EXECUTIVE SUMMARY:

Feasibility of Maximizing Renewables at LNG Facilities

Steve Davis & Associates Ltd.

In collaboration with:

What We Hoped to Learn:

1. Could a single LNG facility reliably maximize its use of renewable energy while meeting schedule constraints?

2. What are the costs and benefits of doing so relative to business as usual?

Our recent Lock in Jobs, not Pollution report concluded that proposed British Columbia LNG facilities could reduce carbon pollution by 30 percent and increase jobs by 40 percent with only a two percent increase in LNG selling price. Such an outcome depended on a new transmission line and collaboration between proponents, which could risk project schedules. Given this, we commissioned NaviusResearch Inc. and Steve Davis & Associates Ltd. to answer two questions:

Our Findings:

Any proponent can can reliably power an LNG plant with renewable energy without impacting project construction schedules. Doing so would create 40 percent more permanent, local jobs, reduces carbon pollution by 45 percent, and increase the sales price of LNG by a modest one percent.

What “Maximum Renewables” Looks Like:

Maximizing renewables at an LNG facility means using energy from wind and natural gas—when winds are calm, natural gas picks up the slack. The existing grid provides electricity for what the industry calls “ancillary services” such as pumps and lighting.

Renewables Provide Reliable Energy

• Wind and natural gas work together without the grid• Combined cycle turbines and reciprocating engines ramp up or down to

follow the wind and provide stable electricity to the LNG facility.• If there’s no wind there’s enough natural gas to power the full facility

• Batteries at the wind turbines• Small batteries at the wind turbines provide 15 to 30 minutes of energy if the

wind drops; this provides plenty of time to ramp up natural gas energy

• Electric drives are already being used• Snohvit E-LNG: Operating since 2007.• Freeport E-LNG: Under construction (Texas).• Woodfibre LNG planning to use electric drives.

Renewables Can Be Built On Schedule:

• Natural gas, wind turbines, and transmission lines can be built in four to five years• The four wind farms in B.C. were built in four to five years

• Natural gas power facilities typically require four years

• Transmission upgrades in Prince Rupert and Kitimat are already underway.

• Proponents don’t have to wait for wind turbines• An LNG facility, if it is built with electric drives instead of direct drives, can

initially run on natural gas and then incorporate wind power as it comes available.

Business-as-Usual vs. Maximum Renewables:

Criteria Maximum Renewable Business As Usual

LNG sales price $11.20 $11.08

Carbon Intensity (tonne CO2eq/ tonne LNG)

0.13 0.24

Permanent, Local Jobs 430 300

% Renewable 44% 0%

NOx Emissions (tonnes per year) 1,100 3,300

Cost (levelize cost $/MWhr) $105 $88

Conclusion: It Can Be Done!

• Any British Columbia LNG proponent could reliably and affordably maximize its use of renewable energy without impacting construction timelines.

• Any British Columbia LNG proponent that chooses to maximize use of renewable energy in its facility will create more permanent local jobs and significantly reduce carbon pollution.