Day 1 - Presentations v1.2

Reduction in Conventional EnergyWhy Approach Improvements in this Order? Consumption • Eliminating waste may affect dimensioning of conversion equipment • Eliminating waste & improving efficiency reduces necessary supply capacity • Return on investment often better for waste reduction and efficiency improvements than supply improvements, for low/moderate levels of investment Reduce Waste/ Increase Efficiency Decreasing marginal returns Increasing marginal returns Fixed costs (usually higher with renewables) Improving Supply (Renewables) Investment 101

Understanding Energy Usage End-useKey Variables: (light, hot water, heat, End-useconsumption compressed air, etc.)EfficiencyTime load is on 1 Efficiency Tariff η “Amplifier” Fuel use/Electricity use Use Use at a point in accumulated time over a period Energy (kWPohw) er (kW) of time = powerR·atitme eof Energy ConsumptionFuel Purchases Peak use($/l, $/gal, $/GJ, during billing$/mmBTU, etc.) period Electricity Consumption Demand Charges(Very large consumers may also Charges ($/kWh) ($/kW)be charged for natural gasdemand, as for electricity) 102

Important Variables in Energy Efficiency• Energy consumption costs = (Pend-use · t ) · cenergy ηconversion• Demand charges = max Pend-use · cdemand• (Where P = power, t = duration of timeηucsoendv,ecrs=ioennergy rate, ηconversion = conversion factor, if required)• Eliminating waste (if at time of peak usage) and improving efficiency reduces both consumption costs and demand charges• Often t (e.g., the number of operating hours per day) is neglected • Can be difficult to estimate when load depends on occupant behaviour • May be fixed • But when assessing overall impact of proposed measure, t is critical 103

Electricity Consumption Affects Heatingand Cooling Loads • Electricity consumed within a building all dissipated as heat • Adds to air conditioning loads • Reduces heating loads • Efficiency measures reducing electricity consumption can therefore reduce AC loads but increase heating loads Waste Heat 104

RETScreen®’s Role in Energy Action Cycle Collect data Measure What is current usage? Scatter plot Load inventory Regression CUSUM Facility characteristics Simulation & modelling Equipment Analyze RETScreen® characteristics What is best action? Study energy bills Simulation & modelling Engineering economics Facility monitoringSub-meter monitoring Implementation Take Action Communication Employee training Establish targetsInvest in technology 105

Energy Efficiency: People and Technology Build an energy managing culture $Operational Behavioural Put & people intechnologic the al actions feedbackFrom: Dollars to $ense Energy Monitoring Workshop, Natural loop Resources Canada 106

Clean Project Analysis with RETScreen® 107

From Pre-feasibility Study to Commissioning time Attaining feasibility level of accuracy is still expensive. What if project doesn’t go ahead? Pre-feasibility: Determine “are we in the ballpark?” as quickly and cheaply as possible 108

Energy Project Implementation Process Pre-feasibility Analysis Feasibility Analysis Development & Engineering Significant barrier Construction &Clean-energy projects Commissioning not being routinely considered up front! 109

Notion of cost-effectiveness only exists by way ofcomparison• Cost-effective compared to what? Proposed Base• RETScreen® always compares two case options • Proposed case versus base case • Clean energy technology versus conventional technology case 110

Incremental Costs and Credits • Need to determine whether additional benefits of proposed case justify additional costs • Incremental costs • Proposed case costs minus base case costs • Incremental benefits (= credits) • Fuel savings • Maintenance savings • Base case credits: avoided initial costs for equipment • e.g., perimeter heating avoided with better windows 111

Considerations in Pre-feasibility Analysis • Climate/energy resources at project site • Equipment performance • Initial project costs • “Base case” credits • Ongoing and periodic project costs 112

Considerations in Pre-feasibility Analysis (cont.) • Price/cost of energy • Financing (e.g., debt ratio & term, interest rate) • Taxes on equipment & income (or savings) • Environmental impacts of energy displaced (e.g., coal, natural gas, oil, hydro, nuclear) • Environmental credits and/or subsidies (e.g., greenpower rates, GHG credits, grants) • Decision maker’s definition of cost-effectiveness (e.g., payback period, IRR, NPV) 113

Why Use RETScreen®? • Simplifies pre-feasibility assessment (and feasibility assessment for small, simple projects) • Requires minimal user input and provides built-in databases for climate, products, etc. • Standardized procedures allow objective comparisons • Validated methodology • By identifying most promising projects, increases potential for successful clean energy project implementation 114

A Framework for Communication RETScreen® serves as a platform for sharing project information 115

RETScreen® Energy Models RETScreen® allows on-grid and off-grid analyses for:Energy Efficiency Technologies Renewables Energy TechnologiesBuilding envelopes BiomassCompressed air systems Geothermal powerHeating/cooling systems Landfill gasLighting Micro hydro turbineProcess heat and steam PhotovoltaicsPumps, fans and motors Solar air and water heatingRefrigeration Solar thermal powerSteam losses Tidal, wave and ocean current powerVentilation Wind turbines 116

RETScreen® Basics: Start Page Project information Clean Energy Project Analysis Software Project name See project database Project location Energy efficiency measures Prepared for Industrial Prepared by Method 1 Project type Higher heating value (HHV) Facility type Analysis type Select climate data location Heating value reference Ottawa Int'l Airport Show settingsSite reference conditions Climate data location Show dataRETScreen4 2008-11-19 Complete Energy Model sheet NRCan/CanmetENERGY © Minister of Natural Resources Canada 1997-2008. 117

