Map showing the location for the proposed biogas plant on the Knox Farm property just north of Highway 401 and abutting Cataraqui Conservation property. Graphic via City of Kingston documents.
Editor’s note: This article has been updated since it was originally published on Friday, Dec. 6, 2024. Please see bottom of article for most recently updated information.
Utilities Kingston has recommended that its ambitious and controversial plan to build a ‘Regional Biosolids and Biogas plant’ on City-owned land near the Little Cataraqui Creek Conservation Area be scrapped.
In a report to the Tuesday, Dec. 10, 2024, meeting of the Environment, Infrastructure and Transportation Committee (EIT), the utility company says that, based on a recent business case analysis by Ernst & Young LLP, the project doesn’t make financial sense.
“Utilities Kingston regards the potential project as technically feasible but financially imprudent and a very high-cost option for achieving GHG (Greenhouse Gas Emissions) reductions through biogas production,” says the report from David Fell, President & Chief Executive Officer of Utilities Kingston.
The business case — which examined project delivery options, market demand, risk assessment, and financial viability — was completed in October following the release of an Environmental Assessment (EA) that identified the Knox Farm property off Division Street as the most suitable location for a methane burning facility.
The proposed Biogas plant would be built on an escarpment located just south of the Little Cat Conservation Area.
An example of a biogas plant. Photo via Canada Energy Regulator study ‘Canada’s Adoption of Renewable Power Sources – Energy Market Analysis,’ 2017.
Utilities Kingston said the purpose of the facility was to take sludge from the Cataraqui Bay sewage treatment plant and all curbside green bin organics collected around the city, plus the potential to accept similar waste from across the region, and truck it to the proposed co-digestion facility to turn methane gas emissions into renewable energy.
Methane gas is emitted from the storage of decomposing sewage sludge and household organics waste. The proposed plant would see residue from the process stored in large holding tanks on site and sold to farmers as fertilizer.
Utility Kingston’s report to the EIT committee marks the first time the business case results have been publicly shared.
In a nutshell, it says there wasn’t enough interest from regional partners to supply materials, and the proposed biogas plant’s operating costs would far outstrip its potential revenues.
“The Business Case projected a $5.1-to-$7.2-million-dollar annual net operating loss and identified risks associated with limited interest from external parties to partner on the project and uncertainty in the project’s ability to secure additional organic waste feedstocks needed to increase biogas production,” the report reads.
The Utility’s own recommendation, which will be discussed by the committee and later City Council, is to not proceed with the biosolids & biogas plant.
Critics of the EA study, which was released in late summer, questioned the potential for strong odours associated with methane gas, its proximity to the conservation area, potential risks of offering farm fertilizer with “forever chemicals” and the high cost to build and operate the facility.
The business case analysis puts those potential financial risks into sharper focus.
“For the business to break even annually, $5.1 to $7.2 million funded from property taxes or sewer rates (or a combination thereof) would be required,” the report concludes.
In total, the business case says the facility would cost $293 million in net dollars to operate over a 35-year period, with a projected net revenue loss of $253 million during the same period when the “worst case” scenario was factored in.
The EA initially identified a preferred gas plant design with an estimated capital construction cost of $71.1 million and annual operating costs of $2.1 million. However, those estimates rose sharply following the outcome of the business case.
Ernst & Young concluded the biogas plant would cost $82 million to build using reserve funds and long-term debt. The higher capital investment was based on the assumption of escalating construction costs.
From an environmental point of view, the EA says there would be no impact on noise, air quality, or traffic beyond what is considered acceptable in the province, and the plant would reduce the City’s greenhouse gas (GHG) output.
But the same report makes it clear that economics should kill the plant, not environmental considerations.
The report lays out the alternatives if the EIT Committee accepts the ‘no-go’ recommendation and it’s affirmed by Council at their next meeting on Tuesday, Dec. 17, 2025.
An aerial view of the Cataraqui Bay Wastewater Treatment Plant. Image via Utilities Kingston website.
With this conclusion, Utilities Kingston said it will have to invest in further expanding the Cataraqui Bay wastewater treatment plant, which has enough solid waste processing capacity until 2029. A study of the proposed biogas facility was born out of a decision made a decade ago to not expand the sewage plant to handle the flushing needs of a growing population.
