RNNR Committee Report

There are a number of integrated energy projects currently underway in various communities across Canada:[68]

• The Town of Vermilion, Alberta (population 3,744) is examining “an innovative approach to solid waste management that will produce power using animal and municipal organic wastes as bio-energy.” The project is expected to reduce greenhouse gasses by the equivalent of “at least 9,000 tonnes of carbon dioxide.”
• The City of Revelstoke, British Columbia (population 8,047) will build a “heating plant that will combust approximately 7,000 tonnes of wood biomass residue annually… to provide hot water and heat to several buildings across the city.” The project is expected to result in a “net 40 to 60 percent process efficiency improvement” in energy capture, transmission and delivery, which would also reduce greenhouse gases by 4,157 metric tonnes annually.
• The Municipality of the District of West Hants, Nova Scotia (population 13,780) will conduct “energy audits of its central administrative building, water treatment plant and waste water treatment plant,” in addition to extensive assessments of energy conservation and efficiency solutions. The study is expected to trigger capital projects that will reduce energy consumption by 20 percent.
• The City of Senneterre, Quebec (population 3,488) plans to establish a “receiving station—a thermal park—to capture thermal waste heat from the Boralex-Senneterre cogeneration unit for use by agricultural, agri-food and agri-industrial production and processing companies” in the form of hot water. The system is expected to reduce water consumption at the cogeneration plant, and achieve about 91 percent reductions in greenhouse gas emissions.
• The Town of Quispamsis, New Brunswick (population 13,521) will “conduct a detailed energy audit and create a local action plan for its municipal facilities and vehicle fleet.” The town estimates about 826 tonnes of greenhouse gas reductions by 2011 (a 20 percent decrease from 1994 levels).

Each of the following case studies highlights a lesson learned in practice through the planning or implementation of an integrated energy system. When brought together, the highlighted themes, which are indicated in the title of each section, represent fundamental factors to advancing integrated energy systems.

Integration: City of Guelph Community Energy Plan

In 2007, the City of Guelph (Ontario) adopted a community energy plan brought forward by private, non-profit and public sector organizations with goals to develop integrated community services (i.e. water, energy, transport, etc.); reduce per capita greenhouse gas emissions below the current global average; reduce per capita energy and water use below comparable cities in Canada; and establish the city as a “location of choice for investment.” Initial assessments of the city’s efficiency and renewable energy strategies fell short of the desired targets, which led to a more integrated strategy by considering local generation and district energy systems. Community projects developed in line with the multi-utility aspects of the city’s plan by incorporating cogeneration, district energy, and an integrated energy master plan.[69]

Still in its planning phase, the case of Guelph illustrates that the integration of expertise, planning and technologies is a fundamental principal in the implementation of integrated energy systems.

Figure 4: Cumulative contribution of energy reduction strategies per capita

Source: City of Guelph.

Figure 5: Cumulative contribution of greenhouse gas reduction strategies per capita

Source: City of Guelph.

Local Resources: Town of Two Hills’ Anaerobic Digester

Anaerobic digestion is a waste management approach that produces energy and can recover natural resources. At the Town of Two Hills (Alberta), the resource potential of feedlot manure triggered a lab-scale anaerobic digestion pilot plant which was very successful and eventually grew into a $100 million commercial-scale project. The project grew to incorporate a regional-scale ethanol production facility in addition to the feedlot and the digester. These three elements form an integrated closed-loop production cycle, where by-products from one process become an input resource to the next. The project’s economic and environmental advantages have benefits for the entire community.[70]

The case of Two Hills demonstrates that communities can achieve great gains by realizing the potential of their local resources. By effectively managing these resources, production and waste management processes can be integrated into self-sufficient closed-loop cycles.

Municipal Authority: Southeast False Creek, Vancouver

Vancouver’s Southeast False Creek development (home of the Olympic Village) is a 6 million square feet compact mixed-use brownfield development that incorporates green buildings, renewable district heating, and a sustainable transportation system. The Green Building Strategy is supported by Vancouver’s land-use and building codes and bylaws, which is an exceptional situation, given that municipalities in Canada rarely control their own building codes. By planning for compact, mixed-use development, the Strategy enables public and active transportation, facilitates efficient building systems, and justifies the economics of district heating and renewable district energy systems. The buildings are designed to integrate with transportation by providing dedicated charge points for electric vehicles. In addition, public transit is undergoing electrification, with plans to reintroduce street cars to Vancouver.[71]

The case of Southeast False Creek illustrates how municipal authority (in this case through independent land-use and building codes) could play a central role in advancing some elements of integrated energy planning.

