OFFSET PROJECT REPORT:

SUNDANCE BIOMASS ENERGY GENERATION PROJECT

FINAL

February, 2011

Prepared by: Blue Source Canada ULC th 700, 717 7 Ave. SW Calgary, AB, T2P 0Z3 Tel: (403) 262-3026 Fax: (403) 269-3024

Sundance Biomass Energy Generation Project Report - FINAL

February, 2011

1.

PROJECT INFORMATION

The Sundance Biomass Energy Generation Project (the Project) is biomass thermal energy generation project, located at the Sundance Forest Industries sawmill, eight kilometres west of the town of Edson, Alberta. The Project is owned and operated by Sundance Forest Industries Ltd (Sundance). The Sundance sawmill facility produces kiln dried lumber for a variety of specialty wood product markets in North America, Europe and Asia. Sundances sawmill operations employ 250 people and produces over 150 million board feet of high quality lumber products. The Project will generate offsets according to the provisions of the Alberta Quantification Protocol for the Diversion of Biomass to Energy from Biomass Combustion Facilities (AENV, 2007). The opportunity for generating carbon offsets with this protocol arises mainly from direct GHG emission reductions achieved through the use of renewable biomass to offset the use of fossil fuels to provide thermal energy to the facilitys lumber kilns. GHG emission reductions from methane avoidance are not claimed for this project as the baseline scenario was the incineration of the wood residues in an olivine burner. Had the facility not installed a new wood residue-fired thermal oil heating plant and associated infrastructure to generate and distribute thermal energy generated from biomass residues produced at the site, the alternative would have been to continue operation of the sawmills two natural gas thermal oil heaters to provide heat to the lumber drying kilns and other buildings at the site. Additionally, the facility would have continued to incinerate the wood residues in the sites olivine wood waste incinerator. The facility installed a Wellons Canada 40 MM Btu/hr thermal oil heating system in 2005 to generate thermal energy from the combustion of sawmill wood residues produced at the site. Thermal energy produced from biomass combustion is distributed around the site to heat the lumber drying kilns and the main sawmill building using the pre-existing thermal oil distribution system. The installation of the biomass combustion unit has resulted in the displacement of all of the natural gas required to heat the lumber drying kilns and the sawmill building.

2.

REPORTING PERIOD

For this project, the carbon dioxide equivalent emission reduction credits are claimed for activities from January 1st, 2010 to December 31st, 2010. No changes to the project operation occurred during this time.

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Appendix A Offset Project Plan: Sundance Biomass Energy Generation Project FINAL (February 2011)

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OFFSET PROJECT PLAN:

SUNDANCE BIOMASS ENERGY GENERATION PROJECT

FINAL

FEBRUARY, 2011

Prepared by: Blue Source Canada ULC th 700, 717 7 Ave. SW, Calgary, AB, T2P 0Z3 Tel:(403) 262-3026 Fax:(403) 269-3024

Sundance Biomass Energy Generation Project FINAL

February, 2011

Contents 1 2 3 3.1 3.2 3.3 3.4 3.5 3.6 Introduction ................................................................................................. 1 Project and Proponent Identification ........................................................... 2 Project Description ...................................................................................... 3 Project Scope .......................................................................................... 3 Project Site Description ........................................................................... 4 Pre-Project Conditions ............................................................................. 6 Actions Taken .......................................................................................... 6 Project Conditions.................................................................................... 7 Inventory of Sources and Sinks ............................................................... 8 Displacement of Fossil Fuels ............................................................ 9 Quantification of GHG Reductions .................................................... 9 Offset Eligibility Requirements .......................................................... 9

3.6.1 3.6.2 3.6.3 4 5 5.1 5.2 5.3

Identification and Justification of Baseline................................................... 9 Quantification of Emission Reductions ...................................................... 11 Process Description ............................................................................... 11 Data Sources ......................................................................................... 13 Quantification Plan ................................................................................. 13 Quantification of the Natural Gas Displaced By the Project Activity 14

5.3.1 5.4

Monitoring Plan ...................................................................................... 17 Metering Maintenance and Calibration ............................................ 17 Manual Checking of Calculator Data ............................................... 18 Record Keeping .............................................................................. 18

5.4.1 5.4.2 5.4.3 6

Reporting of Emission Reductions ............................................................ 19

List of Figures Figure 3.1: Sundance Biomass Energy Generation Facility Layout ..................... 5

