Community Champions & Partners

Once you have established your vision and collected data, you can explore bringing groups together to discuss district energy. The data you’ve collected so far can inform discussions on defining the project scope and roles. This process can also help assess the exposure and attitude to risk of potential partners.

Once you’ve identified project partners, collect commitments such as memorandum of understanding or letter of intent, to solidify relationships while you continue to explore the business case for district energy.

Depending on the size of the project, you should develop a master plan together with key project partners. This will help identify the current and future energy needs, serve as a tool to phase the development to mitigate technical and financial risks, and build awareness and commitment with project partners.

Community Champions

Without a mandatory hook-up requirement, it can take many political, social and economic groups to move a project from idea to reality.

Anchor Load

An anchor load is not the central plant in the district energy system. Rather, it may assume the risks with building out the capital-intensive system and conducting outreach with neighbours to build a coalition in support of a district energy system.

• Some of the qualities of a strong anchor load may include:
  Operating as the primary energy load to initiate the project, usually an institutional or industrial partner with significant energy requirements over a residential or commercial building
• Being located in a dense neighborhood with large scale residential and commercial buildings, and with limited distance between buildings and connections to maximize efficiencies and reduce energy loss.
• Having a high degree of trust in the project. In the regulated world of electricity or natural gas, customers essentially must connect. For district energy, the easy option is to proceed with the status quo. Having a good relationship and trust is essential for the capital-intensive project.
• Providing a fuel source or system (i.e. gas, biomass, waste to energy, lake cooling)
• Financing the capital requirements of the project. This may include supporting the growth of the system/baseload as more connection loads are added and new fuel sources are accessible.

Institutions

Universities, colleges, and healthcare providers have historically relied on district energy networks to produce highly reliable, efficient, and lower-carbon energy services to entire campuses, often comprised of 150 to 200 buildings (e.g. Dalhousie University is advancing the use of biomass in its heating system).

Developers and Property Managers

Developers may design buildings to connect to district energy systems developed by others. They may also lead a district energy project to create a long-term and consistent revenue stream by providing heating, cooling and electricity services to their developments and surrounding buildings.

In meeting building codes, developers may provide energy solutions for buildings, on-site energy networks, or land for energy centres. They may also choose to contribute financially to the expansion of projects via planning obligations and connection charges.

Benefits of district energy for developers and property managers

The benefits of low carbon and resilient district energy systems for developers and property managers include:

Free Up Rooftop Penthouses

A district energy system increases developable square footage in a connected building’s basement and roof by removing the large mechanical room and space for individual utilities.

Reduce Capital Costs

Removing the cooling tower, stacks/chimneys, domestic hot water storage tanks, boilers and chillers saves upfront capital costs.

Expand Marketing Opportunities

The reliability, stability and resiliency of an energy system disconnected from our vulnerable electrical grid can be marketed as an insurance policy against coming climate impacts, while a low-carbon system can be promoted to citizens looking to easily reduce their footprint with limited impact on their lifestyles.

Increase Operating and Energy Efficiency

District energy systems can provide better fuel flexibility, efficiency and pollution control than individual heating and cooling systems. Connection to a district energy system provides an opportunity to meet energy and environmental standards. Developers will also save money by shifting the responsibility for managing a complex onsite plant from building managers and caretakers to offsite and outsourced energy professionals.

Getting district energy ready is low cost

At the very minimum, developers of buildings that are planning to connect to the district energy system now or in the future will have to be district energy-ready. To be district energy ready, developers need:

Pipes

• Traditionally, buildings host a hot water source on the roof and let gravity bring the water down the building, with the pipe size gradually narrowing as you descend. District Energy grants the ability to supply thermal energy from ground level, meaning that hot water may need to be sent upwards, by maintaining a uniform pipe size throughout the building.
• Two-way pipes placed in the building allow thermal energy to be carried from the district energy network to the section in the building where the future energy transfer station will be located.

