Hillsborough announces coal generation project
COMMENT:The push from industry and government to build BC's first coal-fired generation plant has been building since the Liberals became the provincial government in 2001.
Hillsborough Resources first proposed a coal generation plant at its Quinsam Mine in Campbell River not long after. There's no reason to suppose Hillsborough has abandoned the Quinsam project. This new project, AESWapiti, in BC's northeast, is unrelated, however.
It is BC Hydro's F2006 Open Call for Power that has drawn the announcement, and this probably won't be the only coal project pitched into the F2006 Call. Other companies to watch include Compliance Energy, Northland Power, Westhawk Developments, and perhaps even Teck Cominco, Fording Coal, or Elk Valley Coal Corporation.
F2006 Call for Power: 48 bidders, 81 projects
British Columbia does not need coal-fired power. Conservation and efficiency improvements will enable the province to flourish for a number of years before our real power needs can be met only by new generation. However, additional generation is going to happen. The new energy plan, under development now, will respond to reports by the BC Progress Board, the BC Competition Council, BC Chamber of Commerce, etc., calling for provincial self-sufficiency (read, more generation capacity).
Hillsborough will argue that coal generation is clean. But coal is not clean. Nowhere does a coal generation plant match natural gas, for example, for emissions. The AESWapiti project will likely only be as clean as it needs to be to meet provincial emissions limits. In other jurisdictions, however, projects that are being built often exceed regulatory emission levels.
Don't expect anything like that with this project. It is too small to cost justify the pricey investment required to obtain today's "best available control technology" (BACT).
As for greenhouse gases, coal emits roughly three times the CO2 as does natural gas to produce the same amount of electricity. This plant will emit about 1,500,000 tonnes of CO2 per year. Recognizing this, the BC Utilities Corporation will slap an "adder", a surcharge, on the cost of coal-fired electricity of $10 per tonne of CO2. For the AESWapiti 165 MW plant, that will result in an additional operating expense of about $15 million dollars a year.
Though the fuel is cheaper than natural gas, the plant is expensive. AESWapiti will cost about $350 million, about the same as Duke Point. Yet AESWapiti will have a capacity of 165 MW compared to 250 MW for Duke Point.
Coal hasn't made the cut yet in a BC Hydro call. In the past it was because of cost or because it could not guarantee 97% up-time. This time, expect that Hillsborough has read the call requirements closely, and will leave no Ts uncrossed and no Is undotted.
April 7 is the deadline for submission of tenders in the F2006 call. Following that, BC Hydro will release some details of projects and bidders.
EAO Wapiti project site
Project Description
Hillsborough Resources
News Release
For release: March 20, 2006
Hillsborough Resources Limited (TSX: “HLB”) is pleased to announce a proposal to develop an energy generation project in Northeast British Columbia with AES Pacific, Inc., under the name AESWapiti Energy (“AESWapiti”). The energy generation project would include a 165 MW thermal electric power plant and a 35 kilometre, 230 kV transmission line, and would have a contemplated project life of at least 40 years. Fuel for the energy generation facility would be supplied by the Wapiti coal mine operated by Hillsborough. The Wapiti coal property is located between Tumbler Ridge and Dawson Creek in Northeast BC, adjacent to the Heritage Highway.
BC Hydro is seeking new sources of energy, including power from independent power producers, and AESWapiti is now submitting a bid under the current BC Hydro call for power production tenders. AESWapiti is also entering into the Environment Assessment process in support of this bid submission. In this regard, it has commenced information meetings in Northeast BC, and is submitting a Project Description to initiate the process.
Hillsborough Resources Limited is a coal mining company that operates the Quinsam underground thermal coal mine in Campbell River, British Columbia serving the local and west-coast U.S. cement industry, and the Crossville underground coal mine in Tennessee serving the regional power utility and industrial markets. We are also developing substantial metallurgical coal properties near Tumbler Ridge in Northeast British Columbia, as well as the Bingay Creek metallurgical coal project in the Elk Valley region of Southeast British Columbia.
"David J. Slater"
President & Chief Executive Officer
For further information, please contact:
David Slater, President & CEO
Telephone: (604) 684-9288
Fax: (604) 684-3178
This release may contain forward-looking statements regarding the Company's business or financial condition. Actual results could differ materially from those described in this news release as a result of factors including but not limited to the following: re-assessments of corporate or development objectives and requirements; additional technical developments and considerations; unexpected increases in the costs of producing coal, changes in international coal or transportation markets, a rapid change in the value of the Canadian dollar particularly with respect to the US dollar, a fundamental slow down in the North American, Asian or worldwide economies; and other factors.
