footprint in their area. Employment is enhanced in harvesting, transportation and generator operations. This is extremely important to First Nation communities as well as the host community of the generator. They also support the operations of the municipalities where they are located.

There is also a growing interest in Ontario’s sustainably managed forests as an invaluable source of feedstock to support the emerging low carbon bio-economy (fuels, plastics, chemicals). These new technologies require a robust and integrated primary forest products sector to be successful and this includes a stable and reliable source of heat and power. There is tremendous opportunity to attract significant investment into Ontario over the next couple of years and the presence of biomass cogeneration facilities will play a critical role in attracting this investment as they are a source of heat, power and necessary industrial infrastructure.

 Recommendations 

The Ontario Chamber of Commerce urges that the Ontario Government invest in the future of a sustainable forest and biomass generation industry by:

1. Renewing the existing Biomass Power Purchase Agreements for a minimum of 10 years to enhance business certainty;
2. Ensuring that the extended PPAs sustain the same volume of fibre as the current contracts to protect the jobs and the economy of neighbouring facilities and communities as well as the diversion of waste fibre from landfill facilities;
3. Expanding the output of existing biomass generators to meet the electrical demands of the regions where they are located;
4. Create enabling policy to support the development of cogeneration and district energy systems, including a framework for heat contracts, prioritizing government energy procurement and investment incentives for municipalities, generation facilities and building owner, creating conditions for new investment, job creation and revenue streams supporting provincial low carbon objectives; and,
5. Developing a policy which encourages the development of additional biomass generation facilities as an option to the lengthy process for the creation of additional transmission and distribution facilities into communities currently served by radial lines. This would meet the concept of distributed generation as identified by the Independent Electrical System Operator (IESO).