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1 Introduction
The Sundance Biomass Energy Generation Project (the Project) is biomass thermal energy generation project, located at the Sundance Forest Industries sawmill, eight kilometres west of the town of Edson, Alberta. The Project is owned and operated by Sundance Forest Industries Ltd (Sundance). The Sundance sawmill facility produces kiln dried lumber for a variety of specialty wood product markets in North America, Europe and Asia. Sundances sawmill operations employ 250 people and produces over 150 million board feet of high quality lumber products. The Project will generate offsets according to the provisions of the Alberta Quantification Protocol for the Diversion of Biomass to Energy from Biomass Combustion Facilities (AENV, 2007). The opportunity for generating carbon offsets with this protocol arises mainly from direct GHG emission reductions achieved through the use of renewable biomass to offset the use of fossil fuels to provide thermal energy to the facilitys lumber kilns. GHG emission reductions from methane avoidance are not claimed for this project as the baseline scenario was the incineration of the wood residues in an olivine burner. Had the facility not installed a new wood residue-fired thermal oil heating plant and associated infrastructure to generate and distribute thermal energy generated from biomass residues produced at the site, the alternative would have been to continue operation of the sawmills two natural gas thermal oil heaters to provide heat to the lumber drying kilns and other buildings at the site. Additionally, the facility would have continued to incinerate the wood residues in the sites olivine wood waste incinerator. The facility installed a Wellons Canada 40 MM Btu/hr thermal oil heating system in 2005 to generate thermal energy from the combustion of sawmill wood residues produced at the site. Thermal energy produced from biomass combustion is distributed around the site to heat the lumber drying kilns and the main sawmill building using the pre-existing thermal oil distribution system. The installation of the biomass combustion unit has resulted in the displacement of all of the natural gas required to heat the lumber drying kilns and the sawmill building.

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2 Project and Proponent Identification

Corporate Contact Information: Sundance Forest Industries Ltd. Box 6810 Edson, AB Canada T7E 1V2 Contact: Rod Goldie Phone: (780) 723-3977, ext. 265 Fax: (780) 723-3783 Email: rgoldie@sundanceforestindustries.ca All GHG emission reductions generated by the Project from the implementation of the biomass combustion unit and associated thermal energy transfer and distribution infrastructure to reduce the usage of natural gas at the project site are owned solely by Sundance Forest Industries Ltd.

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3 Project Description
3.1 Project Scope

The Project consists of a biomass combustion unit equipped with a thermal oil heating system rated to 40 MM Btu/hr, which was commissioned and installed for Sundance by Wellons Canada, in 2005. The biomass combustion unit heats thermal oil to temperatures exceeding 500 degrees Fahrenheit. The heated thermal oil is then distributed from the heater to the lumber drying kilns and to the sawmill building by a series of pipes. The thermal oil is then re-circulated back to the heater for reheating and redistribution. The thermal oil plant is rated at 40 MM Btu/hr and the Project output is normally 20-30 MMBtu/hr, depending primarily on the sawmill output and the ambient temperature. Approximately 20,000-25,000 GJ/month of natural gas has been displaced by the installation of the biomass energy generation system, or approximately 240,000 300,000 GJ per year. The biomass produced at the site consists of waste wood, primarily pine and spruce, which is generated on site as the result of Sundances processing of raw timber into finished wood products. Of the waste wood that is generated, approximately 1/3 is diverted to the biomass energy generation unit, the majority of the other 2/3 is incinerated in a 66-foot high silo burner. Some marketable materials including clean saw dust and pulp chips are diverted for sale to producers of medium density fiberboard (MDF), pulp mills or to farmers for animal bedding. The biomass residues are produced on-site during the processing of the raw timber and subsequent products and then chipped to sizes of three inches or less. The biomass residues are then transported from the sawmill facility to the biomass storage building or to the incinerator using the existing conveyor system. No additional processing is required to prepare the biomass for combustion as the combustion unit can handle wet biomass with 45-55% moisture content. No loaders are used in the transport of the biomass as the fuel metering system into the combustion unit includes a fully automated conveyor system. The biomass storage building can store three days worth of biomass fuel. Carbon offsets are created by the Project through the displacement of fossil fuels that would otherwise be combusted to heat the lumber drying kilns and site buildings with thermal energy generated from a renewable source of waste biomass produced at the site. These carbon offsets are generated in accordance with the Quantification Protocol for Diversion of Biomass to Energy from Biomass Combustion Facilities (AENV, 2007).

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3.2

Project Site Description

The Project is located at the Sundance sawmill operations west of Edson. The project site consists of the following infrastructure: The biomass combustion unit and thermal oil heater The thermal oil heat distribution system The biomass storage building The silo wood waste incinerator The 6 lumber drying kilns The Sundance sawmill and related buildings, log sorting yard, shipping and handling area and administrative offices The SunPlus Specialty Wood Products Ltd. remanufacturing facility. The Sundance Forest Industries sawmill is located eight kilometers west of the town of Edson, Alberta. The legal description of the site is the SW of Section 1, Township 53, Range 2 west of the 5th Meridian. A plot plan for this site is included as Figure 3.1 below.

