There's a lot of steam in Welland.

It's used to heat buildings.

It's created when water is used to cool molten metal in Welland's steel plants.

But that steam is capable of doing a lot more.

Why not put it to work, driving the turbine of a generator, churning out power that can be used locally or sold into the provincial electrical grid?

It's one of several options that are available to the city when it comes to the development of co-generation projects.

Those options are being considered by Welland Hydro- Electric System Corp.'s president, Ross Peever, who is leading the city's investigation of ways to produce made-in- Welland electricity.

It's a matter of looking at resources available within the city -- and finding a way of harnessing them for power generation.

With the Welland Recreational Canal flowing through the middle of the city, water is one resource the city has in abundance. A lot of that water is already used to produce steam.

"It's used for processing within an industrial site. Or it could be used for heating buildings," Peever said. "The arena is an example. They have a steam component to their operations. They use a boiler for heating, making ice and all those wonderful things."

The hospital also has a large boiler for heating the building, he added.

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In co-generation, steam-- which Peever called a "steam host" -- is also used for generating electricity.

"You can try to bundle up those hosts if they're in close proximity, and then you can produce energy and sell it into the grid."

Mayor Damian Goulbourne said existing companies such as Lakeside Steel and MMFX could play a role in the generation of local electricity.

Those companies, he said, produce a lot of heat as a byproduct of the steel they produce.

"That heat could produce steam which could then be used as a source for a co-gen operation," he said. "We have the tools to actually do something innovative."

But steam is just one way to create electricity here in the city.

Methane gas is another substance Welland has in abundance.

"There's biomass, biofuels -- that would be the methane at the landfill site, but there are other biomasses here. There's compost that's available," Peever said, referring to compost manufacturer Universal Resource Recovery.

"There's something there that could be utilized," he said. "That's a potential and it's an opportunity."

Goulbourne concurred.

"Biomass is an area we think we can have a bit of niche in," he said.

"We're really uniquely positioned because we have Universal Resource Recovery, which is an organics treatment facility. And we have the Humberstone landfill, which produces methane gas."

Paul Grenier, a Ward 3 city councillor and business development manager for Universal Resource Recovery, said the company is very interested in working with the municipality where it comes to using its products for biomass power generation.

"We could be a very good ally," Grenier said. "If that becomes an opportunity we are well-positioned to provide feed stock."

He said the company has already had "very preliminary" conversations with Welland Hydro and city representatives regarding power generation.

There are other potential sources of electricity for Welland to tap into -- including sunlight. But it might not be as feasible. Solar power requires a large area of land to make a solar energy plant worthwhile. And because so much land is required, Peever said "the land has to be cheap."

Welland Development Commission recently identified cogeneration projects as a priority for job creation in the city. As part of that, the commission recommended spending $130,000 for the development of such projects.

Goulbourne said opportunities the city is now exploring stem back to a decision made years ago in city council chambers.

At a time when communities across Ontario and beyond were considering selling or leasing their electrical utilities, Welland chose to hang on to Welland Hydro.

As a result of that decision, the city-owned utility can lead the way towards development of co-generation projects, under the direction of the utilities board of directors headed by Tim Clutterbuck.

Goulbourne said Welland Hydro board members will team up with members of the Welland Development Commission, industry leaders and representatives of Niagara College to form a task force to determine ways of taking advantage of the city's energy-production assets.

Provincial legislation in development is also helping drive the plans forward.

Peever said the proposed Green Energy Act includes several initiatives for the development of power generation alternatives that are less harmful to the environment than coal-or nuclear-powered generators.

For one, he said the act would make it easier to establish green energy generation projects, by reducing red-tape involved in setting up new power stations.

Energy Minister George Smitherman is trying to allow projects to get underway in a reasonable amount of time, Peever said.

If the act is approved, Peever said it will make the city's plans for developing co-generation projects "more feasible."

The provincial government anticipates the act will help create about 50,000 Ontario jobs in its first three years -- according to information provided by the Ministry of Energy and Infrastructure.

Goulbourne is confident the legislation will help make Welland a lot more attractive to new industry, as well as the city's current industries.

That's welcome news to Rick Alakas, president of Canadian Auto Workers Local 523.

"I'm a very big supporter of co-generation," said Alakas-- who represents workers at several Welland industries that could benefit from co-generation projects.

Alakas, who is also a Ward 1 city councillor, called co-generation a way for existing industries to reduce energy costs, as well as an opportunity to lower capital maintenance costs through increased energy efficiency. Local 523 represents workers at both MMFX and Lakeside Steel. He said both plants are large users of water and electricity.

"I believe co-gen is an opportunity for both industries, and other industries in town, to find a way to reduce their overall operations cost," he said. "When you do that, it gives you some footing and a bit of an advantage over some of your competitors."

Peever also sees opportunities for the city by tying other initiatives into plans for local power generation. For instance, he said a co-generation project could make use of post-industrial or brownfield properties throughout the city.

It could allow project proponents to take advantage of incentives already in place for the redevelopment of former industrial property.

Said Goulbourne: "If you can locate it on a brownfield, we have a couple brownfields that are strategically located along the canal, and we can also add geothermal to that process."

The latter reference was to technology that could use the temperature of deep water to help create heat.

Although the environmentally friendly energy could be more expensive to produce, Peever said the dividends the city receives from the sale of locally produced power will mean lower taxes.

But there are other ways local industries and residents would benefit.

For instance, he said local industries could develop their own co-generation projects not connected to the provincial grid. The locally generated energy could allow industries to power their facilities without buying electricity from Welland Hydro.

"That would certainly reduce your energy costs," Peever said.

Local industries could also get involved in a co-operative with Welland Hydro and the city, and earn additional income from the sale of electricity produced through the co-operative to the grid.

Welland taxpayers could also reap benefits of city-run power generation projects through property-tax reductions, because the city would have an additional source of revenue.

Green energy projects, he added, could also mean "all kinds of spinoff jobs" being created.

"Let's look at biofuel as an example. We could get into research and development on it, and you could have an incubator and some pilot projects going on, and spinoffs that could occur on that side."

Goulbourne said attracting new green energy-related industry to the city is one potential spinoff that could result from co-generation projects. "Once we've built up our reputation as being leaders in this area, we also want to get into the manufacturing of green industry technologies," he said.

If the city can establish biomass and co-gen operations, Goulbourne wondered if people will also think about Welland as a place to manufacture the equipment needed for those technologies.

"We've got the skilled labour, and we also have the college," he said, noting Niagara College plans to establish new green industry-related programs in the near future.

"You put that together and we can actually have these facilities that produce clean energy, and we will have the facilities to manufacture it."

Goulbourne said money set aside for co-generation by the development commission will also be used to attract new green industry to the city.

Peever said bringing co-generation projects from the planning stage to reality isn't far into the future.

"There are people looking at co-gen or generators right now," he said. "They'll have to develop their business case on it, and that could be fairly soon."

But other projects will need to await the provincial approval of the Green Energy Act, which Peever expects that will be enacted later this spring, likely in May.

Goulbourne said the city's strategy will be announced in the near future -- within a few months.

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