Whistle Bend Community Solar BTES District Energy Feasibility Study Report. Executive Summary

Transcription

1 Whistle Bend Community Solar BTES District Energy Feasibility Study Report Executive Summary

2 Leidos Canada Inc. Presented to: ATCO Electric Yukon (formerly Yukon Electrical Company Limited) April 2014 Prepared by: Leidos Canada Inc. Renewable Energy and Climate Change Program Queen Street, Ottawa, Ontario K1P 5Y7 Document Reference Number: CM Leidos Canada Procurement Business Number PG0001 Proprietary

3 EXECUTIVE SUMMARY Whistle Bend is envisioned as a neighbourhood for 8,000 residents, complete with transit service, a town square featuring public parkland and numerous retail shops, three schools, plentiful green space and many kilometres of paved and unpaved trails. The project has 7 phases. Design and site services for Phases 1 and 2 are complete. Lot sales have begun and will continue into Phase 3 design has been completed and site services construction is scheduled to start in Lot sales in Phase 3 are scheduled to begin in The schedule for following phases (Phases 4, 5, 6, 7 and later phases) will depend on market conditions. The City of Whitehorse and the stakeholders involved in the Whistle Bend community development are committed to a path of sustainable development and reducing the impact on the environment. In September 2012, ATCO Electric Yukon (formerly known as Yukon Electrical), which is a wholly- owned subsidiary of ATCO Electric, retained Leidos Canada to conduct a feasibility study of the solar borehole thermal energy storage (BTES) district heating system for the Whistle Bend community. Additional contributions (in-kind and financial) from the City of Whitehorse, ATCO Gas and Natural Resources Canada (NRCan) supported the effort of the feasibility study. ATCO Electric Yukon has been providing electrical service to Yukoners for over a century. Chartered in 1901, the pioneer company began generating electricity for the residents of Whitehorse using a wood-fired, horizontal piston steam engine. ATCO Electric Yukon has since grown to serve over 17,000 customers in 19 communities from south of the Yukon border to north of the Arctic Circle. A private, investor-owned utility, ATCO Electric Yukon is a member of the ATCO Group of Companies. Its head office and service centre is in Whitehorse, Yukon Territory. ATCO Electric Yukon has taken on a leadership role in a number of areas in energy management. This includes the implementation of a combined heat and power district energy system in Watson Lake, the development of a Two-way Automated Communication System (TWACS) for automated meter reading and exploring future electricity conservation opportunities in Demand Side Management (DSM) programs. The supply of innovative energy management technologies is of great interest to ATCO Electric Yukon and hence its role in this study. As background information to the solar BTES feasibility study, a short summary of the recent developments in this innovative technology is in order. The solar thermal seasonal energy storage concept has received strong interest and international recognition from many levels of government, environmental organizations and private sector developers. Most recently, a Canadian solar thermal seasonal energy storage demonstration project, the Drake Landing Solar Community (DLSC), received highly prestigious international recognition by winning the Energy Globe Award in both the Fire Category and the overall Golden Energy Award presented in Wels, Austria in November The DLSC system is the world record-holder for the highest solar fraction for any solar district heating system in the world. The DLSC solar BTES energy system has been operated by ATCO Gas since Please see for detailed project information. The DLSC (52 homes pictured below), the first large-scale solar seasonal energy storage project in North America, demonstrates the effective integration of the BTES technology with a locally available renewable energy resource - the sun, to deliver 90% of the community s space

4 heating needs. The DLSC energy system provides thermal energy for space heating only. Domestic hot water (DHW) for the homes in DLSC is produced separately by a combination of natural gas hot water tanks and a two-collector solar thermal DHW pre-heat system. NRCan has conducted a number of studies in other locations across Canada in search of a potential site for a larger solar BTES project to demonstrate the scalability of the successful and award winning Drake Landing Solar Community in Okotoks, AB. However, due to the low price of natural gas, the economic viability of a solar BTES community has been challenging to achieve. In recent years NRCan has identified the energy supply issue in the North as one of the priority areas as the space heating cost is significantly higher than for most of the southern regions in Canada. As a result, the application of the solar BTES concept in Whistle Bend is of special interest to them. In December 2011, the City of Whitehorse commissioned a pre-feasibility study of a solar BTES district heating system for the Whistle Bend community. The pre-feasibility study identified a number of significant benefits in implementing a solar BTES project in Whistle Bend, including but not limited to: reduced greenhouse gas emissions, demonstrated leadership in energy innovation North of 60, and a reduction in peak winter electrical loads. The pre-feasibility study recommended a more detailed study be conducted to evaluate the specific site technical feasibility and financial requirements for a potential solar BTES project in Whistle Bend. Following this pre-feasibility study, ATCO Electric Yukon, ATCO Gas, the City of Whitehorse and NRCan have been working together in further exploring the solar BTES district heating system feasibility in the community. Unlike the DLSC energy system, which it is only providing thermal energy for space heating needs, the Whistle Bend feasibility study is targeting both the space heating and DHW loads. The hot water from the district loop would be first used to provide space heat through the fan coils and air handlers in the houses and then passed through a heat exchanger in a pre-heat tank before the conventional electric hot water tank. On average, about 50% of the DHW requirement would be met by energy extracted from the district loop in the DHW pre-heat tank. The design for the Whistle Bend system would allow 70% of the total home heating requirements (space heat and DHW combined) to be met by solar energy.

