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HomeMy WebLinkAboutPDS-025-22Clarftwn Staff Report If this information is required in an alternate accessible format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Report To: Planning and Development Committee Date of Meeting: May 16, 2022 Report Number: PDS-025-22 Submitted By: Reviewed By: File Number: Ryan Windle, Director of Planning and Development Services Robert Maciver, Deputy CAO By-law Number: Report Subject: Clarington District Energy System Recommendation: Resolution#: PD-064-22 1. That Report PDS-025-22, and any related delegations or communication items, be received for information. 2. That all interested parties be notified of Council's decision. Municipality of Clarington Report PDS-025-22 Report Overview Page 2 This report provides and update on the work underway to assess the feasibility of integrating low carbon district energy (DE) into the development of ongoing Secondary Plans in South Clarington, following action 1.24 of the Clarington Climate Action Plan. This report includes: 1) an overview of the causes of climate change impacting Clarington and beyond; 2) an overview of low carbon DE; 3) the features that make South Clarington a desirable candidate for low carbon DE; 4) the findings of the recently -completed study looking at the feasibility of DE in South Clarington (Attachment 1) and; 5) the next steps that staff will take to enable Council to make an informed decision about whether to proceed with integrating low carbon DE into the ongoing development of Secondary Plans in South Clarington. 1. Background 1.1 Clarington's population is expected to grow to 123,900 people by 2026. Currently the Municipality is engaged in the development of 12 secondary plans and 2 watershed studies to assist in accommodating this new growth. 1.2 According to the Atmospheric Fund's Durham -wide Community GHG emissions Inventory, buildings are responsible for 30% of greenhouse gas (GHG) emissions in Durham Region. 1.3 According to the Intergovernmental Panel of Climate Change's (IPCC) Sixth Assessment Report released in August 2021, human activities that release GHGs are warming the atmosphere, ocean, and land. These changes are already contributing to weather and climate extremes in every region across the globe, including the Great Lakes Region. 1.4 According to the IPCC report Global Warming of 1.5 degrees Celsius, GHG emissions need to be drastically reduced to avoid catastrophic climate change. 1.5 Climate science indicates that there is a narrow window to limit further warming to below 1.5°C above pre -industrial levels, a threshold that if exceeded would bring catastrophic and irreversible climate change. Maintaining temperatures below this threshold will require dramatic reduction in GHG emissions across all sectors of society and coordinated action across all levels of government. 1.6 To avoid the worst impacts of climate change and protect the wellbeing of residents, municipalities, including Clarington, must take actions to reduce GHG emissions from buildings. Municipality of Clarington Report PDS-025-22 2. Context Page 3 2.1 Clarington is responding to climate change. In early 2015, the Municipality established the Priority Green Clarington initiative, which resulted in a framework for sustainable residential developments (beyond code) and a household water and energy efficient demonstration project. (PSD-060-15). 2.2 In late 2019, the Municipality released the Clarington Energy Conservation and Demand Management Plan 2019-2024 (ECDM plan). The ECDM plan identifies actions that the Municipality is taking to conserve energy, reduce GHG emissions and save money in Municipal buildings. 2.3 In November 2019 Council Endorsed the Durham Community Energy Plan (DCEP), which seeks to accelerate the transition to a clean energy economy in Durham, while simultaneously achieving economic, environmental, and social benefits. The DCEP prioritizes the implementation of low carbon energy solutions in Durham Region, including district energy systems, which account for 16 per cent of total emissions reductions within the Region's low carbon pathway. 2.4 In February 2020, Council passed a motion to prioritize the use of low emissions vehicles in the municipal fleet, reducing corporate GHG emissions that contribute to climate change. (Resolution: #C-066-20). 2.5 On February 18, 2020, the Municipality of Clarington declared a climate emergency "framing and deepening our commitment to protecting our economy, ecosystems and community from climate change". 2.6 In March 2021, Council endorsed the Clarington Corporate Climate Action Plan P( SD- 018-21). The CCCAP contains 116 actions to respond to limited risks posed by climate change and establishes corporate GHG emissions reduction targets. The CCCAP sets a target to reduce corporate GHG emissions to 35% below 2018 baseline levels by 2030 and to achieve net -zero emissions by 2050 3. District Energy 3.1 As per action 1.24 of Clarington's Corporate Climate Action Plan, Clarington staff have partnered with the Region of Durham to investigate the feasibility of integrating low carbon DE into Secondary Plans in South Clarington. What is District Energy? 3.2 DE systems are centralized systems where thermal energy (i.e., heating and cooling) is distributed from a central location or several locations via underground pipes to multiple buildings in a neighbourhood, downtown district, or campus (Figure 1). Municipality of Clarington Report PDS-025-22 Off ices To Residential } Energy Centre Distribution - piping feoexchange under stormwater pond Image source: Blatchford Renewable Energy. https://blatchfordutility.ca/district-energy-sharing/ Figure 1. Example of a DE System Page 4 3.3 Without individual boilers, furnaces or chillers, buildings connected to a DES benefit from increased energy efficiency, fuel flexibility, brought on by economies of scale, and additional productive space in buildings. 3.4 The improved efficiencies and potential for low -carbon fuel sources in DE systems make them a key part of climate change and renewable energy strategies in urban areas. 3.5 A DE system functions to distribute steam, hot and/or cold water into commercial, residential, and industrial buildings where it can be used for heating and cooling, as well as electricity production. 3.6 Buildings connected to the thermal grid do not need their own boiler or furnaces, chillers, or air conditioners. Examples of buildings commonly connected to a thermal grid can include commercial buildings, residences, condominiums, hotels, sports facilities, university facilities, and government buildings. 3.7 DE networks transport heat and cooling efficiently up to 30 kilometers from any single heat source. When multiple heat sources are combined, networks can be hundreds of Municipality of Clarington Report PDS-025-22 Page 5 kilometers long. This allows for heating and cooling services to be established across neighborhoods, industrial areas, entire cities, and regions. 3.8 DE networks can balance the supply and generation of heat by time and location. As the heat demands change throughout the day for residential, commercial, industrial, institutional, and public buildings, the heat network matches and manages these changing patterns, while ensuring the most efficient and lowest cost mix of heat sources are used. 3.9 A DE network enables a wide range of heat sources to be combined, many of which have lower costs, lower emissions, and greater reliability than current building heating and cooling systems. 3.10 Heat can be captured and added to the network from any process that produces waste heat including power generation, industrial processes, solar thermal panels, biomass generation and geothermal processes. There are no requirements that energy sources should be from a single source. 3.11 DE systems are typically run as a thermal utility by a company that operates the heating and cooling network, ensures quality service, and manages metering and billing. 3.12 A DE network allows for reduced overall energy consumption and GHG emissions, since generating heat in few larger plants and capturing and using waste heat from industrial producers is more energy efficient than having hundreds of boilers, furnaces and air conditioners heating and cooling individual buildings. Benefits of District Energy 3.13 Lower Costs and Price Stability - District heating systems can source heat from a mix of conventional, clean, and renewable waste sources. Sourcing energy locally and from a variety of sources reduces price volatility and increases reliability. 3.14 District heating and cooling systems have none of the costs normally associated with in - building heating and cooling systems, including boilers, storage tanks, air conditioning units and other associated equipment. Also, cost -related insurance, equipment - maintenance, upgrades, and replacement are eliminated. 3.15 Revenue Generation - DE can generate a significant amount of revenue through heating/cooling sales, power sales, connection charges, ancillary services, and capacity payments. As an investment, DE can provide stable investment returns to the community for many decades. In addition, since most heat sources are local, more energy dollars remain within the local economy. 3.16 Enhanced Comfort - A DE system allows building operators to manage and control their own indoor environments. DE is available whenever a building needs heat. In addition, DE reduces vibrations and noise problems that could annoy building occupants. Municipality of Clarington Report PDS-025-22 Page 6 3.17 Flexible Building Design - The elimination of the conventional or traditional HVAC system requirement expands the number of possible building design options. A building free of boilers and chillers provides architects with greater building design flexibility. District Energy in South Clarington 3.18 Clarington is in an ideal position to explore implementing DE. Sources for low carbon waste heat are in close proximity to several Secondary Plan areas, which could supply affordable, low carbon heat to the Clarington Waterfront and Energy Business Park (Figure 2), Courtice Transit -Oriented Community (TOC) and GO Station Area Secondary Plan (Figure 3), and surrounding areas. M = E I ■ V ■w 6 F .CigosRnad_ _ .. Baseline Road 77—P, ,z-v Darlington Provincial e Park ij R� �i O L+ Baseline Reacl _ Co,,r ice re rn on a oa � :--Craggy a Figure 2 — Courtice Waterfront and Energy Business Park Municipality of Clarington Report PDS-025-22 Page 7 Figure 3 — Courtice Transit -Oriented Community (TOC) and GO Station Area Secondary Plan 3.19 The Clarington Waterfront and Energy Business Park is unique in the abundance of thermal generation sources which could be captured and used in a low carbon DE system. These sources include: • Steam extraction from the Durham York Energy Centre • Waste heat recovery from Darlington Nuclear Plant • Combustion of excess digester gas from the Courtice Water Pollution Control Plant • Sewer and Effluent Heat Recovery at the Courtice Water Pollution Control Plant 3.20 Additional sources of energy that could be incorporated into a low carbon DE system in the future include: • Geo-Exchange • Biomass • Solar Power / Solar Thermal • Waste heat recovery from a small modular reactor (SMR) Municipality of Clarington Report PDS-025-22 Page 8 3.21 The establishment of district energy heating in these new developments has the potential to significantly reduce greenhouse gas emissions, reduce community energy expenses, increase community energy stability and resilience, and create a new revenue stream for the Municipality (if a participant in development). 3.22 Currently, the Clarington Waterfront and Energy Business Park and Courtice TOC and GO Station Area Secondary Plan areas and surrounds are relatively undeveloped. As part of the development process, utilities and services will need to be installed, which is the ideal time to install DE piping and infrastructure. 3.23 The densities for the Clarington Waterfront and Energy Business Park, and projected density for the Courtice TOC and GO Station Area Secondary Plan areas and surrounds are ideal for the installation of low carbon DE. Policy Supporting District Energy 3.24 Action 1.24 of Clarington's Corporate Climate Action Plan of the plan is to "Investigate the feasibility for a District Energy System in new and existing secondary plan areas." 3.25 Item 7.2.10 of the Clarington Energy Business Park Secondary Plan (2006) states "At the appropriate time, but before the area of the Clarington Energy Business Park has been 50% developed, the Municipality and the Regional Municipality of Durham shall consider the feasibility of building a district heating and cooling facility to serve the park." 3.26 Item 13.1.5 of the York Durham Energy Centre Host Community Agreement states that Clarington and Durham will "strongly encourage and promote development within the Clarington Energy Business Park and other areas of Clarington to utilize district heating and cooling provided by the EFW Facility." 3.27 The Municipality of Clarington and the Region of Durham hold the legislative ability to integrate low carbon solutions such as DE into community planning. Within the Ontario Municipal Act 2017, Ontario Municipalities are empowered to take actions to respond to climate change and lead community energy planning. Integrating low carbon energy solutions from local fuel sources into community designs limits GHG emissions that contribute to climate change and provide greater energy security to residents. 4. FVB Prefeasibility Study 4.1 In late 2021 the Municipality of Clarington and the Region of Durham partnered to explore the high-level feasibility of incorporating DE into the Secondary Plans in South Clarington (Attachment 1). 4.2 The Region procured FVB Energy to conduct the pre -feasibility study. The study evaluated potential for an area -wide DE system serving development forecasted to Municipality of Clarington Report PDS-025-22 Page 9 2070, with a total capital cost of $236 million dollars, and over 23 km of distribution piping. 4.3 Phase 1 of the Clarington District Energy Study (DES) proposed by FVB has an estimated capital cost of $112 million, with over 10 km of distribution piping and an Energy Centre in a new facility designed to house the equipment for all seven DES phases. 4.4 The study concluded that there is great potential for a low -carbon DES in Clarington supplied by low carbon heat from the waste heat sources outlined in sections 3.19 and 3.20 above, with significant revenue -generation potential. 4.5 However, the study is high-level in nature, exploring the maximum potential for DE in Courtice over the next 48 years. 4.6 While the study's findings are favourable towards DE in South Clarington, additional work is required to translate the long-term conceptual work into an implementation plan for a potential Phase 1 of DE development. 5. Next Steps 5.1 While the pre -feasibility study demonstrated very promising high-level conditions for low carbon DE, further analysis is needed to map out the short-term viability of integrating DE into the Clarington Waterfront and Energy Business Park, Courtice TOC and GO Station Area Secondary Plan areas and surrounds. 5.2 Regional Staff with the assistance of Clarington intend to prepare a Request for Proposal (RFP) for additional research and a detailed plan to inform decision making and next steps to integrate of DE into the Clarington Energy Business Park, Courtice TOC and GO Station Area Secondary Plan, and surrounding areas. The RFP will be issued by the Region of Durham. 5.3 Regional and local staff will seek funding and partnerships with various stakeholders to undertake this research including: the Region of Durham, Local Distribution Companies, Developers and Provincial and Federal Government. 5.4 Additional research will address several key areas including: • Scoping and defining Phase 1 of DE for short term installation; • Staging and integration into existing Secondary Plan processes; • DE utility ownership, governance, and administration; • Identifying and limiting risks associated with DE;and • Clarifying the DE business case and value proposition for a phase 1 DE project. Municipality of Clarington Report PDS-025-22 Page 10 5.5 Once complete, the Region and Clarington would be positioned to make informed decisions about whether to pursue DE, including: Seeking utility partners to help deliver the system, through a request for expressions of interest; Engagement with development community to build understanding of DE and its value proposition, and discuss options for incentivizing/requiring connection; and Prepare funding applications to support design and construction (e.g., Canada Infrastructure Bank). 6. Concurrence 6.1 Not Applicable 7. Conclusion 7.1 Clarington is in an ideal position to explore DE as a source of low carbon energy in partnership with Durham Region for the South Clarington area. Sources of low carbon waste heat are in close proximity to several Secondary Plan areas, which could supply affordable, low carbon heat to the Clarington Waterfront and Energy Business Park, Courtice TOC and GO Station Area Secondary Plan areas and surrounds. The establishment of a DE in these new developments has the potential to significantly reduce greenhouse gas emissions, reduce community energy expenses, increase community energy stability, and create a new revenue stream for the Municipality. Staff Contact: Doran Hoge, Energy and Climate Change Response Coordinator, 905-623- 3379 ext. 2429 or dhoge@clarington.net. Attachments: Attachment 1 — Clarington DES Study The following interested parties will be notified of Council's decision: Durham Region Home Builders Association The Region of Durham District Energy in Clarington Clarington District Energy Feasibility Studi, March 14, 2022 Prepared by: CV/A3 ENERGY INC Durham Region / Municipality of Clarington — District Energy Study = N/3 E UERGYINC Disclaimer This report has been prepared by FVB Energy Inc. The information and data contained herein represent FVB's best professional judgment in light of the knowledge and information available at the time of preparation. FVB denies any liability whatsoever to other parties, who may obtain access to this report for any injury, loss or damage suffered by such parties arising from their use of, or reliance upon, this report or any of its contents without the express written consent of FVB Energy Inc. The cost estimates and any estimates of rates of productivity provided as part of the study are subject to change and are contingent upon factors over which FVB Energy Inc. have no control. FVB Energy Inc. does not guarantee the accuracy of such estimates and cannot be held liable for any differences between such estimate and ultimate results. Page 2 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC Executive Summary The Municipality of Clarington (MoC) and the Regional Municipality of Durham (DR) are considering a Low Carbon District Energy System (DES) to serve the Clarington Energy Park Expansion and surrounding secondary plan areas. DES are globally recognized as part of the solution to reducing greenhouse gas emissions. DES are known to increase the energy efficiency of building heating and cooling, enable the use of waste, renewable and other alternative energy sources and provide flexibility with respect to thermal general technologies and fuel sources. FVB performed a pre -feasibility study on developing a District Energy System to service the Clarington Waterfront, Energy Park, and surrounding secondary plan areas in Clarington, ON. Based on planning data made available to FVB, the area has the potential to see up to 1.2 million square meters of medium to high -density new development, with the possibility of up to 700,000 square meters of development in the Major Transit Station Area (MTSA) surrounding the future GO station. The DES concept was based on a forecasted buildout of the area from 2025 to 2070. Two Cases were investigated: 1. Conventional DES: Natural gas fired boilers and electric centrifugal chillers (considered as a baseline for Comparison) 2. Low Carbon DES: Steam extraction from the Durham York Energy Centre (waste heat), combustion of excess digester gas from the Courtice Water Pollution Control Plant, effluent heat recovery, and peaking gas -fired boilers and electric centrifugal chillers. In both Cases, it was assumed that the Energy Centre would be located north of the Courtice Water Pollution Control (CWPC) Plant. A four -pipe thermal distribution network would be installed to serve the buildings within each secondary plan area. It has been assumed that the system will serve only medium and high -density developments. A summary of the estimated DES capital costs are outlined in Table A. Table A: Summary of Caaital Costs Clarington DE Study Class D Preliminary Heating Plant Case Installed 57.0 MW 1 Totals 36,827 Case Installed 60.0 MW 2 Totals 45,353 Cooling Plant 10,200 tons 47,257 11,300 tons 47,034 Energy Transfer Stations 121 29,783 121 29,783 Distribution Piping System 23,315 tm 113,659 23,315 tm 113,659 Total DES Capital Cost 227,526 238,828 The key financial results of this study are summarized in Table B. Page 3 of 70 Durham Region / Municipality of Clarington — District Energy Study Table e: Summary of Financial Results at Full System euildout may�V/3 ENERGY INC Ut5 Pre-heaslplllty Highlights Financial (Unescalated) Financial (Fscalated) Reduced Annual Expenses Revenue(k$) Projected 25-Year GHG vs. BAU @ Description IRR 25 NPV Full Build Out (k$) 2021 2021 Years (%) 3.5% (k$) (tonnes) Conventional Case 2 — Low Carbon The results of this study show that a Low Carbon DES based in the Clarington Energy Park to serve the surrounding areas is economically feasible and has the potential to provide significant carbon emissions reductions. Case 1 has been provided for comparison purposes only and FVB does not recommend further work pursuing this option. Case 2 is an excellent example of state-of-the-art 4th Generation District Energy systems through their use of locally available energy sources such as digester gas, waste heat, and effluent heat recovery. Case 2 is economically and technically feasible and provides similar results to a conventional district energy system, while simultaneously offering significantly less carbon emissions as well as long-term savings on expenses after the buildout of the system. FVB believes that DE in Clarington is a unique and exciting opportunity, as well as a good business case, and recommends that a detailed feasibility study be completed once more information is known about development timelines in the area. Page 4 of 70 Durham Region / Municipality of Clarington — District Energy Study = ICV/3 ENERGY INC Contents ExecutiveSummary.......................................................................................................................................3 Tableof Tables..............................................................................................................................................6 Tableof Figures.............................................................................................................................................7 Acronyms...................................................................................................................................................... 