PPA extension for Atlantic Power’s Calstock biomass plant
Atlantic Power has shared updates on the status of the power purchase agreement (PPA) for its Calstock bioenergy facility in Ontario, Canada.
Calstock is an approximately 35 MW biomass plant in Hearst, Ontario, utilising wood waste. The PPA with the Ontario Electricity Financial Corporation, which had been scheduled to expire in June, was recently extended to 16 December on existing terms. According to Atlantic Power, the extension provides the provincial government extra time to evaluate the future role of the Calstock plant and biomass generation in the province.
Atlantic Power said it expects project adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) from Calstock in the period between July and December will be lower than in 2019, mainly due to an expected increase in fuel costs, as a result of lower production from local mills during the pandemic.
Joe Cofelice, executive vice-president of commercial development at Atlantic Power, said: “Market conditions are currently unfavourable for re-contracting in Ontario and California. These short-term arrangements provide the company with additional time to pursue longer-term contracting options for both plants.
“We continue to work with the provincial government and other stakeholders in Ontario to develop a longer-term solution that properly values the non-power benefit streams provided by Calstock.
“At Oxnard, our re-contracting effort has been negatively affected by reductions in electricity demand due to the coronavirus pandemic. We will continue to pursue re-contracting options for Oxnard for 2021 in the expectation that electricity demand will recover to pre-pandemic levels.”
Calstock is an approximately 35 MW biomass plant in Hearst, Ontario, utilising wood waste. The PPA with the Ontario Electricity Financial Corporation, which had been scheduled to expire in June, was recently extended to 16 December on existing terms. According to Atlantic Power, the extension provides the provincial government extra time to evaluate the future role of the Calstock plant and biomass generation in the province.
Atlantic Power said it expects project adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) from Calstock in the period between July and December will be lower than in 2019, mainly due to an expected increase in fuel costs, as a result of lower production from local mills during the pandemic.
Joe Cofelice, executive vice-president of commercial development at Atlantic Power, said: “Market conditions are currently unfavourable for re-contracting in Ontario and California. These short-term arrangements provide the company with additional time to pursue longer-term contracting options for both plants.
“We continue to work with the provincial government and other stakeholders in Ontario to develop a longer-term solution that properly values the non-power benefit streams provided by Calstock.
“At Oxnard, our re-contracting effort has been negatively affected by reductions in electricity demand due to the coronavirus pandemic. We will continue to pursue re-contracting options for Oxnard for 2021 in the expectation that electricity demand will recover to pre-pandemic levels.”
