People may have noticed a lack of activity on the site planned for the The Fort Energy project on Tachie Road.
The bioenergy plant, which would burn wood waste to produce electricity, planned to start construction this spring has been pushed back at least a year, but according to Western BioEnergy Director Harvie Campbell, they still hope to go ahead.
European markets and booming oil and gas in Fort MacMurray are both factors in the delay, but not the only ones, according to Campbell.
“I think it’s just normal development delays,” he said. “I would expect that it would be spring of next year (to be on site constructing).”
Part of the delay he said is due to some decision-making which needs to take place involving choosing the specific boiler and turbine to be used. The equipment will be used in both the Fort St. James plant and a Merritt plant, where the company was approved to build a plant essentially a “carbon copy” of the one planned for Fort St. James. The Merritt plant is similarly delayed.
Another aspect of the delay has to do with capital construction costs and securing a contractor.
Construction of the large bioenergy plants requires similar construction expertise and equipment to that used in the Fort MacMurray-based oil industry. Therefore, with the booming oil and gas industry, demand is making these companies harder to secure.
The European economic troubles creating uncertainty in the markets has also made financing more difficult for these types of projects, according to Campbell. He expects the project to be financed for approximately 70 to 80 per cent of the capital costs, which he said is normal for these types of projects.
Campbell said the goal is to secure the financing by December of this year, with on-site construction then aimed for spring of next year, once the snow is off the site.
Hiring of employees would take place after construction began.
Operation of the plant would begin 24-27 months after construction begins.
Western BioEnergy Inc. is 20 per cent owned by Dalkia, which will also be the operator of the plant, and 80 per cent owned by Fengate Capital out of Toronto.
Both the Merritt and Fort St. James projects will produce about 40 megawatts of electricity, and use wood waste which would otherwise be
left in the bush, or burned in piles.
Previous stories on Fort St. James bioenergy plant: