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Vancouver Landfill Gas Heats Greenhouses


Contact:
Chris Underwood
chris_underwood@city.vancouver.bc.ca
Transfer & Landfill Operations Branch
604-940-3203


Vancouver Landfill: Landfill Gas Collection and Utilization Project


J. Paul Henderson, P.Eng
Manager of Transfer & Landfill Operations
City of Vancouver Engineering Services
Vancouver, B.C.

Tracy Kyle, P.Eng

Chris E. Underwood, P.Eng
Assistant Branch Head
Structures and Greenways Branch
City of Vancouver Engineering Services
Vancouver, B.C.

Note: All authors worked in the Transfer & Landfill Operations Branch at the time they contributed to this paper.

A Portuguese version of this paper can be read here. (Word Document 48K)

Abstract

The Vancouver Landfill is owned and operated by the City of Vancouver and is located in the southwest corner of Burns Bog in Delta, B.C. An active landfill gas (LFG) collection and control system has been operated at the Landfill since 1990 to prevent odours and reduce greenhouse gas emissions. In 2003, the City of Vancouver expanded the existing collection system such that the system now collects approximately 2000 standard cubic feet per minute (scfm) of LFG at a methane content of approximately 50%. The gas collection system includes approximately 200 vertical extraction wells, and 10 horizontal extraction laterals. The laterals are bedded in approximately 2 metres of construction and demolition material that acts as a gas collection and drainage layer.

Since September 2003, a beneficial use system owned by Maxim Power Corporation has been operating at the Landfill. Maxim pipes LFG to CanAgro Greenhouses, and at the greenhouse burns the gas generating 5.55 MW of electricity for sale to B.C. Hydro and 100,000 GJ/year of heat for sale to CanAgro.

The project results in the recovery of approximately 500,000 GJ/year of energy, the total energy requirements of 3,000 to 4,000 homes, and results in a reduction of more than 230,000 tonnes per year CO2 equivalents or the emissions of approximately 45,000 automobiles. The City of Vancouver will receive revenues of approximately $400,000 per year for the duration of the 20- year contract period.

Background

The Vancouver Landfill is located in the southwest corner of Burns Bog in the Corporation of Delta, British Columbia, approximately 20 kilometres south of the City of Vancouver. The Vancouver Landfill is a municipal solid waste (MSW) landfill and is owned and operated by the City of Vancouver.

The Landfill has operated since 1966, and in 2003 received 450,000 tonnes of MSW. The Landfill serves over 900,000 residents and associated businesses from a catchment area including Vancouver, Delta, Richmond, White Rock, the University of B.C. Endowment Lands, and a portion of Surrey. The Landfill is part of the Greater Vancouver Regional District's (GVRD) disposal system consisting of two landfills and a waste to energy facility that collectively serve 2,000,000 people.

The Landfill is considered a long-term disposal facility under the 1995 GVRD Solid Waste Management Plan with a remaining capacity of approximately 18,000,000 tonnes (approximately 12 million tonnes currently in place). In September 1999 Vancouver and Delta reached an agreement that, among other things, provides an operating framework for the Landfill until 2037. The conclusion of the Vancouver-Delta Agreement has allowed the City to proceed with long-term planning and capital improvements including expansions to the site's LFG control system.

The Ministry of Water, Land and Air Protection (MOWLAP), formerly Environment, Lands and Parks, under an Operational Certificate (OC) regulate the operation of the Landfill. The OC includes provisions for controlling and recovering LFG at the Vancouver Landfill.

The City of Vancouver has operated an active landfill gas (LFG) collection and flare system at the Vancouver Landfill since 1991. The original system covered approximately 84 hectares of the site and included 190 vertical collection wells, plus a blower/flare system. The system was installed for odour control. Landfill gas is also used to heat and provide hot water for the Landfill's administration building. Most of the 1991 system has now been decommissioned.

