Verification Report for: 6709) · Carbon Credit Solutions Inc. Renewable Solar Energy Project #1 (5043-6709) October 2018 Page 3 of 62 • Complete report in Verdana 10pt font (no

Carbon Credit Solutions Inc. Renewable Solar Energy Project #1 (5043-6709) October 2018

Verification Report for:

Carbon Credit Solutions Inc. Renewable Solar Energy Project #1 (5043-6709)

Proponent:

Carbon Credit Solutions Inc.

Prepared by: Brightspot Climate Inc.

Prepared for:

Alberta Climate Change Office

Version:

Final

Date:

October 4, 2018


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Table of Contents 1.0 Summary – Offset Project ...................................................................................... 4 1.1 Summary – Facility ........................................................................................................ 8 2.0 Introduction ......................................................................................................... 9

2.1 Objective ............................................................................................................. 9 2.2 Scope ................................................................................................................ 10 2.3 Level of Assurance ............................................................................................... 10 2.4 Criteria ............................................................................................................... 11 2.5 Materiality .......................................................................................................... 11

3.0 Methodology ....................................................................................................... 11 3.1 Procedures ......................................................................................................... 12 3.2 Team ................................................................................................................. 20 3.3 Schedule ............................................................................................................ 22

4.0 Results ............................................................................................................... 23 4.1 Assessment of Internal Data Management and Controls ........................................... 23 4.2 Assessment of GHG Data and Information .............................................................. 24 4.3 Assessment against Criteria .................................................................................. 26 4.4 Evaluation of the GHG Assertion ............................................................................ 28 4.5 Summary of Findings ........................................................................................... 28 4.6 Opportunity for Improvement ............................................................................... 30

5.0 Closure .............................................................................................................. 30 5.1 Verification Statement .......................................................................................... 30 5.2 Limitation of Liability ............................................................................................ 30 5.3 Confirmations ..................................................................................................... 31

6.0 References.......................................................................................................... 31 Appendix A: Final Verification Plan and Sampling Plan ............................................................. 32 Appendix B: Statement of Qualifications ................................................................................ 49 Appendix C: Findings and Issues .......................................................................................... 52 Appendix D: Statement of Verification ................................................................................... 54 Appendix E: Conflict of Interest Checklist .............................................................................. 58 Appendix F: Supplemental Diagrams/Tables/Figures ............................................................... 61

List of Tables Table 1: Risk Assessment .................................................................................................... 16 Table 2: Findings of Data Integrity Verification Procedures....................................................... 23 Table 3: Findings of GHG Data and Information Verification Procedures ..................................... 25 Table 4: Findings of Criteria Verification Procedures ................................................................ 26 Table 5: Offset Criteria Assessment ...................................................................................... 27 Table 6: Summary of Findings .............................................................................................. 29 Table 7: Confirmation Findings ............................................................................................. 31 Table 7: Detailed Findings and Issues Log ............................................................................. 53

Instructions are in italics throughout and should not be deleted when report is complete. Some instructions are specific to the verification of facilities and for offset projects. The document is not restricted but do not alter the format, the layout, the headings or the overall ‘look and feel’ of the document. If if is more usefule to paste information outside of the text box, use the empty line just below the text box to drop text or tables int. This should not change the headings or the formats. There are several dropdown boxes in the document that must be completed.


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• Complete report in Verdana 10pt font (no italics). • After the report is complete, right click the table of contents and ‘update field’ which will

update page numbers in Table of Contents. • If an instruction only applies to facilities or only applies to offsets indicate ‘not applicable’. • Appendix F is available for additional tables, diagrams etc.


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1.0 Summary – Offset Project

Item Description

Project Title

Enter project title (must match the registry project title)

Carbon Credit Solutions Inc. Renewable Solar Project #1

Project Description

Provide a brief description of the project and baseline conditions.

This Project consists of the aggregation of greenhouse gas (“GHG”) emission reductions generated through emission reductions associated with the generation of renewable electricity which displaces emissions associated with coal fired electricity in the Province of Alberta. Carbon Credit Solutions Inc. referred to as CCSI, as an aggregator, has collected greenhouse gas emission reductions created by individual facilities in order to provide sufficient quantities of greenhouse gas emission reductions as required by interested buyers. These greenhouse gas emission reductions have been generated in accordance with the Specified Gas Emitters Regulation Quantification Protocol for Distributed Renewable Energy Generation Version 1.0 March 2013 (“Renewable Energy Protocol”).

Project Location

Include the latitude and longitude for each unique location or installation. Include legal land location if applicable and other information identifying the unique location.

The project consists of numerous distributed renewable generation sites across Alberta. The sub-project locations are described in the Aggregated Project Planning Sheet and the Aggregated Project Reporting Sheet.

Project Start Date

Enter the project start date.

May 1, 2015

Offset Start Date

Enter the start date for offset credit generation.

May 1, 2015

Offset Crediting Period

Enter the offset crediting period, including the offset start date. Include day, month year.

May 1, 2015 – December 31, 2022

Reporting Period

Enter the reporting period being verified.

May 1, 2015 – March 31, 2018


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GHG Assertion (Actual Emission Reductions/Sequestration Achieved)

Enter the actual emissions reductions / sequestration for the reporting period. Enter serial numbers if available.

5,109 tonne CO2e

Protocol

Indicate the relevant protocol (if applicable)

Quantification Protocol for Distributed Renewable Energy Generation, Version 1.0, March 2013

Ownership

Enter offset project owner.

Consumers’ ownership of the greenhouse gas emission reductions has been established by interconnection Agreements between the subproject proponents and the Alberta grid and purchase records for equipment.

Contractual agreements for aggregation of the GHG emission reductions exist between consumers and CCSI as project developer.

Project Activity

State how the project activity meets the eligibility requirements

The project must meet the eligibility criteria stated in Part 3, Section 16 of the Carbon Competitiveness Incentive Regulation (CCIR). In order to qualify, emission reductions must:

• Occur in Alberta; • Result from an action taken that is not otherwise

required by law at the time the action is taken; • Result from actions taken on or after January 1,

2002; • Occur on or after January 1, 2002; • Be real, demonstrable, quantifiable and verifiable; • Be quantifiable and measurable, directly or by

accurate estimation using replicable techniques.

The verification included an evaluation of these criteria as well as the specific applicability criteria described in the Protocol. The results of this analysis are described in Section 4.3 of this report.

Project Contact

Enter contact name, company name, mailing address, phone number and email address.

Richard Kennedy Carbon Credit Solutions Inc. +1 (403)912-9132 [email protected]

Verifier

Verifier name, verifier’s company name, address, phone number email etc.

Aaron Schroeder, P.Eng. 225 West 8th Avenue, Suite 300 Vancouver BC V5Y 1N3 +1 (604) 353-0264 [email protected]


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Verification Team Members

Include verification team members, roles, training, training dates and qualifications.

Aaron Schroeder, P.Eng. Roles: Lead Verifier and Designated Signing Authority Training: Greenhouse Gas Verification – ISO 14064- 3, Canadian Standards Association, 2012; Instructor – Greenhouse Gas Verification – ISO 14064-3, University of Toronto, 2015 – 2018

Melanie Schroeder, CPA, CGA, RPC Role: Associate Verifier Training: GHG Validation and Verification, ISO 14064-3, University of Toronto, February 2018

Michelle Stelmach, P.Ag. Role: Associate Verifier Training: GHG Validation and Verification, ISO 14064-3, University of Toronto, October 2016

Rodrigo Cubedo, EIT Role: Associate Verifier Nathan Muegge, P.Eng. Role: Peer Reviewer Training: Greenhouse Gas Verification,

ISO 14064- 3, Canadian Standards Association

Designated Signing Authority

Enter the designated signing authority for this verification.

Aaron Schroeder, P.Eng. 225 West 8th Avenue, Suite 300 Vancouver BC V5Y 1N3 +1 (604) 353-0264 [email protected]

Verification Strategy

Describe the verification strategy used for the verification, including rationale for the approach. Note, if a controls reliance is used, provide justification for how the project is able to support this approach.

The verification strategy applied a largely substantive approach. The verification procedures, which are detailed later in this section, were designed to test the activity data directly, wherever practical. By applying this approach, the verification did not rely heavily on the Responsible Party’s controls, but rather relied on the substantive evidence collected from verification procedures that reviewed metered data, data directly from invoices and independent laboratory reports, for example.


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1.1 Summary – Facility

Item Description

Facility Name and Company Name

List company name and facility name.

Not applicable for offset verification reports

Facility Description

Provide a brief description of the facility.


Baseline Emissions Intensity Description

List the approved BEIA and the baseline years.


