Midtown Energy Center Feasibility StudayMidtown District Energy
Pre -Feasibility Study
Submitted to
City of Carmel
Submitted by
FVl3
ENERGY INC
222 South Ninth St., Suite 825
Minneapolis MN, 55402
www.fvbenergy.com
Phone 612-338-4489
Fax 612-338-3427
July 14, 2015
MINNEAPOLIS EDMONTON TORONTO OTTAWA VANCOUVER VASIERAS STOCKHOLM
Midtown District Energy Pre -Feasibility Study
City of Carmel July 14, 2015
Situation Summary
Midtown Carmel is a 21 -acre site in Carmel that is being redeveloped by Old Town Development. The
ultimate project size is 1.7 million square feet of building space including mixed use, retail, residential
and hotel/convention center. The first building is under design, and construction is scheduled to
commence in April 2016, with completion of construction of Phases 1 and 2 by the end of 2018.
The City owns and operates a district energy system (DES) south of the Midtown area, serving the
Palladium and municipal buildings. Hot water is produced with condensing boilers and heat recovery
from small modular chillers. This DES has no excess capacity.
The City has requested this proposal to assess the economic feasibility of a new City -owned DES to
serve the Midtown development and potentially other loads in the surrounding area. The pre -
feasibility study proposed herein is a high-level evaluation designed to determine, without spending a
lot of time or money, the potential costs and benefits of a DES for the City and for customers. The City
has indicated that a City -owned site for a potential DES Plant is available just south of the water tower
on the Midtown site.
FVB is willing to sign a Non -Disclosure Agreement (NDA) if desired to protect the confidentiality of
development information.
Data Request
The following data are requested from the City.
1. "Best guess" scenario for ultimate Midtown Carmel redevelopment, including, for each phase:
a. Map location;
b. Building square feet by building usage type; and
c. Year of occupancy.
2. Design information, as available, on the proposed Phase 1 and 2 Midtown Carmel buildings,
including:
a. Square feet of building area by building usage type;
b. Layout drawings; and
c. Default HVAC systems.
3. Current utility prices for commercial buildings:
a. Natural gas
b. Electricity
c. Water
4. For each building served by the existing DES:
a. Building usage type;
b. Building square feet; and
c. 2014 monthly heating and cooling consumption.
5. For the existing DES plant, monthly consumption of natural gas and electricity.
6. City bond rating and interest rate.
7. Confirmation of land availability and utilities access for potential DES Plant site, including:
a. Plot area indicated on map;
b. Natural gas service location and capacity; and
FVB
ENERGY INC
3 (17)
Midtown District Energy Pre -Feasibility Study
City of Carmel July 14, 2015
Deliverables
• Pre -feasibility study report
• Presentation in Carmel to City officials
Project Schedule
Purchase Order or Contract July 22
Receipt of data from City July 29
Submit report Sept. 11
Presentation Sept. 16
Commercial Terms
We propose to undertake the consulting services in accordance with the Scope of Work for a fixed fee
budget of $18,500. The fee will be invoiced when the report is submitted. The budget includes
expenses for a visit to Carmel to present the report.
Payment is due within 30 days of receipt of invoice, after which late charges equal to 1.5% per month
may be assessed.
This commercial proposal is valid until July 31, 2015.
Qualifications
Overview
Who we are
FVB Energy Inc. is an international planning, engineering and management consulting firm which has
specialized in district energy systems for over 40 years. We have offices in Minneapolis (USA), Toronto,
Edmonton, Ottawa and Vancouver (Canada), and Stockholm, Vasteras, Boras, Gavle, Goteborg,
Linkoping, Nykoping, Sundsvall and Orebro (Sweden).
FVB Energy brings the benefits of European experience and expertise in district energy systems,
particularly hot water district heating and CHP, together with North American business, financial and
marketing expertise to assist clients in energy system planning, development and implementation.
Mission
We use our experience and expertise to help clients make wise decisions about producing power,
cooling and/or heating, selling energy to customers, or buying energy from others. FVB Energy
provides a unique and specialized resource to meet client needs:
• Business and technical issues are quickly identified and jointly considered from the outset.
• Valuable "lessons learned" through broad local, national and international experience.
• Knowledge of energy markets and business economics help drive system design decisions.
