Toronto Hydro CHP Event CDM Program Considerations & Participant Agreements

Transcription

1 CHP Event CDM Program Considerations & Participant Agreements Justin MacDonald, CDM Project Consultant March 8, 2017

2 Agenda Topic CHP Project Incentive Funding Example Discussion Walkthrough of example project Timelines New Construction CHP Typical CHP project schedule How this will work IESO Capacity Screening and Windows Incentives Key Dates April 15, 2017 Requirements Eligibility Payment Schedule Minimum Requirements and Remedies

3 Incentive Funding Example Item CHP project without incentive CHP project with incentive CHP Size - kw Annual Electricity Production - kwh 2,261,000 2,261,000 Project Cost $1,540,000 $1,540,000 Incentive $0 $452,200 (29%) Annual Cost Savings $269,000 $269,000 Net Present Value $908,000 $1,258,000 Internal Rate of Return 15.0% 21.3% Payback - Years

4 Expected Timelines 4

5 New Construction CHP Expected to be eligible starting Q Will fall under Process & Systems and Behind the meter generation rules Will require electricity and thermal modelling, similar to High Performance New Construction (HPNC) requirements 5

6 IESO Capacity Screening Required prior to Preliminary Engineering Study (PES)/ Detailed Engineering Study (DES) approval. Requires a pre-assessment be completed by your local utility IESO capacity is screened again at Project Incentive stage Capacity screening is closing mid-april 2017 for several months. New applications will NOT be approved during this black-out Incentive contracts cannot be issued during black-out unless a PES/DES or Project Incentive application has already been submitted 6

7 Incentives Requirements for satisfying contract Achieve a minimum: 80% of anticipated annual electricity savings If not: Incentive is recalculated based on actual electricity savings using original rules (lesser of $200/MWh, 40% of eligible project costs, 1 year payback) Achieve a minimum: 65% total system efficiency If not, possible outcomes: Participant is advised of contract default and provided opportunity to correct receives liquidated damages and/or performance security is used 7

8 Incentives Payment Schedule and eligibility Advanced Payment Incentive: Available for Project Incentive and 3 rd party contracts only Requires Letter of Credit no exceptions Payment schedule is as follows: % - after execution of funding contract % - after 25% of project costs have been incurred % - after 50% of project costs have been incurred % - after In-service date - 10% holdback - after 1 year Measurement & Verification (M&V) report confirming min 80% savings 8

9 Incentives Payment Schedule and Eligibility Deferred Payment Incentive available for all contract types Does not require Letter of Credit Small Capital Project First 50% after 1 st Quarter M&V Report Project Incentive or 3 rd Party 1 st - 30% issued after first quarter M&V Report 2 nd - 30% issued - after second quarter M&V Report Remaining 50% after 1 year M&V Report, confirming min 80% savings 3 rd - 30% issued - after third quarter M&V Report Final 10% holdback after 1 year M&V report, confirming min 80% savings 9

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11 Disclaimer The information in these materials is based on information currently available to Corporation and its affiliates (together hereinafter referred to as ), and is provided for information purposes only. does not warrant the accuracy, reliability, completeness or timeliness of the information and undertakes no obligation to revise or update these materials. (including its directors, officers, employees, agents and subcontractors) hereby waives any and all liability for damages of whatever kind and nature which may occur or be suffered as a result of the use of these materials or reliance on the information therein. These materials may also contain forward-looking information within the meaning of applicable securities laws in Canada ("Forward- Looking Information"). The purpose of the Forward-Looking Information is to provide s expectations about future results of operations, performance, business prospects and opportunities and may not be appropriate for other purposes. All Forward-Looking Information is given pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. The words "anticipates", "believes", "budgets", "could", "estimates", "expects", "forecasts", "intends", "may", "might", "plans", "projects", "schedule", "should", "will", "would" and similar expressions are often intended to identify Forward-Looking Information, although not all Forward-Looking Information contains these identifying words. The Forward-Looking Information reflects the current beliefs of, and is based on information currently available to, s management. The Forward-Looking Information in these materials includes, but is not limited to, statements regarding s future results of operations, performance, business prospects and opportunities. The statements that make up the Forward-Looking Information are based on assumptions that include, but are not limited to, the future course of the economy and financial markets, the receipt of applicable regulatory approvals and requested rate orders, the receipt of favourable judgments, the level of interest rates, s ability to borrow, and the fair market value of s investments. The Forward-Looking Information is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the Forward-Looking Information. The factors which could cause results or events to differ from current expectations include, but are not limited to, the timing and amount of future cash flows generated by 's investments, market liquidity and the quality of the underlying assets and financial instruments, the timing and extent of changes in prevailing interest rates, inflation levels, legislative, judicial and regulatory developments that could affect revenues, and the results of borrowing efforts. cautions that this list of factors is not exclusive. All Forward-Looking Information in these materials is qualified in its entirety by the above cautionary statements and, except as required by law, undertakes no obligation to revise or update any Forward-Looking Information as a result of new information, future events or otherwise after the date hereof. 11