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Bioenergy Call for Power: Phase IICommunity–Based Biomass ProjectsIntroductory Session

Power AcquisitionsBC Hydro

July 2009

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Bioenergy Call for Power: Phase II Community-Based

Biomass ProjectsWelcome & Session Goals

Kenna HoskinsManager, Engagement

Power Acquisitions

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Session Goals

• Introduce the Community-Based Biomass (CBB) Request for Qualifications (RFQ)

• Describe the overall RFQ objectives, design and process

• Provide opportunity to comment on the draft RFQ terms– Encourage written comments

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Agenda

Time Activity Presenter

8:30-9:00 am Registration / Breakfast

9:00-9:30 am Welcome / Session Goals• Overview of Power Acquisitions

Kenna Hoskins

9:30-10:30 am Overview of Bioenergy Phase II - CBB• Goals, Eligibility, Process, Timeline• Evaluation CriteriaQ&A

James Grant

10:30-10:45 am Break

10:45-12:15 pm Walk through CBB elements• Interconnection• Proposal Guide• Commercial & quantitative evaluation• Next StepsQ&A

Laila BassimJames Grant

12:15 pm End of Session

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Expected Outcomes

• Attendees will gain a better understanding of the CBB RFQ; will be able to assess whether this RFQ is right for them

• BC Hydro will receive written comments and feedback on the draft document and process, which will help in the development of the final RFQ

• BC Hydro will gain a better understanding of interest in the CBB RFQ

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Background

Meeting the future electricity needs of British Columbians

Conserving more

Buying more

Building more

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Acquisitions Processes

Active calls for power:

Clean Power CallFill anticipated electricity

needs by purchasing power from larger projects that meet the clean definition

Standing Offer Program

Purchase power from small, clean energy

generators (no more than 10 MW)

Bioenergy Call –Phase II

Fill anticipated electricity needs by purchasing power

from projects that use biomass as a fuel source

Other acquisitions processes:Net Metering

Interconnection of small generating units (< 50 kW)

to BC Hydro’s system

Non-Integrated AreasReduce or eliminate use of

diesel for power in NIA; replace with clean or

renewable energy

Biomass Projects RFP

Community-Based Biomass Projects

RFQ

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Why Bioenergy?

• Bioenergy is clean, capacity-rich electricity that can help BC Hydro close the supply gap

• Significant level of interest from a broad spectrum of potential providers– Existing forest companies– New and existing IPPs– First Nations– Local governments and communities

• Potential opportunities for new technologies

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Bioenergy Calls - Chronology P

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Bioenergy Phase I

• Launched February 2008• Competitive RFP for Projects generating electricity

using forest-based biomass– Sawmill residues, logging debris, trees killed by

the mountain pine beetle, and other residual wood• In December 2008, BC Hydro selected 4 Projects for

a total of 579 GWh/year• In February 2009, Electricity Purchase Agreements

were filed for acceptance with the BC Utilities Commission

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Bioenergy Phase II

• Launched March 2009• Guided by the policy actions and direction

in the 2007 BC Energy Plan and the 2008 BC Bioenergy Strategy

• Includes any form of biomass that meets BC Clean or Renewable Electricity Definitions

• Two “streams”

Community-Based Biomass Projects (CBB):

RFQ focused on innovative, community-level electricity supply solutions using biomass.

Biomass Projects (BP):Competitive RFP for larger-scale biomass projects; target is 1,000 gigawatt hours/year.

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Why Community-Based Biomass?

Seeking innovative, community-level solutions

Cost competitive electricity for the integrated electricity system

+Quantifiable local or regional benefits such as

improved reliability

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Process at a Glance

Draft RFQ & Schedules Released

Comments &Feedback

IncorporateFeedback

Issue Final RFQ

Submission of

Proposals

Evaluation of

Proposals

ProposalsQualified Negotiation

ElectricityPurchase

Agreement

BCUCFiling

Summer & Fall 2009

Winter 2009 - Spring 2010

We are here

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How your input will be used

• Written submissions are compiled and considered by the Call team when revising the terms of the RFQ

• Two ways to submit comments:– Comments on draft RFQ documents submitted to

[email protected] using the Draft RFQ Comments Form found at www.bchydro.com/bioenergycallcbb

– Comments and questions from today’s session submitted using the Comment Cards provided

• BC Hydro determines final RFQ elements using:– Comments from diverse perspectives, forums– Policy framework– Regulatory considerations

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Bioenergy Call for Power: Phase II CBB