5 The concept of solar BTES district energy is based on simple, proven mechanical designs and straightforward operation and controls. However, a few extra considerations need to be incorporated into the design and the development of the community for the solar BTES system to work. Out of these requirements, the solar collector mounting is the most challenging as buildings need to be designed to accommodate the collectors and street orientation needs to be considered early in the planning process to maximize the utilization of the available solar resource to the community. However, this has been done many times around the world and in Canada. If there is a will to implement a solar community, there is a way to get it done. Communities may have to break from how homes were built in the past and start doing things slightly differently. There are many examples of how communities have come together and shown surprising capacity to change to embrace solar technologies. The scope of work of this feasibility study includes three phases: (1) exploratory engagement, (2) project preliminary design and (3) project cost and financial analysis. Phase 1 of the study included project definition, stakeholder engagement, neighbourhood plan review and issues analysis. Phase 2 of the study included a site geological desk review, home thermal energy consumption estimations, solar BTES energy system model development and collector mounting options. Phase 3 of the study included the preliminary design of the solar BTES district energy system and financial analysis. Stakeholder consultations, analytical tools, application of engineering principles and financial analysis were involved in the study. The feasibility study started with a medium and high-density community of 850 homes, selected within the existing development plan, as a potential size for solar BTES district energy system implementation. A number of issues were identified regarding integrating the solar BTES system within the Whistle Bend community, including issues relating to roof space and roof design for solar collector mounting. The risk associated with the uncertainty in the development build-out rate led to the review of a smaller community of 200 homes. The smaller community may be more suitable given the current uncertainty in the pace of development. Furthermore, with a smaller community size, it may be possible to secure 1 or 2 home builders for home construction in the solar BTES community so that the roof design for collector mounting could be better managed. The feasibility study also explored a more compact 200 home community design with a lower system capital cost and better financial returns. This demonstrated the difference between imposing a solar BTES system onto an existing plan versus taking into account the characteristics of a solar BTES system in the development of a community plan right from the beginning. While the difference was not big enough to make the project financially viable without government subsidy, the improvement could be potentially significant for a much larger project. From the estimation of GHG emissions reductions for solar BTES district heating systems and the operating history of the DLSC, there should be a significant reduction in GHG emissions for the Whistle Bend community if a solar BTES district heating system is implemented. A preliminary estimation of approximately 90% GHG emissions reduction is possible when compared to the business-as-usual scenarios.

6 The concept of a solar BTES energy system was not included in the current Yukon Environment and Socio-economic Assessment Board (YESAB) submission. It is recognized that a separate YESAB submission for the solar BTES energy concept would be required. The feasibility study found that it is technically feasible to implement a solar BTES district heating project in Whistle Bend, with the current energy price level and the construction cost premium in the North, the project would require government grants to attract private sector investment. Within the scope of this study, financial analysis showed that grant levels between 50 to 75% would be required to reach the acceptable level of private sector utility investment returns. In order to make the investment opportunity more attractive, a long-term partnership could be established between the private sector and the government agencies. The partnership may be structured to mitigate some of the perceived higher risk areas of the innovative energy technologies such as a solar BTES district energy system in Whistle Bend. The following table presents a summary of the capital cost and a select set of estimated project internal rate of returns from the financial analysis conducted in the study for a potential solar BTES project of various sizes in the Whistle Bend neighbourhood with a 67% government subsidy. Conventional energy refers to heating energy sources such as heating oil or electric heat. The financial returns are presented for a range of conventional energy price annual price increases. A 3% conventional energy price escalation would mean an average of 3% energy price increase in heating oil or electricity from year to year over the life of the project. Table of Internal Rate of returns for Select Set of Financial Analysis Community Size Project Capital Government Subsidy Conventional Energy Price Escalation 2% 3% 4% 850-home $30M $20M home $8.7M $5.8M compact 200-home $7.4M $5M The potential opportunity to store surplus hydro power or wind energy was brought up by stakeholder representatives and discussed with interest during the consultation meetings. This report recognizes these opportunities but did not evaluate them. It is interesting to note that BTES technology offers the potential to manage the energy system of the Yukon with an added dimension time. The seasonal energy storage and retrieval concept enables energy to be looked at not just on a geographical basis but also in a temporal sense. This new dimension presents new opportunities as well as exciting challenges for the broader stakeholder group to explore and work together to create additional synergies. The development of a solar BTES district energy project would require multiple stakeholders and champions to work together for implementation. ATCO Electric Yukon has expressed a strong interest to invest in the solar BTES energy system if sufficient government financial support can be secured and if the project is commercially economical. The City of Whitehorse would have a special role to play and would need to champion this proposal in the local community. The following steps are recommended for ATCO Electric Yukon to discuss with the City of Whitehorse in order to continue the solar BTES project development in Whistle Bend: Share the findings of this study with the City of Whitehorse community to obtain feedback on the solar BTES community energy system concept;

7 Investigate potential funding and project partners for a solar BTES district energy project in Whistle Bend; Continue to monitor the housing development market in the City of Whitehorse; Explore opportunities for securing one (or two) home builder partners for solar BTES project implementation in a smaller community size (approximately 200 homes); Review and explore the inclusion of a compact solar BTES community for a subdivision plan in a future phase; Explore a wider integrated community energy system (ICES) concept for the Whistle Bend neighbourhood, including an energy storage component; and Secure funding for a field test in Whistle Bend to confirm the site geology for BTES operation.