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1. LEASE OF
LAND – ENERGY OTTAWA SOLAR PARTNERSHIP BAIL
FONCIER – PARTENARIAT EN ÉNERGIE SOLAIRE AVEC ÉNERGIE OTTAWA |
Committee recommendationS as
amended
That Council:
1.
Approve
an agreement between the City of Ottawa and Energy Ottawa for the development
of a Solar Energy Park near the Trail Road Waste Facility, as part of an
enhanced partnership with Energy Ottawa as the City’s preferred energy partner;
2.
Declare two
parcels of land near the Trail Road Waste Facility, described as:
a.
a portion
of 4041 Moodie Drive containing an area of approximately 51.7 acres, and
legally described as being CON
4 (RF) PT LOT 5 RP;5R3526 PT OF PT 1 LESS;4R10987 PART; and
b.
a portion
of 4022 Trail Road, commonly known as the former Nepean Landfill containing 69.1 acres, and legally described as part of Lot 9,
Concession 4, Rideau Front, formerly in the Township of Nepean
as being
surplus to the City’s needs; and
3.
Authorize
the City Manager to negotiate and finalize the lease agreement for a period of
twenty (20) years for the lands referred to in Recommendation 2 to Energy
Ottawa Limited based on the terms and conditions described in this report.
4.
That the
Environmental Advisory Committee recommendations be provided to staff for
discussion in the negotiations with Energy Ottawa
Recommandation modifÉes DU Comité
Que le Conseil :
1.
Approuve
la passation d’un contrat de location entre la Ville d’Ottawa et Énergie Ottawa
en vue de l’établissement d’un parc solaire près de la décharge contrôlée du
chemin Trail, dans le cadre d’un partenariat amélioré avec Énergie Ottawa, en
qualité de partenaire privilégié de la Ville en matière d’énergie;
2.
Déclare
excédentaires deux parcelles de terrain situées près de la décharge contrôlée
du chemin Trail et décrites de la manière suivante :
a.
Une
partie de la propriété située au 4041, chemin Moodie, d’une superficie
approximative de 51,7 acres, désignée comme la concession 4 (façade rivière Rideau),
partie du lot 5 RP; 5R3526 partie de la partie 1 moins; 4R10987 partie 1; et
b.
une
partie du 4022, chemin Trail, connu anciennement sous le nom de décharge de Nepean,
d’une superficie de 69,1 acres et dont la description officielle est
partie du lot 9, concession 4, façade rivière Rideau, située dans l’ancien
canton de Nepean
3.
Autorise
le directeur municipal à négocier et à finaliser le contrat de location pour une
période de vingt (20) ans
avec Énergie Ottawa selon les conditions énoncées dans le présent rapport.
4.
Que les recommandations du Comité consultatif sur l’environnement soient
fournies au personnel aux fins de discussion durant les négociations avec
Énergie Ottawa.
Documentation
1.
Deputy
City Manager's report Planning, Transit
and the Environment dated 14 May 2010 (ACS2010-ICS-CSS-0004).
2.
Extract
of Draft Minutes – Planning and Environment Committee meeting of 25 May 2010
3.
Comments from the Environmental
Advisory Committee (EAC) dated 25 May 2010.
Report to/Rapport au :
Planning and
Environment Committee
Comité de l'urbanisme et de l'environnement
and Council / et au Conseil
Submitted by/Soumis par : Nancy Schepers, Deputy City Manager,
Directrice municipale
adjointe, Infrastructure
Services and Community Sustainability, Services d'infrastructure
et Viabilité des collectivités
Contact Person/Personne-ressource : Johanne
Levesque, Director/Directrice,
Community Sustainability/Viabilité des
collectivités
(613)
580-2424 x12257, Johanne.Levesque@ottawa.ca
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SUBJECT: |
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OBJET : |
Bail foncier – Partenariat en énergie
solaire avec Énergie Ottawa |
REPORT RECOMMENDATIONS
That the Planning and
Environment Committee recommend that Council:
1.
Approve
an agreement between the City of Ottawa and Energy Ottawa for the development
of a Solar Energy Park near the Trail Road Waste Facility, as part of an
enhanced partnership with Energy Ottawa as the City’s preferred energy partner;
2.
Declare two
parcels of land near the Trail Road Waste Facility, described as:
a.
a portion
of 4041 Moodie Drive containing an area of approximately 51.7 acres, and
legally described as being CON
4 (RF) PT LOT 5 RP;5R3526 PT OF PT 1 LESS;4R10987 PART; and
b.
a portion
of 4022 Trail Road, commonly known as the former Nepean Landfill containing
61.9 acres, and legally described as part of Lot 9, Concession 4, Rideau Front,
formerly in the Township of Nepean
c.
as being
surplus to the City’s needs; and
3.
