We've all been there, trying to decode a document filled with acronyms and numbers. In this episode of thinkenergy, host Trevor Freeman pulls back the curtain on the typical Ontario electricity bill. Learn about what makes up your monthly bill and exactly where your money goes. From generation mix to infrastructure and provincial differences, tune in as Trevor sheds light on the diverse factors that influence electricity prices across Canada.

Related links

• Trevor Freeman on LinkedIn: https://www.linkedin.com/in/trevor-freeman-p-eng-8b612114

• Hydro Ottawa: https://hydroottawa.com/en

To subscribe using Apple Podcasts:

https://podcasts.apple.com/us/podcast/thinkenergy/id1465129405

To subscribe using Spotify:

https://open.spotify.com/show/7wFz7rdR8Gq3f2WOafjxpl

To subscribe on Libsyn:

http://thinkenergy.libsyn.com/

---

Subscribe so you don't miss a video: https://www.youtube.com/user/hydroottawalimited

Follow along on Instagram: https://www.instagram.com/hydroottawa

Stay in the know on Facebook: https://www.facebook.com/HydroOttawa

Keep up with the posts on X: https://twitter.com/thinkenergypod

Transcript:

Trevor Freeman:

Welcome to a ThinkEnergy Short, hosted by me, Trevor Freeman. This is a bite-sized episode designed to be a quick summary of a specific topic or idea related to the world of energy. This is meant to round out our collective understanding of the energy sector and will complement our normal guest interview episodes. Thanks for joining and happy listening.

Hi everyone, and welcome back to another ThinkEnergy Short. I'm your host, Trevor Freeman. Today, I want to pull apart something pretty fundamental to your relationship with your utility, and something that might seem kind of basic on the surface, but there's actually a lot to it. I'm talking about your bill and how you are billed for electricity in this province, in the province of Ontario. A lot of folks may not pay much attention to their bill, other than the total at the bottom, or maybe you also look at the total consumption number. But there are actually several different components to your bill, and understanding them will help you understand a little bit more about the electricity sector and how it works and how it's funded. And we'll also take a minute to look at electricity costs in Ontario compared to other provinces, and why there's a difference.

Now, there's a lot to go through here. I'm going to do my best to get through it quickly while still explaining everything. But this may be more of a "ThinkEnergy Medium" instead of a "Short." There's just a lot of content to get through. So, let's dive right in. Obviously, we're coming to you from Ottawa here, so we're going to be speaking in the context of Hydro Ottawa. But really, what we're talking about is pretty consistent across the province of Ontario. Your bill in Ontario is generally divided into a couple of different sections: your electricity charges, which could include things like Global Adjustment; delivery charges; regulatory charges; and then you'll see HST, some credits or rebates potentially, and maybe a few other sections, depending on what type of customer you are. So, let's take it from the top.

First off, your electricity charge. This is the cost of the actual power you consume. You will see this expressed as cents per kilowatt-hour. This is the commodity cost of the electricity, of those electrons that you're using in your home or your business to do the things you need to do. In Ontario, most residential customers and a lot of small commercial customers as well are on the Regulated Price Plan, or RPP. The Ontario Energy Board, which is Ontario's independent energy regulator—it's the regulatory body in the province—sets the RPP price for the province based on its forecast of the cost to supply households and small businesses over the next 12 months. So, that's stable, predictable electricity pricing for Ontarians, and new rates generally take effect on November 1 of every year. So you have those rates for typically 12 months, and they change each year on November 1.

There are a couple of different options for how you're billed for electricity under the RPP, which you might be familiar with. There's time-of-use pricing, which has a different rate depending on the time of day or the day of the week. So you've got on-peak, mid-peak, or off-peak, and those are aligned to encourage customers to use electricity outside of the peak demand times in the province when everybody is trying to use electricity for things at home or for work, and there's the most stress on the grid. The exact times of those periods do change between summer and winter. The next option is tiered pricing, and so this is a fixed price per kilowatt-hour up to a certain threshold each month. So you can use a certain amount of electricity at one price. If you go past that threshold, the price goes up. And that's kind of a plan for those who like a consistent amount; they don't want to have to worry about what time of day it is, or maybe the way they've structured their lives or their businesses is such that they have to use electricity during peak times, so that may make sense for them.

The other option is Ultra-Low Overnight, or ULO, pricing. This is really a rate that's focused on primarily electric vehicle owners because it has a very, very low overnight rate. And the idea is that you would charge your electric vehicle—it's a big load in your house or in your business—and you would move that load to be overnight. You would charge it overnight and avoid doing that during the day, because in order to make up for that ultra-low overnight rate, there's a much higher on-peak rate kind of in the late afternoon and evening. So you'd really want to avoid using electricity as much as possible. The overall goal of all these programs, as I said, is to really reduce strain on the grid during those peak times, and that will in turn reduce greenhouse gas emissions because our fossil fuel generation in Ontario—that's natural gas generation—is primarily used during peak times. So we call them our peaker plants, and those are turned on when we need to make up that sort of highest demand load that occurs just a few times during each day and indeed during the year.

The reason that we're able to do these different rates is that over a decade ago, Ontario adopted the use of smart meters for electricity, which accurately measures and tracks electricity usage down to at least the hour, sometimes even more granular than that, and that allows for utilities to really tailor pricing plans around timed consumption. It's worth noting here that if you have signed a contract with an electricity retailer, your electricity charge will be based on the price you agreed to in that contract. So there are retailers out there who will come to you and say, "Hey, we can guarantee you this price of electricity, and it's not going to change for the life of the contract, or whatever their terms may be." And maybe that's a better deal for you, or maybe that makes more sense for your situation. So you can sign on to that. You will be charged at that contracted rate rather than the Regulated Price Plan, and you won't be subject to the changes of that Regulated Price Plan; you'll be with your retailer. That said, you will still see other charges like delivery charges and regulatory charges, which we will get to in a minute.

Before we go there, I do want to quickly talk about commercial customers, because that is a slightly different structure to the electricity charge section. So in that electricity charge section, there is a line item that is the market cost of electricity, and that does change month-to-month. And in fact, it also changes from customer to customer. Basically, there's a price every hour, and that customer's usage over that month results in a prorated price. And so on their bill, they will see the price that they're paying, the market cost of electricity that they've used in that month. There is also a line item for Global Adjustment, which is a very unique Ontario charge. To my knowledge, it only exists in Ontario. So let's take a minute to talk about what Global Adjustment is. There is a certain cost to running the electricity grid in Ontario, and that cost factors in maintenance and planning and conservation programs, as well as long-term fixed contracts. So the system operator signs contracts with generators to supply electricity at a certain rate. The market price of electricity isn't always enough to make up that full cost. So what we pay, the market rate, isn't enough; sometimes Global Adjustment is what makes up the difference. Now, every electricity customer in Ontario pays Global Adjustment, whether you see it on your bill or not. For residential and small commercial customers that are on the RPP, Global Adjustment is built into their rates that I just described above. But for commercial customers, you actually see that as a separate line item. And for most commercial customers, that is a rate that's tied to your consumption. So the more you use, the more Global Adjustment you pay. There is an option for the largest consumers to change that equation about how you're paid or how you're charged Global Adjustment, but we're not going to get into that in this episode.

So that is the electricity portion of your bill. Another quick note here: all the money that you pay for this portion of the bill goes upstream, basically to the generators and the system operators and other players in the system. Your distributor, who actually gives you the bill—so Hydro Ottawa, in my case—doesn't actually keep any of this, nor do they set those rates. That is all upstream of us. That is not the distribution company's territory. We just are the ones that provide the bill and collect what you pay.

Next section is delivery charges. So delivery charges cover the cost of getting electricity from the generating stations all the way to your home or business. It's essentially the cost of building, maintaining, and operating the vast network of transmission lines and towers, distribution systems like their lines and poles and substations and transformers, and all the equipment that's necessary to get electricity to you, to your home or to your business, and also to repair outages. So if there's a storm and lines are down, it's the delivery charges that fund the exercise of going out there and repairing that. So if you think of electricity as the product, the delivery charge is the logistics behind that. So it's like the warehouses and the trucks and the route to get that package to your doorstep. The same thing happens with the electricity system. Some of that delivery charge is fixed, and it doesn't change month to month, no matter what consumption you have, so how much you're using. That's why sometimes you'll hear people say, "Oh, you know, my electricity consumption was super low, but my delivery charge didn't change. That's not fair." And the reality is that we still need to maintain that grid. Even if you have a month where you're not using a lot of electricity, you still want those poles and wires and transformers to be there and to be working and ready for you when you are going to use a lot of electricity.

There's also a customer service charge within that delivery charge, so that kind of covers the meter reading, the billing, the customer service; maintaining that infrastructure is included in there. There's a distribution charge, and that's kind of the main portion that Hydro Ottawa keeps, as well as that customer service charge, and that is for us to maintain the distribution system. And then there's a transmission charge that is to do the same thing, except for the high-voltage transmission system that brings electricity across the province. There is also a line loss adjustment. Now, it's normal for a small amount of electricity to be lost as heat when it travels over power lines. That's just the reality of moving electricity over long distances, and you will see a small adjustment on your bill to account for these line losses, to make sure that all the electricity being generated is actually being paid for. And your local distribution utility, again, Hydro Ottawa, in my case, collects this money and keeps the portion that's meant for the distribution company and pays the rest to all the various other stakeholders in the system that make up the electricity sector. It's important to know that these delivery rates are reviewed and approved by the Ontario Energy Board based on the specific needs and the priorities of each utility. So this is the nature of us being a regulated industry. Our regulator, the Ontario Energy Board, has to approve the rates that we charge. We have to show to the Ontario Energy Board, "Here is what all of our costs are to maintain the system. Here is what we want to do to grow and expand in order to meet our customer needs. Here are all the programs that we're running, and therefore, here are the rates that we need to charge." And the Ontario Energy Board will actually make a ruling on that to say, "Yes, those are fair rates," or "No, we think you're charging too much," or "Hey, we actually think you're charging too little." The Ontario Energy Board also wants to make sure that utilities are being responsible and maintaining the grid so that it is safe and reliable and affordable for their customers.

The next section is regulatory charges. And so that is very simply the cost of having a regulated system of the Ontario Energy Board and having a regulator to oversee and administer the provincial electricity system and ensure that it remains affordable and reliable for everybody. So there is a cost, and that is on everyone's electricity bills. So those are the main sections, but there may be other potential charges and rebates on your bill that you'll see. And so these include things like HST. So electricity is subject to HST in Ontario, so you'll see that tax line. Most customers that are on the RPP, the Regulated Price Plan, are eligible for the Ontario Electricity Rebate, and this is a rebate from the provincial government of Ontario to help reduce electricity costs, primarily targeted at residential, farm, and small business customers. And you will see this on your bill as a pre-tax credit.

One last section that you might see if you're a net-metered customer, and a net-metered customer is someone who generates electricity on their home or business and uses some of that electricity, but may also push some back to the grid. So if you're one of those customers, you will sometimes see net-metered generation credits, and so this is a credit that you get that can be used to offset the electricity portion of your bill based on how much you generate and push back to the grid.

So to wrap this all up, let's take a quick look at why electricity prices are different in different areas of Canada. What's the difference? Why are we not charged all the same? As we've said before, energy is a provincial jurisdiction, so there are provincial grids, and they're usually operated at the provincial level. And, you know, some of the pricing and the structure is set at that provincial level. Different provinces have different generation mixes, and so in some of the sort of cheaper provinces to run, one of the things they have is a lot of hydroelectricity. So these are dams that use the movement of water to generate electricity. Quebec has a lot of hydroelectricity. Manitoba and BC both have a lot of hydroelectricity. And the reason that this results in lower electricity prices is that while there's a high upfront cost to build a dam, to build a generating station based on, you know, falling water, the operating cost is actually extremely low compared to other options. There's not a lot of input, you know, the water is going to do its thing, and once you've got that turbine there and the right infrastructure, it's going to generate electricity. And so there are costs, but not as much as, for example, a nuclear plant or a gas or a coal plant that require a lot of input in the form of fuel to make that plant run. So when you look at where some of the cheapest jurisdictions are and most expensive jurisdictions, there's actually a report from Hydro Quebec that looks at Canadian municipalities, Canadian cities that have the highest and lowest electricity costs. And the four cheapest cities are Montreal, Quebec; Winnipeg, Manitoba; Vancouver, BC; and Ottawa, Ontario. The four most expensive cities, and these are 2023-2024 numbers, I believe, the most expensive cities are Edmonton, Alberta; Calgary, Alberta; Halifax, Nova Scotia; and Charlottetown, PEI.

There are other reasons why different jurisdictions will have different prices. You know, there are different sort of regulatory charges and costs and environments. There's infrastructure and maintenance costs. So an older, more aging grid that has to be renewed and upgraded is going to cost more than something that's gone through that already. If you look at density, also, if you have a very dense population where everyone lives kind of close to each other, it's a lot easier to get electricity to those folks compared to a much more sparsely populated, spread-out area where there are lots of long runs to get electricity to different municipalities and towns and villages. So lots of variables go into the cost of electricity, and it definitely differs from province to province.

So that's the bulk of what we wanted to talk about today. I know it's a lot, but it is really important to understand why you're paying what you're paying for electricity, and what your money is going to do, especially at a time when we are looking to grow and expand our grid, to modernize our grid, to invest in making sure that the electricity grid can support us decarbonizing our lives, electrifying our lives, and adding more distributed energy resources like solar and storage and things like that.

Thanks for tuning in to this episode of ThinkEnergy Shorts, or ThinkEnergy Medium. I hope this breakdown gives you some of that information, and I always appreciate you joining us. I'm Trevor Freeman, and this has been another episode of ThinkEnergy. Thanks for tuning in to another episode of the ThinkEnergy Podcast. Don't forget to subscribe wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback, comments, or an idea for a show or a guest, you can always reach us at [email protected].

What does Ontario's new 12-year Save on Energy framework mean for homeowners, businesses, and the future of energy in Canada? Learn how the program supports smarter grid planning and energy use, lowers emissions, improves affordability, and helps Ontarians make the switch to cleaner technologies. Tam Wagner from the Independent Electricity System Operator (IESO) joins thinkenergy to explain why conservation is a critical tool in Canada's transition to clean energy. Listen to episode 158 today.

Related links

● Tam Wagner: https://www.linkedin.com/in/tam-wagner-p-eng-268828b1/

● Save on Energy framework and programs: https://saveonenergy.ca/

● Independent Electricity System Operator (IESO) : https://www.ieso.ca/

● Trevor Freeman on LinkedIn: https://www.linkedin.com/in/trevor-freeman-p-eng-cem-leed-ap-8b612114/

● Hydro Ottawa: https://hydroottawa.com/en

To subscribe using Apple Podcasts:

https://podcasts.apple.com/us/podcast/thinkenergy/id1465129405

To subscribe using Spotify:

https://open.spotify.com/show/7wFz7rdR8Gq3f2WOafjxpl

To subscribe on Libsyn:

http://thinkenergy.libsyn.com/

---

Subscribe so you don't miss a video: https://www.youtube.com/user/hydroottawalimited

Follow along on Instagram: https://www.instagram.com/hydroottawa

Stay in the know on Facebook: https://www.facebook.com/HydroOttawa

Keep up with the posts on X: https://twitter.com/thinkenergypod

Transcript:

Trevor Freeman 00:00

Welcome to thinkenergy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman, as I explore the traditional, unconventional and up and coming facets of the energy industry. If you have any thoughts, feedback or ideas for topics we should cover, please reach out to us at [email protected]. Hi everyone. Welcome back. Energy is finite. Now don't worry. You didn't stumble into a podcast about theoretical physics. And while yes, that concept, that statement, could launch us into a discussion about the ever-expanding universe, about how we're all made up of the remnants of exploding stars, or how ultimately, all of our collective species' history, including the history of the planet, is but the tiniest fraction of a fraction of a blink of an eye in the grand scale of the cosmos. That's not what we're talking about today. But if you want to talk about that, give me a shout. I'd love to. know today we're talking about much more zoomed in practical look at what that statement means. So, the amount of electricity available to us as consumers who need that electricity to charge our devices, to operate our homes and our businesses, and increasingly, to heat our spaces and to power our vehicles, is limited. In the past, that electricity has been limited by the inputs by the fossil fuels that we need to burn in order to generate that electricity. But increasingly, as we transition to more and more renewable sources who you know, seemingly are infinite, you know, there's a whole lot of sunlight out there. Our limits are more economical and practical. We are expanding the grid. We're adding capacity, adding more generation, transmission, distribution, but those things also come with a cost, so we can't just do it in perpetuity, and we can't do it at the speed maybe necessary for some of the new uses that we're looking for. In light of all that, it does make sense for us to ensure that we are being as efficient as possible with the energy that we do need to use. Enter conservation or demand side management, the intentional effort to reduce wasted energy and to maximize efficiency, while also managing when we use energy so as to spread out the load, to minimize large peaks of demand, which are harder to manage than a more even demand profile. In Ontario, our system operator, the Independent Electricity System Operator, or IESO. Sometimes I'll refer to that as ISO has managed provincial conservation programs for the last two decades. Conservation is and has been a foundational element in grid planning and in our supply mix. That has been the case for a number of years now, and will continue to be the case. Recently, in January of this year, January 2025 the ISO unveiled its ambitious new save on energy framework, a comprehensive 12-year plan designed to empower both residential and commercial customers in Ontario to take control of their energy consumption. This initiative arrives at a really critical juncture, recognizing the pivotal role of energy efficiency and maintaining a reliable and affordable electricity system, something we talk about all the time on the show, amidst a projected surge in demand driven by economic growth and the energy transition towards electrification, something else we talk about all the time on the show. I hope by now you're seeing that all these things come together, and the topics that we talk about are usually related to each other. Backed by significant provincial investment and a strong commitment to collaborate across the sector. And this includes ongoing collaboration with Enbridge and a new role for the local distribution companies like Hydro Ottawa, this new framework really introduces a suite of new and expanded programs aimed at creating this culture of conservation and facilitating the adoption of cleaner energy technologies. It's really meant to complement the energy transition and make sure we do it in a way that is as efficient and affordable as possible. The ISOs new save on energy framework in Ontario holds significant implications for Canada's broader energy future, aligning with a number of key national trends and objectives. So just because this is an Ontario framework, there's a lot of good information here that applies across Canada's energy sector, and indeed, even beyond Canada's borders. Things like supporting our climate goals and emission reduction targets by encouraging a shift away from fossil fuels for heating and transportation, by making it easier to switch to electric options for those two things, things like recognizing energy efficiency as one of the lowest cost resources to address system needs, and in fact, we'll talk about that in our conversation with our guests here in a few moments. Addressing the need for electricity demand. As Canada pursues electrification across various sectors, so in Ontario, our system operator is forecasting a 75% increase in our demand by 2050 you're seeing similar projected increases across the country and indeed around the world, as economies and energy sectors that have been very reliant on fossil fuels look to switch to more electric options, while at the same time managing those other growth items that we've talked about in the past. Ai data centers being one of the big ones. This framework also looks to promote grid modernization and integration of more renewable energy sources across the grids, so in essence, a greater interprovincial electricity system. And finally, looking to foster economic opportunities by stimulating the clean tech sector driving more demand for those energy efficient technologies and services. So, to help us better understand this new program and the role of conservation in Ontario's grid management, I decided to go right to the source, and I'm joined today by Tam Wagner. Tam is the director of demand side management at the ieso and provides thought leadership for the design and delivery of energy efficiency and demand side management programs. Tam has been with the ISO since 2005 in a number of different roles, and so she is well placed to help us dive into all the details about this new conservation framework. And I'm really excited to talk to her today. As I mentioned a couple times in our chat, I come from a conservation background. That's kind of how I got my start in the utility and so it's great to see how it's evolved over the years. And I'm really excited to dive into this with Tam. Tam Wagner, welcome to the show.

Tam Wagner 06:54

Thanks for having me, Trevor.

Trevor Freeman 06:55

okay, so let's dive right in with a little bit of the basics here. Why is energy efficiency a priority for the province? Why are we even talking about energy efficiency?

Tam Wagner 07:05

So, to get into that, I'm going to take a step back first and talk about what electricity demand is doing in the province of Ontario. So, what we're seeing is it's growing according to the ISO latest demand forecast, the provincial electricity demand is anticipated to grow 75% by 2050 and that just further reinforces the need for us to really invest in everything in order to meet those growing electricity demands, including energy efficiency and demand side resources. At the ISO, we've been delivering energy efficiency and demand side management programs for businesses and residences in Ontario for nearly 20 years, and we've done this through different frameworks and business models. And more specifically, since 2011 we've been delivering our programs through our save on energy grant. With that is, is what we've seen is energy efficiency at three cents per kilowatt hour. It's one of our lowest cost resources to meet what Ontario's energy needs, what we've been able to achieve, and it's really building on this success is, since 2006 Ontario has saved 18.5 terawatt hours of electricity as a result of our programs. So, to put that into context, that's the equivalent of powering 2 million homes for one year. And so, with that is when we think about energy efficiency, it's really a key tool in our toolbox to meet some of the reliability needs, yes, in the past, but also those growing needs going forward.

Trevor Freeman 08:27

And what about the so we talk a lot in the show, obviously, about the energy transition in context of climate change and trying to reduce our emissions. How does energy conservation fit into that? What are some of the environmental benefits of focusing on energy efficiency?

Tam Wagner 08:44

When we think about when Ontarians use electricity the most, and usually it's in the summer period with air conditioning load on, in order to meet those electricity peaks, what we run is is a variety of generators within the province, so nuclear, hydroelectric, but also included in that is our natural gas generators. And oftentimes those natural gas generators are on for those peak periods, like I mentioned, in those summer peak periods. So, by leading into energy efficiency and actually reducing what our summer peaks are, we're relying less on those gas generators, and hopefully being able to run them less as well, because we are flattening what that load is, if we're running those gas generators less, we're able to reduce the greenhouse gas emissions that come from those resources.

Trevor Freeman 09:28

Yeah, and just for our listeners, kind of drawing on my background of previously working in energy conservation, all the things that really drive toward wanting to reduce electricity consumption, sort of the highest cost times the highest emission times. They all kind of coincide. So, when you're focusing on that energy efficiency, focusing on reducing your consumption or your demand, it has that added benefit of reducing your cost and reducing your emissions, and all of the above. So really, a lot of things coming together to make. Energy Efficiency makes sense for the customer as well as the utilities and the system operator, of course. Okay, so Tam, you said a couple of things in that answer that I want to dive into a little bit more detail. So the first one is that energy efficiency has been around for a long time. You know, you said, 20 years we've been doing energy conservation in one form or another in the province of Ontario. So, what's different about this latest framework that's just been launched? How has that evolved? What's different moving forward?

