Events:
Partnering for Sustainability – Success Stories
Integrated Gas Recovery Services (IGRS) – as presented by Dympna Scullion
The Britannia Landfill in Mississauga operated from 1980-2002. The Regional Municipality of Peel began to collect the methane produced by the landfill in 1994 but flared it. In 2000 the Region issued a competitive RFP for the generation of power from the methane. In 2003, IGRS signed a contract with the Region of Peel to generate 5 megawatts of electricity from the landfill.
IGRS looked for an electricity buyer but the area was primarily residential. No one needed the constant volume of power 24 hours a day provided by the generator and IGRS couldn’t find a buyer who wanted to lock in at a fixed price given the uncertain market. After IGRS brought these concerns to the Region of Peel, the Region said that they could buy the power to operate their wastewater treatment plants and wouldn’t mind committing to a long-term fixed price.
The partnership has resulted in many benefits for both partners. The Region receives carbon credits for the emissions reductions and will get a discount on their electricity once capital costs are paid off. The long-term fixed price of the electricity over the 20 year deal provides potential savings to the Region and the Region's long-term commitment helps IGRS finance the project.
Key successes include:
- Displacing 5MW of grid electricity with renewal electricity
- Diverting methane and other greenhouse gases (around 200,000 yearly tonnes of CO2 emissions reductions)
- Generating electricity in Mississauga where no generation capacity existed
- The region has a long-term fixed price on power for 20 years
- he facility shows a lot of people through it for demonstration purposes.
An open book approach: IGRS explained to the Region that their financial structure operated through debt-financing and that they would pay the capital down over time. They were likely going to pay the capital off before the end of the project and so could likely give the region a price discount once they were finished paying off the capital.
Shared Risks: IGRS assumes the capital and operating risks and is responsible to operate and maintain the system. They are reimbursed through the income they make through the sale of electricity to the region. If the plant isn’t running, IGRS doesn't generate revenues. The Region of Peel assumes the market risks of purchasing the electricity at a fixed price.
Although the partnership has enjoyed great successes, there have been some challenges:
- The process took 5 years
- Designing and locating the plant in an urban setting was difficult
- There was a steep learning curve with the local utilities
- Appropriately distributing the risk required careful negotiation
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