Consultant sees potential for $5 billion worth of biomass fuelled district energy systems

    By: Janet Whitman

    HALIFAX: Communities around the province are quietly working on bold new proposals to heat entire towns by burning truckloads of pulpwood and sawmill scraps once gobbled up by Pictou County’s Northern Pulp mill.

    Recent Nova Scotia transplant Jamie Stephen has spent the past several months planting seeds for the idea with municipal and town councils. So far, New Glasgow, Digby, and Argyle have signed on and are applying for government funding for feasibility studies that could get multi-million-dollar infrastructure projects shovel ready.

    Those communities would just be the beginning, Stephen tells The Reporter from his new home office in Mahone Bay. The bio-energy consultant uprooted from Ottawa with his wife and three young daughters in November precisely because of the opportunity created here with Northern Pulp’s shutdown and the threat of climate change.

    He estimates the province has the potential for roughly $5 billion worth of biomass fuelled district energy systems eligible for government infrastructure funding that would cover the bulk of the cost. The networks of underground hot water pipes connecting central boilers to buildings are hugely popular in Northern Europe as a source of green energy heating entire cities. But the biomass-fueled systems haven’t caught on in Canada because of misconceptions about their efficiency and carbon footprint.

    With the right uptake, Nova Scotia could slash its greenhouse gas emissions by 40 per cent and eliminate the need to import coal, natural gas, and propane for heat, says Stephen. Widespread burning of locally produced, sustainable biomass could become the necessary ingredient for a thriving, ecological forestry industry that’s been missing since Northern Pulp shuttered and stopped buying sawmill residues and low-grade wood that are by-products of forestry.

    Stephen says the energy infrastructure projects would create new high-paying jobs for boilermakers, pipefitters, and other soon-to-be displaced oil industry workers, instead of retraining them for $20-an-hour positions installing solar panels. The vastly cheaper fuel source could help people suffering from energy poverty, a situation set to worsen as Prime Minister Justin Trudeau hikes carbon taxes in 2030.

    “Municipal-owned district energy just makes a lot of sense,” says Stephen, founder and managing director of TorchLight Bioresources with 18 years experience in consulting and research in the bio-energy field. “It allows you to utilize a local resource and creates a huge number of jobs. Over $1 billion a year could remain in province to be spent on local wood fuel, rather than spent on importing oil, natural gas, and coal.”

    He said the figure doesn’t include the indirect job creation and economic development associated with forestry and new energy infrastructure.

    The response from municipalities has been “very positive,” says Stephen, whose clients also include national and provincial governments, First Nations, utilities, airlines, bioenergy producers, and industry associations.

    “They have recognized the value of district energy and the ability to utilize local, low-carbon fuel to support local economies and employment in the forestry and utility sectors,” he said.

    Infrastructure money from Ottawa and the province could cover 73.3 per cent of the cost for municipality-owned energy systems. The hitch is towns and municipalities lack the financial resources to pay for the required feasibility studies for the energy system-changing infrastructure. Development of a community-wide district energy system, as New Glasgow and Digby are mulling, could be the largest capital projects in each’s history.

    Stephen worked with Federation of Nova Scotia Woodland Owners executive director Pat Wiggin to help New Glasgow put together a proposal seeking around $400,000 for a feasibility study.

    The province’s $50-million forestry transition fund, set up to help the industry after Northern Pulp’s closure, rejected the request in early February.

    “It was disappointing. I think we put together a pretty wicked proposal,” says Wiggin, a Dartmouth native who returned home in 2019 to take the job with the woodland owners after a decade of managing tree-planting projects in northern British Columbia. “One of the reasons we pitched New Glasgow is that, although it’s rural, it’s got a pretty concentrated community. It’s also an area where hundreds of families have been affected by the Northern Pulp closure.”

    Undeterred, New Glasgow chief administrative officer Lisa MacDonald and climate change and sustainability manager Rachel Mitchell plan to apply again, with the enthusiastic support of Mayor Nancy Dicks and the rest of town council.

