British Columbia energy efficiency investments to reduce costs for thermo-mechanical pulp and paper producers

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British Columbia energy efficiency investments to reduce costs for thermo-mechanical pulp and paper producers

July 24, 2014 - 09:38
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SURREY, BC, July 24, 2014 (Press Release) -Bill Bennett, Minister of Energy and Mines and Minister Responsible for Core Review and Jessica McDonald, President and CEO of BC Hydro, announced a new Power Smart program that will reduce electricity costs for pulp and paper producers.

The program will help producers remain globally competitive, supporting thousands of jobs across the province and will reduce overall electricity demand, keeping rates low for all customers over the long-term.

The new program builds on existing initiatives for industrial customers where BC Hydro provides a financial incentive of up to 75 per cent of the project cost to support investments in more energy efficient equipment.

Under the new program, thermo-mechanical pulp and paper producers, which have electricity costs that account for as much as 30% of their operating budgets and represent 10% of BC Hydro's annual power sales, will be eligible for increased incentives ranging from $5 million to $25 million for projects that can reduce their power consumption.

The program is expected to reduce electricity consumption by 300 gigawatt hours per year which will save pulp and paper producers $17.5 million in annual power costs. In addition, by reducing overall electricity demand by this amount, BC Hydro will avoid the need to acquire new sources of power generation, saving ratepayers up to $265 million and keeping rates low for all customers.

The demand for electricity in British Columbia is expected to grow by 40% over the next 20 years. Investing in energy efficiency is a key component of BC Hydro's Integrated Resource Plan target to meet 78% of this new demand through conservation, which is more cost-effective than acquiring new sources of power generation.

There are seven thermo-mechanical pulp and paper operations in B.C. operated by four companies: Canfor (Taylor), Catalyst Paper (Crofton, Port Alberni and Powell River), Paper Excellence (Chetwynd and Port Mellon) and West Fraser (Quesnel).

The new program adds to the $1.6 billion that BC Hydro will spend on Power Smart initiatives as part of the 10 Year Plan. Earlier this month, government, BC Hydro and FortisBC announced an expansion of energy-efficiency programs to help customers, particularly those on low-incomes, reduce their electricity and gas bills.

BC Hydro continues to work with all of its residential, commercial and industrial customers on Power Smart programs and is also conducting a rate design review to provide large industrial customers with more flexible rate options to manage their costs and stay competitive.