Reporter Contact

Enter contact name, company name, mailing address, phone number and email address.


GHG Assertion

Enter the actual emissions, production, emissions intensity and the reduction target being verified.


Verifier

Verifier name, verifier’s company name, address, phone number email etc.


Verification Team Members

Include verification team members, roles, training, training dates and qualifications.


Designated Signing Authority

Enter the designated signing authority for this verification.



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2.0 Introduction Provide an introduction to the facility or project, the verification, and the background.

For Offset Project: summary of offset project baseline, changes to the baseline since project start date and summary of changes at the project since the offset project start date or baseline period.

For Facilities: Description of compliance or baseline report, facility/project boundary, facility identification information, GHG historical performance, summary of changes since the baseline or since the last compliance report.

Summary of Offset Project Baseline

The baseline condition is described as the generation and consumption of electricity that is produced on the Alberta Interconnected Electricity System (AIES), commonly referred to as the provincial “electricity grid”.

Summary of Changes

The Responsible Party’s Offset Project Report (OPR) indicates that there have been no changes to the project boundaries and no equipment changes during the reporting period.

The OPR states that there was a change to the verification frequency of the reporting periods due to the nominal amount of the aggregated emissions quantified. This is the first verification for the Project.

Through the course of the verification, the changes described above were confirmed. No additional changes to the project boundary, emission sources, measurement and monitoring or quantification methodologies were found.

2.1 Objective Describe the objective of the verification (should include expressing an opinion).

The objective of the verification is as follows:

• to issue an verification statement on whether the GHG assertion is without material discrepancy;

• to issue an verification report that provides details of the verification activities; and • to complete the “confirmations” activities defined in the Alberta Climate Change Office

Standard for Validation, Verification and Audit, Section 5.1.3.


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2.2 Scope Define the scope in terms of: geographical, organizational, activities and processes, sources, sinks, categories and greenhouse gases included (considering the completeness of the inventory), GHG assertion time period.

For offset verifications: include the serial range (i.e. XXXX-XXXX-XXX-XXX-XXX-XXX to XXXX-XXXX-XXX-XXX-XXX-XXX) if assigned (i.e. in the case of government verification a serial range will be available, otherwise not applicable).

For Facilities: ensure all specified gases and source categories are evaluated. Include list of negligible emission sources and justification for Emission Performance Credits (EPCs). Include listing of end products.

Project Name: Carbon Credit Solutions Inc. Renewable Solar Energy

Project #1 5043-6709

Serial Range: To be assigned at registration

Organizational Boundary: Aggregation of sub-projects throughout Alberta. Each sub-project organizational boundary is the specific distributed renewable electricity installation.

Geographic Boundary: Various sub-projects throughout Alberta; locations are provided on the Aggregated Project Reporting Sheet

Physical Operations: Solar electricity generation

Emission Sources: B1: Electricity Generation

B3: Line losses from electricity transmission and distribution

IPCC GHGs Emitted/Removed: Carbon Dioxide (CO2)

Methane (CH4)

Nitrous Oxide (N2O);

remaining IPCC GHGs were not emitted in the baseline or project condition

Reporting Period: May 1, 2015 – Mar 31, 2018

2.3 Level of Assurance The verification was conducted to a reasonable level of assurance.

Choose type of verification from the dropdown box above.

Provide explanation on level of assurance.

The Standard for Validation, Verification and Audit, Version 2.0, June 2018 requires that verifications must be designed and completed to a reasonable level of assurance.


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2.4 Criteria Outline the program criteria used and relevant supporting documentation (acts, regulations, protocols, standards, guidance documents, project documentation etc).

The program criteria used and relevant supporting documentation is as follows:

• Climate Change and Emissions Management Act • Carbon Competitiveness Incentive Regulation 255/2017, with amendments up to and

including Alberta Regulation 96/2018 • Standard for Validation, Verification and Audit, Version 2.0, June 2018. Alberta Climate

Change Office • Standard for Greenhouse Gas Emission Offset Project Developers, Version 2.0, July 2018 • Quantification Protocol for Distributed Renewable Energy Generation, Version 1.0, March

2013

2.5 Materiality Define the materiality of the verification.

The materiality threshold is defined in The Standard for Validation, Verification and Audit, Version 2.0, June 2018. For this verification, the materiality threshold is 5%.

3.0 Methodology Statement that the verification is performed according to ISO 14064-3.

Summary of the assessments/tests/reviews/evaluations that were conducted during the verification.

This verification was designed and completed according to the requirements of the ISO 14064-3 Standard.

The following verification activities (assessments/tests/reviews/evaluations) were conducted through the course of this verification. The specific verification activities that were conducted are detailed in the Verification Plan, which is appended to this report. They are also listed with the verification findings throughout section 4 of this report.

• Observations: the site visit included a tour of the project sites to observe solar panels, and observation of the electrical metering;

• Review of documentation: Documents reviewed in the office visit included facility contracts, micro-generation interconnection operating agreements, production reports, and installation invoices;

• Recalculation: the emission reductions for each sub-project were recalculated using metered data, as reported on production reports, by applying the quantification methodologies stated in the Responsible Party’s Offset Project Report, which were found to align with the applicable Protocol;

• Inquiry: the site visits included interviews with sub-project owner/operators to confirm installation and commissioning dates as well as operating conditions. The aggregator’s


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primary contact was also interviewed regarding their aggregation program and specific controls they have implemented to address any risks that have been identified;

• Analytical procedures: a year-over-year comparison of electrical generation was completed to identify any potential outliers.

3.1 Procedures Description of how the verification was conducted including: description of the nature, scale and complexity of the verification activity, confidence and completeness of the responsible party’s GHG information and assertion, assessment of GHG information system and its controls, assessment of GHG data and information, assessment of GHG information system and controls, assessment against criteria, evaluation of the GHG assertion.

The verification strategy applied a largely substantive approach. The verification procedures, which are detailed later in this section, were designed to test the activity data directly, wherever practical. By applying this approach, the verification did not rely heavily on the Responsible Party’s controls, but rather relied on the substantive evidence collected from verification procedures that reviewed metered data, data directly from invoices and independent laboratory reports, for example.

Regarding the scale and complexity of the verification procedures, the verification risk assessment was leveraged to design verification activities appropriate to address the inherent, controls and detection risk evaluated in relation to each activity data and boundary condition. In most cases, these verifications involved review of documentation, recalculation or analytical procedures designed to produce verification evidence to support the accuracy, completeness and consistency of the information. All activity data and boundary conditions were evaluated through the verification risk assessment and verification activities were designed and completed commensurate with the verification risk assessed.

In a similar way, the data integrity, quantification methodologies and quantification itself were assessed through the verification risk assessment. Verification procedures were designed and completed to address each of these key areas.

Verification evidence was developed from each of these verification activities, which was used to establish a verification conclusion regarding the GHG information systems, the Responsible Party’s controls and ultimately, the GHG Assertion.

Describe steps of the verification including planning, assessment, site visit, off-site verification, and report preparation.

The verification was conducted according to the ISO 14064-3 standard, which establishes four primary phases of a greenhouse gas verification as described in this section. The relevant sections from the ISO standard are noted below.

Agreement (ISO Section 4.3)

The verification level of assurance, objectives, criteria, scope and materiality was affirmed in the contract for services and re-affirmed during a verification kickoff meeting.

A conflict of interest review was conducted prior to beginning work and monitored throughout the verification. A conflict of interest statement is appended to this report.


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Internally, Brightspot Climate began documenting the verification upon contract signing. All documentation related to the verification will be maintained for a period of seven years following the date of the verification statement.

Approach (ISO Section 4.4)

Brightspot Climate conducted an initial review of the Project’s greenhouse gas information, primarily by reviewing the reports and the Offset Project Plan. Brightspot Climate prepared a verification risk assessment based on this information, evaluating:

a) the inherent risks of discrepancies for each variable used to calculate each emission source and the general greenhouse gas reporting system;

b) the risk that the Responsible Party’s controls are insufficient to detect and prevent each inherent risk from causing a discrepancy in the GHG assertion; and

c) the potential magnitude of each inherent and control risk described above resulting from the contribution of the associated emission source.

This information was used to develop an appropriate verification procedure for each identified risk. Each procedure was designed to reduce the probability that the verification would not detect a discrepancy that has not been corrected by the Responsible Party’s controls. The tolerable error for each emission source is stated in the verification risk assessment.

Generally, a substantive approach was applied to the verification. Therefore, the verification procedures relied more heavily on data analysis than on controls testing.

