Centrale de chauffage de Chicoutimi SENC
Transcription
Centrale de chauffage de Chicoutimi SENC
Centrale de chauffage de Chicoutimi S.E.N.C. Verification report on a Greenhouse Gas Emissions (“GHG”) reduction project – Fuel switching & Energy efficiency project September 4, 2012 September 4, 2012 Mr. Daniel Gendron Director Centrale de chauffage de Chicoutimi S.E.N.C. 767 Jacques-Cartier Street East Chicoutimi, Quebec G7H 6A3 Raymond Chabot Grant Thornton LLP Suite 2000 National Bank Tower 600 De La Gauchetière Street West Montréal, Quebec H3B 4L8 Telephone: 514-878-2691 Fax: 514-878-2127 www.rcgt.com Dear Sir: Subject: Verification Report on a Greenhouse Gas (“GHG”) Emissions Reduction Project – Fuel switching & Energy efficiency project Enclosed herewith is our verification report on a GHG emissions reduction project performed at 767 Jacques-Cartier Street East, Chicoutimi, Quebec, G7H 6A3. The quantification report that is subject to our verification is included in Appendix 1. Please do not hesitate to contact us for any additional information you may require. Yours truly, Chartered Professional Accountants Roger Fournier, CPA, CA Lead Senior Manager Chartered Professional Accountants Member of Grant Thornton International Ltd Verification Notice on the Declaration of GHG Emissions Reductions Raymond Chabot Grant Thornton LLP Suite 2000 National Bank Tower 600 De La Gauchetière Street West Montréal, Quebec H3B 4L8 Telephone: 514-878-2691 Fax: 514-878-2127 www.rcgt.com Mr. Daniel Gendron Director Centrale de chauffage de Chicoutimi S.E.N.C. 767 Jacques-Cartier Street East Chicoutimi, Quebec G7H 6A3 Dear Sir: We have been engaged by Centrale de chauffage de Chicoutimi S.E.N.C. to perform the verification of Centrale de chauffage de Chicoutimi S.E.N.C. GHG emissions reduction project as an independent third party verifier. We have verified the accompanying greenhouse gas (“GHG”) emissions reduction quantification report entitled Greenhouse gas Project Plan and Report Period 2005-2010 (the “quantification report”). This quantification report dated August 7, 2012 is included, along with the related GHG assertions, in Appendix 1 of our report which is intended to be publicly posted on CSA’s GHG CleanProjectsTM Registry. The present report is the first verification report issued for this project. Responsibilities Management is responsible for the relevance, consistency, transparency, conservativeness, completeness, accuracy and method of presentation of the quantification report. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation of a GHG emissions reduction quantification report that is free from material misstatements. Our responsibility is to express an opinion based on our verification. Standards Our verification was conducted under ISO 14064-3 International Standard, entitled: Specification with guidance for the validation and verification of greenhouse gas assertions (2006). This standard requires that we plan and perform the verification to obtain either a reasonable assurance or a limited assurance about whether the emission reductions declaration that is contained in the attached quantification report is fairly stated, is free of material misstatements, is an appropriate representation of the data and GHG information of Centrale de chauffage de Chicoutimi S.E.N.C. and the materiality threshold has not been reached or exceeded. Chartered Professional Accountants Member of Grant Thornton International Ltd 2 Level of assurance It was agreed with Centrale de chauffage de Chicoutimi S.E.N.C.’s representatives that a reasonable assurance level of opinion would be issued and we planned and executed our work accordingly. Consequently, our verification included those procedures we considered necessary in the circumstances to obtain a reasonable basis for our opinion. Scope A reasonable assurance engagement with respect to a GHG statement involves performing procedures to obtain evidence about the quantification of emissions, and about the other information disclosed as part of the statement. Our verification procedures were selected based on professional judgment, including the assessment of the risks of material misstatement in the GHG statement. In making those risk assessments, we considered internal control relevant to the entity‘s preparation of the GHG statement. Our engagement also included: Assessing physical and technological infrastructure, processes and control over data. Evaluating the appropriateness of quantification methods and reporting policies used and the reasonableness of necessary estimates made by Centrale de chauffage de Chicoutimi S.E.N.C. Identifying GHG sources sinks and reservoirs, types of GHG involved and time periods when emissions occurred. Establishing quantitative materiality thresholds and assessing compliance of results to these thresholds. Ensuring ownership of the project by observing that all reductions are obtained directly by the client. In this regard, we ensured that different elements allowing Centrale de chauffage de Chicoutimi S.E.N.C. to achieve GHG reductions belong to Centrale de chauffage de Chicoutimi S.E.N.C. For the GHG emissions reductions obtained by Cégep de Chicoutimi, we ensured there was an agreement between Centrale de chauffage de Chicoutimi S.E.N.C. and Cégep the Chicoutimi where Cégep de Chicoutimi transfers the rights to their carbon credits to Centrale de chauffage de Chicoutimi S.E.N.C. The verification team Before undertaking this assignment we ensured there were no conflicts of interest that could impair our ability to express an opinion and the conflict of interest review form was completed by all participants to this assignment (see Appendix 2). We also ensured we had the skills, competencies and appropriate training to perform this specific assignment. The work was performed by ISO 14064-3 trained professionals. Training was provided by the Canadian Standards Association. This is a fuel efficiency strategy project that all the team members are competent to undertake since, on top of their professional training, they all have performed many similar projects. The auditors assigned to this audit work were: Roger Fournier, CPA, CA, Lead Verifier Mr. Fournier is an ISO 14064-3 trained professional. He has issued more than 80 GHG reduction project verification reports. The majority of which are registered on the GHG CleanProjectsTM Registry. Mr. Fournier was responsible for the verification work and ensured the production of this report. Deborah Lob, B. Eng., Verifier Ms. Lobo assisted the lead verifier in charge. 