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Figure 3.1: Sundance Biomass Energy Generation Facility Layout

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3.3

Pre-Project Conditions

Prior to the start-up of the Sundance Biomass Energy Generation Facility in October 2005, all of the thermal energy required by the sawmill operations for the six lumber drying kilns and for heating the other buildings on-site was supplied by two natural gas-fired thermal oil heaters. The pre-existing natural gas thermal oil heaters were rated at 24 MMBtu/hr and 13 MMBtu/hr. Thermal oil was distributed to the six wood drying kilns in a closed loop system. Prior to the implementation of the Project, Sundance used approximately 240,000 to 300,000 GJ/year of natural gas to provide 100% of the heat for the drying kilns and site buildings. The majority of the wood waste produced from the sawmill operations was previously incinerated in the sites silo wood waste burner, while recoverable saw dust and wood chips were diverted to downstream users for the manufacture of MDF or sold to pulp and paper producers, respectively. None of the biomass was used for energy generation prior to the Project start-up (on or off-site) as the wood waste incinerator was the only disposal means for unmarketable biomass. 3.4 Actions Taken

In April 2005, Wellons Canada began the construction and installation of the biomass combustion unit, thermal oil heater and associated infrastructure. The project was fully commissioned by the end of October 2005, with thermal energy first generated from biomass and supplied to the kilns and the sawmill building at that time. The project included the installation of Wellons biomass combustion unit, a 40 MM Btu/hr Radiant/Convective thermal oil heater, additional piping for thermal oil distribution, air pollution control equipment for the combustion unit, ash handling equipment, a biomass storage facility, and a building to house the biomass thermal energy generation plant and control room. Each infrastructure component is described in more detail, below. Biomass combustion unit: A Wellons step grate combustor was constructed at the site that was designed to handle input biomass with 45% moisture content. The combustor uses a moving step grate system within the furnace to remove ash buildup using an inclined conveyor system. Combustion air is supplied from three fans that supply under-draft and over-draft air to ensure complete combustion. The air supply is also pre-heated by the combustion exhaust gases after the exhaust leaves the convective heater. Thermal Oil Heater and Distribution System: A thermal oil heater was installed to transfer up to 40 MMBtu/hour of thermal energy to the kilns and sawmill building from the biomass combustion system. The thermal oil heater contains a radiant heating section and a convective heating section to maximize heat recovery. The radiant heater section tubes line the walls of the secondary combustion chamber. A serpentine tube convective heater is located at the outlet

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of the radiant section, complete with rotary and retractable soot blowers. The thermal oil is heated to approximately 500F in the heaters before it is distributed to the kilns and sawmill building for heat distribution. The thermal oil is then recirculated back to the heater after the heat has been transferred in the kilns and buildings. The thermal oil is circulated using two 125 hp pumps, with one on-line and the other as a back-up. A 100 hp diesel powered pump is also used as a back-up during power outages. Approximately 700 ft of additional piping was added to connect the biomass thermal oil plant with the existing thermal oil distribution loop. Air Pollution Controls and Ash Handling: The project included the installation of a multiclone and an electrostatic precipitator to remove particulate matter entrained in the combustion exhaust. The multiclone separates the majority of the particulates using the centrifugal force of the swirling particulates that hit the walls of the collector and drop out of suspension. Finer particulates are removed by the electrostatic precipitator, which inflicts an electrostatic charge on the remaining particulates to direct them to an oppositely charged collector that removes the particles from the exhaust gas stream. Particulates are also removed from convective heater and the air pre-heater, both of which are connected by a conveyor system to the multiclone and electrostatic precipitator that transports the fly ash into a storage bin. The collected fly ash is then given to farmers for application to fields to add nutrients and increase the alkalinity of the soil. The bottom ash from the combustor is also used for road construction at the sawmill site. Biomass Storage Building and Fuel Metering System: A new covered building was constructed to store biomass and feed it to the combustion unit. The storage building can hold up to 3 days of fuel supply for the combustion unit and consists of a moving grate fuel metering system, similar to an auger, to feed biomass from the storage building onto a conveyor that feeds the biomass into the combustor at a rate of approximately 5.5 tonnes/ hour. All of the conveyor systems are electrically driven and connected to the main wood residue conveyor system in the sawmill building. Thermal Oil Plant Building and Control Room: A new building was constructed to house the biomass combustion unit, the thermal oil heater and an operations control room. 3.5 Project Conditions

The biomass fuelled thermal oil heating system generates approximately 22,000 GJ of thermal energy per month that is used to heat the kilns and the main sawmill building. The hot thermal oil is circulated to lumber-drying kilns using the pre-existing thermal oil heat transfer loop, which was expanded to connect the new biomass-fuelled thermal oil system to the six kilns and the sawmill building in a closed loop. The combustion unit consumes approximately 5.5 tonnes of
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biomass per hour when at full capacity, which represents about one third of the wood waste produced at the saw mill facility. The remaining unmarketable wood waste continues to be incinerated in the silo burner. The biomass combustion system has displaced 100% of the natural gas required for heating the kilns and the sawmill building and no supplemental fossil fuels are required to operate the biomass combustion system. A small amount of diesel is used periodically to run the back-up diesel pump; however, the quantity is insignificant since the 100hp pump is tested for one minute per week and only operates during black-outs. Some natural gas is used to heat the other buildings on the site, which are not connected to the thermal oil distribution system and never were. Since these buildings were never connected to the original natural gas-fired thermal oil distribution system, the use of natural gas for space heating is completely independent of the biomass utilization project and therefore functional equivalence is ensured from the baseline to the project scenario. The biomass combustion unit has been operating well and there have been no unplanned shut-downs since the start of operations in October 2005. The plant shuts down annually in the summer for preventative maintenance and equipment calibration. The natural gas-fired heaters have not been used since the biomass unit was commissioned in October 2005 and they cannot be started up without additional maintenance and start-up procedures. 3.6 Inventory of Sources and Sinks