8 1 Introduction..........................................................................................................................................9 2 Secondary Plan Buildout and Phasing Assumptions...........................................................................10 3 Load and Energy..................................................................................................................................23 4 Technology Screening.........................................................................................................................24 5 Business -as -Usual Concept.................................................................................................................33 6 District Energy Concept.......................................................................................................................35 7 Capital Costing....................................................................................................................................46 8 Financial Analysis & Business Case.....................................................................................................51 9 Environmental Benefit........................................................................................................................58 10 Conclusions......................................................................................................................................... 59 11 Next Steps: DES Implementation Strategy..........................................................................................60 Appendix A Secondary Plan Area Load and Phasing Maps....................................................................66 AppendixB Concept Drawings...............................................................................................................70 Page 5 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC Table of Tables Table 1: Secondary Plan Densities..............................................................................................................10 Table2: Population Targets........................................................................................................................10 Table 3: Unit Counts by Apartment Type....................................................................................................11 Table4: School Enrollment.........................................................................................................................15 Table 5: Average Unit Sizes and Occupants................................................................................................16 Table 6: School Sizes Based on Enrollment.................................................................................................16 Table7: Phasing Years................................................................................................................................. 20 Table 8: MTSA Non -Residential Building Phasing.......................................................................................22 Table 9: Building Performance Factors by Phase........................................................................................23 Table 10: Load and Energy by Phase...........................................................................................................23 Table 11: Available Waste Gas for Use in the District Energy Plant...........................................................26 Table 12: Estimated MSW, FSO, SSO and Total Organics for Digestion at Future Anaerobic Digestion Facility......................................................................................................................................................... 27 Table 13: Solar Thermal Technologies........................................................................................................ 31 Table 14: Greenhouse Gas Intensity Limits by TGS v3 Tier.........................................................................33 Table 15: Business -As -Usual Plant Buildouts..............................................................................................34 Table 16: Case 1 Energy Centre Buildout....................................................................................................41 Table 17: Case 2 Energy Centre Buildout - Heating....................................................................................42 Table 18: Case 2 Energy Centre Buildout - Cooling.....................................................................................45 Table 19: DES Capital Cost Summary — Case 1............................................................................................46 Table 20: DES Capital Cost Summary — Case 2............................................................................................46 Table 21: Case 1 Energy Centre Capital Cost..............................................................................................47 Table 22: Case 2 Energy Centre Capital Cost..............................................................................................47 Table23: DPS Capital Cost..........................................................................................................................48 Table24: ETS Capital Cost...........................................................................................................................48 Table 25: DES Annual Operating and Maintenance Cost Estimate At Full Buildout — Case 1 ....................49 Table 26: DES Annual Operating and Maintenance Cost Estimate At Full Buildout — Case 2 ....................50 Table 27: BAU Capital Cost Summary.........................................................................................................52 Table 28: BAU Annual Operating and Maintenance Cost Estimate............................................................53 Table 29: District Energy Rate Summary — Heating and Cooling Energy....................................................55 Table 30: Case 1 Financial Analysis Results.................................................................................................55 Table 31: Case 2 Financial Analysis Results.................................................................................................56 Table 32: Annual GHG Emissions Compared to BAU at Full Buildout.........................................................58 Page 6 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC Table of Figures Figure 1: Clarington Secondary Plan Areas...................................................................................................9 Figure 2: High Density Residential Buildings Connected to DE...................................................................11 Figure3: Townhouse Types.......................................................................................................................12 Figure 4: Townhouses Connected to DE.....................................................................................................13 Figure 5: Typical low-rise office..................................................................................................................14 Figure 6: Low/Mid Rise Retail/Commercial Space in Downtown Toronto.................................................14 Figure7: Markham YMCA...........................................................................................................................15 Figure 8: Clarington MTSA Boundary (Red)................................................................................................17 Figure 9: MTSA Office Locations.................................................................................................................18 Figure 10: Percentage of Residential Development in each Secondary Plan Area.....................................21 Figure 11: Residential Units per Phase.......................................................................................................21 Figure 12: Residential Unit Type Proportion by Phase...............................................................................22 Figure 13: Cycle of Biogas Production........................................................................................................27 Figure 14: Open Loop Geoexchange System..............................................................................................28 Figure 15: Closed Loop Geoexchange System............................................................................................29 Figure16: Biomass Diagram........................................................................................................................30 Figure 17: District Energy 4tn Generation.................................................................................................... 36 Figure 18: What is District Energy?.............................................................................................................37 Figure 19: DE DPS Phasing Map..................................................................................................................38 Figure 20: Thermal Generation Makeup for Each Phase............................................................................43 Figure 21: Chilled Water Generation Makeup............................................................................................45 Figure 22: Self -Generation Costs vs. DE Rate Structure.............................................................................54 Figure 23: Summary of Benefits to Key Stakeholders from a DES..............................................................65 Page 7 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC Acronyms ASHP Air Source Heat Pump BAU Business -As -Usual CWPC Courtice Water Pollution Control DE District Energy DES District Energy System DHW Domestic Hot Water DPS Distribution Piping System DR Regional Municipality of Durham DYEC Durham York Energy Centre EFW Energy From Waste ETS Energy Transfer Station FVB FVB Energy Inc. GFA Gross Floor Area GHG Greenhouse Gas GHGI Greenhouse Gas Intensity — measured as kg CO2e/m2 GIS Geographic Information System GSHP Ground Source Heat Pump HOEP Hourly Ontario Energy Price IRR Internal Rate of Return kWt kilowatt (thermal) — a unit of energy, equivalent to 1 joule per second kWht Kilowatt-hour (thermal) — the total energy of using 1 kWt over the course of an hour MoC Municipality of Clarington MOU Memorandum of Understanding MTSA Major Transit Station Area MWt Megawatt (thermal) — equivalent to 1,000 kWt MWht Megawatt -hour (thermal) — equivalent to 1,000 kWht NG Natural Gas NPV Net Present Value SEC Southeast Courtice PPU Persons Per Occupied Dwelling OPG Ontario Power Generation SHR Sewer Heat Recovery SWC Southwest Courtice TESA Thermal Energy Services Agreement WACC Weighted Average Cost of Capital WSHP Water Source Heat Pump Page 8 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 1 Introduction The Municipality of Clarington (MoC) and the Regional Municipality of Durham (DR) are looking to assess viable options to provide a District Energy System (DES) to serve the Clarington Waterfront, Energy Park and surrounding secondary plan areas. Considerable growth is expected in this area, particularly in the Major Transit Station Area (MTSA) which is expected to be a high -density area centered around a future Courtice GO Station north of the intersection of Courtice Road and Baseline Road West. This area also provides the unique opportunity of having several sources of thermal energy near each other. As a result, DR and MoC have a unique opportunity to integrate an efficient and sustainable DES into the development plan, with the potential to utilize multiple zero or low carbon forms of thermal energy. FVB developed estimated building phasing plans based on secondary plan data made available by MoC and DR, alongside the Durham Region Housing Intensification Study Technical Report, Region -Wide Growth Analysis Technical Report, and staff feedback. The building phasing plans could then be used to generate load profiles. This report includes the analysis of three different district energy scenarios. The first is a base case utilizing natural gas -fired boilers and electric centrifugal chillers and has been used as a first check to the feasibility of District Energy in the area. The second case employs available low or zero carbon technologies within the Clarington Energy Park to reduce the system greenhouse gas emissions. FVB has developed a geographic information system GIS database which shows the secondary plan areas including density targets, as well as FVB estimated building locations with unit numbers, gross floor areas (GFAs), and peak loads. .� A �{ CawilieeFmplaymml Lanes COurti[e W4U4ronl and Emery Park ` Draft MTSA 9ouedary _ i y Sauthcas[ Caurlict -+ Y S4 ULhw Cik �aurliGC Figure 1: Clorington Secondary Plan Areas Page 9 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC 2 Secondary Plan Buildout and Phasing Assumptions 2.1 Secondary Plan Area Densities Residential densities for each area have been defined based on available secondary plan data. These values are summarized in Table 1. These densities have been used to establish the number of units on each parcel of land as defined by the Southeast and Southwest Courtice secondary plansla. Table 1: Secondary Plan Densities Secondary Southeast Courtice (SEC)3 13 — 25 units/hectare 60 units/hectare 120 units/hectare Detached/Semi-Detached 3 — 6 storeys 7 — 12 storeys, mixed use homes must be >80% of acceptable total units Southwest Courtice (SWC)4 Min. 13 units/hectare Min. 40 units/hectare Min. 120 units/hectare Maximum 20% Semi- 2 — 4 storeys 7 —12 storeys, mixed use Detached/ Townhouse acceptable MTSAS 150 people/hectare (Combined residential population target and employment target) Courtice Waterfront and None Energy Park Durham Region provided FVB with unit and population estimates for the Southwest and Southeast Courtice areas as indicated in Table 2. MTSA population is based on assumed low and medium density housing persons per occupied dwelling (PPU) values (per USI/Waston Intensification Report, October, 2021) and estimated unit breakdown provided by Durham Region in December 2021. Table 2: Population Taraets SecondaryPopulation Southeast Clarington 12,000 5,000 Southwest Clarington 7,700 2,900 MTSA 12,500 4,900 + 1,500 To meet the population and unit targets provided by Durham staff for Southwest Clarington, the low density residential required 19 units per hectare, medium density residential required 60 units per hectare, and high density residential required 180 units per hectare. Additionally, a significant portion of low -density development in the northwest half of SWC has already been completed, and as such these areas have not been considered as potential candidates for connection to the DES. Currently, the only loads assumed to be present in the Energy Park area are the current OPG office building (which would require conversion) and the future OPG office addition. The existing Courtice Water Pollution Control (CWPC) offices and the offices at the Durham York Energy Centre (DYEC) have not been 1 Southeast Courtice Adopted Secondary Plan — Schedule A — Land Use Map — Adopted (December 7, 2020) z Southwest Courtice Adopted Secondary Plan — Schedule A — Land Use — Adopted (May 17, 2021) 3 Southeast Courtice Secondary Plan —Adopted (December 7, 2020) 4 Southwest Courtice Secondary Plan — Adopted (May 17, 2021) 5 Courtice Employment Lands and Major Transit Station Area Secondary Plan — Summary Report, PIC #2 (September 29, 2020) Page 10 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC included as future loads for the DES. A future East Penn Canada facility with a full buildout of—350,000 ft2 (32,515 mz) is expected to be constructed in the Energy Park directly north of the DYEC, however the suitability of the facility for connection to the DES cannot be determined', and has therefore not been included as a future load for the DES. 2.2 Defining Building Types and Locations In the absence of detailed development information, FVB has developed reasonable estimates of development types and locations to establish potential system loads. The building type in each location has been determined by the following factors: 1. Required density as dictated by secondary plans or other available planning data 2. Population targets for each secondary plan area (when provided) 3. Land size and location (proximity to Energy Park) 2.2.1 High Density Residential Areas defined as high density residential in secondary plans have been assumed to be comprised of high, medium, or low-rise apartment buildings. These may range from 3 to 15+ storeys as dictated by each secondary plan. Maximum, minimum, and typical assumed unit counts for each type of apartment building are listed in Table 3. Selection of high-, medium- or low-rise apartment buildings for a given parcel of land was based on the overall parcel area as well as location of the parcel in relation to major intersections and regional roads. Table 3: Unit Counts by Apartment Tvne Apartment Type Minimum Units Maximum Units Typical Units ' Proposed Rezoning to permit East Penn development of 1840 Energy Drive, Courtice (PSD-050-19, November 12, 2019) Page 11 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC 2.2.2 Medium Density Residential Medium density development has been based on low-rise apartment buildings or townhouses. Townhouses may take several different forms including side -by -side, stacked, or back-to-back. These forms allow for varying densities and can be selected to best suit a neighbourhood. FVB has assumed that areas where townhouses are located will be generally comprised of a mix of the different types pictured in below. Townhouses have been arranged in complexes ranging from 40 to 200 units in size, as dictated by the size of the available parcel of land. Each complex is assumed to be served by a single connection to the future DES (as opposed to connections to each individual townhouse). Connection to freehold townhomes is challenging due to the large number of small customers. These numerous connections points increase system costs, as well as maintenance and management of billing of the system. A single connection greatly simplifies DE connection cost and management cost of the DES. Based on the density requirements for medium density residential, townhomes have been assumed to be arranged in a condo townhome configuration. Further work could be completed to assess the feasibility of connecting freehold townhome customers. Low-rise apartment buildings have been assumed to be 100% residential buildings, with no or limited mixed -use space. Low-rise apartments have generally been located on smaller parcels of land and closer to major roads. Page 12 of 70 Durham Region / Municipality of Clarington — District Energy Study { F'. ------------ FVB ENERGYINC Zl'.