3 The verification team has reviewed and understands GHG CleanProjectsTM Registry’s registrations requirements. Centrale de chauffage de Chicoutimi S.E.N.C. Centrale de chauffage de Chicoutimi S.E.N.C. produces and sells approximately 150 million pounds of steam per year to its partners. One of its principal partners is Cégep de Chicoutimi. The emissions reduction project The project is located at 767 Jacques-Cartier Street East, Chicoutimi, Quebec, G7H 6A3, and the geographical coordinates are Lat. 48°25'31''N Long. 71°2'41''W, and also at 534 Jacques-Cartier Street East, Chicoutimi, Quebec, G7H 1Z6 with geographical coordinates Lat. 48°25'28''N and Long. 71°3'8''W. Centrale de chauffage de Chicoutimi S.E.N.C.’s project consists in the optimization of it’s steam production by implementing new boilers, optimized control systems, and heat recovery systems. In addition Cégep de Chicoutimi reduced it’s steam needs by implementing a geothermal heating system. The project has started on January 1, 2005 and the emissions reduction initiatives were completed on December 31, 2010. The main GHG sources for the project are the consumption of natural gas and fuel oil at Centrale de chauffage de Chicoutimi S.E.N.C. and the electricity consumption at Cégep de Chicoutimi. The various gases involved at Centrale de chauffage de Chicoutimi S.E.N.C. are carbon dioxide (CO 2 ), methane (CH 4 ), and nitrous oxide (N 2 O). The expected life time of this project, as per page 3 of the attached quantification report entitled Greenhouse gas Project Plan and Report Period 2005-2010, is 10 years. The project was under the responsibility of Mr. Daniel Gendron, Director, who is the signing authority in this matter and the person responsible for the data collection and monitoring. Centrale de chauffage de Chicoutimi S.E.N.C. has implemented a monitoring system that aims at insuring that all installed elements of the project that contribute to GHG emissions reduction are in operation constantly and consistently. The quantification report The quantification report was prepared by L2I Financial Solutions, in accordance with ISO 14064-2 “Specification with guidance at the project level for quantification, monitoring and reporting of greenhouse gas emission reductions or removal enhancement (2006)”. Because the project involves characteristics of district heating project, building energy efficiency, fuel switching and steam production optimization project, no known quantification protocol was found that reliably describes the reality of this project. Hence, a unique methodology that adequately deals with all these aspects has been developed. The proposed methodology may relate in some considerations to the following CDM methodologies: AMS-II.E.: Energy efficiency and fuel switching measures for buildings; AMS-II.C.: Demand-side energy efficiency activities for specific technologies; AM0018: Baseline methodology for steam optimization systems; AM0044: Energy efficiency improvement projects: boiler rehabilitation or replacement in industrial and district heating sectors. 4 The approach that was used for the quantification of the GHG emission reductions was one of comparing emissions related to the project with the baseline scenario and taking into account the steam production intensity for each year. The quantifier determined the GHG emissions for every source of energy by using appropriate emission factors multiplied by the consumption of every GHG source. The emission factors chosen are based on the National Inventory Report 1990-2009, Greenhouse Gas Sources and Sinks in Canada. The verification work Planning At the planning phase of this verification assignment, the following points were reviewed with Centrale de chauffage de Chicoutimi S.E.N.C.’s representatives: Major processes of Centrale de chauffage de Chicoutimi S.E.N.C.’s operations, comprehension of the different operation stages with the purpose of assessing the complexity of the operation, Centrale de chauffage de Chicoutimi S.E.N.C.’s internal control with the purpose of assessing their risk mitigation capacity and finally, emission sources and GHG involved. This preliminary review resulted in the assessment of the following risks: The inherent risk which is associated with the complexity of the project and the task being performed; The control risk which concerns the risk that the GHG project controls will not be able to prevent or detect a material discrepancy; and The detection risk which concerns the risk that the verifier will not detect a material discrepancy that has not been detected or prevented by the GHG project controls. As a result of the assessment of the inherent and control risks, a materiality level was defined, a verification program was designed to mitigate the detection risk and a sampling plan was developed accordingly. Assessing performance materiality Materiality is an amount that, if omitted or misstated, will influence the reader of the report in his decision making. Performance materiality is defined in the Canadian Auditing Standards as an amount, set by the auditor at less than materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds the materiality. We have assessed a materiality level based on the above definitions, using Raymond Chabot Grant Thornton’s performance materiality determination system. This system considers the following information: User expectations; Prior year’s measures of materiality; Industry standards; The entity’s concept of materiality; Our assessment of detection risks; Other entity specific information. We have assessed performance materiality at 5% of declared GHG emission reductions. 5 The inherent risk and the control risk were assessed at an acceptable level for verification purposes. The detection risk, considering the verification program that was designed, is assessed at an acceptable level for verification purposes. Sampling plan determination Standard sampling and testing procedures were the following and were not modified during the verification: Documentation review; Interviews with key personnel; Cross-checking of Quantification report’s calculations; Reconciliation of Quantification report to worksheets; Sampling 25% of emissions where concentrated; Obtention of a declaration of ownership of reductions and removals; Description of relevant information systems used for data collection and monitoring. Conclusion of planning No outstanding issues remained unresolved after the preliminary review. Consequently we could proceed with the verification work. Execution A draft of the quantification report was submitted to us on November 7, 2011. Our initial review of the documentation was undertaken on January 10, 2012 and a verification plan was prepared. We then toured Centrale de chauffage de Chicoutimi S.E.N.C.’s premises on February 24, 2012. In doing so we interviewed Mr. Daniel Gendron. We subsequently received the final quantification report dated August 7, 2012. Information systems Each monitoring system that may have an effect on the data used for emissions reduction calculations has been identified. Mr. Gendron who is responsible for data input and reporting of these systems was interviewed and the control procedures were described and assessed. Where deemed necessary, spot checking was used to ensure the controls had been operating properly throughout the verified period. All reports used in the calculation were reconciled to the calculations results. Assessing quantification methodology We have assessed the unique methodology used for this project. Since it is a unique methodology every step of it was analysed to ensure that results obtained were in agreement with the principles set forth by the CDM methodologies listed above in the paragraph on the quantification report and were also well reflected in the report. We also made sure that the constituants of the unique methodology which originate from different sources are not conflicting with each other. Findings Findings were listed, valued and compared to our established materiality levels. No findings have exceeded the materiality level. 