Authorize
the City Manager to negotiate and finalize the lease agreement for a period of
twenty (20) years for the lands referred to in Recommendation 2 to Energy
Ottawa Limited based on the terms and conditions described in this report.
RECOMMANDATIONS DU
RAPPORT
Que le Comité de l’urbanisme et de
l’environnement recommande au Conseil :
1.
D’approuver
la passation d’un contrat de location entre la Ville d’Ottawa et Énergie Ottawa
en vue de l’établissement d’un parc solaire près de la décharge contrôlée du
chemin Trail, dans le cadre d’un partenariat amélioré avec Énergie Ottawa, en
qualité de partenaire privilégié de la Ville en matière d’énergie;
2.
De
déclarer excédentaires deux parcelles de terrain situées près de la décharge
contrôlée du chemin Trail et décrites de la manière suivante :
a.
Une
partie de la propriété située au 4041, chemin Moodie, d’une superficie
approximative de 51,7 acres, désignée comme la concession 4 (façade rivière Rideau),
partie du lot 5 RP; 5R3526 partie de la partie 1 moins; 4R10987 partie 1; et
b.
une
partie du 4022, chemin Trail, connu anciennement sous le nom de décharge de Nepean,
d’une superficie de 61,9 acres et dont la description officielle est partie du
lot 9, concession 4, façade rivière Rideau, située dans l’ancien canton de
Nepean
3.
D’autoriser
le directeur municipal à négocier et à finaliser le contrat de location pour une période de vingt (20) ans
avec Énergie Ottawa selon les conditions énoncées dans le présent rapport.
BACKGROUND
With the passing of the Ontario Green Energy Act, municipalities
in
A unique opportunity now exists
for the City of Ottawa, in partnership with Energy Ottawa (a wholly-owned
subsidiary of Hydro Ottawa and consequently 100 per cent owned by the City), to
create a renewable energy campus near the Trail Road Waste Facility by adding
two solar energy fields to the existing solid waste-to-energy demonstration facility
(Plasco) and landfill gas to energy (PowerTrail) operations. This renewable
energy campus would be the first of its kind in
To realize this vision, the City of Ottawa intends to build on its relationship with Energy Ottawa (EO) as the City’s preferred energy partner by leasing lands near the Trail Road Waste Facility to construct two ground-mounted solar photovoltaic (PV) fields. Energy Ottawa will act as the owner/operator of both fields with the resulting green power to be sold to the provincial energy grid.
This report discusses the solar park opportunity, the nature of the partnership with Energy Ottawa, and the resulting benefits for both the City and Hydro Ottawa/Energy Ottawa.
DISCUSSION
The
The
In September 2009, the provincial
government, through the Ontario Power Authority (OPA), launched North America’s
first FIT program to promote and increase renewable energy development in
Not surprisingly, the FIT program
has created significant interest in renewable energy facilities in
Several of the approved projects are for ground-mounted solar arrays in Eastern Ontario. This includes projects in the following municipalities and/or townships – Alfred, Brockville, Mississippi Mills, Ottawa, Perth, Portland, Rideau Lakes and Smiths Falls. The region is well positioned as it enjoys strong potential for solar energy generation, with a favourable number of generating hours per year relative to many other parts of the province.
All projects under the FIT program are contingent upon receiving approval (i.e. a FIT contract) from the OPA. Approval is not guaranteed. In addition, the domestic content requirements of the FIT program, which effectively require the use of solar panels assembled in Ontario, could affect the cost and financial viability of the proposed project. Panel manufacturers have indicated their intent to establish operations in Ontario, but product costs are not yet known. As these and other details become available, Energy Ottawa will conduct final due diligence on the financial viability and rate of return of the project, which could impact whether the project proceeds, as well as its size and timing.
City of
Ottawa – Energy Ottawa Strategic Energy Partnership
The City of
In 2004, the City partnered with Energy Ottawa to commission a new five-megawatt waste to energy plant utilizing landfill gas collected from the Trail and Nepean Waste facilities to produce clean, renewable energy. The Trail Road landfill gas to energy project has transformed an unwanted by-product of municipal waste into a valuable source of local renewable energy. To date, this project has generated 67 million kilowatt hours of renewable power, provided benefits to the City of $315,000 in royalties, and enhanced dividends from Hydro Ottawa in addition to the investment of $2 million for upgrades required to the existing landfill gas collection system which would otherwise have been a cost incurred by the City. At the same time, the project has significantly reduced the City’s greenhouse gas emissions by eliminating more than one-half million tonnes of methane gas, which is 20 times more potent than carbon dioxide as a greenhouse gas.