    The aim is to understand what would be financially and technically feasible. In its favour, the town has the highest population density outside of Halifax with 911 people per square kilometre.

    “We were looking at the big picture, what would it take to provide heating for the entire town of New Glasgow, including buildings in our downtown core and homes, or what could be done in a phased approach,” says Mitchell, who was hired as New Glasgow’s climate change coordinator in 2019. “It would tell us what we needed, whether it was a large biomass plant or smaller installations in different areas of town… It would have us shovel ready, as they like to say.”

    MacDonald notes the town already operates a water utility and runs sewer pipes. Adding a district energy system wouldn’t be a stretch.

    “It would provide an alternative to being bound to Nova Scotia Power” – which operates a coal-fired plant nearby in Trenton – “and having better control not only greenhouse gas emissions, but also price control,” she says. “We want to be doing things that are innovative. They work well in other countries. There’s no reason why they can’t work here. They’ve just not been explored properly.”

    The new energy system could also be a significant economic boon for the community hard hit by Northern Pulp’s closure after five decades of operation.

    “Climate change is one of the world’s most pressing issues, but also our greatest opportunity,” says Mitchell. “With an NSCC campus in Pictou County, it’s a great opportunity for students to learn about biomass and renewable energy and even jobs for pipefitting. And then buying fuel that’s essentially low-grade wood fibre from our own backyard is incredible.”

    Instead of a district energy system, Argyle, with its much lower population density, is taking a different tack. The municipality is proposing to buy pellet-burning boilers and install them in houses. Its ownership, with backing from the federal and provincial governments, would help offset the roughly $27,000 expense per boiler, a cost-prohibitive upfront price tag for most homeowners. The significant savings of using a much cheaper and greener fuel would pay out over time. The municipality, as owner of the utility, would get a cut.

    Stephen told Argyle councillors earlier this year that the municipality could serve as a case study to be replicated in similar communities throughout the province, with wood pellets supplied by the Shaw Group’s Shubenacadie-based Shaw Resources and stored in a large silo. He explained that utilizing wood pellets at home is vastly cheaper and three times as efficient as getting power from either coal or biomass burned at a power plant.

    “It is the proven approach for carbon reduction. In Europe, they have over 200 million tons per year of CO2 reductions. To put that into perspective, Nova Scotia’s total greenhouse gas emissions are 17 million.”

    At the end of the presentation, Councillor Calvin d’Entremont quipped, “When do we sign up?”

    Digby’s feasibility study application will be led by Bridgewater-based WestFor Management Inc., established by the province in 2016 to boost the efficiency of Crown land forestry management.

    Stephen is also pitching to Antigonish. The town, in partnership with StFX University, is racing to be the first net-zero emissions community in Canada powered by 100 per cent renewable energy. It is seeking proposals, due in mid-June, to build an electric district heating system with thermal energy storage and the university as the anchor customer. Stephen says biomass is a no-brainer.

    “Ultimately, we can’t be using high-value electricity for such a low value product as heat,” he says. “Biomass would have a small, but meaningful impact on the local rural economy and ensure ongoing operating jobs in forest management, forest operations, and lumber production. Wind and solar create very few operating jobs and all components will be imported.”

    After the New Glasgow rejection for a sliver of the $50-million forestry transition fund, the forestry sector is working on a letter to send to Lands and Forestry Minister Chuck Porter to underscore the need for fully funded feasibility studies for municipalities.

    Neil Jacobsen, a senior policy consultant with Saint John, New Brunswick-based industry association Atlantica Centre for Energy, has visited biomass-fueled district energy systems in Denmark and says governments should be looking at them in this region.

    “Denmark went through a major energy crisis that forced them to adopt and innovate,” he says. “Energy prices are going up here. It’s providing a window of opportunity.