The applicability criteria, identification of sources and sinks, and quantification methodologies for this project have been determined in accordance with the Quantification Protocol for Diversion of Biomass to Energy from Biomass Combustion Facilities (AENV, 2007). As outlined in the protocol, the project proponent has sufficient evidence to demonstrate that: 1. The energy produced from biomass is offsetting fossil fuel combustion that would otherwise be required to generate the necessary thermal energy; 2. The quantification of reductions achieved by the project is based on actual measurement and monitoring (except where indicated in the protocol); and, 3. The project meets the requirements for offset eligibility as specified in the applicable regulation and guidance documents for the Alberta Offset System. Of particular note: i. The Project received its first batch of feedstock after January 1, 2002 as indicated by facility records; and, ii. Ownership of the emission reduction offsets is established as indicated by facility records.
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The Sundance Biomass Energy Generation Project does not involve the diversion of biomass from landfill: therefore, GHG emissions from the disposal of biomass in landfill are not applicable. The protocol applicability criteria related to the diversion of biomass from landfill are also not discussed. 3.6.1 Displacement of Fossil Fuels In the pre-project condition, thermal energy used to heat the wood drying-kilns and the sawmill buildings at Sundance was generated from the combustion of up to 320,000 GJ/year of natural gas. By switching to the combustion of biomass for 100% of the thermal energy required to heat the wood-drying kilns and the sawmill building, the Project displaces the full amount of natural gas previously combusted to heat the thermal oil system for this purpose. 3.6.2 Quantification of GHG Reductions The quantification of reductions achieved by this project is achieved by actual measurement and monitoring, as outlined in section 5.0 of this Offset Project Plan. 3.6.3 Offset Eligibility Requirements This project meets the requirements for offset eligibility as specified in the applicable regulation and guidance documents for the Alberta Offset System. In particular: The Project facility was commissioned in October 2005, which is after the specified start date of January 1, 2002. The Project began generating thermal energy, and displacing fossil fuel usage in October 2005; The Project proponent intends to claim offset reductions for an initial period of 8 years, as specified in the Guidance Document. The end of the initial Project period is thus set at October 31, 2013; and As mentioned in section 2.0, Sundance Forest Industries Ltd. possesses ownership rights to the offsets generated under this project.

4 Identification and Justification of Baseline

There are two components of the baseline scenario that are relevant to this project, namely, the generation of thermal energy to heat the lumber drying kilns and the handling of wood waste generated at the site. The baseline condition for the generation of energy at the sawmill facility was identified based on the historical combustion of natural gas at the site to meet the thermal energy demands of the lumber kilns and other buildings on the site. The site previously operated two natural gas-fired thermal oil heaters and the most

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likely baseline scenario would be the continued combustion of natural gas in this equipment to meet the heat load requirements of the six kilns and the sawmill building. The potential baseline scenarios for the handling of wood waste at the site include the recovery of marketable wood products for sale to other industries, the disposal of wood waste in landfill / long term storage or the incineration of the wood waste in the sites olivine burner. The facility currently recovers as much marketable biomass as possible by collecting wood chips to sell to a pulp and paper mill and recovering sawdust and shavings for sale as animal bedding and MDF wherever possible. Due to the large amount of wood waste generated at the site, which includes low-value hog wood (bark) and wood scraps, there is a large surplus of waste wood beyond what could be sold to other nearby markets. Since the site is permitted to operate a silo burner to incinerate wood waste, the incineration (without energy recovery) of the wood waste is the most likely baseline scenario. This is consistent with the project condition, in which less than 1/3 of the wood waste produced at the site is consumed in the biomass combustion unit and the majority of the remaining 2/3 is incinerated. As such, had the Project not been initiated by Sundance, the biomass would have been incinerated without energy recovery and the saw mill would have continued to rely on the combustion of natural gas to meet the thermal energy demands at the site. The baseline condition is thus the generation of an equivalent amount of thermal energy from the combustion of natural gas as that generated from biomass in the project condition.

