Metro Vancouver’s garbage incinerator in south Burnaby is being forced to retool because it can no longer sell steam to an adjacent industrial plant.
The Norampac linerboard mill – which was the only buyer of steam from the waste-to-energy plant – will close down in December, parent firm Cascades Inc. announced.
That means Metro must upgrade the incinerator at a cost of $4.2 million to turn all of the steam it generates into electricity for sale to the power grid, Metro utility planning manager Toivo Allas said.
The incinerator burns 285,000 tonnes of garbage per year and about a third of the steam produced was piped next door to Norampac.
Selling steam was more lucrative than selling electricity, so the conversion will cut into Metro’s revenue.
The region earned $11 million from the waste-to-energy plant last year and senior engineers say that will drop to about $7 million next year because of the loss of steam sales.
They expect revenue will rebound, but how much depends on Metro securing a higher electricity rate from BC Hydro when the power sales contract is renegotiated in 2013.
Metro hopes most of the electricity output from the incinerator will be counted as green energy and fetch a higher price under B.C.’s Clean Energy Act.
Right now about 63 per cent of the electricity would qualify because it is derived from organic and other non-fossil fuel sources.
The region has also considered building a pipeline to carry hot water eight kilometres west to heat a huge housing development being built in southeast Vancouver.
The challenges selling steam may provide lessons for Metro as it plans to build new waste-to-energy plants to handle an extra 500,000 tonnes of garbage that the region will stop sending to the Cache Creek landfill.
Officials hope any new plant or plants can be located where they can tie into a district energy system serving a cluster of buildings or industries, rather than be tied to a single customer.
The extra revenue versus just generating electricity could save taxpayers hundreds of millions of dollars over the life of the plant, Metro has estimated.