$104.8M annual value at full build
Complete economic model for the Pacific Decarbonized Energy Corridor. Revenue streams, cost analysis, capital requirements, sensitivity modelling, and funding pathways. All figures in $CAD.
Annual Value Breakdown
Eight distinct value streams at full build, separated into direct cash flows to PDEC and broader societal value.
Direct Revenue and Savings
| Revenue Stream | Basis | Annual Value |
|---|---|---|
| Avoided diesel fuel cost | 31.5M L at $1.60/L | $50.4M |
| Solid carbon co-product | Premium carbon black, $1,500/t base case | $8.4M |
| Electrolysis oxygen byproduct | 8 kg O2 per kg H2, industrial sale | $4.2M |
| District heat | Electrolyzer waste heat recovery | $2.6M |
| Grid services / BC Hydro demand response | Electrolyzer load flexibility | $1.5M |
| FortisBC hydrogen blending offtake | Pipeline blending revenue | $1.5M |
| Subtotal - Direct | $68.6M | |
Social and Externality Value
| Value Stream | Basis | Annual Value |
|---|---|---|
| Social cost of carbon | 84,420 t at $294/t (2030 federal SCC) | $24.8M |
| Respiratory health savings | PM2.5 particulate reduction in urban harbour | $7.6M |
| Air quality improvement | NOx, SOx, ground-level ozone reduction | $3.8M |
| Subtotal - Social | $36.2M | |
PDEC as Operator
Financial model for PDEC as a hydrogen producer and seller. Hydrogen priced at $7.50/kg, competitive against diesel-equivalent cost of $10-12/kg for heavy-duty applications.
Hydrogen Pricing
Revenue (annual at full build)
| Hydrogen sales (5.3M kg at $7.50/kg) | $39.9M |
| Solid carbon co-product | $8.4M |
| Oxygen byproduct | $4.2M |
| District heat | $2.6M |
| Grid services | $1.5M |
| FortisBC blending | $1.5M |
| Total Revenue | $58.1M |
Operating Costs (annual at full build)
| Production cost (LCOH x volume) | $11.3M |
| Staffing (280 staff) | $26.6M |
| Maintenance (2% of CapEx) | $4.3M |
| Insurance | $3.0M |
| Land lease | $2.0M |
| Admin and other | $2.0M |
| Total OpEx | $49.2M |
Profitability
Payback is before escalation adjustments and grant/subsidy offsets. With 2%/yr CPI, 5%/yr carbon price escalation, and federal grants covering 30-50% of CapEx (CIB, LCFS, SIF precedent), effective payback falls to 8-12 years. The 280-staff figure includes operations, maintenance, security, and administration across both sites.
Levelized Cost of Hydrogen (LCOH)
Two production pathways blend to a competitive LCOH. Methane pyrolysis produces solid carbon worth more than the production cost, driving its net LCOH below zero. The carbon credit is captured as revenue ($8.4M/year) rather than netted against production cost in the blend.
Electrolysis ($3.27/kg)
| Component | $/kg H2 |
|---|---|
| Energy (52 kWh/kg at $0.048/kWh) | $2.50 |
| CapEx amortization (30 MW PEM, 20-yr) | $0.37 |
| Operations and maintenance | $0.40 |
| Electrolysis LCOH | $3.27 |
Pyrolysis ($2.50/kg gross)
| Component | $/kg H2 |
|---|---|
| Gross production cost | $2.50 |
| Carbon co-product (3 kg C per kg H2) | -$4.50 |
| Carbon price assumption (base case) | $1,500/t |
| Pyrolysis LCOH (net) | -$2.00 |
Production split: 65% electrolysis, 35% methane pyrolysis. Blended LCOH = (0.65 x $3.27) + (0.35 x $0.00) = $2.12/kg. Pyrolysis carbon credit appears in revenue as carbon co-product ($8.4M/year), not as a cost offset.
Capital Requirements and Net Present Value
Phase 1 capital requirements benefit from $10-20M in savings by reusing existing Burrard Thermal infrastructure (grid interconnection, water intake, industrial zoning, rail access) rather than building greenfield.
| NPV Parameter | Value |
|---|---|
| Discount rate | 5% |
| Projection period | 20 years |
| Ramp period | 5 years (linear to full build) |
| Annual value at full build | $104.8M |
| CapEx midpoint | $212.5M |
| Burrard infrastructure savings | $15M |
| Net 20-year NPV | $0.92B |
Sensitivity Analysis
Total annual value response to variation in five key parameters, each tested independently while holding others at base case. The chart below loads data from the economic model and renders the impact of each parameter variation.
Parameters varied independently around base case: diesel price ($1.20-$2.00/L), social cost of carbon ($200-$400/t), electricity rate ($0.040-$0.065/kWh), utilization (60%-95%), solid carbon product price ($1,000-$5,000/t). Electricity rate variation does not affect total annual value because it impacts production cost (LCOH) rather than revenue streams.
Scenario Modelling
Four scenarios ranging from Phase 1 initial deployment through full build with potential export demand. Conservative scenario assumes 50% offtaker participation across all applications.
Phase 1 includes West Coast Express, SeaBus, transit buses, and port cranes at 40% of base demand. All scenarios use a 5% discount rate over 20 years with a 5-year linear ramp to target capacity.
Funding Pathways
Capital assembly draws on proven federal and provincial instruments with strong precedent in Canadian clean energy and hydrogen infrastructure. Phase 0 seed funding enables feasibility and permitting, while Phase 1 capital combines public financing with private equity.
Phase 0: Seed ($500K - $1M)
| Source | Instrument |
|---|---|
| NorthX Climate Tech | Non-dilutive grants and repayable investments |
| NRCan Clean Fuels Fund | Low-carbon fuel production support, co-sponsor with BC Hydro and VFPA |
| UVic | IESVic NSERC funding, PICS fellowship, Gustavson MBA resources |
Key Numbers for Applications
Phase 1: Capital ($160M - $265M)
| Source | Instrument | Precedent |
|---|---|---|
| Canada Infrastructure Bank | Loan for clean energy and trade corridor infrastructure | $337M loan to HTEC H2 Gateway |
| BC LCFS Initiative Agreements | Low Carbon Fuel Standard credits for H2 production and use | $133M across 4 BC hydrogen projects |
| Transport Canada ZETF | Zero Emission Transit Fund for SeaBus, WCE, transit bus applications | $2.75B program (Budget 2022) |
| ISED Strategic Innovation Fund | Large-scale clean energy project support | $420M to Algoma (green steel) |
| PacifiCan | Regional economic development | $3.6M to Ekona Power (pyrolysis) |
| Budget 2025 instruments | Productivity Super-Deduction, $5B Trade Diversification Corridor Fund, Major Projects Office | |
| Industry equity | Ballard, Corvus, BC Hydro, Indigenous equity participation, private infrastructure investors |
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