In 2000, the system was expanded over an additional 58 hectares that had been filled since 1990. The 2000 system expansion includes:

The 2000 gas system expansion commenced operating in February 2001, generating approximately 2000 scfm of LFG. By January 2004, the 2000 expansion area was generating approximately 1300 scfm of LFG.

Site Characteristics

The natural topography of the Landfill site is relatively flat, and the water table is generally within 1 metre of the ground level. The total area of the property is approximately 635 hectares and the footprint of the landfill is 225 hectares. Disposal of MSW at the site has proceeded from west to east. The Landfill's Design and Operations Plan (Sperling Hansen, 2000) includes filling the existing footprint to a total height of 39 metres over the remaining site life of 40 years.

The Landfill is underlain by compressible peat, up to 6 meters thick, which in turn is underlain by flood plain deposits of silty-clay, and sand. The combined thickness of the compressed peat and silty-clay layer is a minimum of 4 metres thick. The peat and silty-clay layers provide a leachate migration barrier that is approximately twice as effective as the minimum requirements of the B.C. Landfill Criteria for Municipal Solid Waste (MOWLAP, 1993) for an engineered landfill liner (one metre thick, 1x10Ð9 m/s, minimum 30 cm hydraulic head) (Gartner Lee, 2000).

The Landfill is constructed by installing compacted lifts of MSW over a 3 metre thick mattress of primarily wood construction and demolition (C&D) material. The C&D mattress is installed on top of the peat to provide a working surface for heavy equipment and act as a conduit for leachate to perimeter leachate collection ditches. Leachate is pumped to a local municipal sewage treatment plant.

Refuse is deposited in 5 metre thick lifts. The active landfill area is the most eastern landfill phase, Phase 1 in Figure 1. Phase 1 will be filled to a maximum height of approximately 35 metres by 2005 or 2006. The remaining landfill phases: 3, and then 2 to 9, will be filled over the rest of the Landfill's operating life.

landfill

2003 Landfill Gas System Expansion

In May 2001, Vancouver City Council approved the next phase of the LFG system expansion at an estimated cost of $1,750,000. This phase involves:

A horizontal gas collection system was installed in Phase 1 to allow the collection of LFG in this area prior to closure of Phase 1. Early gas collection minimizes odours, reduces greenhouse gas emissions and provides more LFG for beneficial use. Golder Associates Ltd. provided professional services for design and installation of the system.

The horizontal gas collection laterals were installed within a 2 metre thick layer of woodwaste C&D material installed on top of the third layer of MSW. Approximately three more lifts of MSW will be installed on top of the C&D material prior to achieving the full landfill height in this phase of approximately 35 metres. The C&D material will act as a gas collection layer improving the flow of gas to the horizontal pipe network, and improving drainage within the landfill. Improving drainage within the landfill will reduce the potential for flooding of the gas collection laterals. Due to the low hydraulic conductivity of compacted MSW, flooding of horizontal gas collection pipes could cause of system failure.

Gas system construction occurred over the summer of 2003, and gas from the horizontal laterals will come on line as additional MSW is filled over top of the C&D material. By the end of January 2004, 3 of the 10 lateral wells were operating. The gas flow from these lines equals approximately 900 scfm, of a total approximately 2300 scfm for the entire system.

2003 Landfill Gas System Expansion

In May 2001, Vancouver City Council approved the next phase of the LFG system expansion at an estimated cost of $1,750,000. This phase involves the installation of horizontal gas collection wells within Phase 1 and additional vertical wells in areas of the landfill that have been filled since 2000 and are not expected to receive additional refuse in the near term. A horizontal gas collection system is being installed in Phase 1 to allow the collection of LFG in this area prior to closure of Phase 1. Early gas collection will minimize odours, reduce greenhouse gas emissions and provide more LFG for beneficial use. Golder Associates is providing professional services for design and installation of the system.

