Thursday 27 October 2016

Part 2: Problems with the City of Vancouver Zero Emissions Building Plan- 2 of 4

Neighbourhood Energy Utilities and Zero Emissions

District energy isn't a new concept. Providing energy to multiple buildings from a single source often makes a good deal of sense on a university campus, healthcare campus or other tight collections of buildings. It's also really useful when you have a diversity of buildings. If one set of buildings is rejecting heat and another is demanding heat, then you can meet demands with the shared infrastructure that a district system provides. 

The challenge then becomes when to apply district energy. Who can own it and what can they charge for heating? How efficient is the system? What's it's fuel source and what is it's full life cycle carbon footprint? How much does it really cost compared to other forms of heating?

Part 2- The District Energy Part of the Plan

In essence a district utility becomes a bit of a monopoly. The City of North Vancouver (Lonsdale Energy Corp) runs their own heating utility that operates off of natural gas on behalf of the City of North Vancouver . Dockside Green has a utility that runs on dry wood waste and the Vancouver Olympic Village has a system that draws heat from sewage with natural gas peaking and back up. 

The idea is to embed district energy into any new large rezoning. Pushing developers or other private entity to create a district heating system. While most systems will start off using natural gas, the idea is that systems could change over to lower carbon heating solutions like wood waste (more on that in Part 3). With a move away from natural gas for heating, the idea is that all heating in Vancouver will be carbon neutral (although the exact technical details are absent from the plan). 

The Cost

While cooling is becoming more and more in Vancouver, we're just going to focus on heating costs since this is what the City of Vancouver is focused on for district energy systems, since the idea is that heating is where the biggest carbon footprint comes from in buildings. 

In simple terms it costs 9 cents a kWh to heat with electricity in BC, 3 cents a kWh to heat with natural gas and about 13 to 20 cents a kWh for heat from a district energy system (depending on the system and how they bill). Much of the increased cost for a district utility is a result of the added infrastructure associated with a district system (the insulated piping, the pumping, the operations etc).

The biggest challenge with choosing any heating system is that fuel sources are always unpredictable. There do appear to be some constants with regards to fuel price for heating. 

If you look at the price of natural gas you see that the prices go up and down over time. They are at historic lows now but we all remember them being much higher.

Natural Gas Price Fluctuations
Natural Gas Price Fluctuations

Electricity pricing on the other hand is something that almost always climbs pretty steadily. 
Electricity Price Increase Over Time
Electricity Cost Steadily Increases
A district energy system (based on it's fuel supply) is subject to the same price fluctuations but because of the greater infrastructure cost associated with district energy the costs are higher per kWh with a host of expensive fixed costs. Price transparency is particularly difficult so a direct comparison is hard as one Olympic Village resident complained

"The problem is that the consumption charges on my bill are dwarfed by fixed charges. 2/3 of the total bill is for flat fees that are charged regardless of what I use."

Getting Approval

The BC Utilities Commission (BCUC) has not been keen to approve most privately owned district energy systems. The most recent Chinatown system was denied, for a host of reasons by the BCUC. Chief among them is that it would give the private entity that would run it exclusive rights to supply heating to buildings limiting the choice for cheaper forms of heating (such as electrical or gas). The real question goes back to choice and when looking at the cost from above most people would likely chose to heat with natural gas. 

The BCUC is a little more likely to approve a district energy plant on a campus (since all buildings are owned by the same entity) or to a government municipality. The thinking on the government run system level is that governments will be more transparent on pricing and are more focused on provided heating as a need rather than at significant profit. However in the most recent case of the Chinatown denial, the BCUC felt that more competitive pricing options existed for heating and that it would not be in the public's best interest to approve a sole service provider. 

The Efficiency  

The efficiency of a typical condensing boiler is up in the 95% range. While a district energy system is often lower (although it can make up some of that inefficiency by moving free heat from some buildings to other buildings). Both the old Vancouver building standard LEED and the potential new standard Passive House (more on this problem in part 4) account for the lower efficiency of district energy systems in their rating. 

Energy loss on district systems
Green Buildings Should Generate Energy On Site

The LEED energy section accounts for district energy efficiency by making the baseline cost the same as the proposed building so that you don't get penalized for the inefficiency of the farther off heating source. City staff (as they push district energy) are currently letting energy modelers skirt this issue on code compliance models by not forcing them to be the same value. This allows a design that would not quality under LEED standards to pass at the city code level so as to ensure that district energy is not seen as a penalty to developers who currently also have to pursue LEED Gold on rezoning projects (although the two come into conflict regardless). 

Passive House accounts for the inefficiency of district systems by using source energy as their baseline for their energy intensity target. This means that you must also account for the line loss, pump energy, and all other factors associated with inefficiency of energy not produced on site. If the City were to move away from LEED (which is not recommended) to Passive House, the same allowance for district energy being used today would also be needed for Passive House buildings to meet their standard. 


The discussion of district energy systems isn't a simple one, although it was simplified for this conversation around the City's Zero Emissions Plan. In general though the World Business Council on Sustainable Development is calling for energy to be produced on site (ideally with renewables like solar or wind). In order to get the efficiency out a district energy system we would need to place buildings that reject heat near buildings that are demanding heat (something that zoning bylaws in Vancouver generally discourage since it likes to cluster residential together). At the same time there is a hesitance from regulatory bodies to allow for the ubiquity of district systems that the City would need to meet it's carbon neutrality in heating strategy. At the same time the price of heating and the actual feasibility of using district energy as carbon neutral energy is a big question. In Part 3 we will explore the carbon neutrality aspect in more detail. 

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