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5 Quantification of Emission Reductions

5.1 Process Description

Quantification of the reductions, removals and reversals of relevant sources and sinks for each of the greenhouse gases will be completed using the methodologies outlined in section 2.5 of the Protocol. These calculation methodologies serve to complete the following three equations for calculating the emission reductions from the comparison of the baseline and project conditions. Two sources/sinks identified under the Baseline Condition in the Quantification Protocol for Diversion of Biomass to Energy from Biomass Combustion Facilities (AENV, 2007) do not apply to this Project: Emissions Decomposition Biomass = Emissions under SSRs B9 and B10 Decomposition of Biomass and Methane Collection/Destruction Emissions
Electricity

= emissions under SSR B11 Electricity Production

The release of methane from the decomposition of biomass under SSRs B9 and B10 is not applicable to this project since the baseline scenario is the incineration of all unmarketable wood waste in the sites silo burner. The emissions associated with the production of electricity in the baseline are not applicable either, as this project does not include any electricity generation; instead, thermal energy is the only output from the biomass combustion unit. Additionally, one source/sink identified under the Project Condition is not applicable to this Project: Emissions
Combustion of Biomass

= emissions under SS P12 Combustion of Biomass

The emissions from biomass combustion in the project condition were excluded as they are functionally equivalent to the baseline scenario. Any biomass wastes consumed for thermal energy generation in the project condition would have been incinerated in the baseline scenario; therefore, the methane (CH 4 ) and nitrous oxide (N 2 O) emissions would be the same for the project and baseline scenarios. This is conservative as the Wellons biomass combustion unit operating in the project condition would have more complete combustion (less unburned hydrocarbons due to controlled combustion) and lower operating temperatures than the wood waste incinerator. Therefore, it is expected that CH 4 and N 2 O emissions would be higher in the baseline scenario and it is reasonable to exclude these emissions for conservativeness. The following three equations serve as the basis for calculating the emission reductions from the comparison of the baseline and project conditions:

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Emission Reduction = Emissions Emissions

Baseline

Baseline

Emissions + Emissions
Thermal

= Emissions

Fuel Extraction / Processing

Emissions
O ti

Project

= Emissions

Fuel Extraction / Processing

+ Emissions

Facility

Where: Emissions Baseline = sum of the emissions under the baseline condition Emissions Thermal Heat = emissions under SS B12 Thermal Energy Produced Emissions Fuel Extraction / Processing = emissions under SS B13 Fuel Extraction and Processing Emissions Project = emissions under the project condition. Emissions Facility Operation = emissions under SS P6, P8 to P11, P13, P14 and P16 Facility Operation Emissions Fuel Extraction / Processing = emissions under SS P22 Fuel Extraction and Processing The details of the parameters used in the equations are presented in Appendix A.

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5.2

Data Sources

As the information in the previous section indicates, there are three main data sources required for the calculation methodology outlined in the Protocol: Volume of fossil fuels used in the project condition to operate the thermal oil heating system Volume of fossil fuels used in the baseline to generate thermal energy for the lumber drying kilns and for space heating in the sawmill building and other buildings Volume of fossil fuels used in the project condition to generate thermal energy for the space heating in the other buildings (i.e., the sawmill building and kilns no longer use any natural gas for heating in the project condition)

5.3

Quantification Plan

Quantification of the emission reductions generated by the Project will be conducted using the Excel Calculator developed by Blue Source Canada along with the Quantification Protocol for Diversion of Biomass to Energy from Biomass Combustion Facilities (AENV, 2007). The general methods of quantification for the required data listed above are as follows: Volume of fossil fuels consumed for facility operation in the project condition - the biomass material handling equipment (conveyors, fuel metering equipment), the ash handling conveyors, the combustor step grate, the combustion unit air supply fans, the air compressor and the thermal oil pumps are all powered by electricity, imported from the regional grid. The only fossil fuel consumed in the process is a small amount of diesel, used to operate the backup thermal oil circulation pumps in case the primary electric-drive pumps are unable to function due to a power outage. The volume of diesel consumed per year was conservatively estimated to be half a tank per year (150 L / year) based on operator knowledge that the tank was only filled once during the first 3 years of the project. Since the diesel pump is tested for one minute per week and only run during black-outs, diesel usage is minimal. If the 100 hp pump were to operate 24/7 it would likely consume less than one tank (300L) of diesel. As such, the emissions from operating the pump for one minute per week and during black-outs will result in a negligible amount of emissions. For conservativeness, these emissions have been estimated and included in the quantification. Volume of fossil fuels consumed in the baseline condition In the baseline scenario, natural gas was consumed in the two thermal oil heaters to provide

