Offset Verification Report for Alberta Distillers Energy ...

Offset Verification Report, Version 2.0 February 2013

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Offset Verification Report for Alberta Distillers Energy Efficiency Upgrade Project GHD | 3445 114th Avenue SE Suite 205 Calgary Alberta T2Z 0K6 Canada

11115885 | Report No 7 | Version 5 | Date: December 13, 2017


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Offset Verification Report for Alberta Distillers Energy Efficiency Upgrade Project, Version 5 Verifier: GHD Limited Project Developer: Blue Source Canada ULC Date: December 13, 2017 1) Project Summary Information

Project Title: Alberta Distillers Energy Efficiency Upgrade Project

Project Description A number of voluntary retrofits to the Project Proponent's Facility have been undertaken since 2004, including a number of boiler system improvements and replacement of one boiler burner with a more efficient model, which have resulted in reduced energy usage and reduced greenhouse gas emissions.

Project Location The Project is located in Calgary, Alberta.

Latitude: 51.022872°

Longitude : 114.027167°

Project Start Date: August 1, 2004

Credit Start Date: January 1, 2012

Credit Duration Period:

January 1, 2012 to July 31, 2017.

This period is the 5-year extension from the previous quantification period of August 1, 2004 to December 31, 2011.

Expected Lifetime of the Project:

The Project lifetime extends beyond the crediting period end date of July 31, 2017.


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Actual Emissions Reductions / Removals Achieved:

The emissions reductions of 14,175 tonnes of carbon dioxide equivalent (tCO2e) are claimed for this project during January 1, 2012 to July 31, 2017.

Applicable Quantification Protocol(s):

Quantification Protocol for Energy Efficiency Projects, (version 1.0), Alberta Environment and Parks (AEP), September 2007

Other Environmental Attributes:

Not applicable.

Project Registration: The Project is not registered in any other greenhouse gas programs

Ownership Alberta Distillers Limited

Project Activity: Please refer to Section 6 of this Report.

Project Contact Name: Kelsey Lank

Title: Carbon Solutions Analyst

Phone: 403 262 3026 x 228

Email: [email protected]

2) Verification Summary Information

Objective The objective of the verification is to provide Bluesource, Alberta Distillers, Alberta Environment and Parks, and the Canadian Standards Association's (CSA) Alberta Emissions Offset Registry (AEOR) that the Facility's Offset Project Report (Report) contains no material discrepancy and was prepared in general accordance with ISO 14064 3 and the SGER.


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Summary Bluesource Canada ULC (Bluesource) retained GHD Limited (GHD) to conduct a verification of the Alberta Distillers Energy Efficiency Upgrade Project (Project). The Project is located at the Alberta Distillers Ltd. Facility in Calgary, Alberta (the Facility) and activities consist of a number of voluntary retrofits undertaken since 2004 to increase electricity savings and reduce greenhouse gas emissions. The Project and resulting greenhouse gas reductions are owned by the Project Proponent, Alberta Distillers Ltd. (Alberta Distillers). This verification is for the period of January 1, 2012 to July 31, 2017.

Lead Verifiers Jack Wallace, P. Eng., M.A.Sc.

Sean Williams, P. Eng.

Team Members NA

Subject Matter Experts

Erik Martinez, P. Eng.

Peer Reviewer Brent Boss, P. Eng.

Jack Wallace

Designated Signing Authority

Verification Dates January 1, 2012 to July 31, 2017 credit period.

Site Visit Dates October 2, 2017

Report Date December 12, 2017

3) Introduction

Bluesource Canada ULC (Bluesource) retained GHD Limited (GHD) to conduct a verification of the Alberta Distillers Energy Efficiency Upgrade Project (Project). The Project is located at the Alberta Distillers Ltd. Facility in Calgary, Alberta (the Facility) and activities consist of a number of voluntary retrofits undertaken since 2004 to increase electricity savings and reduce greenhouse gas emissions. The Project and resulting greenhouse gas reductions are owned by the Project Proponent, Alberta Distillers Ltd. (Alberta Distillers). This verification is for the period of January 1, 2012 to July 31, 2017.

The verification was conducted in general accordance with ISO 14064 – Greenhouse Gases standards (ISO 14064), as required by the Alberta Emissions Offset Registry (AEOR) program. Under the AEOR, registered greenhouse gas (GHG) reductions projects report their offsets for


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each crediting period, which are then third party verified before the carbon offset credits can be used as a compliance option for a regulated facility under the Specified Gas Emitters Regulation (SGER). GHD has prepared this Verification Report in accordance with ISO Standard ISO 14064 Greenhouse gases-Part 3: Specification with guidance for the validation and verification of greenhouse gas assertions (ISO 14064 3), the Alberta Specified Gas Emitters Regulation Quantification Protocol for Energy Efficiency Projects, version 1.0, September 2007 and related Alberta Environment and Parks (AEP) SGER Guidance.

4) Objective The objective of the verification is to provide Bluesource, Alberta Distillers, Alberta Environment and Parks, and the Canadian Standards Association's (CSA) Alberta Emissions Offset Registry (AEOR) that the Facility's Offset Project Report (Report) contains no material discrepancy and was prepared in general accordance with ISO 14064 3 and the SGER.

5) Scope

The following sections describe the scope of the Verification.

Project Understanding

GHD understands that Bluesource is seeking an independent third party to provide verification services for the 2012-2017 Vintage Year Offset Credits of the Alberta Distillers Energy Efficiency Upgrade Project. The organizational boundary for GHG accounting purposes is understood to be the physical boundaries of the Alberta Distillers Ltd. facility in Calgary, Alberta (the Facility). The ownership of the Facility, the Project, and the resulting carbon offset credits belongs to Alberta Distillers, the Project Proponent.

GHD understands that the emissions offsets at the Facility are due to a number of voluntary retrofits undertaken since 2004 by the Project Proponent, including:

Replacement of one (1) boiler burner with a more efficient model,

Implementation of a Programmable Logic Controller (PLC) system and Plantscape interface to improve boiler operation,

Increased flow-through,

Higher boiler loading,

Reduced fan power,

Reduced excess oxygen (O2 trim),

Boiler level control stability, and

Improved heat exchange and temperature gain of 10 degrees Celsius, among others.


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The upgrades have resulted in an overall plant energy consumption decrease of approximately 13 percent below 2004 levels.

The project was previously quantified in March 2012 for the crediting period August 1, 2004 to December 31, 2011, which showed that the project generated 18,538 tonnes CO2e of offsets in that period. In 2015, the Project received a five-year extension allowing credit generation from offsets up to July 31, 2017.

The verification services required are thus for the reporting period January 1, 2012 to July 31, 2017. The emissions reductions from this final reporting period are 14,175 tonnes CO2e. The total project lifetime reductions are 32,713 tonnes CO2e.

Facility Emission Sources

The conditions prior to the implementation of the Project consist of emissions resulting from the energy use of the Facility. The project achieves GHG emission reduction through a number of retrofits that reduce gas and electricity use.

Under both the baseline and project scenarios, the Facility has the following emission sources:

Electricity Consumption – Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O), represented as CO2 equivalent (CO2e)

Natural Gas Consumption – Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O), represented as CO2 equivalent (CO2e)

Geographical and Operational Boundaries

The verification included the emission sources from the following Facility:

Alberta Distillers Ltd. 1521 34 Avenue SE Calgary, Alberta T2G 1V9

Reporting Period

The reporting period is between January 1, 2012 and July 31, 2017.

Use of this Report

This Verification Report has been prepared for Bluesource and Alberta Environment and Parks (AEP) for the purpose of verifying the reported emissions offsets of the Project, under the Climate Change and Emissions Management Act and the SGER.

Level of Assurance

GHD has conducted the verification to a reasonable level of assurance. The verification statement is worded in a manner to meet the requirements set forth in ISO 14064 3. Based on this level of assurance, GHD verified that the Facility's assertions are materially correct, free of material


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misstatements, and an accurate representation of the greenhouse gas reductions of the Project, and that the Offset Project Report was prepared in accordance with the Verification Criteria listed in Section 5.2 and the SGER.

Materiality

Quantitative materiality for this verification is set at plus or minus 5 percent of the reported emissions. An individual error, omission, misstatement or the aggregate effect of discrete errors, omissions, or misstatements may be considered material.

6) Program Criteria The Project meets the following program eligibility criteria:

Occurs in Alberta;

Results from actions not otherwise required by law and be beyond business as usual and sector common practices;

Results from actions taken on or after January 1, 2002;

Occurs on or after January 1, 2002;

Is real, demonstrable, quantifiable, and verifiable;

Has clearly established ownership; and

Is counted once for compliance purposes.

GHD has applied the following criteria for this verification:

For this verification, GHD applied the following criteria:

ISO 14064 Greenhouse gases – Part 1: Specification with guidance at the organization level for quantification and reporting of greenhouse gas emissions and removals, ISO, March 2006 (ISO 14064 1)

ISO 14064 Greenhouse gases – Part 2: Specification with guidance at the project level for quantification, monitoring and reporting of greenhouse gas emission reductions or removal enhancements, ISO, March 2006 (ISO 14064 2)

ISO 14064 Greenhouse gases-Part 3: Specification with guidance for the greenhouse gas assertions, ISO, March 2006 (ISO 14064 3)

National Inventory Report 1990-2014: Greenhouse Gas Sources and Sinks in Canada – Part 2, Environment Canada, 2016.

Quantification Protocol for Energy Efficiency Projects, (version 1.0), Alberta Environment and Parks (AEP), September 2007.

Carbon Offset Emission Factors Handbook (version 1.0), AEP, 2015.

Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance (version 1.0), Specified Gas Emitters Regulation, Alberta Environment and Parks, January 2013.


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Technical Guidance for Offset Project Developers (version 4.0), Specified Gas Emitters Regulation, Alberta Environment and Parks, February 2013.