Tam Wagner 10:29

Now, you're going to get me really excited to talk about this. If we reflect back on on the past, what we've had is is really time bound frameworks. Our frameworks have been anywhere from two years to five years with this new framework that we were starting in is it's a 12-year framework, so over a decade long. The other piece is the funding commitment, and so it's a 12-year framework with a $10.9 billion commitment. So, it's billion with a B. So, we're talking both from a scope and a scale perspective, significant additional investments and time commitment with the new framework. One of the recommendations that the ISO made in our midterm review report, and so this was published in 2022 and the at the midpoint of our previous framework was our recommendation was to move away from these time bound frameworks and better leverage demand side, manage, management and energy efficiency as a resource to respond to evolving system market and customer needs. So, as you noted, Trevor, there is, is the one of the things I also say too, is, is the superpower of energy efficiency is, is it really operates at that intersection point between the electricity grid needs, but also what customer needs are, being able to respond to customer needs will allow us to provide electricity savings to address those energy system needs, and with this new framework, it does exactly that. So not only is the framework a 12-year commitment, a feature of the framework is that it's enduring. So, what do I mean by it being enduring is that within that 12 year period, there's a commitment that at the six year mark, we'll do a midterm review? We'll reflect on what's working, some of the successes of the program, of the framework, but then also, what are the opportunities to enhance it? How a system needs evolved over that time? How have customer needs evolved over that time? And provide recommendations? Going forward with those recommendations, there's an opportunity for the government to then also recommit to the framework and enhance it or extend it out another six years, so that we have another 12-year framework. So, the key element of this is that the framework actually never hits its end point. It just continues to re up itself or extend itself with the with the support and commitment from government. The other piece that I'd highlight too are from a customer perspective is, is, with this framework, there's a there's something for everyone in it. When we look at the electricity system and past frameworks, it really carved out specific customer classes that our programs could serve. With this it captures businesses, whether it be small business, commercial, institutional or industrial or industrial organizations, but it also has call outs for the residential sector as well as customers that have historically been underserved or vulnerable customer segments, including income qualifier First Nations communities. So really a broad scope in not only timing and funding commitment, but also the customers that we can serve with this framework

Trevor Freeman 13:21

That's fantastic, again, lots of good stuff in there. I really like the idea of creating a more enduring model that has more predictability a longer time frame. And the benefits of that are fantastic. It gives our customers predictability. They know these programs are going to be around, and they can plan their projects ahead of time. Instead of scrambling to Hey, we got to get this done in the next 12 months or two years, or whatever the case may be, it lets you know service providers, or those folks that are out there supporting energy efficiency measures build this into their business plans and really spend the time to educate customers. And then, speaking from the utility perspective, this is also great to have that predictability. We can talk to our customers about it. We can say, look, this is the reality here. This is the program that'll be in place for a long time. So I think that's fantastic that we've got that sort of enduring model. Now.

Tam Wagner 14:19

Trevor, I feel like he's been a fly on the ISO walls that we as we've been talking about, the new framework, because those are exactly all the things that we've highlighted. The other piece I would add, too, is, from a workforce perspective, is being able to build capacity in all of our respective organizations, to be able to support the the increased need and demand for for energy efficiencies, whether it be from a contractor or skilled trade perspective. So giving us the time to invest in people as well?

Trevor Freeman 14:51

Yeah, yeah, that's another great point. And our listeners, you know, who knows what their background is, but everybody probably has some experience in you. A plan is great on paper and a program is great on paper, and when you actually implement it, there's a lot of lessons to be learned and iterations and tweaks, and having the runway to learn those lessons and make those tweaks and adjust as you know time goes on and the context change, I think, is another really great benefit of this program, and having that long timeframe to have that flexibility and have the room to maneuver, which is fantastic. So I agree. Okay, so the next thing that you mentioned a little bit ago, that I want to dive into is just the sheer magnitude of additional demand that is coming, and that's not going to be anything new to listeners. We talk about that a lot of you know all the different drivers that are pushing up demand from electrification as a result of the climate crisis, growing demand in AI data centers, et cetera, et cetera. You mentioned the projection of a 75% increase by 2050, so let's talk about the role that energy efficiency in particular will play in helping address that growth and the growing demand that's coming and making sure that we can meet that demand in an affordable way. What's the role of energy efficiency in that?

Tam Wagner 16:19

I think what I'd say is, is the challenge that that puts out to energy efficiency is our forecast. Our latest forecast indicates that 75% growth by 2050 I say the challenge that's put out to energy efficiency is, how do we make it less than 75% so with energy efficiency, what it helps to do is, is it helps to mitigate the pace of that growth by using electricity more efficiently. It's a tool in the ISOs reliability toolbox, and so it's a resource that we will directly incorporate into our planning assumptions and indicate, and basically from the from the get go, say, if we can get this savings and electricity from energy efficiency, those are megawatts that we don't have to go out and procure traditional resources or or defers the timing in which we may need to procure those additional resources, so whether that those resources be supply side generators or transmission or distribution line infrastructure, so really, being able to avoid or defer some of those infrastructure costs. The other piece too about energy efficiency, and back to that point around that intersection point between system need and customer need is our programs. By participating in our programs, you're directly getting dollars right into your pockets. So through our incentives and our rebates, those are dollars that we will provide straight to the customers and participating in our program. So that's the upfront benefit from an affordability perspective, but then from a longer term perspective is it helps customers be able to better manage their energy and usage, and being able to better manage your energy and use you can also better manage what your energy bills are. So, Trevor, you had mentioned around, okay, what are some of those peaking times, and what are the higher costs often attributed to those peaking times is through demand side management and energy efficiency. You can not only shave that peak by using less electricity. The other piece that we're really leaning into, and I keep referring to, demand side management, is, how can you control how you how you use that electricity? One of the things that we've done recently for residential consumers is through our P perks program and through something as simple as a smart thermostat, is being able to actually provide electricity systems to the system savings to the grid through small adjustments on the smart thermostat that you have at home can make really big impact from a grid. Need perspective, but then also impact what your usage is, and shifting some of your use at home into those lower priced hours, when we think of it, the time of use rates.

Trevor Freeman 18:46

Yeah, really, when it comes down to it, every kilowatt hour saved, or, you know, kilowatt avoided, is something that doesn't have to pass through a transmission line or a distribution line. It doesn't have to go through a transformer, and we don't need to generate that somewhere. And so there's obviously savings there. You mentioned a little bit earlier in a previous answer, that stat around, you know, three cents per kilowatt hour. How does that stack up? Or how does that compare to other generation or transmission assets, like when it comes to cost and reliability? Compare energy efficiency to more traditional assets.

Tam Wagner 19:24

The simple answer is, it's lower. So when one of the principles we take when we when we pursue our energy efficiency programs is we talk about it being cost effective. And what that really means is that when we compare it to other traditional infrastructure, so long as the cost of providing those energy efficiency programs, so cost from an administration perspective and delivering the programs, but also including the incentives, the rebates that we provide to customers, so long as that all in cost is less than the cost of traditional infrastructure, whether it be generation or transmission, we'll pursue it. So that's really. Where I'd say just simply, is the energy efficiency programs that we deliver are all cost effective, and so they're all a lower cost than the traditional resources that we employ.

Trevor Freeman 20:11

That working. I can speak from experience, working at the utility, and like I said previously, being in conservation, I have gotten the question in the past, why is the utility or the utility sector, spending money to get us to not use electricity? Isn't that counterproductive? And you just gave the answer right there. It's so much cheaper to do that than to try and build new generation, build new assets. It's the cheapest way to achieve that capacity, to get that capacity that we need on the grid, which, again, we talk about here all the time. So great answer. Let's get into the numbers a little bit. So you mentioned sort of previous savings that we've achieved here in the province of Ontario. And I think you said, if I'm not mistaken, since 2005 we have saved essentially the equivalent of, you know, taking 2 million homes off the grid. I hope that's the right stat. Then the targets that we've got here for this program are pretty ambitious, and so for our listeners, by the end of 2027 so that's really only two and a bit years from now, two and a half, the target for the program is to achieve 900 megawatts of demand reduction and 4.6 terawatts of energy savings. Now, for those of you who are not kind of nerdy engineers like myself, like Tam, sorry, Tam, to throw you in that bucket, that's about the same as taking a half a million homes off the grid. So we've done 2 million homes already, and the last 20 years. In the next two and a half years, we're trying to hit a quarter of that tell me a little bit about the ambition of this program.

Tam Wagner 21:53

Definitely ambitious, if I think that's really great context, and even if I take the context even more recently, when our last framework was a four-year framework. So, from 2021, to 2025, our targets there were 725, megawatts of peak demand savings and 3.8 terawatt hours of energy savings, which were aggressive then. So, we're continuing to be more aggressive on our savings. And what I'd say with that is, that what we're seeing is, is we're seeing a very engaged customer base. Ontarians are very engaged and want to do their part, and especially if their part actually doesn't require a lot of work on, on the Ontarians behalf. And so, what we're really wanting to do is, is tap into that and say, if you, if you want to do your part here, we'll give you a space for you to do your part, whether it be at home, as a as a homeowner, or in your businesses and looking at it from a larger scale perspective, really, what we want to lean into is that all hands-on deck approach. So, recognizing that this is the lowest cost resource to meet our growing needs is, let's start there first. Let's optimize. Let's get everything we can out of energy efficiency and that lowest cost resource before we go up the stack to say, Okay, if it's not an acknew, we've got to spend on something that's a little bit more expensive. But let's first try to exhaust that lowest cost resource first. And one of the things that we also recognize in doing that is, I feel like I talked a lot about the ISO, but definitely the recognition that the ISO is, is that we can't do it all ourselves, is that these growing needs are going to impact everyone, both from a end user or consumer perspective, but also businesses and organizations and utilities that you touched on before Trevor. So as we are faced with the same challenge when it comes to growing electricity needs, how do we work together to address that? And very much a I'm very much a supporter of the saying we're so much greater than the sum of our parts, and being able to work together to achieve those growing needs will be a key part in meeting those very aggressive targets.

Trevor Freeman 24:05

Yeah, so perfect segue into the next thing I want to talk about, which is the role of the different players in the sector. And so just as a refresher for everybody, the Independent Electricity System Operator is the system operator in Ontario who kind of oversees the electricity grid for the province of Ontario. We have a transmission entity who kind of gets the high voltage electricity around the province to the place it needs to be. And then there are distribution entities, and that's who hydro is, who I work for. So Tam, let's talk about the role of that local distribution company, that kind of last line before the customer when it comes to implementing this new framework.

Tam Wagner 24:50

So, I, what I would say is, is that we very explicitly call out collaboration in this framework. So, we talk about, yes, well, the local distribution companies. So specifically, we also talk about our natural gas distributors as well as the federal government in our potential collaboration efforts. So, we'll focus in on the local distribution company side of it. We recognize that as the province wide needs are growing, from a bottom up perspective, the distribution needs are growing in each of the distribution territories as well, and so especially when some of those needs are coincident with each other, there's opportunities for us to really as opposed to us each doing our own thing in order to address our own relative challenges. Is why not work together to come up with a solution that'll address both of our challenges at the same time, and a big goal of that, yes, meeting those system needs, but having that customer focus in mind and saying, looking at it to say, how can we best enhance the customer experience? And if we've got a really strong customer journey and something that really speaks to customers, more customers will participate in our programs, and we'll address our system needs. I don't want to say it as a as a byproduct or as a result, but it starts first with the customer. For the ISO, we recognize, you noted, we're a system operator. We're operating at that 10,000-foot level when it comes to electricity grid, we've had great success in recognizing the value of energy efficiency and demand side management and addressing our bulk system. Addressing our bulk system needs in working with local distribution companies, we want to also be able to support and be able to really move the conversation around how energy efficiency and demand side management can also help address those distribution system needs as well. And what that is we also recognize the strength that LDCs bring to the table when it comes to your customers and the relationship that you have with customers. So what we've been working in, and we've already been working collaboratively with local distribution companies across the province, we're really taking a an approach in two main areas when it comes to that collaboration. So first off, leading into that customer the customer relationship that local distribution companies have working with the utilities to further support the province wide programs that are delivered under the save on energy brand and enhancing the customer journey, customer experience to those really focusing on marketing and business development activities to increase the participation in our province wide programs. So that's the first area of focus that we have with our collaboration. The second area, and leading into the piece around the distribution system needs those utilities may be faced with, is, how do we work together to support some local programming, where from an as a system operator working at that 10,000-foot level, those look that local programming will also yield benefits to the bulk system. And recognizing that there may be gaps and some of the programs that we deliver today, or there may be needs very unique to a geographical area, is how do we work with the utilities to hone in on those provide those opportunities to implement different programs that complement our province wide programs potentially foster further innovation in that regards, and help address those distribution system needs while still providing benefits to the bulk system or the grid level as well. So really focusing in on those two areas. So first of all, enhancing the province wide programs, but then also zooming down a bit and looking to say, how do we work together to be able to provide funding for local programs to help address distribution system needs that the grid level will also benefit with?

Trevor Freeman 28:37

Yeah, that's great to hear. And you answered my next question already, so that's fantastic, which was around the level of knowledge and understanding that the local utilities bring to the mix of specifically what's happening with our customers on the ground in specific areas, and being able to, like you said, build or design unique aspects of the incentive program that are really targeted at a specific need in an area. So for example, if we have a part of our distribution system that's particularly constrained, we may want to target programming in that area to achieve faster results, bigger results, whatever the case may be, or if there's a particular load type or load profile that we want to tackle in an area we can sort of work with, with the ISO, to design a program that's really going to target that need and benefit the distribution and the bulk system at the same time. So great to see that that's part of the mix.

Tam Wagner 29:39

Absolutely, I think the two other things, if I can add to that, is really focusing in on what the customer needs are. And to your point, Trevor around if there are different load types or different customer uses, and then a local distribution company's territory is this, how do we how do we tap into the. And learn about it, that it might be ahead of where the broader Ontario customer base is at, and so that can really foster that innovation, and then maybe spur on potential province wide programs in the future. The other thing I'd notice is that Ontario right now, we're summer peaking, and as I mentioned, our significant electricity load comes from air conditioning. And I think the stat is about a third of our load in the summer is actually attributed to air conditioning load when we do our planning outlooks. So, our annual planning outlook is 20 years out. Is what we're starting to see, is in the early 2030s Ontario becomes dual peaking. What that means is that we still have that summer peak, but we're starting to see the winter peak increase as well, recognizing that we've got over I think over 55 local distribution companies in the province. Some of those local distribution companies are actually winter peaking today. So are there ways for us to to look at what programs, what winter focused energy efficiency programs may be available. I don't want to say pilot those, but potentially launch some of those in those winter peaking utility areas, and again, for the ISO learnings associated with that, so that when the province more broadly becomes dual peaking is have some experience, have some data to inform what might work at the province flight level, to help us better plan and prepare for that future.

Trevor Freeman 31:26

And so, for our listeners, I think we've talked about this before, but as we electrify, especially space heating, we're going to start seeing that higher load in the winter. And you know, there's a way to do it more efficiently than not. So, making sure that we're looking at technology like heat pump and smart thermostats instead of baseboard heating and, you know, sort of more analog controls for that. So programs designed to address that would make a lot of sense, as you say, Tim and in those areas where we're already seeing a significant increase in the winter. So great to hear. Okay, so this seems like a good time to kind of dive into some of the specifics about the programs. We've been sort of talking high level. Let's, let's get into the details. So for residential customers, for folks out there that you know, own their home or rent a home and have a relationship with a landlord, what are some of the programs that are available to those customers to really address energy efficiency in their homes?

Tam Wagner 32:26

So, we've got two specific programs for broad residential consumers in Ontario, I mentioned our peak perks program, and with that, it's a demand response program that's targeted at that summer peak. So it's actually been a very wildly successful program. It's been in market. We're just approaching two years. It launched June of 2023 and what that program does is, if you have central air conditioning or a heat pump in your home that cools your home in the summer, and you have a smart thermostat, is what is by enrolling in the program, you get on immediate enrollment and acceptance into the program, you get a $75 prepaid MasterCard to participate. And participation in the program involves on those peak summer days. And usually, we see those peak days between the months of June and September, will make small, a small two degree adjustment in the temperature in your home and for no longer than a three hour period. And with that is, is that that does provide relief and flattens that peak in from a province wide level to help address what our system peaks are. So I'd mentioned that program has been really successful, so over just shy of two years, we've got over 230,000 poems enrolled in the program. And what we expect with that is just over 160 megawatts of peak demand reduction as a result. When we call on the program and it's quickly become the largest virtual power plant in Canada and one of the largest in North America. So, if you're a residential consumer, with central air conditioning or heat pump that close your home and a smart thermostat, definitely something to look into. One of the things I would really highlight about that program, because you might say, Okay, two degrees. How does how does that feel? Am I going to be uncomfortable, especially if it's a peak summer, what hot and humid day? We've been really mindful of the customers through the design of that program, so the customer is always in control when it comes to our peak perks program. If you're if you work from home, or are home during a day when we're calling a peak perks event and you're finding your home is getting a little bit warmer than you would like, you can always go to your thermostat and readjust the temperature setting back to your normal setting to for to maximize on, on your comfort at the same time is, is when we know we're calling event. What we'll do is this will pre cool your home in advance of the event. So I mentioned it's a three hour event where we where we increase the temperature in your home by two degrees. Is what we'll do is, is as long as there we're not. In a state of emergency in the provinces is will adjust the temperature in your home so it's actually cooler half an hour before the events will cool your home two degrees. And then when we actually call the peak perks event, raise it. I guess the difference would be four degrees. But again, trying to maintain that coolness in your home to maximize on customer comfort and and and help with that. The other program that we have for residential consumers, and was just launched earlier this year, it's our home renovation savings program. So with that, we deliver it in collaboration with Enbridge gas, and it offers rebates for energy efficient upgrades that you may be looking to do in your home. And some of the equipment that we include in that are heat pumps as well as smart thermostats and solar PV, rooftop solar PV as that, as well as battery, battery energy storage systems. And then also, we know that when it comes to your home, being able to retain or heat or cooling weatherization as well, so attic insulation or doors and windows as well. So rebates available for all of those if you're a homeowner in Ontario, great.

Trevor Freeman 36:07

You mentioned earlier that there are sort of income qualified programs or programs for folks living in social housing and First Nations. Can you shed a little bit of light on those specific aspects?

Tam Wagner 36:18

Yes, absolutely. So we've got, again, this the this programs in collaboration with Enbridge gas as well. So we've got the ISOs, the save on energy's energy affordability program, which is offered alongside with Enbridge gasses, winter proofing program, home winter proofing program, and that offers, again, the energy efficient upgrades to customers that are income qualified. So there are income qualifications, whether you're low or moderate income household in Ontario, and it provides you with energy efficient upgrades at no cost to you. So I would highly recommend going to the save on energy.ca website to see what those income qualifications are. It's all dependent on the number of people that live in the home, what the income thresholds are, and again, the all of these upgrades would be available to you at no cost to you at all. From a First Nations programming perspective, we've got two programs offered to First Nations community. We've got the First Nations community building retrofit program as well as the remote First Nations programs, and both of them help both businesses and residences of on reserve First Nations communities make energy efficiency upgrades, again, at no cost to the community or the community members.

Trevor Freeman 37:30

Great, so, really, anybody living in a residential home, there's something out there for you. So rebates to address energy efficient equipment or support from the Ieso to or your local distribution company. Okay, so let's shift over to commercial, industrial, institutional, kind of agriculture, all the other types of customers out there. What are the programs that are being offered, and how do they differ if they do differ from previous programs?

Tam Wagner 38:01

Maybe I'll start with the last part of their question. First, what I'd say specifically with the these businesses is we're even with a new framework. We're not with the old and in with the new. So everything that's been offered in the past is basically available to customers today when it comes to those business programs, and what we're really committed to is, how do we continue to improve the offerings that we have as new technologies or available or organizations are looking to improve some of the processes that might to help result in more efficient energy and usage. So we offer a range of business programs that provide different opportunities. And really our focus is, how do we meet the businesses where they're at based on the type of business that they are, but also where they are along their energy efficiency journey. So a couple of programs that I'll highlight is, is we've got our retrofit program, and that's really been our flagship program, and under the save on energy brand, and what that does, it provides an a la carte list of prescribed technologies with Dean savings that businesses can pick from. So if you're looking at making what upgrades to your heating, ventilation and air conditioning systems and stuff, you can go to our retrofit program, and what it provides you is a list of equipment that it provide indicates what the energy savings that the ISO can expect from it, but and then also provides you with what the incentives levels are for that. So really, that's, I'd say that's kind of the simple, simplest path. From a customer journey perspective, we also recognize that there's a different range of customers when we think about our business customers, and it's not a one size fits all. We also have a small business program that recognizes the unique nature of small businesses in Ontario, and that program offers energy efficient upgrades at no cost to those businesses, and it also provides additional support to install the equipment as well. And we know that it's not all about technologies as well. I've mentioned around sometimes with processes that you. May have within your organization, they can also yield energy savings. So our strategic energy management program is designed to help organizations improve their energy performance by implementing an integrated system of organizational practices, policies and processes to achieve some of these persistent energy savings so really, what I'd say to the businesses is reflecting on what, what the nature of your organization is, how your energy and usage is, is that there's a variety of different programs that hopefully can cater to your needs and check out the save on energy.ca website to find out more.

Trevor Freeman 40:34

Yeah, I think in my kind of review of it, there's, there's support for equipment and sort of technical solutions to address energy efficiency, and you put it very, very well, you know the process, the people side of things, if you need support, if you need guidance, expertise, there's also methods of support to help you access that, whether in your organization or through other means, so lots of different avenues to address energy efficiency in all types of buildings. So those are all existing buildings, which we know are certainly a major part of energy consumption today and emissions today. But we're also building new buildings constantly and constantly adding to our building stock. So what programs are out there to address new building construction and making sure that we're constructing energy efficient buildings that go beyond existing codes and standards?

Tam Wagner 41:33

So, what I'm saying, I'll say there is, we're working on it. So as part of our 2025 to 2027 plan, we have identified the need for a new construction program. We heard this through stakeholder feedback as well. When we did our midterm review back in 2022 we we heard from stakeholders that that's a gap in our programming, and so we're looking, we were looking to address that. That gap has, that has been identified. So right now my team is we're doing some market research, and in order to help inform what the design of a new construction program may look like, our commitment is, is, is, as we've got some of those that early thinking is, we will go out and stakeholder it and invite feedback and into how best to design that program. We know the we know the things we know. We know there are things that others have expertise in, and that that expertise would really be helpful to the ISO as we, as we design the program. So I'd say, stay tuned for that and continue to look at on our stakeholder engagement website for upcoming engagements, where we will seek some feedback and insights into that design of that program.

Trevor Freeman 42:36

Perfect, one last item is beneficial electrification. So we know that the government has kind of directed the ISO to look at how to support beneficial electrification. So maybe kind of two questions here, what is beneficial electrification, if you could kind of help define that for our listeners, and what, how are you looking to support beneficial electrification for customers.

Tam Wagner 43:01

Sure, so how we look at beneficial electrification is, is really around changing your the fuel source of your end use. And that's I could probably plain language that a little bit more and maybe, well, it's easiest to use an example and an example charter that you've actually highlighted is, is for a lot of Ontarians, is, is the way you heat your home isn't actually typically with electricity, and that with fuel switching or switching the source that you heat your home with is that you can yield and really electrifying that is as you can yield greenhouse gas emissions reductions as a result of that of electrification, when We think about it from a beneficial electrification perspective, is electrification perspective, is, is with as we, as we talked about the demand in Ontario increasing is, how can we leverage the way that customers may be electrifying their end uses to ensure that we're doing it in the most efficient manner that will not only yield benefits to the Customers, from a GHG emissions perspective and from an overall energy bills perspective, but also provide benefits to the electricity grid as well. And trying to, instead of hitting that 75% is, how do we actually electrify and and electrify at a rate that's actually less than that 75% would be the goal that we're looking at here with regards to how we're actually applying that is just earlier this month. So in earlier in May, we launched our first offering through the home renovation savings program for a beneficial electrification. And what that entails is for those customers in Ontario that are currently heated through oil, propane or wood heated customers, is we do have a heat pump offering to to support electrifying those end uses that will enable the those customers to be to reduce the GHG emissions in their home, and with that is also save money on their energy bills as well recognizing. A different cost in the electricity side, versus the oil or propane fuels costs.