Heating system

• Use low temperature water heating system for domestic and heating systems (i.e. large temperature differential or ∆T). This network is similar to the steam and hot water in the district energy system. Individual air-source heat pumps in each unit will not work.

Ground Level Adjustments

• Adequate space at or below ground level for a future energy transfer station
• An easement between the mechanical room and the property line to allow for thermal piping

The City of Toronto has more information on getting district energy-ready.

What developers and property managers want

If you’re working with developers on your project, they want clear communication about expectations – what they need to do and what the system can provide.

Developers are typically busy, risk averse and stick with what they know, but most of all they are concerned about the cost. If you want to see your district energy project make economic sense, you will need to get buy-in from a number of developers.

Although the benefits of connection to a district energy system may be common to building occupants and owners from all sectors, each will have their own drivers and may accord different priorities and emphasis to the benefits to be derived.

How to engage developers

1. Produce an information sheet setting out the project concept, describing the technology and the benefits of participation, and mapping out the development process.
2. Stakeholders could be invited to attend workshops or forums where the project champion can distribute information material, deliver a presentation, and provide an opportunity for questions and concerns to be raised.
3. A high-level advisory group of external stakeholders could be formed as a channel for communication and to manage the engagement process.

Primary requirements to engage real estate developers in district energy development include:

• Regulatory framework: This may appear as a community energy plan (CEP), and guidelines
• Community energy and/or emissions reduction targets and metrics
• Education and training
• Partnership considerations and opportunities identified early and throughout (these can be included in the CEP)
• Management of the rights of way of existing roads, pipes and wires for future expansion
• Provide guidelines on expectations for servicing and master servicing agreements. For example:
• City of Toronto DE-ready guideline, which requires developers to do a feasibility study
• City of Markham CEP and Enwave/Mattamy project- direction for developers
• City of London

Local Governments

Cities with their higher density, compact, urban form, and mixed land use represent the greatest potential for the development and expansion of district energy systems. High density neighbourhoods can be instrumental in bringing down costs.

Canada’s major urban centres are now encouraging concentrated development and increased density within existing urban boundaries to protect productive agricultural and dwindling environmental lands outside towns and cities.

In general, municipalities, the political and administrative officials, may be able to support the development of district energy with planning, regulations or funding.

Planning and regulations

Supportive local planning and regulation can aide the implementation of large-scale projects and solidify the buy-in from a wider variety of stakeholders.

Mandatory connection/hook-up

Municipal regulation to require mandatory connection to district energy systems is the best way to reduce risk and encourage economies of scale by ensuring paying customers can mitigate the high cost to develop the energy system. An example of an active role of a local government is the City of Vancouver’s mandate for district energy that required all buildings within the project scope to connect to the Southeast False Creek Utility.

Required district energy-readiness in high-priority areas

Planners can influence the location, form, density, and uses of future development, and can therefore shape the city building process to maximize the potential for district energy. In particular, they could take a proactive position in the early identification of nodes of activity which could support district energy. Encouraging compact development will improve the efficiency of district energy systems, while reducing capital costs.

If mandatory connection is not required, the next best thing municipalities can require is mandatory district energy-readiness on all new buildings in high-priority areas.

Feasibility studies required

Local officials, developers, and industry can collectively identify opportunities to concentrate urban form and leverage sources of waste heat. Infill and intensification efforts can be used to support district energy development by requiring new development applications to undertake a study to determine the feasibility of a district energy system connection within a serviced area. In some cases, identifying a single, large thermal user can act as a catalyst for district energy system development.

Incorporate District Energy into planning documents

Municipalities can try to incorporate the desirability of the development of district energy systems in official plan documents. More detailed direction can be provided within neighbourhood-specific or secondary plans.

Coordination

Municipalities can help smooth the process to develop district energy by establishing the policy framework for integrated approvals, providing guidelines, securing permits, and ensuring regulatory requirements are met. Municipal governments are multi-headed and the approval process for irregular systems needs broad support across multiple departments.