In 2006, Council recognized this relationship by formally approving Energy Ottawa as the City’s preferred partner in the pursuit of initiatives to reduce energy costs and overall energy consumption through energy efficiency, conservation and demand management (ACS2006-PGM-POL-0047). Since 2006, the City has worked with Energy Ottawa to invest more than $3.5 million in various building energy efficiency initiatives with a further $2.1 million anticipated in 2010. Over the last three years, these projects combined have resulted in savings of more than seven million kWh of electricity and almost 160,000 cubic meters of natural gas and oil annually.
The City has also entered into a number of other energy related partnerships. One example is the City’s partnership with the Plasco demonstration facility to produce energy from waste as a by‑product of plasma-gasification. As another example, in early 2010, the City agreed to participate in Hydro Ottawa’s pilot project for the LumenIQ Adaptive Street Lighting technology as a means to lower its annual street lighting costs. The City is also currently working with Energy Ottawa to implement a rooftop solar pilot as part of the Council approved Smart Energy project (one of the projects associated with the City’s Efficiency Savings Initiative). The solar pilot will see solar arrays constructed on the rooftops of two to three City facilities over the next few months, generating between 15 and 20 kW of power and realizing revenues from the provincial FIT program. This project is part of the City’s efforts to identify new and innovative source of revenue and savings, and has the potential for expansion to other City facilities in the future assuming the results of the pilot are successful.
As a natural extension of this relationship, the City now wishes to partner with Energy Ottawa by leasing lands near the Trail Road Waste Facility for the construction of a ground-mounted solar energy park. The proposed partnership is very similar in structure to the successful Trail Road landfill gas to energy project, with Energy Ottawa leasing the site from the City, constructing, owning and operating the facility, and providing financial benefits to the City as a result of revenues generated. This existing partnership has also provided Energy Ottawa with valuable experience operating in and around a landfill site.
This role is also consistent with Hydro Ottawa’s 2008-2012 Strategic Direction, endorsed by Council in June 2008, which identifies as a key priority a growing relationship between Hydro Ottawa and the City in order to reduce the costs of municipal services and at the same time enhance energy-conservation and renewable energy efforts.
Subject Lands
Two parcels have been identified near the Trail Road Waste Facility for the solar energy park which will be developed in two phases as follows:
Parcel A –
4041 Moodie Drive (to be developed as Phase 1)
Location - South-east corner of Moodie Drive and Barnsdale Road
Total area of site - 51.7 acres
Approximate usable area - 30 acres
Current Use - Parcel is part of a larger property that is currently being used to compost leaf and yard waste from the City of Ottawa’s residential collection program.
Estimated power generation 5 megawatts (MW) of peak energy, enough to power up to 600 homes.
Parcel B – 4420
Trail Road - former Nepean Landfill Site (to be developed as Phase 2)
Location - South-east corner of Moodie Drive and Trail Road
Total area of site - 69.1 acres
Approximate usable area - 44 acres
Current Use - Closed Nepean Landfill site which operated between 1960 and 1980. Capped with a low-permeability cover in 1993. Site is operated/maintained in accordance with Certificates of Approval issued by the Ontario Ministry of Environment.
Estimated power generation 7 megawatts (MW) of peak energy, enough to power up to 900 homes.
This site is intended to be developed as Phase 2. As a former landfill it is recognized that this is a sensitive site. Approval is required from the Ontario Ministry of Environment to amend the City’s Certificate of Approval (CofA) to permit a solar installation. Energy Ottawa will work with the City and the Ontario Ministry of the Environment to ensure that the design and installation of the solar collector mounting structure does not affect the integrity of the engineered polyethylene cap, landfill gas collection system, and storm water management system.
Energy Ottawa will support the City’s application to amend the CofA for this site. Construction activities will not be allowed to occur until provincial approval is received.
Details
of the Solar Partnership
The main elements of the solar partnership with Energy Ottawa are as follows:
City of Ottawa
- Grants an exclusive 20-year lease to Energy Ottawa to occupy the two parcels of land as described in this report.
- Provides land on an ‘as is condition.’
- Receives a fixed payment of approximately $125,000 per year (to be finalized based on the actual size of the project) - plus annual escalation based on the Consumer Price Index (CPI) for a period of 20-years, a portion of which flows as each site begins operation. In total, this amounts to approximately $2.5M over the 20 years.
·
At the end of the agreement, the City
can choose to purchase the solar energy park from Energy Ottawa, extend the
lease agreement, or request that the site be decommissioned.
Energy Ottawa
- Acts as the ‘owner/operator’ of both sites.
- Responsible for all costs associated with the design, construction, operation and maintenance, including any realty taxes payable.
- Manages the project and assumes all responsibility and costs for necessary regulatory approvals and permitting.