-I Y 1 _ a 5� �T *W ��g— .0 Figure 4: Townhouses Connected to DE (Left) 30 Regent Townhomes located in Toronto, Ontario (Right) Remington Townhomes located in Markham, Ontario 2.2.3 Low Density Residential Low density development is assumed to be detached or semi-detached houses, similar to the majority of the existing residential areas in Clarington. Parcels of land indicated as low -density in secondary plans were grouped together, however they have not been analyzed in detail as options for connection to a future district energy system. The maps found in Appendix A do not show future low -density residential developments. Page 13 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 2.2.4 Office Buildings Office buildings have been included in the MTSA, as well as the Energy Park. The office buildings in the Energy Park are existing (OPG) or currently under design/construction (OPG Expansion and East Penn office). Refer to Section 2.4.2 for details on how office space was placed within the MTSA. Where data was not available for the type of office building expected, FVB has assumed that the buildings will be low rise (2 to 4 storeys), such as the building pictured in Figure S. Figure 5: Typical low-rise office 2.2.5 Retail / Commercial Space (Non -Residential) Retail and commercial space have been included in the MTSA area. This space may be used for shopping centers, grocery, retail, or commercial applications such as medical offices or other small businesses. The area allocated under this category of building may also be used for other non-residential or non -office uses such as public library, hotels, institutional, or arts and cultural spaces. Loads have been estimated based on a combination of retail and commercial space. Figure 6: Low/Mid Rise Retail/Commercial Space in Downtown Toronto (Source: Turner Fleischer Architects Inc.) Page 14 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 2.2.6 Community Centres FVB has included one community centre within the MTSA area. Community centres with recreational facilities tend to have very high energy consumption. Community centre type buildings have been based on the YMCA facility located in downtown Markham which contains athletic courts, fitness area, indoor track, a pool, and changing facilities. Figure 7: Markham YMCA (Source: YMCA GTA) 2.2.7 Schools Schools have been placed in areas as indicated on secondary plan land use maps. The size of each school has been estimated based on the area population and Clarington percentage of school aged children. School aged children (ages 5 to 17) made up a total of —16.6% of Clarington's population per the 2016 Census'. Based on this, the total estimated school enrollment for each area is shown in Table 4. Table 4: School Enrollment ' 2016 Census Profile: Clarington, Municipality Page 15 of 70 Durham Region / Municipality of Clarington — District Energy Study 2.3 Building Sizes 2.3.1 Residential Unit Sizes and Number Occupants Aw 1MYN/B ENERGYINC FVB has used data from Statistics Canada on dwelling size and the number of occupants from the Housing Intensification Study Report by USI/Watson to define the size of each building type and the overall population of each plan area. Table S: Average Unit Sizes and Occupants Dwelling Type Average unit Size8 Apartment (High Density) 862 ft2 (80 m2) Average Occupants9 1.71 Townhouse (Medium Density) 1,350 ft2 (125 m2) 2.79 Detached/Semi-Detached (Low Density) 1,520 ft2 (141 m2) 3.53 The total building gross floor area (GFA) is determined by the average unit size multiplied by the number of units. Building GFAs may be slightly larger depending on whether each building is mixed use. 2.3.2 School Sizes FVB has determined the approximate GFA for each future school using estimated enrollment numbers and the report "Building Our Schools - A Report from the Expert Panel on Capital Standards - 2010-06", which defines the required school GFA for a given student enrollment. Table 6: School Sizes Based on Enrollment10 SchoolEnrollment Elementary ..School 300 37,700 ft2 (3,500 m2) 51,400 ft2 (4,775 m2) 400 46,000 ft2 (4,275 m2) 64,200 ft2 (5,965 m2) 600 65,500 ft2 (6,085 m2) 85,600 ft2 (7,950 m2) 800 85,500 ft2 (7,945 m2) 112,000 ft2 (10,405 m2) 1,000 N/A 135,800 ft2 (12,615 m2) 1,200 N/A 160,600 ft2 (14,920 m2) 2.3.3 Office Sizes and Occupants FVB has assumed that occupancy of the office space will be 1 occupant per 204 ft2 (19 m2) as per the Housing Intensification Study Technical Report (August 24, 2021). Office buildings are expected to range from 30,000 ft2 (2,790 m2) to 50,000 ft2 (4,650 m2). 2.3.4 Community Centre Size FVB has estimated that a typical multi -use community centre will have a GFA of approximately 60,000 ft2 (5,574 m2), based on similar existing facilities in Markham, Ontario. s Canadian Housing Statistics Program (The Daily, 2019-05-03) — Single -detached houses generally larger in Ontario 9 Per "Housing Intensification Study Report" by USI / Watson dated October 2021 11 Building Our Schools - A Report from the Expert Panel on Capital Standards - 2010-06 Page 16 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 2.4 MTSA Building Type and Location Methodology A secondary plan land use map was not available for the MTSA, so FVB selected a mix of buildings to achieve the unit number targets and office space areas defined in the MTSA Summary Report." FVB has assumed that there will be no low -density development within the MTSA. Higher density land uses such as high- and mid -rise residential and mixed -use buildings as well as office space have been clustered closest to the future GO Station. No future development has been assumed in the area south of the railroad tracks that is currently in use by several existing businesses (Bounded by Trulls Road, railroad tracks, Courtice Road, and Baseline Road West). Figure 8: Clarington MTSA Boundary (Red) 2.4.1 MTSA Residential Based on the MTSA Summary Report it is estimated that the MTSA area will have a total of 4,900 units at full buildout. These units have been broken into high-, mid- and low-rise apartment building per Durham Region comments: • 25% high-rise (11-15+ storeys) • 25% mid -rise (6 -10 storeys) • 50% low -Rise (3-5 Storeys) FVB has made the following assumptions on numbers of units for each type of apartment building based on similar developments in the GTA (see Table 3): • High-rise: 300 units per building • Mid -rise: 200 units per building • Low-rise: 100 units per building This results in the following unit breakdown: • 1,200 high-rise units (4 buildings @ 300 units per building) • 1,200 mid -rise units (6 buildings @ 200 units per building) • 2,500 low-rise units (25 buildings @ 100 units per building) The MTSA Summary report indicates that the MTSA area will have a total of 1,500 townhouse units at full buildout. Townhouses have been assumed to be constructed in blocks of 100 units and are located outside of a 500m radius from the future GO Station. Each 100-unit complex will occupy a space of approximately 1.7 hectares, based on similar townhouse developments in Toronto and Markham. Townhouses in the 11 Courtice Employment Lands and Major Transit Station Area Secondary Plan — Summary Report, PIC #2 (September 29, 2020) Page 17 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC MTSA will represent medium density, with —60 units per hectare. This is denser than existing townhouses in the Clarington area. The total residential population of the MTSA at full buildout (2070) is estimated to be—12,560. 2.4.2 MTSA Office A total of 300,000 ft2 of office space has been included in the MTSA based on Durham Region feedback. This results in employment of approximately 1,500 based on office space occupancy of 204 ft2 (19 m2) per person, as per the Housing Intensification Study Technical Report (August 24, 2021). Office buildings are expected to range from 30,000 ft2 (2,790 m2) to 100,000 ft2 (9,290 m2), however for simplicity, all office buildings in the MTSA have been assumed to be 50,000 ft2 (4,645 m2) capable of housing 250 employees. A total of 6 office buildings have been included in the MTSA and have been generally located in the south area of the MTSA, close to the GO Station and existing employment areas. Figure 9: MTSA Office Locations 2.4.3 MTSA Schools No secondary plan data was available regarding schools in the MTSA, therefore FVB estimated the size and number of schools required based on the population of the MTSA. Refer to sections 2.2.7 and 2.3.2 for details on the methodology for determining the required amount of school space based on overall residential population. For an MTSA resident population 12,560, it is estimated that there would be 1,420 elementary school - aged students and 670 secondary school -aged students. Four (4) elementary and one (1) secondary school have been included within the MTSA area based on building occupancy and phasing. The secondary school would serve the MTSA area along with a portion of SEC. Page 18 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 2.4.4 MTSA Retail / Commercial Detailed information on non-residential space within the MTSA was not available, however it was assumed that a total of 400,000 ft2 of space would be dedicated to retail / commercial space. As discussed Section 2.2.5, the area allocated under this category of building may also be used for other non-residential or non -office uses such as public library, hotels, institutional, or arts and cultural spaces. These types of buildings have been assumed to be dispersed throughout the MTSA in 100,000 ft2 blocks. 2.4.5 MTSA Community Centre It has been assumed that three community centres will be added to the MTSA from 2021 — 2070 (YMCA type or similar). Community centers have been based on the Markham YMCA with a total GFA of 60,000 ft2 and contain athletic courts, a pool, fitness areas, indoor track and changing facilities. The three community centres have been located throughout the MTSA, with the first centre located close to the future GO station and office buildings. 2.5 Potential Areas for Future Expansion Durham Region has noted that the Courtice Employment area west of Trulls Road is the subject of an Employment Area conversion request encompassing approximately 85 hectares of land, with the possibility for this area to be used for residential purposes. Furthermore, a section of the Courtice Waterfront is also being proposed for residential development west of Courtice Road, however the feasibility of this land use is predicated on land use compatibility assessments due to proximity to regional facilities (CWPC, DYEC, future Anaerobic Digester, etc.). If these areas are developed with suitable building typologies (mid to high density development), they would be ideal candidates for future connection to an established DES. At this time, they have not been included in this study as minimal information was available. Page 19 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 2.6 Phasing FVB has developed an estimated phasing plan for development within Clarington. This phasing plan is based on historical population growth in the area, unit counts from Secondary Plan information and feedback from Durham Region and Municipality of Clarington staff. Development has been broken into seven (7) phases, with the first phase beginning in 2025, and the last phase beginning in 2060. Table 7: Phasing Years Phase Start Year End Year 2.6.1 Population Growth in Clarington FVB has assumed that residential units will not be added at a constant rate throughout the phases. The initial phases have the highest number of connected units, however these units are generally medium density building types such as townhomes and low-rise residential. Development in SEC and SWC generally ramps down over the first 4 — 5 phases, while the MTSA generally ramps up. In general the greater the number of buildings with significant load which can be connected to the DES in early phases, the better the financial case will be. 2.6.2 Projected Units in MTSA, Southeast Courtice and Southwest Courtice Based on available secondary plan information, it is estimated that at full buildout of the MTSA, Southeast Courtice and Southwest Courtice will have a total residential unit count of approximately 12,800. FVB has assumed that the phasing will prioritize buildings in Southwest Courtice, followed by Southeast Courtice and lastly, the MTSA. MTSA buildout will begin in 2025, however the majority of high -density development will begin after the anticipated construction of the GO station in "2028 (per feedback from Durham Region). MTSA unit phasing has been based on values provided by Durham Region from the NLBC report "Analysis of the Proposed Lakeshore East GO Rail Extension Alignment Options and Business Case Analysis" dated October 2019. 2.6.3 Phasing Plan The phasing plan generally results in connection of smaller, lower density buildings relatively far from the Energy Park within the Southwest and Southeast Courtice areas and medium density buildings (townhomes) in the MTSA. Overall development of the areas tends to ramp down, with SWC reaching full buildout in Phase 4 and SEC reaching full buildout in Phase 6. The MTSA has a relatively constant rate of development for the first 5 phases, and increases considerably in Phases 6 and 7. Refer to Figure 10 for a breakdown of residential development by phase. There is no development outside of the MTSA after Phase 6. Page 20 of 70 Durham Region / Municipality of Clarington — District Energy Study 100 % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Percentage of Residential Development in Each Secondary Plan Area Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Phase 7 ■ MTSA ■SEC ■SWC Figure 10: Percentage of Residential Development in each Secondary Plan Area 2,500 2,000 500 0 Residential Units per Phase Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Phase 7 ■ MTSA ■ SEC ■ SWC Figure 11: Residential Units per Phase Aw ,aVB ENERGY INC Within each secondary plan area, development generally prioritizes lower density residential in early phases. This is especially true in southwest Courtice where a significant portion of the low density residential has already been constructed in the north half of the secondary plan area. Page 21 of 70 Durham Region / Municipality of Clarington — District Energy Study 100% 90Y. 80% 70Y. 60% 50% 40% 30% 20Y. l0Y% 0% 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% MTSA Unit Type Proportion by Phase Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Phase 7 ■ Hi -rise ■ Mid -rise ■ Low-rise ■ Townhouse SWC Unit Type Proportion by Phase Phase 1 Phase 2 Phase Phase 4 Phase 5 Phase 6 ■ Mid -rise ■ Low-rise ■Townhouse ■ Detached SEC Unit Type Proportion by Phase FV/3 ENERGY INC loon 9O% 8O% 7OY. 60% SOY. 40% 3OY. 20% 1OY. 0% Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 ■ Mid -rise ■ Law -rise ■ Townhouse ■ Detached Figure 12: Residential Unit Type Proportion by Phase (Top Left) MTSA (Top Right) Southeast Courtice (Bottom Left) Southwest Courtice. Schools have been phased to provide adequate capacity following the construction and occupancy of residential units in the area. It has been assumed that the OPG office buildings (existing and new) would be added in Phase 1(-565,000 ft2). MTSA office buildings are added in Phases 2 through 7. Addition of non-residential GFA has been generally aligned with values provided by Durham Region from the NLBC report "Analysis of the Proposed Lakeshore East GO Rail Extension Alignment Options and Business Case Analysis" dated October 2019. Table 8: MTSA Non -Residential Building Phasing Phase 1 Office - Elementary Schools.. 1 x 46,000 ft2 Secondary 1 x 100,000 ft2 2 1 x 50,000 ft2 - - - 1 x 60,000 ft2 3 - 1 x 46,000 ft2 - 1 x 100,000 ft2 - 4 1 x 50,000 ft2 - 1 x 97,000 ft2 - 1 x 60,000 ft2 5 - - - - - 6 2 x 50,000 ft2 1 x 46,000 ft2 - 1 x 100,000 ft2 - 7 2 x 50,000 ft2 1 x 46,000 ft2 - 1 x 100,000 ft2 1 x 60,000 ft2 Page 22 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 3 Load and Energy 3.1 Building Performance Utilizing the estimated building phasing developed in previous sections, FVB has generated load profiles for typical building types. These load profiles were developed based on FVB's extensive database of metered data from similar buildings located throughout the GTA. To capture the expected improvements in building performance in future phases, adjustment factors have been utilized. These factors have been based on several different sources including the Toronto Green Standards, Whitby Green Standards, and proposed 2020 NECB energy tiers. The values utilized are conservative estimates of the energy reductions compared to the baseline and represent changes to building construction which will improve thermal performance. Table 9: Buildina Performance Factors by Phase Phase 1 (spaceHeating Cooling Baseline Baseline Phase 2 -5% +1.25% Phase 3 -10% +2.50% Phase 4 -15% +3.75% Phase 5 -20% +5.00% Phase 6 -25% +6.25% Phase 7 -25% +6.25% 3.2 Load and Energy All Areas (Energy Park, MTSA, Southeast Courtice and Southwest Courtice) Table 10 shows the total combined system loads and annual energy consumption at each phase (e.g. Phase 3 values includes load and energy consumption of all buildings from Phases 3, 2 and 1). Table 10: Load and Enerav by Phase qPhase1 Heating Demand 10.9 Annual Heating 32,400 Peak CoolingPeak 2,100 .. 14,500 Phase 2 18.9 56,800 3,470 22,800 Phase 3 26.0 77,300 4,880 31,300 Phase 4 32.6 96,200 6,170 38,400 Phase 5 36.0 104,900 6,950 42,200 Phase 6 41.1 117,700 8,250 49,300 Phase 7 46.9 133,400 9,700 56,700 Page 23 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC 4 Technology Screening 4.1 Available Energy Sources To optimize the GHG reduction potential of the DES, renewable thermal generation technologies must be selected. These technologies must be chosen to best leverage the local resources, which differ from site to site. The Clarington Energy Park is unique in the abundance of different thermal generation sources in close proximity to the proposed DES. These sources include: 1. Waste heat recovery from Darlington Nuclear Plant 2. Steam extraction from the Durham York Energy Center 3. Combustion of excess digester gas from the Courtice Water Pollution Control Center 4. Sewer and Effluent Heat Recovery at the Courtice Water Pollution Control Centre 5. Digester gas from the future Anaerobic Digester Plant Additional technologies which are less location specific include: 1. Geo-Exchange 2. Biomass 3. Solar Power / Solar Thermal 4.1.1 Darlington Nuclear Generating Station and Small Modular Reactors The Darlington Nuclear Generating Station (DNGS) produces large amounts of waste heat as a by-product of nuclear power generation, which could be valuable for cogeneration. Nuclear district heating has been implemented in Russia, several Eastern European Countries, Switzerland, Sweden, and most recently China. Due to the large amount of heat available, it is often economical to transport the energy hundreds of kilometers. Despite the large potential of utilizing nuclear district heating, there are many hurdles in implementation, especially in the context of retrofitting to an existing nuclear generating facility and as such, extraction of waste heat from DNGS was not considered in detail due to the presence of many more readily available sources of thermal energy in the area. Ontario Power Generation recently announced the development of a small modular reactor (SMR) in the vicinity of DNGS, expected to come into service by 2028. SMR have been identified as a way for Ontario to manage increased electricity demand expected because of the decommissioning of the Pickering Nuclear Generating Station and electrification transportation and other energy intensive sectors. Canadian Nuclear Laboratories (CNL) have identified SMRs as having the potential to be a part of a diverse energy system including district heating, cogeneration, and energy storage12. As this was recently announced, insufficient information was available to include this energy generation technology as part of the feasibility study. However, an SMR that is being newly constructed allows an extremely interesting opportunity for District Energy, as the system could be designed to capture the vast amount of waste heat generated from the system for immediate use in the District Energy System without a significant increase in capital cost. Heat recovery from an SMR would have a very positive impact on the business case for a District Energy System as it is carbon -neutral (there is no increase in emissions by 12Canadian Nuclear Laboratories: Small Modular Reactor Technology Small Modular Reactors - Canadian Nuclear Laboratories (cnl.ca) Page 24 of 70 Durham Region / Municipality of Clarington - District Energy Study = eaV3 ENERGY INC capturing the heat produced from electricity generation), high -temperature, and consistent year-round with low operation and maintenance costs. 