Richmond, B.C., and Corix partner on City Centre district energy program The city of Richmond, B.C., has created a novel public-private partnership with Corix Utilities to develop district energy services for its downtown core. Peter Russell, MCIP RPP, Senior Manager, Sustainability and District Energy, City of Richmond, B.C. Photo Peter Russell. City Centre, Richmond, B.C. ocated on Lulu Island in the Fraser Richmond (fig. 2), is being transformed 1.9 million sq ft of space in eight customer River estuary, the city of Richmond is from a low-density, predominantly com- buildings from two temporary energy cen- part of the Metro Vancouver area in mercial precinct into a series of high- ters, both equipped with natural gas-fired Lthe lower mainland of British Colum- density, mixed-used neighborhoods that boilers totaling 11 MW (37.5 MMBtu/hr) of bia. This coastal city of nearly 220,000 will have an estimated 50,000-80,000 hot water heating capacity. Future plans residents was a key venue during the residents at buildout by 2040. for the system call for construction of a 2010 Winter Olympic Games, site of the Today, providing space and domes- larger permanent energy plant that will long-track speed skating events. In re- tic hot water heating in City Centre is the extract low-carbon heat from a sewer force cent decades, Richmond has experienced new Oval Village District Energy Utility. main, reducing system greenhouse gas rapid growth and today continues its Located adjacent to the Richmond Olym- emissions by up to 80 percent. transition from suburban community to pic Oval – now an indoor multisport arena As it develops the Oval Village sys- a regional town center with international – this district energy system has been in tem, Richmond has been leading the way clout. In the process, its downtown core is commercial operation since 2014 and con- in creating a novel model for a public-pri- undergoing a major redevelopment: City nected its first customer in April 2015. The vate partnership that will see the provi- Centre (fig. 1), the fastest-growing part of first phase of the project currently serves sion of district energy services throughout FIGURE 1. City of Richmond, B.C., and its neighborhoods, including City Centre. FIGURE 2. The city of Richmond, B.C., and the Greater Vancouver area. Knight St Bridge Arthur Oak St Laing Bridge Bridge N Vancouver Mitchell Island International Airport Airport Connector Bridge BRIDGEPORT SEA ISLAND Moray Bridgeport Rd Channel Bridge No. 7 Rd Dinsmore Cambie Rd Bridge EAST No. 2 Rd WEST CAMBIE Bridge CAMBIE Highway 91 Boundary Rd HAMILTON CITY CENTRE Shell Rd EAST RICHMOND Westminster Hwy THOMPSON 8 No. 8 Rd Granville Ave No. 5 Rd No. 2 Rd Blundell Rd SEAFAIR FRASER LANDS BLUNDELL Highway 99 No. 4 Rd Francis Rd No. 3 Rd Garden City Rd ve A Williams Rd SHELLMONT No. 6 Rd No. 1 Rd BROADMOOR Railway Arm Fraser River Steveston Hwy STEVESTON South Shell Rd Gilbert Rd GILMORE George Massey Tunnel SOUTH ARM ISLANDS Source: City of Richmond, B.C. Source: City of Richmond, B.C. © 2018 International District Energy Association. ALL RIGHTS RESERVED. District Energy / Second Quarter 2018 7 FIGURE 3. Aerial rendering of the Oval Village District Energy Utility service area. ment for new buildings undergoing rezon- ing. District energy-ready buildings must be designed to utilize energy from the district system when a neighborhood util- ity is available. Connection to the future utility is secured with a legal agreement prior to the rezoning adoption. Further down the development approvals, this commitment is also registered on the land title. Since implementing this practice in 2009, the city has secured over 8,000 district energy-ready residential units to date in the City Center area, ensuring the Source: City of Richmond, B.C. necessary demand for energy services needed to support a low-risk investment environment. City Centre. The model leverages private- district energy in its City Centre. Rich- sector design, financing, construction and mond’s City Centre Area Plan was rapidly operations expertise while ownership of being implemented; the 2,500-acre area, SINCE IMPLEMENTING A “DISTRICT ENERGY- the utility is retained via the city’s energy largely defined by low-density commer- READY” REQUIREMENT, THE CITY HAS company. The utility is regulated by Rich- cial uses, was transforming into several SECURED OVER 8,000 DISTRICT ENERGY- mond City Council, which defines rates high-density mixed-use neighborhoods. READY RESIDENTIAL UNITS. and service areas. The approach stands out The city envisioned that district energy as an efficient model for delivering district services would be developed in a phased energy services in Canada – a model catch- program, with smaller nodes emerging in To date, most of these buildings are ing the interest of other cities. different areas but eventually connected still in the design or approval stages. Some to form a City Centre-scaled system with have already been constructed as district THE