Verification Plan

Brightspot Climate developed a Verification Plan that documents the level of assurance, verification objective, verification criteria, verification scope, and materiality. Additionally, the Verification Plan provides general description of the Project, documents operational and organizational changes that have occurred since the previous verification, explains the Project’s control environment, and describes the safety requirements of the site visit.

The results of the verification risk assessment and the verification procedures (including the sampling plan) has been included in the Verification Plan, but will not be disclosed to the Responsible Party until the final Verification Statement is issued.

Assessment (ISO Sections 4.5 – 4.7)

The verification procedures consist primarily of tests, analysis and review focused on the following six critical areas:

a) The completeness and relevance of emission sources included in the GHG Assertion;

b) The consistency of the emission sources and quantification methodologies between the Protocol, the Offset Project Plan, Offset Project Report and the tools used to quantify the emission reduction;

c) The accuracy and level of transparency of measured and estimated data sources, data integrity of electronic and manual data transfers and transcription between data systems and the GHG calculation;

d) The accuracy of the GHG emissions reduction calculations;

e) The completeness, accuracy and transparency of information presented in the Offset Project Plan and Offset Project Report documents, including the implementation of stated methodologies and emission factors in the quantification of emissions reductions; and

f) The accuracy of transcription of final calculated values into the GHG Assertion, including the “confirmations” required by ACCO as described in the ACCO Standard for Verification document.


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The principles defined in the preceding six areas are defined in ISO 14064-1 (accuracy, completeness, consistency, relevance and transparency).

Site Visit

Aaron Schroeder and Rodrigo Cubedo and Michelle Stelmach conducted site visits to a three of the project’s seven sub-projects, comprising approximately 97% of the asserted emission reduction.

The site visits included observations of the solar installations and metering equipment in operation. The solar owner/operators were also interviewed to confirm the installation and commissioning dates and to discuss general operations of the equipment during the reporting period.

Further details of the verification activities that were conducted on site, including observations and inquiries, are provided in Section 4 of this report.

Verification Procedures

The remainder of the verification procedures was conducted through a desk review following receipt of the draft GHG Assertion.

Through the course of the assessment phase of the verification, Brightspot Climate issued questions and requests for additional documentation and data. These requests were consolidated in a simple electronic tracking document to maintain a common record of communication.

The Responsible Party had the opportunity to address any issues that were raised through the course of the verification before they were documented as discrepancies in the Verification Report.

Evaluation and Statement (ISO Sections 4.8 – 4.9)

Following the completion of all verification procedures and consideration of all information received from the Responsible Party, the verifier was tasked with concluding whether the GHG assertion is without material discrepancy and whether the verification reviewed sufficient and appropriate evidence to support a reasonable level of assurance.

If any outstanding discrepancies remained, their materiality would have been calculated according to ACCO guidance such that both the aggregate net quantitative error and the absolute quantitative error could be reported. In such circumstances, qualitative discrepancies would be evaluated based on the potential impact on the GHG assertion and the potential impact on the Intended User’s ability to use the reported information.

Peer Review

The independent Peer Reviewer conducted a complete review of the verification. The peer review process examined:

a) The completeness of the verification risk assessment; b) The appropriateness of the verification procedures considering the inherent and control

risks identified in the verification risk assessment; c) The appropriateness of any sampling conducted in each of the verification procedures; d) The completeness of each verification procedure, including the verifiers documentation

of work completed; e) Closure of any issues raised by the verifier through the course of the verification; f) The sufficiency and appropriateness of all evidence reviewed through the verification to

support a reasonable level of assurance; and g) A review of the final Verification Statement and Conflict of Interest Statement.


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Verification Report

The Verification Report includes a Verification Statement, Statement of Qualifications, Conflict of Interest Statement and a report on the findings of the verification. The final Verification and Sampling Plan has been appended to the Verification Report, including the results of the verification risk assessment.

Describe how the risk based approach was implemented in the sampling plan. Identify categories of risk including inherent risk, and detection risk (organization and verifier). Include the Verification Plan with the Sampling Plan in Appendix A. Paste the risk assessment table in this section.

Verification risk is defined as the risk of an incorrect verification conclusion. It can be calculated as the product of

• The Project’s inherent risks; • The Responsible Party’s control risks; and • The detection risks associated with the verifier’s verification procedures.

Inherent Risk × Control Risk × Detection Risk = Verification Risk

The verifier cannot affect the inherent risk or the control risk. Therefore, to reduce the overall verification risk and reach the agreed level of assurance (defined in the verification scope), the verifier must design verification procedures that reduce the detection risk.

Each inherent and control risk was provided with the risk score (high/medium/low). The risk analysis of inherent and control risks considers both the magnitude of the activity data or inventory component on the overall GHG assertion as well as the probability that the risk will result in a discrepancy, as assessed by the verifier.

Important note: The verification strategy for this verification is to use substantive tests instead of control tests wherever possible. Substantive tests are designed to focus on directly testing activity data or inventory components and their associated inherent risks. Control tests are designed to focus on testing the Responsible Party’s controls and if the test is successful, relying on the Responsible Party’s control. Therefore, control tests indirectly test activity data or inventory components.

Each verification procedure listed in the following table denotes if the procedure is a substantive or control test.


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Table 1: Risk Assessment

Activity Data/ Inventory Component

Inherent Risk Control Risk Detection Risk Design

Description

Protocol Applicability Requirements

Connectivity Relevance

Risk that the site is not connected to Alberta’s electricity grid

(Low Risk)

Control: All sites provide invoices or statements from distribution companies.

Control Risk: Invoices or statements may be missing. (Medium)

Low Substantive test: Review invoices or statements and confirm that all sites are connected to the Alberta Grid via electric distribution companies.

Criteria Relevance

Risk that the energy is not solar-derived electricity

(Low Risk)

Control: The Responsible Party implemented a data collection/management system

Control Risk: The data management collection system is not used, or used correctly (Low)

Low Substantive test: Observe the solar panels during the site visit

The project must meet the requirements of the Alberta Offset System

Relevance

The project may not have met the requirements of the Alberta Offset System.

(High Risk)

The Responsible Party does not have a control specifically designed to address this inherent risk. (High)

Low Substantive test: Evaluate the Responsible Party’s evidence regarding the general requirements of the Alberta Offset System.


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Description

Quantification Data

Electricity production

Accuracy (High Risk)

Completeness (High Risk)

The quantity of electricity produced may be inaccurately recorded

Control: The Responsible Party has a data management process to collect, record and store electricity production per facility.

Control Risk: The data management collection system is not used, or used correctly (Low)

Low Substantive test: Review invoices or statements compare to the reported production quantities of each facility

Emission factors Accuracy (Medium)

Incorrect emission factors may be applied in the calculation.


Low Substantive test: Compare the emission factors applied in the calculations to the reference values provided in the relevant reference documents.

Emission Quantification and Reporting

Application of the approved quantification protocol

Accuracy (Medium)

The project developer may not have implemented approved quantification methodologies or

Control: The Responsible Party has developed an Offset Project Plan that is intended to conform to the requirements of the approved quantification protocol.

Low Controls test: Compare the methodologies described in the Responsible Party’s Offset Project Plan to the methodologies described in the approved quantification protocol.


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Description

applied additional methodologies.

Control Risk: The protocol requirements may not have been implemented correctly (Medium)

Substantive test: Recalculate the emission reduction using original metered data and methods described in the approved quantification protocol.

Measurement of the electricity production

Accuracy (Low)

The risk that the meter may not be providing the correct production readings

The meters are provided by the utility companies

Control risk:

The meters are not the original meters (Low)

Low Substantive test: Observe the meters during the site visit to confirm that the meter used for monitoring electrical production is utility grade custody transfer meter.

Data Integrity

Activity data and emission factor data integrity

Accuracy (Medium)

Data may not have been accurately transferred between electronic systems and calculation sheets.

Control: The Responsible Party uses electronic data transfers whenever possible to maintain data integrity.

Control Risk: Electronic data transfers may result in errors or may not be available for all data (medium).

Low Controls test: Analyze all metered data for abnormal data (zeros, missing data, values outside range).

Substantive test: Recalculate the complete emission reduction using original data.


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Description

Transcription of final emission reduction into Offset Project Report

Accuracy (Medium)

Final emission reduction may not have been transcribed accurately from calculation spreadsheets into the Offset Project Report.


Low Substantive test: Compare the final emission reduction quantity reported by the Responsible Party to the quantity reported in the Offset Project Report. Also, compare these quantities to the recalculated quantity in previous verification procedures.


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3.2 Team List verification team members including peer reviewer(s).

Describe the qualifications and training of the team members and peer reviewer(s) including dates of training and certifications.

