Energy Services Acquisition Program


On June 4, 2019, the Government of Canada announced that it is entering into a contract with a Public-Private Partner (P3) for the modernization of the district energy system in the National Capital Region (NCR). Innovate Energy will complete the design and construction by 2025 and will operate the system until 2055.

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As the federal authority for real property, Public Services and Procurement Canada (PSPC) is responsible for the delivery of essential heating services to 80 federal buildings in the NCR and cooling services to 67 of these buildings, including mission-critical sites within the Parliamentary Precinct. As such, PSPC operates five central heating and cooling plants (CHCPs) which were designed and built from 1916 to 1971.

In 2009, Energy Services Acquisition Program (ESAP) was established to explore potential new business models for the provision of energy services in the NCR. In 2018, PSPC issued a Request for Proposal for the modernization of the heating and cooling energy service capability.

Budget 2016 reaffirmed Canada’s commitment to modernizing the delivery of heating and cooling services by implementing more efficient technologies. This will reduce both long-term costs for Canada and greenhouse gas (GHG) emissions. In addition, the new technology will enable Canada to explore the feasibility of using alternative “low or no carbon” sources of energy, the adoption of which could further reduce GHG emissions.

For this project, Canada selected Innovate Energy through competitive tender, to be the Private Partner that will deliver a technologically superior and efficient solution on time and in a manner that ensures the best value for Canadians.

The contract is valued at $2.6 billion and is broken down into two parts. The first, valued at $1.1 billion, is for the design and construction of the new system, to be completed by 2025. The second portion is for the operation and maintenance, which includes energy and fuel costs, of the new system over a 35 year period, valued at $1.5 billion.

Design has been initiated, with construction expected to begin in April 2020 and ending in October 2025. At present, the Phase I modernization project is on time and on budget. The project is expected to reduce operating costs for the Government of Canada over the 35 year life of the operations and maintenance contract. Precise cost savings will be recalculated once Phase II determines greener sources of energy for the District Energy System and after the Phase I construction period is completed.

Canada has taken all steps necessary to ensure that the procurement process for the Project was open, fair and transparent. The public private partnership contract with Innovate Energy was finalized in May 2019.

Due to the modernization of the NCR heating and cooling plants under ESAP, several plant employees’ services may no longer be required due to discontinuance of their particular functions.

PSPC is following the guidelines outlined in the Work Force Adjustment (WFA) agreement and will support all employees through their transition to new roles emerging within the service management areas.

That support includes providing potential opportunities where employees can transfer their competencies into a new job at PSPC, job shadowing opportunities and future employment opportunities after the P3 partner takes over operations.

Each employee will have the support of their union and human resource services in PSPC to ensure that they have all the information necessary to understand their available options based on their career objectives and specific circumstances.

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