Trevor Freeman 45:06

Yeah, I think it's, I mean, I'm someone who, obviously, folks that are listening know, I'm pretty passionate about climate change. And if, if your only lens is GHGs or greenhouse gas reduction, you know, you may jump at electrifying in any possible way, but that could be taking out your furnace and putting in electric resistance baseboard heating, which is not a very efficient way to heat your home, or not as efficient as you could be doing with, for example, a heat pump which is much more efficient, you get a lot more energy out than you put in. And I've preached a lot about heat pumps on this program before, but that's the concept behind beneficial electrification. Is doing that fuel switching, but doing it in a way that one doesn't overly stress the grid. Two, doesn't overly stress your own energy bills, because we don't want to push people into unaffordable energy. So making sure that there's support to do the right move in the right way. Tam, just to wrap up here, you've said it a couple of times, but I'll give you a chance to say one more time, where do folks go to find out more information about these programs, what they can access? How to get that support? Where should they go and look?

Tam Wagner 46:18

So our website is the best place to get that information. So it's saveonenergy.ca. Whether you're a residential, consumer or business, all the information is there. And we also have energy savings tips on our website. So again, that's Saveonenergy.ca.

Trevor Freeman 46:34

Perfect. And I'm going to selfishly add a little plug in there of you can also reach out to your local distribution company, especially if you're here in hydro Auto's territory, we would be happy to help you access these programs and point you in the right direction and make sure that you're getting the support that you need through these programs. Tam, thanks so much for walking through this new framework. It's super exciting. I mean, it's a little bit close to my heart. Again, I've been working in conservation for a while before I moved into my current role, I spent a lot of time in conservation, so it's great to hear about the evolution of the program and where it's going. I'm really excited that it's such an important piece of the planning mix that it's getting the sort of recognition and focus that it's due and really exciting to see how it goes in the next couple of years. So to wrap up, we always end our interviews with a series of questions. So as long as you're ready, Tim, I'm going to jump right in with the first question being, what is a movie or a show that you have watched or are currently watching that you think everybody should take a look at?

Tam Wagner 47:40

This takes away from the seriousness of the conversation that we've been having.

Trevor Freeman 47:44

That's the goal we're trying to focus here.

Tam Wagner 47:47

So for those who don't know me, is I've got, I do have two kids in a series that we're watching right now. Is the rookie. Have you watched that before? Trevor? I

Trevor Freeman 47:56

I haven't, no, but it's on the list. We've got a long list

Tam Wagner 47:58

That sounds like our household as as as well. And it's a fun time. It's, it's a series that we can we watch as a family. And it's, I feel like sometimes we, you know, we try to solve the crime before the show does. But it also has a really good story, kind of, the initial story around an individual who is, I'd say, later in his career, but had a moment where he explored a career shift. And for me, that message there is around like you're never too old to try something new and be successful in it. So I think that's a really good message for me myself, but also a good message for my kids.

Trevor Freeman 48:38

Yeah, very cool. I like that one. I'll have to bump that up on the list. We'll watch it sooner rather than later. If somebody offered you a free round trip flight anywhere in the world, carbon offset accounted for, of course, where would you go?

Tam Wagner 48:50

So I would go to Vietnam. So I am Vietnamese by background, born there, but I've lived in Canada for, oh, over 40 years, been back there a couple of times, and I've always loved it. It's a So, yes, back to kind of from a cultural roots perspective, there's just so much history there. It's a completely different climate from what we have here in Canada. The people are incredibly friendly, and the food is fantastic.

Trevor Freeman 49:21

I have a tiny, tiny sliver of experience, and can say that Vietnam I visited once, and was definitely on the top of my all time favorite trips for a number of different reasons. All the ones you just mentioned are certainly up there for sure. Who is someone that you admire.

Tam Wagner 49:37

And again, I'm going to cheat on this one a little bit, so because it will be fun, but my parents with them. So I'd mentioned were first generation immigrants, when I think about the things that they've done and to come to Canada, we came to Canada as refugees, so to leave a place that they were very comfortable in. Knew the culture. Knew the language to come to a country where completely different environment, completely different culture, had no family here, and their reason for doing it was so that myself and my brothers could have greater opportunities as a parent. I'd like to think that if I was faced with that, I would make the same decision. But until you're actually in those shoes, you never know whether you whether you would or not, so I am definitely very grateful for the decisions that they've made, because it's landed me where I am today, and are very appreciative of that. So very much admire them.

Trevor Freeman 50:32

Yeah, that's a fantastic story. Thanks for sharing that. Tim. Finally, what is something about the energy sector or its future that you're particularly excited about.

Tam Wagner 50:43

We're at a really unique spot right now in that we are very much building for the future, and not just our future or kids future. When we think about the electricity infrastructure, it's things, it's something that's going to be in place for the next 40 plus years. So being able to face that challenge to build something for the generations to come is very exciting for me. It's not just the what of it, but how we do it. As I touched on before around, we're greater than the sum of our parts. Is being able to do that in a way that we can collaborate with each other, really lean on each other's strengths, learn from each other, and then I think that foundational culture is the way that we'll be really successful and ensuring that we can have that reliable, affordable and sustainable electricity future. So excited about the challenge, but also even more excited about how we're going to face that challenge and work together to to to be successful.

Trevor Freeman 51:40

Yes, I love that, and I think that's a great place to wrap this up. I love that. And I say this often to folks like, I can't think of a better spot to be when I think about climate and energy and the energy transition than kind of in the electricity sector, thinking about how all roads, or at least most roads, to the things that we want to envision run through the electricity grid and all the different nuances of that. And you could go down endless paths of, how do we make sure that this is going to work, and how do we make sure it's going to be affordable and that people are going to have the power they need? So super glad to hear that you're excited about that and passionate about that, super glad that you're putting your efforts towards that. Thanks. For coming on and talking to us today and sort of sharing your expertise and wisdom around this pretty exciting new program that hopefully is going to be a major piece of our energy future here in Ontario, at least moving forward.

Tam Wagner 52:38

Thanks for having me. Really appreciated you taking the time and spending it with me as well Trevor.

Trevor Freeman 52:42

Fantastic Tam Wagner, thanks very much for coming on, and we'll chat again soon. Thanks for tuning in to another episode of The thinkenergy podcast. Don't forget to subscribe. Wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback, comments or an idea for a show or a guest, you can always reach us at [email protected]

Canada's energy conversation grows louder every day. But before we can address the national goals or even energy independence, we need to look at our local utilities and energy systems to understand their capabilities. Host Trevor Freeman walks through how the energy conversation needs to start locally, how to future-proof energy systems, and what the hardworking crews do to build and maintain these systems. Listen to episode 156 of thinkenergy.

Related links

• Trevor Freeman on LinkedIn: https://www.linkedin.com/in/trevor-freeman-p-eng-8b612114

• Hydro Ottawa: https://hydroottawa.com/en

To subscribe using Apple Podcasts:

https://podcasts.apple.com/us/podcast/thinkenergy/id1465129405

To subscribe using Spotify:

https://open.spotify.com/show/7wFz7rdR8Gq3f2WOafjxpl

To subscribe on Libsyn:

http://thinkenergy.libsyn.com/

---

Subscribe so you don't miss a video: https://www.youtube.com/user/hydroottawalimited

Follow along on Instagram: https://www.instagram.com/hydroottawa

Stay in the know on Facebook: https://www.facebook.com/HydroOttawa

Keep up with the posts on X: https://twitter.com/thinkenergypod

Transcript:

Transcript: Trevor Freeman 00:07

Welcome to a thinkenergy short hosted by me, Trevor Freeman. This is a bite sized episode designed to be a quick summary of a specific topic or idea related to the world of energy. This is meant to round out our collective understanding of the energy sector, and will compliment our normal guest interview episodes. Thanks for joining and happy listening. Hi everyone. Welcome back to another thinkenergy short. I'm your host, Trevor Freeman. I'm recording this the day after our federal election here in Canada, and energy, as it so often does, did come up on the campaign trail. There was talk about the transfer of energy from province to province, including a west, east pipeline and a national interconnected electricity grid, which we've talked about a little bit here on the show before, improving the way that we move electricity from province to province, not just sort of north to south, between us and the United States, there was also talk about specific strategies on how to address climate targets, albeit not very much talk about that. Nor was there a lot of talk about how to foster the energy transition, although it did pop up from time to time, especially if you're an energy nerd like me and went looking for it. The point is whether it was front and center in election ads or not. There are some big decisions to be made regarding energy in the coming years, and those big decisions will undoubtedly lead, one way or another, to some big energy projects. But that is not what we're going to talk about today. We're actually going to zoom in a little bit and talk about the work that goes on a little bit closer to home that is critical to making the entire system work for the end user. You the customer, me the customer, including those big energy projects, and that is the work that is done to build and maintain our local distribution grid. So the poles and the wires and the transformers that you see outside your home or outside your business that's actually bringing the power the final step, so that you can use it before we can talk about national energy independence, or these large goals that we have as a country. When it comes to energy, we need to make sure that the poles and wires and transformers in every city, every town and every neighborhood are ready, and that we're building the necessary infrastructure to meet that growing demand, and that is where your local utility comes in. We don't just maintain the system that we have, we prepare it for the future and make sure that we're laying the foundation that we need for tomorrow. Here in Ottawa, it is finally, finally spring, or at least it feels like it's finally spring outside, and that means that construction and outdoor work is starting to ramp up. So today I'd like to shed a little bit of light into what our crews do and your local utilities crews likely do to maintain and to build our system. When it comes to keeping our grid operating in tip top shape, nothing beats planned maintenance. This is the cornerstone of any electric utility strategy to deliver safe and reliable power, and this includes proactive measures like replacing aging equipment, trimming trees near power lines and performing essential upgrades. Such activities are vital in reducing the frequency and duration of unexpected outages and helping maintain that resilient power system that we all rely on. So let's go step by step. Utility poles, they are assessed regularly and replaced as needed. Utilities critical hydro pull program tests 1000s of pools annually to identify the ones that require maintenance and new pull installations also support great expansion to meet a city or a community's growing need new residential developments or new commercial developments. For example, next would be something like vegetation management. So this is another critical aspect. Regular tree trimming and removal near power lines can help prevent outages and safety hazards, especially during storms and high winds. Utilities like Hydro Ottawa, who I work for, employ satellite imaging technology to scan the grid, you know, at least twice a year, to identify high risk areas and potentially dead or dying trees, to allow for proactive maintenance, and that's in addition to the sort of visual inspection that happens as our crews are moving about our system, so all these different techniques that we use. It's like high tech arboriculture with Mission grid resilience. We are aiming to reduce the amount of tree contact with our system. If we go below our streets, we will see chambers connecting vast duct structures to our substations. So where you don't see overhead lines, that means those lines are buried running through duct work maintenance, hole upgrades and cable replacements are also part of a comprehensive maintenance strategy. These efforts are critical to keep our underground infrastructure safe and ensure that the structural integrity of our entire power system is able to accommodate our city's current and growing a. Electricity demands, we also have equipment like Transformers and switches and circuit breakers that are located both outside, overhead, underground, in substations and transformers, and they undergo routine inspections and replacements to prevent potential service disruptions. But it's not just maintaining what we've got, we also need to continue expanding to meet growing need we talk a lot on this show, as all you listeners know about the fact that our demand for electricity is growing, and it's growing at a pace that we really haven't seen before. So we need to make sure that we are building out our grid to be able to meet that demand. In order to do this Hydro Ottawa, for example, is embarking on one of the largest Grid Investment Programs in our entire history, and it's something that a lot of utilities in Ontario and across the country are looking at as they do their long term planning and forecasting. So as an example of just what the pace of change is here in Ottawa, traditionally, we would build a new substation every kind of five to seven years. And this is a major project. A substation is a big project. And so one every five to seven years has been the pace in our next five year period. So kind of between now and 2030 we are planning to energize a new substation every single year for the next five years, substations play a pivotal role in the power grid stepping down high voltage electricity that we get from transmission lines to lower voltages that are suitable for distribution to homes and businesses to our customers. So as an example, again, here in Ottawa, we have a substation that became fully operational in 2022 in Ottawa's southwest end, and that substation alone can power 32,000 homes annually. So substations are one of the major pieces of work that we are doing to build out our grid and provide for the growing electricity demands. And along with those substations come new distribution lines and more poles and wires and transformers and all of the associated equipment. Now, a lot of this work might sound routine, but it's not. It's strategic and forward looking and absolutely essential if we want to build a clean, flexible, reliable energy future here in Canada. So when utilities replace an old pull today, it's not just maintaining the status quo. It's laying the foundation for a National Clean grid tomorrow, it's supporting some of those large projects that we talked about at the very beginning of this episode. When utilities install a new conduit for easier cable upgrades, that conduit could be helping future generations of Canadians stay connected to renewable power. When utilities trim one branch at a time, they're protecting the integrity of an entire community's power system. Now behind these initiatives are a number of dedicated, capable, really smart folks that are working on these projects. Obviously, we've got our outdoor crew so power line technicians, our overhead and underground crews, our stations technicians, our forestry crews. These are the folks that are really out on the front line, that are maintaining and building our grid. You'll often see them out there by our trucks, or in orange, if you see them, keep your distance because they're working, but give them a thumbs up, or say hi. Wave at them and tell them they're doing a great job, because they always are. But then we also have some, let's call them back of house folks that are working on various aspects of our grids, and that's everything from our powerhouse technicians that are operating and monitoring the generators that are in our generating stations, and for Hydro Ottawa, that includes our Shoji air generating station in downtown Ottawa on the Ottawa River. We've got smart grid engineers that are focused on integrating renewable energy resources and modernizing the grid to make it more resilient and sustainable and to bring more data in from the grid to let us make better decisions. We've got system operators that really serve as a communications hub between the field workers and the control center, ensuring rapid response to outages and maintaining the integrity of our distribution system. If you haven't already listened to an episode I did almost a year ago now about grid modernization with with Jenna from Jenna Gillis from Hydro Ottawa. Have a listen to that, and you'll hear a little bit about what those system operators do. The collective efforts of all these folks and many others are really crucial to supporting both the local needs and our national energy objectives. So these big projects, again, to you know, to say that point again, those large projects don't happen without the day to day small projects happening as well. So there you have it. I hope you found that to be an interesting look into some of the essential work that your local municipal utility is doing, and how that connects to those larger, big energy policy decisions and projects. As always, really appreciate you tuning in and look forward to chatting with you next time. Take care. Thanks for tuning in to another episode of The thinkenergy podcast. Don't forget to subscribe wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback comments or an idea for a show or our guests, you can always reach us at [email protected]

Greg Lindsay is an urban tech expert and a Senior Fellow at MIT. He's also a two-time Jeopardy champion and the only human to go undefeated against IBM's Watson. Greg joins thinkenergy to talk about how artificial intelligence (AI) is reshaping how we manage, consume, and produce energy—from personal devices to provincial grids. He also explores its rapid growth and the rising energy demand from AI itself. Listen in to learn how AI impacts our energy systems and what it means individually and industry-wide.

Related links

● Greg Lindsay website: https://greglindsay.org/

● Greg Lindsay on LinkedIn: https://www.linkedin.com/in/greg-lindsay-8b16952/

● International Energy Agency (IEA): https://www.iea.org/

● Trevor Freeman on LinkedIn: https://www.linkedin.com/in/trevor-freeman-p-eng-cem-leed-ap-8b612114/

● Hydro Ottawa: https://hydroottawa.com/en

To subscribe using Apple Podcasts:

https://podcasts.apple.com/us/podcast/thinkenergy/id1465129405

To subscribe using Spotify:

https://open.spotify.com/show/7wFz7rdR8Gq3f2WOafjxpl

To subscribe on Libsyn:

http://thinkenergy.libsyn.com/

---

Subscribe so you don't miss a video: https://www.youtube.com/user/hydroottawalimited

Follow along on Instagram: https://www.instagram.com/hydroottawa

Stay in the know on Facebook: https://www.facebook.com/HydroOttawa

Keep up with the posts on X: https://twitter.com/thinkenergypod

Scott Demark, President and CEO of Zibi Community Utility, joins thinkenergy to discuss how our relationship with energy is changing. With two decades of expertise in clean energy and sustainable development, Scott suggests reimagining traditional energy applications for heating and cooling. He shares how strategic energy distribution can transform urban environments, specifically how district energy systems optimize energy flow between buildings for a greener future. Listen in.

Related links

• Scott Demark on LinkedIn: https://www.linkedin.com/in/scott-demark-83640473/

• Zibi Community Utility: https://zibi.ca/

• Markham District Energy Inc: https://www.markhamdistrictenergy.com/

• One Planet Living: https://www.bioregional.com/one-planet-living

• Trevor Freeman on LinkedIn: https://www.linkedin.com/in/trevor-freeman-p-eng-cem-leed-ap-8b612114/

• Hydro Ottawa: https://hydroottawa.com/en

To subscribe using Apple Podcasts:

https://podcasts.apple.com/us/podcast/thinkenergy/id1465129405

To subscribe using Spotify:

https://open.spotify.com/show/7wFz7rdR8Gq3f2WOafjxpl

https://open.spotify.com/show/7wFz7rdR8Gq3f2WOafjxpl

To subscribe on Libsyn:

http://thinkenergy.libsyn.com/

---

Subscribe so you don't miss a video: https://www.youtube.com/user/hydroottawalimited

Follow along on Instagram: https://www.instagram.com/hydroottawa

Stay in the know on Facebook: https://www.facebook.com/HydroOttawa

Transcript:

Trevor Freeman 00:07

Welcome to thinkenergy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman, as I explore the traditional, unconventional and up and coming facets of the energy industry. If you have any thoughts, feedback or ideas for topics we should cover, please reach out to us at [email protected]

Speaker 1 00:29

Hi everyone. Welcome back. One of the overarching aspects of the energy transition that we have talked about several times on this show is the need to change our relationship with energy, to rethink the standard way of doing things when it comes to heating and cooling and transportation, etc. This change is being driven by our need to decarbonize and by the ongoing evolution and improvement of technology. More things are becoming available to us as technology improves on the decarbonization front, we know that electrification, which is switching from fossil fuel combustions to electricity for things like space and water heating vehicles, etc, is one of the most effective strategies. But in order to switch out all the end uses to an electric option, so swapping out furnaces and boilers for heat pumps or electric boilers, switching all gas cars to EVs, etc. In order to do that in a way that is affordable and efficient and can be supported by our electricity grid, we need to think about multi strategy approaches, so we can't just continue to have this one way power grid where every home, every business, every warehouse or office tower satisfies all of its energy needs all the time directly from the grid with no adaptability. That isn't the best approach. It's not going to be affordable or efficient. We're not going to be able to do it fast enough. The multi strategy approach takes into account things like distributed energy resources, so solar and storage, etc, which we've talked about many times on this show, but it also includes approaches like district energy. So, district energy is rethinking how energy flows between adjacent buildings, looking for opportunities to capture excess energy or heat from one source and use that to support another. And that is the focus of today's conversation. To help us dive into this topic, I'm really happy to welcome Scott Demark to the show. Scott has been a champion of sustainability, clean energy solutions and energy efficiency in the Ottawa real estate and development industry for over 20 years now, he has overseen many high-performance development projects and was one of the driving forces behind the Zibi development in downtown Ottawa, and most applicable for today's conversation the renewable district energy system that provides heating and cooling to the Zibi site. Scott is the president and CEO of the Zibi community utility, as well as a partner at Thea partners. Scott Demark, welcome to the show.

Scott Demark 03:15

Thanks. Nice to see you. Trevor,

Trevor Freeman 03:17

So, Scott, why don't we start with definitions are always a good place to start. So, when we talk about a district energy system, give us a high-level overview of what exactly that means.

Scott Demark 03:27

Sure, a district energy system is, is simply the connection, or interconnection of thermal energy sources, thermal energy sinks. And so really, in practical terms. It means, instead of buildings having their own furnace and cooling system, buildings connect to a hydronic loop. A hydronic loop is just pipes filled with water, and then the heat or the cooling is made somewhere else, and that heat or lack of heat cooling is in a pipe. They push the pipe to the building, and then the pipe extracts the heat or rejects the heat to that loop. And so it's simply an interconnection of us as sources and sinks for federal energy.

Trevor Freeman 04:14

And I guess one of the important concepts here is that buildings often create heat, not just through a furnace or not just through the things that are meant to create heat, but, you know, server racks, computer server racks, generate a lot of heat, and that heat has to go somewhere. So oftentimes we're cooling buildings to remove heat that's being created in those buildings, and then other buildings nearby need to be heated in order to make that space comfortable. Is that fair to say?

Scott Demark 04:42

Yeah, absolutely. Trevor, so, an office building in the city of Ottawa, big old government office building, you'll see a pretty big plume on the roof in the winter time. That's not just kind of the flue gas from a boiler, but rather it is actually chillers are. running inside to make cooling, and they're just selling that heat to the atmosphere, even on the coldest day of the year. So, it's people, you know, people are thermal load. Computers are thermal load, and so is solar gain. You know, January is pretty dark period for us, meaning low angle sun. But by this time in a year, you know, or at the end of February, there's a lot of heat in that sun. So, a glass building absorbs a lot of sun. An office building will need cooling on the sunny side of that building a lot of the time, even in the dead of winter.

Trevor Freeman 05:31

Yeah. So, a district system, then, is taking advantage of the fact that heat exists, and we don't necessarily need to either burn fossil fuels or even if it's a, you know, a clean system, we don't have to expend energy to create heat, or create as much heat if we could move that heat around from where it's kind of naturally occurring to where we need it.

Scott Demark 05:54

That's right at the very core of a district energy system. You're going to move heat from a place that it's not wanted to a place that it is wanted. And so in our example of the office building, you know, on the February day with the sun shining in and the computers all running, that building's getting rid of heat. But right next door, say there's a 20-story condo. Well, that 20 story condo needs heating and it also needs domestic hot water. So, year-round, domestic hot water represents 30, 35% of the heating load of any residential building, so at all times. So, a district energy system allows you to take that heat away from the office building and give it to the residential building, instead of making the heat and dissipating that heat to the atmosphere in the office building. So, yeah, it's, it's really a way to move, you know, from sources to sinks. That's, that's what a district energy system does well.

Trevor Freeman 06:48

So we've kind of touched on this a little bit, but let's dive right into, you know, we talk a lot on the show about the energy transition. This, this push to, one, move away from fossil fuel combustion to meet our energy needs. And two, shifting from a kind of static, centralized energy system like we have right now, big generators, large transmission lines, etc., to more of a two-way flow, distributed energy system. What is the role of district energy systems within that transition. How do they help us get closer to that sort of reality that we talk about?

Scott Demark 07:27

I think the biggest way that they help is economies of scale. Okay, so by that, I'll explain that. Imagine there's a lot of technology that's been around a long time that is very scalable to the building level, but most of them are fossil fire. Okay, so the cheapest way to heat a building in Ottawa is to put a gas fired boiler in. That's the cheapest capital cost, first cost, and it's also the cheapest operating cost, is to put a gas boiler in. That industry is well established. There's lots of trades who could do it. There's lots of producers who make the boilers. When you start to try and think about the energy transition and think about what you may do to be different, to be lower carbon, or to be zero carbon, those industries are just starting right. Those industries don't exist. They don't have the same depth, and so they don't have the same cost structure, and often times they don't scale well down to the building. And therefore, a district energy system aggregates a bunch of load, and so you can provide a thermal energy so at scale that becomes affordable. And that is, you know, a very good example of that would be where, you know, you might want to go and recover heat from some process, and we'll talk about Zibi as the example. But if he wanted to go recover heat from some process and bring it in, it doesn't make sense to run a pipeline to a source to heat one building. You can't make financial sense of it, but if you're heating 20 buildings, that pipeline, all of a sudden, makes sense to take waste heat from somewhere, to move it somewhere else. The other advantage is that truly district energy systems are agnostic to their inputs and outputs for heat. So, once you've established that hydronic loop, that interconnection of water pipes between buildings, what the source and what the sources, doesn't matter. So, you may have at one point built a district energy system, and Markham District Energy System is a great example of this market District Energy System was built on the concept of using a co-generation facility. So they burned natural gas to make electricity, they sold electricity to the grid, and they captured all the waste heat from that generation, and they fed it into a district energy system. Well, here we are, 20 plus years later, and, they're going to replace that system, that fossil fired system Augment, not fully replaced, but mostly replace that system with a sewer coupled energy recovery and drive those heat recovery chillers to a sewer system. So, they're putting a very green solution in place of a former fossil solution. They don't have to rip up the pipes, they don't have to change anything in the buildings. They only have to change that central concept. Now, again, Markham could never do that at a one building scale. They're only that at the community scale.