6 During the course of our verification, we obtained all the necessary cooperation and documents required from Centrale de chauffage de Chicoutimi S.E.N.C.’s management. Criteria 1. The attached quantification report is in conformance with the requirements and principles of ISO 14064-2. 2. The approach and methodology used for the quantification are appropriate. 3. The baseline scenario is appropriate. 4. The supporting data are subject to sufficient controls to be considered fair and accurate and should not cause any material discrepancy. 5. The calculations supporting the GHG assertion are sufficiently accurate to be considered fair and should not cause any material discrepancy. 6. There are no competing claims to the ownership of the GHG project and the resulting emission reductions or removals. 7. The project start date is accurate and the lifetime estimation of the project is fairly stated. 8. The quantification report has a low degree of uncertainty and the materiality threshold has not been reached or exceeded. Reasonable assurance opinion Our verification was conducted under ISO 14064-3 International Standard, entitled: Specification with guidance for the validation and verification of greenhouse gas assertions (2006). In our opinion: 1. The quantification report is prepared in accordance with ISO 14064-2 standard: Specification with guidance at the project level for quantification, monitoring and reporting of greenhouse gas emission reductions or removal enhancements (2006), and the principles of relevance, completeness, consistency, accuracy, transparency and conservativeness have been respected. 2. The approach and methodology used for the quantification are appropriate. 3. The baseline scenario is appropriate. 4. Centrale de chauffage de Chicoutimi S.E.N.C.’s data controls management system is appropriate. 5. The quantification report and the GHG assertion are free of material misstatements and are an appropriate representation of the data and GHG information of Centrale de chauffage de Chicoutimi S.E.N.C. 6. To our knowledge, there are no competing claims to the ownership of the GHG project and the resulting emission reductions or removals. 7. The quantification report has a low degree of uncertainty and the materiality threshold has not been reached or exceeded. 8. The GHG emission reductions presented in the quantification report entitled Greenhouse gas Project Plan and Report Period 2005-2010 and dated April 27, 2012 are, in all material respect, fairly stated at 468 tCO 2 eq in 2005, 1,702 tCO 2 eq in 2006, 1,588 tCO 2 eq in 2007, 2,282 tCO 2 eq in 2008, 2,463 tCO 2 eq in 2009 and 1,809 tCO 2 eq. in 2010 for a total of 10,312 tCO 2 e and are additional to what would have occurred in the baseline scenario. The following breakdown of those emission reductions by vintage year is fairly stated: 7 Year CO2 CH4 N2 O 2005 465 - 3 2006 1,691 - 11 2007 1,578 - 10 2008 2,268 1 13 2009 2,449 1 13 2010 1,797 1 11 9. The project start date is accurate and the lifetime estimation of the project is fairly stated. Restricted usage and confidentiality This verification report is produced to be used by the management of Centrale de chauffage de Chicoutimi S.E.N.C. and parties interested in the above described GHG emissions reduction project. Reliance on the conclusions of this verification report for any other usage may not be suitable. The quantification report entitled Greenhouse gas Project Plan and Report Period 2005-2010 and dated August 7, 2012 is an integral part of this verification report and should in no circumstances be separated from it. This verification report and the supporting work files are kept confidential and are available to the client on request and will not be disclosed to anyone else unless compelled by law. They will be safeguarded for 10 years after which period they will be safely destroyed. Chartered Professional Accountants Roger Fournier, CPA, CA Lead Verifier Montréal, September 4, 2012 Appendix 1- Quantification report Centrale de chauffage de Chicoutimi (S.E.N.C.) Greenhouse Gas Project Plan and Report Period 2005-2010 Project proponent: Centrale de chauffage S.E.N.C. 767, rue Jacques-Cartier Est, Chicoutimi, (Québec) G7H 6A3 Prepared by: L2I Financial Solutions 2015, Victoria Street, Suite 200 Saint-Lambert (Québec) J4S 1H1 August 7th, 2012 TABLE OF CONTENT TABLE OF CONTENT .................................................................................................... ii LIST OF TABLES ........................................................................................................... iii ABBREVIATIONS .......................................................................................................... iv Sommaire Exécutif ............................................................................................................ 1 1. INTRODUCTION ............................................................................................ 2 2. PROJECT DESCRIPTION............................................................................. 4 2.1. Project title .......................................................................................................... 4 2.2. Objectives ........................................................................................................... 4 2.3. Type of GHG project .......................................................................................... 4 2.4. Location .............................................................................................................. 4 2.5. Project lifetime and crediting period................................................................... 4 2.6. Conditions prior to project initiation................................................................... 4 2.7. Description of how the project will achieve GHG emission reductions or removal enhancements ....................................................................................... 5 2.8. Project technologies, products, services and expected level of activity ............. 