Ontario Biogas Systems Financial Assistance Program - Phase 2 Application Instructions

These instructions provide valuable information and guidance that will help you complete the Phase 2 application form for the Ontario Biogas Systems Financial Assistance Program.

Please note that:

• These instructions match the flow of the Phase 2 application form.
• The information you provide in the application form will assist the Ministry when assessing the eligibility of your proposed project. Providing insufficient information may result in the application not scoring highly in the review process.

| Additional Funding Conditions | Applicant Information | Project Information |
| Construction, Implementation and Commissioning Information | Sources of Funding |
| Economic Benefits | Construction Readiness |
| General Applicant Information, Confidentiality, Consent and Certification |

Additional Funding Conditions

In addition to normal contractual obligations regarding financial reporting and eligible expenses, successful proponents will be required to participate in the following activities to maximize benefits to the project, and to the public:

1. Training and Information Session

Successful project proponents will be strongly encouraged to attend at a training and information session hosted by the Ministry. The sessions will provide operational information to assist the project proponent in successfully deploying their project, and present "lessons learned" from other biogas projects in Ontario and in other jurisdictions. The training and information sessions will be held a few times per year throughout the province.

2. Operational Data Reporting, Tours and Research

Successful proponents will be expected to share key results of their project if they agree. This will help the Program to achieve the goal of fostering innovation in the biogas sector. There is the expectation that you will share operational data to demonstrate the success of your project, such as electrical power output. Also, the Ministry may ask for organized tours or site visits of the project, with your permission, to promote anaerobic digestion opportunities to other potential people or businesses.

A. Applicant Information

1. Contact Information

• Where there are multiple partners in the project, one project lead needs to be identified.
• Information about partners may be attached as an appendix.

2. Sector Information

• Indicate which type of operation best describes where the biogas system will be located.
• If the biogas system is located at one type of facility, but receiving significant amounts of input materials from another, select both the location of the biogas system and the type of facility supplying inputs.

B. Project Information

1. Project Description

Outline the details of the biogas system, including the inputs, the location, and key operational components.

Ineligible projects include:

• aerobic treatment systems (e.g., composting, aerobic high temperature breakdown, combustion of solid materials);
• biodiesel or other biofuel production systems;
• septic tanks;
• sewage treatment works; or
• pyrolysis systems.

2. General Eligibility

What inputs do you intend to use in the biogas system?

Please specify your primary and additional inputs, as well as the proposed per centages and loading rates (e.g. m³/day) for each input material.

The program distinguishes between "primary inputs" and "additional inputs". Primary inputs to the proposed biogas system must consist of at least 75 per cent agricultural products, agricultural by-products, food-based products, or food-based by-product.

• Input material considered to be eligible as primary inputs include:
  • agricultural products such as corn silage or other energy crops;
  • agricultural byproducts such as manure, crop residues (straw, stalks, corn stover, etc), milking centre washwater, and on-farm slaughter waste;
  • food-based products such as marketable food, off-specification food, and unmarketed food products;
  • food-based byproducts including waste food products, washwater, dissolved air flotation waste, and grease-trap waste.
  • other materials which do not clearly fall into the agricultural or food product or byproduct categories may be excluded from the list of primary inputs.
•   Additional inputs, (which could be up to 25 per cent of the input material) may include:
  • septage;
  • municipal or industrial waste water;
  • municipal solid waste, including source separated organics.

The applicant is responsible for any approval requirements needed to handle any input material.

How do you intend to manage the biogas produced by the system?

The proposed biogas system must produce biogas for use in the production of electricity or heat or for fossil fuel replacement.

Your ability to demonstrate effective biogas utilization beyond the basic program requirements of electricity, heat or fossil fuel replacement is key to a successful application and a successful project. It may not be necessary to satisfy all of the factors below, but they will provide some prediction of project success.

Information to present in this section:

• For electrical projects:
  • Is there capacity for your project at the local transmission station (TS)? Print off Hydro One website where available
  • Have you completed your connection impact assessment? If not, can you demonstrate that there is a good likelihood of success?
  • Have you already secured a contract with the Ontario Power Authority if your intent is to sell power under the Renewable Energy Standard Offer Program?
  • If you intend to net-meter the power, is there sufficient electrical demand on-site today to make the project economical? The project should not be contingent on the creation of future electrical demand for net-metering.
• For on-site heat use:
  • Demonstrate existing requirements for heating on-site. The project should not be contingent on the creation of future heat-use on-site.
  • Does the proposed boiler system or other equipment have the ability to operate on impure biogas? Is there engineered design to support this?
• For natural gas upgrading:
  • Where is the closest gas line?
  • Provide a letter from gas utility indicating willingness to consider this project.
  • Has the proposed technology been deployed for agrifood-based biogas, or only for landfill gas or other impure gas? Is there engineered design to support the use of agrifood-based biogas in this system?
• Example of ineligible activities include:
  • continuous planned flaring or venting of the biogas;
  • simple covering of a manure storage system with venting of the biogas produced.

