Tuesday, May 26, 2009

Multiplex Connection to Community Energy System?

Council is having a special meeting this afternoon to consider designing the Aquatics Centre/Multiplex so it can be plugged into the Community Energy System (CES), which looks like it may now be a reality thanks to new funding announced last week.

The CES would generate steam from waste energy at the Canadian Hydro EcoPower Co-Gen plant at Canfor. This steam would then be piped across the city and be used to heat large public buildings. (Overview of the plan HERE) The catch was that Aquatera had until the end of 2009 to start taking steam.

The project has a long history, at least as long as I've been on council I think. Back in the day Ald. Carol-Lee Eckhardt helped us get a grant from FCM to do a study on the feasibility of the project. The results were that the concept is technically possible but that the business model was hampered by Alberta's system of natural gas rebates, and the high upfront capital cost of construction and the eccoPower Centre was finally built in 2003/4.

The provincial rebates artificially made using natural gas cheaper when prices went up and reduced the incentive for organizations to sign up for the CES. We lobbied the provincial government quite a bit and eventually had the law changed so that any future rebates for natural gas would also apply to bio-mass projects like the CES. Barrier #1 removed.

Upfront construction costs were still an issue of course so it languished. The first three phases were estimated to cost $23 million in January of '08. Of course part of the cost of construction would be recovered through the rates paid by customers but at $23m it would drive the rates up so high that they (again) wouldn't be competitive with the existing natural gas system. It would need at least $12m in "no-cost capital" (aka grants) to make it a feasible alternative to natural gas at current rates.

So it wasn't until City Council committed $6m in a narrow 5-4 vote in the fall of '08 that the project seemed to have some legs again. As we rolled in to 2009 the clock really began ticking on the deadline for Aquatera to start taking steam by the end of the year, or risk loosing the right to do so. The $6m from the city was good but we still needed to find some way to get up to the $12m mark.

When the Federal & Provincial Governments announced the Building Canada Fund to stimulate the economy there seemed to be an opening. Building Canada's goal was to encourage spending by municipalities that would create jobs by getting new projects rolling across the country. The catch was that they had to be new projects that wouldn't happen otherwise, and that cities had to have the money to come up with at least 1/3rd of the project cost. (That last bit is proving difficult for many communities - it's not like communities typically have large amounts of uncommitted cash floating around.)

So about March GP submitted four applications to the Building Canada Fund; Art Gallery Reconstruction, City-Wide Wireless Network, Landfill Gas Extraction and the CES. As far as I'm concerned the CES is the perfect application; it's something that is labour intensive (building the plant and running the pipes through the city), wouldn't happen without the additional support, we have our 1/3 ready and it delivers new "green" infrastructure that can reduce CO2 production by about 13,000 tonnes/yr.

In the interim, construction was progressing at the Aquatics Centre / Multiplex. Although the facility isn't set to open until 2011 if we wanted to plug it into the CES some important design decisions needed to be made early on. How many hot water boilers would we have? Large boilers like these are not "off the shelf" things, they are "build-to-order" and need to lead time. Would the roof-top heating units be natural gas fired or not? If they're not then it changes how we plan for hot water lines to run up to the roof. By the start of May it had reached a point where city administration needed some direction from council: are we building the multiplex to plug into the CES or not?

We had 3 options for the facility heating system and each came with it's own caveat;

• Build in the traditional manner using only natural gas (Cost to connect to a CES later VERY high, approx $5m)

• Build to be totally dependant on the CES (rely on VERY expensive temporary heating solutions if the CES doesn't go ahead)

• Build a flexible system that could accommodate the CES in the future, and act as it's redundancy (about $1m additional upfront costs with a chance of getting $800k back if CES goes ahead)

On May 4th council considered the issue and voted 7-2 (Ald. Wong and myself opposed) in favour of building in the traditional manner. We were told that if we got positive word on the Building Canada application soon we should be able to change direction without too much wasted time or cost.

Fast forward to last week when it was announced that we will receive funds from Building Canada for the CES ( I hear it should be enough to get us to the magic $12m mark) and all the sudden it looks like council may have some reconsidering to do.

A meeting has been called for this afternoon at 1:30 to review the impacts of the new money towards the CES and design implications for the multiplex. I hope we'll end the day with council reversing it's previous decision and directing admin to go ahead with building a flexible system at the multiplex.

I'm not naive enough to believe that things will finally go smoothly for the CES from here on out but hopefully we're on the way.


gpconservative said...

Don't leave me hanging dude. LOL What happened?

Matthew Sharp said...

That seems like a good plan, at least in the short term. Natural gas is still the cleanest fuel we have, and the EcoPower system at Canfor was just slapped with significant emissions penalties.

Has their been any talk about getting the Crystal Centre on the CES or wind grid? I have a personal stake in this, as my mother is arenas manager for the city.

One relatively inexpensive option that you all may wish to look at is bullfrog power. It allows for a conventional natural gas setup, but the firm will pump an equal amount of wind energy into Alberta's grid, allowing for an (ideally) net-zero proposition. Here is the website for checking it out, assuming you have not already;


gpconservative said...

That's actually a very good idea (Bull Frog Power) if Emissions were the only concern. But part of the benefit of the CES project is to get long term prices that offer stability in budgeting. The "hope" of course is that it would be cheaper than NG.


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