5 2.9. Aggregate GHG emission reductions and removal enhancements likely to occur from the GHG project......................................................................................... 5 2.10. Identification of risks .......................................................................................... 5 2.11. Roles and Responsibilities .................................................................................. 6 2.11.1. 2.11.2. Project proponent and representative ........................................................ 6 Quantification and reporting responsible entity ........................................ 6 2.12. Project eligibility under the GHG program ........................................................ 7 2.13. Environmental impact assessment ...................................................................... 7 2.14. Stakeholder consultations and mechanisms for on-going communication ......... 7 2.15. Detailed chronological plan ................................................................................ 7 3. SELECTION OF THE BASELINE SCENARIO AND ASSESMENT OF ADDITIONALITY ........................................................................................................... 8 4. IDENTIFICATION AND SELECTION OF GHG SOURCES, SINKS AND RESERVOIRS ......................................................................................................... 9 5. QUANTIFICATION OF GHG EMISSIONS AND REMOVALS ............ 10 5.1. Baseline GHG emissions/removals................................................................... 10 5.2. Project GHG emissions/removals ..................................................................... 12 GHG Project plan and report ii 5.3. Emission reductions .......................................................................................... 13 6. DATA MONITORING AND CONTROL ................................................... 14 7. REPORTING AND VERIFICATION DETAILS....................................... 17 ANNEX I .......................................................................................................................... 19 LIST OF TABLES Table 2-1: Expected and achieved Emission Reductions (t CO2e) .................................... 5 Table 4-1: SSRs inventory .................................................................................................. 9 Table 6-1: Data description ............................................................................................... 14 Table 7-1: Summary of monitored data* ........................................................................... 17 Table 7-2: GHG emissions and emission reductions (t CO2e) ......................................... 17 Table 7-3: Project GHG emissions by source and GHG type (t CO2e) ............................ 18 Table 7-4: Baseline GHG emissions by source and GHG type (t CO2e).......................... 18 GHG Project plan and report iii ABBREVIATIONS BS: CDM: CH4: CO2: CO2e: CSA: EF: GHG: ISO: IPCC: kWh : N2O: PS: SSR : t: VER : Baseline Scenario (GHG Emission Source) Clean Development Mechanism Methane Carbon dioxide Carbon dioxide equivalent (usually expressed in metric tons) Canadian Standards Association Emission Factor Greenhouse gases International Organization for Standardization Intergovernmental Panel on Climate Change Kilowatt hour Nitrous oxide Project Scenario (GHG emission source) Source, Sink and Reservoir Ton Verified Emission Reduction GHG Project plan and report iv Sommaire Exécutif (Please take note that the remainder of this document is in English) La Centrale de chauffage S.E.N.C. ainsi que ses membres ont conjointement convenu de se doter de systèmes plus performants et de mener des projets d’amélioration de l’efficacité énergétique visant à réduire leur empreinte de carbone et leur impact sur le réchauffement climatique. Le projet de réduction des émissions de gaz à effet de serre (GES) s’est déroulé en deux phases principales. En un premier temps, en 2005, des activités de modernisation de la centrale ont eu lieu. De nouveaux brûleurs, des systèmes de contrôles optimisés et des méthodes de récupération de chaleur ont été mis en place et ont pu commencer à donner des résultats dès 2005. En un deuxième temps, le CEGEP de Chicoutimi, membre de la société, a fait installer en 2008 un système géothermique permettant de diminuer considérablement la demande de vapeur et l’utilisation de combustibles fossiles qui est rattachée à sa production. Les effets combinés de ces activités de projet permettent d’obtenir des réductions d’émission de gaz à effet de serre non négligeables. Le projet et les réductions d’émission de GES seront enregistrés au GHG CleanProjectsTM Registry. Ces réductions sont obtenues et leur quantification effectuée suivant les principes et lignes directrices de la norme ISO 14064 tel que stipulé par le GHG CleanProjectsTM Registry. Les réductions de GES obtenues pour la période couverte par ce rapport sont présentées dans le tableau suivant. 2005 2006 2007 2008 2009 2010 GHG Report Reductions d’émission de GES t CO2 e 468 1 702 1 588 2 282 2 463 1 809 10 312 1 1. INTRODUCTION The Centrale de chauffage de Chicoutimi (S.E.N.C). is a not for profit organization that produces and sell steam for the heating needs of its members. Located in the heart of Chicoutimi, Quebec, it serves some of the most important institutions and buildings in the city center. As an important player in the economic and social fields of the city, the Centrale de chauffage de Chicoutimi wants to play a role of leader in the community social and environmental issues. Hence, for the benefit of its members and the entire society, it has decided to implement a greenhouse gas (GHG) emissions reduction project. Along with the society members, it has been decided to modernize the steam production facility and to evaluate the possibility of reducing the demand for steam. In the first time, efforts have been made to enhance the efficiency of the steam production process. New burners, controls and heat recovery systems have been implemented. Later, an important project activity has been implemented at the CEGEP de Chicoutimi, a society member. This second project activity consists in the installation of a geothermal system that will significantly reduce the needs for steam production and related usage of fossil fuel. Those two components of a grouped project greatly contribute to mitigate the combined impact of the Centrale de chauffage de Chicoutimi.and its members on global warming. The overall GHG project is first described with statements of its objectives, nature, location, lifetime and main characteristics. The most appropriate baseline scenario is identified and the GHG sources, sinks and reservoirs (SSRs) for the baseline and the project scenarios are inventoried. A quantification methodology is described and a detailed monitoring plan is outlined. Values of monitored data and results of emission reductions quantification are given in the final section. This