Setting targets

Municipalities can also set targets and develop high-level strategies to achieve them. For example, Dubai set a target to double the share of cooling capacity from 20% to 40% by 2030 with district energy.

Funding

Local government direct funding or using no-cost municipal land can ease economic and institutional barriers to investment in district energy. For example, the carbon tax in Denmark influenced the buy-ins for district energy implementation. Be cautious in depending on public funding, though, as shifting short-term political mandates can cause problems with the financing of long-term infrastructure projects.

Ownership

Municipalities may have the resources to own district energy services. For example, the City of Vancouver owns the utility managing the Southeast False Creek district energy system and the City of Markham owns the Markham District Energy utility.

Supply and demand

Municipalities have the ability to support the development of district energy as providers of utilities – for instance the City of Toronto is the sole shareholder in Toronto Hydro. Municipalities also impact demand through the consumption of heating and cooling in public buildings.

Federal and provincial government

Federal and provincial governments can be significant sources of funding and de-risking. A number of district energy systems have received funding from higher levels of government to support the development of low-carbon and resilient systems.

A number of projects have succeeded with government support, but projects can often last longer than political mandates, so make sure the underlying business case is strong before proceeding.

Technical Partners & Service Providers

Building district energy systems will require engaging early with technical partners and other service providers. This may include many companies which are able to offer a range of approaches, from contracting to deliver specific elements, to total project development, operation, and ownership. Each of these proponents may play more than one role in a project, and there can be numerous points of entry into the stages of development. Here are some types of partners you might consider engaging with:

Traditional utility companies

Utilities provide a wide range of services, including electricity, gas and water which may be used in your district energy system. Utilities also have the potential to improve the sustainability performance of the district energy system with access to efficient or renewable energy technologies.

For instance, the Alexandra District Energy Utility set up by the Lulu Island Energy Company uses ground source heat pump technology to supply heat in the winter and in the summer months, reverse the energy flow by pumping heat back into the ground.

Energy services companies

Energy service companies have expertise in energy technologies, which can be integrated with district energy systems. They can help optimize the efficiency and cost-effectiveness of a district energy system.

For example, FVB Energy Inc. was instrumental in the design and implementation of the Southeast False Creek Neighbourhood Energy Utility in Vancouver. The system uses a heat pump to recover waste heat from untreated wastewater and also supplies solar thermal energy using rooftop solar thermal collectors.

District Energy Utilities and Equipment Suppliers

District energy utilities and equipment suppliers can provide efficient and high standard equipment for district energy systems by ensuring the quality of equipment and maintenance and repair as required.

For example, Enwave Energy Services offers heat exchangers, cooling equipment, mechanical maintenance, retrofitting, cleaning and repair work. Enwave has provided the Deep Lake Water Cooling system for the City of Toronto’s district cooling system near the city’s downtown core area.

Planning Partners

Implementing a district energy project involves engaging and coordinating with a variety of stakeholders by bringing in expertise across different stages of the project – assessment of municipal reports, market validation, stakeholder alignment and engagement practices.

For example, QUEST Canada is a non-governmental organization that works towards accelerating the push towards embracing community energy solutions like district energy. QUEST Canada has been involved with various district energy projects across Canada like the Alderney 5 project in Nova Scotia.

National Promotion Organizations

National promotion organizations can support the development of community energy systems in collaboration with the municipal strategies of local governments through research, demonstration and deployment activities.

For example, CanmetENERGY’s Sustainable Buildings and Communities Group offers stakeholders a range of expertise and tools for community energy planning and technologies. From the planning phase to post development performance measurement activities, CanmetENERGY can assist existing and new municipalities achieve successful community energy systems.

Financial Services Organizations

Long-term financing is required for scaling up district energy systems and allocating capital to different aspects of the project. They can help carry out a comprehensive technical and financial evaluation of the requirements of the district energy project.

For example, Corix was involved in evaluating the UniverCity district energy project near the Simon Fraser University in Vancouver. The project is a biomass-based DE system providing space heating to a residential community.