4.1.2 Durham York Energy Center The Durham York Energy Center is an energy from waste (EFW) facility that was designed to provide a guaranteed district heating energy output. Extraction steam connections are available at the DYEC, with a total capacity of 11,000 kg/hr of steam @ 13.3 Bar, 260°C. Based on review of available data, it is expected that approximately 7 MW of thermal energy would be available from the DYEC for use in the DES. Drawbacks of steam extraction from DYEC include the limited capacity, as well as the scheduled downtime of the system. Further, steam extraction would have a minor impact on the electrical output of the DYEC. The estimated value of steam, based on the facility lost revenue at a power sale price of $0.08/kWh, is $2.09/MMBtusteam or 1.98 $/GJ13. However, compared to natural gas at $5.50 to $8.00/GJ, this energy is very affordable. Steam to hot water converters (heat exchangers) would be used to transfer heat from the steam to the DES hot water system. The converters would ideally be located at the DYEC to minimize steam transmission losses, and buried, low temperature hot water piping would run from the converters to the distribution system. 4.1.3 Courtice Water Pollution Control - Digester Gas Biogas is also naturally generated during the treatment of wastewater at wastewater treatment plants (WWTP). Currently the CWPC utilizes digester gas to fuel the wastewater management process. During warmer periods, excess digester gas is produced and cannot be used as part of the process. As a result, the excess gas is flared. The CWPC already has digester gas boilers capable of burning the full digester gas production to produce hot water, and as a result it would be relatively simple to tie-in the future district heating system to the existing CWPC digester gas boiler system and extract heat at times when it is not needed by the water pollution control process. It is assumed that this would effectively be free energy and would minimize flaring. Table 11 shows the amount of waste gas assumed for use by the District Energy System. Monthly values for the amount of gas currently used in the boilers and the amount of flared gas was provided by the Courtice CWPC. The amount of Waste Gas was divided into a daily average that was used in the hourly model. The Waste Gas amount does not include that which is currently being used by the plant boilers. It is assumed that as the Clarington area is expanded, the amount of available waste gas would increase by 1.0 ft3/day/person14 according to the population data outlined previously. 13 It is estimated that using -7 MW of steam for thermal energy would reduce the electrical output of the system by 776 kW, which translates into 62.06 $/hr of lost revenue. The lost revenue is divided by the amount of thermal energy provided by the steam in that hour to get a cost of 2.09 $/MMBtusteam. 14SOurce: Opportunities for and Benefits of Combined Heat and Power at Wastewater Treatment Facilities, U.S. Environmental Protection Agency, April 2007 Page 25 of 70 Durham Region / Municipality of Clarington - District Energy Study = eaV3 ENERGY INC Table 11: Available Waste Gas for Use in the District Enerav Plant 1 •. :.ROM 771,338 376,266 12,138 14,277 15,742 16,978 18,019 18,522 19,270 19,949 2 700,713 298,616 10,297 12,436 13,902 15,137 16,178 16,682 17,429 18,108 3 747,805 377,260 12,170 14,309 15,774 17,010 18,051 18,554 19,302 19,981 4 697,051 334,555 11,152 13,291 14,757 15,992 17,033 17,537 18,284 18,963 5 576,852 438,523 14,146 16,285 17,751 18,986 20,027 20,531 21,278 21,957 6 442,062 483,415 16,114 18,253 19,719 20,954 21,995 22,499 23,246 23,925 7 369,092 520,474 16,789 18,929 20,394 21,630 22,671 23,174 23,921 24,601 8 195,393 609,368 19,657 21,796 23,262 24,497 25,538 26,042 26,789 27,468 9 322,210 566,527 18,884 21,023 22,489 23,724 24,765 25,269 26,016 26,695 10 486,625 522,492 16,855 18,994 20,459 21,695 22,736 23,239 23,987 24,666 11 575,991 397,949 13,265 15,404 16,870 18,105 19,146 19,650 20,397 21,076 12 358,954 565,350 18,237 20,376 21,842 23,077 24,118 24,622 25,369 26,048 4.1.4 Courtice Water Pollution Control - Wastewater Heat Recovery There is significant potential for sewer/effluent heat recovery for this District Energy System. Wastewater heat recovery involves leveraging the heat trapped in municipal wastewater. There are two main types of wastewater heat recovery: 1. Sewer heat recovery 2. Effluent heat recovery Sewer heat recovery (SHR) involves tying into a sewer or force main upstream of a wastewater treatment facility. The raw sewage must be pumped through a specialized filter, and the filtered water can then pass through a heat exchanger to act as a source/sink for a heat pump. In the context of the potential Clarington DES, it is likely that the Energy Centre will be located close to the CWPC. As a result, a sewer heat recovery system could tie -into the upstream side of the wastewater treatment plant. One drawback of this would be the impact of the heat recovery system on the sewage temperatures entering the wastewater treatment facility; in the winter, the heat pumps would extract heat from the sewage, cooling it down before entering the CWPC, and in the summer, the heat pumps would reject heat into the sewage, heating it up before entering the CWPC. This may have negative effects on the operation of the CWPC. Effluent heat recovery ties into the sewer line downstream of the water treatment facility and therefore, the water no longer has large solids to contend with. This allows a simpler filtration system to be utilized before sending the water through a heat exchanger to act as a source/sink for a heat pump. Additionally, connection to the effluent side of the wastewater treatment facility ensures that the water treatment process is unaffected. The proposed district energy centre is located very close to the effluent line from the CWPC and would therefore be preferable as compared to a sewer heat recovery system. The effluent water passes through heat exchangers connected to heat pumps, which boost the temperature such that the water can be used in the District Energy System. The effluent wastewater can also be used for cooling as a heat sink. Page 26 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC The capital cost of a sewer heat recovery system is comparable to a geo-exchange system of the same capacity. An effluent heat recovery system will have slightly lower capital cost than a sewer heat recovery system due to the simpler filtration requirements and connection to the sewer line. The fuel cost is directly tied to the price of electricity, with the $/MWh value being less than standard electricity prices due to the efficiencies of the heat pumps. Public perception of sewer heat recovery projects tends to be positive, though care must be undertaken to make sure the sewer intercept portion of the system is fully isolated and contained. Utilizing an effluent system, this risk is minimized. 4.1.5 Future Anaerobic Digestion Facility The future anaerobic digestion (2025 to 2026) facility located within the Energy Park will process source sorted organic material (SSO) and facility sorted organics (FSO). FSO will be extracted from municipal solid waste (MSW) delivered to the facility. MSW is comprised of up to 40% organic material. The following table outlines the expected SSO, MSW and FSO at the facility in 2025 and 2045, as provided by Durham Region staff. Table 12: Estimated MSW, FSO, SSO and Total Organics for Digestion at Future Anaerobic Digestion Facility Year MSW • • Total Organics 2025 95,000 tonnes 38,000 tonnes 35,000 tonnes 73,000 tonnes 2045 110,000 tonnes 44,000 tonnes 46,000 tonnes 90,000 tonnes The combined FSO and SSO materials will be used to produce digester gas which will be converted to renewable natural gas (RNG). 11 Source: Canadian Biogas Association Figure 13: Cycle of Biogas Production's Page 27 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC Anaerobic digestion produces a gas that is primarily composed of methane gas (50%-80%) and carbon dioxide (20%-50%), with trace amounts of nitrogen, hydrogen, and carbon monoxide. In the digestion process, bacteria degrade biological material in the absence of oxygen and release methane. Methane gas is one of the main products released during anaerobic digestion and is also one of the most potent greenhouse gases. By transforming the by-products of anaerobic digestion into RNG, then using RNG in efficient combustion, the methane content of the RNG is transformed into carbon dioxide. Methane is almost 21 times more effective at trapping atmospheric heat than carbon dioxide, so biogas combustion is considered to result in a net reduction in greenhouse gases. Anaerobic digesters usually consist of an organic material holder, a digestion tank, a biogas recovery unit, and heaters to maintain the constant temperature of around 35 °C that is required for optimal decomposition. Solids from an anaerobic digester are typically exported for use as fertilizer or compost material. Based on the availability of alternate energy sources in the area, it is recommended that the renewable natural gas (valued at 20-30 $/GJ) be primarily sold to market or self -consumed by the Region to retain the carbon credits and not used as a fuel source in the DES unless surplus quantities of RNG are produced above market demand or local system offtake capacity. 4.1.6 Geoexchange A ground source, or geo-exchange, system is an electrically powered heating and cooling system that utilizes the earth for both a heat source and a heat sink. It uses the relatively constant temperature of the earth as a heat source in the winter and a heat sink in the summer. Components of the system include heat pumps, hydronic pumps, a ground heat exchanger (typically u-bended pipes in boreholes), and a distribution sub -system. Geo-exchange systems are categorized into two types: open loop and closed loop. Open -loop systems pump groundwater from the ground to the surface. The groundwater is passed through a heat transfer system before being returned by injection back into the ground, at a different temperature than before; warmer when the system is used for cooling, or colder when the system is being used for heating. open loop system vveNs w8ter body Figure 14: Open Loop Geoexchange System Page 28 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC Closed loop systems do not transfer anything other than heat with the surrounding environment. They circulate a fluid through a loop of borehole heat exchange pipes buried in the ground. The circulating fluid, typically glycol to prevent against freezing, passes through a heat transfer system at the surface before being recirculated back through the buried ground loop to exchange heat with the surrounding soil or rock. The length of the ground loop is determined by the capacity required for heating and cooling. The borehole field can be vertical or horizontal depending on the available area; vertical holes require much less land area but require the expense of drilling boreholes. closed loop system vertical horizontal goof ermal piles Figure 15: Closed Loop Geoexchonge System Borehole spacing is critical to the efficient operation and cost-effective construction of the geo-exchange system. As boreholes are placed closer together there will be an increase in thermal interference, decreasing the energy load capacity of the geo-exchange system, and requiring more geo-exchange to be installed to overcome the penalty. Minimum recommended borehole spacing for a closed loop application is 6m (-20ft). Closed loop boreholes are typically drilled to depths of 120-260 m (400-850 ft). Heat pump performance COPS are usually provided assuming a constant entering water temperature (EWT) of 10 'C. In reality, the EWT will vary throughout the year depending on the weather conditions, and the extent and duration of the geo-exchange system usage, among other variables. When designing a geo-exchange system, the designer will set minimum and maximum EWTs. The loop will then be sized to meet these limits. These EWTs are commonly set to be 4 °C (40 °F) minimum for winter heating and 32 °C (90 °F) maximum for summer cooling. In some cases, these values can be altered to meet annual efficiency targets, however most commonly it is assumed that the actual run-times at these EWT values are minimal. The benefit of ground -source geo-exchange is that the temperature of the earth remains consistent year- round, making it a source for heating in the winter and cooling in the summer. However, these systems work best in regions that have a balanced heating and cooling load. If only used for heating or cooling, boreholes must be some distance apart to prevent freezing or overheating of the underground exchange system and have backup systems to provide heating or cooling to regulate the temperature. Page 29 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC Geo-exchange is a green technology and offers substantial GHG reductions compared to a conventional heating and cooling plant. There are minimal environmental impacts imposed by the construction, and the borehole field in a closed -loop system should not adversely impact the ground above it. Some considerations must be made to ensure that the borehole field does not become overheated when providing cooling or frozen when providing cooling, as this would negatively impact the environment as well as severely limiting the efficiency of the geo-exchange system. In the Clarington Energy Park, there is a significant amount of undeveloped area which could be used for geoexchange fields, however, based on the opportunity to utilize effluent heat recovery at the CWPC, it is preferable to save the land area and utilize only effluent heat recovery. If future buildout of the development resulted in higher system demand exceeding the capacity available from the effluent system, it would be possible to incorporate geoexchange into the system as required. Further review of available land area would be required while considering all other future uses including regional facilities expansions. Biomass has the advantage of providing reliable, high -temperature heating year-round to the system at a very low carbon cost and a comparatively low capital cost. Biomass plants are easily scalable and do not require the same space requirements as a geo-exchange system, nor the specificity in plant location of a sewer heat recovery system. slj-_�c tr.lra:':r. Moving FWGCwK Asnnger Fir=a7 )-sic's kvedp 11001 Ash Fan Figure 16: Biomass Diagram16 However, a biomass plant also comes with significant drawbacks, particularly for an urban area. Biomass plants require fuel storage on site, as well as ash removal after the fuel is burnt, which requires large trucks to have constant access to the site. Due to the location of the proposed Energy Centre site within the Energy Park, these are unlikely to be a major issue given that trucks already frequent the DYEC. The energy potential of the biomass system is directly tied to the installed boiler capacity, though this sizing should take into consideration the amount of fuel that is required per day and the associated storage requirements. The capital cost of a biomass system is less than that of a heat pump system such as sewer heat recovery or geo-exchange. However, the fuel cost can be considerably more. Ideally, a biomass system would be 16 Source: The Renewable Energy Hub (www.renewableenergvhub.co.uk) Page 30 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC able to leverage waste wood chips from nearby forestry operations. As there are no major forestry operations close to Clarington, it is more likely that the system would have to purchase biofuel in the form of wood chips or pellets, which can be quite expensive. If MoC and DR are interested in pursuing biomass further, the first course of action would be creating an arrangement with a low-cost wood chip supplier. Public perception of biomass plants varies. There are differing arguments on the GHG emission factors for burning biofuels. While the existing DYEC already has stacks, the additional biomass system plume stacks could be unsightly in a new, urban development, and may have negative effects on public perception of the project. 4.1.8 Solar Photovoltaic (PV) Solar Photovoltaic (PV) panels use radiation from the sun to generate electricity. This electricity can be used to reduce the demand the Energy Centre has on the electrical grid. Because these panels do not generate thermal energy directly, they are typically used to complement the installed thermal generation equipment and are therefore not considered a full solution but rather an add -on that can improve the business case. Solar PV panels are generally paired with a battery storage system for smoothing and strategic deployment. Solar PV panels can improve a DES by both reducing the price of electricity and reducing the GHG emissions due to using electricity from the grid. As the Energy Centre would use the Class A rate, particularly in the later phases, the price of electricity the DES provider would pay is tied to the Energy Centre's electricity consumption on the day that the province of Ontario as a whole requires the most electricity. This often happens in the summer months when cooling demand is the highest, which coincidentally is when Solar PV panels are at their most effective. The electricity generated by these panels behind -the -meter reduces the Energy Center's peak grid demand and consequently lowers the electricity price seen by the DES for the entire year. As well, these summer peak days are when the most peaking equipment, such as natural gas generators, are being deployed for the grid. By reducing the grid electricity consumption on those days, the emissions associated with electricity consumption are reduced. 4.1.9 Solar Thermal Solar thermal utilizes solar thermal collectors to heat water from the sun's energy. While this is a very low-cost solution in terms of fuel consumption, the availability of solar energy is generally not aligned with the thermal load profile. For example, in the winter, when the space heating load is high, there is less solar energy available, and in the summer, there is more solar energy available but little space heating load required. To balance the solar availability and demand, energy storage would be required on both a short-term (hourly) and long-term (seasonal) basis. Because of this, solarthermal installations are typically used as a complement to geo-exchange systems with supplemental insulation. There are several different types of solar thermal collectors available: Table 13: Solar Thermal Technologies Technology Unglazed Collector Cost Low on Air Temperature Performance Warm Mild .d Excellent Poor Poor Flat Plate Collector Low — Medium Excellent Excellent Poor Vacuum Tube Collector Medium — High Excellent Excellent Good Page 31 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC To provide a beneficial amount of annual solar thermal energy production for the DES, a large installed capacity would be required, requiring a large amount of space for installation. Because of these large capacity and space requirements, along with the lower predictability and reliability of the energy source, solar thermal was not considered. Solar thermal however can be well suited at smaller sizes as a secondary alternative energy source, for example, small arrays could be installed on the rooftops of customer buildings. 