Trevor Freeman 10:21

So, you mentioned, I want to pick on something you said there. You talked about a sewer heat energy system. They're pulling heat from the sewer. Just help our listeners understand high level kind of, why is there heat there for us to pull? Like, what's the what's the source there?

Scott Demark 10:38

Yeah. So, when we shower, when we flush toilets, all of that is introducing heat into a sewer system. So, we're collecting heat from everybody's house into the sewer system. The sewer system also sits below the frost line. So, call it Earth coupled. You know it's the earth in Ottawa below the frost line sits around eight, eight and a half c and so at that temperature and the temperature of flushing toilets, we essentially get a sewer temperature in the on the coldest day of the year, that's around 10 10, and a half degree Celsius. And obviously, for lots of the year, it's much warmer than that. And so I think, you know, a lot of people are kind of familiar with the concept of geo exchange energy, or that. Lot of people call it geothermal, but you exchange where you might drill down into the earth, and you're taking advantage of that eight, eight and a half degrees, I'll see. So, you're exchanging heat, you can reject heat to the earth, or you can absorb heat from the earth. Well, this is the same idea, but you accept or reject from the sewer. But because the sewer is relatively shallow, it is cheaper to access that energy, and because it's warm, and on the coldest day, a couple of degrees make a big difference, Trevor, and most of the year so much warmer, you're really in a very good position to extract that heat, and that's all it is. You are just accepting or rejecting heat. You don't use the sewage itself. It doesn't come into your building. You have a heat exchanger in between. But that's, that's what you do.

Trevor Freeman 12:10

Yeah, great. And I, we've talked before on the show about the idea that, you know, for a air source, heat pump, for example, you don't need a lot of heat energy to extract energy from the air. It can be cold outside, and there is still heat energy in the air that you can pull and use that to heat a building, heat water, whatever. So same concept, except you've got a much warmer source of energy, I guess.

Scott Demark 12:34

Yeah, exactly. And you know, Trevor, when you look at the efficiency curves of those air source heat pumps, you know, they kind of drop off a cliff at minus 20. Minus 22 in fact. You know, five or six years ago, they that that was dropping off at minus 10. So, we've come a long way in air source heat pumps. But imagine on that coldest, coldest day of the year, you're still your source is well above zero, and therefore your efficiency. So, the amount of electricity you need to put into the heat pump to get out the heat that you need is much lower, so it's a way more efficient heat exchange.

Trevor Freeman 13:07

Great. Thanks for that, Scott. I know that's a bit of a tangent here, but always cool to talk about different ways that we're coming up with to heat our buildings. So back to district energy. We've talked through some of the benefits of the system. If I'm a building owner and I'm have the decision to connect to a system that's there, or have my own standalone, you know, traditional boiler, whatever the case may be, or even in a clean energy one, a heat pump, whatever. What are the benefits of being on a district system versus having my own standalone system for just my building.

Scott Demark 13:42

Yeah, so when you're wearing the developer's hat, you know they're really looking at it financially. If they have other goals around sustainability, great, that will factor into it. But most of them are making decisions around this financially. So, it needs to compete with that. That first cost that we talked about the easiest ways, is boilers, gas fired boilers is the cheapest way. And so, they're going to look to see it at how. How does this compare to that? And so, I think that's the best way to frame it for you. And so, the difference here is that you need to install in your building a cooling system and a heating system. In Ottawa, that cooling system is only used for a few months a year, and it's very expensive. It takes up space, whether you're using a chiller and a cooling tower on the roof or using a dry cooler, it takes up roof space, and it also takes up interior space. If you do have a cooling tower, you have a lot of maintenance for that. You need to turn it on and turn it off in the spring, on and fall, etc., just to make sure all that happens and you need to carry the life cycle of that boiler plant. You need to bring gas infrastructure into your building. You generally need to put that gas boiler plant high in your building. So up near the top, and that's for purposes of venting that properly. Now that's taking real estate, right? And it's taking real estate on the area that's kind of most advantageous, worth the most money. So you might lose a penthouse to have a boiler and chiller room up there. And you also, of course, lose roof space. And today, we really do try to take advantage of those rooftop, patios and things, amenities are pretty important in buildings. And so, when I compare that to district energy at the p1 level, p2 level in your building, you're going to have a small room, and I really do mean small where the energy transfer takes place, you'll have some heat exchangers. And small, you might have a space, you know, 10 or 12 feet by 15 to 18 feet would be big enough for a 30-story tower, so a small room where you do the heat exchange and then Trevor, you don't have anything in your building for plants that you would normally look after. So, when you look at the pro forma for owning your building over the lifetime of it. You don't have to maintain boilers. You don't have to have boiler insurance. You don't have to maintain your chillers. You don't have to have life cycle replacement on any of these products. You don't need anybody operating those checking in on the pressure vessels. None of that has to happen. All of that happens on the district energy system. So, you're really taking something you own and operate, and replacing that with a service. So, district energy is a service, and what, what we promised to deliver is the heating you need and the cooling you need. 24/7. The second thing you get is more resilience, and I'll explain that a little bit. Is that in a in a normal building, if you if the engineers looked at it and said, you need two boilers to keep your building warm, then you're probably going to install three. And that is kind of this, and plus one sort of idea, so that if one boiler goes down, you have a spare. And you need to maintain those. You need to pay for that. You need to maintain those, etc. But in district energy system, all that redundancy is done in the background. It's done by us, and we have significantly more redundancy than just n plus one in this example. But overall, you know, if you have 10 buildings on your district energy system, each of those would have had n plus one. We don't have n plus 10 in the plant. And so overall, the cost is lower, I would say, if you look at it globally, except the advantages you do have better than N plus one in the plant. So, we have higher resiliency at a lower cost.

Trevor Freeman 17:39

So, we know there's no such thing as a miracle solution that works in all cases. What are the best use cases for district energy system? Where does it make a lot of sense?

Scott Demark 17:50

Yeah, in terms some, in some ways the easiest things, Pretty work. Doesn't make sense. So, so it doesn't make sense in sprawling low rise development. So, the cost of that hydronic loop those water pipes is high. They have to fit in the roadway. It's civil work, etc. And so, you do need density. That doesn't mean it has to be high rise density. You know, if you look at Paris, France, six stories district energy, no problem. There's, there's lots and lots of customers for that scale of building. It doesn't have to be all high rise, but it does, District Energy does not lend itself well to our sprawling style of development. It's much more suited to a downtown setting. It also kind of thrives where there's mixed use. You know, I think the first example we were talking about is office building shedding heat, residential building needing heat. You know, couple that with an industrial building shedding heat. You know, these various uses, a variety of uses on a district energy system, is the best, because its biggest advantage is sharing energy, not making energy. And so, a disparity of uses is the best place to use that. I think the other, the other thing to think about, and this is harder in Canada than the rest of the world, is that, you know, it's harder on a retrofit basis, from a cost perspective, than it is in a in a new community where you can put this in as infrastructure. Day one, you're going to make a big difference. And I'll, you know, give a shout out to British Columbia in the Greater Vancouver area. So, the district, you know, down in the Lower Mainland, they, they kind of made this observation and understood that if they were going to electrify, then District Energy gave economies of scale to electrify that load. And they do a variety of things, but one of the things they do is, is kind of district you exchange system so, so big heat pumps coupled to big fields, and then spring heat made a bunch of buildings. But these are green field developments Trevor. So, as they expand their suburbs. They do need to build the six stories. They very much have kind of density around parks concept. So now Park becomes a geo field. Density around the geo field, but this infrastructure is going in the same time as the water pipes. It's going in at the same time as the roads, the sidewalks, etc. You can dramatically reduce your cost, your first cost related to that hydro loop, if you're putting it in the same time you're doing the rest of the services.

Trevor Freeman 20:27

So, we're not likely to see, you know, residential neighborhoods with single family homes or multi-unit homes, whatever, take advantage of this. But that sort of low rise, mid rise, that's going to be more of a good pick for this. And like you said, kind of development is the time to do this. You mentioned other parts of the world. So, district energy systems aren't exactly widespread. In Canada, we're starting to see more of them pop up. What about the rest of the world? Are there places in the world where we see a lot more of this, and they've been doing this for a long time?

Scott Demark 21:00

Yeah. So, I'd almost say every, everywhere in the northern hemisphere, except North America, has done much more of this. And, you know, we really look to kind of Scandinavia as the gold standard of this. You look to Sweden, you look to Denmark, you look to Germany, even. There's, there's a lot of great examples of this, and they are typically government owned. So, they are often public private partnerships, but they would be various levels of government. So, you know, if you, if you went to Copenhagen, you'd see that the municipality is an owner. But then their equivalent of a province or territory is actually a big part of it, too. And when they built their infrastructure ages ago, they did not have an easy source of fossil fuels, right? And so, they need to think about, how can we do this? How can we share heat? How can we centralize the recovery of heat? How can we make sure we don't waste any and this has just been ingrained in them. So there's massive, massive District Energy loops, interconnecting loops, some owned by municipalities. Someone probably, if you build the factory, part of the concept of your factory, part of the pro forma of your factory is, how much can I sell my waste heat for? And so, a factory district might have a sear of industrial partners who own a district energy loop and interfaces with the municipal loop all sort of sharing energy and dumping it in. And so that's, you know, that's what you would study. That's, that's where we would want to be, and the heart of it is, just as I said, we've really had, you know, cheap or, you know, really cheap fossil fuels. We've had no price on pollution. And therefore, it really hasn't needed to happen here. And we're starting to see the need for that to happen here.

Trevor Freeman 22:58

It's an interesting concept to think of, you know, bringing that factory example in, instead of waste heat or heat as a byproduct of your process being a problem that you need to deal with, something you have to figure out a way to get rid of. It becomes almost an asset. It's a it's a, you know, convenient commodity that's being produced regardless, that you can now look to sell and monetize?

Scott Demark 23:21

Yeah, you go back to the idea of, like, what are the big benefits of district energy? Is that, like, if that loop exists and somebody knows that one of the things the factory produces is heat, well, that's a commodity I produce, and I can, I can sell it, if I have a way to sell it right here. You know, we're going to dissipate it to a river. We may dissipate it to the atmosphere. We're going to get rid of it. Like you said, it's, it's, it's waste in their minds and in Europe, that is absolutely not waste.

Trevor Freeman 23:49

And it coming back to that, you know, question of, where does this make sense? You talked about mixed use. And it's also like the, you know, the temporal mix use of someone that is producing a lot of heat during the day when the next-door residential building is empty, then when they switch, when the factory closes and the shift is over and everybody comes home from work, that's when that building needs heat. That's when they want to be then taking that heat to buildings next to each other that both need heat at the same time is not as good a use cases when it's offset like that.

Scott Demark 24:23

Yeah, that's true. And unless lots of District Energy Systems consider kind of surges in storage, I know our system at CB has, has kind of a small storage system related to the domestic hot water peak load. However, you can also think of the kilometers and kilometers and kilometers of pipes full of water as a thermal battery, right? So, so you actually are able to even out those surges. You let the temperature; the district energy system rise. When that factory is giving all out all kinds of heat, it's rising even above the temperature. You have to deliver it at, and then when that peak comes, you can draw down that temperature and let the whole district energy system normalize to its temperature again. So you do have an innate battery in the in the water volume that sits in the district energy system

Trevor Freeman 25:15

Very cool. So you've mentioned Zibi a couple times, and I do want to get into that as much as we're talking about other parts of the world, you know, having longer term district energy systems. Zibi, community utility is a great example, right here in Ottawa, where you and I are both based of a district energy system. Before we get into that, can you, just for our listeners that are not familiar with Zibi, give us a high level overview of what that community is its location, you know, the goals of the community. And then we'll talk about the energy side of things.

Scott Demark 25:46

Sure. So Zibi was formerly Domtar paper mills. It's 34 acres, and it is in downtown Ottawa and downtown Gatineau. About a third of the land mass is islands on the Ontario side, and two thirds the land mass is on the shore, the north shore of the Ottawa River in Gatineau, both downtown, literally in the shadows of Parliament. It is right downtown. It was industrial for almost 200 years. Those paper mills shut down in the 90s and the early 2000s and my partners and I pursued that to turn it from kind of this industrial wasteland, walled off, fenced off, area that no one could go into, what we're hoping will be kind of the world's most Sustainable Urban Community, and so at build out, it will house, you know, about six, 7000 people. It will be four and a half million square feet, 4.24 point 4 million square feet of development. It is master planned and approved, and has built about, I think we're, at 1.1 million square feet, so we're about quarter built out. Now. 10 buildings are done and connected to the district energy system there. And really, it's, it's an attempt to sort of recover land that was really quite destroyed. You can imagine it was a pretty polluted site. So, the giant remediation plan, big infrastructure plan. We modeled this, this overall sustainability concept, over a program called one planet living which has 10 principles of sustainability. So, you know, you and I are talking a lot about carbon today, but there's also very important aspects about affordability and social sustainability and lifestyle, and all of those are incorporated into the one planet program, and encourage people to look up one planet living and understand what it is and look at the commitments that we've made at Zibi to create a sustainable place. We issue a report every year, kind of our own report card that's reviewed by a third party that explains where we are on our on our mission to achieve our goal of the world's most sustainable community.

Speaker 1 28:09

Yeah. And so I do encourage people to look at one planet living also. Have a look at, you know, the Zibi website, and it's got the Master Plan and the vision of what that community will be. And I've been down there, it's already kind of coming along. It's amazing. It's amazing to see the progress compared to who I think you described it well, like a bit of an industrial wasteland at the heart of one of the most beautiful spots in the city. It was really a shame what it used to be. And it's great to see kind of the vision of what it can become. So that's awesome,

Scott Demark 28:38

Yeah, and Trevor, especially now that the parks are coming along. You know, we worked really closely with the NCC to integrate the shoreline of Zibi to the existing, you know, bike path networks and everything. And, you know, two of the three shoreline parks are now completed and open to the public and they're stunning. And you know, so many Ottawa people have not been down there because it's not a place you think about, but it's one of the few places in Ottawa and Gatineau where you can touch the water, you know, like it's, it's, it's stunning,

Trevor Freeman 29:08

yeah, very, very cool. Okay, so the next part of that, of course, is energy. And so there is a district energy system, one of the first kind of, or the most recent big energy, District Energy Systems in Ottawa. Tell us a little bit about how you are moving energy and heating the Zibi site.

Scott Demark 29:29

Yeah. So first, I'll say, you know, we, we, we studied different, uh, ways to get to net zero. You know, we had, we had a goal of being a zero carbon community. There are low carbon examples, but a zero carbon community is quite a stretch. And even when you look at the Scandinavian examples, the best examples, they're missing their energy goals, largely because some of the inputs that are District Energy System remain false so, but also because they have trouble getting them. Performance out of the buildings. And so we looked at this. We also know from our experience that getting to zero carbon at the building scale in Ottawa is very, very difficult. Our climate is tough, super humid, super hot. Summer, very cold, very dry, winter, long winter. So, it's difficult at the building scale. It's funny Trevor, because you'd actually have an easier time getting to zero carbon or a passive house standard in affordable housing than you do at market housing. And that's because affordable housing has a long list of people who want to move in and pay rents. You can get some subsidies for capital and the people who are willing to pay rent are good with smaller windows, thicker walls, smaller units and passthroughs, needs all those kinds of things. So when down at Zibi, you're really selling views, you're competing with people on the outside of Zibi, you're building almost all glass buildings. And so it's really difficult to find a way to get to zero carbon on the building scale. So that moved us to district energy for all the reasons we've talked about today already. And so, when we looked at it for Zibi, you really look at the ingredients you have. One of the great things we have is we're split over the border. It's also a curse, but split over the border is really interesting, because you cannot move electricity over that border, but you can move thermal energy over that border. And so, for us, in thinking about electrifying thermal energy, we realized that if we did the work in Quebec, where there is clean and affordable electricity, we could we could turn that into heat, and then we could move heat to Ontario. We could move chilled water to Ontario. So that's kind of ingredient, one that we had going for us there. The second is that there used to be three mills. So originally Domtar three mills, they sold one mill. It changed hands a few times, but it now belongs to Kruger. They make tissue there so absorbent things, Kleenexes and toilet paper, absorbent, anything in that tissue process that's a going concern. So, you can see that in our skyline. You can see, on cold days, big plumes of waste heat coming out of it. And so, we really saw that as our source, really identified that as our source. And how could we do that? So, going back to the economies of scale, is, could we send a pipeline from Kruger, about a kilometer away, to Zibi? And so, when we were purchasing the land, we were looking at all the interconnections of how the plants used to be realized. There are some old pipelines, some old easements, servitudes, etc. And so, when we bought the land, we actually bought all of those servitudes to including a pipeline across the bridge, Canadian energy regulator licensed across the bridge into Ontario. And so, we mixed all these ingredients up, you know, in a pot, and came up with our overall scheme. And so that overall scheme is relatively simple. We built an energy recovery station at Kruger, where just before their effluent water, like when they're finished in their process, goes back to the river. We have a heat exchanger there. We extract heat. We push that heat in a pipe network over to Zibi. At Zibi, we can upgrade that heat using heat recovery chillers, to a useful temperature for us, that's about 40 degrees Celsius, and we push that across the bridge to Ontario, all of our buildings in Ontario, then have thin coil units. They use that 40-degree heat to heat buildings. The return side of that comes back to Quebec, and then on the Quebec side, we have a loop and all of our buildings in the Quebec side, then use heat pumps so we extract the last bit of heat. So, imagine you you've returned from a fan coil, but you're still slightly warm. That slightly warm water is enough to drive a heat pump inside the buildings. And then finally, that goes back to Kruger again, and Kruger heats it back up with their waste heat comes back. So that's our that's our heating loop. The cooling side is coupled to the Ottawa River. And so instead of us rejecting heat to the atmosphere through cooling towers, our coolers are actually coupled to the river. That's a very tight environmental window that you can operate in. So, we worked with the minister the environment climate change in Quebec to get our permit to do it. We can only be six degrees difference to the river, but our efficiency is, on average, like on an annual basis, more than double what it would be to a cooling tower for the same load. So, we're river coupled with respect to cooling for the whole development, and we're coupled to Kruger for heating for the whole development. And what that allows us to do is eliminate fossil fuels. Our input is clean Quebec electricity, and our output is heating and cooling.

Trevor Freeman 34:56

So, none of the buildings, you know, just for our listeners, none of the buildings have any. sort of fossil fuel combustion heating equipment. You don't have boilers or anything like that, furnaces in these in these buildings,

Scott Demark 35:06

no boilers, no chillers, no

Trevor Freeman 35:09

that's awesome. And just for full transparency, I should have mentioned this up front. So, the zibi community utility is a partnership between Zibi and Hydro Ottawa, who our listeners will know that I work for, and this was really kind of a joint venture to figure out a different approach to energy at the city site.

Scott Demark 35:28

Yeah, that's right, Trevor. I mean the concept, was born a long time ago now, but the concept was born by talking to Hydro Ottawa about how we might approach this whole campus differently. You know, one of hydro Ottawa's companies makes electricity, of course, Chaudiere Falls, and so that was part of the thinking we thought of, you know, micro grids and islanding this and doing a lot of different things. When Ford came in, and we were not all the way there yet and made changes the Green Energy Act. It made it challenging for us to do the electricity side, but we had already well advanced the thermal side, and hydro, you know, hydro makes a good partner in this sort of thing. When a when a developer tells someone, I'd like you to buy a condo, and by the way, I'm also the district energy provider that might put some alarm bells up, but you put a partnership in there with a trusted, long term utility partner, and explain that, you know, it is in the in the public interest, they're not going to jack rates or mess with things. And then obviously, just, you know, hydro had such a long operating record operating experience that they really brought sort of an operations and long-term utility mindset to our district energy system.

Trevor Freeman 36:45

So, looking at a system like the Zibi community utility or other district energy systems, is this the kind of thing that can scale up over time? And, you know, I bring this up because you hear people talk about, you know, a network of district energy systems across a city or across a big geographic area. Are these things that can be interconnected and linked, or does it make more sense as standalone district energy systems in those conditions that you talked about earlier?

Scott Demark 37:17

Very much the former Trevor like, and that's, you know, that's where, you know, places like Copenhagen are today. It's that, you know, there was, there was one district energy system, then there was another, then they got interconnected, then the third got added. And then they use a lot of incineration there, in that, in that part of the world, clean incineration for garbage. And so then an incinerator is coming online, and so that incinerators waste heat is going to be fed with a new district energy loop, and some other factory is going to use the primary heat from that, and then the secondary heat is going to come into the dictionary system. So, these things are absolutely expandable. They're absolutely interconnectable. There are temperature profiles. There's modern, modern thoughts on temperature profiles compared to older systems. Most of the old, old systems were steam, actually, which is not the most efficient thing the world, but that's where they started and so now you can certainly interconnect them. And I think that the example at Zibi is a decent one, because we do have two kinds of systems there. You know, I said we have fan coil units in in the Ontario side, but we have heat pumps on the other side. Well, those two things, they can coexist, right? That's there. Those two systems are, are operating together. Because the difference, you know, the difference, from the customer's perspective, in those two markets are different, and the same can be true in different parts of the city or when different sources and sinks are available. So, it is not one method of doing district energy systems. What you do is you examine the ingredients you have. I keep saying it, but sources and sinks. How can I look at these sources and sinks in a way that I can interconnect them and make sense? And sometimes that means that a source or a sink might be another district energy system,

Trevor Freeman 39:12

Yeah, systems that maybe work in parallel to each other, in cooperation with each other. Again, it's almost that temporal need where there's load high on at one point in time and low on the other point in time. Sharing is a great opportunity.

Scott Demark 39:26

Yeah, absolutely

Trevor Freeman 39:27

great. Okay, last question for you here, Scott, what is needed, maybe from a regulatory or a policy lens to encourage more implementation of district energy systems. How do we see more of these things happen here in Canada or North America?

Scott Demark 39:45

The best way to put this, the bureaucracy has been slow to move is, is what I'll say. And I'll use Zibi as that example. When we when we pitch the district energy system. At Zibi, we had to approach the City of Ottawa, and we had to approach the city at Gatineau, the City of Ottawa basically said to us, no, you can't put those in our streets. Engineering just said, no, no, no, no. And so, what we did at Zibi is we actually privatized our streets in order to see our vision through, because, because Ottawa wasn't on board, the city of Gatineau said, Hmm, I'm a little worried. I want you to write protocols of how you will access your pipes and not our pipes. I want to understand where liability ends and starts and all of this kind of stuff. And we worked through that detail slowly, methodically with the city of Gatineau, and we came to a new policy on how district energy could be in a public street and Zb streets are public on the Gatineau side today, you know, come forward 10 years here, and the City of Ottawa has a working group on how to incorporate District Energy pipes into streets. We've been able to get the City of Ottawa to come around to the idea that we will reject and accept heat from their sewer. You know, Hydro Ottawa, wholly owned company of the City of Ottawa, has an active business in district energy. So Trevor, we've come really far, but it's taken a long time. And so, if you ask me, How can we, how can we accelerate district energy, I think a lot of it has to do with the bureaucracy at municipalities. And you know, we're we see so much interest from the Federation of Canadian municipalities, who was the debt funder for zcu. We have multiple visits from people all over Canada, coming to study and look at this as an example. And I'm encouraged by that. But it's also, it's also not rocket science. We need to understand that putting a pipe in a street is kind of a just, just a little engineering problem to solve, whereas putting, you know, burning fossil fuels for these new communities and putting it in the atmosphere, like the genies out of the bottle, right, like, and unfortunately, I think, for a lot of bureaucrats, the challenge at the engineering level is that that pipe in the street is of immediate, complex danger to solving that problem, whereas it's everybody's problem that the that the carbons in the atmosphere. So, if we could accelerate that, if we could focus on the acceleration of standards around District Energy pipes and streets, the rights of a district energy company to exist, and not to rant too much, but give you an example, is that a developer is required to put gas infrastructure into a new community, required, and yet you have to fight to get a district energy pipe in the street. So there needs to be a change of mindset there, and, and, and we're not there yet, but that's where we need to go.

