Peat Fuel

PEAT FUEL

Peat is a sustainable resource that can contribute significantly to Ontario’s economy and help reduce carbon emissions from coal burning power stations.

Peat in northern Ontario has an allowable harvest potential of 8.8 million dry tonnes per year. This is determined using Ministry of Natural Resources methodology (for wood harvesting) based on harvesting only new annual growth¹ and leaving the growth capital in place. From data published by the Ministry of Energy, 8 million tonnes of peat fuel can generate 3200 MW of electrical power at 8 cents (or less) per kWh. For example, peatlands held under permit by Peat Resources Limited in northwestern Ontario contain sufficient fuel-grade peat to supply the Atikokan and Thunder Bay Generating Stations for more than 20 years.

Wet peat harvesting is an ecologically sound way to manage peatland ecosystems. Wet peat harvesting is a new process for harvesting fuel peat and eliminates the problems caused by dry peat harvesting. In Canada, 1.2 million tonnes of peat for horticultural use are harvested annually² by draining peatlands to permit the drying of peat for dry harvesting methodologies. The wetland function of the bogs is permanently eliminated. In contrast, wet peat harvesting, as developed by Peat Resources Limited, does not drain peatlands. The wetland functions are maintained and through careful land use planning the bogs can be restored for other uses. Wet harvesting permits peat ecosystems to recover quickly after harvest and application of ecological rehabilitation approaches allows the wetland to begin accumulating carbon within 2-3 years.

Managing peatlands has a positive impact on the provincial carbon budget. Fuel peat is decomposing plant material under an active layer of living Sphagnum moss. Peatlands accumulate carbon by fixing atmospheric carbon dioxide through photosynthesis in the active layer. As proven by our comprehensive field research, peatlands with a high water table emit methane gases in excess of absorbed carbon dioxide. Methane is a greenhouse gas with 23 times the greenhouse warming potential of carbon dioxide. Therefore, removing fuel-grade peat from peatlands with high methane emissions leads to a net overall reduction in greenhouse gas emissions. More importantly, the process can generate additional carbon offset credits especially when plant growth is restored after harvest.

Burning peat fuel can lead to carbon offsets. Under ISO 14064, as defined by the Canadian Standards Association, material used to displace coal can generate carbon credits³ . Peat, when harvested using wet harvesting methods, may generate carbon offset credits under cap and trade systems. These credits are that much greater if the fuel peat is harvested from ecosystems where greenhouse warming gases are significant because of high methane emissions. Peat Resources Limited is the only company in Canada to measure methane emissions for its proposed harvesting sites⁴ . Use of peat fuel therefore provides additional and cumulative economic benefits.

Peat is an economically better fuel than wood fibre. Peat fuel can be used directly as a substitute for coal in power generating stations⁵ . In contrast, wood pellets require new technology for handling and processing as well as extensive retrofit of existing coal burner systems. The current downcycle of the forest industry has led to the freeing of some wood resources but not enough to support economically the demands of Ontario power generation. There is also a need to protect wood assets to support the forest industry during the next economic upswing. As a study commissioned by the Government of New Brunswick shows, diverting forestry resources to wood pellets offers the least economic benefit as compared to other fibre usages⁶ .

Fuel peat supports local economies. Currently, lignite coal for OPG’s generating stations is purchased from Saskatchewan and Wyoming. It is brought to the end users by ship and by rail. Every tonne of coal purchased exports at least $44 outside the Ontario economy. Every tonne of peat harvested and processed in Ontario adds $150 to the Ontario economy through economic multiplication factors. A 1.5 million tonne per year peat fuel production operation in northwestern Ontario, which would satisfy the biomass fuel demand of the Atikokan and Thunder Bay Generating Stations, would generate over 200 new permanent direct local jobs and annually inject $225 million into the economy of northwestern Ontario.

