NOTIFICATION: The Technology Channels will soon be discontinued.
Click here to download complimentary copies of Fastmarkets RISI’s pulp and paper newsletters.

 

Temporary energy exchange for Kruger's Corner Brook Pulp and Paper mill in Newfoundland avoids PM shutdown

Read so far

Temporary energy exchange for Kruger's Corner Brook Pulp and Paper mill in Newfoundland avoids PM shutdown

April 07, 2021 - 18:01
Posted in:

ST. JOHN'S, NL , April 5, 2021 (Press Release) -In response to low water levels in the Grand Lake reservoir, which is affecting energy supply from Corner Brook Pulp and Paper Limited’s (CBPPL) Deer Lake power plant for its mill operations, the Government of Newfoundland and Labrador today announced that Nalcor Energy Marketing (NEM) will enter into a temporary energy exchange agreement for Muskrat Falls commissioning period energy that is surplus to NL Hydro’s requirements during Labrador-Island Link (LIL) and Muskrat Falls commissioning.

This energy will be provided back to NEM from Deer Lake Power when its water supply from the Grand Lake reservoir returns to normal levels. This energy exchange agreement will not affect ratepayers, and the Provincial Government is not providing financial assistance to CBPPL.

According to CBPPL, the mill requires approximately 107 megawatts of power to run its two paper machines. Without assistance, a deficit of CBPPL-generated power, resulting from the low water levels in the reservoir would have forced the shutdown of #2 paper machine, which accounts for approximately 40 per cent of the mill’s production. A shutdown would result in the loss of more than 200 direct and indirect jobs. It would also have a potential impact on integrated sawmill operations in Hampden, Bloomfield and Cottles Island, which rely on CBPPL as a market for small diameter timber, wood chips, sawmill residue and supply of saw logs.

The cost of the transmission of power to CBPPL will be the incremental transmission tariff that NEM would have to pay to exchange the energy with CBPPL. The approximate transmission tariff to be paid by CBPPL is $250,000.

The Government of Newfoundland and Labrador supports the sustainability of CBPPL, and will work with the company to help secure the future of our forest industry for the benefit of the residents and communities throughout the western region and all of Newfoundland and Labrador.

More information can be found in the backgrounder below.

BACKGROUNDER

 Corner Brook Pulp and Paper Limited (CBPPL), a subsidiary of Kruger Inc., is the province’s only newsprint production facility, producing upwards of 250,000 metric tonnes of newsprint per year.  CBPPL is the largest private sector employer in the western region, employing 507 people at the paper mill, woodlands operations and at Deer Lake Power. Another 667 individuals are employed indirectly.

Low water levels in the Grand Lake reservoir are affecting Deer Lake Power’s ability to produce power to support the Corner Brook paper mill.

Today’s announcement enables CBPPL to gain access to power from Nalcor Energy, by granting an exemption under the Electrical Power Control Act. Under the Act, Newfoundland and Labrador Hydro has the exclusive right to supply power to an industrial customer on the island portion of the province. NL Hydro supports this exemption.