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thermal oil to the six drying kilns and the sawmill building. Natural gas is also used for space heating in the winter months to heat the portion of the sawmill not connected to the thermal oil system, which includes the four kiln control rooms, the drysorter area, the Waco moulder area, the main office building and the SunPlus remanufacture building. The site has one main natural gas meter that measures the aggregate gas consumption for all operations at the site, which in the baseline included gas used for heating the thermal oil system, which has now been displaced by thermal energy generated through the combustion of biomass. Only the natural gas usage that has been displaced by biomass combustion in the project activity is quantified for emission reductions, as the remaining natural gas usage for space heating has remained unchanged. Volume of fossil fuels consumed in the project condition for space heating Natural gas is still used for space heating in the winter months to heat the portion of the sawmill not connected to the thermal oil system, which includes the four kiln control rooms, the drysorter area, the Waco moulder area, the main office building and the SunPlus remanufacture building. This natural gas usage is functionally equivalent in the baseline and project conditions, but is described here since it is used in the calculation of the amount of natural gas displaced by thermal energy from biomass combustion. Note: The quantity of thermal energy output from the biomass combustion system and delivered to the kilns and the sawmill building is determined directly from the measured temperatures and flow rates of the thermal oil at the exit from the heater and at the end of the return loop. The thermal energy delivered to the kilns and sawmill building is determined based on this temperature difference, the specific heat capacity of the thermal oil and the mass flow rate of thermal oil in the heat transfer loop. The quantity of thermal energy output per hour is continuously measured by the thermal oil control system; however, due to some data storage issues, the hourly thermal energy output data was not logged during most of 2005 - 2008 and this data is unavailable for use in the quantification of GHG emission reductions. More recent data was available for reality checking of the quantification of displaced natural gas and for general QA/QC. The quantification approach used to determine the baseline natural gas displaced by the project activity is explained in detail in the following section. 5.3.1 Quantification of the Natural Gas Displaced By the Project Activity The calculation of the quantity of natural gas displaced by the project activity required the disaggregation of the sites total natural gas usage into three individual categories: heat for the kilns, heat for the sawmill building and heat for the other buildings on-site. The kilns and the sawmill building are now provided with thermal energy from the biomass combustion system, while the remaining

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buildings are not. 100% of natural gas previously used in the baseline for heating the kilns and the sawmill building has been displaced by the project activity. The monthly aggregate quantity of natural gas used at the project site has been tracked since October 2003 and provides two years of baseline gas consumption data. The site also has three years of project data from November 2005 to December 2008, which was used to establish the normal gas requirements for space heating at the site (to subtract this from the baseline scenario since the thermal energy from the biomass unit has not displaced this component). The use of two years of baseline data and four years worth of project data provided a sufficient data set to minimize the impact of annual fluctuations in ambient temperatures and production levels. For conservativeness, the monthly production levels at the facility and the ambient temperatures were tracked in order to normalize the gas usage before and after the project implementation, as discussed below. The quantity of natural gas (NG) displaced by the project activity in each month was calculated according to the following equations: In the baseline, natural gas was used to heat the kilns, the sawmill building and the other buildings at the site, as shown in (1), below. Site NG
Baseline

= NG

Kilns

+ NG

Sawmill Building

+ NG

Other Buildings

In the project condition, all of the thermal energy required to operate the kilns and provide space heating for the sawmill building has been eliminated and the remaining natural gas consumption is only from the other site buildings not connected to the thermal oil distribution system as shown in (2), below. Project Condition: Site NG
Project

= NG

Other Buildings

The amount of natural gas displaced by the project activity represents the difference between the baseline and project as shown in (3), below. NG
Displaced

= (Baseline Project) = NG

Kilns

+ NG

Sawmill Building

Further, the amount of natural gas consumed to heat the kilns can be determined based on the difference between the total gas consumption in the baseline and the gas required for space heating in the baseline. NG
Kilns Estimated =

NG

Baseline

(NG

other buildings

+ NG

sawmill building )

In order to account for variations in production levels at the sawmill, the natural gas consumption for the kilns was adjusted based on the ratio of the current months production (measured as kiln dried lumber throughput) and the historic average monthly production in the baseline.

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NG

Kilns Actual=

NG

Kilns Estimated

* (Production

Current Month

/ Production

Baseline Monthly

Average )

In order to estimate the baseline natural gas consumption for space heating in the sawmill building the total floor space of all site buildings heated by natural gas was determined. The baseline monthly natural gas consumption for space heating was assumed to be constant for each site building per square foot. In Equation (6) the natural gas consumption for space heating in the sawmill building is determined based on the ratio of floor space in the sawmill building compared to other buildings. NG
Sawmill Building Estimated

= (NG

Other Buildings

/ floor space

Other Buildings )*(floor

space

Sawmill Building )

In order to account for variations in ambient temperatures, which could serve to increase or decrease the total natural gas required for space heating in the baseline and project conditions, heating degree days were used to normalize the results. Heating degree days are used as an index to normalize the ambient temperatures for a location over a period of time relative to a base temperature of 18 C. The number of heating degree-days (HDD) is the sum of the daily heating degree-days for one year. Heating degree-days were used to ensure functional equivalence between the baseline and project scenarios when estimating the amount of natural gas consumed for space heating. NG
Sawmill Building Adjusted

= NG

Sawmill Building Estimated

* (HDD

Current Year

/ HDD

Baseline

Average )

The following table provides a summary of the data sources used to quantify the GHG reductions from the project activity. Table 5.1 Data Collection Methodology Data Sources Meter ID Volume of diesel consumed to operate the back-up N/A thermal oil circulation pumps. GJ of natural gas displaced N/A by the project activity GJ of natural gas consumed at the site in the baseline condition for Atco Gas heating the kilns and for Utility Meter space heating GJ of natural gas consumed at the site in the

Method of Quantification Volume of diesel is manually entered into the Quantification Calculator.