Trevor Freeman 43:07

Yeah, well, it'll be interesting. You know, in 10 years, let's talk again and see how far we come. Hopefully not 10 years. Hopefully it's more like five, to see the kind of change that you've seen in the last decade. But I think that the direction is encouraging, the speed needs a little bit of work, but I'm always encouraged to see, yeah, things are changing or going in the right direction, just slowly. Well, Scott, we always end our interviews with a series of questions to our guests, so as long as you're okay with it, I'll jump right into those. So, the first question is, what is a book you've read that you think everybody should read?

Scott Demark 43:41

Nexus? Which is by Harare. He's the same author that wrote sapiens. Lots of people be familiar with sapiens. And so, Nexus is, is really kind of the history of information that works like, how do we, how do we share and pass information? And kind of a central thesis is that, you know, information is, is neither knowledge nor truth. It is information, and it's talking a lot about, in the age of AI, how are we going to manage to move information into truth or knowledge? And I think it, you know, to be honest, it kind of scared the shit out of me reading it kind of how, how AI is impacting our world and going to impact our world. And what I thought was kind of amazing about it was that he really has a pretty strong thesis around the erosion of democracy in this time. And it's, it was, it was really kind of scary because it was published before the 2024, election. And so it's, it's really kind of both a fascinating and scary read. And I think really something that everybody should get their head around.

Trevor Freeman 44:59

Yeah, there's a few of those books recently that I I would clear or classify them as kind of dark and scary, but really important or really enlightening in some way. And it kind of helps you, you know, formalize a thought or a concept in your head and realize, hey, here's what's happening, or gives you that kind of the words to speak about it in this kind of fraught time we're in. So same question. But for a movie or a show, is there anything that you think everybody should watch

Scott Demark 45:29

That's harder. I think generally, if I'm watching something, it's for my downtime or own entertainment, and pushing my tastes on the rest of the world, maybe not a great idea. I if I, if I'm, if I'm kind of doing that, I tend to watch cooking shows, actually, Trevor. So, like, that's awesome. I like ugly, delicious. I love David Chang. I like, I like, mind of a chef, creativity behind a chef. So those kinds of things, I'd say more. So, if there was something to like that. I think somebody else should, should watch or listen to I have, I have a real love for Malcolm Gladwell podcast, revisionist history. And so if I thought, you know, my watching habits are not going to going to expand anybody's brain. But I do think that Malcolm's perspective on life is, is really a healthy it's really healthy to step sideways and look at things differently. And I would suggest, if you have never listened to that podcast, go to Episode One, season one, and start there. It's, it's, it's fantastic.

Trevor Freeman 46:39

Yeah, I agree. I'll echo that one. That's one of my favorites. If we were to offer you or not, but if we were to offer you a free round-trip flight, anywhere in the world, where would you go?

Scott Demark 46:50

That's hard. So much flight guilt, you know, I know it's a hard assume that there's carbon offset to it. It's an electric plane.

Trevor Freeman 47:00

That's right, yeah,

Scott Demark 47:01

the we, my family, had a trip planned in 2020 to go to France and Italy. My two boys were kind of at the perfect age to do that. It would have been a really ideal trip. And so, I've still never been to either of those places. And if I had to pick one, probably Italy, I would really like to see Italy, mafuti. I think it would be a fantastic place to go. So probably, probably Italy.

Trevor Freeman 47:25

My favorite trip that I've ever done with my wife and our six-month-old at the time was Italy. It was just phenomenal. It was a fantastic trip. Who's someone that you admire?

Scott Demark 47:36

I have a lot of people, actually, a lot of people in this, in this particular space, like, what would I work in that have brought me here to pick one, though I'd probably say Peter Busby. So, Peter Busby is a mentor, a friend, now a business partner, but, but not earlier in my career. Peter Busby is a kind of a, one of the four fathers, you know, if you will, of green design in Canada. He's an architect, Governor General's Award-winning architect, actually. But I think what I, what I really, appreciate about Peter, and always will, is that he was willing to stand up in his peer group and say, hey, we're not doing this right. And, you know, he did that. He did that in the early 80s, right? Like we're not talking he did it when it cost his business some clients. He did it when professors would speak out against him, and certainly the Canadian Association of architecture was not going to take any blame for the shitty buildings that have been built, right? And he did it. And I remember being at a conference where Peter was getting a Lifetime Achievement Award from the Canadian architects Association, and so he's standing up, and people are all super proud of him. They're talking about his big life. And he kind of belittled them all and said, you're not doing enough. We're not doing enough like he's still he's still there. He's still taking the blame for where things are, and that things haven't moved fast enough, and that buildings are a massive part of our carbon problem, and probably one of the easier areas to fix. You know, we're talking about electric planes. Well, that's a that's a lot more difficult than it is to recover energy from a factory to heat a community, right? I admire him. I learn things from him all the time. He's got a great book out at the moment, actually, and, yeah, he'd be right up there on my in my top list,

Trevor Freeman 49:54

Awesome. What is something about the energy sector or its future that you're particularly excited about?

Scott Demark 50:00

I wish you asked me this before the election. I I'm feeling a little dark. Trevor, I think there needs to be a price on pollution in the world. Needs to be a price on pollution in America, in Canada, and I'm worried about that going away. in light of that, I'm not, I'm not super excited about different technologies at the moment. I think there are technologies that are helping us, there are technologies that are pushing us forward, but there's no like silver bullet. So, you know, a really interesting thing that's coming is kind of this idea that a small nuclear reactor, okay, very interesting idea. You could see its context in both localized electricity production, but all the heat also really good for district entry, okay, so that's an interesting tech. It obviously comes with complications around security and disposal, if you like. There's our nuclear industry has been allowed to drink like it's all complicated. So, I don't see one silver bullet in technology that I'm like, That's the answer. But what I do see, I'll go back to what we were talking about before, is, you know, we had to turn this giant ship of bureaucracy towards new solutions. Okay, that's, that's what we had to do. And now that it's turned and we've got it towards the right course, I'm encouraged by that. I really am. You know, there are champions, and I'll talk about our city. You know, there's champions in the City of Ottawa who want to see this happen as younger people have graduated into roles and planning and other engineering roles there. They've grown up and gone to school in an age where they understand how critical this climate crisis is, and they're starting to be in positions of power and being in decision making. You know, a lot of my career, we're trying to educate people that there was a problem. Now, the people sitting in those chairs, it they understand there's a problem, and what can they do about it? And so I am, I am excited that that the there is a next generation sitting in these seats, making decisions. The bureaucracy the ship is, is almost on course to making this difference. So I do think that's encouraging. We have the technology. We really do. It's not rocket science. We just need to get through the bureaucracy barriers, and we need to find ways to properly finance it.

Trevor Freeman 52:34

Right? I think that's a good place to wrap it up. Scott, thanks so much for your time. I really appreciate this conversation and shedding a little bit of light, not just on the technical side of district energy systems, but on the broader context, and as you say, the bureaucracy, the the what is needed to make these things happen and to keep going in that right direction. So thanks a lot for your time. I really appreciate it.

Scott Demark 52:56

Thank you, Trevor, good to see you.

Trevor Freeman 52:57

All right. Take care. Thanks for tuning in to another episode of The thinkenergy podcast. Don't forget to subscribe. Wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback, comments or an idea for a show or a guest, you can always reach us at [email protected]

Will U.S. tariffs disrupt Canada's energy sector? What is the current state of cross-border electricity trade? How can we strengthen interprovincial connections to secure a sustainable energy future in our country? Host Trevor Freeman summarizes the on and offs of Canada's electricity trade. Tune in to learn about the complexities and challenges of evolving energy policies, infrastructure, and regulatory landscapes governed by both federal and provincial authorities.

Related links

● Canadian Energy Regulator: https://www.cer-rec.gc.ca/en/index.html

● The Transition Accelerator: https://transitionaccelerator.ca/

● Electrifying Canada: https://electrifyingcanada.ca/

● Canada Electricity Advisory Council: https://natural-resources.canada.ca/energy-sources/canada-electricity-advisory-council

● thinkenergy episode 143 with Quest Canada: https://thinkenergypodcast.com/episodes/electrifying-canadas-remote-communities-with-quest-canada/

● Trevor Freeman on LinkedIn: https://www.linkedin.com/in/trevor-freeman-p-eng-cem-leed-ap-8b612114/

Hydro Ottawa: https://hydroottawa.com/en

To subscribe using Apple Podcasts:

https://podcasts.apple.com/us/podcast/thinkenergy/id1465129405

To subscribe using Spotify:

https://open.spotify.com/show/7wFz7rdR8Gq3f2WOafjxpl

To subscribe on Libsyn:

http://thinkenergy.libsyn.com/

Subscribe so you don't miss a video: https://www.youtube.com/user/hydroottawalimited

Follow along on Instagram: https://www.instagram.com/hydroottawa

Stay in the know on Facebook: https://www.facebook.com/HydroOttawa

Keep up with the posts on X: https://twitter.com/thinkenergypod

Transcript:

Trevor Freeman 00:07

Welcome to a think energy short hosted by me, Trevor Freeman, this is a bite sized episode designed to be a quick summary of a specific topic or idea related to the world of energy. This is meant to round out our collective understanding of the energy sector, and we'll compliment our normal guest interview episodes. Thanks for joining and happy listening. Hi everyone. Welcome back to another thinkenergy short. I'm your host, Trevor Freeman, today we're going to take a look at Canada's electricity trade. You may recall that in my first episode of 2025 we did a look ahead at the year in energy, and we did briefly touch on potential upcoming tariffs, and I highlighted that there is a fair amount of trade and electricity across the border. So, given that we are still on the potential cusp of these tariffs being implemented, I'm recording this on march 3, and March 4 is the date that new tariffs are set to be implemented by the US on Canada, we thought it was probably a good idea to take a look at trade through the lens of electricity, to give you a sense of how this might impact electricity and what the future might hold. So we'll look at the current landscape, the challenges posed by some of these recent policies, and the potential for strengthening interprovincial connections to ensure a resilient and sustainable energy future. So, let's start by establishing the current state of Canada's electricity trade. In short, Canada's electricity grids were designed to serve local demand, rather than looking at a large scale, integrated national grid, for all. We'll get more into this shortly, but it's the main reason why you'll see the majority of Canada's electricity grids at the provincial level are kind of oriented north to south when it comes to interconnections, rather than east to west. They are a stronger trade relationship to meet the higher demand of the United States, rather than between provinces and territories. Canada's electricity trade has long been a cornerstone of the North American energy framework that's governed by both federal and provincial authorities. These cross-border interconnections have facilitated a robust exchange with Canada, exporting around $3.2 billion worth of electricity to the United States in 2023 alone. And yes, that was billion with a B. So, let's talk about cross border trade. The Canadian energy regulator, or CER, oversees electricity exports to the United States, ensuring compliance with market regulations, fair access and impact assessment on our domestic supply. It should be noted that the CER does not regulate electricity imports into Canada. That is the role of provincial Crown corporations or private market participants who decide on the volume of electricity being traded here in Ontario, as we've talked about many times on the show, the IESO, or Independent Electricity System Operator decides on the amount of electricity that is needed in coming in terms of infrastructure, the CER regulates 86 different international power lines that connect Canada's provinces to the US electricity grid in different locations. So, to help you visualize this, you know, imagine a map of North America, starting west to east. We've got British Columbia, which is linked to the US Pacific Northwest grid. Manitoba and parts of Ontario are both connected to the US midcontinent grid. The other part of Ontario and Quebec are connected to the US Eastern grids. And finally, New Brunswick is connected to the US New England grid. So, there are a lot of different connection points across the map. So that gives you a picture of our current trade relationship, so, now let's look at how some of the recent policy shifts may affect that. Canadians will be well aware that the dynamics of international trade are being tested by the recent shift in the US approach to trade policies, and that includes the electricity trade. As I said at the beginning, I'm recording this on march 3, the day before broad, sweeping tariffs are set to be imposed by the United States on Canada, and that will impact electricity potentially, as well. The Trump administration's imposition of tariffs on Canadian imports has introduced a whole layer of uncertainty and tension. In response, Canadian officials have contemplated numerous different measures, including restricting electricity exports to the United States, states like Michigan and in New York or Minnesota who receive a lot of electricity from us. In Ontario, our recently reelected premier Doug Ford has highlighted the significance of these exports and has noted that Canada's electricity has powered 1.5 million American homes just last year, as recently as last month, Premier Ford raised the possibility of charging Americans more for electricity that Ontario sends to the US, and has also announced plans to cut off energy exports to the United States if the Trump administration moves ahead with tariff threats. These developments create a climate of uncertainty, and such trade disputes underscore the vulnerability inherent in our current trade dependent system. That vulnerability has raised calls for Canada to look and invest inward, which brings us to interprovincial connectivity. Let's examine the case for strengthening interprovincial connectivity in Canada, as I said at the top, we don't have a national grid. In fact, Canada's electricity infrastructure, which we've talked about many times, consists of multiple provincial or territorial grids, each governed and regulated by its respective province or territory. They also vary in systems and resources for producing electricity, with some regions having ample access to water resources, hydroelectricity, for example, others relying heavily on nuclear energy, and still, others looking more to fossil fuels, like oil or gas for electricity generation, a more cohesive pan Canadian electricity grid has long been a topic of conversation, even before this current threat of tariffs from the United States. A few years ago, there was renewed interest in the idea of interprovincial connectivity to achieve a 100% net zero electricity system by 2035 and eliminate harmful emissions countrywide by 2050. Basically, utilizing the electricity grid to support decarbonization at the individual customer level. Of course, the federal government has recently relaxed its goal for a net zero electricity system by 2035 mostly due to feasibility concerns, but the goal is still there to achieve Net Zero electricity generation across the entire country, and work has already been done towards that. So, working closely with Natural Resources Canada, the transition accelerator, which is a nonprofit organization dedicated to accelerating the transition to low carbon economy and advancing Canada's 2050 climate target, created an initiative called Electrifying Canada, which was focused on widespread electrification throughout the economy. That initiative brought together a diverse group of stakeholders, including government, indigenous peoples, industry, labor and civil society, to develop a roadmap for the electrification of Canada. This roadmap runs in parallel with the federal government's Electricity Advisory Council, and outlines recommendations to create a pan Canadian electricity grid, including identifying the infrastructure needed, the regulatory and policy changes that are required and the necessary investments needed to make it happen. Given the challenges presented by the United States and the growing discourse around bolstering interprovincial electricity connections, enhancing our domestic grid could offer several different benefits. These could include energy security. So, by reducing reliance on external markets, we can ensure a more stable and self-sufficient energy supply. There's also economic resilience, strengthened interprovincial trade can mitigate the economic impacts of international trade disputes and tariffs. And finally, there are environmental goals, so a cohesive national grid can facilitate the integration of renewable energy sources, aiding in the achievement of our net zero emissions targets. The CERs Canada's energy future 2023 report projects a 27% increase in interprovincial transmission capacity by 2035 under a global net zero scenario. So, we need this interprovincial connectivity in order to meet our net zero targets. It's something that kind of has to happen anyway, or is one of the key strategies in order to make that happen. This expansion would enable more efficient electricity transfers between provinces, allowing us to optimize resource utilization and enhance grid reliability. All the things that we talk about on this show about how to make our grid more efficient and more effective can be enhanced by looking not just at our provincial grids, but at more of a pan Canadian grid. While a National Grid offers many benefits, there are significant challenges to overcome, surprise. Surprise. We talk about this all the time on the show, so let's explore some of these challenges and considerations in order to make interprovincial connections a reality. To start with, the existing infrastructure was primarily designed for localized needs and aligning the diverse regulatory frameworks of each province or territory presents a complex challenge. Additionally, significant investment would be required to develop the necessary transmission lines and related infrastructure. So, it's both a regulatory challenge as well as a physical infrastructure challenge. We just don't have all the transmission lines and interconnections that are required. Here, according to the CER Market Snapshot webpage, electricity transmission lines in the Yukon and Northwest Territories do not actually connect to the larger North American grids or even to each other. And Nunavut doesn't have any transmission lines connecting its communities at all, but rather, each community independently generates and distributes its own electricity. I'll draw your attention back to an episode that I did last October with Gemma Pinchin from Quest Canada. And in that conversation, she highlighted that almost 200,000 Canadians in more than 280 remote communities don't connect to their local electricity grid or natural gas system, and it's not feasible at the moment for them to do so, given how remote they are. So, that presents some challenges as well. At a more macro level, looking at interprovincial framework, in August 2023 Ontario and Quebec announced a 600-megawatt electricity trade agreement, exemplifying the potential for greater interprovincial collaboration. Such initiatives could serve as blueprints for broader efforts to enhance our national grid. Despite these challenges, there is progress being made by investing in our domestic infrastructure and fostering provincial collaborations, Canada can build a resilient, sustainable and self-reliant energy system poised to meet future challenges. The energy transition, as we've talked about before is all encompassing and includes many different strategies. So, while we sometimes talk about the end result that EV or that heat pump that needs to be installed on the show, we also need to look at the more macro level, as how do we actually arrange our energy systems and our provincial grids, and what is the best option for that. So, that wraps up our look at Canada's electricity trade and how the current trade landscape might impact that moving forward. Hopefully you found that interesting. Thanks for tuning in for another think energy short, as always, we'd love to hear from you, and we'll talk to you next time. Thanks for tuning in to another episode of The thinkenergy podcast. Don't forget to subscribe wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback comments or an idea for a show or a guest. You can always reach us at [email protected]

What does Canada do with excess energy? How is it stored today and how will it be stored as the energy industry evolves? Justin Rangooni, CEO of Energy Storage Canada, shares how energy storage supports a sustainable future for Canadians—from enhanced flexibility to affordability, large-scale grids to individual consumer needs. Listen to episode 152 of thinkenergy to learn about ongoing projects and challenges facing the energy storage sector in Canada.

Related links:

• Justin Rangooni on LinkedIn: https://www.linkedin.com/in/justin-rangooni-5063b542/

• Energy Storage Canada: https://www.energystoragecanada.org/

• TC Energy Pump Storage Project: https://www.tcenergy.com/operations/power/pumped-storage-project/

• From Small to Mighty report: https://energyontario.ca/Files/OEA_ESC_From_Small_to_Mighty_Dec_2024.pdf

• Ontario Energy Board: https://www.oeb.ca/

• Trevor Freeman on LinkedIn: https://www.linkedin.com/in/trevor-freeman-p-eng-cem-leed-ap-8b612114/

Hydro Ottawa: https://hydroottawa.com/en

To subscribe using Apple Podcasts:

https://podcasts.apple.com/us/podcast/thinkenergy/id1465129405

To subscribe using Spotify:

https://open.spotify.com/show/7wFz7rdR8Gq3f2WOafjxpl

To subscribe on Libsyn:

http://thinkenergy.libsyn.com/

Subscribe so you don't miss a video: https://www.youtube.com/user/hydroottawalimited

Follow along on Instagram: https://www.instagram.com/hydroottawa

Stay in the know on Facebook: https://www.facebook.com/HydroOttawa

Keep up with the posts on X: https://twitter.com/thinkenergypod

How can you prepare for the inevitability of a power outage? What role does your utility provider play in restoring power? How are they being proactive about future outages? In this episode of thinkenergy, host Trevor Freeman shines the light on power outages and the strategies used by utilities to manage them. Learn about preventive measures, emergency responses, and the tools Hydro Ottawa uses to restore power quickly and enhance grid resilience. Listen in.