The horizontal gas collection laterals are being installed within a 2 metre thick layer of woodwaste C&D material installed on top of the third layer of MSW. Approximately three more lifts of MSW will be installed on top of the C&D material prior to achieving the full landfill height in this phase of approximately 35 metres. The C&D material will act as a gas collection layer improving the flow of gas to the horizontal pipe network, and improving drainage within the landfill. Improving drainage within the landfill will reduce the potential for flooding of the gas collection laterals. Due to the low hydraulic conductivity of compacted MSW, flooding of horizontal gas collection pipes is a significant cause of system failure.

Gas system construction will occur over the summer of 2003, and gas will gradually come on line as additional MSW is filled over top of the C&D material. In total, the 2003 gas collection system is anticipated to increase LFG collection by up to 1000 scfm.

Future Gas Collection Potential

Given that the Landfill is expected to operate for up to an additional 40 years, LFG will be generated long into the future. Maximum LFG generation is expected to occur at the time of closure of the Landfill in approximately 2040 and is expected to equal up to 6,000 scfm (Conestoga Rovers and Associates, 1999). Increased gas collection will occur incrementally as each phase of the Landfill is completed and closed.

Landfill Gas Beneficial Use

In January 2001, the City issued a request for proposals (RFP) for LFG beneficial use. The RFP outlined the City's desire to find a partner that would finance, design, build and operate a beneficial use facility. The City received a total of 5 proposals for the project with utilization concepts including: drying sea urchin shells for fertilizer, upgrading the gas to pipeline quality for delivery to a local natural gas line, heating greenhouses, direct use in a cement kiln and cogeneration at a neighboring greenhouse. Maxim Power Corporation (Maxim) provided the cogeneration proposal. Maxim's proposal was rated highest, and therefore City staff began negotiations with Maxim.

Maxim's proposal involved:

A schematic of the system is provided in Figure 2. landfill graph

In January 2003 Maxim and Vancouver signed an agreement regarding the project. The agreement has a 20-year term and Vancouver will receive approximately $400,000 per year in revenues from the project. Vancouver's revenues will be used to offset the cost of operating the LFG collection system.

Maxim cut the ribbon for the facility on September 10, 2003. By November 2003, the system was operating at full capacity of 2000 scfm at 50% methane. Any LFG that is not utilized by Maxim will continue to be flared until Maxim installs additional electrical generating capacity. CanAgro is also expected to install a new boiler system that will be able to directly combust residual LFG.

Maxim is selling electricity from the project to B.C. Hydro as "green power". B.C. Hydro is paying a premium for the power as part of its initiative to meet 10% of increased demand for electricity through a variety of new green energy sources through 2010 (B.C. Hydro, 2003). Maxim has a contract with B.C. Hydro to install a 4th engine at the facility and will be producing a total of 7.4 MW of electricity by the end of 2004.

Environmental Benefits

Vancouver's goals in collecting and combusting landfill gas include odour reduction, landfill gas emission reductions, and energy recovery. Landfills are potentially a significant source of greenhouse gas emissions because methane has a greenhouse gas potential of 21 times carbon dioxide. Collecting and burning LFG significantly reduces greenhouse gas emissions due to the conversion of methane to carbon dioxide. International protocols specify that carbon dioxide generated by landfills or through the combustion of LFG does not need to be counted as a greenhouse gas emission because the carbon dioxide had previously been stored in the plant or animal was from atmospheric sources (EPA, 2002). Therefore, the net increase in carbon dioxide is zero.

Table 1 provides an estimate of the total carbon dioxide emission reductions associated with the Vancouver Landfill gas collection and control system and the Maxim cogeneration facility based on a flow of 2000 scfm of LFG at 50% methane (the current capacity of the beneficial use system). The table uses a baseline condition of venting the LFG.

Table 1: Vancouver Landfill LFG Collection and Beneficial Use Carbon Dioxide Emission Reduction

Activity CO2 Equivalent Emission Reduction (tonnes/year)
LFG Collection and Combustion 200,000
Electrical Generation 27,000
Greenhouse Natural Gas Reduction 5,000
Total 232,000

Notes:
Assume alternative electrical generation method is simple cycle electrical using natural gas (e.g. Burrard Thermal) Assume greenhouse alternative fuel is natural gas

As a reference, an automobile produces approximately 5 tonnes/year of CO2 equivalents. Therefore, the net greenhouse gas emission reductions associated with LFG collection and beneficial use at the Vancouver Landfill is equal to the emissions of approximately 45,000 automobiles.