7) Verification Strategy

GHD used the verification procedures detailed in the Verification Plan to assess the following:

1. Accuracy and completeness of annual GHG emissions

2. Uncertainty of external data sources used

3. Emission assumptions

4. Accuracy of emission calculations

5. Potential magnitude of errors and omissions

To sustain a risk-based assessment, the GHD Project Team identified and determined risks related to GHG sink and source emissions during both the desk reviews and the follow-up interviews. The GHD Project Team particularly focused on the accuracy and completeness of provided information. The components of the document review and follow-up interviews are detailed below.

Methodologies Used to Assess/Verify Emissions Data

GHD used the verification procedures detailed in the Verification Plan to assess the following:

Document Review:

- Review of data and information to confirm the correctness and completeness of presented information

- Cross-checks between information provided in the methodology and information from independent background investigations

- Determine sensitivity and magnitude analysis for parameters that may be the largest sources of error

Follow-up Interviews:

- On site

- Via telephone

- Via email

Interviews with Facility personnel to:

- Cross-check information provided

- Test the correctness of critical formulae and calculations

- Review data management and recording procedures

The document review shall establish to what degree the presented documentation meets the verification standards and criteria.

The GHD Project Team's document review during the verification process shall comprise, but not be limited to, an evaluation of whether or not:


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The documentation's completeness and comprehensiveness and whether the structure and verification criteria and its associated guidance were followed.

The monitoring methodologies are justified and appropriate for the specific facility.

The assumptions for the emission calculation are conservative and appropriate.

The reporting methodology clearly identifies the frequency of and responsibility and authority for monitoring, measurement, and data recording activities and sufficiently describes quality control/quality assurance/management control procedures.

Details of Site Visit

GHD conducted a site visit on October 2, 2017. GHD interviewed Blue Source and Alberta Distillers personnel to understand the extent and configuration of the boiler retrofits. GHD discussed data management procedures as well as how invoices for third party electricity and natural gas consumption are tracked, and performed a walk through of the main boiler building, which houses the retrofitted and discontinued boiler equipment.

Details of Document Review

GHD received and reviewed the following documents as part of the verification:

Alberta Distillers Energy Efficiency Upgrade Project: Offset Project Report, November 2017.

Alberta Offset System Greenhouse Gas Assertion of Emission Reduction Credits, November 2017.

Statutory Declaration for Alberta Distillers Energy Efficiency Upgrade Project, November 1 2017.

Alberta Distillers Energy Efficiency Upgrade Project: Offset Project Report, March 2012.

Offset Project Plan: Quantification of GHG Emission Reductions Achieved from Alberta Distillers Energy Efficiency Upgrade Project, Leading Carbon Ltd., March 29 2012.

Offset Quantification Calculator (excel file) for Alberta Distillers Energy Efficiency Upgrade Project, prepared by Bluesource.

Project Summary Memorandum on Project Closure Report – Boiler Automation 2004.

Technical drawing of boiler automation project along with a number of pictures from the Facility.

PDF of Extension Letter by AEP to Bluesource stating the Request for Crediting Extension Period Approval, June 11 2015.

Historic weather data

As a result of GHD's review, all clarifications and issues were resolved through the course of the verification. The details of our review are provided in the Issues Log (Table 1 attached).

8) Verification Plan


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Based on GHD's review of the Facility operations, GHD prepared the table below, which summarizes the potential risk and magnitude of potential errors, omissions, or misrepresentations.

Potential Risk Area

Percentage of Emissions (%)

Risk Type (Inherent, Control, Detection)

Risk Level (High, Medium, Low)

Justification

Baseline Scenario

B4: Generation of Heat and Power

62.33% Inherent High There are a number of retrofits that differ in nature, from boiler level control stability to increased flow-through, which makes the inherent risk high.

Control Low Emissions are based on modelled and logged natural gas consumption and published emission factors, allowing for a low risk.

Detection Medium GHD reviewed a sample of third party consumption data for 2013 for natural gas, and equipment specifications, making the detection risk medium.

B1: Fuel Extraction and Processing Emissions

6.47% Inherent Low The complexity of calculations for reduced natural gas consumption is low. Temperature and natural gas usage data is available.

Control Low Emissions are based on reduced natural gas consumption due to improved heat exchange, using logged data, and published emission factors.


B10: Building Energy Consumption

31.21% Inherent High Complexity of calculations is low. However, large number of lighting fixtures and sources, making the inherent risk high.

Control Low Emissions are based on modelled and logged electricity consumption, operational hours,


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Potential Risk Area




Justification

and published emission factor.

Detection Medium GHD reviewed a sample of third party consumption data for 2013 for electricity, and equipment specifications, making the detection risk medium.

Project Scenario

P4: Generation of Heat and Power



Detection Low GHD reviewed a sample of third party consumption data for 2013 for natural gas, and equipment specifications, making the detection risk medium.

P1: Fuel Extraction and Processing Emissions



Detection Low GHD will review all available boiler and natural gas consumption data, and equipment specifications, allowing for low detection risk.

P10: Building Energy Consumption


Control Low Emissions are based on modelled


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Potential Risk Area




Justification

and logged electricity consumption, operational hours, and published emission factor.


General

Data Management Systems

N/A Inherent Medium Moderate complexity in data management, given numerous sources of data likely collected by multiple employees.

Control Medium Data sources are predominantly accounting records and model extracts; however, the numerous data sources increases the control risk.

Detection Medium/ Low

GHD reviewed all data available to reduce the risk that a material error went undetected.

9) Sampling Plan

GHD developed a Sampling Plan based on GHD's review of the verification criteria. GHD's Sampling Plans are dynamic and the Sampling Plan was revised, as required, throughout the course of the verification.

The table below summarizes the final sampling plan of material sources.

Data/Information Description


Data/Information Source

Collection Frequency

Sample size/Action

Baseline Emissions (BE)


62.33% Third party natural gas consumption record

Monthly or as recorded

All natural gas consumption model records, operational and third party data invoices for 2013

Equipment operations

One-time or as

Database records, drawings, and


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Sample size/Action

records and specifications

recorded lists/packing slips for equipment and fixtures

Maintenance reports

Equipment specification references

Source of emission factors

One-time Carbon Offset Emission Factors Handbook, (Version 1.0, 2015)





Equipment operations records (temperature, pressure, etc.) and specifications

One-time or as recorded

Database records, drawings, and lists/packing slips for equipment and fixtures

Maintenance reports




B10: Energy Consumption

31.21% Third party electricity records


All electricity consumption model records, operational hour and third party data invoices for 2013

Equipment operations records and specifications



Maintenance reports Equipment specification

references




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Sample size/Action

Project Emissions (PE)





Equipment operations records and specifications



Maintenance reports








Equipment operations records (temperature, pressure, etc.) and specifications



Maintenance reports





31.64% Third party electricity records


All electricity consumption model records, operational hour and third party data invoices for 2013

Fixture operations records and


Database records, drawings, and lists/packing slips for


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Sample size/Action

specifications equipment and fixtures

Maintenance reports




General

Operations Overview

N/A Review of facility operations and emission sources

N/A GHD visited the Facility and interview personnel on operations.

Back up of data acquisition systems

N/A General Data Management System

Document retention policy

N/A Reviewed frequency of data backup and interview site personnel

10) Verification Schedule

The following details the schedule of GHD's verification, identifying the dates of key tasks and completion of major milestones:

Project award and kick-off call – Monday, September 4, 2017

Initial document request – Monday, September 4, 2017

Issue Verification Plan – Monday, September 25, 2017

Site Visit – October 2, 2017

Submit Issues Log to Bluesource – Monday, October 2, 2017

Receive Bluesource responses to Issues Log – Monday, October 9, 2017

Issue Draft Verification Report and Statement – Wednesday, November 1, 2017

Receive Bluesource feedback on Draft Verification Report – Wednesday, November 1, 2017

Issue Final Verification Report – Friday November 3, 2017

Issue Revised Final Verification Report – Wednesday, December 12, 2017


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11) Verification Findings

The following subsections provide details of GHD's findings as well as GHD's conclusions. GHD developed a verification issues log to document any issues identified and resolution of those issues. The issues log is presented in Table 1 attached.

Verification Findings

GHD has reviewed the provided documents and found the reductions stated in the Project Report are a fair and reasonable representation of the Project's GHG reductions in accordance with the verification criteria, in all material respects. GHD has concluded that the 2012-2017 assertion of emission reductions of 14,175 tonnes CO2e has been compiled consistent with the requirements of verification criteria. GHD has cross-checked the following:

GHD reviewed the project calculations against the Project Report.

GHD reviewed the quantification methodologies. GHD notes that Blue Source applied the most recent methodology for quantifying GHG emission reductions from the Project, the Alberta Quantification Protocol for Energy Efficiency Projects (Version 1.0, 2007).

GHD reviewed and recalculated the grid emission factor of 0.64 tCO2e/MWh, as applied from Table 2 of the Carbon Offset Emission Factors Handbook (Version 1.0, 2015).

GHD reviewed and recalculated the avoided baseline emissions and project emissions from sampling data for the 2012-2017 period and identified a discrepancy of 0.000%, which does not result in a material misstatement.

Emission Reductions Claimed

The table below presents the baseline and project emissions and emission reductions claimed for the 2012-2017 Reporting Period.

Emission Source Emission Reductions (tonnes CO2e)

2012 2013 2014 2015 2016 2017

B1/P1 Fuel Extraction and Processing

82.80 224.67 184.57 119.85 273.54 125.55

B4/P4 Generation of Heat and Power 798.21 2,165.79 1,779.23 1,155.27 2,636.78 1,210.27

B10/P10 Electricity Usage 254.79 634.06 646.41 739.41 936.29 207.80

Total Offsets

1,135.80 3,024.52 2,610.21 2,014.52 3,846.60 1,543.62

14,175.28

Data Management System and Controls

Retrofits are quantified through a reduction in site electricity and natural gas usage after the installation of boiler burner and associated controls, compared with the baseline condition. The


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baseline condition is taken as metered consumption during the period of January 1, 2000 to June 30, 2004, prior to the retrofit. For electricity, a linear regression model between liters of absolute alcohol (LAA) production and electricity consumption is used to develop a formula to adjust the consumption during the reporting period such that emission reductions from electricity consumption change can be calculated. For natural gas, a linear regression model between LAA and heating degree days (HDD), as determined from weather reports, is used to generate the adjustment formula for emission reductions from natural gas consumption change. Electricity and natural gas consumption are tracked through third party invoices from ENMAX and Shell, respectively.