GHG report is presented in a format that meets the requirements of CSA CleanProjectsTM Registry and the ISO 14064-2 guidelines and principles: Relevance: All relevant GHG sources are meticulously selected and presented in section 4. A precise methodology is used along with project specific parameters values. Completeness: A complete assessment of GHG sources is made and all GHG types are considered in the applied quantification methodology. Complete information regarding project implementation, activities and GHG quantification is given through this GHG report. Consistency: GHG Project plan and report 2 Chosen quantification methodology is appropriate for Centrale de chauffage de Chicoutimi’s specific project. Established baseline scenario, as explained in section 3, is consistent with the project level of activity related to the steam needs of buildings. Accuracy: Calculation uncertainties are kept as small as possible. Transparency: Project related information is transparently communicated through this document so that the intended user knows what the important data are, how they are collected and how the project actually leads to GHG emissions reduction. Data monitoring and GHG emission reductions calculation are clearly detailed in order to provide the reader sufficient information to allow the user to confidently make decisions. Conservativeness: GHG emission reductions are not overestimated. When accuracy is jeopardized because of assumptions, conservative choices are made to make sure that GHG reductions are not overestimated. This report will be made available for public consultation. It is intended to serve as a transparent reference document to support the prospection of potential verified emission reductions (VER) buyers. GHG Project plan and report 3 2. PROJECT DESCRIPTION 2.1. Project title Energy efficiency grouped project at district heating plant and connected buildings in Chicoutimi. 2.2. Objectives This project has two objectives : Enhance the efficiency of the steam production plant Lower the needs for energy on demand side 2.3. Type of GHG project This project is a grouped project classified in the energy efficiency type of project with effects on both production and demand side. 2.4. Location Project activities are implemented at two locations: Centrale de chauffage de Chicoutimi 767, rue Jacques-Cartier Est, Chicoutimi, (Québec) G7H 6A3 Latitude : 48o 25’ 31’’ N Longitude : 71o 2’ 41’’ W CÉGEP de Chicoutimi 534, rue Jacques-Cartier Est, Chicoutimi, (Québec) G7H 1Z6 Latitude : 48o 25’ 28’’ N Longitude : 71o 3’ 8’’ W 2.5. Project lifetime and crediting period The project started being implemented in 2005. The official start date is January 1st 2005 as is the crediting period. Emission reductions are planned to be quantified and claimed over a ten years period extending from January 1st 2005 through December 31st 2014. 2.6. Conditions prior to project initiation At the steam production plant, the four boilers were using old combustion technology and were operated with deficient control. Excess production was purged significant heat was lost through exhaust gas. At the CEGEP, all the heating needs were fulfilled with steam produced at the Centrale de chauffage. Before 2008, there was no other heating means and no energy efficiency measure. GHG Project plan and report 4 2.7. Description of how the project will achieve GHG emission reductions or removal enhancements Emission reductions will result from both a smaller demand of steam due to geothermal system and a more effective production allowing for more steam being produced by unit fossil energy. 2.8. Project technologies, products, services and expected level of activity The technologies that contribute to higher steam production efficiency are a new high efficiency burner in boiler 1, the implementation of an optimized controlled combustion system in boiler 2, 3 and 4, the recovery of purged steam and a heat recovery system on exhaust chimney. All together, the measures are expected to enhance the production efficiency by about 15%. From 600 lbs of steam being produced per GJ of fossil fuel before the project, it is expected a rise to 700 lbs of steam per GJ of fossil fuel. The Centrale de chauffage produces about 150 million pounds of steam yearly. This quantity can significantly vary over time due to changing needs of all the connected customers. By the implementation of a geothermal system, the CEGEP minimizes its need for steam by about 40%. Expected steam consumption will drop from 25 million lbs to 15 million lbs. 2.9. Aggregate GHG emission reductions and removal enhancements likely to occur from the GHG project Table 2-1: Expected and achieved Emission Reductions (t CO2e) Year Expected Emission Reductions (t CO2e) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total 2 000 2 000 2 000 2 500 3 000 3 000 3 000 3 000 3 000 3 000 26 500 Achieved Emission Reductions (t CO2e) 468 1 702 1 588 2 282 2 463 1 809 10 312 2.10. Identification of risks Emission reductions are not only the results of technological improvements. They are also closely related to management methods. Great attention must be paid to energy use practices and management in order to achieve emissions reduction. GHG Project plan and report 5 Energy efficiency and/or fuel switching might become common practice or required by law in institutional buildings for instance. The project would therefore no longer generate emission reductions. 2.11. Roles and Responsibilities 2.11.1. Project proponent and representative Centrale de chauffage, S.E.N.C. is a not for profit organization which serves the interests of its members. Several representatives of these member establishements have contributed to this project. The director of the Centrale de chauffage itself has been designated as the representative of the project proponent entity. Centrale de chauffage, S.E.N.C. Daniel Gendron, Director gendronrobin@hotmail.com 2.11.2. Quantification and reporting responsible entity L2I Financial Solutions is a firm specialized in non-traditional corporate financing. An expertise has been developed in the quantification and exchange of carbon credits. In that capacity, we help companies count, quantify and accrue their carbon offsets and ensure their sale. Our expertise consists in selecting, applying and elaborating quantification methodologies to quantify the emissions reductions based on reputable international sources. Quantification and report writing Mr. David Beaudoin holds a Bachelor's Degree in Biotechnological Engineering from the University of Sherbrooke. During his career, Mr. Beaudoin has occupied several positions such as Process Engineering Consultant, Project Manager in R&D and research assistant for different engineering firms. He works at L2i Financial Solutions as Carbon Credit Advisor. He is responsible for the quantification and the project plan and report redaction. Supervision Mrs. Melina Valero is responsible for supervising the carbon credits quantification team. For many years now, the firm has been looking-out for their customers’ needs regarding the quantification of greenhouse gases. They offer services of GHG quantification, report redaction and the subsequent sale of the carbon credits on organized markets such as the Voluntary Carbon Market. Report Use and Users The target users are the potential offset VER (Verified Emission Reductions) buyers on the voluntary carbon market. The present report will serve as an indicator of the GHG emissions reductions performance of the project and will support the prospective sale of the resulting carbon credits. GHG Project plan and report 6 2.12. Project eligibility under the GHG program The project is eligible under the GHG CleanProjectsTM Registry. It is implemented following the ISO 14064-2 guidelines and principles, is not attempted to be registered under another GHG program and does not create any other environmental credit. 