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Ontario Power to shutter biomass plant 1 year ahead of schedule

Ontario Power Generation Inc. will shutter its Thunder Bay power plant, which was converted to biomass from coal operation in 2015, to stem increasing power costs for Ontario consumers.

The province-owned generator reached an agreement with the Independent Electricity System Operator to shutter the 306-MW plant at the end of this year, CEO Jeff Lyash said on an Aug. 9 conference call. In July the company and the grid operator "determined that operation of our Thunder Bay generating station, which runs on advanced biomass, will end on Jan. 1, 2019," Lyash said. "That's one year earlier than anticipated in the contract with the [Independent Electricity System Operator]. This action will save electricity customers [C]$40 million and it will avoid [C]$5 million in costs for [Ontario Power Generation, or OPG]."

The contract termination will not affect operations at the smaller Atikokan plant, which has a capacity of 205 MW and was converted in 2014. Atokokan's contract with the provincial government runs through 2024, Lyash said. Conversion of the coal-fired boilers at the plants was part of a provincial government scheme to lower emissions by burning wood pellets manufactured from waste at lumber mills. OPG will eventually decommission and demolish the Thunder Bay plant, which is located on the shores of Lake Superior in the northwestern part of the province.

Separately on Aug. 9, the company reported second-quarter net income of C$121 million, compared with C$303 million a year earlier. Its total electricity generation declined to 17.2 TWh in the quarter compared with 18 TWh in the second quarter of 2017. Maintenance and refurbishment work at OPG's nuclear plants and low water flows at its hydroelectric facilities contributed to the generation shortfall, Lyash said.

At the same time, OPG announced its acquisition of Eagle Creek Renewable Energy, a New Jersey-headquartered owner and operator of 216 MW of small hydro facilities primarily in the northeastern and Midwestern U.S. No taxpayer money will be involved in the US$298 million transaction, company officials said.

On Aug. 8 OPG announced that the Canadian Nuclear Safety Commission had extended its licence to operate the Pickering nuclear station through 2028. Under the license, Pickering will continue to generate power through 2024, then undergo four years of decommissioning activity.