Expanding Cataraqui Bay will come with its own cost.
“Based on an updated cost estimate, the capital cost ranges from $13.3-to $17.3-million dollars (sic), with an estimated average net annual operating cost of $500,000,” according to Fell’s report.
But that’s still cheaper than the upfront capital cost of $82 million and an average of $4.9 million in operating costs to build a stand-alone biogas plant, the report notes.
Proceeding with the status quo of burning methane gas to power equipment at the City’s west-end Cataraqui Bay plant, and to flare off excess methane, will not help to achieve the utility company’s stated goal of reducing GHG emissions, the report adds.
The EIT Committee meets at 6 p.m. on Tuesday, Dec. 10, 2023, in the Council Chamber of Kingston City Hall. Meetings can be attended in person, or viewed live via Zoom or the City’s website. Information on viewing the meeting virtually can be found in the meeting agenda on the City of Kingston website.
Update (Wednesday, Dec. 11, 2024):
City Councillors on the Environment, Infrastructure and Transportation Policies (EITP) Committee voted unanimously to cancel construction of a proposed Kingston Regional Biosolids & Biogas Facility on vacant land north of Highway 401.
At their meeting on Tuesday, Dec. 10, 2024, Committee members were provided with a summary of the Utilities Kingston recommendation, which concluded that building a stand-alone facility, proposed for the Knox Farm property off Division Street, was “financially imprudent” and would be a drain on municipal taxpayers for decades to come.
“We weren’t seeing as a result of this project significant amounts of GHG (greenhouse gas) reduction and the project was anticipated to have a very significant cost of $253 million over a 35 year period, and requiring somewhere between $5 million and $7 million in subsidies every year,” explained David Fell, President & Chief Executive Officer of Utilities Kingston.
The high cost to construct a biosolids and biogas facility, coupled with steep annual operating costs, led to the City-owned utility’s recommendation to stop the project in its tracks.
The EIT Committee heard that the recommendation was 10 years in the making after a former city council had endorsed the need for Utilities Kingston to undertake feasibility studies on the project. The ambitious facility aimed to convert biogas from decomposing sewage sludge and household organics into renewable natural gas.
Heather Roberts, Director of Water and Wastewater Services for Utilities Kingston, said the utility invested about $1 million into the necessary environmental and business case studies before recommending that the project be cancelled in any form or location.
“It’s putting an end to looking at it at Knox Farm, and looking at it period,” Roberts said of the recommendation.
She told the EITP Committee that while the facility was technically feasible, the recent business case revealed a very high cost to achieve GHG reductions, a stated goal of the municipality.
If the project doesn’t proceed, as recommended, the “status quo” will continue at its two sewage treatment plants — Ravensview and Cataraqui Bay — where biosolids will continue to be processed and hauled away for non-agricultural uses by a third party contractor, and biogas will be used to power on-site sewage plant facilities with excess to be flared as needed, Roberts explained. She said the Cataraqui Bay sewage plant, serving the city’s west end, does not have sufficient capacity to process wastewater beyond 2029 and the plant would need to be expanded to accommodate future population growth needs as an alternative to axing the proposed Knox Farm biogas facility.
“We feel we can meet the 2029 timeline,” she told the committee, when questioned about the alternatives.
Roberts said the multi-million dollar cost to expand and upgrade the Cataraqui Bay sewage plant will be the focus of upcoming budget presentations, but that any costs would be funded through development charges.
Councillors on the EITP Committee supported the ‘no-go’ recommendation, which is now expected to advance to the Tuesday, Dec. 17, 2024, City Council meeting for a final decision.
“I agree the financial cost just doesn’t make sense. This is outrageous,” said Kingscourt-Rideau District Councillor Brandon Tozzo.
An unidentified member of the public, who described himself as an avid supporter of the Little Cataraqui Creek Conservation Area, applauded the recommendation, but questioned why the City removed environmental zoning protections at the City-owned Knox Farm property in advance of Utilities Kingston’s recommendation, and whether City Council intended to reinstate the environmental safeguards.
Loyalist-Cataraqui District Councillor Paul Chaves, who chairs the EITP Committee, said Utilities staff could not answer that question, and he urged the citizen to bring that question to a future meeting of the Planning Committee.