Revelstoke Development
News - June 26, 2003
| Revelstoke Community Energy Project | |
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Since the last quarterly update,
there have been several developments on this Project. A number of
financial reasons related to the Softwood Lumber issue, the soft lumber
market, the rising value of the Canadian dollar, and the increased scope
and the cost of the Project, caused concern for Downie. Other issues
were delays in obtaining needed grants and other financing combined with
lingering technical concerns about the project’s reliance on virtually
100% cedar residue as fuel. An offer from Riverside Forest Products
provided an alternative that has less risk for Downie and accordingly,
Downie is entering a contract with Riverside to supply its wood residue
to the Armstrong Cogeneration plant. The Armstrong plant is an existing
“utility” scale power plant that has an electrical generating capacity
of 22 Megawatts and requires 220,000 tonnes of wood residue annually
[100,000 more than Riverside produces from its own operations]. Riverside had an understanding from Downie that the planned Revelstoke Project was going to provide a disposal opportunity for all locally generated wood residue and Riverside has agreed to take all of that residue. At the same time, Downie reserved the right to retain enough fuel to be combusted in a new state of the art facility that would provide low-pressure steam and hot water for operating the dry kilns and energizing the Community Heating system, respectively.
This new “Heat Only” project will be 100% City owned through the Revelstoke Community Energy Corporation [RCEC]. FVB Energy Inc., consultants to the City, is currently refining the business case. Negotiations on the detailed aspects of the arrangements between RCEC and Downie are proceeding. Preliminary estimates reveal more favourable economics with a shorter payback time than that of the full-scale cogeneration project. FVB’s conclusions should be finalized by mid July. The “Heat Only” Project will meet BC’s environmental standards, as did the original project. Electrostatic precipitators on the stack will play a role in the control of emissions and there will be no more fly ash. It will take 12 to 14 months to complete the project from the time that a firm decision is made to proceed. Stay tuned! Geoff Battersby |