FV/3
ENERGY INC
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Midtown District Energy Pre -Feasibility Study
City of Carmel July 14, 2015
• On-site marketing and sales support
Engineering
FVB Energy's engineering professionals are industry leaders in the planning and implementation of
district energy, CHP and related renewable technologies:
• District heating, district cooling and power generation plant facilities design
• District hot water, steam and chilled water distribution systems network design
• CHP and power generation plant design
• Thermal energy storage facility design
• Building end-user energy and equipment needs analysis and economic evaluations
FVB Energy works in a variety of engineering roles, including:
• Conceptual design engineer
• Owner's engineer in projects being delivered through Engineer/Procure/Construct,
Design/Bid/Build or other procurement approaches
• Part of Design/Bid/Build or other team
• Final design, specifications and construction drawings and field supervision
• Planning engineer for utility system plant and distribution system planning and modeling for
system expansion and operational optimization
Policy, Legislative and Regulatory Analysis
FVB Energy provides policy analysis and recommendations to local, state and national governments
and international agencies relating to CHP and district energy, including:
• Regulation of energy utilities
• Reform of air emissions regulations to recognize air emissions benefits of CHP and district
energy systems
• Structuring of greenhouse gas (GHG) and other emissions trading programs
• Development and implementation of information and education programs
• Tax policies and incentives
• Financing programs to stimulate use of energy-efficient technologies
• Impact of energy industry restructuring on CHP and district energy
wAsFVB
ENERGY INC
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Midtown District Energy Pre -Feasibility Study
City of Carmel
July 14, 2015
Location
Mammoth Lakes, CA
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Manama, Bahrain
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Markham, Canada
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Marsa Alam, Egypt
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Miami, FL
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Nashville, TN
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New Orleans, LA
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Oregon State University
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Penn State University
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Phoenix, AZ
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Portland, OR
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Prince George, B.C.
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Princeton University
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Rochester, NY
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Sacramento, CA
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San Diego, CA
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Seattle, WA
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St. Paul, MN
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Sudbury, Canada
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Texas Medical Center
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University of Alberta
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University of Calgary
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University of Iowa
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University of N. Carolina
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University of New Mexico
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University of Rochester
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University of Texas Austin
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University of Toronto
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University of Washington
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Washington St. University
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Windsor, Canada
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Yale University
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FVB
ENERGY INC
9 (17)
Midtown District Energy Pre -Feasibility Study
City of Carmel July 14, 2015
experience with EN 253 piping and familiarity with a range of piping suppliers.
We are familiar with a range of strategies for handling thermal expansion depending on routing
constraints. Consultants who are unfamiliar with EN253 piping systems frequently incorporate
unnecessary and expensive designs for expansion.
A key element in ensuring high-quality and timely delivery of
a hot water district heating system is welder training.
Quality is maximized and costs are contained by training and
certifying welders with pre -insulated pipe. FVB has
experience in providing such training or working with the
vendor to implement this critical preparation.
Welder training on pre -insulated steel pipe
FVB also has experience and expertise with direct -buried isolation
valves, which can save significant capital compared with construction
of vaults. For a distribution system of pre -insulated, buried steel
piping, the best solution for direct buried valves for most pipe sizes is
the use of pre -insulated, weld -end ball valves. Along with the benefit
of eliminating the valve chamber, use of weld -end valves eliminates
flanges (a potential source of leaks) and results in a contiguous
welded piping system, where the valves are as strong as the pipe
itself.
Direct buried valve with mechanical actuation
FVB has designed and implemented the two major conversions of U.S. team district heating systems
to modern hot water district heating plant, distribution and building systems. FVB brought European
hot water district heating technology to the U.S., designing a new hot water district heating system to
replace an aging steam district heating system serving downtown St. Paul, MN. The distribution system
has grown to 106,900 trench feet and 485 customers.
Our hot water district heating experience includes:
• life cycle assessment of hot water supply options;
• schematic and detailed design;
• construction supervision and commissioning;
• peer of design work by other consultants; and
• implementation support including procurement of equipment and contractor services.
7
ENERGY INC
Midtown District Energy Pre -Feasibility Study
City of Carmel July 14, 2015
Markham District Energy System
The town of Markham, Ontario was motivated to create a district energy system for two fundamental
reasons:
• An ice storm in Montreal interrupted the supply of electricity, providing a real life example of
what happens when a community relies entirely on an outside resource for electricity.
• Markham was actively trying to attract hi -tech industry to the community and was looking for
an additional edge by ensuring highly reliable, efficient and economical energy.
The district energy system proved to be the added edge that was needed to convince IBM to locate in
Markham. Other hi -tech firms, such as Motorola, have also decided to locate there.
FVB Energy Inc. was involved in the project from the very first feasibility study to a continuing role in
the detailed design of plant, piping and building connection systems. The district energy system that
serves the new Markham Downtown Centre Development began operation on December 1, 2000.
Markham is North America's first district energy system to combine the use of hot water for heating,
chilled water for cooling and combined heat and power (CHP).