    “When you look at the economics and where we are in terms of climate change and carbon pricing and leveraging resources from within the region, the time has come for Atlantic Canadians to take a really hard look at these opportunities.”

    In Nova Scotia alone, the timber harvest is forecast to be about 40 per cent of its peak in the early 2000s.

    “There are differing opinions on Northern Pulp, but one thing is clear – a market for low-grade wood fibre and residues is required for a sustainable forest sector,” says Stephen. “Mixed age stands, achieved through selection harvest, cannot be realized without a market for low-grade wood fibre.

    “Also, if we protect all the forests, all our buildings, furniture and flooring will need to be made out of concrete, steel, and plastic. If we want wood products and want ecological forestry, bioenergy is required.”

    Northern Pulp’s annual consumption of chips, pulpwood, and “hog fuel,” which includes bark and other sawmill residues, was 1.2 million tonnes. Stephen estimates New Glasgow would need around 50,000 tonnes a year, Digby about 10,000 tonnes, Antigonish 25,000 to 30,000 tonnes, and Halifax all the fibre previously consumed by Northern Pulp. The province’s four-million-tonne-a-year harvest difference between 2004 and 2020 is enough to eliminate all heating oil, propane, natural gas, and coal-fired electricity in Nova Scotia, since a large amount of electricity is used for building and hot water heating, he says.

    Notions that burning biomass is inefficient, dirty and leads to clearcutting are the biggest hurdle.

    Using biomass for electricity, as the province does at Nova Scotia Power’s Point Tupper facility and on the South Shore at Brooklyn Energy, owned by the electric utility’s parent Emera Inc., counts as green energy. That’s despite a woefully poor efficiency rate of between 30-34 per cent.

    The technology for bio-energy, like telephones, on the other hand, has grown by leaps and bounds. Generating heat, rather than electricity, is its highest efficiency use at upwards of 85-90 per cent, says Stephen. “We’re importing coal to heat buildings at not much more than 30 per cent efficiency through Nova Scotia Power. It would be more efficient to burn the coal at home.”

    Many Nova Scotians might not realize when they turn on their new, energy-efficient heat pumps or plug in their electric vehicles that they’re powered more than 60 per cent by coal. Nova Scotia Power is in the midst of a many-decade pursuit to wean itself off the dirty fossil fuel. New Premier Iain Rankin is pushing that target 10 years closer to 2030. The tighter deadline for the transformation is bound to be costly for customers. Even when Muskrat Falls hydroelectric power is fully flowing from Newfoundland and Labrador, fossil fuels will still account for the majority of power generation here.

    Unlike fossil fuels, biomass is touted as a renewable, carbon neutral resource. The logic is, while burning biomass releases carbon dioxide, a greenhouse gas, the trees and plants that are the source of biomass capture greenhouse gases through photosynthesis while they grow.

    Environmentalists, including Ecology Action Centre senior wilderness coordinator Raymond Plourde, scoff at the notion.

    “Europe has been subsidizing this massively because it’s considered green and renewable,” says Plourde. “It’s the critical climate accounting error. To count the burning of trees, chips, and pellets as carbon neutral with zero greenhouse gasses is crazy.”

    That makes him an outspoken critic of the inefficient Point Tupper and Brooklyn biomass plants. But Plourde says he gives “a cautious thumbs up” to energy efficient district energy systems that would be fueled by burning by-products from sawmills.

    “What’s the best thing you could do with these leftovers? Frankly, sweep them up and truck them back to the woods to feed our otherwise very impoverished soils,” he says. “But that’s impractical. Selling into a biomass market that was focused exclusively on supplying district heating plants in municipalities throughout the province, to a certain limit, makes sense.”

    He’s not in favour of pulpwood once destined for the province’s mills being repurposed at industrial levels for biomass boilers and wood pellets. The limit should be to sawmill residue and some silviculture thinning from the forest “and hope on Boy Scout honour they’re not grinding up anything else.” He adds the province should have a “Nova Scotia first” policy and not export wood pellets and chips to feed Europe’s insatiable appetite.

