Risk Allocation

The City of Vancouver makes no payments to the private partner, but guarantees provision of landfill gases for the twenty-year duration of the agreement. The City thus assumes the supply risk associated with the project, but it minimizes this risk by retaining responsibility for the management and operation of the gas collection system. The private partner's total investment was approximately $10 million. The private partner signed a power purchase agreement with BC Hydro, and a twenty-year thermal energy sales agreement with the owner of the greenhouse complex. Proceeds form the sales of power and thermal energy go to the private partner, minus a 10% royalty paid to the City. The City's operating costs to capture and provide the landfill gases are approximately $250,000 per year, and the royalties it receives are approximately $400,000 per year.