The amount of energy available from the project is equal to approximately 500,000 GJ/year or the energy requirements of 3,000 to 4,000 households.

References

B.C. Hydro, 2003, www.bchydro.com/environment/greenpower/greenpower1652.html

Conestoga Rovers and Associates, 1999, Final Report Vancouver Landfill Gas Management System Project 1, Report prepared for the City of Vancouver Transfer & Landfill Operations Branch.

EPA, 2002, "Solid Waste Management and Greenhouse Gases: A Life-Cycle Assessment of Emissions and Sinks" EPA 530-R-02-006, Available at www.epa.gov/globalwarming

Gartner Lee Ltd., 2000, Vancouver Landfill Leachate Collection and Containment System Upgrades,Report prepared for the City of Vancouver Transfer & Landfill Operations Branch

MOWLAP (formerly Ministry of Environment, Lands and Parks), 1993, Landfill Criteria for Municipal Solid Waste

Sperling Hansen Associates, 2000, Vancouver Landfill Design and Operations Plan, Report prepared for the City of Vancouver Transfer & Landfill Operations Branch

Also see: Vancouver Landfill Gas Project




Council Supports Project to Use Landfill Gas

February 5, 2002

Vancouver City Council today approved a unique, sustainable energy project at the Vancouver Landfill.

The Landfill Gas Utilization Project would involve burning landfill gas from the site to generate electricity and heat at an existing greenhouse in Delta. (See CanAgro photo below.) The project is unique in Canada because it will recover heat in addition to generating electricity, which increases the environmental benefits by more than 50 per cent.

greenhouse

Landfill gas is produced when garbage breaks down in a landfill. It consists of 50 per cent methane and 50 per cent carbon dioxide. (Household natural gas is 95 per cent methane.) The Vancouver Landfill presently produces about 30 million cubic metres of landfill gas annually (or 2,000 cubic feet per minute). This gas is collected and burned at the Landfill to reduce greenhouse emissions and to control odour. Some of the landfill gas is also used to heat the administration building at the site.

The total energy available from the gas is 500,000 gigajoules/year (equivalent to the energy requirements of 3,000 to 4,000 households). The project will result in a reduction of carbon dioxide emissions of at least 30,000 tonnes per year (equivalent to the annual emissions produced by 6,000 automobiles).

The proposal would see the City working with Maxim Power Corporation, whose proposal was one of five submitted last year. Electricity generated through the project would be sold to B.C. Hydro by Maxim. The City would receive a portion of the revenues from electricity and heat (estimated at about $250,000 to $300,000 per year). These revenues would be used to reduce the operating costs of the Landfill.

The Landfill Gas Utilization Project is expected to be fully operational in 2003.

http://www.city.vancouver.bc.ca/ctyclerk/newsreleases2002/NRlandfillgas.htm


Maxim Power Corp. Announces Awarding of the Landfill Gas Utilization Project for The City of Vancouver Landfill in Delta, B.C.

CALGARY (February 6, 2002)
Suite 802, 500 - 4th Ave. SW
Calgary, Alberta, Canada T2P 2V6
Press Line: 403-263-3021

Maxim Power Corp. ("MAXIM") is pleased to announce that they have been awarded the Landfill Gas Utilization Project (the "Project") by the City of Vancouver (the "City"). The project was initiated through a formal Request for Proposals process in January 2001 to utilize Landfill Gas ("LFG") currently collected and flared at the landfill site located in Delta BC. In August of 2001, the City ranked MAXIM the top proponent to design, finance, build, own and operate a beneficial use facility out of five project contenders. MAXIM and the City concluded negotiations of the business terms and conditions in late December 2001 and on February 5, 2002 the City formally approved the award of the contract to MAXIM.