Other activities which result in beneficial use of the biogas may also be considered on an individual basis. Systems proposing inefficient use or discharge to the natural environment may be ineligible for funding.

Note that some biogas usages may require approvals from the Ministry of Environment (MOE) or the Technical Standards and Safety Authority (TSSA).

How do you intend to manage the digestate produced by the system?

The proposed biogas project must manage digestate in a manner that avoids landfill or sewage disposal. Eligible uses include, but not limited to:

• land application of digestate for field crops at the local farm site;
• separation of digestate to allow the solids to be used at horticultural farms and liquids to be used for field crop nutrients;
• production of a solid compost product that is sold to the local agricultural supplies dealer, and a liquid that is land-applied under agreement with local cash-crop farmers; or
• concentration of digestate into a nutrient product, with a water byproduct that contains no nutrients. (In the case of a clean water byproduct, discharge into a sewage system, or other disposal option such as a vegetated filter strip or approved discharge to watercourse, is acceptable).

If your facility does not have sufficient long-term storage for digestate liquids, please specify the intended storage location of the digestate. Some uses of digestate may require approvals from the Ministry of Environment.

Both the construction of a biogas system tank, and the land application of digestate may require Nutrient Management approvals from the Ontario Ministry of Agriculture, Food and Rural Affairs.

Examples of ineligible digestate utilization:

• incineration of digestate solids for heat, with the ash being disposed of at a landfill;
• discharge of digestate liquids containing nutrients into the sanitary sewer.

Systems proposing other digestate utilization plans that do not fit the general eligibility of the Program may be excluded.

3. Please provide further details about the proposed system that may help the ministry in its evaluation.

• Additional information, such as:
  • key drivers for considering this project;
  • location and partners in the project; and
  • synergies this project captures with other activities at the site.

C. Construction, Implementation and Commissioning Information

In this section is used to described the anticipated timeline of activities and equipment installations and a listing of expenses.

1. Timeline of Activities

In Table 1 list each major activity or equipment purchase and when they will take place. The first quarter of the year (shortened to Q1) is January to March. Please note that invoices for eligible project expenses need to be dated on or prior to March 31, 2010 and submitted by June 30, 2010. The construction, implementation, and commissioning of the biogas system or expansion may not be complete and can extend beyond the first quarter of 2010. However, these expenses beyond March 31, 2010 are not eligible for reimbursement.

Eligible expenses must be directly related to the project and would not have otherwise been incurred by the applicants. Expenditures must be actual cash outlays to third parties that are documented through paid invoices and receipts, except for eligible in-kind activities.

Equipment purchases and activities must be located on the same deeded property as the biogas system, except for those items marked with an asterisk (*).

2. Description of Eligible Expenses

In Table 2, list equipment purchases and activities into different types of expenses, for example:

• material for a particular component;
• labour for a particular component; and
• fees for a single activity or group of activities.

Avoid generic activities that have too many sub-activities.

Examples of good equipment or activity descriptions:

Examples of unacceptable equipment or activities:

Details Regarding Eligible Equipment

• For equipment, please cite the size, design, type, or other specifications that will be useful in understanding its application to the project.
• All eligible equipment must be on the same deeded property as the biogas system, except items marked with an (*) asterisk in the list below.
• Eligible equipment includes:
  1. pumps, piping, liquid pipelines, gas pipelines;
  2. biogas utilization equipment:
     1. electrical generation systems;
     2. boilers, combustion systems;
     3. biogas cleaning systems, gas compressors.
  3. electrical equipment and control systems;
  4. heat transfer and heat recovery equipment,;
  5. digester tanks, substrate (input) tanks, pre-treatment tanks, digestate storage tanks;
  6. supplemental flares;
  7. nutrient/organic matter separators;
  8. solid input devices;
  9. augers;
  10. feedstock management systems;
  11. input/output pasteurization systems;
  12. digestate treatment systems;
  13. structures, or portions thereof, containing items 1 through 12 above;
  14. digester and digestate gas storage systems;
  15. * pipelines, associated short-term collection tanks, and pumps for moving inputs or outputs to/from adjacent or nearby properties;
  16. * gas pipelines, and biogas utilization equipment, where biogas is produced at one location, and effectively utilized at an adjacent or nearby location; and
  17. * electrical equipment, including wiring, transformers, transfer trips and other components, required for safe and reliable transmission of electricity from the biogas system site;
  18. other technical equipment subject to approval.

Details Regarding Eligible Activities

Activities that are required to implement or commission the biogas system are eligible for Phase 2. Examples of eligible Phase 2 activities include:

• labour, wages and expenses for services;
• equipment rentals;
• system optimization expenses
  • testing of final feedstock blend
  • tuning of equipment

Activities which received funding from this Program under Phase 1 cannot be re-submitted under Phase 2.

3. Description of Ineligible or Non-Funded Expenses

In Table 3 please list equipment or activities, with a brief description and value, related to the biogas system for which funds are not being requested, but which may help in demonstrating project completeness. For instance, if the livestock barn is being expanded, a production line is being modified, or a new hot water heating system is being installed, this will assist reviewers to understand the entire project, and how the biogas system fits into the larger picture.