Related links

● Canadian Red Cross Emergency Preparedness Kit: https://www.redcross.ca/how-we-help/emergencies-and-disasters-in-canada/for-home-and-family/get-a-kit

● Hydro Ottawa Outage Centre: https://hydroottawa.com/en/outages-safety/outage-centre

● Hydro Ottawa Emergency Preparedness: https://hydroottawa.com/en/outages-safety/emergency-preparedness

● Trevor Freeman on LinkedIn: https://www.linkedin.com/in/trevor-freeman-p-eng-cem-leed-ap-8b612114/

● Hydro Ottawa: https://hydroottawa.com/en

To subscribe using Apple Podcasts: https://podcasts.apple.com/us/podcast/thinkenergy/id1465129405

To subscribe using Spotify: https://open.spotify.com/show/7wFz7rdR8Gq3f2WOafjxpl

To subscribe on Libsyn: http://thinkenergy.libsyn.com/

Subscribe so you don't miss a video: https://www.youtube.com/user/hydroottawalimited

Follow along on Instagram: https://www.instagram.com/hydroottawa

Stay in the know on Facebook: https://www.facebook.com/HydroOttawa

Keep up with the posts on X: https://twitter.com/thinkenergypod

Transcript:

Trevor Freeman 00:07

Welcome to a think energy short hosted by me, Trevor Freeman. This is a bite sized episode designed to be a quick summary of a specific topic or idea related to the world of energy. This is meant to round out our collective understanding of the energy sector, and will complement our normal guest interview episodes. Thanks for joining and happy listening. Hey everyone, and welcome back, as you heard in the intro, this is a think energy short, so it'll just be me diving into a certain topic that helps round out our understanding of the energy world. Today, we're talking about something that we've all experienced or has affected us in one way or another. At some point power outages. So, a power outage is never fun. Nobody wants to go through that, but as we increasingly electrify our lives, they become more and more impactful when our mode of transportation and our method of heating and cooling our homes relies on electricity, we want that power back as soon as possible. Today, we're going to look at how utilities like Hydro Ottawa manage outages, from prevention to repairs so that we get power back on as soon as possible. Now here in Ottawa, we all know how unpredictable the weather can be. One minute it's a blizzard, the next it's sunny and 15 degrees outside, or vice versa. And over the past few years, we've seen it all from wild wind storms, everybody remembers the derecho, tornados, ice storms, floods, we've kind of run the gamut of weather, and that's going to continue as climate change changes our global weather patterns, we're going to see more and more extreme weather. So, this is a topic that's not going anywhere. It's also not just mother nature that's throwing us curveballs. Sometimes it's a squirrel or another animal that's, you know, causing mischief on our power lines, or a car that takes out a hydro pole, or just equipment reaching the end of its life. Whatever the cause, when the power goes out, all we want to know is one thing, when will it be back on? So today, we'll go behind the scenes a little bit and see how we tackle outages from start to finish. We'll look at the strategies that we use to prevent outages, the priorities that we follow during a storm, and the lessons learned to improve the grid for the future. So, let's dive in. The first topic is prevention. Now we can't predict all outages. For example, if it's animal interference or a car accident, we can't predict that. But, for weather related outages, you might be surprised to know that Hydro, Ottawa has a team monitoring the weather, 24/7. They're kind of like our weather detectives, and they look at forecasts and try to predict potential impacts to the grid related to weather. Even when the skies are clear, however, our crews are working hard to prepare ourselves for things like inclement weather. They're out there, inspecting lines, trimming trees and upgrading equipment. Think of it as giving our entire electrical system a regular health checkup. Speaking of health checkups, trees are a major culprit when it comes to outages, especially here in the Ottawa Valley, where we have so many trees and a lot of forested and wooded areas, which is great, it's why we love this area, but that can interfere with our power lines. So Hydro Ottawa has a team of dedicated arborists who work year-round to keep branches trimmed and clear of power lines. But sometimes there is a storm on the horizon, and that's when things kick into high gear. Our crews are put on standby. We alert our customers through email and text and social media in order to be as prepared as possible and let us respond quickly when an outage does happen. So, during the storm, when the storm hits and the power goes out, what happens then? While restoring power isn't as simple as just flipping a switch. Hydro Ottawa follows a carefully structured plan to ensure safety and that we get the lights back on as quickly as possible. Let's take the example of a major storm that has caused widespread outages across our service territory. Our first job is to investigate the extent of the damage and understand what's actually happened. Where is there damage on our system? Now when it comes to restoration, safety is our number one priority, so we want to address any hazards like downed power lines immediately, as soon as we find out about them, and that's both for the safety of the public and the safety of our crews. Now our crews may be out there even while the storm is still going on, so safety is absolutely paramount, and we ensure that they work safely. The next focus of ours would be critical infrastructure. So, this is things like our own substations and main power lines, the real backbone of our system that provides power to the rest of the city, and then we look at the essential services. So, these would be things like hospitals, water treatment plants, things that our emergency responders need. We then move on to widespread outages. So, our goal is to bring customers back on as soon as possible. And we look for those areas where we can get the largest number of customers back on the quickest. After that, we would move to smaller neighborhoods and smaller clusters, those pockets of outages where there are less customers impacted. And finally, we move on to individual homes and businesses that might be out. Now it's important to note here that if those homes and businesses have sustained damage to their own electrical equipment, so something that is customer owned, that may need to be addressed before we're able to restore power, and the customer needs to work with a licensed electrician to make those repairs before we can turn the power back on. But the good news is is we will work with a customer and help them understand what's required on their side in order for us to restore power safely. Again, I can't stress this enough, we want to make sure we do everything as safe as possible for the customers and for our crews. Throughout this entire process, communication is absolutely critical. So, we want to be communicating with our customers about what's happening on the grid, hopefully giving some insight into when they might expect the power to be back on. To do this, we use outage maps on our website and on our app, text alerts, and social media in order to communicate. Now, it's important to know here that we provide initial restoration times, but those may change once our crew gets on the site and assesses the damage, or as a project progresses and we understand what's required to get that power back on. So, sometimes restoration times can change, and they are dependent on a number of different factors. Can be weather conditions, the location of the outage, how severe the damage is, and what other outages are happening on the grid. During an outage, it's important that you as the customer also stay safe. So, in the winter, stay in your home as long as it's safe and warm and you have food and water. The city during widespread outages, or if an emergency is declared, may open emergency warming centers or cooling centers during the summer months. And you can get more information on that by listening to local broadcasts, by looking at city resources and also checking out Hydro Ottawa resources. One thing I can say is that during a storm and while there's a power outage, our crews will be at work, 24/7, until power is restored to every customer. Okay. So, the storm is over and the power is restored, so the work stops there, right? Wrong. After every storm, we look for lessons learned to improve our response and improve the grid's resiliency. So, we look at outage data, response times, the repair efforts, to really refine our strategies and determine where improvements can be made. One question that we often get, especially after storms, is, why not just put all the power lines underground to prevent storm related outages? While that may sound like a great idea, the reality is that underground systems are significantly more expensive, sometimes up to 11 times the cost of overhead lines. So, undergrounding may work in some cases, it's definitely not a one size fits all fix. The last section to talk about is how to be prepared power outages, unfortunately, will happen. We can't be 100% sure that we can prevent them. So how can you make sure you're prepared? Well, the Canadian Red Cross recommends having an emergency kit ready with enough supplies to be self-sufficient for at least 72 hours. Think about things like food, water, medications, flashlights, a battery powered radio, anything you might need to be self-sufficient for that 72-hour period. There are lots more tips that you can find on this on Hydro Ottawa's website. So have a look. That wraps up today's episode. We've covered a number of different things, from before storm to after storm and continuous improvement. Just remember that you can stay informed by visiting Hydro Ottawa's outage map on our website or on our mobile app. You can follow us on social media and make sure you sign up for outage alerts. Thanks for tuning in to a think energy short and join us next time for another guest interview. Thanks for tuning in to another episode of The thinkenergy podcast. Don't forget to subscribe wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback, comments or an idea for a show or a guest, you can always reach us at [email protected]

Canada's building sector accounts for 30-40% of the nation's energy use. Bryan Fannigan from the Building Decarbonization Alliance joins thinkenergy to share how the sector can align with Canada's emission reduction goals. From policies and grid impact studies to strategies helping steer towards a net-zero status by 2050. Listen in to learn about the practical challenges with decarbonizing existing infrastructures and innovative approaches to support the transition to more sustainable building practices.

Related links

• Bryan Flannigan on LinkedIn: https://www.linkedin.com/in/bryanflannigan/
• Building Decarbonization Alliance: https://buildingdecarbonization.ca/
• The Transition Accelerator: https://transitionaccelerator.ca/
• Concordia Plan/Net Zero: https://www.concordia.ca/sustainability/net-zero.html
• The Canada Green Building Strategy: https://natural-resources.canada.ca/transparency/reporting-and-accountability/plans-and-performance-reports/departmental-strategies/the-canada-green-buildings-strategy-transforming-canadas-buildings-sector-for-net-zer/26065
• ITER fusion energy project: https://www.iter.org/
• Trevor Freeman on LinkedIn: https://www.linkedin.com/in/trevor-freeman-p-eng-cem-leed-ap-8b612114/

Hydro Ottawa: https://hydroottawa.com/en

To subscribe using Apple Podcasts: https://podcasts.apple.com/us/podcast/thinkenergy/id1465129405

To subscribe using Spotify: https://open.spotify.com/show/7wFz7rdR8Gq3f2WOafjxpl

To subscribe on Libsyn: http://thinkenergy.libsyn.com/

Subscribe so you don't miss a video: https://www.youtube.com/user/hydroottawalimited

Follow along on Instagram: https://www.instagram.com/hydroottawa

Stay in the know on Facebook: https://www.facebook.com/HydroOttawa

Keep up with the posts on X: https://twitter.com/thinkenergypod

Transcript

Trevor Freeman 00:07

Hi. Welcome to think energy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman as I explore the traditional, unconventional and even up and coming facets of the energy industry. If you've got thoughts, feedback or ideas for topics that we should cover, we'd love to hear from you. Please reach out to us at [email protected].

Hi everyone. Welcome back. You really can't overstate the importance of buildings in our lives. We eat, sleep, work, learn and socialize in buildings, among many, many other things, a huge percentage of our lives takes place inside buildings. In fact, most of us probably have to make a conscious effort to actually spend time outside of buildings. I know that I try to make a point of spending time outside every day, and I have to be conscious about it, because it might not otherwise happen, and as a result of that, centrality in our lives, buildings are major users of energy. Some estimates say that around 30 to 40% of energy use in Canada is associated with buildings, and they're also a major source of greenhouse gas emissions. So around maybe 18% or so in Canada, that means that the buildings themselves and the way we build them, the way we heat them, the way we use them, are an important part of our efforts to decarbonize and to further the ongoing energy transition. Supporting this effort is the main goal of the building decarbonization Alliance. Spun out of the transition accelerator, the building decarbonization Alliance is a nonpartisan coalition that works to inspire and inform industry and government leadership, accelerate market transformation and really get the building sector on track to meet Canada's emission reduction goals. They focus on convening conversations, conducting analysis and identifying some of the barriers to building decarbonization, and then working with partners to overcome them. And I think that's a really important part. Joining me today as my guest is Brian Flannagan, who's the executive director of the building decarbonization Alliance. Brian brings more than three decades of leadership and consulting experience all focused around reducing emissions and improving the energy efficiency of the built environment. Prior to joining the organization, he's played leadership roles across a number of different leading energy and environmental consulting firms. He spent time working with the Federation of Canadian municipalities and helped launch the Green Municipal Fund. Brian Flannagan, welcome to the show.

Brian Flannagan 02:47

Thanks for having me. Trevor, this is great.

Trevor Freeman 02:50

So why don't we start kind of right with the basics? Can you give us an overview of the building decarbonization Alliance and the work that you are doing alongside your members?

Brian Flannagan 03:00

Yeah, thanks. Well, you know, as you said at the top of the hour, without kind of repeating the background or there, we're a nonpartisan, not for profit organization whose goal it is to really advance sort of market transformation, thinking about it from the perspective of, you know, creating a prosperous economy for Canada, having buildings that are a place where people want to invest, and the long-term goal is that we got to get them. Get to net zero. Global factors dictate that if we don't act on that, we're going to get left behind. And so, for those purposes, we want to bring the market along and align it toward this goal. And so, this alliance that we have is just that we have partner organizations who support this vision to have the building sector decarbonize between now and 2050 to meet those objectives that are set nationally and internationally, for that matter, and we work with those partners to sort of align the narratives around this and to put in place in the long term, the tools and policies that we need to support that. So, our main approach is really to convene those stakeholders around the issues that we see, to tackle some of the sticky narratives that are there. You know, any market transformation involves incumbents that have lots of good reason to maintain the status quo. So that's a feature of a system that we have to acknowledge, and it's something that we recognize we have to adjust those narratives to really advance, advance the common objective, right? And so, we work with that kind of vision, with our stakeholders, to really try to overcome, identify and overcome the barriers to getting to that goal. We kind of focus on a couple of key areas given, you know, the ability decarbonization space, the ecosystem is vast. Lots of market actors already out there, lots of other not for profits, lots of other organizations that are working really, really hard to advance this as well. And so, we tend to focus on kind of four main areas, making sure that there's policy support at various levels of government, and understanding which policies might be effective and which ones might be less so, and trying to advance the ones that. High leverage looking at the grid impacts of electrifying buildings, because it's undeniable that if you switch from fossil combustion of fossil fuels to electricity, you require a clean electricity system that has to have the capacity and be robust enough to support that. So, we want to be clear about that. We want to really address that in a cogent sort of way, and then really mobilizing and activating the sector to implement these changes and to find the solutions, because many of the solutions are at the intersection of different subsets of the of the sector, whether it's banking and finance or whether it's development community or the utilities, every market actor has a role to play to find solutions. Is very rarely one sub sector that can really act to, you know, to overcome a barrier. And so, we try to work at the intersection of these different groups. And by convening the players, we can roll up our sleeves and kind of get to that. And then, last but not least, you know, this is a very complex sort of question in terms of, how do we get there? What are the pathways? It kind of reminds me of nutrition, medicine, things like that, where, you know, at one instance, it's great to eat eggs, and another instance, terrible to eat eggs, and then it's good. To eat eggs. And then it's good to eat eggs again, because the evidence is shifting right, and we have to follow the evidence. We have to understand that the systems are complex and that various investments in the grid will alter the landscape. And so, we're working really hard to increase the analytical capacity of the sector, to model and to be able to understand how this will really play out when you have exponential sort of technological advancement coming to play. And you know, different investments and different dynamics that are bearing out as the sector decarbonizes, which is, it's really complex, and so we need better tools to be able to grapple with that. So those are the four sort of main areas, and it's a heavy lift. We arrive on the scene with great humility, recognizing that we stand on the shoulder of many, many other organizations who've come into the space trying to take a slightly different approach by bringing all the players together and trying to find some common understanding of how we how we get this done. You know, we have to do something different. We've been doing energy efficiency for four decades, give or take with the programming that we've had, and it's been very effective. I don't think there's any more old T 12 light bulbs anywhere that worked. That's great, but we need to do something different now to get fossil fuels out of the buildings for heating purposes, right? That's the goal.

Trevor Freeman 07:18

I'm glad you brought up the complexity side of things. I think when we look at buildings and decarbonizing buildings at first blush, you can think, Okay, well, change out systems. And you know, there are carbon intensive systems and low carbon systems, and obviously we need the latter, but getting those systems in our buildings, and getting buildings that work well with those systems, and getting tenants that interact with those systems, well, is that complex kind of quagmire? And so really glad you brought that up, and we'll probably talk more about that as we go. I do want to also highlight you mentioned kind of working with other organizations and partners, and specifically, I know you guys are affiliated with but somewhat unique from the transition accelerator. So, talk a little bit about the transition accelerator and how your work with them. Sort of overlaps, but is unique.

Brian Flannagan 08:09

Yeah, absolutely. Well, so we're, we are housed within the transition accelerator. We are basically a branded initiative of the transition accelerator. You know, we could stand alone as our own, not for profit and be separately incorporated, but from an efficiency and a sort of effectiveness perspective, the decision kind of was made to stay within the transition accelerator as an organization and so I think it's very effective, because that allows us to leverage, you know, the communications, knowledge mobilization and broader infrastructure for HR and things Like that of the transition accelerator. So, the transition accelerator, is a Canadian not for profit as well, and its focus is very similar to the BDS focus. However, it's elevated to the to an economy wide level. And so, the transition accelerator is interested in finding pathways to net zero for all sectors of the economy. So, I think transportation, the electricity system itself, decarbonizing the grid, looking at low carbon and Net Zero fuels and how those might impact other sectors, heavy industry and aviation and transportation sectors, as well as looking broadly at the overall state of what is the future economy going to look like. The whole point of this is to position Canada internationally as a global leader in this transition, recognizing that other nations are acting, and we have a competitive position to play. And that has to happen by looking across all the different sectors. And so, the objective is really to set that 2050 vision, identify the pathways for the different sectors of the economy. Buildings are one of which and then to kind of advance the whole thing along recognizing as well. I guess what's really important in all of that is that there's a huge interaction between the different sub sectors, right? So, transportation and buildings are a great example. You know, if everybody electrifies EVs, there's an immediate impact on how we electrify the heating systems in the buildings, and then it has a huge impact on the grid immediately as well. And so. The intent with the transition accelerator as an umbrella organization housing all of these activities, is that we capture those dynamics. And when I talked about the analytical capacity, you know, the models that we're building, the end use models for each of the sub sectors, the ideas that they eventually connect, and they that they are able to have a whole of economy sort of flavor to them. And so, it's been a very, very effective relationship. I think it seems to work well, and that vision and idea seems to be materializing as we get going. It's been two years so far, and I can say that it's been just a fascinating journey to be exposed to those other sector dynamics as well.

Trevor Freeman 10:36

Yeah, I know on this show, we talk a lot about the different parts of, as you said, all of society that need to be decarbonized. Obviously, buildings kind of comes to the forefront often and so specifically around buildings talk us through this maybe kind of a basic question, but, you know, help our listeners understand. Why are buildings so important? Why is the decarbonization of our built environments so important when it comes to decarbonizing all of society?

Brian Flannagan 11:05

Yeah, I mean, that's, that's the, that's the crux of the question, right? Well, there's a bunch of reasons. I mean, if you think about it, the building, this is where we live, right? These are our homes. These are, this is where we go to work. This is our place as a business. From an economic perspective, organizations arrive in jurisdictions for the purposes of meeting their overall objectives, and if you require energy intensive sort of production, or if you want to have a big workforce, you want to house your workforce in buildings that align with your objectives. And increasingly, those objectives feature a low carbon kind of future, right? And so just from that perspective, it's important for us to kind of get aligned with the global trend toward this, to make sure that we have the investments that we need and that we want to attract, and we want to have places where people can live that are aligned with those kinds of values. But from an emissions perspective, it's hard to kind of overstate how important this sector actually winds up being the building sector emits about 90 megatons, give or take, of direct scope one emissions. And if you factor in the grid emissions, that result from being buildings being connected. So, the grids across Canada, it's about 120 megatons. There's digits there that we could go into. But to put it into context, that's about the same as all of the vehicles on the road. So, when we think about how important it is to electrify the fleet of vehicles that we're all driving, the building sector is the same. It's the same level of importance. And if we think about all of the work that we've done to decarbonize our electricity system over the years, eliminating coal plants and those kinds of initiatives that we that we hear, are in the news recently, the building sector emits about twice as much as all of that. And so, the context is that buildings are pretty vast in terms of the overall emissions, and when we think about where those emissions come from, ultimately, it's combustion of fossil fuels for heating our buildings. We're in a cold climate in Canada, case, a lot of energy to heat buildings, and because of the abundance of the resource and a bunch of policy decisions that have been made decades ago, you know, we're in a situation where we've got an abundant and relatively inexpensive source of fossil fuel to heat our buildings. It's about 1500 petajoules, I guess, give or take. And ultimately, we need to move to eliminate that over time, or to largely eliminate it. I mean, I think there's always going to be a bit left in the system. There's, you know, it's, it's a very complex and daunting task, because the building sector itself is very diverse. The buildings last a really long time. It's not like, you know, technology change, where you have, if you want to change a phone, you can upgrade it from one year to the next. It's small. It fits in your pocket. It's easy to manage, but buildings are constructed to last hundreds, 100 years. 50 years is the typical lifespan. But, you know, we have lots of buildings that are very, very old, and it's a slow kind of system to turn over. It's a slow inventory to turn over. So, it's a really big challenge, a lot of a lot of emissions from the sector. And so, it rises to the level of really needing close attention and a different approach than what we've been taking in the past.

Trevor Freeman 14:04

Yeah, and one of the things I like about focusing on the building sector is it's one of those areas where efforts to decarbonize, efforts to improve the way we use energy in our buildings, obviously have some carbon impact, but that's not the only benefit that they have. There are sort of other ancillary benefits that that building owners and tenants can realize as a building goes through a decarbonization process. Talk to us a little bit about some of those other benefits and why a decarbonized building is a better building to be in.

Brian Flannagan 14:39

Yeah. Well, I mean, I guess there's, there's a couple of things. I'll take a step back from it and talk about retrofits and deep retrofits versus regular retrofits, you know, and what it winds up looking like in terms of benefit streams. We've, I think, in the past 40 years or so. I think since the since the 80s, we've been doing retrofits that are ostensibly about reducing operating cost. Ostensibly about making sure that we don't have to build out our energy systems bigger than they need to be. It's always about the avoided cost of energy. That's the way our incentive programs have been set up. And so, we've had lots of projects over the years that make buildings more efficient at consuming the energy that they do consume, which is a really important objective. And so, you get, as I mentioned, all the lighting projects that we've done, and we've done three waves of lighting projects, different fluorescent technologies, and then CFL technologies, and then now led technologies. And those are kind of project-by-project retrofits that happen because the building owner says, well, wow, if I do that, I'm going to reduce my utility costs, and I'm also probably going to save maintenance costs, like LED lighting technology really reduces the maintenance costs associated with taking care of the light bulbs. It's a cost reduction exercise, right? What's different about decarbonization is that we don't really have those cost signals, those pricing signals, are just not the same. It's not the same dynamic anymore. And so, you have to bring into play long term energy and social and governance paradigms. You have to bring in long term pricing signals, long term risk. You have to bring in long term market decision making in terms of the global factors that we were talking about earlier, right? And so, you know, it requires a bit of a vision, and it requires acting on the policy environment that's in place. And in order to really make those projects work, you have to take a much longer-term view. You have to look at the overall state of the capital renewal of the building. You have to look at all of the different systems at the of the building at once. And that's where we get into the term a deep retrofit, right? And so those kinds of projects can yield tremendous benefits when they're undertaken correctly and over time, in an individual building or inner portfolio of buildings, and so we get this bundling effect of things happening all at once to really make the space more comfortable at the end of the day, though, what, what the whole objective needs to be, is just eliminating the fossil fuel combustion. And it happens that when you do that at the same time as doing some other things like envelope work or fenestration, or, you know, better, control systems or demand response kind of technologies, then you get this sort of convergence of factors. And so, you know, we to get to the part about the benefits there. We definitely see long term operating cost savings when, when people switch to heat pump technologies, the heat pump is an incredibly efficient it is an energy efficiency measure itself. It's three times, give or take, more efficient than other approaches. And so, you get that long, long term operating cost savings in most in most of the country. The prices vary across the country, but you do get those obviously, if you're taking that approach and you're managing your portfolio with that your portfolio or your home with that longer term vision, you're getting capital renewal, and you're having maintenance and reliability improvements, and we think that it really improves on the value of the asset over time. It's an area that requires further study, actually, because we don't really know how much more value is baked in. There just haven't been that much track record in Canada of having these kinds of retrofits take place, but the so-called green premium, we think, is there as a real benefit to taking this kind of an approach. And notwithstanding that you know, you're renewing all your mechanical systems, you're taking measures to update the envelope and things, you're going to have a more comfortable, better controlled environment. If you're if you're a commercial building owner that's tenanted, your tenants are going to feel more comfortable. The control of the facility can have less complaints and all this kind of thing. If you're a homeowner, you're going to be in a modern, comfortable home that has a heating system. I mean, fossil combustion systems tend to come on and blow really hot, whereas heat pumps tend to stay kind of fully loaded and steady and have this comfortable people report that it's just a much more comfortable kind of system. And I think, you know, over time, people are going to start to see that this is the way a house should be. We're kind of not there yet. The sex appeal of all of this, in terms of the mindset of especially homeowners, I just don't think is there yet. But we're trying really hard to get to a spot where people look at those, you know, retrofitted systems and those modern systems as being sort of the way that it's supposed to be, and this is how comfortable a home is supposed to feel, right? So those benefits are all there, but I think, as I mentioned, what's less clear is, you know, for a commercial building owner, what exactly is the real ROI to fully embrace this approach? I think those are still areas of further study, and the straight-line connection between those things. I wish it was more, a little bit more clear, but we're working on it. That's a part of a study that we're trying to do to really elucidate those types of benefits as well.

Trevor Freeman 19:31

Yeah. Well, I think that's again, to go back to your first answer of the building the analytical capability of the sector to really understand these benefits that I think we intuitively feel are there, but we need the data to back that up, and we need to be able to quantify it, and I think that's really important to tell those stories to be able to help building owners, help homeowners, help the folks that are making decisions, build the case, to really be able to. Say, Yeah, this is the smart move. It's smart to move in this direction. So, it's great to see that you guys are working on that absolutely. So, you know, we've talked through in the last little bit here, some of the reasons why it is so important to decarbonize our building sector. We've talked through some of the benefits of decarbonizing that building sector. But to your earlier point, we're not there yet. We haven't seen massive steps in this direction. There are clearly barriers to this. There are sort of reasons why building owners might hold back or wait or sort of say, hey, not this time around. I'll do it next time. What are some of those barriers that you've come across in the building sector that kind of get in the way of folks making the decision to decarbonize?