RETScreen® Basics: Cell Colour CodingProposed case power system Incremental initial costs Technology Wind turbine  Show data Electricity See maps exported to See product database Analysis type  Method 1 Ottawa Int'l  Method 2 Airport grid Wind turbine  Method 3 Resource assessment 3.9 262.5 Resource method Wind speed 10.0 ft Resource method Wind speed 5.8 100.1 Wind speed - annual m/s 7.0 Measured at m 80.0 6.9 m/s $ 2,000,000 Wind shear exponent ft 229.7 Air temperature - annual 0.14 ft 177.2 Atmospheric pressure - annual °C 5.8 ft² 24,649 kPa 100.1 Wind turbine Power capacity per turbine kW 1,000.0 Manufacturer AAER Model Number of turbines A-1000/S - 70 Power capacity 1 Hub height Rotor diameter per turbine kW 1,000.0 Swept area per turbine m 70.0 Energy curve data m 54 Shape factor m² 2,290 Standard 2.0 118

Clean Energy Project Analysis RETScreen Energy Model - User-defined Energy User-defined Green power Other User-defined Base case Proposed case Technology Grid electricity Wind turbine Power capacity 2,000 Capacity factor kW 30% Electricity exported to grid % 5,256 Incremental initial costs MWh 2,000 O&M (savings) costs $/kW 0.010 Electricity export rate $/kWh 0.150 $/kWhTwo Methods Emission Analysis Fuel type GHG emission T&D GHG emission All types factor losses factor Method 1: Base case electricity system (Baseline) Country - region MWh (excl. T&D) % tCO2/MWh One Sheet Canada tCO2/MWh 5.0% 0.222 Electricity exported to grid 0.211 GHG emission 5,256 T&D losses 8.0% Base case Proposed case tCO2 1,167 Gross annual GHG emission reduction GHG credits transaction fee tCO2 93 Net annual GHG emission reduction tCO2 1,074 GHG reduction income GHG reduction credit rate % 0.0% tCO2 1,074 is equivalent to 218 Cars & light trucks not used $/tCO2 0.00 Financial Analysis % 2.0% yr 20 Financial parameters % 70% Inflation rate % 7.00% Project life yr 10 Debt ratio Debt interest rate $ 4,000,000 100.0% Debt term $ 0.0% Initial costs Incremental initial costs $ 4,000,000 100.0% Other Total initial costs $ 0.0% Cumulative cash flows graph Incentives and grants 14,000,000Cumulative cash flows ($) Annual costs and debt payments $ O&M (savings) costs $ 0 12,000,000 Fuel cost - proposed case $ 398,657 Debt payments - 10 yrs $ 10,000,000 Other $ 451,217 Total annual costs 8,000,000 Annual savings and income Fuel cost - base case $ 0 6,000,000 Electricity export income Other $ 788,400 Total annual savings and income $ 4,000,000 Financial viability $ 788,400 Pre-tax IRR - equity 2,000,000 Pre-tax IRR - assets Simple payback % 34.6% 0 Equity payback % 12.3% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 yr 5.4 -2,000,000 yr 3.2 Year 119

