Department of Natural Resources

Office of Energy R&D

Energy Innovation Program

Clean Energy Innovation Component

Request for Project Proposals Applicants’ Guide

August 15, 2016

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Table of Contents 1 Request for Project Proposals Process ...............................................................................3

1.1 Request for Applicants’ Package ..................................................................................3 1.2 Submitting a Project Proposal .......................................................................................3 1.3 Proposal Review, Selection, and Notification ................................................................4 1.4 Due Diligence Assessment ...........................................................................................4 1.5 Contribution Agreement Negotiation .............................................................................4 1.6 Program Inquiries..........................................................................................................4

2 Program Objectives .............................................................................................................5 2.1 Expected Outcomes ......................................................................................................5

3 Description of the Program ..................................................................................................6 3.1 Definitions .....................................................................................................................6 3.2 Timeframe for Funding ..................................................................................................6 3.3 Eligible Proponents .......................................................................................................7 3.4 Eligible and Ineligible Activities .....................................................................................7 3.5 Canadian Environmental Assessment Act 2012 ............................................................8 3.6 Funding .........................................................................................................................9 3.7 Maximum and Minimum Amount Payable per Project ...................................................9 3.8 Basis and Timing of Payment........................................................................................9 3.9 Stacking of Assistance ................................................................................................10 3.10 Eligible Expenditures and Non-permissible Costs .......................................................10 3.11 Reporting Requirements .............................................................................................11 3.12 Repayable Contributions .............................................................................................11 3.13 Other Terms and Conditions .......................................................................................12

4 Confidentiality and Security of Information.........................................................................13 5 Application Schedule and Process ....................................................................................14

5.1 Application Schedule ..................................................................................................14 5.2 Submitting a Project Proposal .....................................................................................14 5.3 Supporting Documents and Requests for Supplementary Information ........................15

6 Selection Criteria ...............................................................................................................16 6.1 Selection Criteria – Project Proposals .........................................................................16

7 Scope for Project Proposals ..............................................................................................19 7.1 Renewable Energy, Smart Grids, and Storage ............................................................19 7.2 Reducing Dependence on Diesel in Northern and Remote communities, focusing on industry ..................................................................................................................................19 7.3 Methane and VOC Emissions Reduction – Oil & Gas Industry ....................................20 7.4 Carbon Capture, Use and Storage ..............................................................................21 7.5 Energy Efficient Buildings and Communities ...............................................................21 7.6 Industry – Large Emitters ............................................................................................22

Appendix 1: Proposal Template ................................................................................................24 Appendix 2: Costing Memorandum ...........................................................................................25

1- Eligible Expenditures .........................................................................................................25 2- Ineligible Costs ..................................................................................................................27 3- Non-permissible Costs ......................................................................................................27 4- In-kind Support ..................................................................................................................27

Appendix 3: Expected Program Outcomes ................................................................................31 Appendix 4: Technology Readiness Levels ...............................................................................33

Technology Readiness Level Descriptions: .........................................................................33

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1 Request for Project Proposals Process This Applicants’ Guide outlines the Request for Project Proposals (RPP) process for projects to be funded under this Energy Innovation Program call for proposals (the Program)1. It explains how the Department of Natural Resources (NRCan) will review, in a consistent, fair, and transparent manner, Project Proposals submitted in response to the RPP in order to identify, select, and approve an allocation of funding to those projects that best fit with the program’s objectives. Applicants must complete an information form on the Program website at http://www.nrcan.gc.ca/energy/funding/current-funding-programs/12398 in order to receive the necessary documents, and to be on the electronic mailing list for program updates. Project proposal review and selection will be a five step process: (1) request for an Applicants’ Package, (2) submission of a project proposal, (3) proposal review, selection, and applicant notification, (4) subsequent review of successful projects through a due diligence process, and (5) entering into a contribution agreement acceptable to NRCan. NRCan will make the final decision as to which projects will receive funding, and the level of support that will be available to each project. An applicant may withdraw its proposal without penalty at any stage of the evaluation process, by notification in writing. NRCan reserves the right to alter or cancel the currently envisaged process and deadlines at its sole discretion. Funding for this program is subject to Treasury Board approval. Any changes will be communicated to applicants via e-mail.

1.1 Request for Applicants’ Package In order to receive a copy of the Applicants’ Package, applicants will be required to submit a one-page Project Summary including contact information, via the Program website. If you have received this information package through another mechanism, please also submit a Project Summary on the Program website in order to receive regular program updates.

1.2 Submitting a Project Proposal Applicants may submit a full Project Proposal using the template provided in the Applicants’ Package. Note that the section 3.3 and section 6 of the proposal template are different for R&D projects than those for Demonstration projects. Please ensure that you fill the correct portions of the proposal template depending on the nature of the proposed work. Further details are provided in Section 5 of this document.

1 The scope of the activities that will be funded is set out in Section 7.

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1.3 Proposal Review, Selection, and Notification Project Proposals will be evaluated and ranked according to the criteria outlined in Section 6 of this document. Note that the technical criteria for R&D projects differ from those of Demonstration projects. Please ensure that you fill the correct portions of the proposal template depending on the nature of the proposed work. Both successful and unsuccessful applicants will be notified, and unsuccessful applicants will be offered the opportunity to receive formal feedback on the review of their project proposal.

1.4 Due Diligence Assessment All successful applicants will undergo a due diligence assessment, which will include an evaluation of the project’s finances, technical risk, and team risk. NRCan may request that the proponent provide additional information to support the due diligence evaluation. All proponents undergoing due diligence will be notified whether or not their project passes the due diligence assessment. Following due diligence assessment, applicants whose projects pass the due diligence assessment will be invited to begin negotiating a contribution agreement.

1.5 Contribution Agreement Negotiation Any funding under this entire submission, review and assessment process will be contingent upon the execution of a contribution agreement. Until a written contribution agreement is signed by both parties, no commitment or obligation exists on the part of NRCan to make a financial contribution to any project, including any expenditure incurred or paid prior to the signing of such contribution agreement. More information on NRCan contribution agreements will be made available to successful applicants.

1.6 Program Inquiries In order to ensure that all applicants have access to the same information and that there is a written response to every question, all questions and answers will be sent and received via the program email, NRCan.EnergyInnovation-Innovationenergetique.RNCan@Canada.ca. Recurring questions or those that may be useful to other applicants will be posted on the program’s website in a “Frequently Asked Questions” section. Confidential information and details revealing identity will first be removed. No meetings related to the Program will be held between any proposed applicant and program staff involved with the project selection process.