Government Funding: Drake Landing Solar Community, Okotoks

The objective of the Drake Landing Solar Community Pilot Project in Okotoks (Alberta) is to demonstrate how the integration of energy-efficient technologies using seasonal solar thermal energy storage could provide 90 percent of a home’s annual space-heating requirements. With 52 homes at the community, a district heating system stores excess solar energy in the summer to supplement space-heating needs in the winter, and provide 60 percent of hot water requirements year-round. The project added $7.1 million (over $136,000 additional per home) to the development’s initial capital cost, which was only feasible due to financial incentives from the federal and provincial governments. The project is the world’s first application of single-family solar storage technology at the community level.[72]

Large-scale research and development projects come with inherent unknowns (e.g. costs, operations, maintenance, expertise, reliability and longevity) and high risk, which tends to discourage private investment and consumer participation. The case of the Drake Landing Solar community illustrates that government funding is a requisite for the success of such large-scale pilot projects.[73]

Figure 6: Drake Landing Solar Community Setup

Source: ATCO Gas, document presented to the Committee.

Figure 7: Drake Landing greenhouse gas reductions from space and water heating

Source: ATCO Gas, document presented to the Committee.

Financial Management: Énergie Verte Benny Farm, Montreal

Énergie Verte Benny Farm (EVBF) is a non-profit, community-owned energy company that was created to implement and manage the Greening the Infrastructure at Benny Farm project in Montreal. The project “integrates a range of energy and water systems between and within [...] buildings” using various conservation technologies. With initial investments aided by about $3 million from the Federation of Canadian Municipalities’ Green Municipal Fund, the project is expected to eliminate 313 tonnes of greenhouse gas emissions, conserve 6,700,000 litres of potable water, and divert approximately 15,200,000 litres of waste water annually. These achievements will reduce the energy costs during the life-cycle of the project. EVBF will charge 75 percent of the market energy rate to ensure “manageable bills… [and] engage in other community education and energy projects.”[74]

The experience of EVBF illustrates that high initial capital and management costs (e.g. design, technology, expertise, etc.) can be long-term investments with economic advantages spanning the lifecycle of an integrated energy system. This is particularly relevant in the context of rising energy costs. As Daniel Pearl puts it: “when affordable housing is no longer affordable because energy costs are higher than inflation, then the people living in the project no longer can live in the project.”[75]

Incentive: Germany and Sweden

In spite of its relatively scarce natural resources (both fossil fuels and renewable), Germany’s renewable industry is a world leader, employing 250,000 people, reducing the energy sector’s carbon dioxide emissions by one seventh, and adding a total turnover of about 25.5 billion Euros to the country’s gross domestic product. The industry continues to grow despite the current economic crisis.[76]

Figure 8: Renewable energy sources as a share of energy supply in Germany

Source: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (Germany), Renewable Energy Sources in Figures, p.11, document submitted to the Committee.

To counteract initial public rejection of wind energy, project developers organized an outreach program, selling wind park shares to local communities. As stakeholders, the previously disturbing “fluctuating shadows and noise... [turned into the sound of] money [...] being generated...”[77] In addition, the following policy incentives were introduced:[78]

A feed-in tariff system guaranteeing a certain rate for each kilowatt hour’s production (several improvements to feed-in policies were introduced in 2000 and 2004, which advanced renewable energy production as illustrated in Figure 9);

Requirement of transmission system operators to buy all renewable energy production;

A built-in annual reduction of tariffs to encourage early action;

Government guidance to the public on technical details.

Germany is also a net exporter of electricity and a net importer of resources (i.e. fossil fuels and uranium), which makes it more attractive politically and economically to develop renewable energy further. The government continues to discuss ambitious goals of up to 50 percent renewable production by 2030.  However, the feasibility of such continued rapid expansion is unclear, considering current issues with integrating electricity production to the grid. Future technologies may resolve such technical difficulties.[79]

Figure 9: Feed-in and fees under the act on the sale of electricity to the grid and the Renewable Energy Sources Act

Source: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (Germany), Renewable Energy Sources in Figures, p.32, document submitted to the Committee.

In Sweden, the development of district heating dates back 60 years. In the 1950s, major Swedish cities decided to replace their individual oil boilers with district heating for environmental reasons. By the 1970s, the two oil price peaks created enough incentive for even smaller cities to invest in district heating systems in order to reduce their dependence on oil. A politically-driven expansion of district heating continued throughout the 1980s, where “heating plans” provided a regulatory framework by specifying planned areas for district heating development. Today, district heating companies operate in an unregulated market, in competition with other heating systems.[80]

According to Peter Öhrström, the contribution of fossil fuels to heating dropped from 87 percent in 1981 to 12 percent in 2007, which reduced carbon dioxide emissions by over 80 percent. In the same period, biomass increased from 0 to 45 percent, incineration increased from 5 to 16 percent, and industrial waste heat increased from 3 to 7 percent. The system’s reliance on local resources has been beneficial, especially given the long distances between Swedish cities and villages.[81]

As the cases of Germany and Sweden illustrate, incentive creates a context for change. Integrated energy systems demonstrate economic foresight and diversification. They allow communities across Canada to establish self-governing local economies by observing today’s resources and technology potentials and by investing in tomorrow’s needs. The successful implementation of integrated energy systems requires that all levels of government, utility companies, private investors, developers, and citizens contribute within their areas of responsibility.