Clean Energy Project Analysis RETScreen Energy Model - Energy efficiency measures project Fuels & schedules  Show data Fuel Fuel type 1 Fuel type 2 Fuel type 3 Fuel type 4 Fuel type 5 Fuel type 6 Fuel type Electricity Natural gas - m³ Fuel consumption - uRnitETScreen Cost Analysis - Energy efficiency measuMrWehs project m³ #N/A #N/A #N/A #N/A Fuel rate - unit $/kWh $/m³ #N/A #N/A #N/A #N/A Fuel rate Settings 0.100 0.400 Method 1 Notes/Range Second currency Schedule Method 2 Unit ScheSdeucleon1d curreSncchyedule 2 SNcohteedsu/Rlea3nge Schedule 4 NoneSchedule 5 Schedule 6 Description 2C4o/7st allocatioOnccupied Occupied Occupied Occupied Occupied Occupied Temperature - space Ihneiattiiangl costs (credits) °C RET2S2Uc.0nreiten FinancQ2i0au.la0Anntiatylysis - EneUrngityceofsfitciency meaAsmuoreusntproject Relative costs Temperature - space cooFliengasibility study °C Financcioasl tparameUtenrosc2c.0upied Unoccupied Unocc$upied Unoccu-Ppireodject coUsntsocacnudpiesdavings/income summary Yearly cash flows Temperature - unoccupied Feasibility study +/-°C Occupied Occu$pied Occup-Iineditial costsOccu0p.i0e%d Sub-total: General Year Pre-tax After-tax Cumulative Occupied Occupancy rate - daily Development Fuehl/dcost escalationhr/adte h/d % h/d 2.0%h/d Feasibility stuhd/dy 0.0% $ 0# $$ $ Monday Development Infla2ct4ioonstrate 16.0 %$ 2.0% - Development 0.0% $ 00 -19,500 -19,500 -19,500 Tuesday Sub-total: RETScreen Emission ReducDtiisoc2o4nunAt nraatelysis 1-6E.0 nergy efficie ncy %me asu$res pro10j.e0%ct - Engineering 0.0% 0.0% $ 01 36,680 36,680 17,180 Wednesday Engineering Emission Analysis Pro2je4ct life yr 20 Power system pro5j4e,c71t 6 Thursday 16.0 Heating system 0.0R%ETScr$een Sensitivity an0d Ris2k Analysis - 3E7n,5e3r7gy efficien3c7,y53m7easures Friday Engineering - Cooling system 93,128 24 16.0 0- User-defined 0.0% 0.0% $ 03 38,411 38,411 132,431 4750,6.5050%,00000%0 EBnaelarngcyeeofffics1iey00ns0%0ct.ey0m%m&eamsuisrecGs. lobal 172,643Two Methods Saturday Sub-total: Finan22cc44eost 16.0 $ 0.0% Sensi$tivity analysis 04 39,303 39,303 5.0 $$ 213,784 Method 2: Ince2n4tives and grants5.0 0.0% $ 05 40,213 40,213 255,871 Five steps Sunday Energy efficiency measuMreesthod 1 w10a0.r0m%inPegrfoprom$ teannatliyaslisoofnGH65G,000 A6fter-tax IRR - 4e1q,u1it4y1 41,141 42,087 Occupancy rate - annual Incremental initial costsMhe%/ythr od 2 De8b,7t6r0atio 4,693 0 % 00%$ 02.50% Senstito$ivnitnyerasnCgeO2 = 1 ton0ne C7H4 20%(IP4C2C,0827007) Balance of system &misMcee°Ctllhaonde ous De1b0t0% 54% 0% $ changeoverStepmapreraptaurets 3 Heating/cooling 16.0 Equity $ 19,500 Total initial costs 12090.80%Threstho$onldnes CO2 = 615,t0o0n0ne 7N582O (IP4C3C%,0522007) 43,052 298,924 Debt %interest rate %$ 6.00% - 9 44,037 44,037 342,961 Length of heating season Transportation d 241 Depbrtotjeercmt 124 Debtpp-dayments yr $ 10 -Incentives and grants $ 0 10 45,042 45,042 388I,n0i0ti2al costs $ Length of cooling season Training & commissioningd $/yr $ 6,182 - Fuel cost - base case 11 5522,,020408 52,25488,500 440,25605,000 71,500 78,000 10% User-defined Base case electricity system (Baseclionset ) $ -Annual costs and debt payments $ 12 5-32,02%93 53,2-9130% 493,5430% 20% 5443,.305%9 54,33559.9% 547,90320.4% 26.1% 22.7% Facility characteristics Contingencies  Show data % $ 65,000 $ - O&M $ 124,952 -1,200 -201%3 15453,.444%6 55,142446.3% 603,314089.0% 96.5% 86.2% 25465,.535%5 56,251545.8% 659,901390.4% 170.5% 153.9% Interest during construction Income tax analysis $ 65,000 $ - Fuel cost - proposed case $ 140,571 115,369 -101%4 35477,.648%6 57,360856.5% 717,528792.0% 244.6% 221.8% Effective incomEeInntcaterxermrnaeutenmtabler of mFounethl scost % InGcHreGm$eenmtalission 45489,.844%0 58,389460.2% 776,432593.7% 318.9% 289.9% Sub-total: - Debt paymIennctl0su.d-0e1%0 yrs $ 156,190 6,182 0%15 60,017 60,017 836,446 71,500 $ Show : - proposed cTaosetal initial costs Heating Cooling ELloescstriccaitryryforwaridn?itial costs savings O&M(eDs$xa$efcvacilnci.ngtiTonsg&r bDSa)ilma6np5Ncl,eeo0y0pr0ayTboactaklloTasn&snmDeue1saa0ls0cu.or0es%?ts GHG emission $ 171,809 120,351 101%6 897I,n6i6ti2al costs 10% 78,000 Energy MWh MWh DeMpWrehciation method $ $ factor 187,428 201%7 61,217 61,217 960,10645,000 5622,,040401 62,45481,500 960,1040% 280.1% 20% Heating system Annual costs (credits) Coun0try - region - HDaelpf-Ur-yenecaiiatrtirounleta- xyebaarQs1ius0antity Fuel ty0pUenit cyoesst/no tC0O2/MAWmohunYtes - Periodic %costs(credits) tCO2/MWh $0 18 -20%0 225.3% 254.3% Furnace % 19 -100% 960,130141.0% 170.5% 204.1% Cooling system O&M Canada - Ontario All types 0.201 5.0% 0.212 20 396.-11%00.0% 115.8% 153.9% Refrigeration DDeeppprrr-eeoccjeiiaactttiioonn rate 1,179 % 1,0$00 (11,5240.60) End of projectlife - cost Fuel c$ost - proposed case 0 21 320.7%0 3480.8% 960,120540.7% 61.7% 103.8% Building envelope O&M (savings) costs - 0 period10,000 yr 54.4% Building envelope $$ 0 245.3%0 2810.8% 960,101490.4% 71,500 Ventilation Parts & labour proTTjeaacxxptrc-hhoolooijesflleiiddct aat yy $ No1.0--Annual 2140.8% 10% $ Lights User-defined  Ba16s3eline changes0 during availab2le0?,000 19,193 yes/no 0$  Change in GHG emiss9i2o,n29f5actor -2%02%2 170.0%0 1470.9% 960,110340.2% 78,000 duration yr savings income 103,832 -102%3 810.3% 172.2% and 94.9%0 960,10740.5% 171.4% 20% Contingencies % $ (1,200) $ - Fuel cost - base case 170.5% 155.6% $ 115,369 156,190 0%24 169.6% 154.8% 168.7% 153.9% Lights Sub-total: sceascea-se system GH-G summAEalnerncyutr1a(i2Bcl8iiatnysceeoxlmipneoert) 10,000 5,220 0$ (1,210.90) Electricity export income $ 126,906 0 10%25 153.0% Electrical equipment Fuel cost - proposeBda income GHG reduction income - 0 yrs $ 138,442 0 20%26 152.1% Computer Natural gas - - Elec14tmric³ity exported t2o01g,8ri9d1 $ 391 M0W.4h00 0$ 8,0705.06 Customer premium income (rebate) $ 0 27 0 0 960,104 Hot water Electricity ElecMtrWicihty export rate1,066 CO2 e$mission$1/0M0W.0h0C0H4$emissio1n0.60,0612 NOt2hOer einmcoimsesi(ocnost) - yrs $Fuel GH0G em28ission 0 0 960I,n1i0ti4al costs Hot water Sub-total: 8 - Elec-tricitFyueexplomrt iinxco0me facto4r1 $ 0$factor 115,0306.09 CE prfoadcutcotironincome - yrs Decbotnin$stuermespt traioten 0 fac2t9or G5H2,G000e0 mission 580,500 960,10645,000 Pumps Electricity exp%ort escalation rate kg/GJ % Totalkagn/nGuJal savings and income $MW%h 156,19tC0 O2/3M0 Wh -20%t0CO2 -100% 960,1040% Fans Annual savings Fuel type - kg/GJ 4.80% 247.1%0 2160.6% 960,110942.2% Motors Fuel cost - base case Natural gas - 5.470%29 -203%1 246.2%0 130.4 2150.7% 960,110941.3% 30 Hp Natural gas Ele-ctricity GHG reUdnuitcti3o6n.2in%comQeuantity Unit cost  Amount 61.0,20%82 -1003%.2179 245.3%0 271.2 2140.8% 960,101490.4% 10 Hp Electricity Tot-al 00%3.3212 2130.9% 960,110849.5% Process electricity Net5229Gm40H³G1r60e03du..08c%%tion150,6,00900,00976 $ 2,343 tCO2/yr 00$ 2173,509409..380Financial  62.6,0%11 244.4%0 401.7 2130.0% 960,110848.6% NetMGWHGh reduction - 12,02y8r2s 6,462 tCO02.4/y0r0 viability % 7.20% 100%3.4200 243.5%0 $ 1t0C0O.0200 $ 12,2780,6200 Pre-tax IRR - equity 190.4% 20%35 Process heat Sub-total: GHG reduction credit rate $/tCO2 $ 156,190 Pre-tax IRR - assets % 58.8% 36 0 0 960,104 Process steam GHG reduction income $ 0 37 0 0 960,104 Steam losses Periodic costs (creditPs)roposed case system GHG sumGmHGUanrreyidtu(Ectnioenrcgreydeit Yfdfeuicraairteionncy measUunriet scopsyrtroject) 38 0 0 960,104 Amount After-tax IRR - equity  Risk a%nalysis 190.4% Heat recovery User-defined Net cGoHsGt reduction - 0 yrs tCO2 $ 0 - After-tax IRR - assets % 58.8% 39 0 0 960,104 Compressed air End of project life - N2O emission 0 960,104 Compressor GHG reduction credit escalaCtiOon2raetemission % CH4$emission PerformFauneallysis on GHG em4A0fitsesr-itoaxnIRR - equity0 0 960,104 Refrigeration 2.4- Simpfleacpatoybrack Va0lue 960R,1a0n4ge (+/-) Cooling system - - 6c0ostFuel mix10,000 fa ct3o,9r49 20$f0a ctor Equitykgpa/GybJack conysrumption 1.5 fac4t1or GHG e0 mission 650,000 960,10410% Other Fuel type 176 kg/GJ -10,200 960,101400% Total 176 Customer prem%ium income (rebakteg)/GJ 0.0  Pa ra myrMe tWe r h 0t.C5 O2/4M2 Wh Unitt0CO2 1150,369 960,1045% Minimum Maximum - EElleecc-ttrriicciittyyG1pp7orree.tmm6o%iiuuEmmmi(inrs0ecsboiaomtnee)A(rneablaytsei)s 2s,0h4e3et %0 Initial costs 43 $0 58,500 71,500 Natural gas $ 0 Net Present Value (NPV) O&M $ 228 $0 40.8 0 -2,400 El1e7c1tricity % 1,200 359,945 04.4179 109,600 121,137 1.55 Annual life cycle savings 148,380 163,999 He1a,0ti1n6g pr8em2.iu4m%(r6e5b,a00te0) 40,821 Fuel $c/oysrt -1p,0ro6p6osed ca4s2e,279 04.5212 $ 0 225.6 67% 74% 5.40% 6.60% Total Heating p1r0em0.iu0m%income (rebate) $ 0 Fuel cost -1b,2as9e4case 04.6206 $ 0 266.4 1560,190 960,1045% 8 12 Summary  Show data Cooling premium (rebate) % TB&eDnelfoit-sCsoesst (B-C) ratio Debt ratio 19.46 47 Total % 0 266.4 700% 960,1045% Cooling premium income (rebate) $ 0 Debt service coverage Debt interest rate 6.93 48 %0 6.00% 960,10410% GHG emissioFnuerel duction summCaurystomeBrapsreemcaiusem income (rebate) Propose$d case 0 FueElnceorsgtysparvoindgusction cost Deb$t/MteWrmh 49 yr 0 010 960,10420% GHG reduction cost $/tCO2 50 Fuel Fuel cost (312) 0 0 960,104 Gross annual consumption - OtheFr uinecl ome (cost) Fuel  GHG emission Impact - After-tax IRR - equity Fuel type unit Fuel rate coEnnsuemrgpytion Fuel cost consumption MWh Fuel cost Fuel saCveudmulativesacavisnhgsflows graph reduction Net annual Fuel cost - base case Electricity tCO2 Fuel cost - proposed case Natural gas MWh $ 100.000 R1a,t2e82.0 Year$s of 128,200 Ba see2m11,c,08ia6s96ss0..1ei7on$/My$$$$Wr PhGrHoGp11o01es658me,,,637d165i296scsiaosne4820,1058.59.01,200,$$$00 0 21,587 135.3 GHG credits GHG emission Initial costs Total m³ $ 0.400 OD6u9thr,9ae7tri5oi.non7ccocmuer$(r$ceonstc)e 27,990 19,234 transaction fee Debt ratio 156,1G90HG 40,821 reduction O&M Project verification % Debt term Fuel type cEpornnoesjuFremugcepytltieonff-iciecnoncsyuFmumepletioansu- reCscloeEnassnFucumaEelanpl tteiioorngn1yra(ttyCoercEo-)1npsruFomudepultciotinon- tCO2 % tCO2 tCO2 Debt interest rate Sorted by the impact Electricity inc4o0m1e.7 266.4 1,000,000 135.3 unit historical BCaEsepcroadseuction variance MWh 1,066 MWh 1,300.0 C1E,2p82ro.0duction credit-1r%ate $/kWh Natural gas Nemt³annual GH6G0,0e0m0.0ission reC6dE9u,9cp7tr5oio.d7nuction incom14e% 135 $ tCO2 0 is 8e0q0u,0iv0a0lent to 24.7 Cars & light trucks not used CE production credit duration yr Energy Energy - base case Heating Cooling ECleEcptrriocdituyction credTitoetascl alation rate % Energy - proposed case MWh MWh MWh MWh Energy Energy saved 547 248 CodmeplilveetreedFinancial Analysis she6e0t0,000Cumulative cash flows ($) Energy saved - % 171 176 1,199 1,994 1,016 1,363 (MWh) Clean energy Fue18l 4type 376 72 631 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 68.7% 28.9% 1 E1le5c.3tr%icity 31.6% 1,066 Yes 2 Natural gas 228 No Relative impact (standard deviation) of parameter No 400,000 Benchmark 3 Energy unit Reference unit kWh 3,850 4 No Median % 189.7% User-defined m² 2,000 5 m² 6 No Level of risk % Benchmark Energy Heating Cooling 7 Electricity Total No 200,000 Minimum within level of confidence % 138.2% Energy - base case kWh/m² kWh/m² 8 kWh/m² kWh/m² No Maximum within level of confidence % 265.1% Energy - proposed case Energy saved 142 64 9 312 518 No 44 354 98 164 No Distribution - After-tax IRR - equity 46 # 264 No 0 19 # 48 No 0 1 2 3 4 5 616% 7 8 9 10 11 12 13 14 15 16 17 18 19 20 # No Complete Cost An#alysis sheet No -200,000 14% # No 12% # No Frequency # No 10% # No 8% # No Year 6% 4% 2% 12023.0% 0% 15.4% 16.7% 17.9% 19.2% 20.5% 21.7% 24.3% 25.6% 14.1%

