CBRM Council: District Energy

Having watched CBRM council discuss a proposed district energy project for Downtown Sydney last night, I would say regular readers of the Spectator know more about this project than councilors do.

I’ve been following it, as best I can, since it first appeared on my radar in January 2020 — you can read my coverage here and here and here.

My potted history of this project goes like this:

In 2014, there was one line about district energy in the CBRM’s 99-page Municipal Climate Change Action Plan (MCCAP):

Investigate a district energy network for the downtown of Sydney including the Civic Centre.

The project council is now considering was:

…one of a number of initiatives arising from a partnership between CBRM and Efficiency Nova Scotia that dates to 2015 — [and] has been rumbling along behind the scenes since at least 2017, when CBRM and Toronto-based Enwave Energy commissioned a $175,400 feasibility study, for which the CBRM received $74,700 from the Green Municipal Fund (GMF), a federal program established in 2000 and administered by the FCM, and an additional $25,300 from the Nova Scotia Department of Energy. (That left $75,400 which, presumably, was contributed by Enwave.)

The GMF funding was awarded in the spring of 2018, at which point David Brushett, the CBRM’s original Efficiency Nova Scotia on-site energy manager, told council that Enwave, was prepared to make a “substantial investment” in a system that would “utilize waste heat” from Centre 200 and geothermal heat from the harbor to “provide cheap, clean heat and electricity to buildings downtown.”

By 2019, Ken LeBlanc had replaced Brushett as the Efficiency NS on-site energy manager, and he told council in April of that year that the feasibility study was complete and Enwave had “indicated they believe there is a viable project to be had here.” LeBlanc told council:

Right now, it’s a private company doing private business and the CBRM is just going to support that and await their decision on how to move forward.

The District Energy project appeared on a slide during a Municipal Climate Change Action Plan update in January 2020 but was not discussed.

LeBlanc, who became the CBRM’s community development coordinator in April 2020, was scheduled to present to council on the project in October 2021, but the presentation was postponed until last evening, when it finally took place.

 

Confusion

LeBlanc told council last night that the province had already reviewed a funding application for a more detailed study of the district energy project and needed a commitment from the CBRM before it approved any contribution.

District 10 Councilor Darren Bruckschwaiger wanted to when council had agreed to seek funding for this project. He was told (by the Mayor and the CAO and the head of Public Works) that it had been one of three projects submitted for funding consideration, along with the new library and an extension to Centre 200.

CBRM Council Zoom meeting 18 Jan 2022

I remembered three projects being listed at a March 2021 council meeting by Wayne MacDonald, the head of public works, who had told council at the time that the federal government was in the process of establishing a funding stream for “Green and Inclusive Community Buildings” and the municipality had been requested to complete a questionnaire to help inform the process.

MacDonald assured council that listing these projects on the questionnaire did not, as multiple councilors were careful to clarify, in any way lock the CBRM into providing funding to any of these projects, it was the “very preliminary” beginning of a process that would see the federal government determining the criteria for the program.

I looked up the projects MacDonald had recommended putting forward:

CBRM Projects

There was no specific reference to District Energy. The first round of applications for this fund was due in July 2021 and I can’t find any reference to council voting to submit these projects, officially.

And if CBRM council did submit this proposal, why were LeBlanc and Cape Breton Partnership Acting President and CEO Tyler Mattheis asking it last night to “support the funding application?”

I will try to sort this out, but for now, consider me as puzzled as Councilor Bruckschwaiger.

 

Dueling presentations

Here’s the presentation LeBlanc was to have made to council in October:

52_updated_Special_Council_Agenda_-_October_26_2021_Reduced_for_email

 

And here’s the presentation he and Mattheis made to council last evening:

73_updated_Council_Agenda_January_18_2022_Resized_for_Email

 

Basically, since this project was last in view, the Cape Breton Partnership has paid for a more detailed study, which has dismissed all the various possibilities explored in the feasibility study (including a biomass boiler in the basement of a new central waterfront library) in favor of a wastewater energy recovery system. This was identified (with caveats) in the feasibility study as the most financially viable of the systems considered. The feasibility study identified 12 potential client buildings for such an energy system, six of which didn’t actually exist as they were part of Martin Chernin’s proposed waterfront development.

LeBlanc explained last night that the system would see effluent from the Battery Point sewage treatment plant piped to a nearby central plant , where industrial heat exchangers would be used to extract energy from the effluent to produce heated or chilled water that would then be pumped to customers (whose buildings would be retrofitted to allow for this). The effluent would then be returned to the Battery Point plant for treatment.

The system is best suited to large buildings and the October presentation stated that non-binding letters of interest had been sent to 56 potential customers, 12 of whom attended an information session, three of whom signed the letters.

What really jumped out at me is that Enwave is no longer involved in the project. This isn’t a bad thing, this is a utility and utilities should be publicly owned. But Mattheis set off alarm bells in Spectator headquarters when he brought up Enwave — without mentioning its previous involvement with the project — noting it had started life as a department of the City of Toronto before being privatized and suggesting the CBRM might also, ultimately, end up with a private sector operator of this system it is now seeking public money to study and build. (It doesn’t even exist yet and we’re talking about privatizing it.)

No explanation for what happened to Enwave was offered, although CAO Marie Walsh said something cryptic about how the CBRM might be able to take on an equity partner rather than borrowing for the project. She continued:

We had an offer from the beginning from an equity partner but we couldn’t sole-source to that person.

Walsh then admitted she had additional information and proposed they hold an in camera session during which she would share it. [Insert loud raspberry here.] She said the province is pressuring the municipality to support the project but agreed the municipality needed more information.

 

D-Class

The latest study has produced Class D estimates for project costs of $37,920,000 and a slide noted that:

Department of Natural Resources and Renewables are reviewing an application for 73.33% funding through the Investing in Canada Infrastructure Program
• ICIP Contribution: $27,806,736
• CBRM Contribution: $10,112,264

LeBlanc’s October presentation said the province required non-binding letters of interest from Downtown Sydney building owners and a temporary borrowing resolution from the CBRM to proceed to the next step. But last night, council was asked to include the district energy project in the municipality’s 5-Year Capital Plan and Mattheis said nine letters of interest had been signed (without mentioning 56 had been sent out).

But councilors — after confirming with Wayne MacDonald that items included in the 5-Year Capital Plan are generally those the municipality has funding for or is pretty confident of receiving funding for — voted to move discussion of the project to budget deliberations without including it in the 5-Year Capital Plan and planned to schedule an information session (which I hope is not in camera) to get answers to their questions about the project.

Questions like, how many customers have expressed interest in participating? What kind of revenues could be expected? How much is the actual cost of the project likely to differ from the Class D estimates? Would the CBRM be on the hook for cost overruns?

Mattheis and LeBlanc replied that they had all this information (they just, for reasons best known to themselves, chose not to include any of it in their presentation) and would be happy to share it.

And I will be happy to hear it. I’ve got to do more research into this project, but I would note that the savings in terms of greenhouse gas emissions are dependent on  finding a renewable source of electricity to run the plant and that, given LeBlanc would like to see they system up and running in time to serve the Marconi (which has expressed interest but not committed to anything) in 2024 and Nova Scotia Power expects to keep burning coal until 2030, could be difficult.

Featured image: The cover of the initial district energy feasibility report by the Danish company Ramboll.