2.13. Environmental impact assessment The nature of the project does not involve a required environmental impact assessment as the impact on the environment is limited to the GHG emissions. 2.14. Stakeholder consultations communication and mechanisms for on-going As a society serving the needs of its members, Centrale de chauffage S.E.N.C is implementing a project in the name of eight distinct members. They all have been consulted through board meetings and all agreed with this project. Mr. Daniel Gendron is responsible for the communications with the quantifier, the verifier and between the members. 2.15. Detailed chronological plan The first project activity was implemented in 2005. Data monitoring started in 2004 for the purpose of establishing the baseline. Monitoring will be ongoing until the end of the crediting period in 2014. GHG emission reductions are planned to be reported for the first time in 2011 (for the period 2005-2010) and on a yearly basis afterward. GHG Project plan and report 7 3. SELECTION OF THE BASELINE SCENARIO AND ASSESMENT OF ADDITIONALITY The baseline scenario is selected among alternative scenarios representing what would have happened without the project. The alternative scenario that is most likely to occur is selected as the baseline scenario. In this case, the project is voluntary. It aims to lower the GHG emissions associated with energy consumption. The scenario that is most likely to occur in the absence of this project is to keep using the equipment in place prior to the project activities initiation and the GHG emissions that are associated with the consumption of energy in that case. An equipment change or retrofit is not required by law and to stick with in-place systems remains the least expensive and efforts demanding scenario. Therefore the energy performance of steam production and usage in the year 2004 prior to the project activity initiation is used as the baseline scenario. The emission reductions achieved by the project are additional to what would have occurred in the absence of the GHG project since it is voluntary and faces significant investment barriers. Its implementation is highly motivated by the GHG emission reductions potential. GHG Project plan and report 8 4. IDENTIFICATION AND SELECTION OF GHG SOURCES, SINKS AND RESERVOIRS The SSRs for the baseline and the project scenario are identified in the table below and it is stated whether they are included or excluded from the quantification. Table 4-1: SSRs inventory Source Fuel extraction and processing Fossil fuel Baseline combustion at the plant Production of electricity used at the plant Source Project Included? Type Explanation Excluded This emission source is assumed to be negligible Related compared to the combustion. Included CO2, CH4 and N2O emissions are considered. An Controlled important source of greenhouse gases. Excluded Assumed to be functionally equivalent to the project Related scenario. Emissions from electricity are negligible. Included? Type Explanation Fuel extraction and processing Excluded This emission source is assumed to be negligible Related compared to the combustion. Developing and installation of new technologies Installation of equipment creates negligible Excluded emissions compared to achievable reductions on the Related long term. Production of electricity used at the plant Excluded Assumed to be functionally equivalent to the project Related scenario. Fossil fuel combustion at the plant Included CO2, CH4 and N2O emissions are considered. An Controlled important source of greenhouse gases. Production of incremental electricity used for the geothermal system GHG Project plan and report Included Related CO2, CH4 and N2O emissions are considered Although small, it is conservative to consider this GHG source. 9 5. QUANTIFICATION OF GHG EMISSIONS AND REMOVALS 5.1. Baseline GHG emissions/removals BEy = BNGEy + BOEy y: Year index, runs from 2005 to 2014 BEy: Baseline scenario emissions for year “y” (t CO2e) BNGEy: Baseline emissions from natural gas combustion in year “y” (t CO2e) BOEy: Baseline emissions from oil #6 combustion in year “y” (t CO2e) BNGEy = BNGCy * [EFNGCO2 + (EFNGCH4 * GWPCH4) + (EFNGN2O *GWPN2O)] BNGCy: Baseline natural gas consumption in year “y” (m3) EFNGCO2: CO2 emission factor from natural gas combustion (1,878*10-3 t CO2/m3) 1 EFNGCH4: CH4 emission factor from natural gas combustion (3,7*10-8 t CH4/m3) EFNGN2O: N2O emission factor from natural gas combustion (3,5*10-8 t N2O /m3) GWPCH4: Global Warning Potential of methane (21) GWPN2O: Global Warning Potential of nitrous oxide (310) BNGCy = BSPy * NGRy * YRy BSPy: Baseline steam production in year “y” (lbs) NGRy: Natural gas consumption rate in year “y” (m3 / lb of steam produced) YRy: Ratio of production yields: year “y” yield over baseline year “b” yield BSPy = ASPy + AddSy ASPy: Actual steam production in year “y” (lbs) AddSy: Additional steam that has been avoided due to geothermal system (lbs) AddSy: If y ≤ 2007; AddSy = 0 If y > 2007; AddSy = BSUCy - ASUCy BSUCy: Baseline steam usage at CEGEP in year “y” (lbs) ASUCy: Actual steam usage at CEGEP in year “y” (lbs) BSUCy = BSDDR * DDy BSDDR: Baseline steam per degree-day ratio (lbs of steam / degreeday) DDy: Number of degree-days bellow 18oC in the year “y”, taken from the Bagotville airport weather station data archive2 1 National Inventory Report 1990-2009, Greenhouse Gas Source and Sinks in Canada, Part 2, Table A8-1 and A8-2 Environment Canada, National Climate Data and Information Archive, Available at : http://climate.weatheroffice.gc.ca/prods_servs/cdn_climate_summary_e.html 2 GHG Project plan and report 10 BSDDR = ASUC2007 / DD2007 ASUC2007: Actual steam usage at CEGEP in year 2007 prior to geothermal system implementation ( 28 157 621 lbs of steam) DD2007: Number of degree-days bellow 18oC in the year 2007 taken from the Bagotville airport weather station data archive (5603.5) NGRy = ANGCy / ASPy