Report to: General Committee Date
Report Authored:
SUBJECT: Application to
Building
PREPARED BY:
Ext 4735
RECOMMENDATION:
1)
That the report entitled
“Application to Building
2)
And that the Commissioner of
Corporate Services be directed to submit an application for the Birchmount
Energy Centre project as outlined in the report to the Government of Canada and
the
3)
And that the Town proceed with
the project at an upset limit of $13,055,000 ($14,624,000 less land cost of
$1,569,000) on a 1/3 shared basis with the
4)
And that the Town of
5) And that staff report back to Council with a draft lease agreement for the Birchmount Energy Centre with Markham District Energy Inc.
6) And that Staff be authorized and directed to do all things necessary to give effect to this resolution
PURPOSE:
To obtain approval to submit a
request for funding to the Federal and Provincial governments under the
Building Canada Fund (
BACKGROUND:
The Birchmount Energy Centre was one of the
potential projects considered by staff in the spring of 2009 for Stimulus
Funding. Although this project was not
considered among the top priorities submitted to Council in March of 2009, due
in part to the expectation that the facility would be owned by Markham District
Energy (MDE), this project is a priority as an element of the overall district
energy system in
Obtaining external debt financing for the Birchmount Energy Centre is proving to be challenging. Staff is proposing a model whereby MDE owns the land upon which the Birchmount Energy Centre is situated, but the Town owns the constructed energy centre facility. The Town’s investment of $4,351,667 can then be recovered through a long term lease to Markham District Energy.
OPTIONS/ DISCUSSION:
Stimulus
Funding is Still Available
The Town has had several discussions with
both the Federal and Provincial governments and has identified that there is
still uncommitted stimulus funding available.
Although the timeframes for an application for the
The Birchmount Energy Centre project had not
started at the time that the Stimulus Grant applications were submitted in
April 2009, however, the construction has recently begun (December 7th). This may result in the project being
ineligible for Stimulus funding, although the Infrastructure Stimulus Fund
agreement indicates that costs incurred prior to June 5, 2009 are ineligible,
suggesting that costs incurred after June 5, 2009 are eligible. That being said, the deadline of
·
The construction did not commence prior to
·
The benefits listed below are significant
·
The project is on track to be completed no later than
The following is a more detailed description
of the project:
The Birchmount Energy Centre will be a
district energy plant to produce hot and chilled water which are supplied via
underground pipes to provide heating and cooling services to customers east of
The major equipment consists of:
a) two high efficiency electric 1450 ton chillers each
b) two high efficiency natural gas 5 MWth boilers each
The plant is located in
|
Birchmount
Energy Centre Budget |
||
|
Item
Description |
Costs |
%
of Total |
|
1. Land Acquisition & Closing Costs |
$1,569,000 |
10.7% |
|
2. Owner Supplied Equipment |
$2,885,000 |
19.7% |
|
3. PowerStream Costs |
|
|
|
Pole Relocation |
$500,000 |
3.4% |
|
Connection Costs |
$300,000 |
2.1% |
|
4. Engineering & Professional Services |
$1,500,000 |
10.3% |
|
5. Construction Costs |
$7,370,000 |
50.4% |
|
6. Contingency |
$500,000 |
3.4% |
|
Total |
$14,624,000 |
|
|
Note: Construction interest, financing and associated legal costs and commissions not included in above total. |
||
Project
Start Date
Construction commenced
Project
Benefits
The district energy system utilizes higher efficiency boilers and chillers providing an efficiency resource improvement. Further benefits of district energy include:
1. Energy efficient. When hot water or chilled water arrives at a customer's building, the thermal energy is “ready to use”. It is 100 percent efficient "at the door," compared with 80 percent or lower efficiencies when burning natural gas at a building. The less energy used, the less emissions expelled into the environment.
2. Environmentally sound.
District energy enables building owners to conserve energy, improve
operating efficiency and protect the environment. With district energy, building managers no
longer need to burn fuels or store or use refrigerants on site, so the site is
safer and more environmentally sound.
District energy plants can employ stringent emission controls - more so
than individual buildings - and this provides air-quality benefits.
3. Easy to operate and maintain.
District energy is worry-free heating and/or cooling delivered directly
to a customer's building - ready to use.
Customers do not need boilers or chillers, so there is less maintenance,
monitoring and equipment permitting. And
that allows occupants, rather than energy operations, to be the focus. District energy customers also eliminate the
need for fuel deliveries, handling and storage so there are fewer safety and
liability concerns for employees and building occupants.
4. Reliable. Building owners and managers can
count on district energy systems since energy professionals operate
around-the-clock and have backup systems readily available.
5. Comfortable and convenient.
District energy is available whenever a building needs heating or
cooling. In addition, district energy
reduces vibrations and noise problems that could annoy building occupants and
frees up building space so more room is available to meet increasing tenant
storage needs.
6. Design flexibility. No stacks, boilers or cooling towers means greater building design flexibility. Architects can easily design or renovate buildings to be more versatile and aesthetically pleasing for both potential occupants and the community.
7. Fuel flexibility. District energy system facilitates fuel flexibility for all connected customers. Renewable fuels such as biomass, biogas and concentrated solar thermal can be easily integrated into the energy centre plant.
8. LEED. Buildings served by a district energy system receive LEED (Leadership in Energy and Environmental Design) points.
FINANCIAL CONSIDERATIONS AND
TEMPLATE:
The funding formula is based on a 1/3
shared basis with the
ALIGNMENT WITH STRATEGIC PRIORITIES:
BUSINESS UNITS CONSULTED AND AFFECTED:
RECOMMENDED
BY:
______________________ ________________________
Treasurer Commissioner, Corporate Services
ATTACHMENTS:
N/A