RETScreen® Energy Efficiency ModelRETScreen Energy Model - Energy efficiency measures projectFuels & schedules Show data Base case vs. proposed caseFuel Fuel type 1 Fuel type 2 Fuel type 3 Fuel type 4 Fuel type 5 Fuel type 6Fuel type Electricity Natural gas - m³ Steps:Fuel consumption - unit #N/A #N/A #N/A #N/A • Fuel & schedulesFuel rate - unit MWh m³ #N/A #N/A #N/A #N/A • Facility characteristicsFuel rate $/kWh $/m³ • (energy + costs) 0.100 0.400 • SummarySchedule Unit Schedule 1 Schedule 2 Schedule 3 Schedule 4 Schedule 5 Schedule 6 • Energy savingsDescription °C 24/7 Occupied Occupied Occupied Occupied • Project verification °C Occupied Unoccupied Unoccupied Unoccupied Unoccupied • BenchmarkingTemperature - space heating +/-°C 23.0 21.0 Occupied Occupied Occupied OccupiedTemperature - space cooling 23.0 24.0 h/d h/d h/d h/d 121 h/yrTemperature - unoccupied % h/d Unoccupied 0 0 0 0 °C 24 3.0 0% 0% 0% 0%Occupancy rate - daily d 24 Monday d 24 Occupied Tuesday 24 h/d Wednesday 24 18.0 Thursday 24 18.0 Friday 24 18.0 Saturday 8,760 18.0 Sunday 100% 18.0 18.0Occupancy rate - annual 18.0Heating/cooling changeover temperature 6,570Length of heating season 75%Length of cooling season 16.0 242 123Facility characteristics Show data Show: Heating Cooling Electricity Incremental Fuel cost Incremental Simple payback Include Fuel saved GJ GJ GJ initial costs savings O&M savings yr measure? Heating system $ Boiler 0 - - $ $ Cooling system 0 Air-conditioning - 0 - 0 0- Building envelope 0 Appartment building 2,686 0 - 0 0- Ventilation 28,659 Lights 60,000 0 2.1 Electrical equipment Hot water 2,686 0 0 60,000 28,659 0 2.09 Other TotalSummary Show data Fuel type Fuel Base case Proposed case Fuel cost savings Natural gas Fuel Total consumption - Fuel rate Fuel Fuel cost Fuel Fuel cost Fuel saved Fuel cost unit 0.400 consumption $ 64,078 consumption $ 35,419 71,647.8 savings Project verification $ 64,078 $ 35,419 Fuel type m³ $ 160,194.2 88,546.3 $ 28,659 Natural gas $ 28,659 Energy Fuel Fuel Fuel Fuel Energy - base case consumption - consumption - consumption consumption - Energy - proposed case Energy saved unit historical Base case variance Energy saved - % m³ 160,194.2 Benchmark Heating Cooling Electricity Total Energy unit GJ GJ GJ GJ Reference unit 0 0 User-defined 4,204 0 0 4,204 2,324 0 0 2,324 Benchmark 1,880 1,880 Energy 44.7% 44.7% Energy - base case Energy - proposed case kWh 7,500 Electricity Total Energy saved m² 2,000 kWh/m² kWh/m² m² 0.0 Cooling 0.0 155.7 Heating kWh/m² 0.0 86.1 kWh/m² 69.6 0.0 155.7 0.0 86.1 0.0 69.6