ANGCy: Actual natural gas consumption in year “y” (m3) ASPy: Actual steam production in year “y” (lbs) YRy = PYy / PY2004 PYy: Production yield in year “y” (lbs of steam / GJ of fossil fuel) PY2004: Production yield in year 2004 prior to project initiation (lbs of steam / GJ of fossil fuel) PYy = ASPy / TFFy ASPy: Actual steam production in year “y” (lbs) TFFy: Total fossil fuel energy in year “y” (GJ) TFFy = ANGCy * HCNG + AOCy * HCO ANGCy: Actual natural gas consumption in year “y” (m3) AOCy: Actual oil #6 consumption in year “y” (L) HCNG: Heat content of natural gas (0.0371 GJ/m3)3 HCO: Heat content of oil #6 (0.04173 GJ/L) BOEy = BOCy * [EFOCO2 + (EFOCH4 * GWPCH4) + (EFON2O *GWPN2O)] BOCy: Baseline oil consumption in year “y” (m3) EFOCO2: CO2 emission factor from oil combustion (3,124*10-3 t CO2/L) 4 EFOCH4: CH4 emission factor from oil combustion (5,7*10-8 t CH4/L) EFON2O: N2O emission factor from oil combustion (6,4*10-8 t N2O /L) GWPCH4: Global Warning Potential of methane (21) GWPN2O: Global Warning Potential of nitrous oxide (310) BOCy = BSPy * ORy * YRy BSPy: Baseline steam production in year “y” (lbs) (see above for equations) ORy: Oil #6 consumption rate in year “y” (L / lb of steam produced) YRy: Ratio of production yields, year “y” yield over baseline year “b” yield (see above for equations) 3 Office national de l'énergie; http://www.neb.gc.ca/clf-nsi/rnrgynfmtn/sttstc/nrgycnvrsntbl/nrgycnvrsntblfra.html#s1ss2 4 National Inventory Report 1990-2009, Greenhouse Gas Source and Sinks in Canada, Part 2, p.193 GHG Project plan and report 11 ORy = AOCy / ASPy AOCy: Actual oil #6 consumption in year “y” (L) ASPy: Actual steam production in year “y” (lbs) 5.2. Project GHG emissions/removals PEy = PNGEy + POEy + PGEy PEy: Project scenario emissions in year “y” (t CO2e) PNGEy: Project emissions from natural gas combustion in year “y” (t CO2e) POEy: Project emissions from oil #6 combustion in year “y” (t CO2e) PGEy: Project scenario emissions from incremental electricity usage for geothermal system in year “y” (t CO2e) PNGEy = ANGCy * [EFNGCO2 + (EFNGCH4 * GWPCH4) + (EFNGN2O *GWPN2O)] ANGCy: Actual natural gas consumption in year “y” (m3) EFNGCO2: CO2 emission factor from natural gas combustion (1,878*10-3 t CO2/m3) EFNGCH4: CH4 emission factor from natural gas combustion (3,7*10-8 t CH4/m3) EFNGN2O: N2O emission factor from natural gas combustion (3,5*10-8 t N2O /m3) GWPCH4: Global Warning Potential of methane (21) GWPN2O: Global Warning Potential of nitrous oxide (310) POEy = AOCy * [EFOCO2 + (EFOCH4 * GWPCH4) + (EFON2O *GWPN2O)] AOCy: Actual oil #6 consumption in year “y” (L) EFOCO2: CO2 emission factor from oil combustion (3,124*10-3 t CO2/L) EFOCH4: CH4 emission factor from oil combustion (5,7*10-8 t CH4/L) EFON2O: N2O emission factor from oil combustion (6,4*10-8 t N2O /L) GWPCH4: Global Warning Potential of methane (21) GWPN2O: Global Warning Potential of nitrous oxide (310) PGEy: If y ≤ 2007; PGEy = 0 If y > 2007; PGEy = IEUGy * EFECO2 IEUGy: Incremental electricity usage for geothermal system in year “y” (kWh) EFECO2: CO2 emission factor from the production of electricity (3*10-6 t CO2e/kWh)5 IEUGy = AEUCy – AveEUC2005-2007 AEUCy: Actual electricity usage at CEGEP in year “y” (kWh) AveEUC2005-2007: Average electricity usage at CEGEP for years 2005 to 2007 (5 568 800 kWh). This is considered to be the electricity usage for non-heating needs. 5 National Inventory Report 1990-2009, Greenhouse Gas Sources and Sinks in Canada, Part 3, Table A136, p.49 GHG Project plan and report 12 5.3. Emission reductions ERy = BEy - PEy ERy: GHG emission reductions in year “y” (t CO2e) BEy: Baseline scenario emissions for year “y” (t CO2e) PEy: Project scenario emissions in year “y” (t CO2e) GHG Project plan and report 13 6. DATA MONITORING AND CONTROL As shown in the previous section describing the quantification methodology, six parameters must be monitored. They are described below. Monitoring must start in 2004. Table 6-1: Data description Data / Parameters Data unit : Description : Source of data to be used : Value of data applied for the purpose of calculating expected emission reductions : Description of measurement methods and procedures to be applied : QA/QC procedures to be applied : Any comment : ASPy lbs Steam production Centrale de chauffage data log system 150 million lbs Data / Parameters Data unit : Description : Source of data to be used : ASUCy lbs Steam usage at CEGEP Invoice from steam producer (Centrale de chauffage) ASUCy = 18 million lbs Value of data applied for the purpose of calculating expected emission reductions : Description of measurement methods and procedures to be applied : QA/QC procedures to be applied : Any comment : Data / Parameters Data unit : Description : Source of data to be used : The outflow of steam must continuously be monitored along with temperature and pressure conditions. Occasional calibration is done by qualified body. The inflow of steam at CEGEP port is continuously monitored along with temperature and pressure conditions. Occasional calibration is done by qualified body. DDy Degree-days below 18oC in the year Taken from the Bagotville airport weather station data archive Available at : http://climate.weatheroffice.gc.ca/prods_servs/cdn_climate_summar y_e.html Value of data applied for the purpose of calculating expected emission reductions : GHG Project plan and report DDy = 5603.5 14 Description of measurement methods and procedures to be applied : QA/QC procedures to be applied : Any comment : The measurement method is consistent with Environment Canada criteria. Data / Parameters Data unit : Description : Source of data to be used : Value of data applied for the purpose of calculating expected emission reductions : Description of measurement methods and procedures to be applied : QA/QC procedures to be applied : Any comment : ANGCy m3 Natural gas consumption Invoices from natural gas supplier 6 million m3 Data / Parameters Data unit : Description : Source of data to be used : Value of data applied for the purpose of calculating expected emission reductions : Description of measurement methods and procedures to be applied : AOCy L Fuel oil #6 consumption Invoices from oil supplier 350 000 L QA/QC procedures to be applied : Any comment : Data / Parameters Data unit : Description : Source of data to be used : Value of data applied for the purpose of calculating expected emission reductions : GHG Project plan and report No specific procedure must be applied by the project proponent. A gas flow meter continuously measures the inflow. Integrated data over a certain period is reported on natural gas invoices. Occasional calibration is done by qualified body. An oil reservoir is filled when required. The volume of each fill is measured by volumetric flow meter upon delivery. Invoices reflect the delivered oil quantity. Entire year invoices are compiled and assumed to adequately reflect the actual usage in