    Stephen’s argument is that sustainable forestry, as spelled out in 2018’s independent Lahey report on the province’s forestry practices, requires a market for pulpwood.

    “This is small diameter, low value, low quality standing timber,” he says. “A lot of timber cannot be milled into lumber. Historically, that timber went to produce pulp and paper. However, with the closure of both Bowater Mersey and Northern Pulp, there is insufficient demand from the pulp and paper sector.”

    Northern Pulp, shut in early 2020 after then Premier Stephen McNeil refused to allow the mill to continue dumping effluent into Boat Harbour, is trying to make a comeback. It’s unclear whether the company’s new proposal will continue to seek approval for a plan to pump treated wastewater into the Northumberland Strait. With the resumption of the mill, pulp products would be shipped out of the province and new environmental consequences could arise.

    Burning biomass for heat might be the safer bet for a viable, sustainable forestry industry.

    Either way, a buyer for low-grade wood is needed. Without one, high-grading and clearcutting are the only two timber harvest options.

    “High-grading, which is the removal of only sawlogs, is a completely unsustainable forestry practice and is not permitted on Crownland. It decreases the genetic quality of the forest because you a removing all the best trees,” says Stephen. “Clearcutting and leaving trees in the forest to rot is a complete waste of a resource.”

    Winning approval for district energy systems and building them could take a few years. Stephen says steps could be taken sooner to improve efficiency with biomass. Brooklyn Energy has been without a heat customer since the shutdown of Bowater Mersey.

    “A use of heat, which is currently being wasted, would dramatically increase the efficiency of the Brooklyn plant without any additional wood fibre consumption,” says Stephen.

    He points to a Varberg, Sweden, which ran an 18-kilometre transmission line from the pulp mill to the town, as an example. Making biomass at Brooklyn Energy more viable could be a boon to Greenfield-based Freeman Lumber, the largest sawmill west of Halifax. The multi-generational business warned last year it might go under after losing Northern Pulp as a buyer for its wood chips.

    Nova Scotia also has several district energy systems that could be converted to biomass in less than a year. Candidates are the Canadian Forces Bases in Halifax and Greenwood and university campuses, including Dalhousie, Acadian and StFX. Dal’s Truro campus is already heated with a biomass plant.

    Stephen says biomass is a good companion to solar panels and wind turbines. While a growing part of Nova Scotia’s green footprint, the two renewable sources lack the capacity and storage capabilities to meet all of province’s energy needs. Bioenergy is already big in the Maritimes. With many homes heated by pellet and wood stoves, it accounts for 73 per cent of all renewable energy in the region, putting it well ahead of solar and wind.

    “There are a lot of campaigns that are electrify everything and add wind and solar and batteries and that’s the only solution,” says Stephen. “If you actually step back and look at the numbers, we simply will not reach our green-house goals doing that. You can’t decarbonize using electricity if you have a high carbon grid.”

    Nova Scotia can reach its climate-change goals by burning forestry industry by-products in individual wood pellet boilers and district energy systems, he says.

    “I moved here specifically because I know this is the approach that will work. There’s no example in the world where electricity has been used as the primary means of decarbonizing.”

    Even when Northern Pulp was operating, the timber harvest was only about 0.5 per cent of the standing timber. The remaining 99.5 per cent would continue to grow, meaning no net greenhouse gas emissions are released into the atmosphere. It takes between 40 and 60 years for a tree to grow to maturity in Nova Scotia. That makes removal of 0.5 per cent of timber a 200-year cycle.

    “If we actively manage forests, we can remove material for wood products and bioenergy, thereby reducing fossil fuel consumption,” says Stephen. “The alternative to wood buildings is concrete and steel, which is dramatically higher carbon. The alternative to wood furniture is plastic furniture, which is dramatically higher carbon.”

