Tolko Mill to heat up downtown Kelowna

(JULIE WHITTET / iNFOnews.ca)

October 01, 2013 - 12:15 PM

KELOWNA – Wood waste from the Tolko Industries saw mill will soon be a prime source of energy for buildings in downtown.

Energy generated from burning the wood waste will heat water piped below city streets and delivered to customers in the downtown core.

The hot-water based District Energy System was first proposed by FortisBC back in 2007 and today city councillors approved a definitive operating agreement for the project.

Initial construction will target the downtown area, laying underground pipes to service 16 customers including City Hall, Memorial Arena, Rotary Centre for the Arts and Prospera Place. Further build out south of Harvey Avenue would hook up to future developments like the Central Green site.

The system will be owned and operated by FortisBC Alternative Energy Sources, a subsidiary of FortisBC.

Because the system recovers heat from the mill, it would offset the fossil fuels burned by its power plant and act as a renewable source of energy.

FortisBC's strategic solutions manager Siraz Dalmir says the new system meets the city's sustainability targets by reducing greenhouse gas emissions by 80 per cent for downtown buildings and after two years of operation would be equivalent to taking 450 cars off the road.

Along with the $26 million investment, Dalmir says the system will generate a three per cent royalty for the city and create new jobs.

Hooking up to the system won't cost customers anything extra, he says. The rate will be equivalent to current energy costs but more stable, he says, not subject to the volatile price fluctuations experienced with natural gas.

While supportive of the District Energy System, city councillors were concerned about Tolko's long-term commitment to the project.

Coun. Andre Blanleil suggested the north end of town is likely to see high-density redevelopment in the coming years.

"A gas plant might not be popular in that area," he says.

Coun. Robert Hobson echoed those concerns.

“We need to be sure we have a place and technology to replace that energy.”

Tolko Industries has currently signed a 20-year agreement with FortisBC. Their backup plan would involve either relocating to a more industrial area or using an alternate fuel source, Dalmir said.

The project passed regulations set by the BC Utilities Commission in July of this year and now with city approval FortisBC will be finalizing service agreements with their future customers.

FortisBC has also put out a request for proposals for engineering designs, which closes this October.