Facility Types Residential, Commercial & Institutional Buildings Both New & Existing Facilities Industrial Plants & Processes 122

Understanding the Output of RETScreen®’sEfficiency Model 123

Heating & Cooling Systems are Different These provide heating and cooling These require heating, cooling & electricity 124

Energy vs. Fuel No energy requirement, so always 0 Energy: heating, cooling & electricity requirement Fuel: fuel (including electricity) expended to supply heating, cooling, ventilation, lighting, etc.; reflects efficiency of conversion from fuel to energy 125

“-” versus “0”• “-” indicates “not applicable”: building system can’t influence this column• “0” indicates with current parameters, building system doesn’t influence columnHeating system affects only heating column Cooling system affects only cooling column Envelope & ventilation affect only heating & cooling Lighting requires only electricity 126

Electric Loads can Affect Envelope and VentilationHeating and Cooling Requirements Heat from lightsaffects heating & cooling energy requirements 127

Fuel Savings• Only configuration where non-zero figures appear for heating & cooling system Fuel savings due to Fuel savings due to reduced energy heating & cooling system requirements efficiency improvements-envelope improvements 128 -more efficient ventilation -reduced operating hours

Demonstration• Can add/remove with “Include Measure” • Test different options• Simple payback included because it is only financial indicator calculable with given information• Project verification permits comparisons between RETScreen®’s fuel consumption and annual fuel bills• Benchmark expresses fuel or energy on a per unit basis (e.g., GJ/m2, GJ/ft2 or of floor space) 129

Cost and Financial Analyses RETScreen Financial Analysis - Power project• Detailed cost and credit analysis Financial parameters Project costs and savings/income summary Yearly cash flows General (initial, periodic, annual and end of project life Initial costs Year Pre-tax After-tax Cumulative costs/credits) Fuel cost escalation rate Inflation rate % 2,0% Feasibility study 0,3% $ 2 000 000 # $$ $• List of project costs specific to technology Discount rate Project life % 2,0% Development 2,8% $ 22 000 000 0 -236 123 767 -236 123 767 -236 123 767 (e.g. geothermal heat exchanger, landfill gas) Finance % 10,0% Engineering 15,8% $ 125 000 000 1 10 843 430 10 843 430 -225 280 337• Financing Incentives and grants Debt ratio yr 30 Power system 81,1% $ 639 745 890 2 11 950 169 11 950 169 -213 330 168 (including capital investment, debt ratio & length, Debt interest rate, discount rate and inflation) Equity Heating system 0,0% $ 03 13 079 044 13 079 044 -200 251 124 Debt interest rate• Taxes on equipment & income (or savings) Debt term Cooling system 0,0% $ 04 14 230 495 14 230 495 -186 020 629• Environmental credits and/or subsidies Debt payments $ 500 000 User-defined 0,0% $ 05 9 884 572 9 884 572 -176 136 057 (e.g. GHG credits, deployment incentives) Income tax analysis Effective income tax rate % 70,0% Energy efficiency measures 0,0% $ 06 16 602 946 16 602 946 -159 533 111• Decision-maker’s definition of cost-effectiveness Loss carryforward? Depreciation method $ 552 122 123 Balance of system & misc. 0,0% $ 07 17 824 876 17 824 876 -141 708 235 (e.g. payback period, IRR, NPV, life cycle savings, B-C ratio) Half-year rule - year 1 Depreciation tax basis $ 236 623 767 Total initial costs 100,0% $ 788 745 890 8 19 071 244 19 071 244 -122 636 991 Depreciation rate Depreciation period % 7,00% 9 20 342 539 20 342 539 -102 294 452 Tax holiday available? Tax holiday duration yr 30 Incentives and grants $ 500 000 10 15 544 289 15 544 289 -86 750 163 Annual income $/yr 44 493 536 11 22 961 917 21 654 135 -65 096 028 Electricity export income Annual costs and debt payments 12 24 311 026 22 371 253 -42 724 775 Electricity exported to grid Electricity export rate O&M $ 19 359 874 13 25 687 117 23 127 566 -19 597 208 Electricity export income  Fuel cost - proposed case Electricity export escalation rate $ 220 158 510 14 27 090 730 23 920 965 4 323 757 GHG reduction income % 15,0% Debt payments - 30 yrs $ 44 493 536 15 21 793 074 19 029 526 23 353 283 Net GHG reduction No Total annual costs $ 284 011 920 16 23 338 495 19 963 592 43 316 875 Net GHG reduction - 30 yrs GHG reduction credit rate Declining balance 17 24 695 136 20 743 821 64 060 696 GHG reduction income GHG reduction credit duration yes/no Yes Periodic costs (credits) 18 26 078 909 21 551 546 85 612 242 Net GHG reduction - 20 yrs GHG reduction credit escalation rate % 90,0% Maintenance - 5 yrs $ 5 000 000 19 27 490 358 22 385 097 107 997 339 Customer premium income (rebate) % 8,0% $ 0 20 21 500 299 16 927 581 124 924 920 Electricity premium (rebate) Electricity premium income (rebate) yr 15 End of project life - cost $ 10 000 000 21 32 623 148 26 014 199 150 939 119 Heating premium (rebate) Heating premium income (rebate) yes/no Yes 22 34 165 482 26 953 510 177 892 629 Cooling premium (rebate) Cooling premium income (rebate) yr 2 Annual savings and income 23 35 738 662 27 913 151 205 805 779 Customer premium income (rebate) Fuel cost - base case $ 0 24 37 343 306 28 891 623 234 697 402 Other income (cost) Energy Electricity export income $ 290 398 107 25 30 777 013 22 914 851 257 612 253 Rate Other income (cost) GHG reduction income - 20 yrs $ -1 467 964 26 40 649 515 30 899 048 288 511 301 Duration Escalation rate MWh 4 839 968 Customer premium income (rebate) $ 0 27 42 352 376 31 924 949 320 436 251 Clean Energy (CE) production income $/MWh 60,00 Other income (cost) - 20 yrs $ 200 28 44 089 294 32 963 558 353 399 808 CE production CE production credit rate $ 290 398 107 CE production income - 15 yrs $ 4 839 968 29 45 860 950 34 013 253 387 413 062 CE production income CE production credit duration % 2,0% Total annual savings and income $ 293 770 312 30 20 497 616 20 497 616 407 910 678 CE production credit escalation rate 31 0 0 407 910 678 Fuel type  32 0 0 407 910 678 1 Natural gas 2 tCO2/yr 0 33 0 0 407 910 678 3 4 tCO2/yr -733 982 Financial viability 34 0 0 407 910 678 5 6 tCO2 -22 019 461 Pre-tax IRR - equity % 7,6% 35 0 0 407 910 678 7 8 $/tCO2 2,00 Pre-tax IRR - assets % -0,2% 36 0 0 407 910 678 9 # $ -1 467 964 37 0 0 407 910 678 # # yr 20 After-tax IRR - equity % 6,7% 38 0 0 407 910 678 # # tCO2 -14 679 641 After-tax IRR - assets % -1,1% 39 0 0 407 910 678 # # % 2,0% 40 0 0 407 910 678 # # Simple payback yr 14,5 41 0 0 407 910 678  Equity payback yr 13,8 42 0 0 407 910 678 % 5,0% 43 0 0 407 910 678 $ 0 Net Present Value (NPV) $ -72 272 969 44 0 0 407 910 678 % Annual life cycle savings $/yr -7 666 662 45 0 0 407 910 678 $0 46 0 0 407 910 678 % Benefit-Cost (B-C) ratio 0,69 47 0 0 407 910 678 $ 0 Debt service coverage 1,24 48 0 0 407 910 678 $ 0 Energy production cost $/MWh 61,41 49 0 0 407 910 678 GHG reduction cost $/tCO2 No reduction 50 0 0 407 910 678  MWh 100 Cumulative cash flows graph $/MWh 2,000 500 000 000 $ 200 yr 20 % 2,0%  400 000 000 MWh 4 839 968 $/kWh 0,001 300 000 000 $ 4 839 968 yr 15 % 2,0% Energy 200 000 000 Cumulative cash flows ($) delivered (MWh) Clean energy 4 839 968 Yes 100 000 000 No No No 0 No 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 No No -100 000 000 No No No -200 000 000 No No No -300 000 000 No No No No No Year 130

