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Heating - Biomass system - District energy / Canada

Case study assignment

The city of Charlottetown on Prince Edward Island is considering connecting its Civic Centre to the local district heating system, which is primarily fired by wood fuel. The city has hired you to evaluate the impact of such a change on the operating costs and greenhouse gas emissions of the facility.

Site information

Charlottetown is located approximately in the centre of Prince Edward Island and is the smallest provincial capital in Canada with a population of about 35,000 people.

The Civic Centre has a total floor area of 8,000 m² and consists primarily of an arena and an exhibition center. The building is currently heated by oil but the boilers need to be replaced. The average annual efficiency of the oil-fired boilers has been estimated at 63% and the average annual oil consumption is 314,000 L. The domestic hot water load has been estimated at 10% of the total annual heating energy demand.

The distance from the nearest district heating distribution pipe is 100 m. The district heating system is a medium temperature system with a maximum supply temperature of 120ºC.

The district heating plant in Charlottetown produces 85% of its delivered energy from high quality biomass (mostly wood chips) with average moisture content of 45%. The biomass plant operates at a seasonal efficiency of 74%. The remaining energy is produced using #2 fuel oil at 82% seasonal efficiency.

Financial information

The cost to install distribution pipes to connect the Civic Centre to the main district heating network has been estimated at $500/m. The cost for the energy transfer station and removal of existing boilers is estimated at $47,000. All other connection costs are to be borne by the company that owns and operates the district heating system.

Typical financial figures for the analysis are provided by the City: fuel cost escalation rate of 2% (equal to the general inflation rate), discount rate of 10%, debt ratio of 80%, debt interest rate of 8% and a debt term of 20 years. You are also asked to assume a project life of 25 years. The average cost for district heat is $50/MWh (or the equivalent of $118/tonne of biomass for the purpose of this assignment), for electricity it is $0.50/kWh and the delivered cost of oil is $0.40/L.

Prepare a RETScreen study, documenting any assumptions that you are required to make, and report on the significant conclusions from this analysis.


The worked-out solution is the data file selected from within the RETScreen Project Database. The user automatically downloads the Project Database file while downloading the RETScreen software.

Teacher's notes
  • It should be noted that in this case study, RETScreen is primarily being used for its GHG Analysis, Financial Analysis and reporting functions. Most of the basic results relating to energy consumption and fuel costs have already been provided in the Assignment. The inputs to the Energy Model and Heating Load Calculations worksheets are therefore mostly selected to simply ensure that the outputs of RETScreen's energy calculation match the given results, so that the correct energy numbers are passed to the other analysis worksheets.
  • The "heating load for building cluster" can be calculated on the side or found iteratively. Since the oil-fired heating system's seasonal efficiency is known, the user can input different heating loads and observe the effect on the annual fuel consumption (which is also known). This will show that a building heating load of about 100 W/m² corresponds to the given fuel consumption of 314,000 L.
  • For the District Heating Network Design, the "Formula" costing method is used to simplify inputs. Since the cost of the energy transfer station and distribution pipes are known, the cost factors are adjusted to yield the desired cost results. The cost of the energy transfer station includes all changes to the Civic Centre's mechanical room, including the removal of the old oil boilers.
  • Since the Civic Centre is being connected to a larger district heating system, the capacity of the base load heating system on the Energy Model worksheet should be interpreted as that portion of the system's total capacity that is required for the building being analyzed.
  • The base load and the peak load heating systems are defined so that RETScreen will model the correct fuel mix for the district heating system. The biomass boiler capacity is set so that the capacity produced from biomass is 85%. The peak load heating system is defined as an oil-fired boiler and sized at 450 kW so that it produces the remaining 15% of total heating energy demand.
  • All engineering, equipment installation and maintenance costs are borne by the company that owns and operates the district heating system. The only costs borne by the customer (the City) for this project are for the energy transfer station (including removal of old boilers) and the additional distribution line piping. In the actual project, even these costs were financed by the district heating system company and repaid by the customer via a corresponding fixed charge on the monthly energy bills. The $50/MWh energy charge used in this analysis does not include this fixed charge.
Real project


Canada's largest wood-fired district heating system has been in operation in Charlottetown, the provincial capital of Prince Edward Island (PEI), since 1986.

In 1998, the City converted its Civic Centre from stand-alone oil-fired boilers to the biomass-fired district heating system. The Civic Centre is a 8,000 m² facility comprising an arena and exhibition facilities. The old oil-fired boilers were in need of repair and this expenditure was avoided by the connection to district heating.

The PEI Energy Corporation, the company that operates the district heating system, charged no up-front costs for the engineering and installation of the hookup. Instead, PEI Energy is recovering its initial investment via the fixed rate portion of the monthly energy bill that is charged to the Civic Centre. No extra capacity was required at the central plant. All maintenance and service of the district heating equipment is the responsibility of the PEI Energy Corporation.

System description

Using hot water as the heat transfer medium, the district heating system supplies heat to numerous large buildings in Charlottetown, including provincial government offices, the Queen Elizabeth Hospital, the University of Prince Edward Island, the Atlantic Veterinary College, two shopping malls and other commercial and apartment buildings. The system has been extended several times and now comprises a total distribution network of about 16 km. Major investments were made to the system in 1997 to increase capacity and replace emission control systems.

The central plant for the system is currently a Combined Heat and Power (CHP) plant that includes wood- and oil-fired boilers as well as an energy-from-waste facility. The total plant capacity is 35 MW of heat and 1.2 MW of electricity. The system generates about 85% of its energy output from wood and municipal waste with the remainder being produced by oil.

At the Charlottetown Civic Centre, the district heating system replaced three oil-fired boilers for heating and one for domestic hot water. Hot water is also used for the ice resurfacer ("Zamboni") for the hockey arena. About 22% of the heat delivered to the Civic Centre is resold to the adjacent Harness Race Track.

Lessons learned
  • The acceptance of district heating has grown in the community and new connections are continuously being established (both for new and existing buildings).
  • The district heating company pays the full cost of connection to the system and recoups its investment via the monthly energy bill. This has been an effective means of attracting new customers.
The big picture

The community's district heating system was first developed, owned and operated by the provincial government. The system has since been sold and is now owned by a publicly traded company. The system has grown constantly since its beginnings, it continues to incorporate new customers and invests in new technologies to improve efficiency and reduce emissions. Valuable local jobs have been created and it is estimated that 70% of each dollar spent on energy from the district heating system stays in the community, as compared to 10% of the money spent on oil heating.


Recreation centre - Biomass system - District energy, Prince Edward Island, Canada

  • Gregory, Brooke, "Personal communication," Charlottetown Civic Center, 2002.
  • Godkin, David, "Personal communication," PEI Energy Corp, 2002.
  • Ziegler, Urban, "Personal communication," PEMtec, 2002.