Blue Source performs internal QA/QC review through senior experts, and any findings or corrections are logged on a tracking sheet and resolved in the documents with updated version numbering prior to issuance to the verification body.

12) Confirmations GHD confirms that this Verification Report was prepared consistent with AESRD requirements stated in the Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance and at a reasonable level of assurance. Specifically, GHD confirms the following:

Consistency of offset project information across offset project documentation

Offset project location and applicable approval information

Methodology documents or procedures manual

Offset project contact, report dates, emission reduction numbers, etc.

Completeness and accuracy of process and data flow diagrams

13) Statement of Verification

GHD Limited has undertaken a reasonable assurance engagement of the accompanying Alberta Distillers Energy Efficiency Upgrade Project – Greenhouse Gas Project Report, Final Report, version 1 (Project Report) for the vintage period of January 1, 2012 to July 31, 2017 (inclusive), with the asserted emission reduction (or removal enhancement) of 14,175 tonnes CO2e. The table below displays the emission reductions per vintage year.

Emission Source Emission Reductions (tonnes CO2e)

2012 2013 2014 2015 2016 2017

Total Offsets

1,135.80 3,024.52 2,610.21 2,014.52 3,846.60 1,543.62

14,175.28

The objective of the verification is to provide Bluesource, Alberta Distillers, Alberta Environment and Parks, and the Canadian Standards Association's (CSA) Alberta Emissions Offset Registry (AEOR) that the Facility's Offset Project Report (Report) contains no material discrepancy and was prepared in general accordance with ISO 14064-3 and the SGER.


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GHD understands that Bluesource is seeking an independent third party to provide verification services for the 2012-2017 Vintage Year Offset Credits of the Alberta Distillers Energy Efficiency Upgrade Project. The organizational boundary for GHG accounting purposes is understood to be the physical boundaries of the Alberta Distillers Ltd. facility in Calgary, Alberta (the Facility). The ownership of the Facility, the Project, and the resulting carbon offset credits belongs to Alberta Distillers, the Project Proponent.

GHD understands that the emissions offsets at the Facility are due to a number of voluntary retrofits undertaken since 2004 by the Project Proponent, including:

Replacement of one (1) boiler burner with a more efficient model,

Implementation of a Programmable Logic Controller (PLC) system and Plantscape interface to improve boiler operation,

Increased flow-through,

Higher boiler loading,

Reduced fan power,

Reduced excess oxygen (O2 trim),

Boiler level control stability, and

Improved heat exchange and temperature gain of 10 degrees Celsius, among others.

The upgrades have resulted in an overall plant energy consumption decrease of approximately 13 percent below 2004 levels.

The project was previously quantified in March 2012 for the crediting period August 1, 2004 to December 31, 2011, which showed that the project generated 18,538 tonnes CO2e of offsets in that period. In 2015, the Project received a five-year extension allowing credit generation from offsets up to July 31, 2017.

The verification services required are thus for the reporting period January 1, 2012 to July 31, 2017. The emissions reductions from this final reporting period are 14,175 tonnes CO2e. The total project lifetime reductions are 32,713 tonnes CO2e.

This verification report and statement has been prepared for Blue Source, Alberta Distillers, and the AEOR.

Blue Source's Responsibility for the Project Report

Blue Source is responsible for the preparation of the Project Report in accordance with the:

ISO 14064 Greenhouse Gases - Part 1: Specification with Guidance at the Organization Level for Quantification and Reporting of Greenhouse Gas Emissions and Removals, ISO, March 2006 (ISO 14064-1).

ISO 14064 Greenhouse Gases - Part 3: Specification with Guidance for the Validation and Verification of Greenhouse Gas Assertions, ISO, March 2006 (ISO 14064-3).

Quantification Protocol for Energy Efficiency in Projects, Version 1.0, Alberta Environment and Parks (AEP), October 2007 (Offset Protocol).

Carbon Offset Emission Factors Handbook, Version 1.0, AEP, March 2015.


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Technical Guidance for Offset Project Developers (version 4.0), Specified Gas Emitters Regulation, Alberta Environment and Parks, February 2013.

This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of a Project Report that is free from material misstatement, whether due to fraud or error. This responsibility includes the development of the Project Report, which encompasses the collection of data, performance of calculations and presentation of information.

Project reports documenting emissions reductions will be submitted to AEOR annually by the Authorized Project Contact on behalf of the Project Proponent.

Our Responsibility

Our responsibility is to express an opinion on the Project Report based on the evidence we have obtained. GHD is an eligible verification body meeting the qualification requirements of the verification criteria and AESRD Technical Guidance. We conducted our reasonable assurance engagement in accordance with the International Organization for Standardization (ISO) 14064-3 "Specification with guidance for the validation and verification of greenhouse gas assertions." These standards require that we plan and perform this engagement to obtain reasonable assurance about whether the assertions in the Project Report are materially correct and are a fair and reasonable representation of the project's GHG reduction and there have been no material changes to how the project was carried out compared to the description of the project in the Project Plan.

This engagement has been conducted according to the methodology detailed in the verification report by a team of verifiers described in the cover letter. The verification report includes the techniques and processes used to test the GHG information and associated assertions, along with any additional information used in verification.

Opinion

In our opinion, the greenhouse gas emission reductions and removal enhancements stated in the Project Report for the period to January 1, 2012 to July 31, 2017 (inclusive) of 14,175 tonnes CO2e are a fair and reasonable representation of the project's GHG reduction in accordance with the Verification Criteria (Section 5.2) and Alberta Distillers Energy Efficiency Upgrade Project – Greenhouse Gas Project Report, Final Report, Version 1, in all material respects.

This independent reasonable verification statement is intended for Blue Source, Alberta Distillers, and AEP.


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Closure

All of Which is Respectfully Submitted on November 3, 2017 in Calgary, Alberta.

GHD

Jack Wallace, P. Eng., M.A.Sc. (Co-Lead Verifier)

Brent Boss, P. Eng. (Peer Reviewer)

14) Appendices

The signed Statement of Qualifications is included.

The Conflict of Interest Checklist is included.

The Alberta Distillers Energy Efficiency Upgrade Project – Greenhouse Gas Emission Reduction Offset Project Report, Final Report (Project Report) is provided as Appendix A.

The Verification Plan is provided as Appendix B.


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Statement of Qualifications GHD confirms that the verification team, including signing authority, exceeds the qualifications of auditor as stated in Section 18 of the Specified Gas Emitters Regulation, as evidenced in the qualifications below.

Co-Lead Verifier – Jack Wallace, P. Eng., M. A. Sc.

Mr. Wallace is a licensed Professional Engineer in Alberta and British Columbia and has four years of experience at GHD working in a variety of solid waste management and GHG projects, including evaluation and design of waste processing facilities, waste management system planning and financial analysis, validation and verification of GHG emissions reporting and offset projects, and modeling for GHG emissions savings studies. Mr. Wallace has performed many validations and verifications across a range of sectors, and through these projects has gained in-depth knowledge of numerous GHG offset and reduction programs, including: British Columbia, Ontario, Alberta, and California mandatory reporting regulations, ARB compliance offset (cap-and-trade) program, The Climate Registry (TCR), VCS, CAR, Clean Development Mechanism (CDM), and the Gold Standard Foundation. Mr. Wallace is located in Calgary, Alberta and can assist the Project Team with Site visit requirements as needed in the Bluesource Head Office. Mr. Wallace has previously worked with Bluesource on offset verifications for composting and landfill gas facilities in Ontario and BC, energy efficiency upgrades in Alberta, and oil and gas electrification projects in BC.

Co-Lead Verifier – Sean Williams, P. Eng.

Mr. Williams has a Bachelor of Applied Science in Chemical Engineering from the University of Waterloo, and is a licensed Professional Engineer in the provinces of Alberta and Ontario. Mr. Williams has experience in completing permit applications, air and noise compliance assessments, completion of annual inventory reports under O. Reg. 455 and NPRI, and greenhouse gas verifications under the Alberta Specified Gas Emitters Regulation (SGER), Ontario Regulation 452/09, the Quebec Greenhouse Gas Regulation, the California Air Resources Board and The Climate Registry. He has acted as a verifier in the completion over 10 verifications and re-verification audits (on behalf of ESRD) of oil sands mining, extraction, SAGD, upgrader, refinery and ethylene/polyethylene production facilities in Alberta under the SGER. He has also performed as a verifier and lead verifier under supervision for the verification of over 20 oil refineries, chemical manufacturing facilities, power generation facilities and steel mills in Ontario, Quebec and California. He also has experience working in the accreditation audit process for GHD by ANSI, and has knowledge of the ISO 14064 and ISO 14065 standards.

Technical Advisor – Erik Martinez, P. Eng.

Mr. Martinez is an Associate with GHD and is a licensed air quality engineer in Ontario with over 12 years of experience in atmospheric science, air dispersion modelling, emission inventories, environmental compliance and GHG emission reports and


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verifications. Mr. Martinez has a Bachelor of Applied Science in Environmental Engineering with a Chemical Specialization from the University of Waterloo and has also been a Certified Energy Manager (CEM) since 2008. Mr. Martinez has worked on numerous projects involving the measurement, estimation, and abatement of emissions, including GHG emissions from fuel combustion and has also conducted a number of energy audits, including for government offices, community centres, courthouses and universities. In 2014, Mr. Martinez was part of a team that provided verification and re-verification services for January 2004 – April 2011 emission offset projects for the Red Deer, Wolf Creek and Grand Prairie Peace Wapiti Public School boards in Alberta under the SGER, Climate Change and Emissions Management Act.

Peer Reviewer – Brent Boss, P. Eng.