Brian Flannagan 20:43

Yeah, well, that's interesting. You know, there's the framing of the question itself. Is, there's a lot of benefits. It really makes a lot of sense. But why isn't it really happening, right? And the reason for our existence, if this was easy or obvious or self-evident, we wouldn't need organizations like ourselves and you and I wouldn't have to, you know, ruminate and put this information out into the world, it is difficult, and what's promising and what's interesting, before I get into barriers, is that there's a lot of instances where this actually really does make sense, you know, and we don't, I don't know that we necessarily publicize or talk about it enough, but you know, if you're on fuel oil, if you're if you're on the East Coast, where there's a lot of fuel oil still in the system, and your home is heated with fuel oil, it absolutely makes sense to switch out to a heat pump. Now, you know there's a first cost consideration that needs to be born, but thankfully, there are programs that really support overcoming those first cost barriers, but your operating cost savings will be impactful from an affordability perspective. It makes total sense to do it today. And so, anybody that's currently heating with fuel oil should really look at that business case for them personally and their own personal economics. But in most places in the country, if you're on fuel oil, it makes sense to switch right now. You know another case that makes a lot of sense is if you're on electric resistance heating. Many of us are in Quebec. I'm located in Quebec, you reduce your electricity consumption by about two thirds, you're gonna save on your electricity bill. And you know, to boot, you're probably gonna wind up with cooling that you don't already have on. So, there's a real added benefit of having summer cooling, which increasingly a lot of us need, right? And so, there's a lot of times where it's kind of really does make sense if a homeowner has an existing gas furnace that's aging, and they don't have air conditioning now, and they're finding that the summers are a little bit warm, and they need to replace their furnace. I mean, that's a lot of ifs if this, but I think a lot of people are actually in that situation. If you're in southern Ontario and you need to replace your aging gas furnace, switching to a heat pump for the air conditioning part of it in a hybrid system. It totally makes sense to do you're going to buy the air conditioning unit anyway. You're going to have couple of tons of cooling in your in your building, in your home. You may as well make that a heat pump and run it in the spring and in the fall to offset some of your gas bill. Right? And so, there are instances where it really does actually make sense, but you'll notice that my statements are sort of couched in a lot of if this, if that feels like which comes back to the complexity. That's a hard message to sell to homeowners. Contractors have to be on it. Contractors have to be making these recommendations. And the system is not quite there yet where everybody has this aligned narrative about where it makes sense to do it. So those are the things that I think are making up, making it hopeful. You know, we see, also see university campuses for altruistic sort of long-term vision reasons. We want to be a test bed. We want to be a leader. We want to be example. We want to have our students understand what this new global dynamic is going to be. So, we see, you know, universities like Concordia with a plan for Net Zero to be a net zero campus by 2040 you know, does that, is there an economic reason for that? Like, I think it'd be hard to make a financial case that those investments make sense on their own merit, but it's backed by this real vision to have leadership. And so, the budgets and the financial considerations, those constraints are loosened to allow for that vision to take place. And we see that with municipal governments too, you know, they have a long-term view about their assets, and about community energy planning and those kinds of things. And so, there's lots of reasons why, where it does make sense and where movement is happening, you know, but outside of those kinds of obvious cases, I would say that the primary barrier is ultimately still a financial one. If you look at the different considerations to go into replacing your heating, replacing fossil fuel combustion with heat pump technology, or electric all electric, non-emitting technologies. It's expensive. You know, the first cost is high. And if you, many of us now in the space have gone through the exercise of getting contractor quotes and understanding what the cost of doing it is, the upfront cost can be pretty high relative to just replacing with the status quo. And so that's a real barrier for a lot of Canadians, particularly in the current environment that we're in. You know, affordability, inflation, the pocketbook issues have been at the fore, and so overcoming that initial sort of wait now what? How much is it going to cost? It's a real. Concern. And that's one of the approaches at the BDA is really to try, like, we really can't sugar coat that. We have to actually just get to work out what it's going to take to bring that first cost down. So, things like getting to scale and, you know, having the technologies kind of advance, and having products come in that are less expensive in the marketplace to the scale is just really important.

Trevor Freeman 25:19

If I could jump in that that getting those costs down, is that just a matter of time, or is there something that you in your work, or we in sort of more broadly in society, can do to sort of push that faster, to get those costs down quicker?

Brian Flannagan 25:34

Well, I think accelerating the transformation is the idea. I mean, that's the global statement. So, there's a certain rate at which this might scale, and it's kind of going to be painfully slow. And getting the cost down will be painfully slow. The idea of accelerating it, by putting in place policies, and by aligning all of our kind of narratives, and having people moving toward this objective in a more everybody rowing in at the same time, I think, is the idea accelerating that and bringing it in faster will help us to get to that point. It's an extremely simplified thing to say, but ultimately, that's what we have to do, right? And there's certain things that just are kind of confounding. You know, we sell a lot of air conditioning units. I think it's about 400k by our last estimate. I'm not sure about that, that exact spec, but I think it's about 400,000 air conditioning units in Canada every year. The cost difference to make those heat pumps, from a technology perspective, is the reversing valve in that piece of equipment. It's a couple 100 bucks. We've talked to lots of our manufacturer partners about sort of what this would look like if we weren't buying air conditioners anymore, and instead, we're just putting in heat pumps. So, the incremental cost there's actually quite low. We could probably have a setup where everybody's buying heat pumps instead of air conditioning units for their summer cooling requirements. And then what happens when you do that? Suddenly, you've got 400,000 more heat pumps coming into the market, and you've got 400,000 more installations happening that are heat pumps instead of air conditioning so people are getting used to it, contractors are getting used to it. And those kinds of things can kind of ratchet it up and make a step change, you know. So, I think advancing and getting to scale involves kind of deploying those types of things where there's high leverage and where it's an easier case, and it's kind of some of what the BDA is trying to do is find those things that have this incremental leverage point that really gives us a step change to advance the market transformation in a way that was a little bit faster than it otherwise would be, right? So that's, that's the first cost barrier is, is one, and it's very real. I would hasten to add that in some instances, the buildings also require changes. You know, you have buildings that have a certain electrical configuration for the capacity that is required with the fossil fuel heating system if you're going to add electric capacity, that could necessitate panel upgrades and other service upgrades to the facility. So those costs are also really real, and there's lots of policies, and there's technical standards associated with that that need a close look so that practitioners in the space have clear guidance on when those things are required and not required. And I wouldn't, I wouldn't say the word there yet, in terms of that consistency of approach and consensus on how to do that. But those factors are very real. Those are some of the barriers on the first cost notwithstanding that on the operating cost side, it's, it's also complex, because across the country we have vastly different electricity and natural gas rates owing to the different configurations of the energy systems in each of the provinces, you know. So, we've got provinces like in Alberta, where natural gas costs are extremely low and electricity costs are relatively higher than, you know, next door in British Columbia, the rates are just closer in British closer together in British Columbia. And so, when you're contemplating a switch from one to the other, the gap just isn't as far to jump across. And so those dynamics play out across the country in very real ways. So as a homeowner or as a business owner, the economic drivers are just very different. And so, it's challenging because you can't just make a generalized statement to say, yes, it's less expensive to do this without also adding, if you happen to be in Quebec, it's not true in Alberta, right? So often what we get is confounding messages where people say, well, hang on a second. You said it was affordable, but I'm in Calgary, so it's affordable. Like, yeah, you're right. It's not yet affordable there, and we have to work to address, you know, those are all nuances in the statements that we make that that causes to have to really dig in and differentiate, sort of the different scenarios under which it's beneficial. But that barrier is, is a very real one, and maybe this is the last one that I would add, is that for building owner or portfolio buildings, or for just a homeowner, we just don't have the policy drivers that really align around this idea. You know, the urgency in the sense that this, that there's a movement toward getting this done by having policies at the municipal, provincial and federal level, kind of aligned toward this objective. So, if you look at the different the patchwork of sort of political leanings across the country, there just doesn't seem to be a strong alignment. And so, if you're if you're trying to manage the long-term sort of investments that you're making in a building portfolio, you'd kind of be forgiven for saying, well, wait a minute, this program was in place, or this policy was in place, and now it's not in place. And you know, the carbon tax is a great example of that recently, where you were just seeing the erosion of that idea as a long-term driver to investments. And now, with the current political environment that we're in, it's really just an open question, what is going to happen to the tax at all? And so, from a business perspective, I think that represents a real sort of that uncertainty and policy direction is also a big barrier that we need to we need to get to grip with.

Trevor Freeman 30:44

That's a great way to transition into this next question that I've got for you. So last year, it's 2025, when we're recording this. So, I can say last year now, you guys released a jurisdictional scan on I kind of think, like policy and drivers around building heating decarbonization. So, I want to dive into that a little bit. Let's start by having you talk through some of the key findings of that report. What did you find when you looked across sort of jurisdictions about what's happening with building heating decarbonization?

Brian Flannagan 31:15

Yeah. Well, what's interesting to stand back from for a second is that. So, this report is a jurisdictional scan, and the intent is really to provide a roundup of the various the ways that the various actors at different levels in the policy landscape implement conditions that ultimately reduce emissions in our buildings. Buildings, it's important to note, are largely a provincial jurisdiction. You know, the building codes, the development processes, a lot of the regulatory framework that they operate within the utility framework. So, all the utilities that the buildings are connected to are generally a provincial policy question. And so, when you when you look at what are the policies that are in place, you would expect that provincial policy would would have to lead the way, because buildings are primarily a provincial jurisdiction. Municipal governments have a big role to play when you think of all of the zoning and the bylaws that apply and the development requirements that apply at a municipal level. So, I mean, municipalities actually have quite a lot of power in with respect to buildings, but they are a subset of provincial governments and have to operate sort of at the best of the provincial requirements. And then when you think about the federal level, federal level really doesn't have a whole lot of jurisdictions on buildings. They can set equipment standards, and they can set environmental regulations through the environmental act, but so when you have to kind of stand back from it, and our goal with the report was to say, well, how does this all play it? What does it actually wind up looking like in terms of decarbonization policies? And what we can kind of look at is, how do you actually implement a policy that would reduce emissions? Well, you can focus on the energy source itself, and say, you're not allowed to have gas in your building. So, this is like a gas band. This is a pretty heavy stick that you would wield, which, which is one way to do it. You can focus on the equipment and say, hey, you're not allowed to have an oil system anymore. So, you're not focusing on the energy source, but you're focusing on the piece of technology itself. You can focus on the energy performance and say, you're building, given the size of your building, or the shape of your building, or what the building is for your building shouldn't use this much energy, or should use less than this much energy. So, you can put a line in the sand there, or you can focus on the emissions and say, similarly, for that size and shape of building, or type of building, your building shouldn't emit more than a certain amount. And what, what our findings are is that it's sort of all of the above out there, you know. And at the municipal level, we see quite a lot of action of different municipalities trying on different sort of approaches for size, and there's no clear trend as to which of those particular mechanisms seems to have favor. It's sort of a bit of a bit of a mix in terms of all of that. But at the highest level, you know, we have the federal government sort of setting a context, or setting the stage with national model energy codes, there's a commitment for them to release an emission-based code. And that's a welcome sort of direction. It's been in the works for quite a while. We have policy in terms of investments for, you know, low-income retrofits, and we have loan programs and those kinds of things that continue to be on the scene with the green building strategy, which is also welcome and really necessary. Actually, when you think about the kind of context that we're in around affordability, we also see some commitment to look at the idea of the equipment and regulating. There's a commitment to put in place a framework to look at regulating some of the equipment. So, there's a little bit of distance in terms of the direct action there, but at least there's some acknowledgement that the federal order can begin influencing the scene I mentioned at the provincial level, that you know, there's a certain that's where the jurisdiction really is for buildings, and this is where we kind of see quite an absence of real progressive policy. What we see in British Columbia, quite a lot of activity, and Quebec, quite a lot of activity, and Ontario, a couple of measures, most notably, I guess, the requirement to report on building energy. So, this is the idea of looking at the energy performance of the buildings. But outside of those three jurisdictions, we don't really see a lot of progressive policy to really act on the idea of carbon emissions directly from buildings. And then at the municipal level, we see in Ontario, the City of Toronto is trying to, is proposing to look at building performance standards, which would be a sort of an energy and emission sort of threshold mechanism. But then in British Columbia and Quebec, we see just a lot more activity, many more municipalities within those jurisdictions trying on different mechanisms for size. We have, like in Quebec, we have Laval in Montreal and Prevost and regional governments as well. So, the Metropolitan Community of Montreal putting in place various tools to try to curb emissions. And in in British Columbia, there's just way more activity. There's a different sort of setup there in terms of what municipalities are and aren't allowed to do. And so, we see like there's Saanich in Vancouver and North Vancouver and Victoria Whistler, all of these municipalities are putting in place various tools to try to direct what the future should hold in terms of building emissions, whether for new construction or for existing buildings. And notably, we also see some interesting, just interesting kind of mechanisms, like in in British Columbia, flight adjustment on taxation, tax relief for heat pump technologies, which isn't it's not a regulatory sort of approach in the true sense of that. But it's an economic lever that I think can be, can be helpful and sort of send the right cumulative signals to allow market actors to kind of act.

Trevor Freeman 36:50

I think, I mean great answer. Thanks for that, Brian. It really does highlight kind of a theme, I guess, if you will, that comes up on the show often of there is no one solution, and you can take that statement and apply it to any part of the decarbonization ecosphere that you want. There's, there's no blueprint for how we're going to do this. It's going to be sort of a mix of a bunch of different policies and strategies and, you know, carrots and sticks and levers and whatever analogy you want to use that we're going to need. And it's interesting to see, as you highlighted different jurisdictions, different parts of the country, are at different spots, and some, you know, further down that journey than others, for different reasons. And again, coming back to your comment about building that analytical capability to really understand what is working and why, and is it, is it specific to this region or this, you know, whatever climate region or economic region, that that policy or that structure works, or is that something that can be applied across a broader swath of the economy or our society? So really interesting. I'm going to cherry pick something here and dive in and say, you know, we talked a little bit about heat pumps. So, heat pumps, obviously, are a super important technology for decarbonizing some aspects of building heating, specifically on the smaller scale. So residential homes are a great example. We really need to see more heat pumps that's going to be one of the main ways that we decarbonize home heating, looking at, sort of what's happening across the country at the various different levels of jurisdiction. Are there specific frameworks or strategies that you think are really essential to support heat pump adoption as an example that we can sort of look at?

Brian Flannagan 38:39

I mean, I think, I think your, your lead into the question is actually the answer that I would have given you know, there is, there just isn't one sort of tool or approach that will universally drive this thing, certainly not when you talk at a national level. A lot of the discourse that we have internally at the BDA is that this is a regional issue. You know, it really is a, I think, at the end of the day, municipal by municipal approach to things, given the local conditions. And when we, you know, we talked about some of the barriers earlier around pricing. So notionally, anybody that's in a jurisdiction with provincial level utility like British Columbia or Quebec has the same pricing, right? But in Ontario, that's not the case. Like local distribution companies have different pricing structures. Just depends on if you're in Ottawa or Kingston, Cornwall or Toronto, it's just the pricing is just different. Now we have gas utilities that are more uniform across Ontario, so that pricing is similar. So, it really winds up being a regional question. And if I said, you know, Trevor, I want to I want to call a contractor and I live in Hamilton, that's a different question than saying, I want to call a contractor and I live in Saskatoon. Is the HVAC industry the same in both of those places? It's just not like the. Capacity of the industry to influence your decision and the knowledge that they have. And by the way, Saskatoon is a heck of a lot colder, right? So, the question of, you know, will this, will this heat pump actually work for me in my climate up in Saskatoon, is a different question than if you're sitting in Windsor, where your cooling load is probably more of a concern these days, right? And so, we have to, I think we have to get away from the idea that nationally, there's going to be one sort of thing that will really wind up driving the change the electricity system and the gas system. The energy systems in each of the jurisdictions are so different, and the local constraints on labor force, the local affordability considerations with the economics of a given industry, if you're in Alberta or if you're in Newfoundland, the socioeconomics are just very different. The affordability questions are more or less pressing across the country, and so I think there isn't one sort of tool or policy that could rule them all. We need a sort of a wide range of different options to look at that recognize those local and regional kind of considerations. And interestingly enough, going back to the transition accelerator and the kind of approach that we take, we actually have a different vertical. We call them verticals. So, the building vertical is one, but we have a different vertical called regional pathways, where we have a whole other team that's just out meeting with jurisdictions at a regional level to try to understand what exactly are those local constraints that impact on the different economic sectors, buildings being one of them, and we tap into that kind of stream all the time. I mean, that said, I don't think you'll let me get away without providing some kind of answer. I do. I do. I do. Really think that the ways that the utility systems are regulated are a big deal. You know, right now, I think it's fairly safe to say that we live in a utility regulatory environment that was geared to accelerate the expansion of the gas system several decades ago, and the pricing and how connections are made, and how that's reflected on the rate base versus the developer. There's a lot of things that are kind of baked in that where it's not really a level playing field. I think equalizing some of those policies across the country would be extremely helpful. I mentioned earlier that our past sort of energy efficiency retrofit environment has been advanced mostly on the idea that we want to avoid the cost of adding new generation. Well, clearly, if we're talking about electrifying our buildings, adding new generation is a given. We have to do that. And so obviously that paradigm doesn't work when we're talking about fuel switching rather than energy efficiency. And so, we need to have that regulatory space around utilities take a different approach to just looking at the avoided costs. And we see this. This is happening, but it's just it's painfully slow, because those sectors are cautious by definition, and they need to be. But we have to have a new set of programs and a new sort of set of economic tests and tool boxes that allow incentives to start flowing for these kinds of retrofit projects based on a new sort of set of business-as-usual scenarios. You know, if we decarbonize only with air source heat pumps, it's going to lead to a certain set of costs and certain set of investments. If we decarbonize with more ground source heat pumps, it's a different set. And there's a difference there in terms of the price and impact on the energy system and rate payers. And so, capturing that dynamic, I think, is really will be, will play an important long-term function outside of that, you know, any mechanism. And this is why that sort of patchwork of municipal tools that are being deployed is interesting. Any mechanism that just sends a signal to the market that emitting carbon from your buildings is going to have a pricing consequence or a consequence in terms of what you can and can't develop. Any of those market signals are helpful, even signals that those things may eventually come into play, like what the federal government has done, that sort of we commit to putting in place a framework to look at the eventual change of the structure. Even those kinds of statements can help influence the narrative around decision making for what future risk looks like to building owners and so, you know, building performance standards, I think, are really interesting. I've seen the difference that it makes in the discourses that we have with players that are in Vancouver, and it the idea that eventually we're going to have to pay more to emit it's a powerful motivator. But I have to hasten to add, you have to make sure that the market can respond. You don't want to have those kinds of policies in place without also making sure that you've got the HVAC industry ready, you've got the labor force to get the job done, because then you have policies that fail, right? So, any of those kinds of policies, I think, are interesting to see implemented and tested and understand the degree to which they actually drive the market.

Trevor Freeman 44:58

Yeah, I think you've done a great job of, of really helping paint that picture of even a simple challenge, you know, simple in quotation marks, obviously, of getting more heat pumps into more buildings requires different roles at different levels. And so there's that sort of federal role to, you know, again, understand what, what are the levers that a federal government might have knowing that some of the specifics around buildings are not in their jurisdiction, but helping to support predictability when it comes to pricing signals, for example, like a price on carbon, or supporting sort of national workforce training to get more contractors out there to support installations, down to sort of the provincial energy policy level, down to the municipal level of how do municipalities support their citizens, their residents, and making these changes in their buildings and the levers that they have? And I think there's a role for all those levels to play. It's just understanding where are those sorts of sweet spots to put pressure on and to sort of push towards that, that action that ultimately is up to building owners and tenants to take. Great thanks for that. Brian. So, a couple last questions here. As we, as we near the end of our conversation, I do want to take a minute and just sort of put ourselves in the headspace of a building owner. So, someone that has a has a building, let's say, a commercial office building, and is looking to take steps towards phasing out fossil fuel use in their buildings. They want to decarbonize. What are some of the strategies that you've observed in your work that that really do work from that building owner perspective, what are some of those steps that they can take to move towards decarbonizing their building?

Brian Flannagan 46:47

Yeah, it's a good question. I think it depends on who the building owner is. You know, as an if we're talking about a residential kind of homeowner, the idea, I think, is just to start getting start making long term plans and budgeting what this is going to look like, and taking it into a consideration when you're, you know, planning the various renovations that you're going to have at your home. Most people renovate for specific reasons that are outside of just, hey, I want to do the right thing by the environment right lots of my friends, of lots of people in our circles do that. They're the thin edge of the wedge of sort of early adopters that do it for truly altruistic reasons, right? But most homeowners don't operate in that way. And so, the idea is to, you know, really begin looking at, well, how old is my furnace, and when do I think, I might need to replace it? And to start putting in place the decision making early so that you're not caught off guard with a surprise replacement. I think the biggest tragedy right now is that a lot of people are replacing their furnaces because they're in an emergency situation. You know, the heating season is upon us, and you know, a contractor comes and just says, hey, listen, there's no time to start entertaining alternatives. We got to get your system in place. And they replaced within with a like for light gas furnace, and that thing is going to be in place for 1520, years, right? So, we're now at 2045, and so, you know, the urgency of the idea of avoiding those emergency replacements as much as possible is really, really critical. So, for a homeowner, I would say the steps to take are, you know, look at it from a long-term perspective. Where is the industry going in 10 years, if you want to sell your home, is it going to be better or you're going to be better off or worse off if you've got the most modern and best technology in place for your building, can you demonstrate that you've made investments that are in line with this idea? I think those kinds of things are important considerations to make and to begin budgeting forward appropriately. You know, because it is a little bit more expensive on the first cost, programs are difficult to navigate, so it takes time and energy to kind of understand what those program environments are and what you're eligible for grants. But it's sort of that doing that work up front before you get caught off guard is important. And I would say if anybody wants to add an air conditioner, if anybody's contemplating getting cooling to deal with our summer heat situation that's present in many parts of the country. It's really, really beneficial to strongly consider adding a heat pump in that moment, I think, for commercial building owners, you know, it's a similar thing, but it's but it's elevated to a higher sort of long term capital planning exercise, the idea of what we call decarbonization plans, building and portfolio decarbonization plans, this is a field that's really growing among consultants and architect and engineering firms to offer a service to help building owners understand how all these pieces fit together, and to be able to decarbonize their building stock in a logical, sort of sensible way, based on the current state of the building in its overall capital replacement needs, and especially looking for synergies between the bigger projects, like envelope upgrades and the bigger projects having to do with the end of equipment life, making sure that that end of. Life moment is again captured in a similar way to what we just talked about with homeowners, so that you're not in a situation where your choices are limited. And I think, you know, ultimately, a lot of it for bigger portfolio owners, has to, has to come back to some of the ESG kind of impetus. And really trying to understand, in addition to that, what that dream premium would look like for them, you know, and kind of how it aligns with their corporate values and the financial criteria that get baked into the project. And we know that there are a lot of projects, for example, when geothermal systems are put into place, where you're freeing up mechanical space that can then deliver revenue additional revenue streams. And so, the direct sort of cost comparison of before and after isn't necessarily obvious, and that's why having decarbonization plans that try to bring in those value streams as aggressively as possible can really be helpful.

Trevor Freeman 50:57

Yeah, I think I mean, the main takeaway for me from that is, is plan. Think about this ahead of time, do your analysis. And it's something that I know in the work that that I'm involved in here at Hydro Ottawa. It's something we talk to our commercial customers, especially a lot about is spend the time to create the plan so you're not caught off guard. You know what you're going to do. You know what your strategy is, and you can implement it doesn't have to be done overnight, and the context will change, right? You know, new programs will come into play. Existing programs will leave. There will be different times where it makes sense to do different projects. But if you have that plan, if you know what the strategy is, then you're, you're well set up. So maybe one last quick question. You know, the idea of programs coming and going. It's not always a straight path when it comes to policy, and as much as there's been some exciting things happening in the last little while when it comes to policy and the regulatory framework around decarbonization, so we've had a price on carbon in Canada for a while. We know that things ebb and flow, and so we are likely looking at least a federal election this year here in Canada, likely a provincial election here in Ontario, where we're speaking from. And these things can change policy and policy can ebb and flow. How does the decarbonization effort handle changes in policy, changes in prioritization from the different levels of government that we talked about, you know what? What is the strategy when it comes to those changes as we move forward?