Engineering or Architecture Firms

Engineering and architectural firms are educated in best practices and building codes and are well positioned to coordinate with other service providers. They can be brought in early as part of the integrated design process to help set expectations, define the vision, and contribute to design charrettes.

 

Engage with stakeholders

For a successful implementation of a district energy project, you must meet the expectations for a wide range of stakeholders, such as investors, local governments, local authorities, developers, operators and most importantly customers.

External Engagement Strategy

When planning an external engagement strategy, you should look to understand the local context, identify stakeholders, develop key messages, determine engagement channels, and create and execute an implementation plan.

Understand the local context

Understanding the local context includes considering who are your community champions to support the project and how you can build this capacity. You should also get a sense of how you can integrate with city planning, policies and regulations, and how to navigate the political environment. 

Identify stakeholders and conduct stakeholder analysis

The various champions or service providers will either partner with you on the project, serve on a potential steering committee to share their expertise, or be included in the stakeholder engagement process. Stakeholder analysis may include classifying them into buckets such as supporters, observers, opponents, or undetermined. This will help prioritize the stakeholders based on their goals, motivation, influence/power and interest. Then you can strategize your actions.

Determine key messages

When creating communication messages, it is important to consider mental models (the thought process for how something works) and framing. This will increase the success of connecting with your target audience. Framing involves defining an issue in the context that will achieve a desired outcome. For instance, some policy makers may be more interested in the low-carbon aspect of your project, while developers want to hear about the return on investment.

Select appropriate engagement channels

Select the appropriate public and stakeholder engagement channels before you engage.There are varying methods of engagement that include informing, consulting, involving, collaborating and empowering. For example, Edmonton’s The Way We Green environmental plan used multiple engagement tools to consult with the community, including workshops, focus group sessions, online questionnaires, surveys, public forums, and various community and stakeholder meetings and events.

Create an integrated implementation plan

The information collected in the steps above are now aggregated and presented in the implementation plan. The plan also includes tasks for project partners, and key performance indicators to track progress towards goals and milestones.

Common misconceptions

Common misconceptions about district energy systems that you might come across.

Traditional sources are cheaper

Some believe that the initial and long-term costs of heating/cooling spaces from a DE system are higher than on-site, traditional thermal energy sources. Realistically speaking, every DE project is different, so the capital and ongoing costs can vary from one case to another. Similarly, some conventional electrical utilities may offer cheaper electricity than that offered by a CHP plant. Again, this is case-specific, and you should do your own research for your project to move beyond this misconception.

It’s not reliable energy

Low-carbon district energy systems are not always considered to be reliable sources of heating or cooling. For some, only the burning of fuel can produce a reliable amount of heat. This misconception is largely based in people’s comfort with the status quo, and has no real scientific foundation.

Biomass emits strong odours

Many are opposed to biomass as a fuel source because they believe it increases air pollution and emits strong odours in the community in which the plant is located. This is only true for poorly-designed plants. Numerous examples exist for biomass and incinerator plants that are nested in the heart of communities, with no complaints of odour or air pollution.

Plants are unattractive

Some think that district energy plants are unattractive and prone to clashing with the aesthetics of the local neighbourhood. Yet again, this is only true for poorly-designed facilities. Consider Copenhagen’s ski-hill DE waste-to-energy CHP plant, Amager Bakke.

It’s not a solution to climate change

District energy systems are not always viewed as being green solutions for many environmental issues such as climate change. This misconception is likely grounded in DE projects’ common use of natural gas, a fossil fuel, as an energy source. Natural gas, is one of the least emissive types of fossil fuels, and its consumption in district energy (especially CHP) plants is far more efficient than traditional uses. On top of this, district energy plants that run on natural gas can often be run on upgraded biomethane, which is a renewable resource.

It’s a source of electricity

While district energy systems can provide electricity for buildings through combined heat and power systems, district energy is primarily used for heating and cooling spaces.

For more information see the The Stakeholder Engagement Guide for District Energy Systems created by CanmetENERGY with funding from Natural Resources Canada.