There may be few or no expenses that merit explanation if the project is a straightforward installation of a biogas system.

Examples of ineligible Phase 2 equipment include:

• items or expenses that are peripheral to or not connected to the biogas system itself, including, but not limited to:
  • unrelated barn, farmstead, system, or process modifications or expenses
  • purchase of new equipment such as a tractor that will be used largely in other applications
  • new structures not associated with the biogas system
• activities or equipment located off of the deeded property (with the exceptions noted above).

Activities (including labour or expenses) related to equipment listed above is an ineligible expense.

4. Eligible Expenses Timeline

Summarize in Table 4 the expected time of expenses from activities and equipment listed in Table 2.

• Eligible expenses incurred on or after January 1, 2007 may be retroactively supported for successful projects.
• Provide a single price, not a price range. Use your best estimate of expenses if they are not yet finalized.
• For individual items exceeding $25,000 in value, you may be required to provide copies of at least three written tenders to demonstrate the evaluation of alternatives.
  • Written tenders should identify a price from a service provider or vendor who can provide the service or product (or reasonable equivalent).
  • In some instances the lowest tender may not be the best for the project. Where the lowest tender is not the one selected, a written explanation of the rationale for selecting the higher-priced item will be required.
  • At the time of application, the applicants must make a request in writing to the Ministry with a rational for sole or single sourcing.
  • Where insufficient information is provided to demonstrate the evaluation of alternatives, individual expenses exceeding $25,000 may be rejected.

In-Kind Contributions

In-kind contributions are activities that are undertaken by the project proponent (or someone acting on their behalf) for which an invoice is not generated. Examples of in-kind contributions include:

• use of equipment owned by the operation;
• personal or in-house labour which otherwise could have been contracted out.

Where the project proponent undertakes in-kind activities related to Phase 2 activities, reimbursement may be claimed as follows:

• work undertaken by the proponent may be billed at a maximum rate of $20/hour for labour and services.
• equipment use may be billed at a maximum rate of $50/hour.

Eligible in-kind contributions may be claimed as follows;

• Level 1: In-kind contributions up to $1,500.
  • the applicant will provide a signed statement confirming the type of work and hours worked.
• Level 2: In-kind contributions exceeding $1,500, but less than $10,000
  • the applicant will require two written tenders from contractors for equivalent work to demonstrate the value of the activity.
  • the applicant will provide a signed statement confirming that the work was completed.

The Ministry reserves the right to limit the funds related to in-kind activities.

In-kind contributions can be anticipated and listed on the eligible expenses tables, or can be submitted with other invoices once the work has taken place.

D. Sources of Funding

Phase 2 Funding

Please specify the total funds requested from the Program by completing Table 5.

• Line 4 of the table "Phase 1 funds received for this Project (if any) "should only be filled out if Phase 1 funds were received specifically for activities related to the proposed Phase 2 project.

• List additional funding sources and the amount in Table 6. Other sources of funding may include loans, investments from partners, cash, etc.
• In general, grants received from other provincial funding programs may not be listed as a source of funding for the purposes of this Program.

E. Economic Benefits

The project proposal will be reviewed by a Technical Review Panel to assess if the project will be successful, meets the program objectives, demonstrates economic value of public funds, and contributes to the local, regional, and provincial economy.

Outline the economic benefits of your project in Table 7. including:

• number of jobs created and/or retained;
• total amount of investment;
• spin-off benefits in supply purchases, sales of by-products, if any; and
• how the project contributes to the local, regional, and provinicial economies.

Description of Biogas System Sustainability Plan

Please describe how your biogas system operation will remain sustainable over time in Table 8. For example, will there be a reliable supply of input materials and will there be sufficient labour to manage the biogas system daily.

F. Construction Readiness

Be sure to consult with your local building official early in the project planning period to determine approvals requirements.

• Each local building department has flexibility to require building permits for different components of a biogas system.
• There may be other conditions required prior to securing a building permit, including site plan approval, nutrient management approval, or other conditions.

G. General Applicant Information, Confidentiality, Consent and Certification

1. General Applicant Information

• This section provides detailed information regarding the applicant and the organization(s) involved in the application.

2. Confidentiality

• Application forms and supporting material submitted to the Province of Ontario will be subject to the Freedom of Information and Protection of Privacy Act. Any information submitted in confidence should be clearly marked "confidential" by the applicant.

3. Consent

• All applicants hereby consent to inspection of their premises and/or documents that pertain to this project as described in the agreement by the Province of Ontario or its designate. Successful applicants consent to having their names, funding amounts and short summaries of their projects and results made available to the public. 

4. Certification

• You are certifying that the application is complete and accurate.

| Additional Funding Conditions | Applicant Information | Project Information |
| Construction, Implementation and Commissioning Information | Sources of Funding |
| Economic Benefits | Construction Readiness |
| General Applicant Information, Confidentiality, Consent and Certification |