As we move into the fall heating season, energy costs continue making headlines around the world. Here in Ontario, municipalities and housing providers are asking about alternatives to the conventional energy mix that heats and powers their portfolios. In this issue, we explore various options, from alternative fuels to funding, and how they can support affordability and carbon reduction.
We hope you enjoy our fall issue!
In this issue:
- Alternatives to Conventional Fuels – What Are the Options?
- FCM’s Funding Targets Energy Efficiency
- Upcoming Webinar – Enbridge Gas Incentive Programs For Affordable Housing
- How’s your Utility Performance?
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Alternatives to Conventional Fuels – What Are the Options?
With global energy pricing continuing to make the headlines, housing providers are asking about alternative fuels and other approaches to cutting energy costs.
At the same time, many Ontario municipalities are adopting net-zero carbon targets that apply to both publicly and privately owned buildings, including non-profit and co-operative housing. Here, we look at some alternative energy sources and approaches, their costs, availability, and carbon cutting capability.
Electrification
Large municipal housing corporations like Ottawa and Toronto are moving towards electrification of their portfolios in response to municipal climate targets of net-zero emissions by 2040. The upfront cost to electrify gas-fired buildings can seem daunting, so it’s important to consider the full lifecycle impacts particularly given that social housing buildings are long-term investments. And since Ontario’s electricity supply mix is relatively clean, electrification is a winning strategy for meeting emissions reduction targets.
For more information on the pros and cons, check out this webinar on electrification in multifamily housing in the U.S.
Renewable Natural Gas
Renewable Natural Gas (RNG) is identical to conventional fossil-based natural gas but is sourced by siphoning methane gas off landfills, manure ponds, and sewage plants. It can flow through the same pipelines to your door but, unlike conventional gas which is traded on a market, RNG is usually purchased through project contracts.
RNG has been positioned as a carbon reduction alternative to conventional gas, but, while it may be suitable for certain industrial purposes, it has significant barriers of cost, carbon intensity, availability, and infrastructure needs. These include:
- Carbon Intensity: RNG has been touted as an answer to decarbonization because in theory consumers are putting waste gas to use that would otherwise be released to the atmosphere. While RNG has a lower carbon intensity compared to conventional natural gas, there are some better decarbonization strategies available, especially for housing, where electrification, renewables, and reducing demand will likely achieve quicker and longer-lasting carbon reductions for the time and money invested.
- Cost: RNG is four to five times the price of conventional natural gas. As a carbon reductive investment, that premium may be better spent on options that reduce your overall demand.
- Availability: RNG is project-based, and in Canada, most projects have already been sold, such that there is little RNG available for purchase. Municipalities could consider landfill-based projects, either internally or through third parties, and could either sell or use the RNG. However, such projects would need to begin now to contribute to achieving 2040-2050 climate targets.
- Infrastructure Lock–in: RNG can only ever offset a small portion of overall gas demand. Each RNG project needs to be connected to a pipeline to carry the gas to consumers, which locks-in infrastructure and enables more fossil fuel use. Rather than support increased demand for gas and by extension, gas infrastructure, the focus can be on reducing overall methane generation. For example, diverting landfill waste to recyclers or composting facilities, cutting down on trash, and improving livestock practices could have more positive impacts than commercializing RNG.
Hydrogen
Like RNG, hydrogen has been touted as an alternative fuel to natural gas and could similarly be introduced on existing pipelines, provided they have been made of hydrogen-safe materials. Since hydrogen is not available in a pure state, it must be extracted, most readily from methane – in other words, natural gas. This process creates carbon dioxide as a by-product, which will require large-scale carbon capture plants to be built to sequester the carbon dioxide created by hydrogen extraction.
Hydrogen can also be available through electrolysis, which, if powered by wind farms, does not produce carbon dioxide and is therefore somewhat greener. However, with either method, there is an overall energy loss in producing hydrogen and again when compressing hydrogen so it can move through pipelines. These two factors make hydrogen not only a less efficient alternative but also a much more expensive one.
Heat Pumps / Geoexchange
At the centre of a geoexchange system is a heat pump. Air source heat pumps extract heat from the air and move it into the building during the winter and out of the building during summer. A ground source heat pump does the same thing but uses the ground or a body of water as the heat source or heat sink depending on the season. These systems can run on electricity, gas, or a combination, with electric heat pumps being top choice from a carbon reduction standpoint; in fact, they are a key technology for moving off gas and electrifying buildings. At 200 to 500 percent efficiency, these systems are miles ahead of high-efficiency furnaces and boilers. They also have the advantage of being able to address heating, cooling, and hot water heating needs.