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2 Program Objectives The Program’s objective is to support energy technology innovation to produce and use energy in a more clean and efficient way. This Program is a key component of the Government of Canada’s actions to achieve real emissions reductions, while maintaining Canada’s economic advantage and its ability to create jobs for Canadians. The Program will also help in the search for long-term solutions to reducing and eliminating air pollutants from energy production and use. The Program will provide funding for clean energy research, development, and demonstration (RD&D) activities to support energy technology innovation to produce and use energy more cleanly and efficiently. The scope of the activities that will be funded under this component is set out in Section 7. The Program will be built on the principles of collaboration among players in the national innovation system. Collaboration among provincial/territorial and municipal governments, utilities and private companies will be encouraged.

2.1 Expected Outcomes Expected long term outcomes of the Program will include an improved suite of clean energy technologies, new knowledge to inform improved regulations; increased involvement and collaboration of the research community and key stakeholders; increased competitiveness of Canada’s clean tech industry; increased awareness and understanding of technologies and processes associated with reducing air emissions; increased capability to develop new and improved energy systems and technologies that contribute to clean air objectives. New technologies will be expected to lead to significantly reduced emissions of particulates, gaseous pollutants, toxic substances and greenhouse gases from the production and use of energy. New knowledge will also support the development of regulations, codes and standards. A detailed description of the short, medium, and long-term outcomes for the Program is provided in Appendix 3: Expected Program Outcomes.

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3 Description of the Program The Program has the following terms and conditions. These features will be incorporated in the contribution agreements entered into with selected applicants.

3.1 Definitions “Contribution” means funding provided by Canada under the contribution agreement toward Eligible Expenditures. “Due Diligence Start Date” means the date on which the proponent was notified that it succeeded to the Due Diligence stage; “Eligible Expenditure Period” means the period starting on the later of the date on which the proponent was notified that it passed a due diligence assessment, or April 1 of the fiscal year in which the contribution agreement is signed and ending on the earlier of Completion Date and March 31, 2018; “Eligible Expenditures” means those costs incurred within the Eligible Expenditure Period, either directly by the Proponent or through a third party, which are cash disbursements made with respect to the activities set out in the Proposal; “Profit” means in relation to the project, net operating profit as determined by Generally Accepted Accounting Principles (GAAP); "Project" means the Applicant’s proposal, as submitted to NRCan; “Total Project Costs” means the Contribution and other verifiable contributions either received or contributed by the Proponent from the Due Diligence Start Date to the Completion Date and directly attributable to the Project.

3.2 Timeframe for Funding Projects will be eligible for Program funding from the time that an applicant is notified that their project has been selected to proceed to a contribution agreement until March 31, 2018. Applicants may also continue to contribute to their portion of the project costs until March 31, 2019, though no Program funding will be available after March 31, 2018. Further clarifications on Program funding will be provided to successful proponents during the contribution agreement negotiation process. In all cases, until a written contribution agreement is signed by both parties, no commitment or obligation exists on the part of NRCan to make a financial contribution to any project, including any expenditure incurred or paid prior to the signing of such contribution agreement.

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3.3 Eligible Proponents Eligible proponents will be legal entities validly incorporated or registered in Canada, including electricity and gas utilities, companies, industry associations, research associations, aboriginal and community groups, Canadian academic institutions, and provincial, territorial, regional and municipal governments and their departments and agencies. Collaboration with federal laboratories The program is considering a collaborative mechanism which would allow in-kind participation of a federal organization in a contribution project funded under this program. As there is no current confirmation that this will be possible, it is suggested that information on any potential collaboration of this type between a federal research organization and an applicant be described in a separate document and attached to the proposal as supplementary information. Subcontracts directly with federal laboratories may be included as part of the Total Project Costs provided that the recipient is able warrant that they have sufficient funds outside of any Program contribution to cover all costs associated with said subcontract.

3.4 Eligible and Ineligible Activities

3.4.1 R&D Proposals Program funds can be applied to the following kinds of R&D activities. Applied research related to the early-stage (pre-prototype) development of new and

transformative clean energy technologies; Support for the development of energy-related codes and standards, regulations, and test

procedures, designed to eliminate or reduce barriers to the deployment of clean energy technologies;

Development, assessment, testing and integration of novel and innovative equipment, software and methodologies - for example:

o proof of concept of technologies where there is a significant technical risk, including field trials, bench-scale testing, pilot plants and prototypes;

o integrated energy systems; o clean energy analytical tools and modelling software

Pre-demonstration field trials - limited duration tests designed to identify further R&D needs before a technology can proceed to a pre-commercialization demonstration with limited expectation of long term operation); and

Assessments or characterization studies, including data compilations and syntheses, where there is a significant energy-related knowledge gap.

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R&D funds are not available for the following activities: Demonstration, deployment or replication of technologies that are already at the commercial

stage; Repeated technical field trials, unless the equipment or method being tested has been

significantly modified or the environment in which the trial is to take place is significantly different;

Incremental improvements to equipment, software and other tools for energy production, transportation, distribution, conversion and use that are already in the market place, or that are ready for commercialization;

Feasibility studies to determine the appropriateness of implementing a standalone commercially available technology in a particular actual or hypothetical setting;

Resource assessments or characterization for conventional energy resources; and Manufacturing start-up and trouble shooting

3.4.2 Demonstration Proposals Program funds can be applied to the following kinds of demonstration activities: The permanent (for the normal life of the equipment) installation of a pre-commercial

technology with the intent that it continues to operate in its intended operational environment.

Permanent modification of existing processes, equipment, or systems to accommodate an innovative technology.

The permanent installation of equipment and/or infrastructure to support a demonstration, or multiple demonstrations.

Associated costs for the engineering, design and permitting of a permanent installation as identified in the bullet above, including elements of a Front-End Engineering Design study (FEED) (see below) if required as part of a demonstration. Operation, performance testing, and analysis of pre-commercial equipment in its intended environment to assess performance of an innovation.

3.4.3 FEED Study Proposals Front-end Engineering Design studies focus on the technical requirements as well as financial and regulatory requirements to complete a demonstration project as defined above. A FEED determines the demonstration project’s specific requirements including technology, budget, and timelines to avoid significant changes in the execution phase of the demonstration project. Acceptable FEED studies could also incorporate a feasibility study, as well as completing any environmental assessments and addressing any other regulatory requirements. Standalone R&D not connected with a FEED study is not permitted. FEED studies must have a demonstration project as defined above as the end goal of the effort.

3.5 Canadian Environmental Assessment Act 2012 The Canadian Environmental Assessment Act, 2012 (CEAA) is the legal basis for the federal Environmental Assessment (EA) process for most projects in Canada, except for projects in the

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Mackenzie Valley, the Yukon and in Nunavut, where other processes and legislation may apply. The CEAA outlines the responsibilities, requirements and procedures for the environmental assessment of projects and establishes a process for assessing the potential environmental effects of “projects” in which the Government of Canada has a decision-making responsibility. Proponents should clearly indicate in their project proposal if a federal environmental assessment is required, as additional information may be requested by the Program.

