Enwave Energy Corporation - Future Cities Collaborative

1
Agenda
Energy Master Planning in Toronto – laying the foundations for district energy
• The History of District Energy in Toronto – the Grand Vision of the 1970’s
• The Toronto District Heating Corporation – the first step
• Enwave Energy Corporation – Public Private Partnership
• Deep Lake Water Cooling – What is possible
Precinct Planning in Toronto – two case Studies with district energy
• Railway Lands Precinct Plan - Overview
• Waterfront Toronto Precinct Plan - Overview
Lessons learned and Best practices
• Lessons Learned in each case
• Conditions for success
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History of District Energy in Toronto
3
University of Toronto
BLOOR STREET
250,000 PPH
48 buildings
Commissioned 1914
U of T
QUEEN’S PARK
Queen’s Park Systems
COLLEGE STREET
210,000 PPH
11 Buildings
Commissioned 1952
HOSPITALS
800,000 pph
33 customers downtown
Commissioned 1968
TORONTO
HYDRO
KING STREET
Terminal Railway System
100,000 pph
6 buildings and Railway
Roundhouse
Commissioned 1920
TERMINAL RAILWAY
JARVIS STREET
Toronto Hydro System
BAY STREET
775,000 pph
6 Hospitals connected
Commissioned 1972
SPADINA AVENUE
Hospital DE system
Grand Vision – Phase I: Refuse Fired Steam Plant
• City of Toronto facing a waste
disposal problem in early
1970’s.
• Landfill approaching capacity.
• Works commissioner
proposes converting Hearn
Power Generating plant into
Refuse Fired steam plant –
sending power to grid and
steam to downtown Toronto
for heating
• Incineration of Waste is very
controversial – opposed by
local residents in downtown
• Debate goes on for four years
(1976 – 1980)
4
Grand Vision – Phase III: Steam into City
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The Grand Vision – Phase II: Interconnection
U of T
BLOOR
STREET
QUEEN’S PARK
COLLEGE STREET
BAY STREET
TORONTO HYDRO
System
KING STREET
TORONTOTERMINAL
RAILWAY
System
JARVIS STREET
HOSPITALS
SPADINA AVENUE
• While debating environmental issues of
Refuse Fired Steam Plant (“RFSP”),
City Council approves plan to
interconnect Toronto Steam systems
• 5 district energy system operators agree
to take steam from RFSP
• City Council approves plan to build
24” steam mains to interconnect
systems
• Between 1976 – 1980 City spends
$17million to build interconnecting
steam mains to create one District
Energy company
• With steam mains commissioned,
steam can now flow between all
systems.
• Refuse Fired Steam Plant initiative
fails as Toronto Regional Government
purchases Keele Valley Landfill site in
1980.
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TDHC – The Consolation Prize
Hospital
Network
Provincial
Government
Network
Toronto
Terminal
Railway System
University of
Toronto System
Toronto Hydro
System
TDHC
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• With interconnection piping
complete, City leads initiative to
create a single DE system to
serve downtown.
• DE operators agree to turn-over
their plants and networks to new
entity
• Toronto District Heating
Corporation (“TDHC”) created
by Act of Parliament
• Structured as non-profit
cooperative w/o share capital
• Company obligated to re-pay
City’s $17 million investment
• 10 member Board appointed by
each of the founding systems.
City appoints 4 members
including the Chair
TDHC – Early Challenges
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• Company operates like a
utility.
• Legislative restrictions and
non-share capital structure
restrict company’s ability
to borrow
• Public sector partners
unable to fund expansion
– company must sell
receivables
• City “forces” buildings to
connect so that private
building owners subsidize
public sector founders
• Significant customer
dissatisfaction
• Business stagnating
• City debt rises to $30
million by 1997
• City brings in Private
partner to help
From TDHC to Enwave Energy Corporation
Hospital
Network
Provincial
Government
Network
Toronto
Terminal
Railway
System
University of
Toronto
System
Toronto Hydro
System
•
•
•
Enwave begins as a 50/50 partnership
with City of Toronto and OMERS – a
privately held corporation with two public
sector shareholders.
All other stakeholders bought out at Book
value of business - first PPP in City’s
history
Governed by a unique shareholder
agreement that offers many protections
for the City, including:
–
–
–
–
TDHC
•
•
•
•
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2/3 Super majority for Board decisions
Chairmanship of Board with 42% interest
90 days to meet a capital call
2 years to buy- back diluted position
New structure brings in capital to grow
