BIOENERGY PRESENTATION October 19, 2016
I NTRODUCTION TO P INNACLE With superior logistics: Canada’s largest wood pellet producer: • Private covered hopper fleet of 500 railcars In business since 1989, BAT • • Own wood pellet terminal, built to Operating 7 plants totalling 1,500,000 tpa • accommodate Panamax bulkers capacity • All mills inter-connected to 2 ports by rail • Well funded owners (ONCAP) • Long term freight COA’s in place The gold standard for sustainability: • Highly regarded delivery track record in • Located in BC’s rich fibre basket Europe and Asia • 60 million hectares of forest Winners of: • 95% of which is certified • BC Export Awards 2013 • PEFC Chain of Custody certified • Premier’s Award for Job Creation in 2013 • On track for SBP certification Pellet Plant Lavington Port 2
P LANT L OCATIONS IN THE S UBSTANTIAL F IBRE B ASKET OF B RITISH C OLUMBIA Legend Sawmills / Forest Products Pinnacle Plants PLANT CAPACITY 2016 Ports Houston (2006) 220,000t Burns Lake (2011) 440,000t Meadowbank (2008) 200,000t Quesnel (1988, 1999) 90,000t Williams Lake (2004, 2007) 220,000t Armstrong (2007*) 60,000t Houston Mill Lavington (2015) 270,000t Burns Lake Mill Meadowbank Mill TOTAL 1,500,000t Quesnel Mill TERMINAL CAPACITY 2016 Williams Lake Mill Westview (2013) 1,200,000t Fibreco (Contracted, Third Party) 750,000t TOTAL 1,950,000t Armstrong Mill Lavington Mill 3
P ELLET P RODUCTION AT A G LANCE PHASE IV Pinnacle Pellet complete manufacturing process Hog/Trees Grinding PHASE II Hammering PHASE III Sawdust Drying Green Hammering Shavings PHASE I Dry Conventional pellet manufacturing Screening Cooling Pelletizing Shipping 4
L OWEST R ISK W OOD P ELLET S UPPLIER IN THE W ORLD • Operating 7 pellet plants, producing 1.5 million tonnes of wood pellets • Situated in BC, one of the worlds most sustainable and plentiful fibre baskets • Having long term residual fibre supply contracts with diversified, senior saw- millers A pioneer in the diversification of feedstock (bark, sawdust, shavings, chips, • harvesting residuals and undersized logs) • Leveraging 25 years of production experience, proprietary equipment & technical expertise • With dual port, rail linked and panamax capable export logistics And strongly positioned for growth with ONCAP as an equity partner • 5
I NSTITUTIONAL H EATING Bulk truck deliveries into hoppers: • Education facilities, community centres, recreation facilities, prisons, hospitals, police, military and coast guard detachments, greenhouses. • Remote facilities often heated with oil or diesel if no gas installed 6 6
I NDUSTRIAL / CHP Bulk ship or rail deliveries into silo: • Carbon neutral alternative to fossil fuels • Often seasonal demand • Sensitive to logistics costs 7 7
R ENEWABLE E NERGY G ENERATION Full shiploads into storage facilities: • Co-fired up to 15% with coal • Dedicated firing with maybe 10% coal 8 8
P ORT OF V ANCOUVER • Fibreco Terminal, third party owned and operated • Capacity 45,000t silo and shed stored 9
P ORT OF P RINCE R UPERT • Westview Terminal, Pinnacle owned and operated • Capacity 50,000t silo stored 10
W ESTVIEW T ODAY Canada’s first shipping terminal designed specifically to handle wood pellets Design Features: Four corrugated metal 1 wood pellet storage 3 silos: 45 m tall, 27 m 3 diameter; 50,000 tonnes total capacity Enclosed belt conveyors 3 5 4 and bucket elevators 1 1 1 1 4 Dust limiting ship loader 5 6 Berthing dolphins to 5 secure ships Berth capable of 6 handling Panamax-class vessels up to 75,000 DWT
P INNACLE ’ S C USTOMER M IX
O UR PURPOSE - R ENEWABLE , L OW C ARBON E NERGY Primary Sunlight and heat Photosynthesis Lumber And Growth Carbon Sawmilling sequestration in wood products Waste Renewable CO ₂ Bioenergy Pellet Manufacturing Sawdust, shavings & bark Generator Fuel Wood Pellets 13