3.6 Funding Financial support for projects is constrained by the total amount available for this component, the timeframe of the program, and project selection criteria. Collaboration and leveraging are strongly encouraged, and these will be included among the selection criteria. The Program will provide for Eligible Expenditures, set out in Section 3.10. In-kind contributions from the proponent and their partner(s) will be accepted on a case by case basis to count towards the proponent’s portion of the project costs. In-kind support must be verifiable and directly support the project. Further details for estimating verifiable in-kind support are in Appendix 2: Costing Memorandum.

3.7 Maximum and Minimum Amount Payable per Project

3.7.1 Demonstration Projects and Front End Engineering Design (FEED) Studies

The Program may pay up to 50% of Total Project Costs per project, up to a maximum amount of five million dollars ($5,000,000.00). The minimum funding requested per project is three hundred thousand dollars ($300,000.00).

3.7.2 Research and Development Projects The Program may pay up to 75% of Total Project Costs per project, up to a maximum amount of five million dollars ($5,000,000.00). The minimum funding requested per project is three hundred thousand dollars ($300,000.00).

3.8 Basis and Timing of Payment Contribution agreements will set out the required terms for payment, made upon receipt of proper documentation as defined in the contribution agreement. Final payment will not be made until all project activities have been completed by a proponent and are deemed acceptable to NRCan. To ensure appropriate project oversight, a percentage of the contribution will be withheld until all conditions of the contribution agreement have been met. The percentage withheld will be determined based on the nature of the project and its risk level, and will be stated in the contribution agreement. Proponents under the demonstration component of the Program may be audited one or several times either at project completion or at NRCan’s discretion during the project. Auditors will call

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and potentially visit each proponent on site at the beginning of the project to explain the auditing process, and review project financial controls.

3.9 Stacking of Assistance Prior to signing contribution agreements, on an annual basis, and upon project completion, proponents will be required to disclose all sources of funding on individual projects, including contributions from other federal, provincial/territorial, and municipal governments and industry sources. Total Canadian government assistance (federal, provincial/territorial, regional and municipal governments) must not exceed 75% of Total Project Costs, except in the case where the recipient is a provincial/territorial, regional, or municipal government or their department or agency, in which case, the total Canadian government assistance authorized may be up to 100%. For greater clarity, a recipient that is a provincial/territorial, regional, or municipal government or their department or agency will be required to contribute at least 25% of the Total Project Costs from either its own resources or other non-Canadian government partners. If the proposed total Canadian government assistance exceeds the limits set out above, Canada reserves the right to reduce the Program contribution to the project until the stacking assistance limit is met. If total Canadian government assistance exceeds the limits set out above upon project completion, Canada reserves the right to recover the excess contribution from the proponent. Note that the government assistance referred to in these stacking limits does not include loans from governments or Crown agencies. For example, loans to the project from governments or Crown agencies would not be included in this calculation; however, if a preferential interest rate is obtained through government loans, the cost savings due to the preferential rate would be included. Clarifications will be provided on a case-by-case basis.

3.10 Eligible Expenditures and Non-permissible Costs Eligible Expenditures for an approved project under the Program must be directly related to, and necessary for, the implementation and conduct of a project as defined in Schedule A of a contribution agreement, and will include:

salaries and benefits for employees on the recipient’s payroll, for actual time spent by the employees on the project;

professional, scientific, technical and contracting services; reasonable travel costs, including meals and accommodation; printing services; data collection services, including processing, analysis and management; licence fees and permits; field testing services; purchase, installation, testing and commissioning of qualifying equipment, materials and

products, including diagnostic and testing tools and instruments;

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laboratory and field supplies and materials; and overhead expenses, provided they are directly related to the conduct of the project and

can be attributed to it. Overhead costs will be negotiated and agreed to on an individual basis with project proponents before signing a contribution agreement. They will not exceed 15% of eligible expenditures.

Costs ineligible for reimbursement from the Program (but permitted as part of the proponent’s contribution to the total project costs) will include:

The reimbursable portion of Federal and Provincial Taxes In kind costs

Costs not allowed to be counted toward total project costs (non-permissible costs) will include:

Land Costs Legal Costs Proposal preparation costs All costs associated with the protection of IP Costs incurred before the Due Diligence Start Date, or after the Project Completion

Date. Note: More details on costing are included in Appendix 2: Costing Memorandum

3.11 Reporting Requirements Proponents will submit regular updates to NRCan summarizing the project progress and expenses incurred. Regular communication between NRCan and the proponents will be implemented to monitor progress. Note that the Program requires an additional 5 years of reporting by proponents beyond the project end date.

3.12 Repayable Contributions

3.12.1 Demonstration Projects and FEED Studies Contribution agreements for demonstration projects and FEED studies may be conditionally repayable within five years after Project Completion if the project generates profit. The requirements that may trigger repayments will be detailed in the Contribution Agreement (CA), along with the process for repayment. Prior to signing a CA, the proponent will be required to submit a financial ProForma that shows the expected financial performance of the project. This should include all major line items for both revenue and expenses using generally accepted accounting principles, between the Project Completion Date then annually for five years thereafter. Following the Project Completion Date, proponents will be required to provide a financial statement on the profitability of their project, (as described in the previous paragraph), using generally accepted accounting principles, on an annual basis. If a profit is generated, then the

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amount to be repaid will be: profit times the proportion of Program funding to Total Project Cost up to Canada’s Contribution.

3.12.2 R&D Projects Contribution agreements for R&D projects will not be repayable because the R&D contributions are for activities whose primary aim is to further research and development.

3.13 Other Terms and Conditions All Intellectual Property (IP) that arises in the course of a project funded through a

contribution agreement shall vest in, or be licensed to, the proponent. The proponent will grant to Canada a non-exclusive, irrevocable, world-wide, royalty-free licence in perpetuity to use project reports and modify such reports and documents for non-commercial governmental purposes.

No Member of the House of Commons shall be admitted to any share or part of the

contribution agreements, or any resulting benefit. The Proponent will comply with the Conflict of Interest Act, the Conflict of Interest and Post-

Employment Code for Public Office Holders. Funding may be cancelled or reduced in the event that departmental funding levels are

reduced by Parliament to a point where the Program could not meet its existing commitments. Agreements will include provisions to this effect.

Proponents will be required to acknowledge the financial support of Canada in all public

information produced as part of the project. As part of project monitoring requirements, NRCan will have the right to visit and inspect all

project sites, upon providing a reasonable notice to project proponents.

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4 Confidentiality and Security of Information The Access to Information Act, (the “Act”) governs the protection and disclosure of information, confidential or otherwise, supplied to a federal government institution. This Act is a law of public order; as such the government of Canada, including NRCan, cannot contract out of it. Paragraph 20(1) (b) of the Act states that: a government institution [such as NRCan] shall refuse to disclose any record requested under the Act that contains financial, commercial, scientific or technical information that is confidential information supplied to a government institution by a third party and is treated consistently in a confidential manner by the third party.

