Converting Northwest Thermal

Transcription

1 Converting Northwest Thermal - Atikokan Generating Station - Thunder Bay Generating Station September 27, 2012 NWO Regional Conference

2 Ontario Hydro s 5 Successor Entities (Apr. 1999) 1. Ontario Power Generation (OPG) electricity generator 2. Ontario Hydro Services Company, later renamed Hydro One Inc. with 5 subsidiaries, including Hydro One Networks Inc. - runs most of the transmission and distribution systems for power in Ontario 3. Independent Market Operator (IMO) later renamed Independent Electricity System Operator (IESO) administers electricity grid 4. Electrical Safety Authority - enforces electrical safety across Ontario OEFC 2 5. Ontario Electricity Financial Corporation - responsible for servicing the debt and liabilities of the former Ontario Hydro, that were not assigned to the successor companies

3 Ontario Power Generation Profile Ontario s public power company. Profits stay in Ontario. Lowest price generator. Generated 84.7 TWh of electricity in 2011 (88.6 in 2010). Produces about 60% of Ontario s electricity. 11,800 employees. Capacity: 19,049 MW. 3

4 OPG Facilities Two Nuclear stations (10 units) Five Thermal stations (13 units) 65 Hydroelectric stations (240 dams) 2 Wind Turbines 2 Natural Gas stations (co-owned) 4

5 Ontario s Long-Term Energy Plan Ontario s Long-Term Energy Plan Highlights: Nuclear continues to supply 50% of Ontario s electricity. Increase hydroelectric generation. Expand renewable generation from wind, solar and bioenergy. Use natural gas generation for reliability and to meet peak demand. Expand supply from high efficiency combined heat and power. Continue to grow conservation. 5

6 Ontario s Long-Term Energy Plan Ontario s Long-Term Energy Plan Implications for OPG s Thermal Business: AGS 211 MW Convert Atikokan GS to biomass. Convert Thunder Bay GS to natural gas. TBGS 306 MW Eliminate coal generation by end of Close two additional Nanticoke GS coal generators in Initiate natural gas pipeline studies for Nanticoke GS and Lambton GS. Potential for biomass co-firing with natural gas in converted coal units in the future. Nanticoke GS 2,000 MW Lambton GS 950 MW 6

7 Powering Northwestern Ontario CAPACITY - OPG s generating capacity in northwestern Ontario is just less than 1200 MW (687 MW Hydro and 517 MW Thermal = 1194 MW). Hydro plants in the region provide majority of generation for NWO. The converted units at both NW Thermal plants retain their full capacity. Thermal plants cover peaks, low water periods and system stability with reliable, quick response capability. DEMAND - peaked at just over 1100 MW in 2005 and then decreased through to 2009 at which time it began to stabilize. CURRENT DEMAND in NWO ranges from 550 to 700 MW. CURRENT EXCESS CAPACITY in NWO is about 500 MW. Excess generation in northwestern Ontario positions the region as a 7 platform for growth and development.

8 Northwestern Ontario Peak Electricity Demand MW Northwest Peaks (Weather-Corrected, except for May to Sept) - (MW) jan feb mar apr may jun jul aug sep oct nov dec Source for basic peak demand - IESO

9 Nuclear Context Nuclear electricity generation provides over 50% of Ontario s power. Over the next 10 to 15 years: 9 Pickering Nuclear s reactors will be taken out of service by Current in-service capacity is 2100 MW. Darlington Nuclear and Bruce Nuclear have a 10,000 MW capacity which will taken offline for refurbishment creating a short term valley in electricity from nuclear over a number of years. 2,000 MW of nuclear new build at Darlington is in the LTEP.

10 Wind Generation in Ontario September The ramp rate and flexibility provided by Thermal can enable intermittent renewable generation.

11 Northwest Thermal Conversion Atikokan GS Project Biomass Wood Pellets 11

12 Why Biomass Wood Pellets at Atikokan GS? Makes use of existing generating station owned by people of Ontario. Conversion costs less than new build. Sustainable and environmentally responsible fuel source. Available when needed to meet peak demand and to back up OPG Hydro in low-water years and intermittent renewables like wind and solar. Synergy with Ontario s forestry sector. Help develop Ontario s forest / agriculture biomass fuel supply chain. Greenhouse gas benefits compared to fossil fuels. Co-firing biomass with natural gas an option for the future. OPG will source biomass fuel that will not impact food supply. 12

13 Atikokan GS Conversion Concept Fuel change from coal to biomass wood-fibre pellets. Annual demand expected to be 150 million kwh. Some modifications to furnace. New fuel handling and storage system to ensure safety. 10,000 tonnes of storage using two 5000 tonne silos. Pellets first in first out - minimizes self heating. 13

