Energy
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Extreme weather conditions in the Kildala Pass were among the factors that created challenges for Rio Tinto Alcan Primary Metal BC’s power operations during 2007 (Ralph Braun photo). |
Overview
Large amounts of electricity are needed in order to separate aluminum from the oxygen to which it is bonded in its natural form, and operational realities typically mandate ongoing production at relatively constant rates. Viable aluminum smelters therefore need access to cost-effective and continuously available energy, the environmental soundness of which is also of growing importance.
The Kitimat smelter meets more than 95 per cent of its energy needs with self-generated hydroelectricity. The Kemano powerhouse is a highly efficient generating facility, given a unique combination of landscape and hydrological features.
Self-generated hydroelectricity is carbon-neutral, and insulates Rio Tinto Alcan Primary Metal BC from the impacts of continued escalation in purchased energy costs.
Strategies and Initiatives
Hydroelectric generation at Kemano was lower in 2007 than in 2006, reflecting reduced powerline transmission capacity, and a maintenance-related generator shutdown. Each of these factors impacted power operations for several months (See “Power Ops and Reservoir Management”.) Natural gas usage increased while fuel oil usage remained essentially constant.
The casting area, while using a larger volume of natural gas, reduced its intensity of use by 20 per cent (MJ per tonne of production) in 2007, based on previous improvements in usage monitoring.
Overall energy-use intensity in the reduction area remained relatively high in 2007 at 18.62 kWh per tonne of production. This is, in part, a function of the age and inherent limitations of the technology currently in use at the smelter. Efficiency has been further impacted in recent years by raw material challenges.
While energy use intensity will be significantly improved by the modernization project, initiatives continued to be pursued in 2007 with immediate energy-efficiency benefits. This included ongoing implementation of an anode effects reduction program (see "Climate Change"); the implementation of a stud upgrade project; and the Kitimat High Amperage Low Energy Project.
Implementation of the Kemano Asset Improvement Program also continued, an objective of which is to improve the efficiency of energy generation per unit of water used. A targeted three per cent improvement was achieved during 2007, while future work will focus on improving the lifespan of powerhouse components.
Power Sales: New Agreement Puts Smelter First
Since the Kemano powerhouse has always produced more electricity than the Kitimat smelter requires, Rio Tinto Alcan Primary Metal BC has a long-standing practice of selling power in excess of the smelter’s needs to the provincial electricity utility.
The modernized smelter will consume virtually all of the firm power available from Kemano (that is, the amount of power known to be reliably generated on a continuous basis). But some power sales will continue, and the approval of a new energy purchase agreement had to be in place before the project was submitted for Board consideration.
A long-term agreement between Rio Tinto Alcan and BC Hydro (the 2007 EPA) was unconditionally approved by the British Columbia Utilities Commission (BCUC) in January 2008, after an earlier agreement had been rejected based largely on energy-pricing considerations.
A “smelter first” provision is a key term within the new agreement, and prioritizes the electricity needs of the smelter over power sales.
Power sales have been a point of contention with the District of Kitimat, the municipality within which the smelter is located. It unsuccessfully opposed power sales through two now-concluded legal actions and through interventions during the BCUC hearings.
During 2007, attempts were made to re-open a dialogue with the District in support of modernization, notwithstanding differences on the power sales issue. While this did not succeed, modernization and the power sales agreement have been supported by other municipalities, the Haisla First Nation, and local business interests.