MAXIM will install a cogeneration facility which will provide the City with a comprehensive LFG utilization solution that will be highly responsive to the City's immediate and future needs to efficiently and economically manage and utilize the LFG collected at the landfill site. MAXIM expects the facility will be able to utilize in excess of 95% of the LFG available and the overall system energy efficiency will reach 85%. The plant will have an installed electrical capacity of 5 MW and capture additional energy through a water based heat recovery system. The facility will also include a short electricity transmission system connected to a local 25 kV distribution power line, and a 2.3 km LFG fuel supply pipeline system. Electricity from the cogeneration plant will be sold to B.C. Hydro under a 20 year Electricity Purchase Agreement which was executed on January 4, 2002, in response to their 'Under 40 GWH/year Green Energy Projects' program. Waste heat will be recovered from the plant in the form of hot water, which will be sold to CanAgro Produce Ltd. ("CanAgro"), providing them with an attractive long-term commercial supply arrangement for a substantial portion of their energy requirements.

CanAgro owns two large vegetable greenhouses located in Delta with a total glass growing area of approximately 2.5 million square feet or 57 acres. They are utilizing leading edge technology including computer controlled heating, CO2 generation, ventilation, and irrigation systems, which has consistently made them industry leaders in terms of yield and quality.

Rick Hopp, Senior Vice President, Business Development for MAXIM reports "This is a very unique and exciting opportunity for the City of Vancouver, CanAgro and the community to realize a world class sustainable waste to energy recovery system in British Columbia using state of the art cogeneration technology. The City, MAXIM and CanAgro have worked very hard to develop a project that will provide both environmental and financial benefits to all parties."

The LFG will be supplied by the City to MAXIM under a 20-year gas supply agreement. The City will continue to construct and operate the LFG gathering and collection systems in accordance with their operating plans. MAXIM will have the first right to utilize all the LFG over the contract term providing future opportunities for project expansion as the LFG volumes increase. Mr. Hopp adds, "This project is a perfect example of MAXIM's strategy in offering creative energy solutions that are part of the "new carbon economy". We will be utilizing a waste source of carbon close to our customer and turning it into viable energy sources in the form of heat and power. The project is clearly a win-win solution for the community, the City, CanAgro, BC Hydro and MAXIM shareholders."

The project will result in the reduced consumption of traditional hydrocarbon fuels (eg: natural gas) used for boiler fuel at CanAgro and for power production by BC Hydro. It is estimated that over 450,000 gigajoules per year of energy will be displaced by MAXIM's cogeneration plant. This is the equivalent to providing the annual energy requirements of approximately 3000 to 4000 homes. The project will also result in a net reduction in greenhouse gas emissions of 30,000 tonnes per year, similar to removing 6000 automobiles from the road.

MAXIM expects to complete detailed engineering, receive all permits and begin construction by May 2002 with a planned in service date of December 2002.

Based in Calgary, Alberta, MAXIM provides innovative distributed power solutions in domestic and international energy markets. MAXIM owns and operates 55 MW of generating capacity in Canada, Europe and Asia, has 44 MW under advanced stages of development, and a further 103 MW under evaluation and development. MAXIM trades on the Canadian Venture Exchange under the symbol "MXG".

For further information:
John R. Bobenic, President and C.E.O., Maxim Power Corp., (403) 263-3021
Rick Hopp, Senior Vice President, Business Development, Maxim Power Corp. (403) 263-3021
http://www.maximenergy.com/contact.htm




ADMINISTRATIVE REPORT

SUBJECT:
Vancouver Landfill:
Landfill Gas Projects

Council: February 5, 2002
TO: Vancouver City Council
FROM: General Manager of Engineering Services

RECOMMENDATION

A. THAT, subject to the conditions set out in Recommendation C, an agreement be entered into with Maxim Energy Group Ltd. and, if applicable, CanAgro Produce Ltd., for the beneficial use of Vancouver Landfill gas where the City will receive revenues estimated at approximately $250,000 to $300,000 per year for the next 20 years. These revenues will help reduce the overall cost of operating the Landfill.