Mr. Boss is an Associate with GHD and a licensed Professional Engineer in Alberta, Saskatchewan, and Ontario and has a Bachelor of Engineering in Environmental Engineering from the University of Guelph. Mr. Boss is located in GHD's Edmonton, Alberta office and brings a wide variety of experience in solid waste engineering, construction administration and oversight, and a range of GHG validation and verification activities. As the Greenhouse Gas Assurance Services Manager for GHD, Mr. Boss works closely with the United Nations Framework Convention on Climate Change (UNFCCC) and the International Standards Organization (ISO) 14065 GHG accreditations. Mr. Boss assisted in leading the successful applications and approvals process in which GHD is now recognized as a Designated Operational Entity (DOE) with the UNFCCC and as a Validation/Verification Body under the ISO 4065 program. Mr. Boss has also led GHD to become registered to complete Validation and Verification Services with The Gold Standard, the Fair Recycling Foundation (formerly the Swiss Charter Foundation), and the Verified Carbon Standard (VCS). Mr. Boss has completed over 100 GHG validation/verification projects as a lead auditor or peer reviewer/technical expert on over a wide range of sectoral scopes ranging from but not limited to renewable power generation (wind, geothermal, and hydroelectric), oil and gas, agricultural, and landfill gas/biogas combustion plants. Mr. Boss has also completed several methodology review processes under the VCS. Mr. Boss has accreditation as a Lead Verifier and Offset Project Specialist in Ozone Depleting Substance (ODS), and Livestock projects under the California Air Resources Board (ARB) GHG Offset Reporting System and has assisted in the development of several agricultural manure digestion projects under the Climate Action Reserve (CAR) in California. Mr. Boss has previously worked with Bluesource on offset verifications for composting facilities in Ontario and BC, and oil and gas electrification projects in BC.

All of Which is Respectfully Submitted on December 12, 2017,

Jack Wallace, P. Eng.


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Conflict of Interest Checklist A conflict of interest checklist must be completed and signed before the verification is undertaken. It affirms that the verification team is independent and free from conflict of interest. This document is part of the required project documentation needed to register a project on the registry. Question Yes No Specifics

1. Can the verifying organization or the verification team members directly benefit from a financial interest in the Project Developer or the Project Developer’s Project? For example: Owning shares of the Project Developer; Having a close business relationship with the Project

Developer; Contingent fees relating to the results of the engagement; Potential employment with the Project Developer; or Undue concern about the possibility of losing the verification

or other fees from the Project Developer.

2. Can the verifying organization or verification team members be in a position of assessing their own work? For example: Provided greenhouse gas consultation services to the project; Provided validation for the project If providing non-greenhouse gas work for the company,

consideration needs to be given as to how potential and perceived conflict of interests can be managed.

A member of the verification team was previously employed with the company

3. Does the verifying organization or a member of the verification team, or a person in the chain of command for the verification, promote or be perceived to promote, a project developer's position or opinion to the point that objectivity may, or may be perceived to be, compromised? For example: Dealing in, or being a promoter of, greenhouse gas credits on

behalf of a project developer; or Acting as an advocate on behalf of the project developer in

litigation or in resolving disputes with third parties.


24

Question Yes No Specifics

4. Is one or more of the verification team too sympathetic to the project developer's interests by virtue of a close relationship with a project developer, its directors, officer or employees? For example: A person on the verification team has a close personal

relationship with a person who is in a senior greenhouse gas compilation role at the project developer; or

The verification team or a person of influence on the verification team has accepted significant gifts or hospitality from the project developer.

5. Is a member of the verification team or a person in the chain of command is deterred from acting objectively and exercising professional skepticism by threats, actual or perceived, from the directors, officers or employees of the Project Developer. For example: The threat of being replaced as a third party verifier due to a

disagreement with the application of an greenhouse gas quantification protocol;

Fees from the project developer represent a large percentage of the overall revenues of the verifying organization.

The application of pressure to inappropriately reduce the extent of work performed in order to reduce or limit fees; or

Threats of litigation from the project developer.

Designated Signing Authority

Date: December 13, 2017 Name: Jack Wallace Title: Co-Lead Verifier City, Province, Calgary, Alberta,

Canada

Table 1

Issues LogBlue Source Canada ULC

Alberta Distillers Energy Efficiency Offset ProjectCalgary, Alberta

Version 513-Dec-17

Page 1 of 1

Issue No. Issues/Questions Explanation/Response Status

1Alberta Distillers Limited (ADL) and Bluesource to provide monthly electricity invoices for 1 year, as a sample to cross-check for calculation spreadsheet accuracy, as available.

Bluesource provided Enmax electricity invoices for January-December, 2013, for cross-checking.

Closed.

2Alberta Distillers Limited (ADL) and Bluesource to provide monthly natural gas invoices for 1 year, as a sample to cross-check for calculation spreadsheet accuracy, as available.

Bluesource provided Shell natural gas invoices for January-December, 2013, for cross-checking.

Closed.

3ADL and Bluesource to confirm data retention policies and their conformance with the Protocol.

Data retention policies were discussed during the site visit held October 2, 2017.

Closed.

4

Bluesource to confirm the data range, parameters and individual steps for the multiple linear regression performed, given a discrepancy noted when compared with GHD's recalculation of the regression through the Excel data analysis tool.

Specifically, GHD observed that Bluesource had included data from July 2004 in the regression calculation, which was the month of shutdown when the boiler retrofits were installed.

Bluesource provided updated calculations, with regression equations omitting the July 2004 data.

Closed.

GHD 11115885 (7) v3

GHD | Verification Report - Alberta Distillers | 11115885 (7) V5

Appendices


Appendix A U of A Energy Efficient Lighting Offset Project –

Greenhouse Gas Project Report, Final Report, Version 1 (Project Report)

Alberta Distillers Energy Efficiency Upgrade Project

Greenhouse Gas Emissions Reduction

Offset Project Report For the Period January 1, 2012– July 31, 2017

FINAL REPORT

1 November 2017

Prepared by: Blue Source Canada ULC (Project Contact) Suite 1605, 840-7th Avenue SW Calgary, Alberta T2P 3G2 T: (403) 262-3026 F: (403) 269-3024 www.bluesourceCAN.com

Prepared for: Alberta Distillers Limited (Project Proponent) 1521 34 Ave SE Calgary, Alberta T2G 1V9 T: (403) 265-2541

www.beamglobal.com

http://www.bluesourcecan.com/

http://www.beamglobal.com/

Prepared by: Blue Source Canada ULC 1506, 840-7th Ave. SW, Calgary, AB, T2P 2G3 Tel: (403) 262-3026 Fax: (403) 269-3024

Contents Contents ........................................................................................................................................................ 2

List of Tables ................................................................................................................................................. 2

List of Figures ................................................................................................................................................ 3

List of Abbreviations ..................................................................................................................................... 3

1 PROJECT SCOPE AND PROJECT DESCRIPTION ....................................................................................... 4

2 PROJECT CONTACT INFORMATION ....................................................................................................... 6

3 PROJECT DESCRIPTION AND LOCATION ................................................................................................ 7

4 PROJECT IMPLEMENTATION AND VARIANCES ..................................................................................... 8

5 REPORTING PERIOD .............................................................................................................................. 8

6 GREENHOUSE GAS CALCULATIONS ....................................................................................................... 8

6.1 Baseline Condition .................................................................................................................... 9

6.2 Natural Gas Regression Analysis ............................................................................................... 9

6.3 SS B1/P1 (Fuel Extraction and Processing) .............................................................................. 10

6.4 SS B4/P4 (Generation of Heat and Power) ............................................................................. 11

6.5 Electricity Regression Analysis ................................................................................................ 11

6.6 SS B10/P10 (Electricity Usage) ................................................................................................ 12

7 GREENHOUSE GAS ASSERTION ........................................................................................................... 13

8 OFFSET PROJECT PERFORMANCE ....................................................................................................... 15

9 PROJECT DEVELOPER SIGNATURES ..................................................................................................... 16

10 STATEMENT OF SENIOR REVIEW .................................................................................................... 17

11 REFERENCES .................................................................................................................................... 18

Appendix A – Credit Extension Approval Letter.......................................................................................... 19

List of Tables TABLE 1. MULTIPLE LINEAR REGRESSION RESULTS FOR NATURAL GAS CONSUMPTION IN THE HISTORIC PERIOD

(2000-2004) WITH HDDS AND LAAS. .................................................................................................................. 10

TABLE 2. REGRESSION STATISTICS FOR HISTORIC ELECTRICITY CONSUMPTION (MWH) AND LAA PRODUCTION

(2000-2004)......................................................................................................................................................... 12

TABLE 3 - EMISSION FACTORS USED FOR THE ALBERTA DISTILLERS ENERGY EFFICIENCY PROJECT (2012-2017). ..... 13

TABLE 4 - OFFSET TONNES CREATED BY THE PROJECT PER YEAR. ............................................................................... 14


List of Figures FIGURE 4 - CREDITS CREATED BY THE PROJECT, BY VINTAGE YEAR ............................................................................ 15

List of Abbreviations ACCO Alberta Climate Change Office

AEOR Alberta Emissions Offset Registry

AER Alberta Energy Regulator

AENV Alberta Environment (now Alberta Climate Change Office)

AESRD Alberta Environment & Sustainable Resource Development (now Alberta Climate

Change Office)

AEUB Alberta Energy and Utilities Board

AEP Alberta Environment and Parks (previously Alberta Environment & Sustainable Resource

Development)

Blue Source Blue Source Canada ULC

CH4 Methane

CO2 Carbon Dioxide

CO2e Carbon Dioxide-equivalent

ERCB Energy Resources Conservation Board

GHG Greenhouse gas

GWP Global Warming Potential

HFC Hydrofluorocarbon(s)

LAA Litres of Absolute Alcohol

N2O Nitrous Oxide

PFC Perfluorocarbon(s)

SGER Specified Gas Emitters Regulation

SS Sources and Sinks


1 PROJECT SCOPE AND PROJECT DESCRIPTION The project title is: Alberta Distillers Energy Efficiency Upgrade Project

The project’s purpose(s) and objective(s) are:

The opportunity for generating carbon offsets with this project arises from

the direct greenhouse gas (GHG) emission reductions resulting from the

implementation of industrial process changes and facility retrofits that result

in energy efficiencies to reduce fossil fuel combustion for heating and

electricity generation.