    Stephen says Rankin, a former environment minister who got elected on a green energy platform, could meet his target to get off coal, as well as the need for heating oil and propane, simply by bringing forestry harvest levels up to where they were in 2004 when Abercrombie’s Northern Pulp and the South Shore’s Bowater Mersey were operating.

    “That’s what makes the most sense to me, rather than just trying to import electricity for heat,” he says. “I hear about wind and solar and electrification and Tesla all of the time, but I don’t hear anything at all about biomass – the thing that is actually driving decarbonization in Europe – which is unfortunate.”

    The market penetration for district energy building heat in northern European countries is between 55-95 per cent, including a state-of-the-art biomass plant in Denmark’s capital Copenhagen that has an artificial ski slope on its roof.

    “In Canada, we’re at one per cent,” says Stephen. “This is not some novel idea. It’s been repeated in other countries over and over again. Go to any Nordic country and it isn’t even a discussion about how it should be heated. It’s just like a discussion around water and sewer.”

    Nova Scotia has had a district energy system in its backyard, in Charlottetown, P.E.I, for decades. With no natural gas pipelines flowing to the province, the city opted to build its own energy system in 1980 to heat government buildings and a hospital.

    The plant, now owned by Toronto’s Enwave Energy Corp., has expanded to more than 145 buildings. It burns waste in addition to wood chips, helping reduce landfilling by 90 per cent.

    Burning garbage in district energy systems in Nova Scotia would be viable in bigger centres like Halifax and Sydney. But permitting and social acceptance are obstacles.

    “The largest opportunity is on the forestry side because of the closure of the pulp mills and the need for rural jobs,” says Stephen.

    Nova Scotia Power isn’t likely to welcome the prospect of new competition. The privately owned company, along with natural gas supplier Heritage Gas Ltd., came out in opposition last year to a plan by Halifax Water to create a district energy system as part of the Cogswell redevelopment in the city’s downtown. The utility wants to heat six giant real-estate developments with its sewage treatment plant.

    Rankin told Halifax Magazine in an interview after he was elected premier that he’d like to expand a program he rolled as forestry minister in the fall to use wood chips to heat six public buildings. Those buildings would consume about 5,000 tonnes a year, less than 0.4 per cent of the wood fibre consumed by Northern Pulp.

    Stephen spoke with Rankin before the election to discuss the potential for district energy systems.

    “His primary concern is what people are going to think about burning wood,” says Stephen. “I completely understand where he’s coming from. It’s a communications thing.”

    To help on that front, the Federation of Nova Scotia Woodland Owners was awarded a $215,000 grant from Natural Resources Canada’s Forest Innovation Program to examine the social acceptability of active forest management, bioheat, and district energy, a study Stephen is helping out on.

    “Looking across country as to where greatest opportunity is to actually shift towards development, which is really where I’m looking to go, Nova Scotia makes the most sense both on the forestry and energy side,” says Stephen.

    When it comes to heat, Nova Scotians, with their electric baseboard heaters and oil-fired furnaces, pay some of the highest prices in the country. Heating oil is poised to jump by 60 cents a litre by 2030 as new carbon taxes are imposed.

    With the closure of Northern Pulp, the forestry industry lost the buyer of as much as 90 per cent of its wood shavings, bark, and other low-grade wood fibre. The lost market has delivered a blow to sawmills (which, so far, has been masked by a surprise lumber boom amid the coronavirus pandemic) and the ability of the industry to manage the forests in a stable, ecological manner.

    Wiggin is a vehement opponent of clearcutting. He says his main job is to manage forests for the future and make sure Nova Scotia landowners “always have some sort of security blanket of offtake” for wood chips and other low-grade by-products, whether to a mill or a boiler.

    “In a country where more than 80 per cent of energy demand is heat, you’d think all of these light bulbs would be going off,” he says. “You’d think they might say, ‘Hey, maybe we should use what we have and solve these internal problems we have in provinces with the loss of major pulp clients.’”