Power of a new green plant
Published Saturday October 31st, 2009
Energy: Metepenagiag First Nation joint venture to build $70-million plasma gasification plant will attract business and jobs
OTTAWA - Built on the ashes of an old industry and fuelled by a community's trash, the super-hot flame of a new green power plant may be burning in Miramichi in two years.
Metepenagiag First Nation has entered a joint venture to build a $70-million plasma gasification plant on the site of the former UPM groundwood mill in Nelson.
It would burn 200 tonnes per day of residential and commercial garbage using a high-temperature (1500 degrees C) plasma torch, creating a clean synthetic gas that would then burn in turbines to produce 10 megawatts of electricity for the provincial power grid.
The project, still at the development stage, would create an estimated 200 construction jobs and 40 permanent jobs.
It would take roughly two years to plan and build.
The project still has significant goals to meet.
They include finalizing a power purchase agreement with NB Power and another with the Northumberland Solid Waste Commission, securing project financing and receiving environmental approvals.
But Metepenagiag Chief Noah Augustine said all the feasibility studies and discussions with outside parties and investors are encouraging.
Already, for example, the venture has signed an option to buy the site with Umoe Solar.
The plant, Augustine said, will benefit the wider community as well as his First Nation, which plans to convert the site to land with reserve status.
That process is possible under federal policies that are part of land claims.
The economic significance is two-fold: it would afford the venture lower property tax rates, and it would mean the bulk of revenue would return to Metepenagiag for investment in more economic development.
"We're attracting business and jobs to Miramichi that wouldn't otherwise be attracted here," said Augustine.
"Those are the tools we're using. Like any other government, we're creating incentives.
"But we're doing it very carefully with the full cooperation of the municipality."
He said an agreement with the city of Miramichi for the municipal services to the site would provide revenue directly to its coffers as well.
Metepenagiag is pursing economic development to secure a revenue stream into the community, but "in pursuit of that, we don't have to be greedy and pursue it all for Metepenagiag.
"There's an opportunity to share in the revenues.
"We're into this as a win-win situation."
Augustine said he has received written assurances from Premier Shawn Graham that the announced $4.75-billion purchase of NB Power by Hydro-Quebec will pose no obstacle to the project.
Metepenagiag has formed new joint venture company, Northumberland Energy Corporation, with two partners.
The partners are:
* Newlook Industries Inc. of Toronto, a publicly traded company listed on the TSE Venture Exchange (TSXV: NLI), whose chairman and CEO John Simmonds has a 40-year business career creating or acquiring several corporations, including golf course giant Clublink (founder) and is also involved in casinos and horse racing. Newlook is moving out of wireless technology investments into green energy.
* Sunbay Energy Corporation, an energy project development company formed in 2007 to build and operate plants like this one in Canada. Sunbay is pursuing permits to build a 20MW plasma gasification plant in Port Hope, Ont. and another in Chapleau, in northern Ontario, that would use wood fibre biomass as its feedstock.
The financing for the Miramichi project will come from debt and equity investors, said Sunbay's Jordan Oxley.
Sunbay will provide development funding for permitting, options and preliminary engineering from its own resources.
Project finance will come in perhaps six to nine months.
Banks, other investors and the technology providers will all likely play a role.
The power purchase agreement will be key to securing final investment decisions.
"It's like a bankable document" because it guarantees a long-term source of revenue, he said.
The technology comes from Europlasma SA.
The publicly traded company (on the NYSE Alternext for small and medium-sized companies) is based in Bordeaux, France.
A group of four companies, Europlasma was begun in 1992 by former aerospace engineers involved in creating plasma torch technology. They now have 260 employees. The company has proposed or built similar plants in Portugal and Wales.
Europlasma's various plasma-torch facilities reached one million operating hours in 2007.
Augustine credited Miramichi economic development officer Jeff MacTavish and Gary Wood, executive director of the First Nations Business Liaison Group, with linking up Metepegagian with Sunbay.
Augustine co-chairs the liaison group with well-established Fredericton businessman and former MP Bud Bird.
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