Date when the project began:

The Project began on August 1, 2004, and is a result of actions taken on, or

after, August 1, 2004.

Expected lifetime of the project:

The expected lifetime of the Project corresponds to the expected lifetime of

the equipment installed, or until the equipment is retrofitted.

Credit start date: The credit start date for this project is January 1, 2012.

Credit duration period: The original crediting period of the project was from August 1, 2004 to July

31, 2012. During the first reporting period, credits were claimed from August

2004 to December 31, 2011. A 5-year extension was granted in June of 2015,

allowing credit generation from August 1, 2012 to July 31, 2017. Because the

first reporting period only included up to the end of 2011, the entire 2012

period is covered within this second, and final, reporting period for the

project.

Reporting period: January 1st, 2012 to July 31st, 2017.

Actual emissions reductions:

The total project emission reductions as a result of this project since August 1,

2004 (the original Project credit start date) are listed below in carbon dioxide

equivalents (CO2e), with the current and final reporting period italicized:

2004 721 tonnes CO2e/year

2005 3,930 tonnes CO2e/year


2007 3,966tonnes CO2e/year











To July 31, 2017 1,544 tonnes CO2e/year

Emissions reductions from this final reporting period which covers January 1, 2012 to July 31, 2017 are:

14,175 tonnes CO2e

Total project lifetime reductions: 32,713 tonnes CO2e

Applicable Quantification Protocol(s):

The quantification protocol used is the Quantification Protocol for Energy

Efficiency projects, Version 1, September 2007 (AENV, 2007) published by

Alberta Environment (AENV). There have been no revisions to the protocol

since the credit extension approval was made.

Protocol(s) Justification: The opportunity for generating carbon offsets with this project arises from

the direct greenhouse gas (GHG) emission reductions resulting from the

implementation of industrial process changes and facility retrofits that result

in overall efficiencies in energy use per unit of alcohol productivity.

Other Environmental Attributes:

No other environmental attributes, credits, or benefits are being sought or

created by this Project.

Legal land description of the project or the unique latitude and longitude:

The Project is located in Calgary, Alberta.

Latitude: 51.022872°

Longitude: 114.027167°

Ownership: Alberta Distillers Ltd. is the sole owner of the facility and responsible for

operating all elements of the facility.

Reporting details: This is the second offset report for this project, covering January 1, 2012 to July 31, 2017 following the credit extension granted in 2015.

Verification details: The verifier, GHD, is an independent third-party that meets the requirements

outlined in the Specified Gas Emitters Regulation (SGER). An acceptable

verification standard (e.g. ISO14064-3) has been used and the verifier has

been vetted to ensure technical competence with this project type.

This is the 1st verification carried out by the verifier for this project.

Project activity: This Project meets the requirements for offset eligibility as outlined in section


3.1. of the Technical Guidance for Offset Project Developers (version 4.0,

February 2013). In particular:

1. The project occurs in Alberta: as outlined above;

2. The project results from actions not otherwise required by law and

beyond business as usual and sector common practices: Offsets

being claimed under this project originate from a voluntary action.

The Project activity (i.e. energy efficiency retrofits) occurs at a non-

regulated facility and is not required by law. The protocol uses a

government approved quantification protocol, which indicates the

activity is undertaken by less than 40% of the industry and is

therefore not considered to be sector common practice.

3. The project results from actions taken on or after January 1, 2002, as

outlined above August 1, 2004;

4. The project reductions/removals are real, demonstrable, quantifiable

and verifiable: The Project is creating real reductions that are

demonstrated through directly measured natural gas and electricity

consumption, with 3rd party invoices to support credit claim.

5. The project has clearly established ownership; as discussed above.

The project will be counted once for compliance purposes: The Project credits

will be registered with the Alberta Emissions Offset Registry (AEOR) which

tracks the creation, sale and retirement of credits. Credits created from the

specified reduction activity have not been, and will not be, created, recorded

or registered in more than one trading registry for the same time period.

2 PROJECT CONTACT INFORMATION Project Developer Contact Information

Alberta Distillers Limited

Don Peters

Chief Engineer & Energy Supervisor

Direct: 403-513-8271


1521-34 Ave SE

Calgary, AB

T2G 1V9

Web: www.beamglobal.com

Authorized Project Contact

Blue Source Canada ULC

Kelsey Locke, AIT

Carbon Solutions Analyst

Phone: 403-262-3026 x228

Fax: 403-269-3024

Suite 1506

840-7th Ave SW

Calgary, AB

T2P2G3

http://www.beamglobal.com/



Web: www.bluesourcecan.com

Verifier

GHD Jack Wallace, P.Eng Co-Lead Verifier Phone: 403-271-2000 Email: [email protected]

Suite 205 3445 114th Avenue SE Calgary, AB T2Z 0K6 Web: www.ghd.com

This is the 1st verification carried out by the verifier for this project.

3 PROJECT DESCRIPTION AND LOCATION The Alberta Distillers Energy Efficiency Upgrade Project (‘the Project’) is located at the Alberta Distillers

Ltd. (ADL) plant in Calgary, Alberta. The Project is owned and operated by the Proponent.

The opportunity to generate offset credits from the Project arises from the direct GHG reductions from

reduced natural gas and electricity demand and consumption achieved through the energy efficiency

retrofits implemented at the distillery during beverage production. In addition, indirect emission

reductions are realized due to avoided use of fossil fuels that would have been required in electricity

generation.

The Quantification Protocol for Energy Efficiency Projects, version 1.0 (September 2007) (‘the Protocol’)

is intended for projects where the opportunity for generating carbon offsets arises from the direct and

indirect reductions of GHG emissions resulting from the implementation of industrial, commercial, and

agricultural process changes and facility retrofits. As a result, overall energy efficiencies in energy use

per unity of productivity – alcohol production – are achieved. Because the process changes may include

mechanical, biological, and/or chemical components of the operation and may impact on-site heat,

electrical and power requirements, the protocol is applicable to the Project.

In 2004, ADL began to improve the boiler operations at the distillery to reduce energy consumption and

improve the overall reliability and performance of the equipment. In July 2004, the burner on Boiler #7

was replaced with a new, more efficient burner. The combustion, level, and steam controls were

upgraded and tied into and controlled by a Programmable Logic Controller (PLC system) and Plantscape

interface. Automation allowed for the use of the excess boiler O2 sensors in the control to maximize the

potential savings through O2 trim. Further, automation improves boiler level control from a single

element (level) to a three element (level, steam flow, and water flow) to reduce carry over issues,

remove obsolete controllers and equipment, and improve steam header pressure control. As a result,

Boiler #7 increased capacity from 45,000 lb/hr to 60,000 lb/hr and the plant is able to run off Boiler #7

alone rather than utilizing multiple boilers. Boiler #7 is able to run the entire plant at a higher efficiency

load instead of running two boilers at less efficient reduced capacity. Now, Boiler #6 that was used along

side Boiler #7 in the past is available on hot standby if needed.

http://www.bluesourcecan.com/

mailto:[email protected]


4 PROJECT IMPLEMENTATION AND VARIANCES As no revisions or additions have been made to the Quantification Protocol for Energy Efficiency

Projects, version 1.0 (Sept 2007), there have been no required methodological changes to the

quantification approach. Emission factors have been updated to the most recent published factor in the

Alberta Carbon Offset Emission Factor Handbook (No.1, 2015).

5 REPORTING PERIOD For the purposes of this project report, the carbon dioxide equivalent (CO2e) emission reduction credits

are claimed for activities from the 1st of January 2012 until the 31st of July 2017 – for a total of nearly 5

years.

6 GREENHOUSE GAS CALCULATIONS GHG emission reductions were calculated following the Quantification Protocol for Energy Efficiency

Projects, version 1.0 (AENV, 2007). The activities and procedures outlined in the original Offset Project

Plan prepared by TransCanada and Leading Caron Ltd. provide a detailed description of the Project’s

adherence to the requirements of the quantification protocol. The formulas used to quantify GHG offset

by the Project are listed below.

Emission Reduction = Emissions Baseline – Emissions Project

Emissions Baseline = Emissions Fuel Extraction & Processing + Emissions Electricity + Emissions Heat & Power Gen

Emissions Project = Emissions Fuel extraction & Processing + Emissions Electricity + Emissions Power Gen

Whereby Emissions Baseline = sum of the emissions under the baseline condition.

(i) Emissions Fuel Extraction & Processing = emissions under SS (B1) Fuel Extraction/ Processing

(ii) Emissions Electricity = emissions under SS (B10) Electricity Usage

(iii) Emissions Power Gen = emissions under SS (B4) Generation of Heat and Power.

Emissions Project = sum of the emissions under the project condition.

(i) Emissions Fuel Extraction and Processing = emissions under SS (P1) Fuel Extraction/ Processing

(ii) Emissions Electricity = emissions under SS (P10) Electricity Usage

(iii) Emissions Power Gen = emissions under SS (P4) Generation of Heat and Power.


6.1 Baseline Condition

The baseline condition is represented by historical data from January 2000 until December 2004 (4.5-

year period), to generate the dynamic project baseline for 2012 to 2017. The data encompassed litres-

of-absolute-alcohol (LAA) production, electricity, and natural gas consumption records for the historical

period. These sources of data were used to generate two regression analyses described below, in order

to predict natural gas and electricity consumption that were weather and production normalized.

6.2 Natural Gas Regression Analysis

The natural gas consumption of the facility during the project period is dependent on both the LAA

productivity of the facility (e.g. unit of production for functional equivalence) and the weather since

natural gas is the heat source as well as process fuel. Using historical weather data from Environment

Canada with a base temperature of 18°C, a heating degree day (HDD) correction was made to normalize

natural gas consumption data with weather data for the baseline years. HDD data was obtained from

both the Calgary INT’L A and Calgary INT’L CS weather stations – both of which are located near the

Calgary airport – depending on the completeness of the data file for each year. Where there was missing

HDD data for entire months, the alternative station location was used to supplement the data for a

complete yearly record.

