Cities tap earth, sea and sewage for district energy

Community energy companies are drawing on a wide range of low-carbon technologies to heat (and cool) entire neighbourhoods across North America

Cities embrace community energy – Deep Lake Water Cooling enwave

Earlier this spring, contractors in San Jose, California, broke ground on a 1.3-million-square-foot tech hub complex with more than the usual complement of green features, beginning with its name: Park Habitat. Targeted at office and retail tenants, the development team, led by Vancouver’s Westbank, says the downtown high-rise project will be fitted out with a landscaped green roof, indoor and outdoor “pockets of nature” and naturally ventilating exterior walls and windows to prevent excessive solar gain. 

Out of sight, meanwhile, the towering net-zero complex incorporates an entirely electric community energy system (a.k.a. district energy) designed by another Vancouver outfit – Creative Energy, the descendant of the city’s district heating utility, which was founded in 1968 with a mandate to pump steam through a network of pipes connecting buildings around the downtown core. 

As an approach to distributing energy in cities, district heating isn’t new; the earliest systems date to the late 19th century, in cities like Hamburg and New York. The benefits and economies of scale were obvious: individual buildings could buy their heat from the district heating agency instead of maintaining boilers in the basement. The problem was that district heating utilities – some municipal, others limited to campuses – tended to rely on dirty or carbon-intensive energy: municipal waste incinerators and fossil-fuel-fired boilers. 

In the 2000s, however, Toronto and other waterfront cities like Amsterdam and Singapore built district cooling systems based on the same principle: pipes linking clusters of buildings and using lake or ocean water as the coolant. As with district heating, property owners didn’t have to maintain expensive HVAC equipment, while local utilities benefited because these systems reduced loads during hot summer days when demand for air conditioning was high.

These days, district energy companies like Enwave, which built Toronto’s deep lake water cooling system, are drawing on a far broader range of low- and no-carbon technologies to make and distribute clean heating and cooling, including geo-exchange, electric boilers and heat pumps for recovering waste heat, including heat from municipal sewer mains. 

Amy Jacobs, Enwave’s senior vice-president of commercial operations, says that large-scale community developments are installing geo-exchange systems – pipes that go deep into the ground, where they absorb and compress heat. Enwave is building out one such network for a six-building redevelopment of a former civic centre precinct in the Toronto suburb of Etobicoke. “There’s a lot of interest from all developers to move toward a low-carbon technology, and geo-exchange is top of mind for many of them,” she says.

Matthew Tokarik, president of Subterra Renewables, a geo-exchange developer, agrees. He observes that geo-exchange firms are seeing so much demand that they’re scrambling to secure access to drilling equipment. “We’re starting to feel a tipping point,” he says. 

Unlike traditional district heating networks, which pump steam through pipes, geo-exchange projects distribute lower-temperature heat from the ground, which is then upgraded by electric heat pumps. The same systems – so-called ambient loops – can be run in reverse to remove excess heat from buildings in the summer. 

There’s a lot of interest from all developers to move toward a low-carbon technology.

-Amy Jacobs, Enwave’s senior vice-president of commercial operations

Subterra, whose financial partner is Forum Equity Partners, which invests in real estate and infrastructure, has also seen growing interest in what Tokarik describes as a key financial innovation that has enabled developers to wrap their minds around geo-exchange more readily. The company both builds the systems and then operates them on behalf of landlords or condo corporations, whose boards and property managers have neither the interest nor expertise to run this kind of infrastructure. 

“We understand that the market is asking us to do this,” he explains. “If I’m a condo developer, [either for a] single building or community, I don’t want to put up the increased capital to build these systems out because I’m not going to be here to recover that cost over the long-term.”

What’s more, not all of Subterra’s projects involve condos. Tokarik cites subdivisions being built by Mattamy Homes that will rely on a community geo-exchange system, and each new home is fitted out with a heat pump. 

Creative Energy has tapped this market as well and is building district energy infrastructure for high-rise development projects, including Toronto’s Honest Ed’s site and another cluster of condos in Oakville. 

Diego Mandelbaum, Creative’s vice-president of development, also points to a yet-to-be-announced subdivision in one of the Greater Toronto Area’s eastern suburbs that will use waste heat from a large regional sewer main as its energy source. The technology to capture sewer heat was pioneered by a Vancouver company, Sharc Energy. The City of Toronto in 2019 decided to launch a similar Wastewater Energy Transfer program, dubbed WET. The first project, currently under construction, will provide heat to the Toronto Western Hospital, displacing an estimated 90% of its current natural gas consumption, making it the largest such installation in the world at the moment. City officials calculate that waste heat from the sanitary trunk sewer network could support up to 20 more hook-ups, reducing emissions by 200,000 tonnes of CO2e annually.

Creative’s other new district energy projects include a large Seattle health services complex and Thompson Rivers University, whose board has pledged to make its Kamloops campus carbon neutral by 2030. 

The company is also building an innovative system for a cluster of five residential towers on Vancouver’s Horseshoe Bay. “We looked at ‘How do we eliminate cooling towers from that project, and almost eliminate natural gas? says Krishnan Iyer, Creative’s president and CEO. “We looked at geothermal, but the best single source of energy was actually the ocean. And so we submerged two very large heat exchangers into the Pacific Ocean, where we anchored them down, ran piping across the ocean floor to a plant that we own and operate. And then we’re providing heating and cooling using the ocean as a giant thermal battery.” 

Iyer’s key point – and one that speaks to the evolution of the district energy industry – is that Creative’s approach, like those of its competitors, is increasingly “technology agnostic.” The fundamental economics hasn’t changed much since the 19th century – it makes good financial sense to distribute heating and cooling through a network that links up buildings within a district. But thanks to rapid advances in technologies that can tap all sorts of renewable heating and cooling sources, the energy powering such infrastructure can now be generated in ways that don’t emit carbon. It’s a green take on an old idea. 

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