For Offsets: fill in the sample Statement of Qualification provided and included in Appendix B.

For Facilities: include the Statement of Qualifications from the facility compliance form in Appendix B.

ISO 14064-3 defines sixteen subject matter areas in which the verifier should demonstrate familiarity (see ISO 14064-3, Section A.2.2.3). The verification team has competencies in each of these sixteen subject matter areas.

Lead Verifier: Aaron Schroeder, P.Eng.

Aaron Schroeder will be the Lead Validator and Designated Signing Authority. His extensive experience quantifying and verifying greenhouse gas emissions satisfies all sixteen subject matter areas defined in the standard.

Biography: Aaron Schroeder has eleven years of professional experience analyzing, quantifying and verifying greenhouse gas emissions in North America. Prior to forming Brightspot Climate Inc. in 2015, Aaron worked for several years leading a team of fifteen greenhouse gas verification and policy analysts across Canada with ICF International. He provided leadership for this team and led the development of ICF’s standardized verification process, conformant with ISO 14064-3. In 2012, ICF’s verification process was accredited by the American National Standards Institute (ANSI).

Mr. Schroeder’s hands on experience conducting greenhouse gas verifications includes numerous engagements for oil and gas extraction and processing, refining, pipeline, electricity generation and petrochemical facilities. Additionally, he has conducted verifications of emission reduction projects in industrial facilities, renewable energy, waste management and agriculture. He is sought after for his expertise devising strategies to bridge the gap between theoretical and practical implementation of methodologies for quantifying, reporting and verifying.

In 2014, the University of Toronto engaged Mr. Schroeder to instruct professional development courses on greenhouse gas inventory and project quantification, reporting and verification. Since 2014, Mr. Schroeder has instructed several of these courses in live, two-day sessions and on-line instruction as a sessional lecturer through the university’s School of Environment. Additionally, Mr. Schroeder has worked with the School of Environment to re-write and update the courses.

Training: Greenhouse Gas Verification – ISO 14064-3, Canadian Standards Association, 2012; Instructor – Greenhouse Gas Verification – ISO 14064-3, University of Toronto, 2015 - 2017

Associate Verifier: Melanie Schroeder, CPA, CGA, RPC

Biography:

Melanie Schroeder is a public practice accountant with over 20 years’ experience in the accounting industry. Early in 2018 she decided to take her extensive audit and compliance background and combine it with her passion for sustainability. Her broad experience in SME’s, audit, and systems make her an asset within the GHG verification teams while her overall experience allows her to support the Brightspot team in a variety of functions.


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Training: Melanie received GHG Validation and Verification, ISO 14064-3, training through the University of Toronto in February, 2018.

Associate Verifier: Michelle Stelmach, P.Ag.

Biography: Michelle Stelmach has worked as an associate verifier for numerous verification and protocol development initiatives under Alberta’s Specified Gas Emitters Regulation. This work has included performing farm site visits and assisting with the verification planning and procedures for Conservation Cropping, Agricultural Nitrous Oxide Emission Reduction (NERP) and Fed Cattle (Beef Days on Feed) projects.

Michelle has worked with the Hazard Analysis Critical Control Point (HACCP) to design and conduct internal system audits and to meet Canadian Food Inspection Agency standards at the producer level, in feed manufacturing plants and poultry processing plants. She has extensive experience working with agricultural producers across Alberta through her work as Program Advisor and Coordinator with Maple Leaf Foods and Landmark Feeds.

Training: Michelle received GHG Validation and Verification, ISO 14064-3, training through the University of Toronto in October 2016.

Associate Verifier: Rodrigo Cubedo, EIT

Biography: Rodrigo Cubedo has a background in mechanical engineering, specializing in aerospace projects. Rodrigo has leveraged his engineering experience to understand and systematically improve the processes used to work with international clients. He is fluent in Spanish, English, French and basic Mandarin. His experience working with a large accounting firm through an in-house deployment of analytical software exposed him to a systematic research framework. Since joining Brightspot in early 2018, Rodrigo has provided analytical support to more than 20 greenhouse gas verifications.

Training: Rodrigo Cubedo graduated as a mechanical engineer from McGill University in June of 2016.

Peer Reviewer: Nathan Muegge, P.Eng.

Biography: With over a decade of experience in the fields of energy and environment, Nathan has a broad background in the application and evaluation of conventional and emerging energy technologies. More recently service offerings are expanding into the fields of Health and Safety, Emergency Response and Preparedness, and Risk Assessments Services.

Training: Greenhouse Gas Verification – ISO 14064-3, Canadian Standards Association, 2009; Environmental Auditing, Legislation, Regulations and other Canadian Requirements, 2008


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3.3 Schedule Provide a list or table of verification activities and dates. Indicate when the verification was completed.

Verification Kickoff Meeting July 24th, 2018

Draft Verification Plan August 7th, 2018

Site Visits August 8th, 21st, 22nd, 2018

Supplementary Information Request September 14, 2018

Draft Verification Report October 1, 2018

Final Verification Report October 4, 2018


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4.0 Results Add introduction to results section here, if desired.

The verification results are presented in the following five subsections. Subsections 4.1 – 4.3 present the results of the verification procedures for the data integrity (4.1), Quantification Methodologies and Quantification (4.2), and Boundary Conditions and Activity Data (4.3).

4.1 Assessment of Internal Data Management and Controls Provide a summary the information system(s) and its controls for sources of potential errors. Include information on the selection and management of data, process for collecting and consolidating data, data accuracy systems, design and maintenance of the GHG system, the systems and processes that support the GHG information system and results from previous assessments if applicable.

The Project’s GHG quantification is primarily performed in the Carbon Credit Solutions Inc. “Data Management System” database (“DMS”). All data required to quantify emissions reductions for the Project is electronically transferred from other electronic sources or manually transcribed from reference documents.

The final calculated quantities from this database are transferred into the Offset Project Report. Carbon Credit Solutions Inc. utilizes a paperless filing system, so all documentation, equipment photos, invoices, contracts, etc. are scanned or uploaded to their “DocSys” filing system.

The CCSI DMS includes quality control processes and procedures to prohibit double and incorrect entry of records.

The Responsible Party maintains an Offset Project Plan (OPP) and produces an Offset Project Report (OPR), which document the emission sources, processes for collecting GHG activity data, equations applied to quantify emissions reduction, calculation assumptions, and a discussion of GHG data management.

Findings from Previous Verification

This is the first verification for the Project; no verifications were previously conducted for this project.

Results of Verification Procedures

There were three verification procedures completed to test data integrity. The results of these procedures are provided in the following table.


Page 24 of 62

Table 2: Findings of Data Integrity Verification Procedures

GHG Report Element

Verification Procedures Verification Findings


Controls test: Analyze all metered data for abnormal data (zeros, missing data, values outside range).

The activity data and emission factor data was analyzed for any abnormal data. There were periods of zero production during the reporting period for some sub-projects. Upon further investigation, these were confirmed to be production outages due to technical difficulties.

No discrepancies detected.


Substantive test: Recalculate the complete emission reduction using original data.

The complete emission reduction was recalculated using the original data.


Transcription of final emission reduction into Offset Project Report

Substantive test: Compare the final emission reduction quantity reported by the Responsible Party to the quantity reported in the Offset Project Report. Also, compare these quantities to the recalculated quantity in previous verification procedures.

The emission reduction quantity was accurately transcribed into the Offset Project Report.


4.2 Assessment of GHG Data and Information Provide a summary of the information found during the verification of the GHG data and a summary of the GHG Assertion that was assessed.

For Facilities: Confirm that the quantification methodologies that were used in the compliance report are the same as those reported in the BEIA.

For Offset Projects: Confirm that the quantification methodologies that were used by the project proponent are the same as those described in the project plan. Indicate which quantification methodologies were used by the project proponent.

The GHG information consists of the activity data applied to quantify emissions reductions, the source documentation for the activity data, the information in the Offset Project Plan, as described in the previous section of this report, and the documentation supporting the boundary, methodologies, meter calibration, and emission factors.


Page 25 of 62

Table 3: Findings of GHG Data and Information Verification Procedures

GHG Report Element


Verification Findings

Quantification Data

Electricity production

Substantive test: Review invoices or statements and compare to the reported production quantities of each facility

The electrical production documented on production records matched the values in the CCSI Data Management System (emission reduction calculation software).


Emission factors Substantive test: Compare the emission factors applied in the calculations to the reference values provided in the relevant reference documents.

The recalculation matched the quantity reported by Carbon Credit Solutions. Therefore, the emission factors applied by the Responsible Party are proven to match the emission factors prescribed in the quantification protocol.