A multiple linear regression analysis is a commonly used technique for HDD corrections. Under this

method of analysis, it is assumed that the natural gas consumption of a heated facility is proportional to

the number of HDDs over that period as well as the LAA productivity. To normalize the data, a year’s

worth of monthly degree days and LAA production is plotted along the x-axis against monthly natural

gas consumption (m3) data on the y-axis. The regression line is the line of best fit through the points in

the scatter chart.

Monthly data for gas consumption, HDDs, and LAAs were collected for each month in the selected

historical period, 2000-2004, and a multiple linear regression analysis was performed. The regression

generated a unitless R-Squared “R2” value between 0.0 and 1.0, whereby 1.0 indicates the perfect ‘fit’,

to determine the strength of the relationship between HDDs, LAAs and natural gas consumption.

By multiplying the monthly HDDs in the project years by the slope of the regression line for the

predicted baseline year and adding the y-intercept from the baseline year, the predicted volume of

baseline gas consumed for that month was determined. Therefore, the historical 2000-2004 period was

used to generate ‘regression-predicted’ natural gas consumption data for the dynamic baseline period

to be compared against the metered consumption. The data used in the historic period was derived

from “ATCO” measurements and was the only data source available for those years. For the project

years however, Shell consumption data was used because it contained complete monthly records for all

years.

The resulting regression equation is:

Pred_NGB-201x (m3) = 734.5(HDDPY) + 0.583(LAAPY) – 7337.8

Where,


Pred_NGB-2001x (m3) = regression predicted dynamic baseline natural gas consumption for the specified

project year

HDDPY = Heating Degree Days in the project year for a specified month

LAAPY = Litres of Absolute Alcohol in the project year for a specified month

The statistics generated by the regression analysis are presented below in Table 1.

Table 1. Multiple linear regression results for natural gas consumption in the historic period (2000-2004) with HDDs and LAAs.

Regression Statistics

Multiple R 0.983364132

R Square 0.967005016

Adjusted R Square 0.965735979

Standard Error 88563.00702

Observations 55

The regression analysis generated a strong correlation between the variables, indicated by the high R2

value of 0.967.

6.3 SS B1/P1 (Fuel Extraction and Processing)

The following calculation is based on Table 2.4 of the Protocol.

Dynamic baseline (B1) emissions were determined through the following calculations.

Emissions of CO2 = (Pred_NGB−201x x EFCO2EX) + (Adj_NG201x x EFCO2P)

Emissions of CH4 = (Pred_NGB−201x x EFCH4EX) (Adj_NG201x x EFCH4P)

Emissions of N2O = (Pred_NGB−201x x EFN2OEX) (Adj_NG201x x EFN2OP)

Where,

Pred_NGB-201x = predicted volume of natural gas consumed (m3) in the baseline condition, generated

using the historic regression formula

EFCO2EX/EFCH4EX/EFN2OEX (tonnes/m3) = Emission factor for natural gas extraction of CO2, CH4, and N2O from

the Carbon Emission Factors Handbook.

EFCO2P/EFCH4P/EFN2OP (tonnes/m3) = Emission factor for natural gas processing of CO2, CH4, and N2O from


Project (P1) emissions were determined through the following equations:

Emissions of CO2 = (NG_Pro201x x EFCO2EX) + (NG_Pro201x x EFCO2P)

Emissions of CH4 = (NG_Pro201x x EFCH4EX) (NG_Pro201x x EFCH4P)


Emissions of N2O = (NG_Pro201x x EFN2OEX) (NG_Pro201x x EFN2OP)

Where,

NG_Pro201x (m3) = Metered natural gas consumption in the project years (2012-2017) as obtained from

Shell consumption data.

EFCO2EX/EFCH4EX/EFN2OEX (tonnes/m3) = Emission factor for natural gas extraction of CO2, CH4, and N2O from


EFCO2P/EFCH4P/EFN2OP (tonnes/m3) = Emission factor for natural gas processing of CO2, CH4, and N2O from


6.4 SS B4/P4 (Generation of Heat and Power)

The calculation of generation of heat and power emissions also used the volume of natural gas

consumption derived from the multiple linear regression analysis.

Dynamic baseline (B4) emissions were determined through the following calculations.

Emissions of CO2 = Pred_NGB−201x x EFNG−COMB,CO2

Emissions of CH4 = Pred_NGB−201x x EFNG−COMB,CH4

Emissions of CO2 = Pred_NGB−201x x EFNG−COMB,N2O

Where,

Pred_NGB-201x (m3) = predicted volume of natural gas consumed (m3) in the baseline condition, generated

using the historic regression formula

EFNG-COMB, CO2/ EFNG-COMB, CH4/ EFNG-COMB, N2O (tonnes/m3) = Emission factor for natural gas combustion of

CO2, CH4, and N2O from the Carbon Emission Factors Handbook.

Project (P4) emissions were determined through the following equations:

Emissions of CO2 = NG_Pro201x x EFNG−COMB,CO2

Emissions of CO2 = NG_Pro201x x EFNG−COMB,CH4

Emissions of CO2 = NG_Pro201x x EFNG−COMB,N2O

Where,

NG_Pro201x (m3) = Metered natural gas consumption in the project years (2012-2017) as obtained from

Shell consumption data.

EFNG-COMB, CO2/ EFNG-COMB, CH4/ EFNG-COMB, N2O (tonnes/m3) = Emission factor for natural gas combustion of

CO2, CH4, and N2O from the Carbon Emission Factors Handbook.

6.5 Electricity Regression Analysis

A linear regression analysis was also run to determine the relationship between electricity consumption

(MWh) and LAA productivity in the historic period (2000-2004). The regression equation was then used


to predict the electricity consumption for the dynamic baseline condition of the project, and be

compared against the metered electricity consumption in those years (2012-2017).

The resulting linear regression formula was as follows:

Pred_E201x = 0.000957(LAAPY)+306.9

Where,

Pred_E201x = Predicted baseline electricity consumption (MWh) using the historic regression equation.

LAAPY = LAA productivity in the project year for a given month

The statistics for the regression are presented below in Table 2.

Table 2. Regression statistics for historic electricity consumption (MWh) and LAA production (2000-2004).

Regression Statistics

Multiple R 0.980632262

R Square 0.961639633

Adjusted R Square 0.960915852

Standard Error 115.0033122

Observations 55

Similar to the natural gas regression, the R2 value of 0.962 indicates a strong relationship between

electricity consumption and LAA production.

6.6 SS B10/P10 (Electricity Usage)

The calculation of electricity usage emissions used the predicted electrical consumption (MWh) derived

from the linear regression analysis above.

Baseline (B10) emissions, in CO2e, were determined using the following equation:

Emissions of CO2e = Pred_EB−201x x EFE−CON,CO2𝑒

Where,

Pred_EB-201x (MWh) = Predicted electricity consumption in the baseline year determined from the historic

regression analysis.

EFE-CON,CO2e (tonnes CO2e) = Emission factor from the Handbook for electricity consumption on-site in

Alberta.

Similarly, project (P10) emissions in CO2e were determined through the following equation:

Emissions of CO2e = E_Pro201x x EFE−CON,CO2𝑒

Where,


E_Pro201x (MWh) = Billed electricity consumption in the specified project year.

EFE-CON,CO2e (tonnes CO2e) = Emission factor from the Handbook for electricity consumption on-site in

Alberta.

For the historic year 2000, used in the electricity regression analysis, billed electricity consumption data

was not available; therefore, metered consumption was used instead. For the remaining historic years

(2001-2004), billed data was used to maintain consistency with the data source used in the initial project

reporting period.

Table 3 provides the emission factors used for the Project calculations.

Table 3 - Emission factors used for the Alberta Distillers Energy Efficiency Project (2012-2017).

Parameter Relevant SS

CO2 Emission

Factor

CH4 Emission

Factor

N2O Emission

Factor

CO2e Emission

Factor

Emission Factor Source

Natural Gas Combustion (Industrial)

B4/P4 1.918 kg/m3

0.000037 kg/m3

0.000033 kg/m3

- Carbon Offset

Emission Factors

Handbook, Version 1.0 March 2015

Natural Gas Extraction

B1/P1 0.043 kg/m3

0.0023 kg/m3

0.000004 kg/m3

-

Natural Gas Processing

B1/P1 0.090 kg/m3

0.0003 kg/m3

0.000003 kg/m3

-

On-site Electricity

Consumption

B10/P10 - - - 0.64

tonnes/MWh

7 GREENHOUSE GAS ASSERTION The greenhouse gas assertion is a statement of the number of offset tonnes achieved during the

reporting period. The assertion identifies emissions reductions per vintage year and includes a breakout

of individual greenhouse gas types (CO2, CH4, N2O, SF6, HFCs, and PFCs) applicable to the Project and

total emissions reported as CO2e. The total in units of tonnes of carbon dioxide equivalent (CO2e) is

calculated using the global warming potentials (GWPs) referenced in the SGER.

Table 4 identifies the greenhouse gas assertion, containing the calculated number of offset tonnes

achieved, separated by each unique vintage year and GHG released. As shown, the Project created

14,186 tonnes of GHG reductions in the reporting period, from January 1, 2012 to July 31, 2017.


Table 4 - Offset tonnes created by the Project per year1.

Year Greenhouse Gas Reductions in tonnes CO2e

CO2 CH4 N2O PFCs HFCs SF6 CO2e Total

VY 2012 848.8 27.3 4.9 n/a 254.8 1,135.8

VY 2013 2,303.0 73.4 13.4 n/a 634.1 3,023.9

VY 2014 1,892.0 60.8 11.0 n/a 646.4 2,610.1

VY 2015 1,228.5 39.5 7.1 n/a 739.4 2,014.5

VY 2016 2,803.9 90.1 16.3 n/a 936.3 3,846.6

January 1, 2017 – July 31, 2017

1,287.0 41.4 7.5 n/a 207.8 1,543.6

Total Reductions 10,363.2 332.4 60.2 0 3,418.8 14,175

1 Emission reductions per GHG species, as shown in table, are subjected to rounding errors and may not work to

total tonnages displayed; however, the GHG assertion is correct.


