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AGS biomass conversion a go

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The inking of a much-anticipated power purchase contract has ended almost two years of uncertainty around the future of the Atikokan Generating Station.

The 10-year agreement between Ontario Power Generation and the Ontario Power Authority—announced last Thursday in Thunder Bay by Thunder Bay-Atikokan MPP Bill Mauro—means the conversion of the plant from coal to wood biomass power can move ahead immediately.

The $170-million conversion project will make the AGS one of the largest biomass plants in North America, and is anticipated to secure existing jobs and create or support around 200 direct and in-direct forestry jobs.

The project will take close to two years to complete and create some 200 construction jobs during that phase.

The power purchase contract has been at least 22 months in the works, and negotiations between the two Crown corporations have meant “a long road, with a lot of new ground and terms to settle,” noted AGS manager Brent Boyko.

“It’s a unique process and the first biomass [power] project of this scale in Ontario,” he added.

The contract guarantees the purchase of 96,000 tonnes of wood biomass annually to provide the same production capacity (more than 200 megawatts) as the current station.

It was the “final piece of the puzzle” to ensure OPG had the financial security to proceed with the conversion project, Boyko said.

While the OPG has yet to finalize the wood pellet supply contracts, Boyko noted negotiations with a couple of proponents were continuing (Atikokan Renewable Fuels is one of the bidders).

What is known, however, is that the wood pellets will be sourced from within Ontario, and Thursday’s announcement now allows that industry to move forward, he added.

“Pellet plants didn’t exist in Ontario—this will create that industry,” Boyko stressed.

The demand for wood pellets is expected to require 200 direct and in-direct jobs.

“The conversion of the generating station from coal to biomass will keep energy jobs in the town of Atikokan and create forestry jobs in Northern Ontario,” said Mauro.

The construction phase already has begun, with contracts awarded to Aecon for fuel storage and handling and Doosan Equipment for combustion modification work (in the lead-up to the announcement, some site preparation already was completed).

For Atikokan Mayor Dennis Brown, who attended last week’s announcement in Thunder Bay along with Coun. Jerry Duhamel and AGS reps, the deal “provides certainty for the people of Atikokan and businesses.”

“They now know this will happen, and they can plan accordingly,” he reasoned.

Not only is it positive news for the forest industry and local economy, it protects about a third of the town’s tax base, Mayor Brown noted.

Along with council and staff, the mayor has met with current and past ministers of energy to push for a deal to go ahead.

Most recently, Mayor Brown and then Atikokan CAO Andre Morin met with Chris Bentley in January. And just last week, Mayor Brown left another message for the minister’s office, calling for a power agreement as soon as possible.

Mayor Brown said saving the station—the province’s most modern coal station, which was built in 1985, representing a $700-million investment—has been an ongoing struggle since 2003, when the province announced plans to end coal power.

He credited the work of Mauro and community members for their sustained efforts to save the station and gain the attention of the province.

Recalling the well-attended public meetings and the community outcry which prompted a visit here by former Energy minister Dwight Duncan back in 2005, Mayor Brown said the community’s efforts in this process can’t be overlooked.

“The whole town of Atikokan deserves a lot of credit for this announcement,” he stressed.

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