Overview

James Grant

RFQ Project Manager

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RFQ Overview

1. Goals

2. Eligibility

3. Process

4. Evaluation Criteria

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RFQ Goals

1. Help B.C. reach goal of becoming electricity self-sufficient by 2016, while securing cost-effective firm, clean or renewable, carbon-neutral energy for ratepayers

2. Fulfill objectives in the BC Energy Plan and the BC Bioenergy Strategy

3. Qualify at least two Proposals to engage in negotiations, which may result in Electricity Purchase Agreements being awarded

4. Conduct a fair and effective process

5. Reduce Project attrition and ensure a Projects’success

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Eligibility

Eligibility Requirements:

• Biomass (Clean or Renewable Electricity)• Must be registered in RFQ• Between 50 kW and 5 MW• Located in B.C.• Point of Interconnection: (D-connected, and at

customers’ sites D- or T-connected)• New or existing Projects• First Nations consultation plan• Must be metered according to RFQ guidelines

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Eligibility

Fuel TypeQualify as clean biomass fuel under the BC Clean or Renewable Electricity Definitions applicable to biomass projects

www.empr.gov.bc.ca/EAED/AEPB/Documents/CleanEnergyJune.pdf

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Eligibility

Project SizeMust have an installed capacity larger than 50 kW, no greater than 5 MW

• Size allows connections to Distribution System (D-connected)

• Size reflects community-based focus of RFQ

• Smaller projects (< 50 kW) under Net Metering Program

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Eligibility

First Nations Consultation Submit a consultation plan that identifies First Nations affected by the Project, and the strategy to engage and consult

• Respondents are required to submit a First Nations Consultation Plan in order to be eligible to participate in the CBB RFQ

• Additional details are provided in the Proposal Guide

• BC Hydro has new obligations for First Nations consultation with respect to its electricity purchases

• February 28, 2009 BC Court of Appeal judgments: – Carrier Sekani Tribal Council v. BCUC– Kwikwetlem First Nation v. BCUC

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Eligibility

Interconnections: Point of Interconnection: Distribution System, or on an existing BC Hydro customer’s site, which could be either D-connected or T-connected Interconnection Conformity: Consistency between technical parameters of Proposal and interconnection application and study

• BC Hydro integrated system only

• BC Hydro not required to transmit energy through another utility or out-of-province jurisdiction

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Process and Schedule

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Evaluation

Evaluation criteria categories:

Economic Viability

D-System Benefits

Development Risk

First Nations Involvement

Community Benefits Innovation

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Evaluation: Economic Viability

• Analysis of financial and physical parameters that define a contract or commercial arrangement for both the buyer and seller

• Funding from alternative sources (e.g., Innovative Clean Energy (ICE) Fund, Sustainable Development Technology Canada)

• System impact (Transmission or Distribution)

Economic Viability

D-System Benefits

Development Risk



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Evaluation: Development Risk

• Project development and operating risks, including:– permitting, technological, constructability and schedule

risks– supply reliability and other operating availability risks

• Fuel availability, with a desirability of minimizing adverse impacts on existing productive uses of biomass

• Status of community engagement and breadth of community support

• Environmental impacts

Economic Viability

D-System Benefits

Development Risk



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Evaluation: D-System Benefits

Distribution System Benefits include:• Reliability / Islanding• Capacity constraints• Power quality

Economic Viability

D-System Benefits

Development Risk



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Evaluation: Community Benefits

• Quantifiable economic near-term benefits to local community and potential for future long-term business and energy system growth

• Contribution to and coordination with a community’s environmental programs

• Community or industrial use of waste heat (space and water heating, lumber drying, etc) and other by-products of electricity generation from biomass

• Environmental benefits

Economic Viability

D-System Benefits

Development Risk



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Evaluation: First Nations Involvement

• Quantifiable economic near-term benefits to First Nations and the potential for future long-term business and energy system growth

• Ownership and commercial opportunities that have First Nations involvement

• Community benefits that are also First Nations benefits

Economic Viability

D-System Benefits

Development Risk



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Evaluation: Innovation

• Broader commercialization potential: – consideration of innovative technologies, designs,

consortia or business models that can productively inform and/or influence the near-term BC marketplace for bioenergy

Economic Viability

D-System Benefits

Development Risk



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Questions?