The GJ of natural gas displaced by the project activity are calculated based on the difference between the metered GJ of gas consumed in the baseline and project conditions. The GJ displaced are adjusted for variations in production and ambient temperatures (using heating degree days).

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project condition for space heating Monthly production throughput) (kiln

N/A

Heating Degree Days N/A

The GJ of natural gas displaced by the project are then manually entered into the Quantification Calculator. The monthly kiln throughput volumes of wood are used to normalize any differences in gas consumption due to month to month production changes. The production records are obtained from facility operating records. HDDs are used to normalize impacts of ambient temperatures on the gas required for space heating.

5.4

Monitoring Plan

In general, the data control process employed for the Project consists of manual data capture and reporting, and manual entry of monthly totals or average values into the quantification calculator. For monitoring and quality assurance purposes, the quantification methods and formulas used in the quantification calculator have been reviewed by Blue Source on behalf of the project proponent. 5.4.1 Metering Maintenance and Calibration Monitoring and QA/QC for the metering systems used at the Sundance biomass energy generation facility consists of a simple maintenance and calibration program as very few parameters are required in the quantification of emission reductions. The details of maintenance and calibration for each meter used in the collection of data for emission reduction calculations are provided in Table 5.4.1 Table 5.4.1 Metering Maintenance and Calibration Details Project Meter ID Meter Maintenance Calibration Specific Data Make/Model Schedule Schedule Volume of Diesel Consumed to Operate N/A N/A N/A N/A Back-up Thermal Oil Circulation Pumps Consumption Atco Gas of Natural Utility Utility Meter As needed As needed Gas in the Meter

Accuracy Rating

N/A

N/A

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Baseline and Project 5.4.2 Manual Checking of Calculator Data The quantification of the volume of diesel used is completed manually using conservative estimates based on the hp-rating of the pump (100 hp), the volume of the diesel tank (300 Litres) and the estimated operating hours of the diesel pump (1 minute per week plus black-outs). Monitoring and QA/QC for diesel volumes will consist of manual checking of data entered into the quantification calculator against the original diesel bills to ensure independent review of the data prior to verification. The quantification of the GJ of natural gas consumed at the site in the project and baseline conditions is also done manually based on the monthly invoices received from the natural gas supplier. The estimated consumption of natural gas for the kilns is corrected for the monthly volume of wood throughput. By normalizing the gas consumption with throughput, any changes in production levels at the plant are accounted for to prevent overestimation of the GHG reductions. In order to ensure that the baseline natural gas consumption for space heating is not overly influenced by ambient temperatures, the heating degree days in each month of the baseline and project conditions were compared. The heating degree days data was only used if it provided a conservative approach to estimating the amount of natural gas displaced by the project activity. Manual checking will be conducted on an annual basis by Blue Source Canada and will consist of: Reconciliation of values in the calculator with hard-copy records of electronic data; Comparison with data from other time periods to identify any major discrepancies (reality checking); and Recalculation of selected values to ensure that the quantification calculator remains accurate.

5.4.3 Record Keeping Record-keeping practices for the project consist of: Electronic recording of values of logged primary parameters for each measurement interval;

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Printing of monthly back-up hard copies of all logged data; Written logs of operations and maintenance of the project system including notation of all shut-downs, start-ups and process adjustments; Retention of copies of logs and all logged data for a period of seven years; and Keeping all records available for review by a verification body.

6 Reporting of Emission Reductions

Emission reductions achieved through this Project will be claimed on an annual basis and quantified in accordance with the calculation methodology described in the Quantification Protocol for Diversion of Biomass to Energy from Biomass Facilities (AENV, 2007). GHG emission reductions will be verified by a third-party verifier according to the Guidance Document provided by AENV.

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APPENDIX A PROTOCOL QUANTIFICATION TABLE

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1. Project/ Baseline SS Project SSs

2. Parameter / 3. Variable Unit Emissions Fuel i N20 ) Emissions

Operation Facility Operation

4. Measured / 5. Method Estimated = (Vol. Fuel i * EF Fuel

i CO2 );

6. Frequency

7. Justify measurement or estimation and frequency

i CH4 )

(Vol. Fuel i * EF Fuel

; (Vol. Fuel i * EF

Facility

kg of CO 2 ; N/A CH 4 ; N2O

N/A

N/A

Quantity being calculated in aggregate form as fuel and electricity use on site is likely aggregated for each of these SSs. Both methods are standard practice. Frequency of metering is highest level possible. Frequency of reconciliation provides for reasonable diligence. Reference values adjusted annually as part of Environment Canada reporting on Canada's emissions inventory. Reference values adjusted annually as part of Environment Canada reporting on Canada's emissions inventory. Reference values adjusted annually as part of Environment Canada reporting on Canada's emissions inventory.

Volume of Each L, m Type of Fuel / or Vol. Fuel i other P6, P8 to P11, P13, P14 and P16 CO 2 Emissions Facility Factor for Each Operation Type of Fuel / EF Fuel i CO2 CH 4 Emissions Factor for Each Type of Fuel / EF Fuel i CH4 N 2 O Emissions Factor for Each Type of Fuel / EF Fuel i N2O

Measured

Kg CO 2 per L, Estimated m3 or other kg CH 4 per L, Estimated m3 or other kg N2O per L, Estimated m3 or other

Direct metering or reconciliation of volume in storage (including volumes received). From Environment Canada reference documents. From Environment Canada reference documents. From Environment Canada reference documents.

