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St. Marys Paper co-gen plant creates 555 jobs (6 photos)

By Donna Hopper
SooToday.com
Tuesday, November 09, 2010

NEWS RELEASES

DAVID ORAZIETTI, MPP

ONTARIO POWER AUTHORITY

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Orazietti announces $175 million biomass co-generation plant for St. Marys paper creating 555 jobs

Provincial governments renewable energy programs making Sault green energy capital

SAULT STE. MARIE, ON - The province and St. Marys Paper have reached a 10-year, 30-megawatt Power Purchase Agreement (PPA) that will enable the company to build a $175 million biomass-fuelled co-generation plant, creating 555 jobs announced David Orazietti, MPP.

The plant will generate enough power to operate the mill and excess energy will be distributed to the provincial electricity grid.

“Our government has provided loans for St. Marys Paper in order to protect local jobs and revitalize the forestry sector and this new provincial power agreement makes it possible for the mill to build a biomass co-generation plant, which will provide it with long-term stability and greater job security for its workers,” said Orazietti. “A biomass-fuelled co-generation plant creates a cost effective energy alternative that can supply the mill with enough power to be self-sustaining and positively impact the environment by decreasing green house gas emissions.“

The construction of the new biomass-fuelled co-generation plant will create 400 jobs and, once complete, the facility will employ 30 people and create an additional 125 jobs for workers collecting biomass fuel.

The co-generation plant will replace the paper mill’s aging boilers and allow biomass to be used as fuel in new state-of-the-art boilers, which are the first of their kind in Ontario and will decrease green house gasses.

“The provincial government’s support for a power purchase agreement is extremely important to the long-term viability of St. Marys Paper as it allows the mill to build a biomass co-generation plant that will provide a self-sustaining supply of energy that helps protect local jobs,” said Dennis Bunnell, CEO and board chair of St. Marys Paper. “Building a biomass co-generation plant will strengthen the local economy by creating 555 short-term and long-term jobs in the Sault and Algoma region and, once complete, allow the mill to more effectively transition to the bio-sector.” ‪

Today’s agreement is in addition to a recent funding announcement for an $8.8 million re-payable loan from the province’s Ministry of Northern Development, Mines and Forestry (MNDMF), which will enable St. Marys Paper to re-open and resume printing production in December, 2010.

In 2007, the Ontario government provided St. Marys with a loan of over $17 million for working capital to restructure and re-open, which brings total provincial support for the paper mill to $25.8 million.

The Ontario government has been the only level of government to support the workers and families at St. Marys Paper during the company’s past two restructuring efforts.

In response to challenges in the forestry industry, such as escalating costs and a high Canadian dollar, the provincial government, beginning in 2005, made $1.08 billion available to the forestry sector in Ontario through the Forest Sector Initiatives fund.

The province’s commitment to the forestry sector to update equipment and improve energy efficiencies is the largest-ever provincial investment in the forest sector in Canada.

Key provincial government investments that are transforming Sault Ste. Marie into the green energy capital of North America while also strengthening the local economy and creating jobs in the Sault and Algoma include:

- Ontario power purchase agreement to facilitate $400 million investment by Brookfield Renewable Power in 189 MW wind farm

- Ontario power purchase agreement to facilitate $250 million capital investment by Starwood Energy in 50 MW solar farm

- Ontario power purchase agreement to facilitate $175 million investment by St. Mary’s Paper in 30 MW biomass co-gen plant

- Ontario power purchase agreement to facilitate $135 million investment by Essar Steel in 70 MW co-gen plant – eliminating 400 tons of Nitrous Oxide

- Over $7 million to green Sault Ste. Marie schools including energy retrofits

- $6 million in provincial gas tax funding has reduced air emissions through increased public transportation ridership

- $3 million to Sault Ste. Marie and Region Conservation Authority for water protection

- $2.5 million for Heliene Canada to build a $6 million solar module manufacturing plant

- $2 million for Ellsin Environmental tire recycling project in Sault Ste. Marie

- $1.4 million to construct methane collection system at landfill to reduce greenhouse gases

- $135,000 to support SITTM Technologies biofuel project

- Certificate of Approval for Elementa’s innovative waste-to-energy project

- Introduction of Water Opportunities and Conservation legislation that will create high skills jobs and make Ontario an international leader in the water and wastewater technology sector.

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Clean energy project in Sault Ste. Marie

TORONTO (November 9) - The Ontario Power Authority (OPA) and St. Marys Paper Corporation have signed a 10-year contract for the company to generate clean electricity at a new biomass-fuelled plant to be built next to its existing mill in Sault Ste. Marie.

St. Marys Renewable Energy Corporation will operate the new plant, contracted to supply 30 megawatts (MW) of electricity.

About 555 direct and indirect jobs will be associated with the project, which is expected to reach commercial operation by early 2014.

The plant's primary fuel source will be biomass including bark and waste wood.

The heat it provides will be used in the mill's industrial processes, and the electricity that is not used by the mill will be sold to the grid.

"We are delighted to announce this contract," said Ontario Power Authority Chief Executive Officer Colin Andersen. "We recognize the strategic importance of this project to the mill and to Sault Ste. Marie, and we are glad we could reach an agreement that works for St. Marys and serves Ontario ratepayer interests."

"We want to thank everyone who has worked so hard on the project design, the application process, and the approval process," stated Dennis Bunnell, CEO of St. Marys Paper Corp. "The efforts expended to this point have been enormous. St. Marys is now in a position to step into the twenty-first century while looking confidently toward the future. We plan to finalize the funding and begin construction in 2011. Everyone involved in St. Marys is excited to be part of the province's renewable energy initiatives."

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