business
City and OMERS sign-up all their
buildings
City grants benefits to developers who
sign-up to Enwave system
City agrees to build DLWC using its water
department infrastructure as part of
Railway lands Precinct Plan
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The Railway Lands Precinct Plan (1986- 2000)
Railway Lands Precinct Plan
•
•
•
•
•
1980’s sees City engaged
in master planning again
to deal with derelict
railway lands
City council adopts a
precinct plan in 1986 to
rezone the railway lands
as commercial and
residential
Includes plans for green
infrastructure and district
energy
City approves plan to
build new main drinking
water pumping station
1994 - Approves TDHC’s
request to build new
chiller plant to start
district cooling and
potentially anchor a future
DLWC system
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Railway Lands pre- 1980
Railway Lands today
Energy Master Plan
•
•
•
•
•
•
•
The railway Lands Precinct Plan
becomes the catalyst for the future
Deep Lake Water Cooling
As part of Precinct Plan, two
original developments must pay for
DE infrastructure and connect
Metro Toronto Convention Centre
agrees to house TDHC’s district
cooling plant in its basement and
connect
ACC agrees to pay for street
infrastructure and connect
All developments must contribute to
infrastructure costs and connect to
DE system
Policy creates animosity and slows
down development
This changes once Enwave is
created
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TDHC Chiller Plant in basement of Metro Convention
Centre
John Street Pumping Station – Future hone of Enwave’s
Energy Transfer Station
Energy Master Plan (cont.)
• Once Enwave in 2000, the company begins negotiating
new terms with all stakeholders in the re-zoned Railway
Lands
• ACC and MTCC contracts are re-negotiated on new
commercial terms
• Company asks City to repeal By-Laws requiring
buildings to connect and/or pay for infrastructure and
negotiates commercial terms with all stakeholders
• Today all but two 20 story condo developments are
connected to Enwave’s DLWC and heating systems
(over 3 million sq.ft), including:
– The Delta Hotel where thermal storage was introduced
– 151 Front Street – one of 8 Telecom Hotels in North America
and the only one in Canada
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Deep Lake Water Cooling
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Deep Lake Water Cooling
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Pumping
Station
Filtration Plant
Cooling
Plant
DLWC - Intake Lines
• 2,839 concrete anchor blocks
• 85 fused joints
• 9 miles of pipe
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INTAKE LINES
• 3 HDPE pipes each 4ft in
diameter with total capacity of
100,000 USGPM
• laid on bottom of lake bed 280ft
below the surface and secured
with concrete anchors
• bring clean, cold water to the
City’s Island Filtration Plant
saving the City significant
operating and capital costs and
providing redundancy of supply
• 20 years of bathometric studies
in Lake Ontario have confirmed
that the reservoir of cold 38°F
water that lies about 3 miles
south of Toronto Island at a
depth of 273 ft. is replenished
annually through a natural cycle
of inversion
• Total weight of 3 intakes is over 25,000 tons
DLWC - John Street Pumping Station
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February 2004
Installation of HX
April 2003 - Excavation
October 2003
July 2003
Summer 2004
Completed Energy Transfer Station
DLWC - JSPS Heat Exchangers
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DLWC - Simcoe Street Chilled Water Plant
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•
Chillers at the SSCP provide system reliability and additional cooling
for peak summers days
•
Chiller capacity:
Simcoe Plant
John Street Plamt
External Plants
13,400
7,800
10,000
•
11 MW turbines provide back-up power for the system to ensure
reliability
•
24/7 operation by 16 experienced, highly trained full time staff
SSCP Polishing and Backup Chillers
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DLWC - Distribution Network
•
•
•
•
Almost 18 miles of distribution piping
beneath city streets
60 feet below the surface at the
southern end and 120 feet below the
street at the northern-most point
Serving 64 of Toronto’s largest
buildings including government,
hospitals, commercial and residential
customers
Over 29 million sq. ft connected to the
system
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DLWC – Distribution Pipe
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Raw Water By- Pass: Scope of Project