Pursuant to Paragraph 20(1) (b) of the Act, NRCan will protect the applicant’s confidential information supplied to NRCan from disclosure if:

a) the applicant’s information supplied to NRCan contains financial, commercial, scientific or technical information; and

b) the applicant consistently treats such information in a confidential manner. Further, NRCan will protect the applicant’s confidential information in its possession to the same extent as the applicant protects said confidential information in its own establishment: if the applicant chooses to send the proposal or other confidential information to NRCan by e-mail, NRCan will respond to the Proposal by e-mail. Similarly, if the applicant’s correspondence is through regular mail, NRCan’s response will be in like manner. However, in all cases, NRCan will use e-mail correspondence to the applicants for all non-confidential matters. For more information on this subject, a careful reading of the entire section 20 of the Access to Information Act is greatly encouraged.

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5 Application Schedule and Process

5.1 Application Schedule The following is the current schedule for the application and review process: Final date for submission of Project Proposals October 31, 2016 Project Selection by Federal Expert Committee Fall 2016 Applicants notified of NRCan decision Late Fall 2016 Negotiation of contribution agreements Winter 2016 Anticipated contribution agreement signing Winter 2016/Spring 2017 The above schedule is subject to change. Any changes will be communicated to applicants via the e-mail addresses provided during the submission of the information form at the time of request for Applicants’ Package, as well as updated on the Program website.

5.2 Submitting a Project Proposal Proposals must be submitted by providing a completed proposal template (included in the Applicants’ Package), without which they will not be considered. The completed template must be submitted as a Word file and in addition, the applicant must separately print and sign the attestations page, scanning and sending the signed version as a PDF. Printed and mailed versions of the proposal and attestations will be accepted, but electronic versions are preferred. Note that section 3.3 and section 6 of the proposal template are different for R&D projects than those for Demonstration projects. Please ensure that you fill the correct portions of the proposal template depending on the nature of the proposed work. An applicant may provide supporting material for any aspect of the proposal. Applicants are required to submit A SINGLE COPY of the above documents postmarked by 23:59 EDT, October 31, 2016. It is the applicant’s responsibility to retain proof of the time that the documentation package was sent to NRCan. This may be required in the event that NRCan does not receive the documentation package by the deadline for reasons that are beyond the control of the sender. As per Section 4 above, NRCan recognizes that e-mail is not a secure means of communication, and NRCan cannot guarantee the security of confidential information sent via e-mail while it is in transit. Nonetheless, applicants who regularly use e-mail to communicate confidential information within their own organizations may choose to submit their documentation packages by e-mail to: NRCan.EnergyInnovation-Innovationenergetique.RNCan@Canada.ca. Applicants may also submit their documentation by courier or registered mail to:

Energy Innovation Program Office of Energy Research and Development Natural Resources Canada 580 Booth St., 14th floor

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Ottawa, ON K1A 0E4 Where applicants submit A SINGLE COPY of the required files by courier or registered mail, we request that A SINGLE COPY of the required files in an electronic version on a memory stick be included in the package, clearly marked with the name of the organization and the title of the project. If you are submitting by courier, it is recommended that you inform us by e-mail that you are doing so.

5.3 Supporting Documents and Requests for Supplementary Information

If you are providing supporting material, we request that it be in electronic format, preferably PDF. However, please note that the maximum total size of e-mail attachments is 9 MB. If your electronic submission would exceed the maximum, we suggest you submit A SINGLE COPY of the material by courier or registered mail, on a memory stick, clearly marked with the name of the organization and the title of the project. We request that you restrict additional material to that which is directly relevant to, and in support of, your project proposal. The Program may request supplementary information at various points in the review process. Please note: up to three years of financial statements may be requested during the selection process from the applicant in order to assess project and applicant financial risk. Financial review will be done in confidence by financial analysts contracted by the program. These requests to the applicant will be made via e-mail, and responses should be by e-mail, courier or registered mail. Any additional material and documentation provided in response as attachments should be in electronic format, preferably PDF. The Program may also request presentations by the applicants, either in person or by teleconference, during the review process.

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6 Selection Criteria

6.1 Selection Criteria – Project Proposals Applicants must address all of the criteria below in their project proposals, providing supporting information for all assertions. Note that the descriptions of the individual criteria below are indicative of the factors considered by reviewers, but are not meant to be all inclusive. Applicants are urged to submit all information they feel would be relevant in addressing the criteria in their proposals. Project proposals will be rated and ranked on a comparative basis, against other proposals being reviewed, based on the following criteria and on an overall assessment of individual project proposals.

6.1.1 Mandatory Criteria Proposals will be evaluated using the following mandatory criteria:

Mandatory Criteria Is the applicant an eligible recipient of funding under this RPP? Yes/No Is the project located in Canada? Yes/No Does the project end before March 31, 2019? Yes/No Does the total funding meet all of the criteria as laid out in the proposal template?

Yes/No

Is the proposal complete, with all requested documentation? Yes/No Does the project meet the scope of the RPP as defined in Section 7? Yes/No Does the proposal include a signed attestation? Yes/No

6.1.2 Evaluation Criteria Proposals that meet the mandatory criteria listed above will then be reviewed and ranked using the criteria below; each of the three themes are given equal weight:

6.1.2.1 Relevance How well does the project technology and concept meet the objectives of the

Program as outlined in Section 2? How well does the project as proposed align with the program’s expected outcomes

(short, medium, and long term) as defined in Section 2.1 and in Appendix 3? How well does the project align with the scope statement set out in Section 7?

6.1.2.2 Risk What is the ability of the project manager, the technical and scientific team, and

partner organizations to deliver the project over the lifetime of the project? What is the complexity of the project? (i.e. number of project steps, number and

magnitude of project unknowns and uncertainties). Is the project ready to

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commence? Projects that are ready to start as soon as EIP funding is confirmed will be preferred.

What is the quality of the project plan in terms of risk management strategies, achievable timelines, and clear go/no-go decision points as part of well-planned project management?

What is the financial risk of the project (i.e. financial strength of the applicant and partners, adequate evidence of co-funding, including evidence that such co-funding has been secured, solid and reasonable budget for the planned project activities)?

6.1.2.3 Impact Demonstration Projects and FEED Studies

Receptor capacity and interest: Is there evidence of adequate and abiding receptor capacity and interest in using the results of the demonstration project?

What is the funding leverage from partners? Projects with higher proportions of funding from the proponent and partners compared to the Program contribution will be preferred. Projects with a greater portion of co-funding in cash versus in kind will be preferred.

What is the potential impact of the technology should the project be successful? Will there be new codes and standards developed or policies implemented? Does the technology address a significant gap that will lead to a technical advancement needed to meet other objectives (such as environmental and/or economic objectives?)

