Town of Norman Wells District Heating Plan

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Town of Norman Wells District Heating Plan

• Michele Guy, P.E., P.Eng.
• Senior Project Manager
• Northern Infrastructure

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Agenda

• Project Progress
• District Heating System Plan Private
  Infrastructure Service Options
• Project Costs Funding
• Timing
• Transition Team

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1. Project Progress

• a. Conducted assessment to identify possible
  alternative fuel options.
• Result Identification of three viable options
• Biomass Wood Fuel Source
• Fuel Oil
• Propane

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1. Project Progress

• b. Completed Technical Report with recommended
  options presented to Council July 2012
• Result Council passed a motion committing to
  implementing a biomass solution to serve the
  Town. The requested increase scope to include
  service to both Areas A and B.

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1. Project Progress

• 3. Financial analysis of a community (district
  heating) biomass heating system for Areas A B
  completed.
• Result Initial identification of funding sources
  for the required 37 MM.
• Grants
• Low Interest Government Funding
• Private Funding/Investment
• Private Donations

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2. District Heating System a. District Heating
for the entire Town

• Area A
• Areas A B
• 37 million

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2. District Energy (DE) System Plan

• Fueled by biomass (wood pellets) to service the
  downtown and other areas currently serviced by
  natural gas.
• Would include a new centralized fuel storage
  system, new centralized combustion equipment and
  new heat distribution piping.
• Individual facilities would be provided with new
  heating service connections and new piping.

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2. DE System Area A
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2. DE System Area B
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2. Private Infrastructure
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3. Project Cost Funding a. Impact of Grants

• Grants tied to Biomass DE
• Federal Grant PPP Canada - 8,000,000
• FCM - 1,000,000 grant
• ENR - 50,000 grant
• (CanNor 1,000,000)

Option 2
Total Project Cost 37 million
Public Grants 9 million
Net Project Costs 28 million
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3. Project Costs and Funding b. Impact of Owner
Contribution
Option 2 Option 2
Scenario A Scenario B
Net Project Cost 28 million 28 million
Town Financing Available 10 million 10 million
Owner Contribution 0 6 million
Addl Funding/Grants Required 18 million 12 million

• Lower Owner Contribution
• Additional funding more manageable

• (Owner contribution is less than for diesel
  conversion)

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3. Project Costs and Funding c. Summary of Costs
Option 2 Option 2
Scenario A Scenario B
Average Facility Conversion Cost to Owner 0 16,200
Multiple of Gas _at_ 1.81 per CCF 2.65 2.50

• Financial Assumption
• Includes operating cost fuel, maintenance,
  administration, debt financing
• Capital costs amortized over 25 years at 1.5 per
  annum
• Includes anticipated grants
• Does not include all possible grants, therefore,
  could be lower

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3. Project Costs Funding Biomass District
Heating

• Least expensive energy costs and cost to
  homeowners
• Biomass DE - 2.5x gas (fuel, OM, capital)
• Fuel oil - 3.0x gas (retail fuel only)
• Propane - 4.0x gas (retail fuel only)
• Can be converted to gas DE in future
• Maximizes grants/funding, and minimizes costs to
  individual owners

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3. Project Funding Govt money
identified/applied for to-date

• PPP Canada
• Notice to proceed to business case
• 25 of public infrastructure in grant money
• ecoENERGY
• Development Funding for PPP Canada Business Case
• This is required for the PPP Canada Application.
  It will serve the project regardless of the PPP
  Canada support.
• CanNor
• Access to 1,000,000 in grant money.
• GNWT ENR
• Access to 50,000
• Other sources of money through CanNor
• Green Municipal Funding (FCM)
• 1,000,00 in grants
• 10,000,000 in low interest loans

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3. Project Funding PPP Canada - (Public
Private Partnerships)

• Design, Build, Finance, Operate and Maintain
• Governments recognize value of engaging
  private-sector innovation to build more for less.
• Private sector assumes major share of
  responsibility in terms of risk and financing for
  the delivery and the performance of the
  infrastructure, from design and structural
  planning, to long-term maintenance.
• Federal government committed 1.2 billion to P3
  projects annually.

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3. Project Funding ecoEnergy

• Government of Canada has nearly 5 billion for
  ecoENERGY initiatives.
• Purpose is to help Canadians use energy more
  efficiently, boost renewable energy supplies and
  develop cleaner energy technologies.
• Submittal is under review to fund 215,286 for
  preparation of the PPP Canada Business Case.

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3. Project Funding CanNor

• Supporting communities to create jobs.
• Strengthening territorial economies, economic
  diversification and encouraging Northeners
  participation.
• CanNor has 1,000,000 available in grant money
  and more available through the GNWT.
• Application will be submitted next week.

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3. Project Funding Green Municipal Fund

• Funding and knowledge to municipal govts and
  their partners for municipal environmental
  projects.
• Fund the best examples of leadership and
  innovation in municipal sustainable developments.
  
• 1,000,000 available in grant money.
• 10,000,000 available in loans at 1.5 interest.

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4. Timing

• Funding
• When, how much, at what cost?
• Imperial Oil
• Availability of NG, Flexibility, Communication
• Town forcesparticipation
• Pooling resources, Action (Transition Team),
  involvement.
• Load Reduction
• Increase Energy Efficiency

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4. Timing Options for Reducing Natural Gas Use

• GNWTs reduced load (houses and businesses)
• Improve Energy Efficiency
• Programmable t-stats (compatible with DE)
• Air leakage sealing
• Faucet aerators
• Compact Fluorescent Lights (CFL)
• All the above 40 gas reduction

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5. Transition Team It takes a Community

• Be informed.
• Get involved.
• Ask Questions.
• Talk to, email, write letters to your govt and
  federal leaders.
• Join or support the Transition Team.
• Help your Town leaders make this state-of-the-art
  heating system a reality for the Town of Norman
  Wells.

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District Heating Transition Team
Transition Team Leader (Selected by Team Members)
Chamber of Commerce
Other Agencies NWT
PWS
Business Owner
Imperial Oil
Alternative Energy Alliance Rep.
Town Councilor
Lands NWT
Residential User or Community Organization
Enbridge
AEA
Town Staff
AE Facilitation Team
AE Technical Team
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5. Transition Team When there is a will there
is a way...

• THE 4 DISCIPLINES OF EXECUTION
• Focus on the Wildly Important
• Create a Compelling Score Board
• Translate Lofty Goals into Specific Actions
• Hold Each Other Accountable All of the Time
• FRANKLIN COVEY

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THE GOALBiomass District Heating System

• A flexible solution
• The least expensive heating solution.
• The most sustainable heating solution.
• A comprehensive solution.
• Benefit from economies of scale.
• Cohesiveness.
• Consensus

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Thank you!

• Any questions?