- Enters into a FIT contract with the Ontario Power Authority (subject to acceptance by the OPA) to sell the resulting green power to the grid under a guaranteed fixed-price 20-year contract.
- Retains all revenues from the generation of electricity over the 20-years.
The partnership is expected to provide the following benefits:
City of Ottawa
- Increased revenue through lease payments for the subject lands and enhanced dividends from Hydro Ottawa over the 20-year term of the project.
- Enhanced leadership in the area of renewable energy through the development of a unique, first-in-Canada renewable energy campus centred on a municipal solid waste site.
- Alignment with the City’s strategic objectives for environmental sustainability by increasing the supply of local renewable energy.
- Enhanced business potential of a wholly-owned City asset, Energy Ottawa, with potential for future financial benefits due to resulting business growth in the future.
Energy Ottawa and Hydro Ottawa
- Increased capacity and expertise in solar generation, enhancing the company’s potential for business growth in this area.
- Progress in the implementation of Hydro Ottawa’s 2008 – 2012 Strategic Direction, enhancing the company’s ability to provide dividends and long-term value to the City of Ottawa.
- Increased revenues.
- Strengthened position as a renewable energy leader in Ontario.
Project Timeline
Subject to approval by Council, subsequent approval by the OPA, and final financial due diligence, it is anticipated that the major milestones of this project would be as follows:
Phase 1 - Parcel A –
4041 Moodie Drive
June 2010 Submission of FIT Application
Fall 2010 FIT contract decision
Q4 2010 – Q1 2011 Engineering and detailed design
Q2 2011 – end 2011 Construction and commissioning
Q1 2012 Solar array operational - first lease payment to City
Phase 2 - Parcel B – 4420 Trail Road - former Nepean Landfill Site
Timing to be determined
ENVIRONMENTAL IMPLICATIONS
The creation of the Trail Road Solar Energy Park will create a new source of clean, renewable energy and reduce the amount of greenhouse gas emissions produced from an equivalent amount of conventional energy.
The project is directly aligned with both the City’s Environmental Strategy; Air Quality and Climate Change Management Plan which seeks to “promote and facilitate the development of new alternative energy projects using green or renewable energy;” and the Choosing our Future initiative and its Energy goal which aims to have energy used efficiently and be supplied from green, renewable sources.
RURAL IMPLICATIONS
There are no rural implications associated with this report.
CONSULTATION
Staff from the Real Estate Partnership and Development Office, Environment Services, Environmental Sustainability and Legal Services have provided input into the development of this report. Hydro Ottawa and Energy Ottawa staff was also consulted and fully support this report.
COMMENTS BY THE WARD COUNCILLOR
The Councillor for Ward 21 – Rideau-Goulbourn is aware of the Energy Ottawa Solar Partnership proposal and is supportive of the initiative.
LEGAL/RISK MANAGEMENT IMPLICATIONS
This report will result in a long term obligation of the City in
accordance with the elements set out above. There are no additional legal/risk
management implications.
CITY STRATEGIC PLAN
This initiative is directly aligned with the following City Strategic Plan priorities - Solid Waste and the Environment (Objective 1- Enhance environmental sustainability and reduce greenhouse gas emissions) and Sustainable Finances (Objectives 2 - Increase new sources of funding).
TECHNICAL IMPLICATIONS
N/A
FINANCIAL IMPLICATIONS
It is anticipated that there will be no additional cost to the City to lease lands to Energy Ottawa to develop and operate the Solar Energy Park near the Trail Road Waste Facility. Energy Ottawa will be responsible for funding all costs associated with the design, construction, operation and maintenance of the two solar arrays.
Energy Ottawa will enter into the lease agreement for the properties with the City subject to receiving approval for the project from the Ontario Feed-in-Tariff Program and assuming the final due diligence on the project demonstrates an appropriate financial return. The estimated effective date is fall 2010.
An annual rental income of $125,000 is anticipated subject to final negotiations and will be adjusted each year for inflation based on the CPI. Rent is due as each site becomes fully operational and is payable for a 20-year term. It is expected that all necessary approvals will be in place and the first site operational by early 2012, with the second site coming on-line in 2013.
The tax assessment unit expects that additional realty tax revenues may also be generated by the project.
SUPPORTING DOCUMENTATION
Document 1 Parcel A – 4041 Moodie Drive
Document 2 Parcel B – 4420
Trail Road - former Nepean Landfill Site
DISPOSITION
Upon approval by Council, staff will negotiate and finalize the lease agreement with Energy Ottawa.
PARCEL A – 4041 MOODIE DRIVE DOCUMENT
1
DOCUMENT 2
PARCEL B – 4420 TRAIL ROAD - FORMER NEPEAN LANDFILL SITE