Continuous metering or monthly reconciliation.

Annual

Annual

Annual

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Emissions Fuel Extraction / Processing = (Vol. Fuel i * EF Fuel Fuel i * EF Fuel i N2O ) Emissions
Fuel

i CO2 )

; (Vol. Fuel

* EF Fuel

i CH4 )

; (Vol.

Extraction / Processing

kg of N/A CO2e

N/A

N/A

Quantity being calculated in aggregate form as fuel and electricity use on-site is likely aggregated for each of these SSs. Both methods are standard practice. Frequency of metering is highest level possible. Frequency of reconciliation provides for reasonable diligence. Reference values adjusted annually as part of Environment Canada reporting on Canada's emissions inventory. Reference values adjusted annually as part of Environment Canada reporting on Canada's emissions inventory. Reference values adjusted annually as part of Environment Canada reporting on Canada's emissions inventory.

Volume of Fuel Combusted for P6, P8 to P11, P13, P14 and P16 Facility Operation / Vol. Fuel P22 Fuel CO 2 Emissions Extraction Factor for Fuel and Including Processing Production and Processing / EF Fuel CO2 CH 4 Emissions Factor for Fuel Including Production and Processing / EF Fuel CH4 N 2 O Emissions Factor for Fuel Including Production and Processing / EF Fuel N2O Baseline SSs

L/ m3/ Measured other

Direct metering or reconciliation of volume in storage (including volumes received). From Environment Canada reference documents. From Environment Canada reference documents. From Environment Canada reference documents.

Continuous metering or monthly reconciliation.

kg CO 2 per L/ Estimated m3/ other kg CH 4 per L/ Estimated m3/ other kg N2O per L/ Estimated m3/ other

Annual

Annual

Annual

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Emissions Fuel i N20 ) Emissions

Thermal Heat

Thermal Heat

= (Vol. Fuel i * EF Fuel

i CO2 );

(Vol. Fuel i * EF Fuel

i CH4 )

; (Vol. Fuel

* EF

kg of CO 2 ; N/A CH 4 ; N2O

N/A

N/A

Quantity being calculated.

Calculated relative to baseline natural Volume of Each L, m3 gas usage as Type of Fuel / or Measured compared to Vol Fuel i other project natural gas usage. See section 5.3 B12 Thermal Energy kg From CO 2 Emissions Produced CO 2 Environment Factor for Each per L, Estimated Canada Type of Fuel / m3 or reference EF Fuel i CO2 other documents. kg From CH 4 Emissions CH 4 Environment Factor for Each per L, Estimated Canada Type of Fuel / m3 or reference EF Fuel i CH4 other documents. kg From N 2 O Emissions N2O Environment Factor for Each per L, Estimated Canada Type of Fuel / m3 or reference EF Fuel i N2O other documents. B13 Fuel Emissions Fuel Extraction / Processing = (Vol. Fuel i * EF Fuel Extraction Fuel i * EF Fuel i N2O )

Continuous metering

Method is standard practice.

Reference values adjusted annually as part of Annual Environment Canada reporting on Canada's emissions inventory. Reference values adjusted annually as part of Annual Environment Canada reporting on Canada's emissions inventory. Reference values adjusted annually as part of Annual Environment Canada reporting on Canada's emissions inventory. ) ; (Vol. Fuel i * EF Fuel i CH4 ) ; (Vol. i CO2

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and Processing

Emissions

Fuel

Extraction / Processing

kg of N/A CO 2 e

N/A Direct metering or reconciliation of volume in storage (including volumes received). From Environment Canada reference documents. From Environment Canada reference documents. From Environment Canada reference documents.

N/A

Quantity being calculated in aggregate form as fuel use on-site is likely aggregated for each of these SSs. Both methods are standard practice. Frequency of metering is highest level possible. Frequency of reconciliation provides for reasonable diligence. Reference values adjusted annually as part of Environment Canada reporting on Canada's emissions inventory. Reference values adjusted annually as part of Environment Canada reporting on Canada's emissions inventory. Reference values adjusted annually as part of Environment Canada reporting on Canada's emissions inventory.

Volume of Fuel L/ m3/ Combusted for Measured other B12 / Vol. Fuel

Continuous metering or monthly reconciliation.

CO 2 Emissions Factor for Fuel Including Production and Processing / EF Fuel CO2 CH 4 Emissions Factor for Fuel Including Production and Processing / EF Fuel CH4 N 2 O Emissions Factor for Fuel Including Production and Processing / EF Fuel N2O

kg CO 2 per L/ Estimated m3/ other kg CH 4 per L/ Estimated m3/ other kg N2O per L/ Estimated m3/ other

Annual

Annual

Annual

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