Last week, our client Metro Vancouver closed a deal with Lonsdale Energy Corporation (LEC) to sell low-carbon heat to LEC. LEC is a district heating system in the City of North Vancouver which provides heat service to buildings in the Lower and Central Lonsdale areas. The heat source for this project will be the effluent (treated sewage) from Metro Vancouver’s new North Shore Wastewater Treatment Plant, which is currently under construction in the District of North Vancouver and will replace the existing Lions Gate plant located next to the Lions Gate Bridge. LEC currently uses natural gas to produce nearly all of its energy; this project will reduce LEC’s natural gas consumption significantly, reducing GHG emissions by an average of over 7,000 tonnes per year.
At the new treatment plant, a set of heat pumps will draw on the large amount of low-temperature thermal energy in the effluent (which averages ~15 C over the course of the year) to produce higher-temperature hot water for use by LEC. The project will include a 1 km long interconnection from the new treatment plant to LEC’s network. There is additional thermal energy in the effluent stream that could be tapped into for further phases.
Reshape has been involved as an advisor to Metro Vancouver on pricing and other contract terms. While the arrangement is government-to-government, it does have commercial contract terms and is in many ways similar to an Energy Purchase Agreement with an independent power producer. This arrangement is very common in the electricity world, but much less so for district heating systems. Effluent heat recovery is also pretty rare, and we certainly haven’t found another example of this kind of “independent heat producer” arrangement for effluent heat recovery.
Metro Vancouver is paying the majority of the capital cost for this project, and will retain the majority of the GHG reductions to reduce its corporate emissions. The project is projected to come on-line in 2021.
Congrats to the entire team on this project including LEC’s management, Metro Vancouver (particularly Lillian Zaremba), and Sean Casey at FVB.