B. THAT, subject to the conditions set out in Recommendation C, Golder Associates Ltd. be retained to provide engineering services for an expansion to the landfill gas collection system at the Vancouver Landfill at a cost of $143,955 plus GST. Funding for the work was approved by Council on May 8, 2001, as part of a loan from the Solid Waste Capital reserve with repayment by users of the Landfill through the Burns Bog Rate.

C. THAT no legal rights or obligations will arise and no consents, permissions, leases or licences are granted by the above and none will arise or be granted unless and until all contemplated legal documentation has been (a) approved as to form by the Director of Legal Services and the General Manager of Engineering Services, and (b) executed and delivered by the Director of Legal Services on behalf of the City.

POLICY

On May 3, 1994, Council agreed to support the Regional Solid Waste Management Plan (SWMP), which includes requirements to upgrade the Vancouver Landfill.

On October 16, 1990, Council adopted the Clouds of Change program of actions, committing to reduce carbon dioxide emissions by 20% by 2005 compared to 1988.

Consultant awards exceeding $30,000 require Council authorization.

SUMMARY

This report recommends two projects involving landfill gas (LFG) generated from the Vancouver Landfill: the beneficial use of the collected gas, and engaging Golder Associates Ltd. to provide engineering services for an expansion to the Landfill gas collection system.

It is recommended that the City enter into an agreement with Maxim Energy Group Ltd. (Maxim), and if applicable, CanAgro Produce Ltd (CanAgro), for the sale of LFG for beneficial use purposes. Maxim proposes to utilize landfill gas collected by the City in either a cogeneration system to produce electricity and beneficially utilize waste heat, or in a simple cycle electricity generating system. Electricity from either system would be sold to B.C. Hydro and heat from the cogeneration system would be used to heat CanAgro's greenhouses located in Delta.

This project will result in a number of benefits:

This report also recommends that Golder Associates Ltd. be retained at a cost of $143,955 plus GST to provide engineering services for an expansion to the Vancouver Landfill gas collection system. Funding for the entire project, including engineering and construction, estimated at $1,750,000 was approved by Council on May 8, 2001. Council's approval will be sought for award of a construction contract for this project after engineering work is complete.

Gas Flaring


Photo: Vancouver Landfill flare system


PURPOSE

The purpose of this report is to recommend that the City enter into an agreement with Maxim Energy Group Ltd. (and if applicable, CanAgro Produce Ltd.) for the sale of Vancouver Landfill gas for beneficial use purposes. The report also recommends Council approve the award of a contract to Golder Associates Ltd. to provide design and construction engineering services for an expansion to the landfill gas collection system at the Vancouver Landfill.

BACKGROUND

As part of the City of Vancouver's solid waste management system, the Vancouver Landfill receives approximately 400,000 tonnes of municipal solid waste each year. Under the City of Vancouver's agreements with the municipality of Delta and the Greater Vancouver Regional District the Landfill is expected to operate until at least 2040. Future operations will be restricted to the existing landfill footprint and involve increasing the height of the Landfill.

Landfill gas (LFG) consisting primarily of methane and carbon dioxide, is a natural by-product of the landfill process. LFG is generated from the biological decomposition of organic wastes (food wastes, yard trimmings and paper) commencing a few months after deposition of the waste and for several decades following landfill closure. LFG is collected to prevent odours, reduce greenhouse gas emissions and to recover energy.

Under the Landfill's B.C. Ministry of Water, Land and Air Protection Operational Certificate (OC) Vancouver has an obligation to manage landfill gas from the Vancouver Landfill. Although beneficial use of LFG is not mandated, the OC specifies that if Vancouver does not make sufficient progress towards beneficial use, the Ministry of Water Land and Air Protection may mandate it.

On July 27, 1999 Council approved a recommendation from the City Engineer to upgrade and expand the Vancouver Landfill gas (LFG) control system, and to seek proposals for beneficial use of the gas. A budget of $5,400,000 was set for upgrading and expanding the LFG control system.