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Agenda

Time Activity Presenter

8:30-9:00 am Registration / Breakfast

9:00-9:30 am Welcome / Session Goals• Overview of Power Acquisitions

Kenna Hoskins

9:30-10:30 am Overview of Bioenergy Phase II - CBB• Goals, Eligibility, Process, Timeline• Evaluation CriteriaQ&A

James Grant

10:30-10:45 am Break

10:45-12:15 pm Walk through CBB elements• Interconnection• Proposal Guide• Commercial & quantitative evaluation• Next StepsQ&A

Laila BassimJames Grant

12:15 pm End of Session

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Interconnections

Laila BassimSpecialist Engineer

Generator Interconnection

& Transmission Services

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Outline

• Role of GITS• Process• Timelines & Cost of Study• Interconnection Process for D-connected Generators• Key messages for interconnections• Contacts

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Role of GITS

Generator Interconnection and Transmission Services (GITS):

• Looks after all Interconnection Applications for CBB Projects until RFQ is complete

• Facilitates interconnection of D-connected generators to the Distribution System (generators connected at 35 kV or less)

• Is the point of contact for D-connected generators

• Looks after Interconnection Agreements for D-connected generators

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Overview of Process

• Respondents are required to submit a completed Interconnection application to BC Hydro

• The studies allow BC Hydro/BCTC to analyze and assess the impact of a Project on the Distribution or Transmission System

• This information is also used in proposal evaluation

• After the RFQ process is complete:– BC Hydro looks after D-connections– BCTC looks after T-connections

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Process

• All Projects participating in this RFQ will be studied on a stand-alone basis, under the same system conditions

• All Respondents must file an Interconnection Application by the applicable deadline– Includes proposals involving eligible incremental

generation– Proposals from Respondents with existing

interconnection agreements for existing generation, will be required to file a new application for the incremental generation

• If a proposal is successful in the RFQ process (i.e. is a “Qualified Proposal”), the cost of the interconnection study, and any subsequent studies necessary to complete the Project’s interconnection until the COD is achieved, will be borne by the Respondent

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Timeline & Cost of Studies

Application form posted on BC Hydro website

Application completed & signed by a professional engineer & submitted to GITS

Completed application signed by professional engineer + deposit

BC Hydro reviews completeness of Application; issues a deficiency list, if required

D-connected Projects: submit

signed PreliminaryInterconnection

Study Agreement to BC Hydro + deposit

T-connected Projects: submit

signed Feasibility Interconnection

Study Agreement to BCTC + deposit

Selection of qualified proposals

$15,000 deposit for each Project to BC Hydro (GITS)

$15,000 deposit to BC Hydro or

BCTC

July 2009

Oct 2009

Nov 2009

Early 2010

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Distribution Generator Interconnection(35 KV or Less)

BC Hydro Interconnection Process for Generators without Transmission Impact:

Impact/Design Study

Interconnection Agreement

Interconnection Application

Conduct Preliminary

Studies

Construction of Interconnection

Facilities

4 - 10 weeks

4 - 16 weeks

Over $40kProject Interconnection Requirements

Sign Facilities Letter

Commissioning and Interconnection

Customer Inquiry and/or Initial

Meeting

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BC Hydro Interconnection Process for Generators withTransmission Impact:

Interconnection Application

8-14 weeks

12-30 weeks

Typical:>$200k

Project Interconnection Requirements

InterconnectionAgreement

Commissioning and Interconnection

Construction of Interconnection

Facilities

Sign Facilities Letter

Interconnection Design/Impact

Study

Customer Inquiry/Initial

Meeting

PreliminaryInterconnection

Study

Distribution Generator Interconnection(35 KV or Less)

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Typical Distribution Generator Interconnection

IPPGenerator

Point of Interconnection

(POI)

M

BC Hydro’s Interconnection Facilities

IPP’s Interconnection Facilities

BC Hydro Facilities

Private Line

One-Span Primary Extension

Other Customers

IPP Private Facilities

Substation25 KV

138 KV

Tap

Other Customers

TransmissionSubstation Distribution Asset

P&CC Equipment

Station Service

Distribution

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D-Studies

• D-studies may include the following assessments:– feeder thermal and voltage limits – fault levels– protection coordination– recloser control– location of capacitor bank and voltage regulator– primary service

• After completion of D-studies an interconnection cost estimates will be provided

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T-Studies

• BCTC will perform a study similar to the SGIP Feasibility Study (NRIS)

• T-Studies will:– Consist of a short circuit analysis and a power flow

analysis– State the assumptions upon which it is based– State the results of the analysis – Provide requirements or potential impediments to

providing the requested interconnection service, including a preliminary indication of the cost and length of time that would be necessary to correct any problems identified in that analysis and implement the interconnection and preparation of interconnection cost estimates