4.2 Conclusion It is recommended that the DES should leverage its proximity to the DYEC and CWPC as potential energy sources. Connection to the DYEC will provide reliable, year-round heating energy, and the system can use excess digester gas from the CWPC to avoid flaring. Finally, effluent heat recovery from the CWPC will be used to provide baseload heating and cooling. This production mix will provide a robust sustainable system baseload. Should additional renewable baseload capacity be required, geoexchange can be used to complement the effluent heat recovery installation. Page 32 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 5 Business -as -Usual Concept In order to determine the feasibility of a District Energy System, it is important to consider what the buildings would do if they were to operate "business -as -usual", or without a connection to a District Energy System. Each building would have a small heating and cooling plant that would serve that building only. The business -as -usual (BAU) costs are used to set the DES rates, or charges, that would be charged to a customer's building for their thermal energy services by the district energy utility. The DES rates set the revenue for the DES business case. They are generally equal to or competitive with the costs a building would pay for a stand-alone system. Because of this relationship between the BAU and the DES revenue, it is important to match the desired goals for energy use and greenhouse gas emission reductions between the two scenarios. As Clarington does not have strict targets at this time, it was assumed that targets from the Toronto Green Standards version 3 (TGS v3) for Greenhouse Gas Intensity (GHGI) Targets would suffice in the interim. The timelines for the implementation of these standards has been relaxed to better reflect the actual timeline for Clarington. The GHGI limits by TGS v3 tier are outlined in Table 14. Table 14: Greenhouse Gas Intensity Limits by TGS v3 Tier Residential Greenhouse Tier 1 GHGI Tier 20 Gas Intensity Limits 2 GHGI (kg/m') 15 Tier 3 GHGI (kg/m') 10 I (kg/ml) 5 Retail 20 10 5 3 Office 20 15 8 4 Community 20 15 10 5 Effective for Phase' 20 15 8.3 4.7 Minus Plug LoadS2 18.4 13.4 1 6.7 1 3.1 Note 1: Effective for Phase is a weighted average of the GHGI for the phase based on the GFA of each building type in that phase. Note 2: Plug Loads include lighting, elevators, secondary -side building pumps, and other electrical loads that are not associated with the DES. These factor in to the total GHGI limit for a building so must be taken into account when calculating the GHGI limit for the DES. It is estimated that the plug loads create 1.6 kg/m2 of CO2 for each phase based on standard electricity use factors and the Ontario electrical grid emission factor. Various options for the BAU scenario are presented to meet the energy and emission targets for each phase. These range from high -efficiency natural gas boilers, electric DHW heaters, and centrifugal chillers for Phase 1 to base loading renewable technologies, such as air source heat pumps (ASHPs). The size of the ASHPs installed determines how much of the annual heating and cooling energy they can supplement —the larger the capacity, the more they contribute to GHG emission reductions, but the more expensive they are to operate. In Tier 4, the GHGI requirements are strict enough that natural gas boilers can no longer be used, and all heating must be done electrically. An overview of the assumed BAU equipment by phase is shown in Table 15. Page 33 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC Table 15: Business -As -Usual Plant Buildouts 1 Tier 2 Proposed Natural Gas Fired, High Efficiency Condensing Boilers Electric DHW Heaters Water Cooled Chillers + Cooling Towers 2 Tier 3 Air Source Heat Pumps (sized for 30% of peak) Natural Gas Fired, High Efficiency Condensing + Electric Boilers Water Cooled Chillers + Cooling Towers 3 4 Tier 4 Air Source Heat Pumps (sized for 75% of peak) Electric Boilers Water Cooled Chillers + Cooling Towers 5 6 7 5.1 Phase 1 In Phase 1, in accordance with the Tier 2 targets, high efficiency condensing boilers, electric DHW heaters, and electric chillers would be sufficient to meet the GHGI requirements. Each building would have a penthouse plant comprised of 3 natural gas boilers sized at 50% of peak load and 2 chillers sized at 60% of peak load. 5.2 Phases 2 and 3 With the slightly more aggressive GHGI targets, Phases 2 and 3 would require an air source heat pump installed in each building to offset some of the emissions from the natural gas boilers. Chillers, cooling towers, and natural gas boilers would still be used to meet peak demands. Air Source Heat Pumps (ASHPs) are common in moderate climates where they can operate year-round without the risk of freezing, such as in Vancouver, BC. In Southern Ontario, ASHPs would operate during the shoulder seasons, providing heating or cooling as required. They have a higher coefficient of performance (COP)17 than electric boilers, lowering fuel costs and associated emissions, but have a higher capital cost and carry the risk that they will not be able to contribute enough to meet targets due to operational limitations based on the outdoor air temperature. 5.3 Later Phases In Tier 4, high efficiency condensing boilers are no longer sufficient to meet the GHGI targets even with peaking loads, which means that electric boilers would take their place. ASHPs would continue to be used as they have a higher COP than electric boilers and therefore reduce the electricity consumption and the GHG emissions of the building. In Tier 4 phases, these would be sized for 75% of the building's peak to take an even larger share of the thermal energy generation. Chillers and cooling towers would continue to be used to provide cooling at peak times. 17 The coefficient of performance (COP) of a piece of equipment is the ratio of the units of thermal energy produced for each unit of electrical energy consumed. An electric boiler with an efficiency of 99% has a COP of 0.99, and a heat pump with a COP of 3.0 has an efficiency of 300%. Page 34 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC 6 District Energy Concept 6.1 What is District Energy? The concept behind district energy systems is simple yet powerful. District Energy Systems (DES) connect multiple thermal energy users (buildings) through a piping distribution network to a centralized heating and cooling source. In District Energy systems, rather than having a boiler and chiller in each building, a central energy facility provides heating and cooling, and in some cases domestic hot water, to the connected buildings. Due to economies of scale and onsite operating engineers, centralized energy systems can implement innovative low carbon alternatives and operate more efficiently resulting in a reduction of GHG and reliance on fossil fuels. DES is recognized by the UN Environment Programme (UNEP) as playing an instrumental role in reducing GHG emissions and uptake of renewable energy sources in communities. The concept of district energy is not new; history points to the Romans as the earliest users. These piped heating systems were used to heat dwellings as well as baths. In Canada, the first district energy system was established in 1880 in London, Ontario, to serve the university, hospital and government building. In 1911 the University of Toronto launched its own district heating initiative, followed in 1924 by the first commercial system established in the City of Winnipeg. Traditionally, in North America, the most common application of district heating and cooling is in university, military, government and large industrial campuses; since 1990, there has been a significant growth in commercially utility operated systems, including Toronto, Montreal, Ottawa, Markham and Vancouver. Therefore, the system is mature and well developed — currently we are in the 4th generation of district heating in Canada: • 1st Generation: Steam Based Systems (1880 —1930) • 2nd Generation: Pressurized Super Heated Water above 100 °C (1930 —1980) • 3rd Generation: Pressurized Water at temperature typically below 100 °C (1980 — 2020) • 4th Generation: Pressurized Water at temperatures typically between 50 — 70 °C (2020+) Page 35 of 70 Durham Region / Municipality of Clarington — District Energy Study IG: STEAM Steam system, steam pipes in concrete tlucts ;u DH flow DH return W �ag•c 26: IN SITU 3G: PREFABRICATED 40: 4tA GENERATION Pressur d hot-water system Pre -insulated pipes Low energy tlemantls Heavy equipment Large "buVltl Industriagsed compact i Iation) Smart energy (optimum interaction on site" stations substations Salso with s Metering and monitoring o7 energy sources, distribution and consumption) 2-way DH <70°C <45°C Data center Energgy is lclency Seasonal heatILaage - scale solryr o sca eoae Biomomaassss CHP Bi ��� GeoWemial� Industry surplus PY, Wave s Wind surplus, ElecDlclry Heat- Heat- storage neat - storage storage Steam- CHP coal storage Hp 7 CHPCHP oIIwas[e,, Indusrpltry suus C o CHP coal 11 Gas waste, Coal Leal Oil,- Waste Waste Local District Heating ❑'strict Heating District Heating 1G f 1880-1930 2G 11930-1980 3G I L980-2020 Aw N/3 E UERGYINC s0-60°C (70°C) IULTDH ,50:8 -25°C — Future energy source " .t Biomass conversion w 2 wayy DVstrlc[ • • Heating e.g. supermarket �C HP B omasa � Cold centralised storage Central Ised heat pump �1 low energy buAlsoildings CHP waste District Heating incineration Development � — Pen dcof bestng generation}! 4G 12020-2050 available technology Figure 17: District Energy 01 Generation District energy systems have three main components: 1. Energy Centre(s) (EC) - is the thermal energy source. They typically include: a. Baseload capacity (i.e. cogeneration, heat pumps, biomass boilers, condensing boilers) that offer key advantages and utilize a secure, low(er) cost fuel source. Generally highest efficiency and higher capital cost equipment. b. Peaking boilers that typically utilize a more conventional fuel source. c. Standby boilers are typically identical to the peaking boilers but are included to provide a level of redundancy and increased thermal energy reliability. 2. Distribution Distribution Piping (DPS)(DPS) - is the insulated piping network that transfers heating and cooling medium from the energy source to the customers. 3. Energy Stations (ETS)Transfer Stations (ETS) - include heat exchanger interfaces between the district energy system and customer building's heating and cooling systems. Having community -shared heating and cooling sources eliminates the need for individual boilers, chillers and cooling towers at each building. Figure 18 illustrates the concept of district energy; a thermal energy grid that connects energy producers and users. Page 36 of 70 Durham Region / Municipality of Clarington — District Energy Study CONNECTING RENEWABLE ELECTRICITY GENERATION CONNECTING INDUSTRIAL DEMAND CAPTURING WASTE HEAT FR SEWAGE AND WASTEWATER 6.2 Energy Transfer Stations WASTE Figure 18: What is District Energy? Aw mayseVS E UERGYINC CONNECTING SOURCES OF "FREE COMBINED HEAT AND Each building will be connected to the distribution system indirectly through an Energy Transfer Station (ETS). The purpose of the ETS is to transfer the energy transported from the Energy Centre through the distribution piping network to the end customer via heat exchangers to satisfy the building's heating needs. An energy transfer station (ETS) typically consists of a space heating, domestic hot water and space cooling heat exchanger, isolation valves, strainers, a control package - including controller, control valve(s), temperature sensors, and energy metering package. The ETS is physically located in each building and replaces the use of thermal energy generating equipment in the building such as boilers, chillers, and heat pumps. The ETS will be designed, installed, and owned by the DES. It will utilize brazed plate heat exchanger technology as well as gasket plate and frame units for DHW and cooling (double walled units). All costs to connect the building will be borne by the DES; no capital costs are incurred by the building owner. A DES connection to existing buildings may require additional capital to retrofit the building's systems; this could include the construction of risers to connect to the existing penthouse mechanical rooms. 6.3 Distribution Piping System The distribution piping system is the physical link between energy sinks (customers) and sources (plants). The concept is based on a below ground direct buried hot water and chilled water distribution network with supply and return piping in a closed circuit (4-pipe system). Both the heating and cooling piping would Page 37 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC generally be installed in the same trench in a parallel configuration. Stacked configuration (e.g., hot water pipes on the top of the cooling pipes) would be considered where street space is too congested for a parallel configuration — this option is not preferred as it is cost and time intensive and as well as more challenging to access and maintain. A preliminary distribution piping concept was developed, including routing and sizing to provide district heating and cooling services to the targeted building developments. The layout of the distribution piping network is based on the Central Energy Centre location in the Energy Park. The proposed DPS route, CEC, and customer locations are shown in the attached GIS model. Figure 19: DE DPS Phasing Map. The DPS construction is generally implemented in open trench construction and it is advantageous if the installation can be completed in parallel with other buried municipal or utility service upgrades or roadway improvements. Because of the expected intensification in the area, it is assumed that DE piping could be Page 38 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC designed and installed in conjunction with upgrades/installation of other infrastructure in the area. Design of distribution piping must be coordinated with other utilities to ensure adequate space and separations are maintained and as result, it is essential to engage with the municipality/region early in the design process to ensure that the process is as streamlined as possible. It is possible to utilize trenchless and or boring technologies for areas that are sensitive to open trench construction such as highways, railways, and transit lines etc. Trenchless construction is very expensive, upwards of double the open trench construction costs, and therefore is generally limited to "crossings" perpendicular to roadways and not considered for parallel road construction. The proposed pipe routing has been selected to minimize the length of distribution piping and minimize crossings of railroads and highways. The chosen route crosses railroads in three locations. Two locations within the Energy Park will likely require the use of trenchless construction, while the crossing at the bridge on Courtice Road above the railroad tracks will likely require the pipes be run alongside or under the bridge. Because distribution piping is planned to be installed in many areas (particularly within the MTSA) where existing roads and utilities do not exist, distribution piping system design and installation is simplified thanks to the ability to coordinate with the civil designers. When designing DPS alongside other utilities, it is possible to establish mutually beneficial routing and incorporate things such as "utility crossing zones" — clear vertical sections below grade which can be used for all utilities to cross at intersections and other and for branches off mains. DES planning requires extensive cooperation with local utilities, municipal works, and road construction. The groups need to be aware that there is planning around DE infrastructure in the next 1-5 years. Due to the significant growth anticipated in the area, extensive work will be required to service the future developments. This is an ideal time to install DPS piping to align with customer phasing and avoid unnecessary road rework. The district heating piping system assumes the use of pre -insulated steel installed in accordance with ANSI B31.1 and CSA B51 designed for 1,100 kPa (160 psig) at maximum 95°C (203°F) design temperature. The district cooling piping assumes welded steel with epoxy coating. Because the system being proposed is a 4t" generation district energy system with low temperature hot water, plastic piping such as pre -insulated PE-RT or pre -insulated PEX could also be used. These types of piping eliminate the risk of corrosion damage and can be installed more efficiently. The pipe sizing for the selected route will be governed by the following four key factors: • Supply and return temperature differentials, referred to as AT (delta T); • Maximum allowable fluid velocity; • Distribution network pressure at the design load conditions; and • Differential pressure requirements to service the most remote customer. Distribution pipe sizes are based on a differential temperature of 25 °C for heating and 8 °C for cooling with a maximum flow velocity of 2.0 m/s. The temperature of the district system is dictated by the customer buildings and the thermal generation technologies being employed. The design of each customer building's internal heating system will need to be coordinated to achieve the district side return temperatures. It is assumed that the system will be a 41" generation low temperature hot water system, with a maximum district supply temperature of 70°C and an associated district return temperature of 45°C. A district heating supply temperature reset schedule would be employed. Low temperature systems reduce Page 39 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC thermal distribution losses and allow the use of lower grade energy sources (such as wastewater heat recovery). It is assumed that the district side chilled water supplied to each building would be 4°C minimum in the summer, with an associated district return temperature of 12°C. A district cooling supply temperature reset schedule would also be employed. The main pipes are estimated to be 400 mm for heating, capable of delivering 50 MW of heating, and 550 mm for cooling, capable of delivering 10,000 tons of cooling. For main lines of this size, the trench width would be "3,500 mm wide. Branch sizes range according to assumed building connection load from 65 mm to 150 mm on the heating piping and 100 mm to 400 mm on the cooling piping. Trench widths for branches are narrower, generally closer to 2,000 — 2,500 mm. 6.4 Energy Centres Two energy centre scenarios were reviewed: 1. Conventional DES with gas fired boilers and electrical centrifugal chillers. Boiler and chiller installation would be phased as required based on the system demand. The energy centre would serve all loads identified in the Energy Park, MTSA, Southwest Courtice, and Southeast Courtice. 2. Low -Carbon DES serving all loads in the Energy Park, MTSA, Southwest Courtice, and Southeast Courtice. Thermal generation would be provided by excess digester gas from the CWPC, steam extraction from the DYEC, wastewater heat recovery at the CWPC, and peaking gas fired boilers and electric centrifugal chillers. In both scenarios, FVB has assumed that a single energy centre would serve the entire DES and has been sized to allow for a maximum installed equipment capacity as required. If the DES were to expand beyond what has been assumed in this report and require greater peak thermal demand, it is possible to add satellite peaking energy centres throughout the system. These facilities would generally have less expensive, less efficient equipment and would only operate to provide supplemental heating and cooling capacity to the expanded system on the coldest and hottest days of the year, which would represent a very small percentage of the overall annual energy. The location and required capacity of the peaking facilities could be determined based on available land area and hydraulic analysis of the distribution system. 