8 OFFSET PROJECT PERFORMANCE The Project created credits in eight previous vintage years, prior to the 2012-2017 reporting period.

Figure 1 shows the credits created by the Project annually for its full 8-year crediting duration starting

August 1, 2004 and ending on December 31, 2011 in addition to the 5-year extension period

encompassed within this report.

Figure 1 - Credits Created by the Project, by Vintage Year

The total credits generated during the first crediting period (2004-2011) were 18,538 tonnes of CO2e.

Comparatively, total credits in the second reporting period (2012-2017) were tonnes 14,175 CO2e. The

average credit volume per year was 2,471 tonnes in the first project period; whereas the average

volume per year in the current reporting period is 2,579 tonnes, an increase of 4.3%.

The trend in offset volume created per year corresponds to the trends in natural gas and electricity

consumption, as well as LAA production per year. All three variables were lowest in 2012, and highest in

2016, as indicated by subsequent offset volume in those years.

0

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ton

nes

)

Vintage Year


10 STATEMENT OF SENIOR REVIEW This offset project report was prepared by Kelsey Locke, Blue Source Canada and reviewed by Tooraj

Moulai, Blue Source Canada. Although care has been taken in preparing this document, it cannot be

guaranteed to be free of errors or omissions.

Prepared by:

Senior reviewed by:

Kelsey Locke Carbon Solutions Analyst November 1, 2017

Tooraj Moulai Senior Engineer, Carbon Services November 1, 2017


11 REFERENCES Alberta Environment and Sustainable Resource Development, 2013, Technical Guidance for Offset

Project Developers - Version 4.0, February 2013.

Alberta Environment and Sustainable Resource Development, 2015, Carbon Offset Emission Factor

Handbook – Version 1.0, March 2015.

Alberta Environment and Sustainable Resource Development, 2007, Quantification Protocol for Energy

Efficiency Projects (September 2007, Version 1).


Appendix A – Credit Extension Approval Letter


Appendix B Verification Plan

GHD 3445 114th Avenue SE Suite 205 Calgary Alberta T2Z 0K6 Canada T 403 271 2000 F 403 271 3013 W www.ghd.com

November 3, 2017 Reference No. 11115885-07 Ms. Kelsey Lank Carbon Solutions Analyst Bluesource Canada ULC 717 17th Avenue, Suite 700 Calgary, Alberta T2P 0Z3 Dear Ms. Lank: Re: Verification Plan

Alberta Distillers Energy Efficiency Upgrade Project Verification Services for 2012-2017 Vintage Year Offset Credits

1. Introduction

Bluesource Canada ULC (Bluesource) retained GHD Limited (GHD) to conduct a verification of the

Alberta Distillers Energy Efficiency Upgrade Project (Project). The Project is located at the Alberta

Distillers Ltd. Facility in Calgary, Alberta (the Facility) and activities consist of a number of voluntary

retrofits undertaken since 2004 to increase electricity savings and reduce greenhouse gas emissions.

The verification will be conducted in general accordance with ISO 14064 – Greenhouse Gases standards (ISO 14064), as required by the GHG CleanProjects® CSA Registry program.

GHD has prepared this Verification Plan in accordance with ISO Standard ISO 14064 Greenhouse gases - Part 3: Specification with guidance for the validation and verification of greenhouse gas assertions (ISO 14064-3) and the Alberta Specified Gas Emitters Regulation Quantification Protocol for Energy Efficiency Projects, version 1.0, September 2007.

2. Verification Objective

The objective of the verification is to provide Bluesource and CSA with assurance that the

CleanProjects® CSA Registry Report contains no material discrepancy and was prepared in general

accordance with ISO 14064-3.

3. Level of Assurance

The verification was conducted to a reasonable level of assurance.

http://www.ghd.com/

11115885Lank-5 2

4. Verification Standards

For the verification, GHD applied ISO 14064-3 as the standard.

5. Verification Criteria

For this verification, GHD applied the following criteria:

• ISO 14064 Greenhouse gases – Part 1: Specification with guidance at the organization level for quantification and reporting of greenhouse gas emissions and removals, ISO, March 2006 (ISO 14064 1)

• ISO 14064 Greenhouse gases – Part 2: Specification with guidance at the project level for quantification, monitoring and reporting of greenhouse gas emission reductions or removal enhancements, ISO, March 2006 (ISO 14064 2)

• ISO 14064 Greenhouse gases – Part 3: Specification with guidance for the greenhouse gas assertions, ISO, March 2006 (ISO 14064 3)

• National Inventory Report 1990-2014: Greenhouse Gas Sources and Sinks in Canada – Part 2, Environment Canada, 2016.

• Quantification Protocol for Energy Efficiency in Commercial and Institutional Buildings, (version 1.0), Alberta Environment and Parks (AEP), October 2010.

• Carbon Offset Emission Factors Handbook (version 1.0), AEP, 2015.

6. Review Team

6.1 Roles and Responsibilities

Co-Lead Verifier – Jack Wallace, P. Eng., M.A.Sc. – Mr. Wallace will co-lead the verification and is

responsible for reviewing of the verification plan. Mr. Wallace will review the risk assessment, review

of raw data, data management procedures, and draft findings. Mr. Wallace will prepare and sign the

verification statement and verification report.

Co-Lead Verifier – Sean Williams, P. Eng. – Mr. Williams will aid in the development and revision of

the verification plan and sample plan, developing a risk assessment, reviewing raw data, reviewing

management of data quality and preparation of draft findings. Mr. Williams will conduct the Site visit.

Technical Advisor – Erik Martinez, P. Eng. – Mr. Martinez will review the emission offset

calculations and verification report and provide technical expertise to the verifiers throughout the

project.

Peer Reviewer – Brent Boss, P. Eng. – Mr. Boss will complete a peer review of the verification plan,

risk assessment and verification report and findings.

11115885Lank-5 3

6.2 Qualifications

Co-Lead Verifier – Jack Wallace, P. Eng., M. A. Sc.

Mr. Wallace is a licensed Professional Engineer in Alberta and British Columbia and has four years of

experience at GHD working in a variety of solid waste management and GHG projects, including

evaluation and design of waste processing facilities, waste management system planning and

financial analysis, validation and verification of GHG emissions reporting and offset projects, and

modeling for GHG emissions savings studies. Mr. Wallace has performed many validations and

verifications across a range of sectors, and through these projects has gained in-depth knowledge of

numerous GHG offset and reduction programs, including: British Columbia, Ontario, Alberta, and

California mandatory reporting regulations, ARB compliance offset (cap-and-trade) program, The

Climate Registry (TCR), VCS, CAR, Clean Development Mechanism (CDM), and the Gold Standard

Foundation. Mr. Wallace is located in Calgary, Alberta and can assist the Project Team with Site visit

requirements as needed in the Bluesource Head Office.

Mr. Wallace has previously worked with Bluesource on offset verifications for composting and landfill

gas facilities in Ontario and BC, energy efficiency upgrades in Alberta, and oil and gas electrification

projects in BC.

Co-Lead Verifier – Sean Williams, P. Eng.

Mr. Williams has a Bachelor of Applied Science in Chemical Engineering from the University of

Waterloo, and is a licensed Professional Engineer in the provinces of Alberta and Ontario.

Mr. Williams has experience in completing permit applications, air and noise compliance

assessments, completion of annual inventory reports under O. Reg. 455 and NPRI, and greenhouse

gas verifications under the Alberta Specified Gas Emitters Regulation (SGER), Ontario

Regulation 452/09, the Quebec Greenhouse Gas Regulation, the California Air Resources Board and

The Climate Registry. He has acted as a verifier in the completion over 10 verifications and

re-verification audits (on behalf of ESRD) of oil sands mining, extraction, SAGD, upgrader, refinery

and ethylene/polyethylene production facilities in Alberta under the SGER. He has also performed as

a verifier and lead verifier under supervision for the verification of over 20 oil refineries, chemical

manufacturing facilities, power generation facilities and steel mills in Ontario, Quebec and California.

He also has experience working in the accreditation audit process for GHD by ANSI, and has

knowledge of the ISO 14064 and ISO 14065 standards.

Technical Advisor – Erik Martinez, P. Eng.

Mr. Martinez is an Associate with GHD and is a licensed air quality engineer in Ontario with over

12 years of experience in atmospheric science, air dispersion modelling, emission inventories,

environmental compliance and GHG emission reports and verifications. Mr. Martinez has a Bachelor

of Applied Science in Environmental Engineering with a Chemical Specialization from the University of

Waterloo and has also been a Certified Energy Manager (CEM) since 2008.

Mr. Martinez has worked on numerous projects involving the measurement, estimation, and

abatement of emissions, including GHG emissions from fuel combustion and has also conducted a

11115885Lank-5 4

number of energy audits, including for government offices, community centres, courthouses and

universities. In 2014, Mr. Martinez was part of a team that provided verification and re-verification

services for January 2004 – April 2011 emission offset projects for the Red Deer, Wolf Creek and

Grand Prairie Peace Wapiti Public School boards in Alberta under the SGER, Climate Change and

Emissions Management Act.

Mr. Martinez has previously worked with Bluesource on the offset verification for the University of Alberta Energy Efficient Lighting Offset Project.

Peer Reviewer – Brent Boss, P. Eng.

Mr. Boss is an Associate with GHD and a licensed Professional Engineer in Alberta, Saskatchewan,

and Ontario and has a Bachelor of Engineering in Environmental Engineering from the University of

Guelph. Mr. Boss is located in GHD's Edmonton, Alberta office and brings a wide variety of

experience in solid waste engineering, construction administration and oversight, and a range of GHG

validation and verification activities.

As the Greenhouse Gas Assurance Services Manager for GHD, Mr. Boss works closely with the

United Nations Framework Convention on Climate Change (UNFCCC) and the International

Standards Organization (ISO) 14065 GHG accreditations. Mr. Boss assisted in leading the successful

applications and approvals process in which GHD is now recognized as a Designated Operational

Entity (DOE) with the UNFCCC and as a Validation/Verification Body under the ISO 4065 program.