Types of Costs and Credits• Credit is a base case cost that is avoided in proposed case• Costs/credits classified by when they occur • Initial costs/credits: Year 0 (time of construction/installation) • Annual costs/credits: Fixed amount in each of Year 1, 2, 3, … • Periodic costs/credits: Fixed amount in Year n, 2n, 3n, … (n ≠ 1) • End of project life costs/credits: Final year of projectAnnual Credits End of Project Life CreditY0ear 1 2 3 4 5 6 7 8 9 10 0 Periodic CostsInitial Costs 131

Determining Incremental Costs• For RETScreen® to calculate total incremental costs, user supplies: • Incremental costs (i.e., user subtracts base case costs from proposed case costs) -or- • Costs for the proposed case & a credit for the total base case costs (i.e., RETScreen® subtracts base case costs from proposed case)• RETScreen® calculates fuel costs automatically • Fuel cost in the base case (an annual cost) • Fuel cost in the proposed case (an annual savings) • RETScreen® calculates the difference to find incremental annual fuel cost savings 132

Costs in Start Page Method 1 Single sheet analysis: all costs in Energy Model tab 133

Start Page Method 1 Entering Costs in Forms 134

Start Page Method 1Entering Costs in Energy ModelHeating projectHeated floor area for building m² Base case Proposed case IncrementalEnergy efficiency measures 1,000 initial costsHeating load for building W/m² 10%Domestic hot water heating base demand % 60 54 $ 1,500 10% 10%Total heating MWh 250 225 kWBase load heating system Fuel Rate: MWh Standard Eff Boiler 101.9% $ 1,500Technology price per unit 60.0 55.0 100.0%Capacity % 250.0 225.0 Column forHeating delivered of fuel GJ Natural gas - GJ GJ incrementalFuel type $/GJ Natural gas - GJ 92% $/GJ initial costsSeasonal efficiency $ 83% 880Fuel consumption - annual 1,084 9.000Fuel rate 9.000 7,924Fuel cost 9,759• For Heating Project, Cooling Project, CHP, renewable energy projects, etc. 135

Start Page Method 1Entering Costs in Financial Analysis Financial Analysis Initial Financial parameters % 2.0% Total incrementalincremental Inflation rate yr 20 cost from formscosts/credits Project life % 0% & Energy Model Debt ratio $ 96,050 appears here Initial costs $ Energy efficiency measures $ 96,050 Can enter Other additional costs Total initial costs and credits Annual Incentives and grants $ hereincrementalcosts/credits Annual costs and debt payments $ -4,200 136 O&M (savings) costs $ 140,617 Fuel cost - proposed case $ 1,000 Heating Project O&M costs $ 137,417 Total annual costs Annual savings and income $ 179,137 Fuel cost - base case $ -2,000 Cooling Project O&M savings $ 177,137 Total annual savings and income