that year. No specific procedure AEUCy kWh Electricity usage at CEGEP Invoices from power supplier 7 million kWh 15 Description of measurement methods and procedures to be applied : QA/QC procedures to be applied : Any comment : GHG Project plan and report Electricity meter monitors the power usage. Monthly reading of the meter is achieved and invoices reflect the usage of that period. Occasional calibration is done by qualified body. 16 7. REPORTING AND VERIFICATION DETAILS The project plan and report is prepared in accordance with ISO 14064-2 standard and the GHG CleanProjectsTM Registry requirements. The methodology that is used, the choice of region specific emission factors and a rigorous monitoring plan allow for a reasonably low level of uncertainty. L2I Solutions is confident that the emission reductions are not overestimated and that the numbers of emission reductions that are reported here are real and reflect the actual impacts of the project. Monitoring started in 2004 for the purpose of establishing the baseline. Below is a summary of the monitored data and calculated GHG emission reductions for the covered period. Emission reductions are reported here for the years 2005-2010 The GHG report is prepared in accordance with ISO 14064-2 and GHG CleanProjectsTM Registry requirements. Emission reductions will be verified by an independent third party to a reasonable level of assurance. Raymond Chabot Grant Thornton will be the verifying firm for this reporting period. This is the first GHG assertion for this project. Table 7-1: Summary of monitored data* year 2004 2005 2006 2007 2008 2009 2010 ASPy lbs 162 162 333 154 266 137 163 044 956 167 292 375 166 396 337 173 310 248 149 701 898 ASUCy lbs DDy - 28 157 621 22 898 802 17 339 422 14 479 417 ANGCy m3 - 5603,5 5525,5 5622,6 4837,8 6 281 337 6 013 097 6 094 717 5 759 451 5 878 900 5 869 874 5 625 862 AOCy L 622 580 344 786 23 475 569 946 280 298 737 682 272 536 AEUCy kWh 5 488 800 5 496 000 5 721 600 5 732 400 6 768 000 7 178 400 *See table 6.1 for the variables’ acronyms meaning Table 7-2: GHG emissions and emission reductions (t CO2e) Baseline scenario 2005 2006 2007 2008 2009 2010 GHG Project plan and report 12 915 13 293 14 264 14 274 15 878 13 301 Project scenario 12 447 11 591 12 676 11 992 13 415 11 492 Emission reductions 468 1 702 1 588 2 282 2 463 1 809 10 312 17 Table 7-3: Project GHG emissions by source and GHG type (t CO2e) Sources GHG type 2005 2006 2007 2008 2009 2010 Incremental Electricity Natural Gas Fuel Oil TOTAL CO2 CH4 N2O GHG CO2 CH4 N2O GHG CO2 CH4 N2O GHG GHG 0 0 0 0 2 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 3 11 293 11 446 10 816 11 041 11 024 10 566 5 5 5 4 4 4 65 66 62 64 64 61 11 363 11 517 10 883 11 109 11 092 10 631 1 077 74 1 781 877 2 305 853 0 0 1 0 1 0 7 0 11 6 15 5 1 084 74 1 793 883 2 321 858 12 447 11 591 12 676 11 992 13 415 11 492 Table 7-4: Baseline GHG emissions by source and GHG type (t CO2e) Sources GHG type 2005 2006 2007 2008 2009 2010 Natural Gas Fuel Oil Total CO2 CH4 N2O GHG CO2 CH4 N2O GHG GHG 11 717 13 127 12 172 13 143 13 051 12 232 5 5 5 5 5 5 68 76 70 76 75 71 11 790 13 208 12 247 13 224 13 131 12 308 1 118 84 2 003 1 043 2 729 987 0 0 1 0 1 0 7 1 13 7 17 6 1 125 85 2 017 1 050 2 747 993 12 915 13 293 14 264 14 274 15 878 13 301 GHG Project plan and report 18 ANNEX I Calculation examples for year 2010 Baseline calculation for 2010 = BNGEy + BEy 13300,7509 = BNGEy = 12308,356 + BNGCy BOEy 992,394901 *[ EFNGCO2 + ( EFNGCH4 12308,356 = 6513643,16 *[ = 6513643,16 = BSPy * 159532455 * NGRy * 0,03758043 * = AddSy 159532455 = ASPy + 149 701 898 + AddSy = 9830556,92 = BSUCy 24309973,9 - ASUCy 14 479 417 = 24309973,9 = BSDDR * 5 025 * DDy = 5025,00598 = ASUC2007 / 28 157 621 / DD2007 5603,5 BNGCy BSPy BSUCy BSDDR GHG Project plan and report * 0,001878 + ( 0,000000037 * GWPCH4 )+ ( EFNGN2O * )+ 21 ( 0,000000035 * YRy 1,08645851 9830556,92 4837,8 19 GWPN2O )] 310 )] NGRy = 0,03758043 = ANGCy / 5 625 862 / ASPy 149701898 = 1,08645851 = Pyy / 680,518416 / PY2004 PYy = 680,518416 = ASPy / 149701898 / TFFy 219982,141 = 219982,141 = ANGCy * 5 625 862 * HCNG + 0,0370804 + YRy TFFy BOEy = BOCy 626 + ( + 0,003124 ( * [ EFOCO2 992,394901 = 315543,156 * [ BOCy = 315543,156 = BSPy * 159532455 * Ory * 0,00182052 * = 0,00182052 = AOCy / 272536 / ASPy 149701898 Ory GHG Project plan and report AOCy * 272 536 * EFOCH4 * 0,000000057 * HCO 0,04173 )+ ( EFON2O * )+ 21 ( 0,000000064 * GWPCH4 YRy 1,08645851 20 GWPN2O )] 310 )] Project calculation for 2010 = PNGEy + Pey 11491,1958 = PNGEy = 10630,7807 = POEy = 857,135804 = PGEy = 3,27923808 = = 1 609 600 = IEUGy 10630,7807 + * ANGCy [ * 5 625 862 [ AOCy POEy + 857,135804 + EFNGCO2 * [ * 1 609 600 [ IEUGy AEUCy 7 178 400 - + ( EFNGCH4 * 0,001878 + ( 0,000000037 * * [ EFOCO2 272 536 * [ PGEy 3,27923808 + ( EFOCH4 * )+ GWPCH4 ( EFNGN2O * )+ 21 ( 0,000000035 * + ( + 21 ( GWPCH4) 0,003124 + ( 0,000000057 * + ( + 0,000002 ( EFECO2 EFECH4 * 3E-10 * GWPCH4 + ( + 21 ( EFON2O 0,000000064 * EFEN2O * 1E-10 * AveEUC2005-2007 5 568 800 Emission reductions for 2010 ERy = BEy - PEy 1 809 = 13 301- 11 492 GHG Project plan and report * 21 GWPN2O )] 310 )] GWPN2O )] 310 )] GWPN2O )] 310 )] Appendix 2 – Conflict of interest review checklist Conflict of interest review checklist The verifier and the verification team must ensure that they are truly independent from the project, project proponent(s), quantifier, and/or other agents related to the project. The verifier shall avoid any actual or potential conflicts of interest with the project proponent and the intended users of the GHG information. Client name: Centrale de chauffage de Chicoutimi S.E.N.C. Report identification: Verification report on a Greenhouse Gas Emissions (“GHG”) reduction project – Fuel switching & Energy efficiency project Date of report: September 4, 2012 Professional: Roger Fournier, CPA, CA, Lead verifier I confirm the following: Yes No Details Independence I remained independent of the activity being verified, and free from bias and conflict of interest. I maintained objectivity throughout the verification to ensure that the findings and conclusions will be based on objective evidence generated during the verification. Ethical conduct I have demonstrated ethical conduct through trust, integrity, confidentiality and discretion throughout the verification process. Fair presentation I have reflected truthfully and accurately verification activities, findings, conclusions and reports. I have reported significant obstacles encountered during the verification process, as well as unresolved, diverging opinions among verifiers, the responsible party and the client. Due professional care I have exercised due professional care and judgment in accordance with the importance of the task performed and the confidence placed by clients and intended users. I have the necessary skills and competences to undertake the verification. September 4, 2012 Signature Date