¹ According to Ontario government inventories there are around 20 billion dry tonnes of fuel grade peat in 22 million ha of peatlands that, on average, accumulate carbon at the rate of 20 g of Carbon m-2 yr-1. Given that peat is 50% C on a dry basis, peatlands in Ontario accumulate roughly 8.8 million BDT/yr. Therefore, 8.8 million BDT/yr would be the provincial annual allowable harvest (AAH).
² www.peatmoss.com
³ www.csa.ca/products/environment/Default.asp?articleID=8686&language=english
⁴www.peatresources.com
⁵www.energy.gov.on.ca/english/pdf/electricity/Atikokan_report_2006.pdf
⁶ www.gnb.ca/cnb/Promos/Forest/pdf/RobertsReport-e.pdf

Peat is partially decomposed plant remains in shallow bogs, occurring most abundantly in cool temperate regions of the northern hemisphere. Peat fuel is derived from the more decomposed (humified) peat layers in the bogs.

Canada contains over 170 million hectares of peatlands, the largest area of any country, and about 40% of the world’s peatlands. Finland with 10 million hectares and Ireland with only 1.2 million hectares have flourishing peat fuel industries.

In Europe, peat fuel is produced in Finland, Ireland, Sweden, Latvia, Estonia and Lithuania with average annual production exceeding 3,200 ktoe (thousand tonnes of oil equivalent). The industry employs over 16,000 people and the annual value of peat fuel sales is about 400 million Euros.

Peat fuel has a variety of applications for power generation and heating purposes.

large scale (> 100 mw) electricity generation stations (operated extensively in Ireland, Finland and Eastern Europe);
medium scale (20 – 100 mw) biomass power plants and co-generation industrial facilities;
small scale (< 10 mw) district energy and heating systems in remote communities of Northern Canada;
pellet stoves for home heating that are increasing in popularity in North America.

Peat fuel can be produced at a range of energy values (determined by moisture content) and in the form of granules, briquettes or pellets depending on customer needs and the distance and mode of transportation of the product.

Peat fuel has many environmental and economic benefits:

low sulphur content
minimal mercury content
low ash content
energy values equivalent to coal
less expensive than oil and natural gas and price competitive with other biofuels
minor engineering retrofit needed when substituted for, or blended with, coal
source of local employment and regional economic development in areas disadvantaged by weakened forestry sector

Peatlands harvested by the Company’s unique wet harvesting system can be easily and quickly restored as functioning wetlands. The wet harvesting system permits progressive rehabilitation of the production field so that only a relatively small area of peatland is impacted at a specific time. This minimizes dust concerns and allows careful hydrological monitoring and water management to reduce effects on local drainage systems.

Peatlands are natural biological systems that are undergoing continual growth. Therefore, peat fuel is a sustainable biomass fuel.

Government of Ontario Regulation 116/01 (Environmental Assessment Act, Electricity Projects) defines peat as biomass.
At its 25th session (April 2006), the International Panel on Climate Change (IPCC) proposed that “peat” should not be considered as a “fossil fuel” and should be placed in its own fuel category. The IPCC agrees that there is a considerable difference between peat and fossil fuels.
In its December 2006 resolution on a strategy for biomass and biofuels, the European Parliament includes “peat” as a long-term renewable energy source for biomass and bioenergy production.
The Canadian federal government’s Clean Energy Canada website defines peat as a solid biofuel together with wood and wood-waste.
Peat fuel may be considered CO2 neutral and could be a cap and trade offset within various climate change mitigation schemes currently under development.

Air monitoring has confirmed that, in their natural state, peatlands of northwestern Ontario are a carbon source due to methane emissions. After harvesting and restoration, the new wetlands become a carbon sink due to more actively regenerating surface vegetation. The harvesting/restoration process produces a net greenhouse gas emission reduction.

Peatlands are widely distributed across all Canadian provinces. Ontario has Canada’s largest area of peat accessible to national transportation systems. The most prospective areas, close to markets and transportation, lie well south and outside the Far North Boreal Planning region proposed by the Ontario government.