The expanded LFG collection system was completed by February 2001, and the system has operated continuously since that time. The majority of LFG collected at the Landfill is currently flared for the purpose of controlling odours and greenhouse gas emissions. In addition to flaring, approximately three percent of the collected LFG is used to provide heat and hot water for the Landfill's administration building. Based on the current rate of LFG collected and flared, approximately 500,000 gigajoules of energy per year is available for utilization. This amount of energy is equivalent to serving the annual energy requirements for approximately 3,000 to 4,000 homes.

DISCUSSION

Landfill Gas (LFG) Beneficial Use

In January 2001, Engineering Services issued a request for proposals (RFP) for beneficial use. The basis of the RFP was to find a partner that would beneficially use the LFG. The City expected that a partner could be found to design, finance, build and operate a beneficial use facility and provide the City with a royalty based on the amount of LFG provided to the partner.

On April 17, 2001 five companies responded to the RFP. Three companies were short-listed based on an evaluation of proposal quality, technical and economic feasibility, and potential benefits to the City:

Short-listed Proponent Type of Project Proposed

Maxim Energy Group Ltd. Produce electricity and heat via cogeneration Blue Sky Energy Corporation Upgrade LFG and sell to natural gas utility Norseman Engineering Ltd. Use as a boiler fuel to heat greenhouses.

In August staff entered into negotiations with the top ranked proponent, Maxim Energy Group Ltd.(Maxim). Maxim is proposing to either use the LFG in a cogeneration system at CanAgro Produce Ltd. or alternatively generate electricity at the Landfill using simple cycle technology. In both cases the electricity would be sold to B.C. Hydro.

Cogeneration using LFG involves burning the LFG in an electrical generating system and then utilizing the waste heat, in the form of hot water. The heat would be used to heat CanAgro's greenhouses which are located directly south of the Landfill. All of the energy used by CanAgro will directly reduce the amount of non-renewable energy used by the greenhouse facility.

Simple cycle electrical generation involves burning the LFG to generate electricity without recovering the waste heat. Simple cycle electrical generation recovers approximately 30% to 35% of the available energy, whereas cogeneration can recover up to 85% of the available energy.

Maxim's proposal is to provide the City of Vancouver with a royalty of up to 10% of gross revenues for a cogeneration facility or up to 12% of gross revenues for a simple cycle facility. The initial revenue to the City for either project is expected to equal $250,000 to $300,000 per year. The proposed revenue projections include revenues for greenhouse gas (GHG) emission off-set credits because the electricity price offered by B.C. Hydro is based on B.C. Hydro assuming ownership of any credits. A GHG off-set credit represents a reduction in emissions equivalent to one tonne of carbon dioxide. GHG credits are tradable when a buyer with a high cost option for emission reductions purchases a lower cost option from a seller. The electricity price that B.C. Hydro is offering includes the potential value of GHG credits from the project and is substantially higher than would be available if the project was not considered beneficial to the environment.

Under either a cogeneration or simple cycle scenario, the City's only obligations would be to provide Maxim with LFG as well as a small amount of land for infrastructure under a lease agreement. Maxim proposes that the City and Maxim enter into a 20 year agreement which is consistent with Maxim's agreement with B.C. Hydro for the supply of electricity.

Maxim has advised that overall revenues to the City are anticipated to be higher for a simple cycle system than a cogeneration system due to the additional cost associated with building and maintaining a pipeline to CanAgro. The City's preference is cogeneration since:

The final location for the facility will depend on whether Maxim and CanAgro can obtain all of the authorizations required for the cogeneration facility and the detailed economics of the two options. The ultimate type and location of the proposed LFG beneficial use system will be approved by the General Manager of Engineering Services and Director of Legal Services.