Economic and social impact: What is the economic and social impact should the project be successful? Is there a market opportunity for export of the technology? Does the project have replication potential elsewhere in Canada? Will the project contribute to the training of highly qualified personnel and/or job creation for Canadians?

Environmental impact: What is the environmental impact should the project be successful? Will there be GHG emissions reductions associated with the project’s success? Does the potential for replication increase the environmental benefits? Are there any other environmental benefits associated with the project?

What is the quality of the proposed knowledge transfer plan in terms of stakeholder engagement, knowledge dissemination, and publicly available materials?

Research and Development Projects

Is collaboration key to the success of the project? If so, are the relevant collaborators involved in the project (from either a financial or technical perspective)? Is there evidence that the target audience of the R&D is interested and will use the results of the project?

What is the funding leverage from partners? Projects with higher proportions of funding from the proponent and partners compared to the Program contribution will be preferred. Projects with a greater portion of co-funding in cash versus in kind will be preferred.

Technical and Economic Impact: Will the technology advancement result in reduced costs and/or improved technical performance? Is this a transformative technology that could ultimately replace conventional technology? Will the R&D in this project help to

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address barriers to adoption of this technology? Will the project contribute to the training of highly qualified personnel and/or job creation for Canadians?

Policy and Regulatory Impact: Will this project contribute to the development of codes and standards, regulations and/or policies? Will this project help industry reduce the cost of compliance with GHG regulations?

Environmental impact: What is the environmental impact should the project be successful? What is the significance of the anticipated GHG emissions reductions associated with the project’s success? Will there be reduced air emissions or other environmental benefits associated with the project’s success?

What is the quality of the proposed knowledge transfer plan in terms of stakeholder engagement, knowledge dissemination, and publicly available materials?

6.1.3 Other Criteria In addition to the above criteria, other departmental priorities including regional balance may be considered in the final project selection.

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7 Scope for Project Proposals The Program’s objective is to support energy technology innovation to produce and use energy more cleanly and efficiently. Proposals are being requested in the following strategic priority areas:

7.1 Renewable Energy, Smart Grids, and Storage Urban renewable energy systems can contribute to the transition to a low-carbon economy and help reduce the economic, environmental, and health risks associated with air pollution and climate change. With more than 80% of Canadians living in cities, urban environments are an area of key focus in achieving greenhouse gas (GHG) reductions, requiring a cross-sectoral focus on the energy system and its linkages to other urban systems such as transportation, potable water supply and wastewater treatment. Proposals are requested from utilities, municipalities, clean technology producers, and urban developers for FEED studies or demonstrations that would drive towards highly efficient and clean energy use in an urban environment to significantly reduce energy use at the community level and increase its renewable content through the innovative integration of some combination of: renewable energy sources for heat and/or power (e.g. bioenergy, solar, geothermal, wind); smart grid concepts (e.g. Automated voltage control, Dynamic capacity rating, Distributed

energy resources monitoring and control, Microgrids, Enhanced fault prevention, Self-healing grids, Green Button, Advanced metering);

energy storage/management; net zero housing/building concepts; community energy planning; EV charging/grid management concepts; and, information and communication technology (ICT) solutions (e.g. wireless and broadband

networks; sensors and meters; servers and databases; analysis software and applications).

This program component will accept proposals for demonstration projects and FEED studies only.

7.2 Reducing Dependence on Diesel in Northern and Remote communities, focusing on industry

Industry generates 42% of energy demand in the North and provides important economic development opportunities for Northern communities. In recent years, large-scale deployment of renewable energy technologies at Northern* industrial sites (e.g. large scale wind turbines at mines) has proven the capability to operate in northern conditions and ultimately reduce diesel fuel use in these locations. Given the significant opportunities to reduce diesel use at mining sites through innovation and the associated environmental and economic benefits that can be achieved, this component of the Program is seeking proposals for opportunities to reduce the use of diesel fuel at industrial sites through innovative demonstrations or FEED studies of energy efficiency technologies, clean transportation, renewable heat and power, cogeneration, energy storage, and/or smart grid technologies.

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This program component will accept proposals for demonstration projects and FEED studies only. *North of the discontinuous permafrost line.

7.3 Methane and VOC Emissions Reduction – Oil & Gas Industry Canada’s oil and gas sector releases significant amounts of methane and volatile organic compounds (VOCs) through venting, flaring and fugitive equipment leaks. It is estimated that these sources contribute to approximately 10% of greenhouse gas and 30% of VOCs emitted in Canada.

The objective of the call for proposals is to fund research and development, demonstration projects, and FEED studies which would address methane and VOC emissions from this energy sector in support of Canada’s objective to reduce methane emissions by up to 45% by 2025. In particular, the following areas will be targeted: Development of sensors and field deployable analytical technologies or methods for point

source and area source emissions detection, quantification and speciation between methane and VOCs. Examples include: o Development of field deployable laser based spectroscopy applications for methane

and VOCs; o Open path optical technologies to quantify black carbon particulates, which are

formed when methane and VOCs are flared; and, o Development of standards and codes of practice for high accuracy and precision field

analytical methods or in-situ standardized calibration methods to achieve laboratory quality results in the field in real time and assure/maintain the accuracy of integrated monitoring equipment.

Development of new, or improvement to existing, emission factors and predictive models. Examples include: o Hydrocarbon storage tank models to accurately quantify working and breathing

losses; and, o Emission factors for sources such as flaring, venting, fugitive equipment leaks,

combustion and processing. Development of Supervisory Control and Data Acquisition (SCADA) systems which can be

integrated into process control systems. This will serve to optimize process efficiencies and stability and reduce emissions and costly product or energy losses. Examples include: o oil sands solvent recovery; o storage tank vapour recovery; o flare system operation; and, o improved steam system management.

SCADA systems that enable continuous emissions data logging and dissemination, which

can provide cost effective and instantaneous awareness of emissions causing events such as process upsets or the onset of fugitive equipment leaks and enable immediate and targeted deployment of emissions mitigation solutions. These systems will also improve emissions reporting and inventorying abilities.

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Scaling down of proven technologies for cost effective deployment to smaller upstream

facilities (e.g., micro-condensation of diluents from VOC rich flare and vent streams at production facilities).

This program component will accept proposals for R&D projects, demonstration projects and FEED studies.

7.4 Carbon Capture, Use and Storage To achieve the GHG reductions necessary to meet Canada’s 2030 targets, innovative new technologies, such as carbon capture and storage, will be required. This will be particularly the case in the oil and gas and industrial sectors. Although used in very specific applications, the cost and efficiency of carbon capture systems need to be improved in order to deploy this technology more broadly. Research and development proposals would ideally address these challenges, paving the way for significant emission reduction and contributing to enabling a transition to a low-carbon economy. In particular, the following areas will be targeted: new applications of carbon capture in oil and gas and other industrial sectors; next generation, lower cost carbon capture technology; and, new uses for captured CO2.

This program component will accept proposals for R&D projects only.