Emission Quantification and Reporting


Controls test: Compare the methodologies described in the Responsible Party’s Offset Project Plan to the methodologies described in the approved quantification protocol.

The Responsible Party’s Offset Project Plan follows the methodologies described in the quantification protocol.

The recalculation matched the quantity reported by Carbon Credit Solutions. Therefore, the methods applied by the Responsible Party are proven to match the methods described in the quantification protocol.



Substantive test: Recalculate the emission reduction using original metered data and methods described in the approved quantification protocol.

The complete emission reduction was recalculated using the original data. The recalculated quantity reasonably matched the value calculated by the Responsible Party.



Page 26 of 62

GHG Report Element


Verification Findings

Measurement of the electricity production

Substantive test: Observe the meters during the site visit to confirm that the meter used for monitoring electrical production is utility grade custody transfer meter.

All of the meters observed during the site visits were confirmed to be utility grade meters with current Measurement Canada labels.


4.3 Assessment against Criteria Provide a description of how eligibility criteria is met or not met.

For Offset Project: Complete Table 1 to indicate if the GHG Assertion conforms to the Regulation and Standard for Greenhouse Gas Emission Offset Project Developers eligibility criteria.

For Facilities: Delete Table 1 and Indicate if verification criteria are met or not met and explain.

Table 4: Findings of Criteria Verification Procedures

GHG Report Element

Verification Procedures Verification Findings

Protocol Applicability Requirements

Connectivity Substantive test: Review contracts to confirm that all sites are connected to the Alberta Grid via electric distribution companies.

The contracts that were confirmed connection to the Alberta grid via electric distribution companies.


Criteria Substantive test: Observe the solar panels during the site visit

The solar panels and respective meter were observed during the site visit. Additionally, we inquired with the site operator about the operation of the solar panels.


The project must meet the requirements of the Alberta Offset System

Substantive test: Evaluate the Responsible Party’s evidence regarding the general requirements of the Alberta Offset System.

See Table 5 on the following page.



Page 27 of 62

Table 5: Offset Criteria Assessment

Offset Eligibility Criteria

Assessment

Reduction or sequestration occurs in Alberta

The aggregated project includes sub-projects in locations throughout Alberta. The Aggregated Project Reporting Sheet was reviewed to confirm all locations are within the Province of Alberta.

Result from actions not required by Law at the time the action is taken

The project activity is not required by municipal, provincial or federal regulations or directives.

Result from Actions taken on or after January 1, 2002 and occur on or after January 1, 2002

The project start date is May 1, 2015.

Reduction or sequestrations is real and demonstrable

The emission reduction was demonstrated through measurement and estimation of data required for the quantification. The GHG information presented to the verification team included sufficient and appropriate evidence to substantiate conformance with the Protocol Applicability Requirements and to substantiate the quantification data.

Quantifiable and measurable

The emission reduction was demonstrated through measurement and estimation of data required for the quantification. This data was substantiated by sufficient and appropriate evidence. Table 3 of this report presents the findings of the evaluation of each variable required for the emission reduction quantification.

Verified by a third party verifier that meets the requirements in Part 1 for the Standard for Verification.

Brightspot Climate Inc. is an independent third-party verifier that meets the requirements outlined in Section 1 of the Standard for Verification. The Lead Verifier and Designated Signing Authority, Aaron Schroeder, is a Professional Engineer and has extensive experience quantifying and verifying greenhouse gas emissions, satisfying all sixteen subject matter areas defined in the ISO 14064-3 Standard.


Page 28 of 62

4.4 Evaluation of the GHG Assertion The verification assessment is that the GHG Assertion meets the requirements of the Carbon Competitiveness Incentive Regulation

Provide an assessment of the evidence collected during the verification. Determine if the data and information available support the GHG assertion. Provide a conclusion on whether the assertion meets the materiality requirements and the level of assurance agreed to at the beginning of the verification process.

The results of each verification procedure are provided in the preceding three subsections (4.1 – 4.3). Sufficient and appropriate evidence was collected through the verification procedures to reach the verification conclusion at a reasonable level of assurance, which is provided in the Verification Statement.

The data and GHG information provided by the Responsible Party is sufficient to support the GHG assertion.

There were no material or immaterial discrepancies detected in the final GHG assertion.

4.5 Summary of Findings Provide a summary of material and immaterial discrepancies expressed in tonnes and as net and absolute error in Table 2. Include whether the discrepancy was an understatement or an overstatement.

Include a more detailed description and log of results in Appendix C the “Issues Log”. This log will include both resolved and unresolved issues from the verification. Unresolved issues should be brought forward to Table 2.


Page 29 of 62

Table 6: Summary of Findings

Number the finding with the year and provide a unique # for each finding. Note: A detailed description of all material and immaterial findings should be provided in Table 3 of Appendix C. Provide only a summary statement (1-4 sentences) for each unresolved immaterial finding and each material finding (resolved or unresolved). If the finding is a resolved material finding, then put the tonnes net and absolute in the summary description column and indicate n/a in the net and absolute columns. Do not include the tonnes in the total error calculation. Indicate the type of error (qualitative or quantitative). Indicate the Source Category (for facilities) or the Source/Sink (for offsets). Indicate if the finding is an understatement or overstatement. Provide both net and absolute error in tonnes of CO2 eq and as a % of the assertion. Provide the total net error and the total absolute error in tonnes of CO2 eq and as a % of the assertion.

Result Type Summary Description of Finding Source Category or Source/Sink

Understatement / Overstatement

Tonnes CO2e % net

Tonnes CO2e % absolute

N/A N/A There were no discrepancies detected through the course of the verification.

N/A N/A N/A

Total Error


Page 30 of 62

4.6 Opportunity for Improvement Provide feedback on the data management system and controls, transparency, completeness of the inventory, additions to the quantification methodology document or diagrams, etc. Include positive considerations and observations also.

Identify strengths and weaknesses that may help to improve the report/s for the current facility, sector, and compliance program. Identify ways in which the project/facility could be more easily verified.

Overall, the GHG information was orderly and thoroughly presented.

The emission reduction data was satisfactorily organized and sufficiently transparent to conduct the verification procedures.

Sufficient and appropriate evidence was provided by the Responsible Party to conduct each of the verification procedures.

The Offset Project Plan and Offset Project Report thoroughly document the emission sources, quantification approach, equations, data collection and information controls.

5.0 Closure 5.1 Verification Statement Include the signed verification statement in Appendix D.

Instructions to insert a pdf: 1. Click Insert>Object 2. In the Object dialog box click Create from File and then click Browse. 3. Find the pdf you want to insert then click Insert. 4.Click OK.

For Offset Projects: fill in the sample Verification Statement provided, sign, scan and paste.

For Facilities: paste a signed version of the Verification Statement from the facility compliance form. Include the conclusion on the GHG assertion and any qualification or limitations and the level of assurance.

Provide the verification conclusion in the drop down box below.

The verification conclusion is:

Positive

5.2 Limitation of Liability Include signed Conflict of Interest Checklist in Appendix E.

For Offset Projects: fill in the sample Conflict of Interest Checklist provided, sign, scan and paste.

For Facilities: paste the signed Conflict of Interest Checklist from the facility compliance form.

Insert limitation of liability statement and include information in an Appendix F if applicable.


Page 31 of 62

5.3 Confirmations Document information confirmed, including any discrepancies or inconsistencies, as per the Confirmations section in the Standard for Greenhouse Gas Verification.

Section 5.1.3 of the Standard for Verification document lists seven activities that are beyond the scope of a typical greenhouse gas verification.

Table 7: Confirmation Findings

Confirmation Confirmation Finding

Correct entry of administrative fields such as facility codes and legal locations

The Offset Project Report was reviewed for completeness and accuracy. All sub-project and legal location information is complete and accurate.

Quantification Methodology document is provided and consists of the required components

The Responsible Party has documented all relevant methodologies, procedures and controls in the Offset Project Plan and the Offset Project Report.

Simplified process flow diagrams and energy diagrams

The Responsible Party’s Offset Project Plan and Offset Project Report provide process flow diagrams, which were reviewed and found to accurately represent the Project.

Fuel usage This requirement is not applicable to Offset Projects.

Additional request items/forms are complete and reasonable justification provided where needed

The Statutory Declaration was reviewed and found to be complete.

The Aggregated Project Reporting Sheet was reviewed. Sub-projects listed on this sheet were included in the Aggregated Project Planning Sheet and accurately describe the sub-projects included in the Project.

N/A is checked on pages in the reporting form that do not apply

This requirement is not applicable to Offset Projects.

