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BC Hydro supports mill's efficiency, generation plans

Domtar's pulp and paper mill at Kamloops. (Photo courtesy domtar.com)

Posted by Dag Sharman

Clean power and energy efficiency were at the centre of a major funding announcement at Domtar’s pulp and paper mill in Kamloops recently. BC Hydro is playing a critical role in this initiative through our innovative program known as the Integrated Power Offer (IPO).

In June 2009, Natural Resources Canada announced that up to a billion dollars in funding would be available to companies under their new Pulp and Paper Green Transformation Program. Upon hearing the news, BC Hydro immediately contacted pulp and paper companies in B.C. to offer our support to help them access the funding for energy efficiency and power generation upgrades at their B.C.-based mills.

BC Hydro developed the Integrated Power Offer to help put B.C.’s mills in an attractive position to secure that Green Transformation Program funding. The IPO is an innovative approach to addressing our industrial customer’s needs that integrates both energy efficiency and generation.

BC Hydro commits to buy power

For industry, investments in power generation facilities are generally very capital intensive. That means that without a commitment from BC Hydro to buy the power, investing in additional power generation facilities generally does not make sense for industry. But under the IPO, the industrial customer secures, in BC Hydro, a long term buyer for the incremental power it generates while at the same time optimizing the available Power Smart technical support and financial incentives for energy efficiency projects.

Mills more efficient, more competitive

The IPO approach helps to ensure that industrial customers commit to making their facilities more energy efficient before BC Hydro agrees to buy power from them. When companies become more energy efficient and generate more power, they are more productive and more competitive. In addition, long term electricity purchase agreements with BC Hydro, which are part of the IPO, provide long term revenue sources which help make the companies more sustainable in their communities.

Under the Integrated Power Offer, BC Hydro is currently working with its pulp and paper customers because of that sector’s immediate opportunity to capture federal Green Transformation Program funding. But over the longer term, BC Hydro intends to explore an integrated offer for other industrial customers and possibly other customer classes.

The benefits of the IPO are widespread. Bringing Green Transformation Program funding to B.C. communities to assist companies in completing projects that are about both energy efficiency and power generation not only helps the companies and the local communities, but it also helps B.C.’s economy and allows BC Hydro’s customers to attain more clean, renewable electricity, bringing us closer to our 2016 commitment of becoming electricity self-sufficient in British Columbia.

Look for more announcements regarding the Integrated Power Offer very soon.