Brian Flannagan 52:36

Yeah, it's a great question. I mean, especially, especially in the times that we're in for the listeners. You know, this is the day after Prime Minister Trudeau announced his resignation, and there's a lot that's happening. I think the strategy overall is, it's quite simple, but it's to recognize that this has always been the case. You know, municipal and provincial and federal governments across the country are changing on different timetables all the time, the alignment of sort of ideological approaches to dealing with the climate crisis are in flux, and have been in flux the whole time, you know, and so I think it's incumbent on us, and this is, this is part of the approach that will be saved. The BDA, the building decarbonization Alliance, is trying to take a different approach. I don't know that we're there in terms of truly embodying that Spirit just yet. It's a work in progress. We're still very new, but the idea of really embracing that we have to be able to work with an incumbent of any political stripe or leaning, including gas utilities, who are powerful incumbents here, who have every reason to want to continue what they're doing, we have to find logic and rationale to drive us, commonly toward a net zero objective for all of the international, global competitiveness positioning issues that we talked about earlier. Right? It's not easy to do that, because climate ideology has traditionally sort of been a left leaning ideology, and I think it's difficult to overcome that and work with different ideologies. But you know, when you have a populist sort of idea saying, hey, people can't afford a house, or people can't afford their energy bills, those are statements that resonate with people, and we have to. We can't come along and say, oh no, this is totally affordable, this is easy, this is a slam dunk. You just electrify your building, like spend $20,000 on a heat pump. You should be able to do that like that is not in touch with the reality of what a lot of people feel. So, I think it's the strategy for us is to recognize that we have to be able to truly address those concerns with evidence and with science and with technologies that actually deliver the goods, we think that there's a strong case for many of those things, like cold climate heat pumps work that question. I think that question is largely resolved, and if you don't have exactly the technology that you need put in a hybrid system for now. That's fine in 15 years when you replace it, the cold climate heat pumps then, or even going to be better, you know? So, there are things that we can put to bed, but we have to be able to if that isn't the case, if it's not actually affordable in a given jurisdiction, we can't walk in and say, hey, well, why aren't you guys doing this? This is affordable. It's not and I think those political ideologies often tap into those different elements where we don't have the narrative fully baked as powerfully as we should to counter, you know, whether it's questions of energy system reliability or energy choice is another sort of theme that comes out. You can't tell me which heating system I'm going to use. Well, I don't need to convince you if you already believed that it's just fundamentally better, you know. And we see this with electric vehicles, actually, the transition there has been interesting where the strategy is to say, hey, this electric car is like, way better than an internal combustion car, you know. Credit to Elon Musk for bringing out a vehicle that was just faster than anything else. Any piston head would just look at that and say, oh, my God, the performance is crazy. And sort of having, having those ready answers to really diffuse with conviction and based on actual evidence, to diffuse those messages, I think, is really, really important. And we have a lot of areas of study that are still left. We talked about the green premium earlier, for investments in commercial buildings. We don't really know, you know. And to say, well, if you invest your property value is going to go up, or the asset value is going to increase. It's just, we just don't know that. And so, following the evidence and being able to acknowledge where we don't, where we don't have all of the answers, I think, is important, and then finding the answers and stating them with conviction when it when it does make sense, you know. And I think in the cases that I mentioned earlier, if you're, if you're heating with fuel oil, the affordability question is solved. You should get all fuel oil because that will help you to pay your energy bills, right? And so those kinds of messages, I think, land with any political stripe, if it's back based, and if it actually follows from a logical thread. You know, it's hard to do, but I think it's necessary work if we're really going to get to where we need to go.

Trevor Freeman 57:06

Yeah, and at the end of the day, I mean, the work doesn't stop just because the headwinds get a bit stronger. And you know, the like you said, we got to find those messages that resonate and that makes sense, and then are rooted in fact and rooted in things that really resonate with people. So, I think that's a great place to wrap up the conversation. Brian, I really appreciate your time today. Thanks for joining us. We do always end our chats here with a series of questions to our guests. So, I'm going to put you on the spot here with a few questions, starting with, what is a book that you've read that you think everybody should read.

Brian Flannagan 57:40

Oh, my God, there's so many. I would go with. Outlive. The byline is the science of longevity, and it's by an author called Peter Ottawa, and it's, I think it's just pretty important reading about, you know, the major causes of illness in North America, and strategies that you might deploy to try to live healthier, longer. Pretty cool reading, lots of lots of stuff in there for everybody to take away, I think.

Trevor Freeman 58:09

Yeah, and good time of year for it, the New Year. Everybody's on their health kick right now. So, grab that book and get some ideas. 100% so same question, but for a movie or a show, what's a movie or show that you have watched that you think everybody should take a look at.

Brian Flannagan 58:23

My favorite go to is the Shawshank Redemption. I just can't think of a movie that's represents better storytelling. The cast is incredible. The story is incredible. It moves me every time I watch it. That's just crazy good. So, that's usually at the top of my list. I mean, there's so many. I'm a bit of a movie. But of a movie buff. There's lots and lots. But that one usually, usually rises to the top.

Trevor Freeman 58:47

My kids are getting older, and I'm starting to think about, yeah, what are all those movies that are so good that I just need them to be a little bit older before I can watch with them? So that's definitely on the list.

Brian Flannagan 58:58

100% I've and I've had this. I've had the same ruminations with my kids, when, when is it appropriate? Because there's some very mature themes. But it's a great movie, for sure.

Trevor Freeman 59:08

If someone offered you a free round-trip flight, let's hope for a sort of electrified plane or some sort of carbon offset anywhere in the world, where would you go?

Brian Flannagan 59:17

It's going to be biofuels, by the way, for the airline industry. That's why we need to save all of the biofuels for those harder to decarbonize sectors. When people talk about decarbonizing buildings with biofuels and things like that, it's like, no, no, we have to save them. So that's why electricity, it's a whole that's a whole other aside to the conversation that we had. But yes, I'd, I'd go to New Zealand or in Australia. I think I haven't been, long flight. The great value, and thanks for the free tickets, Trevor, I'll look for them in the mail, but yeah, I haven't been and the idea there's just so many adventures to be had out there, hiking or mountain biking or just exploring the Outback and camping would just be fantastic. It's a lifelong dream. I'll get there eventually.

Trevor Freeman 59:58

Who's someone that you admire? Well, it's just so many different role models. I mean, in in the news recently, I would say, a bit of a news junkie, and so following the war in Ukraine over the last several years has been, you know, heartbreaking, and in many ways, kind of, you know, Volodymyr Zelensky as their leader has been inspirational. And kind of, it's reemerging in the news given the election of Donald Trump again, and you know, the resolve and sort of his beginnings, and how he came into that role, and what he's having to contend with, and the kind of leadership that he's exhibiting. And I'm certain that there's lots of flaws and lots of things that I may not be aware of in the man, but looking at it from an outside observer, based on the news that I'm able to access, oh my goodness. What a leader. Very, very inspirational. Yeah, it is always cool to see examples of just phenomenal leadership in the face of adversity, and there are a few of those throughout history. But yeah, that's definitely a good example of it. Last question, what is something about the energy sector or its future coming up, you know, at the beginning of 2025 here something that you're really excited about.

Brian Flannagan 1:01:04

Yeah, I mean, it's, it's sort of way out there. And I know from an energy future perspective, in terms of generating abundant energy, we've got wind and we've got solar that are, you know, just declining in price and increasing in terms of their capacity to feed electricity systems like that, obviously, is really promising, but something that's had my attention for a really long time is the prospect of eventual nuclear fusion. I know that that's bonkers. It's super expensive. And there's lots of reasons to say, well, come on, Brian, that's never going to really be a solution like that's certainly not going to help us for 2050 and all those things are true. So, things are true. But there's a project that's taking place in France. It's an international collaboration called ITAF, which is building this really huge, the first at scale, sort of example of a nuclear fusion reactor. And the project is fascinating. It's got an amazing website that details and that illustrates in great detail how they're building this thing, and how various countries are bringing different components together, and the technical and engineering challenge of it. It's like a moonshot. And I don't know what it is about that that captures my imagination the way that it does, but seeing that kind of an engineering feat unfolding, and it's like a 30-year project to get the thing done, seems like it's probably going to work by the time they get it finished, computing technology will be sufficient. Will be sufficiently advanced to control the Plasma field, and all these things are kind of lining up. The idea of being able to turn something on and off that's nuclear, without the safety considerations, and having that kind of power emanate from it, basically free energy at the end of the day, quote, unquote, it just captures my imagination in a way that none of the other sort of technologies that we're plugging away with, the reliable things like wind and solar that that's for sure, that's the way it's going to going to go in terms of clean energy. But yeah, that project just there's something about it. Anybody who's listening should look it up. It's it er, that's super cool to see how they've put together the graphics and the story of the of the system, and who knows, maybe, maybe our grandchildren will see that kind of technology helping to power all of the advanced systems that we're going to need in 100 years.

Trevor Freeman 1:03:14

Yeah, I had this conversation with a friend not too long ago about, you know, what is the thing that's happening now that's it's on the periphery. We're not too familiar with it, but in 50 years, people will look back and be like, oh, I wonder what it was like to be aware of the infancy of that thing. And who knows, maybe nuclear fusion is that thing so great example. Well, Brian, I really appreciate your time today. Thanks for joining us and talking through decarbonization of buildings, this massive part of the decarbonization effort that certainly could use all the focus it can get. So, appreciate your time and good to chat.

Brian Flannagan 1:03:50

Yeah, thanks to you. It's been it's been a lot of fun. Keep doing what you're doing. It's been great.

Trevor Freeman 1:03:55

Awesome. Take care. Thanks for tuning in to another episode of the think energy podcast. Don't forget to subscribe wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it feedback comments or an idea for a show or a guest, you can always reach us at [email protected]

The energy sector is always changing. Episode 149 of thinkenergy explores what to keep an eye on this year. Like political influence. How will the Trump administration's takeover reshape policies across the border? What are the potential impacts of federal and provincial elections here in Canada and Ontario? From energy strategies to affordability to decarbonization efforts. Listen in as host Trevor Freeman uncovers how politics influence the energy sector and what to expect from thinkenergy in 2025.

Related links

• Trevor Freeman on LinkedIn: https://www.linkedin.com/in/trevor-freeman-p-eng-cem-leed-ap-8b612114/

• Hydro Ottawa: https://hydroottawa.com/en

To subscribe using Apple Podcasts:

https://podcasts.apple.com/us/podcast/thinkenergy/id1465129405

To subscribe using Spotify: https://open.spotify.com/show/7wFz7rdR8Gq3f2WOafjxpl

To subscribe on Libsyn: http://thinkenergy.libsyn.com/

---

Subscribe so you don't miss a video: https://www.youtube.com/user/hydroottawalimited

Follow along on Instagram: https://www.instagram.com/hydroottawa

Stay in the know on Facebook: https://www.facebook.com/HydroOttawa

Keep up with the posts on X: https://twitter.com/thinkenergypod

Transcript:

Trevor Freeman 00:07

Welcome to thinkenergy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman, as I explore the traditional, unconventional and up and coming facets of the energy industry. If you have any thoughts, feedback or ideas for topics we should cover, please reach out to us at [email protected] Hey everyone, and welcome back, and welcome to 2025. Happy New Year. I hope you all had a restful and relaxing break. I know I certainly enjoyed a little bit of time off with some friends and family, and it was nice to sort of recharge. But here we are at the start of a new year, at 2025 early January, the whole year is ahead of us, and there's lots of work to do, and being in the energy sector means there's lots of change ahead. On that note, today, we thought we'd dive into some of the areas that we think might shape or influence or be areas to watch for when it comes to energy in 2025. There's no such thing as a quiet or stand still year when it comes to the energy sector, 2025 will be no different. So, we thought we'd take a look at some of the things that we think might sort of hit the headlines or really drive change. So, without further ado, let's dive into those areas. Area number one is politics. So, energy is political, and energy shapes politics, and politics shapes energy, and that's the same every year, but 2025 is shaping up to be a pretty significant year when it comes to political change that might impact energy policy. So, to start with, we are mere days away, a little over a week away as I record this from a new US administration. The Trump administration will take over on January 20, and like any change in administration and what is arguably the biggest economy in the world that will have an impact on climate change policy, energy policy, the flow of goods across borders. You know, there's talk of tariffs between Canada and the US. So just because it is in the United States, that doesn't mean it won't impact us here in Canada, so we'll be looking to see what change that does bring, what how that influences politics and energy policy and the flow of goods and all of those things that can impact what we do with energy. A little bit closer to home however, we also have some change potentially coming here in Ontario, at least, we are looking at potentially two elections this year. So, to start with, there's the federal election. It is very, very likely, almost a sure thing that we will see a federal election in the coming months. Justin Trudeau has recently announced his resignation, which will almost definitely trigger an election. So, we could be looking at a new government, or a new mandate for the existing government. So, what might that mean? Well, if the Liberal Party the current government, manages to get another mandate and remain in power, we kind of know what their priorities are. They've been going down a path for the last little while. They will probably continue to invest in clean energy infrastructure, they will continue to push for net zero goals and look for ways to support others to achieve net zero targets as well. If there's a change in governments, which the polling suggests is likely, and the Conservatives get into power, they are likely to look to prioritize affordability and resource sector competitiveness. They may also adjust timelines for emissions targets as a result of that. The one big thing that's worth mentioning, of course, is the price on carbon. This was brought in by the existing Liberal government, and they stand behind it. The Conservatives are very much campaigning on a platform of getting rid of the price on carbon, the Federal price on carbon that will have significant impact on energy policy and how things move. There are a few previous episodes that you can listen to that talk a little bit about that, and I'm sure we'll talk about it throughout the year as things play out. And finally, in this section, in Ontario, it's very likely that we might see a provincial election as well. All signs are kind of pointing towards a provincial election this year. So what could that mean? Well, similarly, our existing government has kind of made their energy policy known. We know what their focus is. So they are focused on expanding our traditional energy mix, so nuclear, some natural gas, as well as some investments in renewables in order to make sure that the grid can handle growth and electrification in that sort of rising demand that we're seeing. Should we see a change in government to one of the opposition parties? There may be more of a push for more renewable sources and lowering those carbon emissions faster than the current pace of change, at least based on what they are saying. So we'll keep an eye on that and how that comes into play. Obviously, energy is sort of primarily in the provincial jurisdiction here, so a change in government or a new mandate for the existing government would certainly have a big impact on energy policy. So area number one politics, area number two is energy affordability. So Canadians have always cared about affordability when it comes to energy this has been sort of a driver in previous elections, but it is definitely top of mind now, as we are coming out of sort of a wave of inflation, supply chain issues, there's an affordability crisis, sort of across the economy in Canada, for many Canadians. So that definitely applies to energy as well. What does this mean? Well, it certainly will influence the way many people vote in the elections that I just mentioned. So look for Canadians to be wanting to know what those political parties stance is on energy and energy affordability. It may also impact the pace of adoption of decarbonization measures and electrification and some of those energy transition pieces that we're seeing. So if folks are struggling with the affordability of their bill. That means they are not likely to invest in large upfront capital cost items to change that. On the other hand, Canadians will be looking for ways to reduce their energy costs, and so maybe some of these items that might help reduce electricity costs will become more attractive to Canadians, they will also be looking for programs to help them with this, and the province just recently announced their new incentive structures, or the new iteration of save on energy incentive programs called the home renovation savings program here in Ontario, and Canadians will likely want to take advantage of that to help upgrade equipments, make their homes more efficient. There's a commercial stream for that as well, so businesses and institutions will also be looking to take advantage of that to address energy costs. So energy affordability will certainly be a driver, as it often is in 2025. Area number three is decarbonization. So decarbonization is here to stay, and we expect that to ramp up this year, for sure, to continue being a point of importance for Canadians. So the climate crisis won't disappear from the news. As I record this, we're, you know, seeing these really terrible images and stories coming out of the Los Angeles area about wildfires, it seems like that's a perennial thing. We see that every year now, that will continue, and that really does drive people to think about their own decarbonization journeys. We are still in the early stages of adoption for some of this technology. You know, heat pumps, home generation and storage, real deep decarbonization measures were in those early stages. So I don't expect, you know, massive steps forward in the next 12 months, but I think more folks are going to start thinking about and planning for their actions on this, and that's at the both the residential and the commercial level. So here at Hydro Ottawa, we're seeing a lot of our commercial customers take advantage of our Enercan funded Ottawa Retrofit Accelerator program, which really supports that sort of carbon pathway planning, that plan to decarbonization. And I think a lot of folks will start thinking, you know, what's my next move when it comes to decarbonizing? You know, if my furnace is getting to be a little bit old, am I going to put that heat pump in? You know, even if I don't do it in the next 12 months, I want to start thinking about what that looks like. So we expect decarbonization to continue to be a point of focus. We expect it to be a point of topic, you know, in these elections that we talked about, because that climate crisis is in front of our faces, always in the news, and that won't be changing. Area number four is clean electricity, grid modernization and energy efficiency. So in keeping with the previous point, decarbonization, electrification is one of the main tools to decarbonize, and we are moving to changing some of those end uses, from fossil fuel combustion to electricity. So things like heating our homes, our spaces, our water and transportation. You know, how we get around, what we drive, what sort of public transportation we take. The solution to these things, when it comes to climate change, is primarily electricity. So in order to make sure that we have enough electricity and that the electricity we have is clean enough to support that, we will see more movement towards this in this year. So just in December before the end of the year, December 2024, the Federal clean electricity regulations were finalized. And these regulations kind of chart a path to decarbonizing electricity generation in Canada by 2050 you'll notice that that's a change in date. The previous target was going to be 2035 but over the course of the last little while, the federal government has come out and said, yeah, look, we think it's more realistic to set 2050 as a target, so that is the new target. And the federal government's investing significant money behind this. There's $60 billion to help this general move towards decarbonizing our electricity generation, and to make sure that that's done in a way that keeps energy affordable for Canadians. At the same time, utilities across the country will continue to invest in grid modernization. So as well as infrastructure expansion, not just modernization, we're also building and growing our grids to keep up with the pace of change, but we need to also be able to leverage more DER's on the grid, so more distributed energy resources, small scale solar generation, things like that. So we will continue to see utilities make steps in that direction. They will look to levels of government to support those initiatives through programs and funding and regulatory change. So we will continue to see that change in grid modernization. I know it's definitely a big topic for us here at Hydro Ottawa. And finally, in this section, energy efficiency. Energy efficiency is not new. It's been around for for quite a while. In fact, it was the primary focus, kind of before we shifted a little bit more towards thinking about carbon. But we cannot fully decarbonize. We cannot fully electrify without significant energy efficiency. We just won't be able to affordably build the infrastructure we need if we're not using energy in an efficient way. So that will continue to be a focus. And in fact, I mentioned the new incentive programs from the province of Ontario that is very much designed to support ongoing energy efficiency measures. So, we will continue to see that as a focus in 2025 and our final area, area number five, is technology. So there is no year anymore, in fact, maybe there never was where technology doesn't continue to grow and expand and evolve in ways that we couldn't even imagine. And it does seem like the pace of change is picking up, but I think that's kind of normal. So we will see technology that supports or augments the energy transition continue to evolve in 2025 and the ways that technology influenced that really, you know, we have an idea on some of them, and it'll be interesting to look back in 12 months at what we know in December 2025, that we didn't even know here today in January. So a couple specific areas. You know, we're seeing EV technologies continuing to involve we will see continued EV adoption throughout the year. Year over year, over the last five years, you know, EV adoption in Canada has increased steadily. In July of 2024 you know, zero emission vehicles hit almost 14% of market share, we can expect that to continue increasing. As that happens, you know, more charger technology out there, more sort of, not just the physical charger, but the ways that those chargers interact with the grid more control over that to make sure that we're managing charging in an appropriate way. The role of AI is really going to be interesting to watch this year. So AI, of course, is all over the news across all sectors of the economy, but certainly in the energy sector, it has a role to play, and there's kind of two facets to that. The first is the role that AI might play in helping us manage our energy costs, our energy usage, and that's both at the consumer level. So, what will AI help me do in my home, to manage my energy costs, to manage the sort of cleanliness of my energy? Let's say I want to really focus on just, you know, green energy when the grid is at its cleanest and try and avoid it when it's maybe more carbon intensive. What's the role of AI in that this is likely a multi year stretch. I'm not saying that we're going to sort of have all those questions answered by the end of this year, but I think we will see movement in that direction over the course of this year, and then also at the utility level. What's the role of AI in helping utilities manage the grid? You know, understanding where there are feeders that are increasing or that are getting near capacity limits and needing to shift. Again, this is not a 12 month exercise. This is a multi year exercise, but I expect we will maybe see some movement in that direction. The other way that AI and the increasing role of AI will impact the energy sector is just purely from an energy needs perspective, so AI is an order of magnitude higher when it comes to the amount of computing power that is necessary. So that, you know, the kind of stat that gets thrown around is that a chat GPT search uses about 10 times more energy as a standard Google, you know, search, a search engine search. So with all of this stuff going through AI, we're seeing more computing power needed. So that means, you know, bigger, more dense data centers that have larger cooling needs, which means more energy requirements. And, as much as we're seeing electrification drive demand up for electricity AI usage and data center usage is also driving up demand. And, so we're seeing larger load requests. You know, utilities are having to figure out, how do we provide way more power than we've had to previously, to some of these new customers and customers that are wanting it kind of overnight, like, hey, we're ready to build a data center like tomorrow. Can you supply us with a significant amount of power? So that will certainly be a driver. The last little piece of technology that I want to mention there's, you know, we could go on for hours on this topic is when it comes to sort of home generation and storage, especially storage. Solar panels have kind of been around for a while now. We've seen that really precipitous drop in price when it comes to solar technology, and that continues, but home, or sort of behind the meter storage, is really becoming a thing that is more realistic than it has ever been before. So, the incentive programs that I've brought up a couple times here in the province of Ontario now provide an incentive to put in a behind the meter battery in your home, and the role that those will play, we're only just beginning to see, you know, helping customers manage their energy costs. You know, charge that with your solar panels and then use the battery during peak times, or charge it during off peak times and use it during peak times. You know, managing costs redundancy and resiliency, and, you know, helping you out with a bit of a bridge during times of outage will be really important. And you know, we're seeing that at the at the household level, but we're also going to see that on a much bigger scale, at the commercial level. So, commercial customers are also looking at what's the role of battery storage to help them manage costs, and then even one next level, up at the grid level. So, we are seeing large scale battery storage projects that will support sort of grid management, help manage peaks for utilities so that they can, you know, defer or delay or reduce the size of that infrastructure builds, you know, if they can manage to rely on batteries for those handful of times a year when we spike into those peaks, then that helps out with grid planning. So those are some of the technology pieces that we expect to see really kind of flourish or take it to the next level in 2025 again, all of these things are not short term projects, 2025 we'll see some change, but these are, like, multi year things that will go on beyond that. So those are the areas that we think will kind of drive change, or be areas to watch for this year. You can likely expect some conversations on the podcast about that over the course of the year, because certainly they will be making news, and there's some really interesting folks working on some really interesting things when it comes to those areas. But, was there anything that we didn't identify that you're kind of keeping your eye on? Is there anything that you think we should be keeping your eye on, or that you're keeping a look at? Feel free to let us know you can reach out to us at [email protected] As always, we love to hear your thoughts and feedback. We love to hear kind of your ideas for topics or episodes that we should do or guests that we should have on the show. We're going to continue to explore with format this year. So we'll definitely keep talking to some really smart folks, we will throw out a few more of those kind of explainer episodes where we try to demystify a complex or maybe unseen topic when it comes to the energy sector. But, whatever we do, we look forward to having ongoing conversations with you guys and hearing your feedback, and this is the kind of stuff that we just love talking about. So thanks for listening. Happy New Year, and we look forward to chatting to you next time. Thanks for tuning in to another episode of the thinkenergy podcast. Don't forget to subscribe. Wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback comments or an idea for a show or a guest, you can always reach us at [email protected]