Project report information details as required The Responsible Party has prepared an Offset Project Report that meets all the requirements specified in the Standard for Greenhouse Gas Emission Offset Project Developers, Version 2.0, June 2018

6.0 References None.

Page 32 of 62

Appendix A: Final Verification Plan and Sampling Plan


Page 33 of 62

Information to be included in the Verification Plan and Sampling Plan:

Revisions to the sampling plan

Date originally sent to Facility/project

Level of assurance agreed with the facility/project developer

Verification scope

Verification criteria

Amount and type of evidence (qualitative and quantitative) necessary to achieve the agreed level of assurance

Methodologies for determining representative samples

Sampling Plan and Procedures

Risk Assessment: Risks of potential errors, omissions or misrepresentations that are identified throughout the verification process including:

- Details of site visit

-offset/facility boundaries

- Methodologies, emissions factors and conversions used

- Comparability with the approved baseline

- Conformance to the program criteria

- Integrity for the responsible party’s data management system and control (organization chart, GHGH management plan, personnel/consultant training, protocols used, control system documentation, software/program documentation/certifications)

- Greenhouse gas data and information, including the type of evidence collected, verification testing and crosschecking, inventory of emission sources

- Discussion of data management, (measurement, fuel sampling, calibration, consistent use of standard conditions, data storage, procedures to fill missing data; procedures to repair inconsistent data, adjustment of variables and factors)

- Other relevant information

+1 (604) 353-0264 • www.brightspot.co • [email protected]

Carbon Credit Solutions Inc.

Carbon Credit Solutions Inc. Renewable Solar Energy # 1 Verification Plan

August 7, 2018

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Brightspot Climate Inc. – Verification Plan Carbon Credit Solutions Inc. – Carbon Credit Solutions Inc. Renewable Solar Energy #1

i

Terminology

ISO 14064-2 defines the following terms used in the context of a GHG verification:

GHG Assertion: a declaration or factual and objective statement made by the Responsible

Party.

The Alberta Climate Change Office Standard for Verification1 extends this definition to include

the document that identifies the greenhouse gas emission reduction and/or removals and

emissions offsets being claimed by the offset project over a defined period of time.

Project: activity or activities that alter the conditions identified in the baseline scenario which

cause greenhouse gas emission reductions or greenhouse gas removal enhancements.

The GHG Assertion subject of this verification is for Carbon Credit Solutions Inc. Renewable

Solar Energy #1 which will be referred to throughout this document as “the Project”.

ISO 14064-2 defines the following parties associated with the verification:

Responsible Party: person or persons responsible for the provision of the greenhouse gas

assertion and supporting GHG information.

The Responsible Party for this verification is Carbon Credit Solutions Inc. (CCSI).

Intended User: individual or organization identified by those reporting GHG-related information

as being the one who relies on that information to make decisions.

The Intended User for this verification is the Alberta Climate Change Office (ACCO).

Verifier: competent and independent person, or persons, with the responsibility of performing

and reporting on the verification process.

The Verifier for this verification is Brightspot Climate Inc. (Brightspot Climate). The members of

the verification team are provided in section 2 of this document.

1 Standard for Validation, Verification and Audit, Version 2.0, June 2018, Alberta Climate Change Office.


1

Introduction

This document serves to communicate information between the parties associated with the

independent verification of the Offset Project Report for the Carbon Credit Solutions Inc. Renewable

Solar Energy #1.

This document contains six sections:

1. The Introduction, which defines the principles by which this verification will be conducted;

2. The Verification, which defines the verification parameters and the GHG inventory principles that

will be tested by the verification. This section also provides information regarding the verification

team and site visit;

3. The Responsible Party Data Management and Controls, which describes the data management

system and control environment implemented by the Responsible Party;

4. Previous GHG Assertions, which describes any modifications to the original project that have

been made since the original Offset Project Plan was developed and any findings from previous

verifications for this Project;

5. The Verification Risk Assessment and Verification Procedures, which describes the risks of

potential errors, omissions or misrepresentations to the overall GHG assertion and the

verification procedures that have been developed to reduce the overall verification risk; and

6. The Sampling Plan, which lists the verification procedures that could apply sampling of the

project data, along with the sampling size, the sampling methodology and justification.

The Responsible Party developed the Project in accordance with the requirements of the <Protocol,

Version #, Month Year> (the Protocol).

GHG Quantification Principles

ISO 14064-2 defines six principles that are fundamental to the fair accounting and reporting of GHG

information. The verification procedures will test that these principles have been upheld through the

Responsible Party’s inventory, accounting and reporting processes.

Section 3.2 – 3.6 of ISO 14064-1 defines these principles as follows:

Accuracy: reduce bias and uncertainty as far as practical

Completeness: include all relevant emission sources

Conservativeness: use conservative assumptions, values and procedures to ensure that GHG

emission reductions or removal enhancements are not over-estimated

Consistency: enable meaningful comparisons of reported emissions (from year to year or

between facilities or between companies)

Relevance: select GHG sources, sinks and reservoirs, data and quantification methodologies

appropriate to the needs of the intended user

Transparency: disclose sufficient and appropriate GHG information to facilitate verification and

to allow intended users to make decisions with relative confidence


2

Verification

Verification Principles

ISO 14064-3 defines four fundamental principles to conducting a greenhouse gas verification, namely

independence, ethical conduct, fair presentation and due professional care.

Brightspot Climate has implemented processes, including mandatory training for all verification team

members, to ensure the application of these principles for this verification.

Regarding the principle of independence, Brightspot Climate conducted an assessment of threats to

independence prior to initiating this verification. No real or perceived threats to independence were

identified. Brightspot Climate will continue to monitor for threats to independence throughout the

course of this verification. A final “Conflict of Interests Checklist” will be appended to the Verification

Statement.

Verification Parameters

The verification will be conducted according to the parameters defined in the following table:

Table 1: Verification Parameters

Level of Assurance Reasonable assurance

Objectives

• issue a verification statement on whether the GHG assertion is

without material discrepancy;

• issue a verification report that provides details of the verification

activities; and

• complete the “confirmations” activities defined in the Alberta

Climate Change Office Guidance Document2, Section 5.1.3

Criteria

• Climate Change and Emissions Management Act

• Carbon Competitiveness Incentive Regulation 255/2017 with

amendments up to and including Regulation 96/2018

• Standard for Validation, Verification and Audit, Version 2.0, June

2018

• Standard for Greenhouse Gas Emission Offset Project Developers,

Version 2.0, July 2018

• Quantification Protocol for Distributed Renewable Energy

Generation, Version 1.0, March 2013

2 Standard for Validation, Verification and Audit, Version 2.0, June 2018. Alberta Climate Change Office.


3

Scope

Project Name: Carbon Credit Solutions Inc. Renewable Solar

Energy #1

Geographic Boundary: Various locations within Alberta.

Physical Operations: Distributed solar electricity generation

Emission Sources: B1: Electricity Generation

B3: Line losses from electricity transmission and

distribution

IPCC GHGs Emitted: Carbon Dioxide (CO2)

Methane (CH4)

Nitrous Oxide (N2O)

Reporting Period: May 1, 2015 – Mar 31, 2018

Materiality Quantitative materiality threshold is 5% of asserted greenhouse gas

emission reduction.

Preliminary Verification

Schedule

Verification Kickoff Meeting July 24th 2018

Draft Verification Plan August 7th, 2018

Site Visit August 8th, 2018

Draft Verification Report August 15th, 2018

Final Verification Report August 22nd, 2018

Verification Team

Aaron Schroeder, P.Eng., will be the Lead Verifier and Designated Signing Authority for this verification.

His extensive experience quantifying and verifying greenhouse gas emissions satisfies all sixteen subject

matter areas defined in the ISO 14064-3.

Michelle Stelmach, P.Ag., will conduct site visits and complete verification procedures under the

supervision of the Lead Verifier.

Melanie Schroeder, CPA, CGA will provide analytical support to the verification team through the

completion of the verification procedures and the development of the Verification Report.

Nathan Muegge, P.Eng., will conduct an independent peer review of the verification.

Additional information regarding the qualifications of the verification team will be provided in a

Statement of Qualifications, which will be appended to the Statement of Verification.

Site Visit Safety Requirements

Personnel conducting site visits are required to wear personal protective equipment including steel-toed

boots.


4

Control Environment

The Responsible Party’s Offset Project Plan (OPP) describes the processes, procedures and systems

that have been designed and implemented within their quality assurance/quality control framework. The

accuracy and completeness of the documentation of the Responsible Party’s controls will be reviewed

through the course of the verification.

The following processes, procedures and systems have been employed by the Responsible Party and

are divided into 3 Stages: Data Collection, Data Entry and QA/QC Processes. Within each of these 3

stages are automatic and manual controls to ensure the credits generated are sound.