The first District Energy plant is located adjacent to the local utility's office. Natural gas fired boilers
within the plant produce hot water for the district heating system. The initial plant has been expanded
several times to add heating and cooling capacity to the system. In 2007 Markham was awarded a 20
year contract for an additional 5.0 MW of CHP by the Ontario Power Authority. In 2008 a second
District Energy plant began operation, and a third plant began operation in 2011. A second separate
district energy system is now under construction.
The entire system is owned and operated by Markham District Energy for the town of Markham.
C7FVB
ENERGY INC
13 (17)
Midtown District Energy Pre -Feasibility Study
City of Carmel July 14, 2015
Regent Park
The Regent Park District Energy project had a large number of energy source alternatives, including
geo-exchange considered at the feasibility study stage. The build -out will have 50 mid -high rise multi -
residential buildings, and townhouses, with 5,000 residential units (two-thirds market units), together
with retail and community amenities. It is also intended to serve some existing buildings.
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Toronto Community Housing
Corporation (TCHC) engaged FVB in
2004. Energy system alternatives
were discussed with stakeholders,
energy demands forecasted,
potential energy sources evaluated
and technical concepts developed,
together with conceptual cost
estimates. Pricing formulae and a
Business Plan were developed.
Studies were made of extending the
DPS to serve nearby existing
buildings, including four high rise
apartment buildings owned by
TCHC that contain a total of 1,200
units.
Assistance was provided in the selection of and negotiations with a private utility partner, Corix
Utilities. The Board of TCHC approved the Business Plan and the project was committed in 2006.
When the Toronto Transit Commission closed down a busy street to replace streetcar tracks in 2007,
this window of opportunity was used to install part of the DPS for Phase 2. The Energy Centre
commenced operation in 2009 serving Phase 1.
At build -out, the Energy Centre will generate over 100 million Btu per hour of heating and 4,500 tons
of cooling, with provision to incorporate a variety of energy sources. There will be over 13,000 trench
feet of buried 4 -pipe heating and cooling distribution piping. The hot water distribution system utilizes
European Standard (EN 253) thin walled steel pipe, insulated with PUR insulation, HDPE outer jacket
and a built in leak detection system. The chilled water system utilizes North American Standard Yellow
Jacket steel pipe.
FVB was the prime consultant responsible for preliminary engineering, detailed engineering,
construction support and periodic review of business development options. All of FVB's deliverables
have been on-time and on -budget. Regent Park Energy (Partnership between TCHC & Corix) owns and
operates the entire system.
FVB
ENERGY INC
15 (17)
Midtown District Energy Pre -Feasibility Study
City of Carmel July 14, 2015
Metropolitan Washington Council of Governments
For the Metropolitan Washington Council of Governments (COG), FVB completed two tasks to support
its initiative to advance district energy utilities, combined heat & power (CHP), and microgrids, which
we collectively call Community Energy Solutions (CES).
Integrating Energy into Local Regulations and Programs
The first report addresses how local governments can facilitate implementation of DES through zoning,
regulations, ordinances, policies and programs. This report describes current policies and regulations
in the COG region, summarizes examples of policies elsewhere, and recommends best practice
strategies for consideration by COG jurisdictions.
The report describes fundamental characteristics of CES and the resulting challenges faced in
implementing these systems, including those relating to: awareness, information & education,
leadership, price signals, capital costs, air emissions permitting, land use, lack of integrated planning,
siting, and grid access. The report provides a range of recommendations for facilitating development
of CES through local policies, regulations, ordinances, zoning and programs.
Business Case for Integrated Energy Solutions
The second report provides an overview of integrated community energy technologies, assesses costs
and benefits, describes implementation challenges, and outlines alternatives models for ownership
and operations. This report:
• Describes these clean energy technology options;
• Provides costs and benefits of a range of technology configurations, including capital
and operating costs, customer savings, power -related benefits, energy efficiency
benefits and environment benefits;
• Summarizes challenges that can constrain the implementation of these systems; and
• Describes alternative models for ownership and operation of these systems.
Resume
This work will be performed primarily by Mark Spurr. His resume follows.