14 Atikokan GS Plan view West Silo East Silo Transfer Tower

15 Excavation at Atikokan GS 15

16 Foundation Forming at Atikokan GS 16

17 Sustainable Fuel Supply: Atikokan GS Fuel must meet the United Nations Framework Convention on Climate Change definition of renewable biomass. Atikokan GS: 90,000 tonnes of wood-based fuel per year Less than 1% of annual harvest in Ontario. Fuel must be sourced / processed in Ontario. OPG in final negotiations regarding fuel supply. 17

18 Biomass Sustainability Analysis Conducted by The Pembina Institute in Based on thorough forest carbon life-cycle modeling and socioeconomic analysis. Findings: A biomass program using wood pellets at a rate of 2 million tonnes per year can be done sustainably with no systemic decline in forest carbon stocks over time. Significant greenhouse gas benefits over natural gas combined cycle (80% lower GHG emissions). 18

19 Atikokan GS Repowering Project Schedule 2012 Energy Supply agreement with OPG/OPA complete. Business case approved by OPG Board of Directors and government support attained in July Environmental Compliance Approval certification with MOE for finalization Material handling system construction in progress Furnace and Combustion system modification begins Commission and place in-service. 19

20 Northwest Thermal Conversion Thunder Bay GS Project Natural Gas

21 Why Natural Gas at Thunder Bay GS? Coal is not an option after Natural gas repowering of Thunder Bay GS provides the most cost effective option to retain regional capacity, ensure a reliable, flexible supply of electricity and support future economic growth in the region. Repowering makes use of existing assets owned by the people of Ontario and costs less than building a new gas plant. Short lead time. CO2 and acid gas emissions are reduced by 45% compared to coal. Conversion to gas allows additional investigations of biomass and advanced biomass fuels. 21

22 Natural Gas Pipeline to Thunder Bay GS Union Gas has been hired to provide natural gas supply to Thunder Bay GS. Union Gas will design and construct the necessary gas pipeline to the station. Environmental Review re routing options is underway. Union Gas public consultation winter / summer Pipeline construction begins spring / summer Pipeline construction complete November

23 23 Thunder Bay GS Conversion Project Schedule Concept Study Phase complete. Definition Phase work includes: prepare design requirements / specifications for fuel conversion prepare contract / tender documents competitive selection process for conversion construction develop execution plans (how, who and when) submit Environmental Compliance Approval application tender for and carrying out controls design engineering perform Financial and Project Management due diligence dialogue with Union Gas and OPA re Power Purchase Agreement prepare documents for OPG Board approval Next step - Execution Phase In-service and commercial operation 2014

24 Thunder Bay GS Conversion - Community Outreach Stakeholder Updates ongoing. Community Information Displays at City Hall and Waverley Resource Library for month of March. Community Information Session May 3, Labour Centre, Fort William Road. Environmental Compliance Approval application is posted on MOE s Environmental Registry online for public comments (to Oct. 5.) If you wish to comment, please visit the site at WEB-External/searchNotice.do; Enter the number Comments are very important to the government s decision making process. 24

25 Northwest Thermal Conversions - Moving Forward Resolutions provided in support of the conversion projects: City of Thunder Bay TBGS Town of Atikokan AGS & TBGS NOMA AGS & TBGS NOACC AGS & TBGS Thunder Bay Chamber of Commerce TBGS Atikokan Chamber of Commerce AGS & TBGS CAW #1075 AGS & TBGS Thunder Bay District Labour Council AGS & TBGS Fort William First Nation OPG is minimizing Thunder Bay Gas Conversion Project spending and activities until a Power Purchase Agreement is successfully negotiated with the OPA. Once finalized, we can seek final approval to move into the execution phase and complete contract negotiations with suppliers. The local project team remains intact and engaged in 25 project activities.

26 Northwest Thermal Conversion Projects - Jobs Converting the units preserves jobs at Thunder Bay GS and Atikokan GS. Thunder Bay GS conversion project will generate ~ construction jobs in 2013/14 (plus pipeline construction jobs). Atikokan GS conversion project will generate 200 construction jobs. Will stimulate the creation of jobs in wood pellet supply. 26

27 Northwest Thermal Impact on Economy Total municipal property taxes paid by OPG s Northwest Thermal plants annually - $3.5M Corporate Citizenship Program - $160,000 in support of environmental, cultural, educational, health, youth programs and poverty-related causes to local charities annually. Goods and Services - OPG spends $9 million annually in northwestern Ontario of which well over half is spent in Thunder Bay and Atikokan. Employees serve as volunteers in the community and contribute about $80,000 annually to local charities. 27

28 Summary of Benefits - Northwestern Ontario Atikokan GS and Thunder Bay GS Conversion Projects Economy: Cost: Jobs and investment in Thunder Bay, Atikokan and northwestern Ontario. Re-use of existing generating stations owned by the people of Ontario. Conversions cost less than building new. Development: Environment: Flexible: 28 Capacity is retained and will be demand driven. Positions Thunder Bay, Atikokan and northwestern Ontario for future growth. Opportunities to manage CO2. Lower life cycle greenhouse gas emissions per kwh compared to coal. Provides needed flexibility for the electricity system.

29 29 Thank you!