• Data Collection – Owners/operators submit their information in the application. An initial meeting

is conducted to determine the facility qualifies under the Protocol.

• Data Entry – Data input team members collect monthly production data from participants,

ownership information and details of each facility.

• QA/QC – After data entry is complete, the file goes through a review at the project

administration level. Each vintage year is reviewed as well as each ownership document.

When the review is complete the file is locked down and ready for audit.

• A new Offset Project Plan is developed for each Project. The Credit Development Manager

reviews the document for accuracy, completeness, consistency, relevance and transparency.

The OPP documents:

o Facility eligibility requirements

o Field-level data collection

o GHG emission reduction quantification methodology

o Documentation requirements and document sources

o Data management

o Data quality controls and procedures, including data collection, data entry into DMS,

data maintenance and validation, emission reduction calculation and reporting.>


5

Previous GHG Assertions

Changes to Operations and Boundaries

The original Offset Project planned a verification for the period of May 1, 2015 to December 31, 2015

and then annually thereafter. Due to the nominal amount of aggregated emissions quantified and the

prohibitive costs, this is the first verification of the project since the original project plan was developed.

No other changes to the original project plan have been made since the original Offset Project Plan was

developed.

Verification Risk Assessment and Verification Procedures

Verification risk is defined as the risk of an incorrect verification conclusion. It can be calculated as the

product of

• The Facility’s inherent risks;

• The Responsible Party’s control risks; and

• The detection risks associated with the verifier’s verification procedures.

Inherent Risk × Control Risk × Detection Risk = Verification Risk

The verifier cannot affect the inherent risk or the control risk. Therefore, to reduce the overall verification

risk and reach the agreed level of assurance (defined in the verification scope), the verifier must design

verification procedures that reduce the detection risk.

Each inherent and control risk was provided with the risk score (high/medium/low). The risk analysis of

inherent and control risks considers both the magnitude of the activity data or inventory component on

the overall GHG assertion as well as the probability that the risk will result in a discrepancy, as assessed

by the auditor.

The Verification Risk Assessment Summary on the following pages describes the following information:

Activity Data / Inventory Component: The boundary, eligibility requirement, data component or

reporting activity being evaluated.

Inherent Risk: The verifier’s evaluation of inherent risk. Inherent risks have been categorized

according to the ISO 14064-1 principles (accuracy, completeness, consistency, relevance,

transparency)

Control Risk: A description of the Responsible Party’s controls (if any controls are applicable)

and the verifier’s evaluation of control risks.

Max Detection Risk: The maximum detection risk that can be applied and still result in an overall

verification risk that meets the agreed level of assurance.

Designed Detection Risk: The detection risk of the verification procedure that the verifier intends

to complete. Note that the designed detection risk must always be equal to or lower than the

maximum detection risk.


6

Verification risk: the product of the inherent, control and (designed) detection risk, as defined in

the equation above.

Important note: The verification strategy for this verification is to use substantive tests instead of control

tests wherever possible. Substantive tests are designed to focus on directly testing activity data or

inventory components and their associated inherent risks. Control tests are designed to focus on

testing the Responsible Party’s controls and if the test is successful, relying on the Responsible Party’s

control. Therefore, control tests indirectly test activity data or inventory components.

Each verification procedure listed in the following table denotes if the procedure is a substantive or

control test.


7

Table 2: Verification Risk Assessment Summary

Activity Data /

Inventory

Component

Inherent Risk Control Risk Max

Detection

Risk

Designed

Detection

Risk

Description of Verification

Procedure

Verification

Risk

PROTOCOL APPLICABILITY REQUIREMENTS

Connectivity Relevance

Risk that the site is not

connected to Alberta’s

electricity grid

(Low Risk)

Control: All sites

provide invoices or

statements from

distribution

companies.

Control Risk: Invoices

or statements may be

missing. (Medium)

High Low Substantive test: Review

invoices or statements and

confirm that all sites are

connected to the Alberta Grid

via electric distribution

companies.

Low

Criteria Relevance

Risk that the energy is

not solar-derived

electricity

(Low Risk)

Control: The

Responsible Party

implemented a data

collection/manageme

nt system

Control Risk: The data

management

collection system is

not used, or used

correctly (Low)

High Low Substantive test: Observe the

solar panels during the site

visit

Low


8

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

The project

must meet the

requirements of

the Alberta

Offset System

Relevance

The project may not

have met the

requirements of the

Alberta Offset System.

(High Risk)

The Responsible

Party does not have a

control specifically

designed to address

this inherent risk.

(High)

Low Low Substantive test: Evaluate the

Responsible Party’s evidence

regarding the general

requirements of the Alberta

Offset System.

Low

QUANTIFICATION DATA

Electricity

production

Accuracy (High Risk)

Completeness (High

Risk)

The quantity of electricity

produced may be

inaccurately recorded

Control: The

Responsible Party has

a data management

process to collect,

record and store

electricity production

per facility.

Control Risk: The data

management

collection system is

not used, or used

correctly (Low)

Low Low Substantive test: Review

invoices or statements

compare to the reported

production quantities of each

facility

Low


9

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Emission

factors –

Accuracy (Medium)

Incorrect emission

factors may be applied in

the calculation.

The Responsible



designed to address

this inherent risk.

Low Low Substantive test: Compare

the emission factors applied

in the calculations to the

reference values provided in

the relevant reference

documents.

Low

EMISSION REDUCTION QUANTIFICATION

Application of

the approved

quantification

protocol

Accuracy (Medium)

The project developer

may not have

implemented approved

quantification

methodologies or applied

additional

methodologies.

Control: The

Responsible Party has

developed an Offset

Project Plan that is

intended to conform

to the requirements of

the approved

quantification

protocol.

Control Risk: The

protocol requirements

may not have been

implemented correctly

(Medium)

Low Low Controls test: Compare the

methodologies described in

the Responsible Party’s

Offset Project Plan to the

methodologies described in

the approved quantification

protocol.

Low

Substantive test: Recalculate

the emission reduction using

original metered data and

methods described in the

approved quantification

protocol.

Low


10

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Measurement

of the electricity

production

Accuracy (Low)

The metered quantity, as

reported, may not

correspond to the actual

amount produced.

The Responsible



designed to address

this inherent risk.

High Low Substantive test: Observe the

meters during the site visit to

confirm that the meter used

for monitoring electrical

production is utility grade

custody transfer meter.

Low

DATA INTEGRITY

Activity data

and emission

factor data

integrity

Accuracy (Medium)

Data may not have been

accurately transferred

between electronic

systems and calculation

sheets.

Control: The

Responsible Party

uses electronic data

transfers whenever

possible to maintain

data integrity.

Control Risk:

Electronic data

transfers may result in

errors or may not be

available for all data

(medium).

Medium Low Controls test: Analyze all

metered data for abnormal

data (zeros, missing data,

values outside range).

Low

Substantive test: Recalculate

the complete emission

reduction using original data.

Low


11

Activity Data /

Inventory

Component


Detection

Risk

Designed

Detection

Risk


Procedure

Verification

Risk

Transcription of

final emission

reduction into

Offset Project

Report

Accuracy (Medium)

Final emission reduction

may not have been

transcribed accurately

from calculation

spreadsheets into the

Offset Project Report.

The Responsible



designed to address

this inherent risk.

(High)

Medium Low Substantive test: Compare

the final emission reduction

quantity reported by the

Responsible Party to the

quantity reported in the Offset

Project Report. Also,

compare these quantities to

the recalculated quantity in

previous verification

procedures.

Low


12

Sampling Plan

The verification procedures that could apply sampling of the project data are listed in the following table.

The sampling size, the sampling methodology and their respective justifications are also described in the following table.

Table 3: Sampling Plan

Activity Data /

Inventory

Component

Detection

Risk

Design

Description of Verification Procedure Sample

Size

Sampling Methodology and Justification

Emission factors Low Substantive test: Compare the emission factors

applied in the calculations to the reference values

provided in the relevant reference documents.

All values There are only two emission factors in the

project; therefore, sampling is not

applicable.

Electricity

Invoices/

Statements

Low Substantive test: Review invoices or statements

compare to the reported production quantities of

each facility

All values There is a small number of documents to

review; therefor, review of all values is

practical and has lower verification risk than

sampling.

Connectivity Low Substantive test: Review invoices or statements and

confirm that all sites are connected to the Alberta

Grid via electric distribution companies.

All Values There is a small number of documents to



sampling.

Measurement of

the electricity

production

Low Substantive test: Observe the meters during the site

visit to confirm that the meter used for monitoring

electrical production is utility grade custody transfer

meter.