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Carmel Redevelopment Commission
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ENERGY INC
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Mark Spurr
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ENERGY INC
Integrating Energy into Local Regulations and Programs, and the other on
the Business Case for Integrated Energy Solutions.
o Led a study for the International Energy Agency on integrating renewable
energy and waste heat recovery with district energy systems.
o Cost of service study and rate design for a public university utility system
with CHP.
o Assessment of the market for small-scale biomass boiler systems in Min-
nesota.
o Authored "Combined Heat and Power (CHP): Essential for a Cost Effective
Clean Energy Standard", a White Paper for the IDEA.
o Due diligence reviews for sale or acquisition of district energy businesses,
including sell -side due diligence for sale of district cooling assets, bank
due diligence for non-recourse debt financing of a district cooling perfor-
mance contract for an large Saudi Arabian industrial facility, and buy -side
due diligence for acquisition of district energy systems.
o Led FVB's work as principal author of the District Cooling Best Practice
Guide published by the International District Energy Association.
o Ongoing representation of the IDEA with the Congress, White House and
federal agencies relative to energy policy, climate change and environ-
mental regulation.
o Project principal for feasibility analysis of sustainable energy options for
mixed use redevelopment project at site of naval base in Massachusetts.
o Project principal for feasibility analysis of district energy and CH for a large
mixed-use redevelopment area in Seattle.
o Feasibility analysis, conceptual design, rate structure and pro -forma finan-
cial analysis of geothermal district heating system in California.
o Analysis for the International Energy Agency on international and national
carbon dioxide emission trading mechanisms, including recommendations
for trading program structures that will promote district energy and CHP as
a climate change strategy.
o Represented district energy industry in committee which developed special
calculation methodology to provide credit for combined heat and power
and district energy systems in Leadership in Energy and Environmental
Design (LEED) sustainability rating system.
o Rate design study for major university, including analysis of alternatives
and development of a recommended rate structure for an integrated cam-
pus utility system including CHP, district heating and district cooling.
o Technical, economic and financial analysis of geothermal district heating
system and potential use of district heat to provide cooling services.
o Economic feasibility of expansion of municipal district heating system.
o Technical and economic feasibility of district cooling using seasonal aqui-
fer storage of groundwater chilled with ambient winter air.
o Technical and economic feasibility of heat pump system for integrating an
existing district heating system with a potential new district cooling system.
o Economic feasibility of conversion of a coal-fired district heating plant to
combustion of refuse -derived fuel and waste wood.
o Market assessment and technical/economic feasibility of satellite district
heating and cooling system for near-term independent operation and long-
term link -up with established district heating and cooling system.
o Evaluation of the technical, economic and financial characteristics of an
existing district heating and cooling system for potential acquisition.
o Expert testimony for public utilities commission hearing on proposed new
district heating system, including rate structures and customer contracts.
Resume of Mark Spurr Page 2
Mark Spurr
FV/3
ENERGY INC
Selected
Publications
Education
Memberships
Awards
"Expanding Bio -fueled District Energy in the USA." Conference on Fueling
Energy Independence - Bioenergy's Role in the Solution, May 2007
"Dollars, Dirhams & Cooling Demand: Economic Drivers Behind District
Cooling Growth in the Middle East." First Annual Middle East Conference of the
International District Energy Association, January 2007.
"Evaluating CHP in Campus Master Planning: Decision-making in the Face of
Uncertainty," International District Energy Association Workshop on How to Build-
ing Combined Heat & Power on Campus, March 2005.
"Economic and Design Optimization in Integrating Renewable Energy and
Waste Heat with District Energy Systems." International Energy Agency, 2014.
(Lead author)
"District Cooling Best Practice Guide." International District Energy
Association, 2008. (Managed lead authorship of FVB Energy)
"Promotion and Recognition of DHC and CHP Benefits in Greenhouse Gas
Policy and Trading Programs." International Energy Agency Programme of Re-
search, Development and Demonstration on District Heating and Cooling including
the integration of CHP, 2002. (Co-author)
"Combined Heat and Power: Capturing Wasted Energy." American Council for
an Energy Efficient Economy, 1999. (Co-author)
"District Energy Systems Integrated with Combined Heat and Power — Anal-
ysis of Environmental and Economic Benefits," U.S. Environmental Protection
Agency, 1999.
"Integrating District Cooling with Combined Heat and Power." International
Energy Agency Research Program on District Heating and Cooling, 1996.
University of Wisconsin, Management Institute, 1980.
University of Minnesota, Graduate School of Public Affairs, 1976-1978.
Macalester College, B.A., Environmental Studies, Summa Cum Laude, Phi Beta
Kappa, 1976.
Member of International District Energy Association (IDEA) since 1986.
Member of the IDEA Board of Directors (ex officio since 1995).
Contributor to District Energy magazine and newsletter since 1987.
From 1992 until 2012, represented the USA on the Executive Committee, Interna-
tional Energy Agency (IEA) Implementing Agreement on District Heating and Cool-
ing including Integration with Combined Heat & Power.
Norman R. Taylor Award, International District Energy Association, 2001.
Leadership Award, International District Heating and Cooling Association, 1990
Resume of Mark Spurr Page 4