6.4.1 Central Energy Centre: Location & Space Requirements The Central Energy Centre (CEC), to serve the Clarington Energy Park DES will house the thermal generation equipment. The thermal energy generated will be supplied to customer buildings connected to the system for space heating, space cooling and domestic hot water heating. In both energy centre scenarios, the plant has been located as a standalone building just north of the CWPC. It is estimated that the following plant footprints would be required for each of the two cases: 1. Case 1: 1,693 m2 2. Case 2: 2,070 mz 6.4.2 Technical Concepts and Phasing 6.4.2.1 Energy Centre Phasing The phased approached attempts to defer the outlay of capital until there is the load and corresponding revenue stream to support that capital. The challenge with the phasing approach is to find the right Page 40 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC balance between the economies of scale, design and construction effort, and the initial capital required to provide the plant infrastructure to support the future phases. The DES CEC plant infrastructure required for the full build -out would be installed during the first phase with only the heating and cooling equipment required for the first phase demand installed within the plant. Although it requires more capital to be expended at the beginning of the project, this is the most practical method that avoids removing and upsizing equipment from phase to phase. Overall, the plant has been phased so there is N+118 heating capacity and N chiller capacity at full build -out. The following sections will provide a breakdown of the proposed equipment capacity at each phase. In Case 2 where less conventional energy sources are provided, N+1 redundancy has been provided by including additional gas -fired boiler capacity equal to or greater than the largest thermal source. In this case, this is the EFW facility at 7.0 MW. 6.4.2.2 Case 1: Conventional DES FVB has completed a baseline scenario utilizing gas fired boilers and electric, centrifugal chillers. While this scenario does not optimally use the energy sources available in the Clarington Energy Park, it is important to develop this case as it proves the viability of the DE system. Because of the duration of the system buildout, the boilers and chillers installed in the first phase will reach their end -of -life at the beginning of Phase 7. To minimize plant space and future maintenance costs, it is proposed that when these units are replaced it is with larger units to meet the full buildout capacity. Table 16: Case 1 Enerav Centre Buildout Diversified Installed Diversified Installed Phase Peak Heating Boiler Cumulative Demand Capacity Installed (MW) (MW) Boilers Peak Cooling Chiller Demand Capacity (tons) (tons) Cumulative Installed Chillers •0 TR 18 N+ 1 Capacity represents the total installed capacity minus the largest boiler. This is the maximum load the system can meet with any one boiler non -operational. Page 41 of 70 Durham Region / Municipality of Clarington — District Energy Study = saV3 E UERGYINC 6.4.2.3 Case 2: Low -Carbon DES — Serving the Energy Park, the Major Transit Station Area, Southwest Courtice, and Southeast Courtice While Case 1 is the most straightforward concept for an Energy Centre, it does not mean it is the better solution long-term. With many municipalities declaring a climate emergency and carbon taxes being raised at a federal level, there are many incentives to prioritise a system that reduces GHG emissions while using a diversity of fuel sources. Clarington has several unique opportunities to leverage renewable technologies for thermal generation right from the beginning of the system development through to the full system buildout. The proposed Low -Carbon DES would meet the same GHGI targets required of the building BAU buildouts, previously outlined in Section 5, while leveraging easily accessible, low capital technologies right from the inception of the system. An overview of the Energy Centre buildout is shown in Table 17. Table 17: Case 2 Enerav Centre Buildout - Heatina Heating Energy Centre — Case 2 Diversified Peak Heating Available PhaseT D• ..city (MW) Source Breakdown DYEC-7 MW, Steam Extraction to STM-HW HX 1 10.9 20 CWPC —1 MW, Excess Digester Gas 2 x 6 MW Natural Gas Boiler 2 18.9 27 Add 7 MW Natural Gas Boiler 3 26.0 39 Add 2 x 6 MW Natural Gas Boiler 4 32.6 44 Add 5 MW Effluent Heat Pump 5 36.0 49 Add 5 MW Effluent Heat Pump 6 41.1 54 Add 5 MW Effluent Heat Pump Replace 2 x 6MW Natural Gas Boilers (Phase 1) with 7 46.9 60 2 x 9 MW Natural Gas Boilers DYEC-7 MW, Steam Extraction to STM-HW HX CWPC —1 MW, Excess Digester Gas Full 46.9 60 2 x 6 MW Natural Gas Boiler 2 x 9 MW Natural Gas Boiler 3 x 5 MW Effluent Heat Pump The first renewable technology that would be leveraged right from the beginning of the system build -out is digester gas from the CWPC facility that is currently flared. The digester gas is a product of the anaerobic digestion that is essential to the wastewater treatment operation, and its use is considered carbon neutral. The 1 MW capacity shown is the nominal heating capacity available from the waste gas that is currently being flared. However, it should be noted in the hourly model developed for the lifecycle costs and GHG emissions the flared gas varies by season as shown in Section 4.1.3. The second renewable technology, also implemented at the conception of the Energy Centre, is the use of steam from the Energy -from -Waste (EFW) facility. This facility burns municipal waste to create Page 42 of 70 12 10 8 � 6 0 4 2 30 25 20 15 0 10 5 Durham Region / Municipality of Clarington - District Energy Study = eaV3 ENERGY INC electricity 24/7 year-round. It currently has a connection available for use by a district energy system of around 7 MW that could be leveraged with minimal capital cost. By Phase 4, the energy requirements of the DES are such that additional renewable technologies are required to meet the Tier 4 GHGI target to match the BAU. Another unique opportunity exists to leverage the heat trapped in the wastewater effluent being discharged by the CWPC facility. By using heat pumps, heat can be extracted or rejected to the effluent water for heating or cooling respectively, depending on the demand of the system. 5 MW of heating capacity is installed in each of Phases 4, 5, and 6 to continue to meet the GHGI targets with increasing system demand. A visual comparison of the make-up of the thermal generation in each phase is shown in Error! Reference s ource not found.. Note that the capacity at full load of the technologies are shown - the actual composition hour -by -hour may change based on maintenance requirements and variable fuel supply, such as the effluent or digester gas. P1 Heating Load Duration Curve P2 Heating Load Duration Curve 20 18 16 14 12 -- 10 0 B 6 4 2 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 9,000 9,000 Hours � NG Boilers � Heat Pump � EFW � Dig. Gas -Cumulative LDC P3 Heating Load Duration Curve 35 30 25 20 a 0 15 10 5 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Hours NG Boilers � Heat Pump � EFW � Digester Gas -Cumulative LDC 0 1,000 2,00o 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Hours � NG Boilers � Heat Pump � EFW � Digester Gas -Cumulative LDC P4 Heating Load Duration Curve 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Hours � NG Bailers � Heat Pumps � EFW � Digester Gas -Cumulative LDC Figure 20: Thermal Generation Makeup for Each Phase Page 43 of 70 40 1 35 30 _ 25 � 20 0 J 15 10 5 so 45 40 35 30 v 25 20 15 10 5 Durham Region / Municipality of Clarington — District Energy Study P5 Heating Load Duration Curve 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,0W 9,000 Hours LNG Boilers � Heat Pumps � EFW Digester Gas -Cumulative LDC P7 Heating Load Duration Curve 4s 40 35 30 25 0 20 15 10 5 FV/3 ENERGY MC P6 Heating Load Duration Curve 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Hours LNG Boilers � Heat Pumps EFW � Digester Gas -Cumulative LDC 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Hours NG Boilers � Heat Pumps � EFW � Digester Gas -Cumulative LDC Figure 20: Continued On the cooling side, there is less of a requirement for leveraging renewable technologies as centrifugal chillers operate from electricity at a high efficiency. However, the effluent heat pumps have capacity to supplement the cooling load. In particular, when there is both a heating and cooling demand on the system, the heat pumps can operate in a simultaneous capacity providing both heating and cooling to the system for the same electricity consumption, for even greater GHG emission reductions. Page 44 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC Table 18: Case 2 Enerav Centre Buildout - Coolina Cooling CoolingDiversified Peak .Capacity Demand • •Breakdown 1 2,100 3,400 2 x 1,700 TR Chillers + Cooling Towers 2 3,470 5,100 Add 1 x 1,700 TR Chiller + Cooling Tower 3 4,880 5,100 4 6,170 7,740 Add 1 x 1,700 TR Chiller + Cooling Tower Add 1 x 940 TR Effluent Heat Pump' 5 6,950 8,680 Add 1 x 940 TR Effluent Heat Pump' 6 8,250 9,620 Add 1 x 940 TR Effluent Heat Pump' Replace 2 x 1,700 TR Chillers + Cooling Towers 7 9,700 11,320 (Phase 1) with 2 x 2,550 TR Chillers + Cooling Towers 2 x 1,700TR Chillers + Cooling Towers Full 9,700 11,320 2 x 2,550TR Chillers + Cooling Towers 3 x 940 TR Effluent Heat Pumps' Note 1: Effluent Heat Pump capacity is based on 5 MW heating capacity and assumed COP of 3.0 heating/2.5 cooling. However, limitations on the effluent discharge temperature (30°C max.) mean that there are times during the peak cooling season that the actual capacity is less than the nominal tonnage. The cooling plant buildout has taken this into account when sizing the chillers and cooling towers. The makeup of the chilled water generation at full buildout is shown in Figure 21. The actual hourly output of the heat pump may vary based on the availability of the effluent and the simultaneous heating load. 40 35 30 _25 0 0 J15 10 5 P7 Cooling Load Duration Curve 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Hours Chillers Heat Pumps -Cumulative L0C Figure 21: Chilled Water Generation Makeup Page 45 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 7 Capital Costing 7.1 Capital Cost Estimate (Class D Estimate-25%/+50%) The preliminary capital cost estimates for each phase of the proposed district energy system development have been estimated based on FVB's costing templates and established unit costs, vendor and contractor estimates. Class estimates are considered Class D, indicative-25%/+50%. Owner's contingency, soft costs, and legal and easement fees are not included. A summary of the capital costs for each element of the proposed DES can be found in Table 19 and Table 20. 7.1.1 Energy Centre The Energy Centre is assumed to be fully constructed in the first year of the project, with major equipment being added meet growth in system demand. The plant concept assumes a new, purpose-built single storey (-10m) high building that houses the energy centre with cooling towers situated on the roof. 7.1.1.1 Case 1: Conventional DES The Energy Centre for Case 1 is estimated to require 1,690 mz of floor area. A summary of the capital cost per phase is presented in Table 21. Page 46 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaVi9l ENERGY INC Table 21: Case 1 Energy Centre Capital Cost Case 1 Energy Centre Capital Cost (2021$)' Heating Capacity (MW) Heating Plant Cooling Capacity (tons) Cooling Plant Total Phase Phase 1 18.0 $ 16,394,000 3,400 $ 21,943,000 $ 38,337,000 Phase 2 12.0 $ 2,660,000 1,700 $ 3,510,000 $ 6,170,000 Phase 3 6.0 $ 1,344,000 0 $ - $ 1,344,000 Phase 4 6.0 $ 8,911,000 1,700 $ 8,576,000 $ 17,487,000 Phase 5 0.0 $ - 1,700 $ 3,552,000 $ 3,552,000 Phase 6 6.0 $ 1,344,000 0 $ - Phase 7 9.0 $ 6,174,000 1,700 $ 9,676,000 $ 15,850,000 Total 57.0 $ 36,827,000 10,200 $ 47,257,000 $ 82,740,000 Note 1: Includes Contractor OH&P, Construction Management Engineering (8%), and Contingency (20%). Does not include taxes. 7.1.1.2 Case 2: Low -Carbon DES The Energy Centre for Case 2 is estimated to require 2,050 m2 of floor area. The additional space compared to Case 1 is primarily for housing the heat pumps which have a large footprint. The cost per phase is presented in Table 22. Table 22: Case 2 Energy Centre Capital Cost Case 2 Energy Centre Capital Cost (2021$)' Heating Capacity (MW) Heating Plant Cooling Capacity (tons) Cooling Plant Total Phase Phase 1 20.0 $ 18,158,500 3,400 $ 24,810,500 $ 42,969,000 Phase 2 7.0 $ 1,876,000 1,700 $ 3,418,000 $ 5,294,000 Phase 3 12.0 $ 3,094,000 0 $ - $ 3,094,000 Phase 4 5.0 $ 10,503,000 2,600 $ 9,333,000 $ 19,836,000 Phase 5 5.0 $ 3,899,000 900 $ 488,000 $ 4,387,000 Phase 6 5.0 $ 3,899,000 900 $ 488,000 $ 4,387,000 Phase 7 6.0 $ 3,923,000 1,700 $ 8,496,000 $ 12,419,000 Total 60.0 $ 45,352,500 11,200 $ 47,033,500 $ 92,386,000 Note 1: Includes Contractor OH&P, Construction Management, Engineering (8%), and Contingency (20%). Does not include taxes. 7.1.2 Distribution Piping System The DPS capital cost assumes an open trench construction with a 1x4, 4-pipe configuration, a supply and return pipe each for heating and cooling. It is assumed that the DES piping network would be installed as part of the municipal service work in order to synergize with excavation, backfill, and final roadway restoration work to keep capital costs down. A stacked configuration, 2x2 configuration, for the distribution piping infrastructure may be investigated if utility congestion in the roadway is a concern. This type of installation tends to increase capital cost and installation time. Table 23 shows the capital costing for the distribution piping system for both Case 1 and Case 2, serving the entirety of the study area. Page 47 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaVi9l ENERGY INC Table 23: DPS Capital Cost DPS Capital Cost (2021$)' Trench Length (m)2 Main Pipe Branch Pipe Total $/tm Phase Phase 1 10,385 $ 60,549,000 $ 2,592,000 $ 63,141,000 $ 6,080 Phase 2 4,310 $ 15,011,000 $ 2,528,000 $ 17,539,000 $ 4,069 Phase 3 3,445 $ 11,559,000 $ 2,831,000 $ 14,390,000 $ 4,177 Phase 4 2,070 $ 5,632,000 $ 1,982,000 $ 7,614,000 $ 3,678 Phase 5 650 $ 1,178,000 $ 753,000 $ 1,931,000 $ 2,971 Phase 6 1,185 $ 2,700,000 $ 1,371,000 $ 4,071,000 $ 3,435 Phase 7 1,270 $ 3,572,000 $ 1,401,000 $ 4,973,000 $ 3,916 Total 23,3151 $100,201,000 $ 13,458,000 $ 113,659,000 1 $ 4,900 Note 1: Includes Contractor OH&P, Construction Management, Engineering (91%), and Contingency (15%). Does not include taxes. Note 2: Includes length for main line and branch connections. 7.1.2.1 Exclusions - Primary electrical service upgrades and electrical costs if required. - Duties and taxes - Cost of land acquisition, easements, and rights of way 7.1.3 Energy Transfer Stations The capital cost for the Energy Transfer Stations includes the construction and installation of the ETSs within each of the buildings. The ETS capital cost for both Case 1 and Case 2 is shown in Table 24. Table 24: ETS Capital Cost ETS Capital Cost (2021$)' # of ETS's (kW) ETS Capital Cost Total $/ETS Phase Phase 1 24 $ 5,978,000 $ 5,978,000 $ 249,083 Phase 2 20 $ 4,983,000 $ 4,983,000 $ 249,150 Phase 3 17 $ 4,269,000 $ 4,269,000 $ 251,118 Phase 4 17 $ 4,417,000 $ 4,417,000 $ 259,824 Phase 5 9 $ 2,194,000 $ 2,194,000 $ 243,778 Phase 6 17 $ 3,884,000 $ 3,884,000 $ 228,471 Phase 7 17 $ 4,058,000 $ 4,058,000 $ 238,706 Total 121 $ 29,783,000 $ 29,783,000 $ 246,140 Note 1: Includes Contractor OH&P, Construction Management Engineering (9%), and Contingency (15%). Does not include taxes. 7.1.4 Assumptions 7.1.4.1 Owner's Soft Costs Owner's Soft Costs were estimated as 2% and include legal, accounting, and development, as well as a contingency cost. 7.1.4.2 Engineering Costs Engineering Costs were estimated at 8% for the plant design and 9% for DPS and ETS design and includes all engineering work during the design and construction process, including specialty consultants if required. Page 48 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 7.1.4.3 Construction and Design Contingency A design and construction contingency has been included for at 20% for the plant capital estimate and 15% for the DIPS and ETS capital estimates due to the conceptual level of the project and uncertainty in construction costs due to material and labour shortages and effects of the current pandemic climate. 7.2 Annual Operating & Maintenance Cost Estimate The following section gives an overview of the fixed (labour, maintenance, etc.) and variable (gas, electricity, water, etc.) operation and maintenance costs for each Case. 7.2.1 Case 1: Conventional DES The operation and maintenance costs for the Case 1 DES are shown in Table 25 below. Table 25: DES Annual Operating and Maintenance Cost Estimate At Full euildout — Case 1 DES O&M Component.. Heating Variable O&M19 $ 3,204,500 Heating Fixed O&M20 $ 765,700 Cooling Variable O&M21 $ 3,188,917 Cooling Fixed O&M22 $ 692,700 DIPS and ETS Maintenance $ 205,700 Carbon Tax $ 4,085,600 It was assumed that the price of natural gas for the plant is $5.50 / GJ based on Enbridge's Rate 6 structure. This is based on actual cost data from a similar DE plant, and includes all supply, delivery, and carbon costs. For the conventional system, electricity cost was estimated based on the Class B rate structure. With conventional equipment, the electrical peak of the plant coincides with the peaks used to assess Class A Global Adjustment charges and therefore it does not present any cost savings. Based on the Class B rate structure, the effective electricity price is $0.18/kWh and includes average monthly HOEP prices from 2020 and delivery & connection charges according to Hydro One. Peak shaving using natural gas generators or solar PV with a battery storage system could reduce the cooling variable O&M cost by reducing the effective cost of electricity; this would be investigated in further stages of the DES design. The natural gas boilers are assumed to have a seasonal efficiency of 85% and the electric boilers are assumed to have an efficiency of 99%. The chillers are assumed to have a COP of 4.5. Carbon tax is estimated using Canada's currently forecasted model of $50/tonne in 2022, increasing by $15/tonne yearly until 2030 ($170/tonne). After 2030, it was estimated for this study that the carbon tax 19 Heating Variable 0&M costs include natural gas, electricity, makeup water, chemical treatment, and sewer costs for the condensing boiler, electric boilers, and heat pumps for their contribution to heating. 20 Heating Fixed O&M costs includes major equipment maintenance, insurance, and operator and administration costs. 21 Cooling Variable 0&M costs include electricity, makeup water, chemical treatment, and sewer costs for the chillers, cooling towers, and heat pumps for their contribution to cooling. 22 Cooling Fixed O&M costs includes major equipment maintenance, insurance, and operator and administration costs. Page 49 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC increases at a rate of 2% each year. As there is a significant amount of natural gas used in the conventional system this value becomes significantly detrimental to the success of the system in the long term. 7.2.2 Case 2: Low -Carbon DES Case 2 is benefitted by the efficiencies of the effluent heat pump and the competitive cost of steam from the EFW facility and waste digester gas. The operations and maintenance costs for this case are presented in Table 26. Table 26: DES Annual Operating and Maintenance Cost Estimate At Full Buildout — Case 2 DES O&M Component.. i Heating Variable O&M $ 2,848,000 Heating Fixed O&M Cooling Variable O&M Cooling Fixed O&M DPS and ETS Maintenance Carbon Tax $ 684,100 $ 2,092,900 $ 691,700 $ 205,700 $ 649,200 The stated assumptions for Case 1 continue to apply. The heat pumps are assumed to have a heating COP of 3.0, a cooling COP of 4.0 (both varying with the effluent temperature), and a simultaneous COP of 5.0. With the addition of the heat pumps, the electricity cost is estimated based on a Class A rate structure to achieve some cost savings. The effective electricity price becomes $0.13/kWh without peak shaving and includes average monthly HOEP prices from 2020 and delivery & connection charges according to Hydro One. It is estimated that the Peak Demand Factor (PDF) of the plant at full buildout is 1.30x10-4 based on the 2020 Ontario peaks. Currently, Ontario's peaks occur in the summer and the electricity cost is mainly driven by the chiller requirements. However, if the peaks begin to occur in the winter due to the increased electrification of heating equipment, plant operations could be conducted such that heat pump use is reduced during these peaks and natural gas boilers are favoured. Peak shaving using natural gas generators or solar PV with a battery storage system could also reduce the heating and cooling variable O&M cost; this would be investigated in further stages of the DES design. The EFW plant is assumed to have an opportunity cost associated with the steam use by the DES as this steam can no longer be used for generating electricity, and this cost would have to be covered by the DES operator. Based on the current cost of electricity, the amount of steam used by the DES, and the efficiency of the engine, the variable cost associated with energy use from the EFW is 2.09 $/GJ. At this stage of the study, it is assumed that the Region of Durham would not charge the DES operator for the use of the effluent. However, this is subject to change. Page 50 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC 8 Financial Analysis & Business Case 8.1 Glossary Key Financial Terms: • NPV (Net Present Value) is the different between the present value of the benefits of a project and its costs. • IRR (Internal Rate of Return) is defined as the interest rate that sets the NPV of the cash flows of a project to zero. • WACC (Weighted Average Cost of Capital) is the average cost of capital an entity must pay to all its investors, both debt and equity holders. • The discount rate is the interest rate used to determine the present value of future cash flows. 8.2 Cost of Capital and Capital Expenditure Escalation This study does not assume the use of debt financing. However, recent market activity is indicative of a low interest environment as investors seek safe yields. There is strong reason to believe that the cost of capital will continue to be low for the foreseeable future.23 Based on FVB experience, the DE cost of capital and discount rate is assumed to be 3.5%. DR/MoC may have an alternative discount rate they would like to use, and future development of the DES business concept including the Owner/Operator model can further address use of the most appropriate discount rate. While the cost of capital will likely be low, the cost of construction and capital expenditures is likely to rise substantially over the coming years. A lack of skilled construction laborers and materials shortages will lead to higher future capital expenditure costs.24 Based on current industry trends, the capital expenditure escalation rate is assumed to be 4.0%. In other words, the capital cost of new construction is expected to rise more quickly than the standard CPI inflation rate of 2% annually. 