3 sub-

project

sites

Three of seven sub-projects in the

aggregated project comprises

approximately 97% of the total asserted

emission reduction.

Activity data and

emission factor

data integrity

Low Controls test: Analyze all metered data for abnormal

data (zeros, missing data, values outside range).

All Values There is a small number of documents to



sampling.

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Appendix B: Statement of Qualifications

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Statement of Qualifications Offset Report Project Name Offset Project ID

Carbon Credit Solutions Inc. Renewable Solar Energy Project #1 5043-6079

Reporting Company Legal Name Report Type Reporting Period

Carbon Credit Solutions Inc. Offset Report from

May 1, 2015- March 31, 2018

to Signature of Third Party Verifier

I, Aaron Schroeder

(Third Party Verifier), meet or exceed the qualifications of third-party verifiers described in Section 29 of the Carbon Competitiveness Incentive Regulation.

Verifying Company Name

Brightspot Climate Inc. Per: Aaron Schroeder

Signature of Third Party Verifier Date:

Training Received Under ISO 14064 Part 3

• Greenhouse Gas Verification – ISO 14064-3, Canadian Standards Association, 2012 • Instructor – Greenhouse Gas Verification – ISO 14064-3, University of Toronto, 2015 – 2018

First Name Last Name

Aaron Schroeder Professional Designation E-mail Address Phone Number Professional Engineer [email protected] (604) 353-0264

Lead Verifier

� Same as third party verifier??

First Name Last Name Professional Designation E-mail Address Phone Number Training Received Under ISO 14064 Part 3

October 4, 2018

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Peer Reviewer First Name Last Name Nathan Muegge E-mail Address Phone Number [email protected] (647) 280-0410 Training Received Under ISO 14064 Part 3

• Greenhouse Gas Verification – ISO 14064-3, Canadian Standards Association, 2009 • Environmental Auditing, Legislation, Regulations and other Canadian Requirements, 2008

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Appendix C: Findings and Issues

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Table 7: Detailed Findings and Issues Log

Number the issue with the year and provide a unique # for the issue. If the issue resolved during the verification, indicate that in the resolution column. If the issue is not resolved during the verification, or if the issue was material (whether resolved or not) record it as a finding in Table 2 and provide a cross reference to the finding # in the resolution column. Describe the issues investigated. State the verification criteria that are not met. Provide a description of how it is not met and provide the evidence. Indicate the Source Category (for facilities) or the Source/Sink (for offsets). Indicate if the finding is an understatement or overstatement. Summarize information between verifier and client. Provide a conclusion including % discrepancy, if applicable.

Item (YR-##)

Description of the Issues Investigated During the Verification

Summary of information exchanged between Verifier and Responsible Party

Resolution Conclusion

N/A There were no discrepancies detected through the course of the verification.

N/A N/A N/A

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Appendix D: Statement of Verification


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Statement of Verification Associated SGER Submission

Offset Project Protocol Project ID #

Carbon Credit Solutions Inc. Renewable Solar Energy Project #1

Specified Gas Emitters Regulation Quantification Protocol for Distributed Renewable Energy Generation, Version 1.0, March 2013 5043-6709

Project Developer Serial Range Start Report Period

Carbon Credit Solutions Inc. N.A.

May 1, 2015- March 31, 2018

Serial Range End

N.A.

Statement of Verification

GHG Assertion

Value Units

Total Baseline Emissions 5,109 tonnes CO2e

Total Project Emissions 0 tonnes CO2e

Other N.A tonnes CO2e

Net Reductions 5,109 tonnes CO2e


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Statement of Assertion

The Responsible Party’s GHG Assertion is comprised of the Offset Project Plan, Offset Project Report and supporting documentation.

The GHG Assertion covers the reporting period May 1, 2015 to March 31, 2018 and states an emission reduction and removal claim of 5,109 tonnes CO2e over this period.

The emission reduction and removal claim consists of 2015, 2016, 2017 and 2018 vintage credits.

Responsibilities of Project Developer and Third Party Verifier

Our responsibility as the Verifier is to express an opinion as to whether the GHG Assertion is materially correct, in accordance with approved Protocol, the Carbon Competitiveness Incentive Regulation (the “Regulation”), and the Alberta Climate Change Office – Standard for Greenhouse Gas Emission Offset Project Developers, Version 1.0, December 2017.

We completed our review in accordance with the ISO 14064 Part 3: Greenhouse Gases: Specification with Guidance for the Validation and Verification of Greenhouse Gas Assertions (ISO, 2006). As such, we planned and performed our work in order to provide positive, but not absolute assurance with respect to the GHG Assertion.

The verification procedures that were performed through the course of the verification were developed based on the results of a risk assessment that was completed during the verification planning stage. These verification procedures are described in the Verification Plan. Certain verification procedures included data sampling. The sampling type, sample size and the justification for the planned sampling type and size are detailed in a Sampling Plan, which is included in the Verification Plan.

Conclusion

I believe our work provides a reasonable basis for my conclusion.

There were no unresolved discrepancies in the final GHG Assertion.

Based on our review, it is my opinion at a reasonable level of assurance that the GHG Assertion is materially correct and presented fairly in accordance with the relevant criteria.

Signature of Third Party Verifier




Date:

First Name Last Name

Aaron S Schroeder

October 4, 2018


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Professional Designation E-mail Address

Phone Number

Professional Engineer [email protected] (604) 353-0264

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Appendix E: Conflict of Interest Checklist


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Conflict of Interest Checklist

Associated SGER

Submission Offset Project Protocol

Carbon Credit Solutions Inc. Renewable Solar Energy Project #1

Specified Gas Emitters Regulation Quantification Protocol for Distributed Renewable Energy Generation, Version 1.0, March 2013

Project Developer Report Type Report Period

Carbon Credit Solutions Inc. Offset Report

May 1, 2015 – March 31, 2018

Checklist Respond either "True" or "False" to each of the following statements:

1.

The relationship between my firm and this reporting company poses unacceptable threat to or compromises the impartiality of my firm.

False

2.

The finances and sources of income of my firm compromise the impartiality of my firm.

False

3.

The personnel my firm has scheduled to participate in the verification may have an actual or potential conflict of interest.

False

4.

My firm participated in some manner in the development or completion of the associated offset submission for this reporting company.

False

5.

My firm provided greenhouse gas consultancy services to this reporting company.

False

6.

My firm will use personnel that have, are, or will be engaged or previously employed by the reporting company.

False

7.

My firm will outsource the Statement of Verification for the associated offset submission.

False

8.

My firm offers products or services that pose an unacceptable risk to impartiality.

False

Important: If you have checked "True" to any of the above, you may not fulfill the "independence" requirement for third party verifiers. Please contact Alberta Environment and Parks for further instruction. If the potential conflict of interest is a sufficient threat to impartiality (perceived or actual), or cannot be effectively managed, you Third Party Verification Report will not be acceptable to Alberta Environment and Parks.


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I , Aaron Schroeder (Third Party Verifier), have personally examined and am familiar

with the information contained in this Conflict-of Interest Checklist, and can demonstrate freedom from any conflict of interest related to the reporting company for which the verification was performed. I hereby warrant that the information submitted in this Conflict-of Interest Checklist is true, accurate and complete to the best of my knowledge, and that all matters affecting the validity of this Conflict-of-Interest Checklist have been fully disclosed. Impartiality shall be monitored over the duration of the verification and any identified actual or potential conflict-of-interest situations will be communicated to AEP directly.



Signature of Third Party Verifier Date:

First Name Last Name Aaron Schroeder Professional Designation E-mail Address Phone Number Professional Engineer [email protected] (604) 353-0264

October 4, 2018

Page 61 of 62

Appendix F: Supplemental Diagrams/Tables/Figures

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Table 8: Supporting Documentation Reviewed

File Name Description

26072018_Solar Spatial Location Template.xlsx

Sub-project location information

26072018_Solar Verification Data Package.xlsx

Verification data

Carbon Credit Solutions Solar OPP.pdf Carbon Credit Solutions Inc. Renewable Solar Energy #1 Offset Project Plan

Various solar system installation invoices Invoice for solar panel installation

Fully Executed Commercial EPC Agreement (numerous)

Instalment agreements

monthly report.pdf (numerous) Production report

Interconnection agreements (numerous) Interconnection agreements

Limitation of Liability

The verification described in this report was designed and completed to achieve the verification objective and is not intended to provide assurance of any kind for any other purpose.

This report is intended for the Responsible Party and the Intended User as defined in the attached verification report.

Brightspot Climate disclaims liability for use by any other party and for any other purpose.