SUBMITTED PHOTO                                David Tiessen at the Arterran booth at the CEM10/MI4 in Vancouver.

SUBMITTED PHOTO David Tiessen at the Arterran booth at the CEM10/MI4 in Vancouver.

Experimental wood pellet firm eyes large-scale Vancouver Island production

Arterran Renewables leasing Port Alice pulp mill, eyes Cowichan, Campbell River locations

Economic hope has been rekindled in Port Alice in the form of an experimental wood pellet plant taking over the remote North Island community’s dormant Neucel pulp mill.

Vancouver-based Arterran Renewables has signed a lease with Neucel to use the site for a demonstration plant that will manufacture industrial wood fibre pellets marketed to customers looking to replace coal and reduce carbon emissions. Port Alice is one of three Vancouver Island communities being targetted for the experiment.

“There’s two projects that are definitely in the works, and three project locations on the Island that we’re looking at,” Arterran’s Director of Business Development, David Tiessen told Canadian Biomass magazine. “Those locations are in the North Island at Port Alice and/or Coal Harbour, in the Central Island at Elk Falls, Campbell River, and then in the South Island in the Cowichan area.”

RELATED: Pellet plant proposal economic lifeline for Port Alice?

“If you could make a replacement for coal out of one of the most plentiful substances on Earth for about the same cost of coal that would be a big deal right?” Arterran’s web site asks. “That’s what we do!”

It uses a chemical process to transform cellulose — right now primarily wood products — to make a “drop-in” replacement to coal.

Signed on Aug. 18, the Neucel lease is for a term of one year for a fee of $1. The parties are presently drafting a memorandum of understanding that outlines a formula and conditions for the purchase of the mill. Once Arterran and Neucel agree on terms, Arterran will be able to proceed with it commercial demonstration.

The commercial demonstration will produce fuel for waiting potential customers in the hope it will lead to long-term agreements. These agreements will then be presented to the bank for to finance large-scale production.

The company is in the final stages of a federal grant application to help fund the demonstration plant. It is also meeting with a large forestry company, as well as the province to secure a feedstock/foresty partner, location and permits.

Tiessen said it will be difficult to pin down exactly when pellet production will begin “due to staged variables” but the are hoping to begin production in the second quarter of 2020.

Arterran has a number of potential future customers waiting to test their product. A municipal generation unit in the US is looking to acquire 3,400 tonnes of pellets to test in place of coal at their facility. A Japanese trading house intends to walk through their commercial demonstration prior to contracting 300,000 tonnes/year. A German utility seeks to license their technology after the demonstration and deploy it in Brazil.

A Swedish utility is planning to close a 400mw coal plant unless they can find a biofuel to power it instead. India is seeking to replace 10 per cent of coal because it is a cheaper source of power.

RELATED: Tax-deliquent Neucel pulp mill means Port Alice arena won’t open this year

When asked about what is to be done about the $3 million Neucel owes the Village of Port Alice, Tiessen said they have no way of knowing at this time.

“We share a good, open dialogue with the Village of Port Alice. They wish to see us succeed, are very supportive, and we plan to be a socio-economic solution provider for the North Island delivering a sustainable fuel and environmental solution to the world.”

“We are a socio-economic and environmental solution for the future, not the past. Every community we site a 150,00 t/yr project is a $30 million investment into that community creating 51 FTE + supporting over 200 non-direct positions. Currently we have three, possibly four island locations suitable with fibre to support siting 150,000 t/yr plant and these projects will advance after the commercial demonstration.”

According to Arterran’s estimates, each 150K facility will lead to 271 new jobs, $16,819,545 total in wages and salaries, $4,709,473 in tax revenue and $2,160,00 corporate tax revenue.

– Debra Lynn