8.3 Revenue: Business -As -Usual - Self -Generation The Business -As -Usual cost and assumptions determine the target pricing for the DES service and the potential revenue. To examine the feasibility of a District Energy System, it is important to consider what the buildings would do if they were to operate "business -as -usual", or without a connection to a District Energy System. Each building would have a small heating and cooling plant that would serve that building only. Various options for the business -as -usual (BAU) scenario are presented to meet the energy and emission targets for each phase. The estimated BAU solution that buildings would choose in each phase was outlined in Section5. The estimated building energy tiers are consistent between the DES and BAU scenarios. The district energy service is priced to be competitive with what the building would pay if a standalone self - generation heating and cooling plant is installed. Therefore, the self -generation costs for the buildings are estimated for the financial model. 2s https://www.bankofcanada.ca/rates/indicators/capacity-and-inflation-pressures/expectations/ 24 https://www.theglobeandmail.com/business/industry-news/property-report/article-construction-industry-fears- a-skilled-trades-shortage/ Page 51 of 70 Durham Region / Municipality of Clarington - District Energy Study = eaV3 ENERGY INC 8.4 Business As Usual Annual Self -Generation Costs Customer buildings' BAU costs, otherwise referred to as standalone or self -generation costs, include the total costs of owning, operating and maintaining heating and/or cooling in -building systems if it were not connected to the DES. The self -generation cost can be conceptualized as being comprised of two components: 1. Annual Operating and Maintenance (O&M) Costs. This includes fuel, electricity, other consumables, onsite staff time and maintenance. 2. Capital Costs. For new buildings there are two components: • The upfront capital cost avoided in having to build the space and initial cost to install the heating and cooling equipment; and • The avoided future replacement/sinking fund for equipment replacement. The BAU costs were estimated for the potential customer buildings. Market -based district energy rates are developed to be cost -competitive with the modelled self -generation costs. 8.4.1 Self Generation: Capital Cost Due to the level of detail known about the buildings, as well as the high-level nature of the pre - feasibility study, standard $/kW installed metrics for heating and cooling self -generation plants developed by FVB through years of experience and completed projects were used to estimate the BAU capital costs. These metrics were tailored based on the size of the individual buildings, the expected installed capacity of each building for adequate redundancy, and the TGS v3 Tier (Table 15) they are anticipated to meet based on the phase in which they are constructed. These capital costs are shown in Table 27. Table 27: BAU Capital Cost Summary BAU Capital Cost Summary (2021$) Pi P2 P3 P4 PS P6 P7 Year 2025 2030 2035 2040 2045 2050 2060 Number of Heat Pumps Average Unit Capacity 0 0.0 19 3,904.1 17 3,302.3 17 3,700.5 11 1,819.2 14 2,307.4 18 2,379.1 Heat Pump Heating Capacity NG Boiler Heating Capacity Elec Boiler Heating Capacity 0 16,344 806 6,135 12,270 S75 4,687 10,188 570 5,011 0 9,784 2,419 0 4,838 3,899 0 7,799 4,804 0 9,607 Total Heating Capacity 17,150 18,980 15,445 14,795 7,257 11,698 14,411 Heat Pump Cooling Capacity Chiller Cooling Capacity 0 8,877 7,199 6,079 5,500 5,680 5,879 5,451 2,838 3,074 4,575 5,509 5,636 6,236 Total Cooling Capacity 8,877 13,277 11,180 11,330 5,912 10,084 11,872 Heat Pump Heating Capital Cost NG Boiler Capital Cost Elec Boiler Capital Cost 0 13,937,000 5,013,800 3,564,000 12,356,300 4,153,600 2,723,050 9,919,800 4,148,100 2,910,600 0 15,561,700 1,404,700 0 8,286,300 2,263,800 0 11,667,700 2,789,600 0 14,194,400 Total BAU Heating Capital Cost 18,950,800 20,073,900 16,790,950 18,472,300 9,691,000 13,931,500 16,994,000 Heat Pump Cooling Capital Cost Chiller Capital Cost 0 13,910,000 3,240,000 9,947,000 2,475,500 9,256,000 2,646,000 9,138,000 1,277,000 5,194,000 2,058,000 8,337,000 2,536,000 9,450,000 Total BAU Cooling Capital Cost 13,910,000 13,187,000 11,731,500 11,784,000 6,471,000 10,395,000 11,986,000 Total BAU Capital Cost Total Cumulative BAU Capital Cost 32,860,800 32,860,800 33,260,900 66,121,700 28,522,450 94,644,150 30,256,300 124,900,450 16,162,000 141,062,450 24,326,500 165,388,950 28,970,000 194,358,950 Heating FTEOperator Staff Cooling FTEOperator Staff 2 2 3 3 3 3 3 3 3 3 3 3 3 3 Number of Buildings 25 19 17 17 11 14 18 Page 52 of 70 Durham Region / Municipality of Clarington — District Energy Study Aw eaV/3 ENERGY INC 8.4.2 Self Generation: Operating and Maintenance Cost Estimate Table 28 shows the estimated fixed and variable heating and cooling costs for the full buildout of the Clarington development if each building had a standalone solution rather than being connected to a centralized DES. Table 28: BA Annual Heating Variable O&M` Heating Fixed O&M21 Cooling Variable O&M21 Cooling Fixed O&M21 DPS and ETS Maintenance Carbon Tax and Maintenance Cost Estimate $ 12,289,300 $ 1,515,300 $ 3,411,800 $ 1,355,800 N/A $ 1,220,900 It was assumed that the price of natural gas for the plant is $7.00 / GJ based on Enbridge's Rate 1 structure. The electricity rate for this pre -feasibility study was assumed to be Class B with an effective cost of $0.18/kWh. The natural gas boilers are assumed to have a seasonal efficiency of 75% and the electric boilers are assumed to have an efficiency of 99%. The chillers are assumed to have a COP of 3.5. The ASHPs are assumed to have a COP that varies with the outside air temperature according to data from the manufacturer. Carbon tax is estimated using Canada's currently forecasted model of $50/tonne in 2022, increasing by $15/tonne yearly until 2030. After 2030, it was estimated for this study that the carbon tax increases at a rate of 2% each year. 8.5 Financial Model 8.5.1 General The key inputs to the financial model are: 1. Project phasing, load and capital estimates, which vary from project to project and for different phases within projects, i.e. contracted capacity (in kWt or tons) and capital (in $ millions). 2. Capacity charges that have been determined through a BAU cost analysis to be competitive for the subject scenario (i.e. $ per contract ton per month or $ per contract kWt per month). 3. Operating assumptions using typical default values and ratios for operating costs per unit of energy or unit of installed capacity, which are largely the same between all projects, being 21 Heating Variable C&M costs include natural gas, electricity, makeup water, chemical treatment, and sewer costs for the condensing boiler, electric boilers, and heat pumps for their contribution to heating. 26 Heating Fixed O&M costs includes major equipment maintenance, insurance, and operator and administration costs. 2' Cooling Variable 0&M costs include electricity, makeup water, chemical treatment, and sewer costs for the chillers, cooling towers, and heat pumps for their contribution to cooling. 28 Cooling Fixed O&M costs includes major equipment maintenance, insurance, and operator and administration costs. Page 53 of 70 Durham Region / Municipality of Clarington — District Energy Study Aw mayeaW3 ENERGYINC adjusted from time to time as energy prices change or experience leads to the recommendation of different ratios. 8.5.2 Thermal Revenue 8.5.2.1 District Energy Rates District energy rates are the charges the customer building's pay for the DES service. They are developed based on a virtual plant model as if the building were not connected to the district energy system (refer to Section 8.3 and Section 8.4 above). It analyses the capital costs and operation and maintenance cost for a stand-alone building system to generate the building's space heating, space cooling and/or domestic hot water (DHW) needs. The self -generation costs determine the district energy rates which are generally comprised of two components: 1. The Energy Charge - The annual energy charges are based on the annual energy consumption, current utility rates and the equipment efficiency expected to be achieved in the self -generation scenario. 2. The Capacity Charge - The Capacity Charges are based on the standard rates applicable to the load for heating and cooling. The following figure shows the relationship between the Self -Generation and district energy rate structures. District Energy Rate Structure 1 involves an energy charge and capacity charge. District Energy Rate Structure 2 involves a one-time connection fee to cover capital costs, reducing ongoing rates. Self -Generation District Energy Rate District Energy Structure 1 Rate Structure 2 Capital Fixed Capacity Connection Fee Fixed Capacity O&M Variable Energy Variable Energy Variable Energy Figure 22: Self -Generation Costs vs. DE Rate Structure The rate structure is assumed to utilize a fixed capacity charge and a variable energy charge structure (Rate Structure 1 shown in Figure 22 above). The fixed capacity charge assumed in calculating the revenue in the financial model is set equal to the BAU fixed costs and the sum of the BAU capital costs discounted at the DE discount rate. In other words, the capacity charge is determined to be the heating or cooling capacity multiplied by the calculated capacity charge such that the sum of heating or cooling capacity charges over the course of the —25 year modeling period equal the NPV of the BAU capital costs using the DE discount rate. It is important to consider that capacity charges are representative of fair and competitive pricing, but are not an edict or mandate in any way — in reality, an Energy Service Agreement (ESA) will be negotiated for each customer to address their specific needs and Page 54 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC circumstances. An indicative rate for the first year of connection for Case 1 and Case 2 is presented in Table 29. Table 29: District Energy Rate Summary — Heating and Cooling Energy29 CoolingDES Charges Heating Energy 72.01 $/MWht 70.82 $/MWhc Capacity 181.53 $/kW 192.86 $/kW The capacity charge rates are set to be competitive against the annualized fixed cost of conventional heating and/or cooling. A capacity charge of $182 kW/year for heating and $193 kW/year for cooling is based on the calculated avoided fixed operation and maintenance cost and avoided capital of the business -as -usual case, and represents the estimated average of the rates charged to each building. These will be refined as the design process for the Clarington DES continues, further feasibility studies are completed, and conversations with developers in the area to be served by the DES are carried out. These serve as a starting point to highlight the baseline cost savings of the DES over the business -as - usual scenario and are used in this pre -feasibility study. The actual rate charged to each building will depend on many more factors, including the actual BAU design and anticipated equipment composition of the building. 8.5.2.2 Thermal Revenue Assumptions To calculate the thermal revenue in the financial model, the calculated Capacity Charge is multiplied by the peak heating and cooling demand in each year, and the Energy Charge is multiplied by the total heating and cooling energy for that year. The peak demand and annual energy are calculated in the technical model and only increase when a new phase comes online. The Capacity Charge and Energy Charge are assumed to increase by the standard CPI inflation rate of 2% annually. 8.5.3 Financial Results 8.5.3.1 Case 1: Conventional DES Business Case The results of the financial model for Case 1 are shown in Table 30. The Case 1 DES presents a return on investment of 7.2%. This is considered a good business case. The business case would be aided by higher density development and a faster buildout. The biggest detriment to the Case 1 business case is the assumed carbon tax. While the capital cost for the energy centre is less than if renewable technologies were implemented like in Case 2, the fact that 29 Year 1 of occupancy. Page 55 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGYINC the BAU has significantly less GHG emissions coupled with an aggressive carbon tax is a detriment to the business case. 8.5.3.2 Case 2: Low Carbon DES Business Case Case 2 presents a similar business case than the conventional system and falls within the 6-8% range that is considered a good business case for District Energy. The operating costs are significantly better long-term due to the carbon reduction. It is hindered by the increase in capital required to implement the renewable technologies, but it also presents lower fuel costs, operational and maintenance costs, and associated carbon costs than the BAU scenario. 8.5.4 Improving the Business Case The results of the financial analysis show there is a decent opportunity for District Energy in Clarington, aided by the abundant energy resources but challenged by the relatively low density and distance between development nodes. The business case could be improved by the following elements. 8.5.4.1 Heat Recovery from on SMR OPG has recently announced development of an SMR in the DNGS vicinity. As mentioned in Section 4.1.1, this consistent, high -temperature heat source would have a positive impact on the business case while significantly lowering the GHG emissions of the DES. Not enough information was available at the time of this report to include this as an energy generation source, but if MoC and DR are considering moving forward with District Energy, it is highly recommended that there is coordination with OPG to incorporate heat recovery capabilities as part of the construction of the SMR. 8.5.4.2 Decreasing Development Timeline A longer buildout timeline negatively affects the business case as returns on capital, particularly for the DPS infrastructure and the Energy Centre building costs, are delayed until buildings come online and begin generating revenue for the system. The business case would improve if the number of phases were reduced, or if the time between phases is reduced. 8.5.4.3 Increased Density Several parts of the Clarington development, particularly outside the MTSA, are planned for a much lower density than typically seen in Canadian District Energy Systems. Townhouses, detached homes, and low-rise residential blocks are less benefited by a DES than high-rise residential buildings or high - density office towers, as they have lower demand and energy for the installed DPS and Energy Centre infrastructure. Higher density throughout the area would allow for a better return on capital through revenue generated from the connected buildings. 8.5.4.4 Solar PV Power The land around the EFW and wastewater treatment plant is largely undeveloped and relatively flat. There is potential for the installation of a large array of solar PV panels for generating electricity that could be used to power the Energy Centre. While this wouldn't be enough to fully power the system, particularly in the winter, it would allow for peak shaving under Class A, which would reduce the Page 56 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC average electricity price, and would also allow for clean energy use when the grid is at its peak emission levels. 8.5.4.5 Peak Shaving Generators Another option for peak shaving is the installation of natural gas generators. While the use of these would increase emissions somewhat, effective peak shaving typically only requires the generators are deployed for thirty hours over the course of a year to ensure the peaks are properly captured. The generators would also be able to provide emergency backup in the case of an electrical back-up, which could be necessary when the heating system relies on the effluent heat pumps. There is increasing availability of shared savings agreements with generator manufacturers, where rather than paying a capital cost or a lease payment, the savings shared due to peak shaving are split between the plant owner and the generator vendor. Page 57 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 9 Environmental Benefit 9.1 Greenhouse Gas Emissions Savings To calculate the greenhouse gas emissions of both the District Energy and the BAU cases, the following emission factors were used. - Grid Electricity: Hourly Average Emissions Factor (AEF) for Ontario published by the Toronto Atmospheric Fund (TAF).30 Yearly average is 31 kg CO2e/MWh,. - Natural Gas: 176 kg CO2e/MWhg31 Combustion of digester gas has been assumed to have green house gas emissions of 0 kg CO2e/MWh because this gas is typically flared by the facility. The DES concept assumes that only the gas that would traditionally be flared is used for generating thermal energy, and as a result, there is no net increase in the GHG emissions as compared to flaring. The greenhouse gas emissions for thermal energy recovered from the EFW facility have been assumed to be 0 kg CO2e/MWh since there would be no net change to the amount of waste that is combusted by the facility (which is capped at 140,000 tonnes per year and proposed increase to 160,000 tonnes per year) and therefore no increase in the facility's emissions. Heat extraction for DE would have a minimal impact on the facility's electrical output, which has been captured in the opportunity cost as described in Section 4.1.2. Table 32: Annual GHG Emissions Compared to BAU at Full Buildout Business as Usual 11,054 9.02' - Case 1: Conventional DES 28,721 23.44-17,667 Case 2: Low Carbon DES 4,564 3.73 6,490 Note 1: GHGI in this table represents the total at full buildout. It will not necessarily match the TGS Tier 4 standard as it incorporates buildings constructed to meet less stringent standards. 9.2 Other Environmental Benefits, Synergies, and Considerations 1. Opportunities and heat available for snowmelt operations: sidewalks, parking lots, bus depot and transportation hubs can benefit from reduction in salting and snow clearing efforts, improved accessibility and public safety. 2. Roof space for most buildings would be more congenial without stacks and cooling towers. The roof might thereby be used as common areas for the enjoyment of building occupants, green roof, implementation, solar PV/solar thermal, rainwater harvesting. 3. Provide opportunities to utilize waste heat producers. 4. Increase energy literacy starting with demand -side reductions and improving supply side efficiency. 5. Supports small local power generation/cogeneration and micro -grid strategies for backup power. 