7.5 Energy Efficient Buildings and Communities The built environment, consisting of residential, commercial and institutional buildings, accounts for 17% of Canada’s total GHG emissions as a percentage of total primary energy use. This includes 12% of direct emissions attributed to the buildings sector, and another 5% attributed to electricity use by buildings. Reducing GHG emissions in the buildings sector requires ongoing innovation in the design, construction and operation of the built environment so that affordable, higher efficiency homes, buildings and equipment become available to Canadians. This program component will target the following areas:

7.5.1 Net Zero Energy Communities Showcasing technology, tools and solutions, and how to use and integrate these to

maximize energy efficiency at the community level (i.e. design, planning & construction); and,

Addressing barriers including costs and integration in codes and standards, electric vehicle readiness, optimization and validation and lack of awareness of new technologies.

7.5.2 Commercial Buildings Addressing both technical and non-technical barriers to Net Zero Energy (e.g. inform

codes and standards) for new and existing buildings; Deep retrofit in municipal, university, school and hospital sectors, demonstrating the ability

to reach Net Zero through retrofits and helping to address barriers including integration in codes and standards, optimization and validation, and lack of awareness of new technologies; and,

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Automated performance assessment and ongoing optimization of building operations.

7.5.3 Equipment Highly efficient heating and cooling technologies, addressing technical and non-technical

barriers to get technologies to deployment (development of standards for new categories of products; optimization, validation and market visibility in pilot homes; adaptation of equipment from foreign manufacturers to Canadian conditions).

Target technologies could include cold climate heat pumps, micro-combined heat and power, and zone control.

7.5.4 Housing and Building Design Tools Design and optimization tools to support the integration of innovative solutions in new and

existing buildings; and, Integration of energy efficiency modules to broader building modelling and visualization

tools such as Building Information Model (BIM). This program component will accept proposals for R&D projects, demonstration projects and FEED studies.

7.6 Industry – Large Emitters Studies that analyzed the Canadian industrial energy use and GHGs reveal that 80% of the energy and 75% of the emissions that are attributed to industry come from a handful of large companies. Innovative new technologies are needed to meet Canada’s GHG emission reduction targets for these emission intensive industry sectors.

7.6.1 Fuel Switching Fuel switching is the use of alternative or low-carbon fuels, used as a fuel or feedstock, in industrial processes to improve industrial energy and/or emission profiles. Proposals are requested from industry that focus on fuel switching in industry. The priority areas are: assessment or advancement or certification of alternative fuels; fuel pre-processing; fuel switching protocols; and, assessments on the fuel supply chain and their impacts.

7.6.2 Biorefineries Biorefineries are defined as facilities that convert biomass into a spectrum of value-added bio-based products and bioenergy while concurrently reducing industrial energy intensities, reducing fossil fuel consumption, and lowering industrial air emissions. Canada has a large biomass supply combined with globally competitive technology development companies that can enable the development of a strong bioeconomy using biorefineries. Proposals are requested from industry that undertake the innovative integration of bioproduct production processes, or next generation bioenergy technologies into existing assets (e.g. first generation biofuel plants, pulp and paper mills, agricultural facilities, and the food and beverage industry). The priority areas are: Solid biomass handling;

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Biomass pre-processing technologies; Integration of bioproduct processes; and, Integration of advanced biofuels.

This program component will accept proposals for R&D, demonstration projects and FEED studies.

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Appendix 1: Proposal Template Please note the following when completing the proposal template.

1. The proposal template was sent to you by e-mail as a Microsoft Word file entitled “EIP Proposal Template”, along with this Applicant’s Guide.

2. Unless otherwise specified, the “proposed project” or the “project” or the “proposal” in

this template refers to the proposed project submitted in response to the RPP process undertaken by the Program.

3. Completion and submission of this proposal template does not imply that the proposed

project will be approved for co-funding by the Program.

4. Applicants, their partners and collaborators must submit all information required under this request.

5. The completed proposal must be submitted by e-mail, courier or registered mail by 23:59

p.m. EDT, October 31, 2016. Please refer to Section 5.2 Submitting a Project Proposal for the submission procedure. Submissions sent after that time will not be accepted. It is the applicant’s responsibility to retain proof of time the documentation package was sent to NRCan. This may be required in the event that NRCan does not receive the documentation package by the deadline for reasons that are beyond the control of the sender.

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Appendix 2: Costing Memorandum

1- Eligible Expenditures Eligible Expenditures for an approved project under the Program must be directly related to, and necessary for, the implementation and conduct of a project as defined in Schedule A of a contribution agreement, and will include:

salaries and benefits for employees on the recipient’s payroll, for actual time spent by the employees on the project;

professional, scientific, technical and contracting services; reasonable travel costs, including meals and accommodation; printing services; data collection services, including processing, analysis and management; licence fees and permits; field testing services; purchase, installation, testing and commissioning of qualifying equipment, materials and

products equipment and products, including diagnostic and testing tools and instruments;

laboratory and field supplies and materials; and overhead expenses, provided they are directly related to the conduct of the project and

can be attributed to it.

Salaries: Salaries include wages for all personnel with direct involvement in the project such as engineers, scientists, technologists, draftsmen, researchers, laboratory, experimental and shop labour. All eligible personnel must be employees on the Proponent’s payroll. Payment in terms of shares, stock, stock options and the like are not eligible. The amount invoiced shall be actual gross pay for the work performed and shall include no markup for profit, selling, administration or financing. The eligible payroll cost is the gross pay of the employee (normal periodic remuneration before deductions). Normal periodic remuneration rates are the regular pay rates for the period excluding premiums paid for overtime or shift work. The payroll rate does not include any reimbursement or benefit conferred in lieu of salaries or wages. When hourly rates are being charged for salaried personnel, the hourly rates shall be the periodic remuneration (annual, monthly, weekly, etc.), divided by the total paid hours in the period including holidays, vacation, paid sickness time. Labour claims must be supported by suitable records such as time sheets and records, and be held for verification at time of audit. Management personnel are required to maintain appropriate records of time devoted to the project. Benefits: Benefits are defined as a reasonable prorated share of expenses associated with the direct labour cost such as the employer’s portion of Canada Pension Plan, Quebec Pension Plan and Employment Insurance, employee benefits such as health plan and insurance, Worker’s Compensation, sick leave and vacation plus any other employer paid

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payroll related expenses. Those items which have no relationship to the project or which have been charged on an indirect basis are non-eligible. The determination of the fringe benefits amount shall be in accordance with generally accepted cost accounting principles. In general, fringe benefits rate provided in the project estimate shall be computed once during the life of the project and agreed on prior to the signing of the Agreement. If retroactive adjustments are made, these must be indicated on claims for progress payments for NRCan approval. Overhead expenses: With regard to Overhead Expenses, they may include:

administrative support provided directly to the project by the proponent’s employee(s), valued on the same basis as professional staff time;

routine laboratory and field equipment maintenance, based on the actual cost to the proponent that is directly related to the project;

heat, hydro, and office operating costs (e.g. faxes, telephone), provided that they are directly related to the project.