Mr. Boss has also led GHD to become registered to complete Validation and Verification Services with

The Gold Standard, the Fair Recycling Foundation (formerly the Swiss Charter Foundation), and the

Verified Carbon Standard (VCS). Mr. Boss has completed over 100 GHG validation/verification

projects as a lead auditor or peer reviewer/technical expert on over a wide range of sectoral scopes

ranging from but not limited to renewable power generation (wind, geothermal, and hydroelectric), oil

and gas, agricultural, and landfill gas/biogas combustion plants. Mr. Boss has also completed several

methodology review processes under the VCS.

Mr. Boss has accreditation as a Lead Verifier and Offset Project Specialist in Ozone Depleting

Substance (ODS), and Livestock projects under the California Air Resources Board (ARB) GHG

Offset Reporting System and has assisted in the development of several agricultural manure digestion

projects under the Climate Action Reserve (CAR) in California. Mr. Boss has also performed

environmental and GHG reporting under Environment Canada's PERRL Initiative for several landfills

within Ontario. Following the lifespan of the PERRL program, Mr. Boss continued to quantify and

report emissions for these sites under the ISO: 4064 – Part 2 standards. Mr. Boss has developed

ISO based audits for several large scale aerobic composting facilities within Ontario as well as an

energy-from-bagasse plant in Brazil.

Mr. Boss has previously worked with Bluesource on offset verifications for composting facilities in

Ontario and BC, and oil and gas electrification projects in BC.

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7. Project Understanding

GHD understands that Bluesource is seeking an independent third party to provide verification

services for the 2012-2017 Vintage Year Offset Credits of the Alberta Distillers Energy Efficiency

Upgrade Project. The organizational boundary for GHG accounting purposes is understood to be the

physical boundaries of the Alberta Distillers Ltd. facility in Calgary, Alberta (the Facility).

GHD understands that the emissions offsets at the Facility are due to a number of voluntary retrofits

undertaken since 2004, including:

• Replacement of one (1) boiler with a more

efficient model

• Implementation of a Programmable Logic

Controller (PLC) system and Plantscape

interface to improve boiler operation

• Increased flow-through

• Higher boiler loading

• Reduced fan power

• Reduced excess oxygen (O2 trim)

• Boiler level control stability

• Improved heat exchange and temperature

gain of 10 degrees Celsius, among others

The upgrades have resulted in an overall plant energy consumption decrease of approximately 13 percent

below 2004 levels.

The project was previously quantified in March 2012 for the crediting period August 1, 2004 to

December 31, 2011, which showed that the project generated 18,538 tonnes CO2e of offsets in that

period. In 2015, the Project received a five-year extension allowing credit generation from offsets up to

July 31, 2017. The verification services required are thus for the period January 1, 2012 to July 31, 2017.

8. Verification Scope

8.1 Facility Emission Sources

The conditions prior to the implementation of the Project consist of emissions resulting from the energy

use of the Facility. The project achieves GHG emission reduction through a number of retrofits that reduce

gas and electricity use.

Under both the baseline and project scenarios, the Facility has the following emission sources:

• Electricity Consumption – Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O), represented as

CO2 equivalent (CO2e)

• Natural Gas Consumption – Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O), represented

as CO2 equivalent (CO2e)

11115885Lank-5 6

8.2 Geographical and Organizational Boundaries

The verification included the emission sources from the following Facility:

Alberta Distillers Ltd.

1521 34 Avenue SE

Calgary, Alberta

T2G 1V9

8.3 Reporting Period

The reporting period is between January 1, 2012 and July 31, 2017.

8.4 Use of this Report

This report has been prepared for the use of Bluesource and CSA.

9. Verification Schedule

GHD understands that the final verification report must be submitted no later than the first week of

November, 2017. A site visit to Alberta Distiller's will be arranged with depending on the availability of

Facility staff and verification staff; GHD includes a recommendation for the week of the site visit in the

schedule below. The following presents the proposed verification project schedule:

• Project award and kick-off call – Monday September 4, 2017

• Initial document request – Monday September 4, 2017

• Issue Verification Plan – Monday September 25, 2017

• Site Visit – Monday October 2, 2017

• Submit Issues Log to Bluesource – Monday October 2, 2017

• Receive Bluesource responses to Issues Log – Monday October 9, 2017

• Issue Draft Verification Report and Statement – Wednesday November 1, 2017

• Receive Bluesource feedback on Draft Verification Report – Wednesday November 1, 2017

• Issue Final Verification Report – Friday November 3, 2017

The above schedule requires that Bluesource provide responses to all requests for information within the

dates shown. Should Bluesource require additional time to respond to requests for information, the

schedule will be adjusted accordingly.

10. Assessment of Risk and Magnitude of Potential Errors, Omissions or Misrepresentations

Based on GHD's initial review of the Facility operations, the following table summarizes the potential risk

and magnitude of potential errors, omissions or misrepresentations, as currently known.

11115885Lank-5 7

Potential Risk Area




Justification

Baseline Scenario





B1: Fuel Extraction and Processing Emissions




B10: Building Energy Consumption


Control Low Emissions are based on modelled and logged electricity consumption, operational hours, and published emission factor.


11115885Lank-5 8

Potential Risk Area




Justification

Project Scenario




Detection Low GHD reviewed a sample of third party consumption data for 2013 for natural gas, and equipment specifications, making the detection risk medium.




Detection Low GHD will review all available boiler and natural gas consumption data, and equipment specifications, allowing for low detection risk.



Control Low Emissions are based on modelled and logged electricity consumption, operational hours, and published emission factor.


11115885Lank-5 9

Potential Risk Area




Justification

General Data Management Systems

N/A Inherent Medium Moderate complexity in data management, given numerous sources of data likely collected by multiple employees.

Control Medium Data sources are predominantly accounting records and model extracts; however, the numerous data sources increases the control risk.

Detection Medium/ Low

GHD reviewed all data available to reduce the risk that a material error went undetected.

During the review, any new risks or material concerns that could potentially lead to errors, omissions and

misrepresentations will be identified, reviewed and assessed.

11. Sampling Plan

GHD developed a sampling plan based on review of the objectives, criteria, scope, and level of assurance

detailed above. The sampling plan is dynamic and was revised, as required, throughout the course of the

verification. The following table summarizes the sampling plan:





Sample size/Action

Baseline Emissions (BE) B4: Generation of Heat and Power

62.33% • Third party natural gas consumption record


• All natural gas consumption model records, operational and third party data invoices for 2013

• Equipment operations records and specifications


• Database records, drawings, and lists/packing slips for equipment and fixtures

• Maintenance reports • Equipment specification

references

• Source of emission factors

One-time • Carbon Offset Emission Factors Handbook, (Version 1.0, 2015)

11115885Lank-5 10





Sample size/Action





• Equipment operations records (temperature, pressure, etc.) and specifications




references



B10: Energy Consumption

31.21% • Third party electricity records


• All electricity consumption model records, operational hour and third party data invoices for 2013





references


One-time • Carbon Offset Emission Factors Handbook,

(Version 1.0, 2015)

Project Emissions (PE) P4: Generation of Heat and Power








references



11115885Lank-5 11





Sample size/Action





• Equipment operations records (temperature, pressure, etc.) and specifications




references




31.64% • Third party electricity records


• All electricity consumption model records, operational hour and third party data invoices for 2013

• Fixture operations records and specifications




references



General Operations Overview

N/A • Review of facility operations and emission sources

N/A • GHD visited the Facility and interview personnel on operations.

- Back up of data acquisition systems

N/A • General Data Management System

• Document retention policy

N/A • Reviewed frequency of data backup and interview site personnel

12. Quantitative Testing

Quantitative data or raw data was made available to GHD. GHD evaluated annual GHG emission

calculation methodologies.

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13. Materiality Level

Materiality for the Facility verification was set at 5 percent. A series of discrete errors, omissions or

misrepresentations or individual or a series of qualitative factors, when aggregated, may be considered

material.

14. Verification Procedures

The review procedures used in this verification were used to assess the following:

1. Accuracy and completeness of annual GHG emissions

2. Uncertainty of external data sources used

3. Emission assumptions

4. Accuracy of emission calculations

5. Potential magnitude of errors and omissions

To sustain a risk-based assessment, the GHD Project Team identified and determined risks related to

annual GHG emissions during both the desk reviews and the follow-up interviews. The GHD Project Team

focused on the accuracy and completeness of provided information. The components of the document

review and follow-up interviews are:

• Document Review:

- Review of data and information to confirm the correctness and completeness of presented

information.

- Cross-checks between information provided in the project plan and information from independent

background investigations.

- Determine sensitivity and magnitude analysis for parameters that may be the largest sources of

error.

- Comparison of emission offsets from those of previous reporting year(s), as applicable.

• Follow-up Interviews:

- On Site

- Via telephone

- Via email

The GHD Project Team interviewed the project personnel in order to:

• Cross-check information provided.

• Compare with projects or technologies that have similar or comparable characteristics.

• Review data management and recording procedures.

• Test the correctness of critical formulae and calculations.

11115885Lank-5 13

• Witness and compare with similar projects in the jurisdiction.

The document review established to what degree the presented GHG Emissions Report documentation

met the verification standards and criteria.

The GHD Project Team's document review during the verification process comprised, but was not limited

to, an evaluation of the following:

• The documentation is complete and comprehensive and follows the structure and criteria given in the

criteria.

• Baseline and monitoring methodologies are justified and appropriate.

• The calculation of GHG offsets is appropriate and uses conservative assumptions for estimating GHG

offsets.

• The GHG information system and its controls are sufficiently robust to minimize the potential for

errors, omissions, or misrepresentations.

• The project meets the quantification protocol eligibility criteria.

15. Closure

The Verification Plan is considered to be a dynamic document that may require modification and

adaptation to conditions as encountered during the completion of the Verification process. GHD will

communicate all changes to the verification plan with Bluesource throughout the verification.

All of which is respectfully submitted,

GHD

Jack Wallace, P. Eng., M.A.Sc.

JW/mg/5

Encl.

cc: Sean Williams, P. Eng.

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