The day-to-day operation of the LFG collection system, which includes wells, pipelines, blowers and flares is the responsibility of a contractor hired by the City to operate the system. The City will maintain this responsibility under the proposed agreement to ensure the maximum available LFG is collected thus preventing odours and greenhouse gas emissions. Once a contract for beneficial use is in place, the City will pursue seeking proposals for the operation of the LFG control system. There may be an opportunity to reduce costs by contracting with the same contractor responsible for operating the beneficial use system. This determination will be made when proposals are received. Council's approval will be sought for the award of a LFG system operation and maintenance contract.

Landfill Gas (LFG) Control System Expansion

On May 8, 2001 Council approved the expenditure of $1,750,000 for the next phase of LFG system expansion. This expansion is to occur in the eastern-most area of the Landfill - the most recently filled area of the site. The expansion will result in approximately 20 percent more LFG available for beneficial use, will further minimize the potential for off-site odours, and will further reduce greenhouse gas emissions from the Landfill.

On November 1, 2001 Engineering Services issued a Request for Proposals to threeconsultants for the next phase of Vancouver Landfill gas system expansion, involving engineering design, tender preparation and contract administration services. The consultants were pre-qualified based on previous work completed for the City and their proposals submitted for Landfill gas projects in 1999 and 2000.

On November 28 three proposals were received with total costs as follows (excluding GST):

Golder Associates Ltd. $173,955 Conestoga-Rovers & Associates $188,854 CH2M Hill Canada $228,174

Based on a detailed evaluation of the proposals, it is recommended that Golder Associates Ltd. be awarded the work on the basis of best value for the City, their qualifications, experience and the scope of work they propose. Golder's proposal was also the least expensive of the proposals that the City received.

Prior to Engineering Services proceeding with this recommendation for award of the project to Golder, in December the City Engineer authorized that Golder be retained to complete a technical assessment of the collection efficiency of the Landfill's existing LFG control system for a cost of $30,000. City policy stipulates that consulting assignments with value not exceeding $30,000 can be awarded by the General Manager of Engineering Services. In the event that the overall project is not awarded to Golder, the preliminary work could be used by the successful consultant. Early completion of this work by Golder will expedite the completion of the entire project, regardless as to which consultant is awarded the project. The remaining portion of the work that the General Manager of Engineering Services is seeking Council authority to award is $143,955.

FINANCIAL IMPLICATIONS

The proposed Vancouver Landfill gas utilization contract with Maxim will result in revenues of approximately $250,000 to $300,000 annually for a contract term of 20 years. Revenues to the City from the project may increase in the future with opportunities for additional energy use and potentially the recovery of carbon dioxide. All revenues from the project will be used to offset the cost of operating the LFG control system and therefore reduce the overall cost of operating the Landfill. The annual cost of operating the LFG control system is approximately $250,000. The overall annual cost of operating the Landfill is approximately $10,000,000. The reduction in costs should result in a small reduction in annual Solid Waste Utility fees (less than $1/household/year reduction).

The total cost of the next phase of Landfill gas collection system expansion, including engineering and construction costs, is estimated at $1,750,000. This expenditure will be funded with a loan from the Solid Waste Capital Reserve with repayment by Landfill users through the Burns Bog Rate, as approved by Council on May 8, 2001. The estimated cost ofengineering for this project is $173,955. Once engineering work is complete and the construction is tendered, Council's approval will be sought for the award of a construction contract.

ENVIRONMENTAL IMPACT

The beneficial use of the Vancouver LFG is an environmentally responsible means of energy conservation. LFG used as an alternative fuel will reduce the consumption of non-renewable energy by up to approximately 500,000 gigajoules per year, (equivalent to providing the annual energy needs to approximately 3,000 to 4,000 homes), and will result in a reduction in greenhouse gas emissions of approximately 30,000 tonnes per year of carbon dioxide equivalents (equivalent to approximately 6,000 automobiles).

By expanding the Vancouver Landfill gas collection system the City will ensure that the Landfill will continue to meet environmental standards, and provide cost-effective management of municipal solid waste with minimal environmental impact.

http://www.city.vancouver.bc.ca/ctyclerk/cclerk/020205/a6.htm


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Revised December 9, 2004

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