Overhead costs will be negotiated and agreed to on an individual basis with project proponents before signing a CA. They will not exceed 15% of Eligible Expenditures. Materials: Materials include those consumed in carrying out the project, including those utilized in the production and operation of models, prototypes and pilot plants. Only utilities consumed to operate equipment or processes are eligible and may be metered and reported separately from the total utility cost. Utilities used for buildings are not eligible. Materials purchased solely for the project and issued from the Proponent’s inventory are eligible. All materials shall be charged to the project at the net price excluding GST after deducting all trade discounts and similar credits. Surplus materials shall be credited to the project at the original purchase price. Equipment: Equipment consists of equipment acquired or constructed exclusively for the project. In order to be eligible, such equipment must be identified in the project cost estimate, and approved by the Minister. All such equipment shall be charged to the project at the net price (excluding GST) after deducting all trade discounts and similar charges. Where such equipment is obtained from another division of the Proponent or from a related company, the eligible expenditures shall not exceed fair market value and shall not include any markup for profit, administration, selling or financing expense. Sub-Contractors and Consultants: The nature of goods or services to be acquired shall be set out in the proposal estimate. The amount eligible from a sub-contractor or a consultant shall be the actual contract amount. Testing Services: Eligible testing services are those conducted by testing organizations or accredited laboratories, such as the Canadian Standards Association, Underwriters Laboratories and must be essential to the success of the project. Testing services shall be charged at actual cost. Regulatory costs, where required may be eligible e.g. testing to comply with Environmental Standards. All such costs should be identified in the original

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proposal cost estimates. Travel, Meals and Accommodation costs: Unless stated otherwise in the Contribution Agreement between the NRCan and the proponent, Treasury Board rates that are in effect at the time of signing the Contribution Agreement shall be used in reimbursing the following expenses:

• Travel, food and lodging costs to meet with NRCan officials. • Travel, food and lodging costs necessary for other project activities, e.g. field trials

and demonstrations at locations away from the proponent=s usual location; project planning and review meetings between the principal proponent and its partner(s).

2- Ineligible Costs Costs ineligible for reimbursement from the Program (but permitted as part of the proponent’s contribution to the total project costs) will include:

The reimbursable portion of Federal and Provincial Taxes In kind costs (See Section 4)

3- Non-permissible Costs (1) Land Costs (2) Legal Costs (3) Proposal preparation costs (4) All costs associated with the protection of IP (5) Costs incurred before the Due Diligence Start date, or after the Project Completion

Date.

4- In-kind Support The Program accepts In-Kind contributions (defined below) as part of Total Project Costs, subject to the definitions and limitations described in this section. IMPORTANT NOTE Proposed in-kind contributions that are deemed acceptable by NRCan officials must be supported by a formal commitment from the project proponent to provide them, prior to any commitment on Program funding to the proposed project being made. Purpose

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The purpose of this section is to identify the kinds of non-cash contributions (“in-kind support”) that are acceptable as part of the overall funding for the project from the project proponent2, and to provide guidance on how to put a value on those contributions. Definitions

• In-kind support - a cash-equivalent contribution in the form of an asset3 for which no cash is exchanged but that is essential to the project and that would have to be purchased by the project proponent on the open market, or through negotiation with the provider, if it were not provided by the project proponent.

• Fair market value - the average dollar value the project proponent could get for a contributed asset in an open and unrestricted market, between a willing buyer and a willing seller (the proponent) who are acting independently of each other. As a guide, it should approximately represent the original cost minus the depreciation.

• Most favoured customer - a customer given the deepest discount from the normal selling price for a good or service sold to it by the project proponent.

Eligibility of in-kind contributions To be eligible as an in-kind contribution:

• The contributed asset must be from one of the categories identified below under the heading “Categories of Eligible In-kind Support”

• It must be essential to a project=s success and would otherwise have to be purchased by the project proponent

• Its value must be determinable and verifiable • Its valuation must be confirmed by NRCan officials or its auditors, and agreed upon

by the project applicant and NRCan. Assessing the Value of In-kind Contributions Two different approaches to the valuation of in-kind support are possible:

• Using the fair market value, as described above. • Using the incremental cost – the cost to the project applicant or its partners and

collaborators of providing the contributed asset over and above normal operating costs.

Categories of Eligible In-kind Support

2 Unless otherwise indicated, “project proponent” in this section refers to the project applicant and its partners and collaborators 3 AAsset” in this section means a useful and valuable good, service or other support provided to the

project.

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1: Salaries and Benefits This category addresses the provision of the project proponent’s employees’ time to undertake work, such as research, technology development and assessment, and expert analysis that is wholly and directly in support of the project.

• Services of an employee of the project proponent shall be valued at the employee's regular rate of pay (plus an amount of fringe benefits that is reasonable, allowable, and allocable, but exclusive of overhead costs), provided these services are consistent with the duties for which the employee is normally paid.

2: Professional, Scientific and Contracting Services This category addresses the provision of analytical and technical services. Analytical and technical services include routine laboratory and field technical services such as data collection, laboratory analyses and measurements, and field measurements, exclusive of equipment maintenance. These services may be provided by a component of the project proponent’s overall organisation, or provided to the project proponent by a third party. The value of analytical and technical services provided by or to the proponent should be the lesser of the project proponent’s internal rate4 for the service if that service is provided internally (i.e., within the project proponent=s organisation), or the incremental cost to the project proponent if it is provided by a third party. 3: Provision of Equipment and Laboratory and Field Supplies and Materials This category includes equipment, laboratory supplies and field supplies that are provided by or to the project proponent, and the provision of access to, and use of, proprietary software and databases owned by or provided to the project proponent. Values assessed for equipment and laboratory and field supplies and materials provided to the project must meet the following criteria:

• The value of supplies and materials shall not exceed the selling price to the provider’s most favored customer at the time of provision.

• The value of equipment shall not exceed the fair market value of equipment of the same age and condition at the time of provision.

• If the equipment is special purpose, one-of-a-kind, its value shall not exceed the cost to the provider of its design, testing and manufacture.

• The value of access to, and use of, proprietary software and databases should be the incremental costs to the project proponent of providing that access and use, such as staff time involved, including providing any required instruction on their use. Costs associated with developing the software or databases are ineligible as an in-kind contribution.

4. Travel, Meals and Accommodation costs

4 “Internal rate” means the rate that would be charged by the component of the project proponent that provides the service to the component of the proponent that receives it.

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Unless stated otherwise in the Contribution Agreement between the NRCan and the proponent, Treasury Board rates that are in effect at the time of signing the Contribution Agreement shall be used in assigning a value to the following expenses.