With natural gas pricing expected to continue rising, electric heat pumps are increasingly affordable for fuel-switching scenarios when you consider the lifecycle operating costs of your buildings. For buildings with old electric baseboard heaters, heat pumps are not only far more efficient but offer greater comfort as well.
Buying Power
In 2021, New York City Housing Authority (NYCHA) launched its Clean Heat for All Challenge to drive innovation and growth of heat pumps in the U.S. NYCHA leveraged its portfolio of 2,198 buildings to invite manufacturers to develop low-cost, easy-to-install heat pumps for building retrofits. To attract interest, the agency committed to purchase and install a minimum of 24,000 units of the winning model. New York State Energy Research and Development Authority (NYSERDA) are sweetening the deal by recruiting housing agencies from across the state and U.S. to participate in what is shaping up to be a major market transformation initiative.
NYCHA has already seen success implementing a similar project for refrigerators. Not only will the heat pump project lead to improved technologies, it will also help increase the market for them, make them more affordable to buy, and help American housing providers reduce their carbon impacts. Could the Ontario community housing sector leverage its 260,000-plus to achieve similar market transformation? This could be one avenue for Ontario housing providers to explore.
Building Improvements
We’ve said it before, and we’ll say it again: changing your fuel supply is just one tool in your toolbox. The most sure-fire way to cut your energy costs is to cut your demand for energy in the first place. You can do this by improving the building envelope, sizing heating, cooling and water heating systems appropriately, and where applicable, integrating renewable energy technologies. Energy reduction projects will have the greatest overall impact, now and for the long term. To fund such projects, check out some of the funding and supports available from FCM in the article below.
Achieving carbon reduction targets will require significant innovation and investment. But if you are willing to undertake this worthwhile initiative, there are many options that offer both affordability and decarbonization right now and over the long term.
FCM Funding Targets Energy Efficiency
The following is a guest article from the Federation of Canadian Municipalities.
Have you wanted to address the energy efficiency upgrades needed in your building, but they keep getting outcompeted with other priorities? You are not alone. There are so many priorities with respect to building maintenance and operations that it is hard to stay on top of it all. Often, competing priorities, combined with lack of technical know,-how can make it difficult to take action to reduce building energy demand and greenhouse gas (GHG) emissions. But what if you could address your priorities while gaining technical knowledge, all while saving money on your energy bills?
To help assist with the up-front cost of investing in energy efficiency improvements, the Federation of Canadian Municipalities’ Sustainable Affordable Housing (SAH) initiative is here to help realize deep energy reductions and maximize cost savings for both housing providers and residents. Accessing SAH funding at the planning and study phase of a project can help housing providers build the business case for deep energy reductions and validate overall reduction and savings potential. The SAH also provides access to Regional Energy Coaches who can help assess the opportunities in your buildings and find a good match with the Green Municipal Fund (GMF) or other funders.
Here are helpful links to support your project at whatever stage it’s at:
- Explore how the Sustainable Affordable Housing initiative offers support throughout the life cycle of an affordable housing construction project through five funding options.
- Search the SAH resource library with over 50 practical resources to inform and guide retrofits to existing affordable housing units, or new builds that are energy efficient and emit lower greenhouse gas emissions.
- Check out these five SAH factsheets for a “how to” for successful projects. Each factsheet outlines the benefits the upgrades provide, from increased affordability to lower GHG emissions and better quality of life for residents. Whether you want to make your current buildings more efficient or begin design on a high-performance new build, these resources will provide key insights to help achieve your performance targets.
For more information, contact the SAH team at 1-877-417-0550 or gmfinfo@fcm.ca
October Webinar: Enbridge Gas Incentive Programs For Affordable Housing
Join us for a free webinar sponsored by Enbridge Gas Inc. on October 25, 2022 from 1:00 – 2:00PM.
In this webinar, Energy Solutions Advisor, Jeff Blunt, will give an overview of energy efficiency incentive programs from Enbridge Gas geared to affordable housing, including:
- Affordable Multi-Family Housing program
- Affordable Housing Savings by Design program
- Home Winterproofing program
Jeff will identify opportunities to install the right equipment and uncover all the financial incentives offered by Enbridge Gas to maximize returns on energy-saving capital upgrades. He will also feature case studies of projects that have benefited from the expert help and incentives to maximize their buildings’ energy performance.
How’s your Utility Performance?
If your building is enrolled in HSC’s Utility Management Program (UMP), you can log-in to see how well it is using energy and water. We enter your natural gas, electricity, and water data into the online system. You simply need to log-in to view the helpful dashboards and reports that show your energy and water performance month to month and year over year.
If you have questions about your UMP results, contact HSC Energy Services – we’d be happy to help!
Other Topics? If you’d like to suggest a topic or want a one-on-one review with HSC staff, please contact us!
