The Village office is closely tracking the cost versus pay back of the system. The system is relatively new (at the time of publishing this case study), therefore calculations on return on investment are just starting to emerge.
Projections estimate a mildly positive return on investment in coming years with a current expectation to be revenue neutral, with heat savings going to property and building owners.
The feasibility study prior to the project cost $25,000. The total actual project cost was $704,320.00, the installation of the district heating system portion of the project cost was estimated at $396,980. A complete exterior retrofit was estimated at $247,250. The remaining $60,090 was spent on building retrofit improvements and boiler fuel storage.
Financial support for the feasibility study ($25,000) came from the Omenica Beetle Action Committee and expertise from the Wood Waste to Rural Heat Initiative. The Federal Gas Tax Innovation Fund provided $644,230.00. The remaining expenses totalling $60,090 came out of the Village budget. Northern Development Initiative Trust later provided an additional grant to build three commercial rental spaces.
The Village and School District will save money on future carbon taxes because of the reduction of natural gas used to heat the municipal office and Telkwa Elementary School.
Staff at the Village of Telkwa estimate that the annual carbon tax savings would be approximately $2,850. This comes from an estimated savings in energy of 1740 GJ converted to greenhouse gas emissions (114 tonnes) and multiplying by the carbon tax ($25 per tonne of GHG emissions).
In addition, the municipality charges for heat supplied to partners. The municipality is not a British Columbia Utilities Commission (BCUC) regulated utility company; it supplies heat to the buildings that are connected to the system through energy service agreements. Building energy meters are used to measure consumption. The data is recorded and then used to invoice property owners; at a reduced rate - about 20-25% less than the current rate for natural gas.
The consumer benefits from an approximate 35% reduction in heating costs due to a combination of factors; delivered efficiencies, existing equipment efficiencies, building envelope efficiencies, and distributed heat through hydronics versus forced air.
The system’s wet heat (water) is more efficient than forced air. The system is more efficient than existing electric or natural gas systems which typically have a higher heat conversion loss. Any losses in existing systems are negated by being connected to the new system resulting in cost savings.
The system was built to accommodate future expansion at minimal cost. The Village receives rental income from leased retail space with potential for more rental income as more businesses are brought on board.