31 Source: "A Clearer View on Ontario's Emissions", June 2019 31 Source: "National Inventory Report — 2021 Edition — Part 2" Page 58 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 10 Conclusions Durham Region and the Municipality of Clarington have an excellent opportunity to develop a low carbon district energy system to serve the Clarington Energy Park and surrounding secondary plan areas. This study investigated two possible district energy concepts — one conventional system with gas fired boilers and chillers (for comparison) and a low carbon DES. The Low Carbon District Energy case is an excellent example of a 4tn Generation District Energy System, particularly due to its low distribution temperatures which allows it to efficiently tap into the numerous local thermal energy sources. Both cases present good business cases, indicating that District Energy should be pursued as part of this development. Availability of the many viable alternative thermal energy sources (energy from waste, effluent heat recovery, excess digester gas) within such a small area is unique to Clarington and allows the Low Carbon DE scenario investigated to present similar business case to the conventional district energy scenario, while simultaneously offering significant overall carbon emissions reductions. FVB recommends completing further work developing the Case 2 Low Carbon DE scenario once more detailed information on projected developments and development timelines are known. Page 59 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 11 Next Steps: DES Implementation Strategy 11.1 Task 1 - Develop DES Business Concept The first task is to confirm the Owner/Operator model and establish suitable governance for a commercial DES system or utility (e.g. relationship with shareholders and funders). Key questions to consider include: • Who will own the plant and distribution system? • Who will operate the system most effectively to benefit the community? • Who has access to potential sources of private financing or government grants? • Can capital costs and financing responsibilities to be shared? From FVB's experience, it is understood that building owners/developers want a clear understanding of: • What the DES service being provided is. • Who are they dealing with? • That the service is fair and the process transparent. • That the DES service will meet their project timeline. • That the service is cost competitive. • What are the benefits and where do goal align? Identify DES engagement strategy: City/Regional Role - Effective DES implementation requires a proactive role by the City/Region. Staff will need to articulate the rationale and role of the City/Region and requirements of these roles to all departments, the City Chief Administrative Officer (CAO) and ultimately City/Regional Council. The City/Regional staff at every level must understand that they are instrumental to the ultimate success of the DES implementation. A senior staff person should be assigned to play the lead role in the establishment of the DES business structure, as well as negotiating the terms of a hybrid model if that is the Town's preferred option. This individual would also be required to make the case to internal approval authorities for any specific monetary or in -kind contribution. Authority to execute the City/Regional roles should be sought from Council. Having established a responsible entity to take carriage of the project, the assigned representatives would be duly authorized to execute the balance of the implementation plan as outlined below. Prior to the commencement of marketing, an initial business plan should be developed with a project schedule, costs/revenue projection, and draft sample Memoranda of Understanding (MOU's) and Thermal Energy Service Agreements (TESA's) for customers. Key Stakeholders — Identify and involve key stakeholders who may benefit from the establishment of a DES in Clarington. Tours of successful district energy systems, workshops, and shared experiences with other building owners and operators are an effective way to involve community stakeholders and familiarize them with district energy. Page 60 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC • City Councillors Regional/Provincial Government Officials • Developers/Landowners • Local Residents and Residential Organizations • Business Groups • Energy Managers, Organizations and Environmental Groups • General Public • DES Developers • Internal City / Regional Groups such as Water, Municipal Infrastructure, Roads, Building Operators, Planning/Policy • Others: Enbridge, IESO, Elexicon, Metrolinx • Key Community Members Benefits to the Communitv - It is important to communicate a concise clear message based on: 1. Adding Value to the City/Region 2. Strengthening the local economy 3. Improving energy efficiency and energy security 4. Offering a cleaner means of meeting (thermal) energy demands 5. Providing energy flexibility and resilience. Understand Barriers to DES Implementation: • Low energy prices. • Lack of capital: community energy systems are capital intensive. • Economics: requirement for short term paybacks on energy investments. • Lack of technical and DES business knowledge by companies, policy makers. • Need for effective policy incentives to stimulate investment in energy. • Lack of buy in from "all" stake holders including multiple levels of government, developers, local utilities, building owners. • Understanding of the true cost of energy production — capital & operating and maintenance. • Little benchmarking and measurement in the HVAC industry to understand efficiencies and performance. Funding Funding opportunities can start to be investigated for further development of the DE concept and re- assess the feasibility of the system as additional planning information becomes available, particularly in regards to the current uncertainty regarding development timelines within the MTSA. Funding opportunities may have a factor in the owner/operator model chosen. FVB has had success with the following funding sources for grants and low -interest loans for low carbon district energy projects: • The Federal Confederation of Municipalities' (FCM) Green Municipal Fund (GMF) o Funding for GHG reduction pathway feasibility study. Provides a grant for a portfolio of buildings to a maximum of $200,000 to cover up to 80% of eligible costs. • Low Carbon Economy Fund (LCEF) Page 61 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC o $2 billion fund leverages investments in projects that will generate clean growth and reduce greenhouse gas emissions. • Canada Infrastructure Bank (CIB) o Provide accessible debt financing for projects leading to greenhouse gas reductions over the projected life of equipment financed and create employment. 11.2 Task 2 — DES Marketing DES Marketing is the process of teaching consumers why they should choose a connection to a district energy provider over continuing with a standalone heating/cooling system for their building. Marketing is a form of persuasive communication which includes creating the product or service concept, identifying who will be DES customer buildings, promoting it, and moving it through to a connection agreement. The DES marketing phase involves increasing awareness and demonstrating viability. The most important building owners/developers to approach would be the City, Region, and Province. Staff and decision makers responsible for heating and cooling of all publicly owned buildings identified as potential connections should be engaged in preliminary discussions aimed at introducing the possibility connection to DES. The potential value to the City/Region should be stressed and the planned process for establishing the DES business explained, including the expected schedule. An important outcome of this activity would be to gain the cooperation and participation of each building owner/operator in the establishment of the DES along with commitments to coordinate their planning activities with the DES activity. DES marketing, learning, and increasing know how will continue to be an on -going effort. 11.3 Task 3 - Refine the Technical Concept Further The DES technical concept should be detailed further based on the results of discussions with the building owners/developers. This effort would include investigation into the following: • Commitment of the site identified for the energy centre, coordinate with architectural and development team if energy centre will be embedded in a building. • Technical planning and coordination will occur with the overall site planning. • Identify coordination required and potential synergies with other ongoing infrastructure development work in the targeted development areas. • Analysis of wastewater treatment effluent to confirm suitability and capacity of effluent stream. • Review building energy models and identify simultaneous heating and cooling opportunities to increase effectiveness of effluent heat recovery. • Investigate utility servicing required for energy centre including natural gas service, electrical connection, water, etc. • Preliminary review of Environmental Compliance Approval requirements related to air emissions, noise assessment, and use of cooling towers. • Refine technical concept design and improve cost estimate class. Page 62 of 70 Durham Region / Municipality of Clarington — District Energy Study = eaV3 ENERGY INC 11.4 Task 4 - Project Review Stock would be taken of the prospects and suggested character of the DES as informed by ongoing and previous efforts. An especially important step would be to solicit comments on the current effort from buildings owners/developers, as these will form the basis of MOU's that they will be asked to sign. The list of prospective customer peak loads and energy use, and consequently the cost/revenue may be revised as a result of this work. 11.5 Task 5 - Develop Project Technical Definition Based on a primary review of likely customers, the Project Technical Definition (PTD) should be developed. (This is sometimes contained in a Design Basis Document). The PTD will include initial sizing of equipment, schematics and layouts, including pipe route and sample pipe details. More refined capital cost estimates would be developed from the PTD. Based on the projected customers' avoidable costs and discussions with the landowners/developers, a pricing structure will be developed. The pricing structure and capital cost estimates will be used to develop the project business case and review of risks. 11.6 Task 6 - Obtain Customer Commitment With a solid business plan (including pricing) in hand, presentations will be made to landowners/developers aimed at securing sign -off of MOU's. Explanations will be given describing what it means for a building to be connected to district energy from both a technical and business perspective. The key pricing message will be the concept that district energy will cost no more than the business as usual alternative but will provide better value for money through risk mitigation and service reliability. In a standalone situation, the building owner/operator assumes all risk of faulty equipment and operator error. By connecting to a DES, building owners transfer this risk to the CES owner. The landowners/developers will be asked to sign -off on MOU's, in acknowledgement of draft TESA's that will also be presented to them. In FVB's experience, the execution of TESA's can be a time-consuming process. MOU's provide the DES developer with some assurance of customer commitment to support application for capital approvals and construction financing, even while final customer review and execution of TESA's are in process. 11.7 Task 7 - Finalize Project Definition The Project Technical Definition and business plan will be reconfigured as necessary in accordance with the MOU's. This may include some refinement to the pricing and consequently revenue projections. The final business plan should include confirmation of business and financing structure, governance, pricing, cost/revenue projection, project schedule, risk management plan, environmental and social performance and samples of MOU and TESA. At this stage a go or no-go decision for development of a DES may be made, and if positive would move into a detailed design and implementation phase. Page 63 of 70 Durham Region / Municipality of Clarington — District Energy Study Aw eaV/3 ENERGY INC 11.8 Task 8 - District Energy Ready Infrastructure One of the most common concerns of prospective DE investors is the extent to which enough customers are committed to subscribe to the service. Therefore, the best thing the City could do to facilitate realization of the benefits of DES is to encourage buildings to connect to the DES. The City is well positioned to be effective in this role through its relationship with real estate developers. Representatives of the City can engage developers in discussion about the mutual benefits of DES. In areas where DE service is, or may, become available, the development approval process might be used to require or incentivise large, new buildings to be constructed in a way that are at least "DE -ready". New developments and sub -division plans can include space reserved in right of ways for DE infrastructure or it can be installed as part of the municipal servicing. These initiatives can be developed through planning and policy. 11.9 What's in it for Developers? What's in it for the City/Region? 11.9.1 Resiliency and Reliability Central energy systems are very reliable, and the buried infrastructure reduces susceptibility to extreme weather events such as tornadoes and ice storms. The use of local and diverse energy sources increases energy security and resilience. 11.9.2 Environmental and Energy Efficiency The economies of scale and centralized nature of DES enables a highly flexible and adaptable fuel and technology mix to be used which increases the opportunity to use local waste energy streams and implement low -carbon energy sources. In addition, purpose built and operated central energy facilities together with combined thermal loads allows primary fuel sources to be used more efficiently thereby reducing GHG emissions. Buildings connecting to district energy systems demonstrate environmental and energy leadership and a commitment to combatting climate change. 11.9.3 Flexible Building Design Reduces mechanical and electrical service and rooftop space that would have housed boiler and chillers, cooling tower and boiler stacks / chimneys. Space can be used for amenity and community space, green roofs, rainwater harvesting, solar PV/thermal initiatives. Reduction in noise, vibration, and on -site building emissions. 11.9.4 Reduced Costs Building owners can defer capital dollars and upfront/replacements costs for purchasing boilers and chillers. Also lowers risk due to capital and operating costs from boilers, chillers, heat pumps, radiators and cooling towers. Eliminates onsite fuel and reduces building electrical load. 11.9.5 Local Economy Boost District Energy Systems are infrastructure projects that can create and enhance a local energy market and industry, creating jobs during construction and requiring operators and services. Page 64 of 70 Durham Region / Municipality of Clarington — District Energy Study Aw eaV/3 ENERGY INC 11.9.6 Consumer and Public Safety District Energy Systems significantly reduce the risk of Legionella bacteria by eliminating the need for cooling towers. It also eliminates the risk of carbon monoxide poisoning from boilers. Furthermore, connecting to a DES allows for public spaces such as community centres, schools, and libraries to have the capability of being utilized as emergency centres in the case of environmental disasters and other incidents of local crisis. Figure 23: Summary of Benefits to Key Stakeholders from a DES Business Sense • Cost savings, deferred capital costs & Economic • Energy savings, stabilized energy costs Development • Alternative income stream, waste fuel sources Energy • Energy reliability and flexibility Security • Increased efficiency and conservation • Reduce impact from loss of heating and cooling that can affect productivity Environmental • Green image/marketing, environmental and Other stewardship/leadership • Architectural opportunities: roof free for amenity space, green roof, • Renewable opportunities: roof free for solar thermal/PV • Increase comfort from hydronic heating and possibly radiant floor heating • Improved air quality + health benefits • Potential to provide green roof space Page 65 of 70 • ROI, local economic development • Job creation, risk mitigation • Infrastructure asset • Increase urban densification and planning • Increases potential for uptake of waste heat and renewable energy sources • Increased energy security and resilience with local energy production and future proofing • Fuel flexibility • Potential to develop local fuel sources • Lower demand on existing gas/electricity infrastructure • Reduced electrical peak demand • Environmental benefit from efficiency, CO2e GHG reduction • Helps to meet GHG reduction targets and fuel conservation methods • Can reduce water usage in cooling systems • Promote energy awareness • Synergy with potential storm water reduction strategy Durham Region / Municipality of Clarington — District Energy Study Appendix A Secondary Plan Area Load and Phasing Maps Document List: • A.1 — Major Transit Station Area (MTSA) • A.2 — Southeast Courtice Secondary Plan Area • A.3 — Southwest Courtice Secondary Plan Area Page 66 of 70 Aw IMYN/B ENERGYINC Durham Region / Municipality of Clarington — District Energy Study A.1 Major Transit Station Area FVB Density and Building Make -Up Assumptions Clarington Major Transit Station Area Page 67 of 70 LEGEND MId�H gh-Rlse 0 owlMd-Rise pTownhouse • OH'ce ■ Schml • Community Cernre OGO Station ONorvResidernial F 3 ENERGYINC Durham Region / Municipality of Clarington — District Energy Study A.2 Southeast Courtice Secondary Plan Area Page 68 of 70 IaV/3 ENERGYINC Durham Region / Municipality of Clarington — District Energy Study = ,aVB ENERGY INC A.3 Southwest Courtice Secondary Plan Area 1=VB Density and Building Make -Up Assumptions MC.21 Phase 2 - - — --- _ MC-23 - Phase 4 200 Units .� 100 Units MC.22 -Phase 3 \'- 100 Units -> DOWN CRESCENT ( , I '� � Medium Density Residential EXISTING �. GOWN CNESCENT -- TH.413 - Phase 2 76 Units ccArvoviEw oaivE Phase 3 Low Density Residential �! 40 Units 1 I CP ES -Phan 400 S 3 40O Students SOUTHGATE 01INE 1- Phase 2� Students 0 FFNAING UNIVE ENTENS1ON \. MC.20 - Phase 1 200 Units LC.44 -Phase 4 !xs� — - U 100 Units f O O � LC.41 - Phase 1 LC.43 - Phase 3 100 Units 100 Units cv way LC.42 - Phase 2 1 DO Units LEGEND cP Community Park ® Neighbourhood Park Q Parkette 0 Stormwater Management Facilities Q Cemetery Q Other Green Spaces 100 Units Q utility Q Low Density Residential Q Medium Density Residential Q High Density Residential C) Neighbourhood Commercial p Environmental Protection Area Schedule A - Land Use Bayview (Southwest Courtice) Secondary Plan Page 69 of 70 ® Special Study Area I Preferred School Site •> Key View Corridors _} Prominent Intersections Q Former Employment Lands (Area designated PSEZ and proposed for conversion to permit residential uses) 0 500m ® 1 1 1 1 1 1 Area Scale May Za77 0.1267in2lha Durham Region / Municipality of Clarington — District Energy Study Appendix B Concept Drawings Document List: • SK-1238-001: Heating / Cooling Concept Schematic (1 pg.) • SK-1238-100: District Energy Piping Overview (1 pg.) • SK-1238-101: Plant Concept Layout (1 pg.) Page 70 of 70 Aw IMYN/B ENERGY INC 18000 OUTFALL PIPE I I I I I I I I TO LAKE HEAT PUMPS PH4 - 1 X 5,000 PH5 - 1 X 5,000 PH6 - 1 X 5,000 WATER-COOLED COOLING TOWERS CENTRIFUGAL CHILLERS PHI - 2 X 6,000 kW PH7 - REPLACE WITH 2 X 9,000 kW I I I I I I L-------- ---- ------------------------------------------------ DHR NOTES: 1. DRAWING IS A CONCEPT ONLY AND DOES NOT CONSTITUTE ALL MECHANICAL/ELECTRICAL EQUIPMENT REQUIRED. LEGEND ® PUMP FLOW DIRECTION VARIABLE VFD FREQUENCY DRIVE STAMP: m ' REVISIONS JAN 24/22 REVISED STUDY CONCEPT B NOV 5/21 STUDY CONCEPT ONCEPT A REMARKS NO, INIT. This document the property of FVB Enerogy Inc. nd the information hereon is not to be used cop, d cepl for the pecific prof' t it was ued, without the written-thorimtion of eFVB Enerayslnc. CLIENT: Clad"a CONSULTANT: FV/3 E11ERGYNC 3901 HIGHWAY #7; SUITE 300 VAUGHAN, ONTARIO L4L 81_5 TEL: (905) 265-9777 PROJECT TITLE: CLARINGTON DISTRICT ENERGY SHEET TITLE: HEATING/COOLING CONCEPT SCHEMATIC OWN: E.CAI I JOB NO.: 221238 APPR: DATE: NOV 2021 DWO SK-1238-001 DE PLANT TUN'R DISTRICT ENERGY PIPING OVERVIEW R " ■� • I� •.n 7r�t VP O ED ENERGY DR IfO z m i EFW (7MW) 0 r F e�OcFRcy DARLINGTON ENERGY COMPLEX (EXISTING) �, �.w , ■ i AND FUTURE OPG EXPANSION rr•� r far per vr;� r�, •� ..., --� ` 9l M DHS LPS FROM STEAM TURBINE EXTRACTION PLANT • DHR CND TO ATMOSPHERIC DRAIN TANK EFW STEAM-TO-HW HEAT EXCHANGER 1 DHS HWS FROM BOILERS DHR HWR TO BOILERS COURTICE WPCP DIGESTER GAS BOILERS HEATEXCHANGER 0 10 40 80 200 SCALE 1:2000 LEGEND ❑ EXISTING BUILDING ❑ NEW BUILDING DISTRICT ENERGY HEATING PIPE DISTRICT ENERGY COOLING PIPE STAMP: CONCEIDTIJ DESIGN REVISIONS 1AN 26/22 REVISED STUDY CONCEPT B VOV 22/21 STUDY CONCEPT A DATE REMARKS N0. INIT. This tlo<ument 1. the property f NB Enerogy Inc. nd the formation hereon is of to be urd pee c pt for the pecific pro- t it was ued. without the ritten authorization of PVB Energy Inc. CLIENT: ClaboOP CONSULTANTALMW -V�/3 G�V ■ 3901 HIGHWAY #7; SUITE 300 VAUGHAN, ONTARIO 141 815 TEL: 905 265-9777 FAX: 905 265-1756 PROJECT TITLE: CLARINGTON DISTRICT ENERGY STUDY SHEET TITLE: DISTRICT ENERGY PIPING OVERVIEW DGN: A.HENDERSON SCALE: N.T.S. OWN: E.CAI JOB NO.: 221238 APPR: DATE: NOV 2021 SK-1238-100 WATER F E D C B A N 6 OVERHEAD DOOR 0 g DISTRICT PIPES 5500 CLG/4000 HTG CHANGE/ LOCKER ROOM WASHROOM \ / WATER TREATMENT o o STORAGE/OTHER AND UTILITIES x LUNCH/MEETING ROOM CONTROL ROOM / \ ® C O O HYDRO DU CT BANK LILER 9,000 1 0 kW HIGH VOLTAGE MID/LOW VOLTAGE ELECTRICAL ROOM DISTRIBUTION ELECTRICAL ROOM PUMPS MR3 ® BOILER #1 PHASE 1 O O PHASE 2 9,000 kW BUILDING UILDING o o q CHILLER #2 0 9,000 kW HEAT PUMP #1 5.000 kW HEAT PRECOVERY UMPS BOILER #2 9,000 kW CONCEPTUAL DESIGN 0 o BOILER #3 REVISIONS N o 7,000 kW � o CHILLER #3 JAN 26/22 REVISED STUDY CONCEPT B o 6,000 kW NOV 22/21 STUDY CONCEPT A ® ® DATE REMARKS N0. IN IT. This document the property to beB End - Inc. odand the formation hereon is o uI p ceWt for the tit was ued, without eFVB 2 O O pacific prof' the ritten authorization of Energyslnc. CLIENT: HA _ HEAT PUMP #3 HEAT PUMP #2 5,000 kw UILDING S,D00 kW Clarington BOILER #4 6,000 kW ® CHILLER #4 6,D00 kW CONSULTANT: w FVi3 BOILER #5 Era9mymvc 6,000 kW 3901 HIGHWAY #7; SUITE 300 OVERHEAD DOOR VAUGHAN, ONTARIO L4L 8L5 TEL: 905 265-9777 FAX: 905 265-1756 — GAS METERING STATION I PROJECT TITLE: CLARINGTON DISTRICT ENERGY SEWER n STUDY SHEET TITLE: 22000 23500 PLANT CONCEPT LAYOUT 45500 AT FULL BUILDOUT DGN: A.H ENDERSON SCALE: AS SHOWN OWN E.CAI JOB NO.: 221238 PLANT CONCEPT LAYOUT 0 0.5 2 4 10 APPR: DATE: NOV 2021 - scn�e iaoo NO S K —12 3 8 —101 SCALE 1 100