January 9, 2006

Proposed Halifax district energy system would be a leader in emissions reductions

A natural gas-fuelled community energy system proposed for Halifax is expected to reduce greenhouse gas (GHG) emissions by approximately 128,000 tonnes per year in its first phase. The development of the system is being supported by the governments of Canada and Nova Scotia, along with the Halifax Regional Municipality and other partners.

A 15-megawatt cogeneration plant would generate electricity and provide heat and hot water using clean natural gas instead of Bunker C oil, currently the most commonly used fuel. It would serve Dalhousie University, St Mary's University, the Victoria General Hospital complex and the Halifax Infirmary complex. Heritage Gas would be the natural gas supplier and Nova Scotia Power would purchase the electricity produced.

At an estimated cost of $47 million, the system will be the one of the largest gas turbine-driven district heating systems of its kind in Canada and the largest in terms of emissions reductions. In addition to the initial GHG reduction, the implementation of this system would yield significantly more reductions as more elements are added to the system. It would also substantially reduce emissions of other air pollutants.

There is also the potential to include as a part of the system the use of cold water from Halifax Harbour to provide air conditioning in buildings. A report on the potential for "sea water cooling" is now being prepared.

The federal and Nova Scotia governments are each committing up to $20 million toward the project cost, with the other partners contributing as well. Details of the cost-sharing arrangements by the federal, provincial and municipal partners will be worked out over the coming weeks, once negotiations with the key anchor customers are concluded and a business plan is finalized. The federal contribution to this project will come from the $250-million Partnership Fund, the key mechanism for federal-provincial collaboration in Canada's climate change plan.

In addition, the federal and Nova Scotia governments, along with Heritage Gas, will provide financial incentives to owners and managers of commercial and institutional buildings and municipal, university, schools and health facilities to convert furnaces and water-heating equipment to energy-efficient natural gas equipment.

A federal investment of approximately $3.8 million will be matched by the province to provide rebates for up to 50% of the capital costs paid by medium and larger energy consumers to replace their existing space and water heating equipment with high-efficiency equipment.

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