Canadian city refunded after district energy initiative fails

City authorities from Guelph in Ontario, Canada are relieved after capital invested in a failed district energy scheme was returned to the city coffers.

Guelph Today website reports that the city negotiated its way out of a costly energy contract. $60 million in capital costs have been avoided and over $600,000 in security deposits returned to city.

“I’m ecstatic about this outcome for the city. This is definitely a good way to start the year off,” Mayor Cam Guthrie said. ENVIDA Community Energy Inc, an independently-run extension of city-owned Guelph Hydro Electrical Systems, also recouped over $600,000 in security deposits related to an agreement made with the province’s Independent Electricity System Operator (IESO) to build two 10-megawatt power plants, one in the Hanlon Creek Business Park and in Downtown Guelph.

Those plants would have cost $60 million and were to replace two smaller test facilities currently in use in supplying a centralized heating and cooling source to city customers through the cities since-failed district energy initiative.

It was revealed to Guelph City Council last July that the district energy initiative had failed, already costing the city $14 million, due primarily to an inability to attract enough customers, poor initial revenues and other strategic errors.  Mayor Guthrie said, “I believe that ideology was driving this forward and when you have blind ideology pushing things like this forward you start spending more and more and more money.”To have something like this come to light early is a huge benefit to the community.”

The original district energy plan hoped to connect large customers like the University of Guelph and Guelph General Hospital to the district energy system, but failed to materialise.

Source: Decentralised Energy