BACKGROUND STORY multiple energy plants. energy-ready but without a district energy When the city of Richmond devel- An early opportunity emerged to get connection. These buildings are built using oped its Community Energy & Emissions district energy planning work going. As hot water hydronic heating systems with Plan in 2012, it was estimated that Rich- a host city for the 2010 Winter Olympic a developer-installed boiler plant instead mond residents, businesses and insti- Games, Richmond committed to building of an energy transfer station. Given the tutions spent CA$440 million ($354.5 a speed skating oval venue. To raise a por- pace of development and the varied loca- million) on energy in 2010. Those dollars tion of the funds to build the venue, the tions of where redevelopment is occur- were largely directed to major energy city disposed of a number of consolidat- ring throughout City Centre, the city had utilities and multinational oil companies. ed sites in 2006, while retaining a major to make strategic choices regarding where At the time, the city already understood waterfront parcel in the center on which and when it would service new buildings. through the 2012 launch of its Alexan- to construct the Olympic Oval; significant The Oval Village was the first such area, dra District Energy Utility in Richmond’s residual funds raised from the disposition but other areas with potential for servic- West Cambie area (adjacent to City Centre) were used to replenish and further grow ing exist throughout City Centre. The city that district energy was an effective tool the city’s land inventory. The land disposi- expects that over time and with Richmond for reducing community greenhouse gas tion also created the opportunity for the council endorsement, those buildings emissions. District energy could also raise city to approach the waterfront parcel de- could eventually be connected once the new non-tax-base revenues while creating veloper to work together to assess the via- distribution network is more established in local jobs. Each new building connected to bility of district energy to service buildings those areas. district energy in Richmond represented on that site. The result of the city’s direct (and represents) a new significant reten- engagement with the developer eventu- ESTABLISHING A NEW ENERGY COMPANY tion of energy spending in the community, ally led to the parties signing a memoran- Given the investment potential of effectively “localizing” energy generation. dum of understanding to work together. the developer’s waterfront site alone and Of those cities and universities seizing This site and eventually surrounding sites given the multiple rezonings under way the opportunity in British Columbia, some would become the service area for the in the immediate surrounding area, the began investing directly using their own Oval Village District Energy Utility (fig. 3). city realized a new approach to financ- resources while others sought to engage Around the same time, seeing the ing a district energy project would be re- the private sector. long-term potential of district energy quired. Rather than become encumbered The city saw the opportunity to “get across City Centre, the city also began in- with debt, the city sought a private-sector ahead” of redevelopment by planning for cluding a “district energy-ready” require- partner in 2010 to design, build, finance 8 District Energy / Second Quarter 2018 © 2018 International District Energy Association. ALL RIGHTS RESERVED. and operate the Oval Village District En- cluded infrastructure, business and finan- come to a final agreement that could be ergy Utility, choosing Corix Utilities. Then cial planning, and, second, development executed. Critical terms of the agreement in 2013, the city established Lulu Island and execution of a long-term concession included Energy Co. (LIEC) as a wholly owned mu- agreement. capital investment structure (debt/ · nicipal corporation to work directly with Given the MOU the city held with equity) with a defined debt rate and its private-sector district energy partner. the developer who purchased the water- return on equity for Corix; For context, under the British Co- front site, the due diligence phase started capital, capital expenditure and · lumbia Community Charter, local gov- with initially understanding development operating plan review and approval ernments have broad powers to provide timing for the waterfront site alone and processes; services to their citizens that “council developing an appropriate infrastructure customer service standards; · considers necessary or desirable, and may plan and financial model. The developer’s a process whereby LIEC had the right · do this directly or through another public plan was to develop the site strategical- to complete a service-level review; authority or another person or organiza- ly over an approximately 15-to-20-year expectations on service levels to be · tion” (Section 8.2); local governments also timeline.