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Key Messages for Interconnections

• Follow timelines!• Submit application signed by a professional engineer

by October 2009• Complete any deficiencies in the application by

November 2009• Submit completed, signed by a professional

engineer, application and $15,000 deposit to BC Hydro by November 2009

• Ensure that the application is valid for the proposal• GITS role is to help you with your application until

the CBB RFQ is complete• Call me or Charley if you have any inquiries re:

interconnection

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Contacts

Generator Interconnection and Transmission Services333 Dunsmuir Street, 10th FloorVancouver, BC V6B 5R3

Laila Bassim Charley Ye [email protected] [email protected] 604-623-4138

For more information please visit:www.bchydro.com/interconnections

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Questions?

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Proposal Guide

James GrantRFQ Project Manager

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Introduction

• Highlight of unique items in the Proposal Guide

• Q&A

• Comment cards available to write down ideas, questions, and comments

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Proposal Guide

Four main sections:

Section 1 - Commercial & Quantitative Evaluation Data– Quantitative Evaluation

Section 2 - The Respondent– Respondent Information

Section 3 - The Project– Project Details

Section 4 - Supplementary Information– “Catch-All”

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Section 3.4 Biomass Fuel Plan

• Should demonstrate that the Respondent has a plan to contract for, and has reasonable assurance of, the supply or availability, and if applicable the transport and storage, of biomass required for the operation of its Project

• Should address fuel availability and the potential impact on other users, with a desirability of minimizing adverse impacts on existing productive uses of biomass

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Section 3.4 Biomass Fuel Plan (cont’d)

• Identify the approximate volume (in tonnes) of biomass that is expected to be consumed in energy (steam/electricity) generation at the facility

• The fuel plan should be split up identifying the volumes for each of the following categories: Description Fuel Examples

Category A Pulp Residuals Black Liquor

Category B Sawmill & Manufacturing Residuals

Hog Fuel, Sawdust, Chipping operation residues

Category C Forest Sourced Fuel Roadside Debris, Logging Slash, Sort Yard Debris, Standing timber

Category D Sorted Municipal Solid Waste (MSW)

Clean organic material sorted from MSW

Category E All other Clean Biomass Agricultural residues, energy crops

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Section 3.12 First Nations Consultation & Benefits

• Respondent should explain how it will undertake consultation with First Nations

• Submission of First Nations consultation plan is also an eligibility requirement– addressed by subsections 3.12 (a) through (f) of the

Proposal Guide

• Details of commercial arrangements, ownership and future business opportunities that will have a beneficial impact on First Nations and demonstrate First Nations involvement

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Section 3.3 Generation Technology

• Proven Technology: – identify at least three other existing generation plants

using the same generation technology• Unproven or Near-Commercial Technology:

– approximate market potential in MW installed and GWh/year in B.C. for the proposed technology

– barriers that block the development of this technology to its market potential

– how the Project addresses those barriers and accelerates the deployment of the technology in B.C.

– the nature of any ownership/equity stake in the Project by a proposed technology equipment supplier

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Section 1 Commercial & Quantitative Evaluation Data

• Attachment 1 to Proposal Guide

• Detailed information for BC Hydro to understand Project financial and technical inputs to assess and model the economic viability of the Project

• Indicative pricing to ensure that the expectations of the Respondent and BC Hydro are reasonable

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Section 3.16 Financial Information

• Demonstrate Respondent’s ability to finance the Project• Provide up to date information on the financing of the

Project• Any letters of commitment• All assumptions:

– Forecast of spending by year prior to commercial operation

– Description of tax assumptions (including applicable CCA classes and the corresponding % of capital cost)

– List and description of grants or subsidies available and their amounts (in $ millions)

– Detailed summary of financing assumptions (e.g., fees, reserves, debt coverage ratios)

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Proposal Guide Key Messages

• A well laid out Proposal demonstrates the Respondent’s current development status and understanding of the future development requirements

• Be as complete as possible in your Proposal • If you have identified an issue:

– Disclose it fully - BE TRANSPARENT– Provide a mitigation plan

• Provide all requested information available in your Proposal – do not assume that you will be given a chance to discuss your Proposal

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Next Steps

• Submit comments by July 31, 2009:– Download draft documents at

www.bchydro.com/bioenergycallcbb, fill-in the Draft RFQ Comment Form and email to [email protected]

Draft RFQ and

Schedules Released

Comments and

Feedback

Incorporate Feedback

Issue Final RFQ

Submission of

Proposals

Summer – Fall 2009

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Questions?

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