Project Green District Energy Feasibility Study - Partners in Project ...

TRCA Pearson Eco-Business Zone District Energy Feasibility Study 10 April 2012
serious problem in this case because the relatively large amount of available Capital Cost
Allowance results in the assumed 30% average tax rate not being reached until the 12 th year of
operation.
The model has the capability to either include CHP, or not, and to take into account any level of
government funding assistance and any level of intended customer savings from BaU selfgeneration
costs. Sensitivity analysis can be performed on specified variances in capital,
escalation, gas prices, fixed O&M costs, DES energy rates, DES capacity rates and the level of
funding assistance. The model encompasses multiple phases, each with its own tranche of the
overall financing package. I Phases beyond Phase 1 are considered speculative due to the
lower portion of customers visited. However, the Project IRR was calculated for Phases 1, 2
and 3 for illustrative purposes. This comparison shows that the expansion does not improve the
IRR. This is because, according to this very preliminary analysis, the additional pipe cost more
than off-sets the lower unit cost of adding production capacity. It is possible this could be
improved by more detailed analysis and optimization of CHP.
Phase 1 2 3
IRR 5% 4% 4%
MW Contract Load 13.6 15.5 22.3
8.1 Thermal Revenue Assumptions
Table 18 IRR by Phase & Contract Capacity
The connected customer heating capacity is based on the results discussed in Section 2:
Customer Demand. The total projected customer capacity is assumed to be connected in two
sub-phases. Table 20 shows the phased heating capacity. Table 21 shows the phase timing
with customers being connected in phases over a period of two years with the first customer
revenues starting in 2015.
Pearson DES
Capacity (kW)
Installed Contracted
Phase 1 A 8,000 4,825
Phase 1 8,000 8,800
Total 16,000 13,625
Rationale kW
total diversified 11,581
rounded up 12,000
redundant boiler 4,000
total capacity 16,000
Table 19 Thermal Capacity Build-up
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