R ENEWABLES • We believe that we need all of the Renewables: Sun, Wind, Biomass etc. Each has their strengths and weaknesses: 1. Wind • Low capex and low maintenance costs • Not available all of the time (not dispatchable) • In the UK we have massive diesel generator “farms” to provide back up • “not in my back yard” 2. Solar • Low operating and maintenance costs • Not dispatchable and massive battery technology is still very expensive 3. Biomass Renewable, dispatchable and can be used in existing coal fired plants • • Not enough biomass to replace coal. 14
B IOMASS IS PART OF THE L OW -C ARBON F AMILY ALONGSIDE W IND & S OLAR Carbon Neutrality • Alberta has an abundance of CO2 Biomass. • Plants grow by photosynthesis - absorbing CO₂ and emitting O₂ . Mature trees and agricultural crops • are harvested, CO ₂ is sequestered. • Sawdust, bark, wood and agricultural residuals are gathered for pellet production and then burned cleanly for heat and electricity in place of fossil fuel. • New replacement trees and crops are planted. • A continuous and sustainable carbon cycle. 15
B IOMASS C AN R EPLACE C OAL IN E XISTING C OAL P LANTS • Financial incentive for private and government PPA owners to change the fuel source for these plants. Reduce fiscal costs. • Wood pellets have a high level of energy content consistency. • Conversion from coal to biomass can be achieved without a loss of firming generation capacity. Coal Wood Pellets 19 gigajoules per tonne 18 gigajoules per tonne 16
C HANGING THE TYPE OF FUEL AND REDUCING SHUTDOWN COSTS Coal plants can partly or completely be converted to biomass. By switching fuel in the existing plants you extend their life and reduce the shutdown costs beyond 2030. Reduces fiscal cost and creates jobs long term. 17
B IOMASS WORKS AROUND THE WORLD Biomass is a proven commodity in the production of Electricity around the world. 18
B IOMASS GENERATES J OBS Example of new construction in 2015 using Best Available Technology: • Facility footprint is small at only 2.0 hectares • Capacity 270,000 metric tonnes per year • Construction created 120,000 hours of employment • Full-time direct employment at the plant (excludes inbound and outbound logistics) of 25 individuals 19 19
A LBERTA Two main levels of opportunity : • Full scale conversion from Coal to Biomass • Co firing Coal with Biomass • Smaller scale community based generation is possible Policy Environment: • 2030 • Renewables Wind, Solar and Biomass: Biomass is dispatchable 20
B IOMASS POTENTIAL IN A LBERTA Excess wood fiber ~ 400,000 Oven-dried tonnes / Year: • Beehive Burners still in operation in Alberta (examples include: Tolko Forest Industries in High Level and Foothills Forest Products in Grand Cache) Stable and consistent use of residuals that are periodically utilized as absorbent • material during oil and gas exploration (market has all but disappeared) • Deciduous species is currently under utilized and would represent an incremental opportunity. Straw in excess of feed market ~ 9 million Oven dried tonnes / Year • Study by Ian Murray and Company of Edmonton • More work is require to understand the impact of straw on boilers and the mitigation strategies that would support the use of this feed-stock Power generation within existing grid infrastructure that can be dispatched on demand • Unlike other renewable energy sources like wind and solar that provides intermittent power supply, biomass generation can be dispatched in response to peak demands. • Capital cost efficiency is further enhanced by leveraging current gird infrastructure. • Stable Net Calorific Value of fuel – 18.2 GJ / Tonne Alberta’s existing rail Infrastructure is well suited to provide for cost and carbon efficient delivery of both “Made in Alberta” biomass solutions 21
O THER POTENTIAL 1. USA • Clean air act Biomass as a transition fuel in the “coal valleys of USA” • 2. China 3. India 22
B IOMASS AS A FEEDSTOCK 1. Transportation 2. Biofuels 3. Biochemicals 23
P ARIS A CCORD • Great step forward but not enough • Urge you to be responsible citizens in you daily life and an work • Commute to work on a bike • Turn down your heat or shut off the AC • Push your policy makers 24
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