Costs in Start Page Method 2 More detailed analysis; dedicated Cost Analysis 137

Start Page Method 2Entering Costs in Forms• Same as for Start Page Method 1 138

Start Page Method 2: Cost Analysis User picks cost or credit Total costsInterest during construction from forms appear here Years 7, 14, 21 … (not just once in year 7) Periodic & end of project life costs (ignored in Start Page Method 1) 139

DemonstrationCost Analysis Tab: Method 1 Versus 2• Method 2: detailed checklist of initial cost and annual cost line items• Method 2: list of project costs specific to technology• Ground heat exchanger (tied to ground heat exchanger tool)• Landfill gas (tied to landfill gas tool)• Fuel handling system• User-defined User picks• Various renewable energy technologies (hydro, wind, solar) technologyBalance of system & miscellaneous Ground heat exchanger 1,000 $ from drop- Specific project costs kW 0.4 $ 3,000 $ down list Circulating pump m³ 0.19 $ Circulating fluid m 542 $ 20 $ 415 Trenching & backfilling m 1,084 $ 3$ 575 Loop pipe kW 24.4 $ 20 $ 10,842 Fittings & valves 3,253 489 140

DemonstrationCost Analysis Tab: Rightmost Column• User configures information to be displayed in rightmost column• Calculations are not affected• Notes/range: User enters explanatory notes for each line item• Second currency: User specifies % of each line item that must be paid for in a secondcurrency User specifies exchange rate• Cost allocation: User specifies % of each line item to be allocated to a second budget • E.g., can be used to track contribution of different departments or fraction of costs eligible for a grant 141

GHG Emission Analysis • Standardised methodology validated by a team of experts from Government and Industry • Three methods available: 1. Standard analysis: RETScreen® automatically uses IPCC and industry standard values for: • CO2 equivalence factors for CH4 and N2O • CO2, CH4, and N2O emissions for common fuels • Efficiency for conversion of fuel to heat or electricity 2. Custom analysis: the user specifies these values 3. User-defined analysis: user can enter GHG emission factors directly 142

What Needs to Be Calculated?• Annual greenhouse gas emission reduction • Base case (typically conventional technology) vs. proposed case (clean energy technology) • Units: tonnes of CO2 per year • CH4 and N2O emissions converted to equivalent CO2 emissions in terms of their global warming potential 143

Sources of Emissions• Electricity Generation • Grid (emissions produced off site) • Electricity produced on site• Fuels Combusted on Site• Refrigerant Losses • Synthetic refrigerants extremely powerful GHGs• Landfill Gas Emitted or Flared • Methane is a powerful GHG 144

Electric Grid GHGs: Baselines• Baseline: Assumed emissions associated with each MWh of grid electricity that is consumed/saved • Average emissions (historic or anticipated) for national/subnational area • Emissions associated with generator at the margin (i.e., that will be ramped up or down); typically natural gas or hydro• Choice of baseline both tricky and critical for GHG credit sales • Dispatch of generating units • Imports and exports• Electric losses in transmission and distribution system (i.e., between generator and consumer) increase emissions per unit of electricity consumed 145

Components of Emissions Analysis Base case electricity system (Baseline) User specifies baseline foUrseelrescptreicciiftiyes baseline for electricity (emissions factor for grid electricity) Base case system GHG summary (Baseline) For all base case emissions sources (fuels, electricity, refrigerants), RETScreen® calculates: Quantity consumed • Emissions factor for source = tCO2 emitted in base case Proposed case system GHG summary (Energy efficiency measures project) For all proposed case emissions sources, RETScreen® calculates: Quantity consumed • Emissions factor for source = tCO2 emitted in proposed case GHG emission reduction summary RETScreen® subtracts proposed case emissions from base case emissions to find Net Annual GHG Emission Reduction, in tCO2 146

Start Page Method 1Emission AnalysisBase case electricity system (Baseline) Fuel type GHG emission T&D GHG emissionCountry - region All types factor losses factorCanada (excl. T&D) % tCO2/MWh tCO2/MWh 3.0% 0.202 0.196Database of average emissions factors byGHG emission country and fuelBase case tCO2 868.1 For all emissions 416.1 sourcesProposed case tCO2 452.0 2.0%Gross annual GHG emission reduction tCO2 443.0GHG credits transaction fee %Net annual GHG emission reduction tCO2 is equivalent to 1,030 B Paid to creditingGHG reduction income agency (e.g.,GHG reduction credit rateGHG reduction credit duration $/tCO2 15.00 UNFCCC for CDMGHG reduction credit escalation rate yr 10 % 5.0% projects) 147

Three Options in Start Page Method 2• Method 1: User specifies grid electricity emissions factor • Equivalent to Start Page Method 1• Method 2: User specifies mix of fuels for grid baseline and generator efficiency by fuel type• Method 3: User specifies: • Global warming potential of CH4 and N2O • Grid mix of fuels & generator efficiency by fuel type • CO2, CH4 & N2O emissions factors for each fuel and refrigerant 148

Changing Baseline• RETScreen® permits user to specify a change in electricity baseline emissions factor n years into project • Start Page Method 2 only 149

Clarification: Proposed Case Emissions Factor• In Start Page Method 1, renewable electricity production (e.g., wind) accorded non-zero proposed case GHG emissions • Reflects T&D losses for electricity exported to grid • These pare back base case T&D losses • When T&D losses are equal for base case & proposed case, they cancelBase case electricity system (Baseline) Fuel type GHG emission T&D GHG emissionCountry - region Natural gas factor losses factorFinland MWh (excl. T&D) % tCO2/MWhElectricity exported to grid tCO2/MWh 10.0% 0.269 tCO2GHG emission tCO2 0.242 T&D losses 5.0%Base case tCO2Proposed case 26,280Gross annual GHG emission reduction 7,066.4 353.3 6,713.1 150