PORT ANGELES — Nippon Paper Industries USA plans a $71 million “green energy” cogeneration plant for its Port Angeles mill.
The project includes a new state-of-the-art steam boiler and a turbine generator which would make the company more efficient, reduce overall air pollution and produce 20 megawatts of energy from forestry biomass — residue from local timber operations — that would be sold to power companies.
It is also expected to create more than 20 jobs in the forest industry.
The project was announced Friday by Harold Norlund, Port Angeles mill manager, after it was approved by the board of directors of Nippon Paper Group, Nippon USA’s parent company in Tokyo.
“Today we announce the investment of $71 million in our community,” Norlund said in a statement.
“The cogeneration of steam and electricity from this project will take our business to a new and more sustainable level and allow us to continue to improve our paper making business,” he added.
Norlund said that the plant would create more than 20 new jobs “through the harvesting of forest residual biomass that would otherwise be left in the woods or burned in slash piles.”
The biomass fuel would come from throughout the North Olympic Peninsula, he said.
In addition to the forestry jobs, Norlund said, “the project will result in design and construction jobs in foundation, boiler and building construction at the Port Angeles mill” during some 18 months of construction.
The almost 200-employee Port Angeles mill — which makes paper used for telephone books, other custom paper and newsprint — expects to begin construction later this year after necessary environmental studies have been done and state and local permits have been approved.
The mill now uses steam from one large biomass boiler, two smaller oil-fired boilers and an electric boiler.
The main boiler was built in the 1950s, Norlund said.
The new equipment would be capable of being powered by 100 percent biomass, and would produce more steam than the previous one, enough to supply the paper mill and a 20- megawatt turbine generator.
The boiler and other equipment is expected to be ready for testing in the second quarter of 2012.
The project would add a 5,000-square-foot boiler building and another 5,000-square-foot building to house the turbine generator, as well a 3,000-square-foot building to house air pollution control equipment that has a stack serving as an exhaust for the boiler fire.
Once power generation shifted to the new equipment, “that big vapor plume that you see will be gone,” Norlund said.
Perhaps the most striking aspect of the additions would be a 14,000-square-foot triangular building for storing biomass fuel.
The shape would minimize dust buildup, Norlund said.
Board approval was the first hurdle in realization of the project, Norlund said.
Now, the company — which has spent more than $500,000 on design by Amec in Vancouver, B.C., and on feasibility studies — must focus on acquiring an air permit through the Olympic Region Clean Air Agency and other environmental permits.
“Air and environmental permits must be approved before we can continue to keep investing,” said Norlund, adding that the company has not gained any grants or loans for the project so far, although it hopes to apply for federal funds in the future.
A portion of the company’s $71 million investment is expected to be reimbursed to the company through federal grants, said Norlund, saying that there is a potential for up to 30 percent reimbursement.
So far, the company has been told it could be eligible for federal Department of Commerce money in the form of a $1.4 million loan and a $600,000 grant, once it signs a contract for the project.
The company has not applied for any grants or loans.
“There are lots of hurdles for us before that is available to us,” Norlund said.
The public comment period on a draft environmental impact study led by the city of Port Angeles closed last week.
The city will prepare a final draft after reviewing the public comments. The draft is available at www.cityofpa.us/.
The draft impact statement said that “the emissions of most air pollutants from the mill would be substantially reduced” because of state-of the art-air pollution controls.
Norlund said it is estimated that the new boiler would result in a 19 percent overall net reduction of pollutants from the company’s paper-making process, with significant decline in major pollutants such as carbon monoxide, particulate matter and sulfur dioxide.
Emissions of two pollutants would increase slightly, he said.
He said he expects a full payback of the company’s investment “over a reasonable amount of time” through more efficient, cost-effective operations and the sale of the biomass-fueled “green” electricity to power companies.
Potential customers would include local agencies such as Clallam Public Utility District.
“The power produced by this boiler will be sold as renewable energy that meets the requirements of the renewable energy portfolio standards passed in many states, including I-937 passed by Washington voters,” Norlund said.
The company owns its own electrical power lines for transmission of the energy.
Earlier this year, the state Department of Natural Resources selected Nippon as one of four Forest Biomass Initiative partners to use forest residuals from state lands for green energy projects on a pilot basis.
The Port Angeles mill has been in existence — owned by different companies — since 1920.
Nippon acquired the mill from another Japanese company, Daishowa America, when it bought Daishowa in 2003.