Divert raw water entering the City
Raw Water Pumps to unused slow
sand filters with new 52” pipe

Remove sand and store raw water in
6 unused slow sand filters
(14,000,000 gallons/ 52,995,764 L)
(option for 2 more tanks in future)

Connect sand filters to abandoned
72” water main that runs to north end
of Muggs Island

Construct new tunnel from north end
of Muggs island to JSPS for raw
water supply and discharge

Install mechanical equipment at
JSPS: 8 new Heat Exchangers, 3
new Chillers, new 9 MW power feed,
pumps

Install two chilled water supply and
return lines from JSPS to Lower
Simcoe

Discharge raw water into Reece
street sewer system to flow into
harbour
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Project Overview
Install two chilled water supply & return lines from JSPS to Lower
Simcoe and outflow line to the harbor
Construct tunnel from north end of islands to JSPS for raw water
supply & discharge
Connect sand filters to abandoned 72” water main
Diverts raw water from the City Raw Water Pumps to storage tank
DLWC with Thermal Storage
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Environmental Benefits
•
•
Electrical use reduced by 90% over
chillers
– City Demand reduced by 61 MW
– Consumption reduced 85 Million
kWh/Yr.
– 173 million kw/th not put in lake
from coal plants
– CO2 Emissions reduced by
79,000 tonnes/ Year
– 145 tonnes of Nox reductions
– 318 tonnes reduction in SOX
– 714 million liters less water used
in cooling towers
– Water use reduced by 700 million
liters p/a
Equivalent of 15,000 vehicles
removed form Toronto streets
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Waterfront Toronto Precinct Plan 2007 - 2030
Energy Master Plan for Waterfront Toronto
•
In 2007, District Energy was seen as a core part of Waterfront Toronto’s
sustainability mandate because it:
– Reduces greenhouse gas emissions: 3m tonnes by 2050
– Provides Fuel Flexibility and is easily upgraded to more sustainable
technologies as they become available
– Is more reliable than systems provided by individual users
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Energy Master Plan (cont.)
• WT realized that DE would have to be
implemented from the outset if it was going
to be done cost effectively – while
roads were be planned and built and
in time to capture the maximum
customer base to maximize benefits
and financial value.
• The government partners lead
by the Province of Ontario were
encouraging WT to proceed.
Approximately $30M was
committed by the Federal
Government ($23.6m), Province
of Ontario ($4.7m) and the City
of Toronto ($1.5m)
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Re-thinking Energy Master Plan
•
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By January 2008, WT had spent over $1.5 developing ground rules for DE
development but the Board instructed staff to EXIT district energy planning
immediately (i.e. sell the right and obligation to design and build a District
Energy system) in order to:
• Transfer risk to an experienced provider
• Acquire District Energy expertise from a third party
• Reduce WT’s cash outlay
•
However, EXIT was delayed because:
– Real Estate and Financial markets had weakened over the past year increasing
absorption and financing risks and making EXIT for WT more expensive
– Market soundings they conducted suggested that they could not achieve
worthwhile risk transfer
– EXIT to private sector at that time would have required greater subsidy to cover
cost of debt and taxes
– Retaining the DE through full build might create an asset with modest positive
returns
•
WT considers 3 Options to salvage the Energy Master Plan:
Energy Master Plan Options
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• Option A – One large District Energy Centre (DEC) in
each neighbourhood EBF and WDL – original plan.
• Option B – Build three smaller DEC’s in each
neighbourhood with phased build out as demand grows
– alternative plan to optimize capital costs and make
incremental commitments.
• Option A/B – Build three small DEC’s in EBF with
phased build out. Build one small (immediately) and one
large later in WDL
Option A - One large DEC in each Neighborhood
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Option B –Three smaller DECs in each Neighborhood as
demand grows
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Option A/B – Three small DEC’s in EBF and a small
and a large one in WDL
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Option B – least funding required at $147 m.
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COSTS
Item
Units
Option A
Option B
Option A/B
Phase 1 (Partial) Capex
2009 $m
NA
28
28
Phase 1 Capex
2009 $m
109
20
20
Phase 2 Capex
2009 $m
43
42
77
Phase 3 Capex
2009 $m
41
81
56
DE Piping
2009 $m