• Travel, food and lodging costs to meet with NRCan officials. • Travel, food and lodging costs necessary for other project activities, e.g. field trials

and demonstrations at locations away from the proponent=s usual location; project planning and review meetings between the principal proponent and its partner(s).

5. Overhead expenses With regard to Overhead Expenses, they may include:

• administrative support provided directly to the project by the proponent’s employee(s), valued on the same basis as professional staff time (as described under category 1);

• routine laboratory and field equipment maintenance, based on the actual cost to the proponent that is directly related to the project;

• heat, hydro, and office operating costs (e.g. faxes, telephone) telephone, provided they are directly related to the project.

Overhead costs will be negotiated on an individual basis with project proponents. They will not exceed 15% of eligible expenditures.

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Appendix 3: Expected Program Outcomes The following short-term outcomes are expected during the Program period:

Academia, industry and public sector collaborations for the advancement and demonstration of clean energy technologies; the outputs that contribute to this outcome include collaborations (e.g. contracts, agreements, memoranda of understanding, partnerships etc.) established to research, develop and demonstrate clean energy technologies.

Increased availability of scientific and technical knowledge to advance the

development of technology; the outputs that contribute to this outcome include knowledge products (e.g. technical papers, workshops and codes, standards and regulations) informed by research, development and demonstration.

The following medium-term outcomes are expected 1-5 years following the Program period:

Further investment in the development of new knowledge and technologies by academia, industry and the public sector to meet economic and environmental challenges

The long-term outcome (greater than 5 years following the Program end) is:

Environmental and economic and benefits from the advancement of clean energy technology.

1- Guide to Outputs and Outcomes Output – Outputs are the products of the project. They are classed into two groups: Interim Outputs are not generally intended for dissemination beyond the project team and

NRCan. They are indicators of progress in the project, in logical steps. Examples are project status reports, working papers, test reports, draft technical reports and analyses, and beta-version software products (including databases) for limited distribution for testing purposes. Some interim outputs (e.g. progress reports) may be required under the terms of the contribution agreement, should the project be approved for Program funding.

Final Outputs are the products to be delivered at the end of the project that are intended for

dissemination to, and use by, the intended beneficiaries of the project (including NRCan) - the stakeholders. Examples: technical reports and analyses; engineering analyses; prototype /early-stage technologies and systems developed and demonstrated; technology assessments; new measurement techniques and protocols; pilot installations; software products. Intended final outputs will be identified in the contribution agreement.

Outcome – Outcomes are the consequences attributed, in whole or in part, to the project. They are the changes or impacts to which the project leads. Outcomes are classed as short-term,

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medium-term and long-term (sometimes referred to as immediate, intermediate, and final, respectively).

Short-term Outcome: Short-term (less than 1 year after completion of the project) flow directly from the project’s final output(s). Example: new knowledge is made available, e.g. operating parameters, lessons learned regarding the implementation of an energy project, information on commissioning energy systems, how barriers to deployment of the energy system were overcome, etc.

Medium-term Outcome: Medium-term outcomes (typically 1-5 years after completion

of the project) flow from the short-term outcomes. Examples: the project has been in full operation for some time; greenhouse gas reductions have been documented; CO2 credits have been claimed; other benefits have been achieved; the project is intended to be replicated; lessons learned regarding cost reductions, operations, etc.

Long-term Outcome: Long-term outcomes (typically more than 5 years after

completion of the project) represent the raison d’être of the project. They flow from the medium-term outcomes: for example, from the wide scale deployment and operations of a new technology leading to large and sustained reduction of greenhouse gas emissions from an industrial process.

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Appendix 4: Technology Readiness Levels Technology Readiness Level (TRL) is a measure used to assess the maturity of evolving technologies (devices, materials, components, software, work processes, etc.) during its development and in some cases during early operations. Generally speaking, when a new technology is first invented or conceptualized, it is not suitable for immediate application. Instead, new technologies are usually subjected to experimentation, refinement, and increasingly realistic testing. Once the technology is sufficiently proven, it can be incorporated into a system/subsystem.5 The lowest level, TRL 1, indicates that information already learned from basic scientific research is taking its first step from an idea to a practical application of a lesson learned. For example, after learning that hydrogen and oxygen can be combined to generate electricity, some would suggest an idea for building a machine to do just that. A technology that has achieved TRL 9 is one that has been incorporated fully into a larger system. It has been proven to work smoothly and is considered operational. An example of an operational TRL 9 technology is the fuel cells which combine hydrogen and oxygen to generate electricity for NASA's space shuttle.6

Technology Readiness Level Descriptions: 0 R&D not specifically intended for technology development (but could be in support of

technology adoption). Examples are knowledge generation to support codes, regulations and standards needed to support domestic adoption and to support Canada’s position in opposing non-tariff export barriers. Also includes Basic Research conducted prior to Applied Research.

1 Early-stage scientific research begins the translation to applied R&D - lowest level of technology readiness. Basic scientific research begins to be translated into preparatory applied research and development. Examples include paper studies of a technology’s basic properties, algorithms and mathematical formulations.

2 Technology development begins - once basic principles are observed, development of practical and specific applications can be initiated. Applications are speculative and there may be no proof or detailed analysis to support the assumptions. Examples are limited to analytic studies, including concept development.

3 Active R&D is initiated - active research and development is initiated to establish proof of concept, including analytical and laboratory studies to physically validate analytical predictions of separate elements of the technology, i.e., individual components that are not yet integrated into the technology.

4 Basic technological components are integrated to establish that the pieces will work together, i.e. initial operational characterisation of technology. Standalone component prototypes implemented and tested.

5 http://en.wikipedia.org/wiki/Technology_readiness_level 6 http://www.nasa.gov/topics/aeronautics/features/trl_demystified.html#.Us2Z_fvhH2Q

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5 System / subsystem prototypes are improved significantly - the basic technological

components / prototypes are integrated within a reasonably realistic supporting environment so that the technology concept can be tested in a simulated environment. Examples include bench-scale laboratory integration of components and observation of operating characteristics.

6 Model/prototype is tested in relevant environment - representative model or prototype system, which is well beyond that of TRL 5, is tested in a relevant test environment. Represents a major step up in a technology’s demonstrated readiness. Examples include testing a prototype at the pilot scale, integrated with existing systems, if applicable, in a laboratory environment or in a simulated operational environment. Engineering feasibility demonstrated.

7 Prototype near or at planned operational system - represents a major step up from TRL 6, requiring demonstration of an actual system prototype in the intended operational environment. Examples include field testing or field trials over a period sufficient to provide meaningful data on the performance of the technology.

8 Technology is proven to work in a “real world” operating environment - actual technology completed and qualified through test and demonstration. This includes projects currently at the demonstration project stage.

9 System proven though successful demonstration. Actual application of technology is in its final form – commercialisation-ready technology proven through successful operations.