Nelson Hydro has cancelled its proposed $6-million development of a district energy heating system in Nelson after studying the possibility for 10 years.
The city now says the project has become too financially risky, even though much of the funding was expected to come from grants.
The biomass energy project would have seen waste wood from forests in the region trucked into Nelson to a biomass boiler that would use advanced combustion technology to produce heat for downtown buildings.
Development would have involved facility construction, retrofits to heat the buildings and the supply lines to connect them, as well as procurement, management and transportation of waste wood supply.
“The intention was, we’ve got all this biomass in the area and maybe there is an opportunity to use it,” said Nelson Hydro’s general manager Scott Spencer.
“But we’re at the point now where I needed to make a decision on whether we needed to continue … We took a hard look at it this year. Biomass has a huge risk associated with it, with all the other big projects that have been discussed regionally.”
He was referring to projects such as such as REN Energy’s Renewable Natural Gas facility in Fruitvale and Mercer’s Biomass Gasification project in Castlegar, and suggesting that perhaps biomass energy is a job for the private sector.
The energy produced by a city biomass project, Spencer said, could end up costing more than the natural gas it was intended to replace. And he said the net amount of greenhouse gas reduction might be less than expected and may not justify the project cost estimates.