Hillsborough Resources news release, 20-Mar-2006
AES
AES is one of the world's largest global power companies, with 2004 revenues of $9.5 billion. With operations in 26 countries on five continents, AES provides power to people in more countries around the world than any other company. Through 129 generation facilities and 14 regulated utilities, AES has the capacity to generate 44,000 megawatts of electricity and provide power to 100 million people worldwide. Our global workforce of 30,000 people is committed to operational excellence and meeting the world's growing power needs. To learn more about AES, please visit www.aes.com or contact AES media relations at media@aes.com.
Hillsborough Proposing Coal-Fired Plant In B.C.
Energyanalects
20 March 2006
Vancouver-based Hillsborough Resources Limited reports it is involved in a proposal to develop a coal-fired generation project, with AES Pacific, Inc., in northeastern British Columbia.
The project would be developed under AESWapiti Energy name and involve constructing a 165-megawatt, thermal, generating plant and a 35-kilometre, 230-kilovolt transmission line as part of the BC Hydro and Power Authority call for power process, Hillsborough said.
The company indicated fuel for the generating facility would be supplied by the Wapiti coal mine operated by Hillsborough, adjacent to the Heritage Highway between Tumbler Ridge and Dawson Creek in northeastern B.C.
Hillsborough said BC Hydro is seeking applications from independent power producers (IPP) and that AESWapiti would be submitting a bid under the current call for power process.
According to Hillsborough, AESWapiti is also starting the environment assessment process in support of this bid submission. In this regard, it has commenced information meetings in northeastern B.C. and is submitting a project description to initiate the process.
Besides Wapiti, Hillsborough operates underground thermal coal mines at Quinsam near Campbell River on northeastern Vancouver Island, serving industrial markets, as well as Crossville in Tennessee, providing regional power utility and industrial activity.
http://www.energyanalects.com/
Coal-fired power plant proposed for B.C.
Scott Simpson
Vancouver Sun
March 21, 2006
British Columbia may soon join the rest of the world in burning coal to generate power.
A Vancouver-based coal-mining company announced Monday a $350-million proposal to build a coal-fired electrical generating plant in northeastern B.C. in answer to BC Hydro's recent call for new sources of electricity.
Hillsborough Resources and a subsidiary of U.S.-based multinational utility company AES are proposing to develop a 165-megawatt thermal power plant that would represent a fundamental change of direction for meeting B.C.'s growing electricity requirements.
The plant would be supplied by thermal coal from Hillsborough's Wapiti coal property northeast of Tumbler Ridge.
Since 2002, Hydro has rejected five private-sector bids -- including two from Hillsborough and one from Teck Cominco -- to build coal-fired plants to feed the provincial electricity grid.
In those instances the projects did not directly conform to the requirements set out in a series of Hydro calls for tender, while a handful of other calls were restricted to so-called green energy such as run-of-river hydroelectricity.
However in Hydro's most recent call, announced last December, none of the project requirements set out by the Crown corporation would specifically disqualify coal-fired generation.
Hydro is seeking 2,500 gigawatt hours of baseload or 'firm' energy to get B.C. back to a position of independence from outside supply.
That requirement excludes seasonal and intermittent green sources such as wind and run-of-river power -- although it is separately asking for green sources to supplement new baseload supply.
Coal is the most common energy source for electricity in North America, cheap and easy to develop albeit with a significant toll to pay in terms of degraded air quality.
B.C.'s reliance instead on a sprawling system of dams and hydro electricity reservoirs has long made this province a North American anomaly.
But Hillsborough president and CEO David Slater noted that B.C. has nearly reached the limit of its ability to develop large-scale hydro and is already importing about 14 per cent of its power from other jurisdictions such as Alberta that depend heavily on coal.
Hillsborough Resources said in a news release that the proposal would be developed in partnership with AES Pacific Inc., under the name AESWapiti Energy.
The project would include a 35-kilometre, 230 kV transmission line, and would have a contemplated project life of at least 40 years, the release said.
Both the B.C. government and the BC Competition Council have stated support for development of coal-fired power.
In an interview, Slater said Hillsborough is in the process of contacting local and regional governments and first nations in the vicinity of its proposed project, and plans to submit a formal bid to Hydro before the call for tenders closes on April 7.
"I think the biggest obstacle is probably going to be BC Hydro," Slater said. "They are going to have to get their heads around the fact that there is a clean way to burn coal."
Bob Stobbs, executive director of the Canadian Clean Power Coalition, said coal-fired generation technology has made huge gains in recent years in terms of reduced emissions.
Stobbs pointed to Epcor's Genesee Phase 3 project in Alberta as a model of a modern coal plant that uses higher burning temperatures, fabric filters and desulphurization flues to bring emissions down to levels comparable with natural gas-fired generating plants.
"The technology is out there and it's evolving all the time. Coal is no longer dirty," Stobbs said.
Posted by Arthur Caldicott on 21 Mar 2006