20
20
20
ETS Units
2009 $m
18
18
18
Total
Current $m
231
209
219
Escalation
Current $m
14
17
17
Interest
Current $m
57
57
57
Early Losses
Current $m
13
12
12
Total
Current $m
315
295
305
Amount
Amount
Amount
Initial Equity
30
30
30
Addt’l. Equity
85
39
58
Total Equity
115
69
88
79
78
78
194
147
166
FUNDING AND RETURNS
Current $m / %
Debt
Debt + Equity
Energy Master Plan Salvaged
•
By 2009, had failed to unfold as
planned but DE delivery obligations
to George Brown College, the
Toronto Community Housing
Corporation and private developer,
Urban Capital Corp., necessitated
that WT proceed without delay.
•
It was estimated that abandoning
the District Energy would cost the
Agency an incremental $13m $16m for Interim Plant replacement
and Customer Settlements in
addition to the approximately $15m
that had already been invested in
Capital and Development Costs for
a total cost to abandon of $28$31m.
•
WT was stuck had it not been for
Enwave stepping in to take over.
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Corus Energy Centre in Corus Entertainment Building
•
•
•
•
Enwave recommended that Urban Corp be
allowed to build in-house plant with future
DE connection potential
Interim Plant was replaced by a $5m plant
inside the Corus building saving WT $10
million
Plant in GBC upsized and street
connections left to connect to Corus and
network
New Energy Master Plan developed
Corus Plant
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Other Metrics and Information
Background:
•
Commissioned by Enwave in 2013, operated remotely
2014 Quantity Sold (mlbs)
16,000
•
Provides hot and chilled water to the Corus Building under a 20 year
contract
System Peak
3 mWh
Delivery Pressure
28 PSI
Network:
•
Fuel Storage Capacity
Internal building supply connected to street network and George
Brown College
2014 Quantity Sold (TH)
System Peak (Tons)
Capacity:
•
Houses 2 chillers with nameplate capacity of 880 tons each
•
2 boilers with combined nameplate capacity of 20,478 MBH
•
•
Return & Supply Temperatures
Designed with the ability to import and export both chilled water and
hot water from a future district energy system
Plant is operated remotely from Enwave Toronto facilities
Heating Assets
Year Commissioned
2013
Cooling Assets
Year Commissioned
Operating Season
Year-round
Energy Supply
Fuel Source
Natural Gas
Commodity Source
Commodity Source
Boilers (MBH)
Capacity (MBH)
Condensate Return
LDC
2 x 10,239
20,478
No
Capacity (Tons)
2013
Electricity/Water
LDC
1,760
0
2,800,000
1,000
Suppy @ 44°F
Return @ 58°F
Annual Maintenance Capex
$28,000
Annual R&M Cost
$77,000
Permits
All standard permits as
required
Precinct Master Planning – Lessons Learned
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Conditions for Success
1. Value Proposition
– Compelling, very clearly defined and communicated
2. Consensus
– There must be broad support for the initiative.
– Government, developers and community must agree to key
elements of design
3. Funding
– Government must have a private sector partner for infrastructure
development
4. Follow-through
– During and post construction there must be on-going verification
of goals and modification if necessary
Precinct Planning
Railway Lands Precinct Planning (1986 – 2000)
–
–
–
–
Value proposition ✓
Consensus ✓
Funding ✗
Follow-through ✓
Waterfront Toronto (2007 – present)
–
–
–
–
Value Proposition ✗
Consensus ✗
Funding ✗
Follow-through ✗
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Waverley’s Opportunity
•
•
•
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Set up a for-profit, independent company with the appropriate
private sector partner (Projectcorp).
Allow Projectcorp to operate independently and treat it as you do
any other private company – almost.
Realize benefits as a shareholder and regulator
Waverley Council Contribution
Private Partner Contribution
Assets and/or capital – buildings and Capital
infrastructure
Legislation – Official Plan
amendments mandating and
rewarding developers
Professional management and
financial discipline
Growth Opportunities – new zoning
Leveraged resources
Synergies between departments
Marketing
Best Practices
Best Practices
Waverley’s Opportunity (cont.)
•
•
•
Develop and communicate a clear
value proposition with all stakeholders.
Market your precinct plan – create
excitement and capture people’s
imagination
Establish the ground rules for all
participants, including:
– Conditions that will require a building to
connect to system, if they are met
– Rewards for developers that connect to
network infrastructure and penalties for those
that don’t
• Monitor, verify and modify legislation, regulations and planning
practices to ensure that you continue to meet your goals
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QUESTIONS?