A paid-media partnership with the Federation of Canadian Municipalities
In the 1990s, Markham, Ontario, recognized it needed to change course: shifting from rapid growth to denser neighborhoods with smarter urban planning. The looming issues of climate change and energy needs were already apparent, and in 1999, Markham’s city council decided to invest in a district energy system for heating and cooling its downtown area. Rather than depending on separate boilers and air conditioning units for each building, the city supported a collective energy network that could grow alongside future developments.
Fast forward about 25 years later, insulated pipes hidden underground in parts of Markham transport hot and chilled water between central energy facilities and connected buildings covering over 14 million square feet of space. This investment has paid off for Markham. The system has enabled a quicker shift to cleaner energy while making the city more resilient by enhancing long-term energy reliability and adaptability as community demands change.
“The thing we’re able to do with[centralized plants] is adopt new technologies long before a building would,” says Peter Ronson, COO of Markham District Energy. “And so the buildings on a district energy system benefit from the transition to higher efficiency and lower carbon footprint.”
The opportunity for Canada
In terms of shared community energy, Canada is currently trailing behind regions like Europe, the Middle East, and Asia where urban systems are more prevalent. Cities leading the way in Canada are reaping significant benefits; for instance, Yellowknife in the Northwest Territories could save around $160,000 every year thanks to its district energy system.
A widespread transition to centralized thermal energy networks could enhance Canada’s economic resilience while speeding up emission reduction efforts. These initiatives are easy to finance and can scale effectively with private sector backing. Networked systems help cities become more robust against power outages and other disruptions. Worldwide examples show their effectiveness during various disasters, including ice storms and hurricanes. According to Gerard Mac Donald, principal at Reshape Infrastructure Strategies in Vancouver, this is partly because district energy systems can utilize multiple sources of energy while using superior quality equipment.
Upfront investment, lasting benefits
Even with their economic and environmental benefits, getting district energy projects off the ground faces significant hurdles according to Ronson. These systems need considerable upfront funding but can expand efficiently as demand increases. They can start small with just a few buildings and grow over time. Initial support from the Federation of Canadian Municipalities’ Green Municipal Fund-which offers grants and loans for clean energy projects-has helped many initial phases launch successfully.
“District energy is one of the smartest ways to decarbonize buildings,” Mac Donald explains because it reduces emissions “with a lot less electricity than you would if you went at it building by building.” That’s why it’s catching attention not only from those in district energy but also politicians focused on user costs.
Investors are paying attention too. “District energy is increasingly compelling because compared to traditional utility models; it provides communities local control along with better resilience against fuel price spikes or outages,” notes Marieke Cloutier, senior director of programs at the Green Municipal Fund. “It presents large-scale opportunities for net-zero investments that offer strong returns alongside efficient transaction costs.” The Green Municipal Fund was an early supporter investing over $17 million in grants and loans into Markham Centre’s district energy over two decades-turning it into Canada’s fastest-growing utility which attracted more than $270 million additional capital through different stages of growth from institutions like the Canadian Infrastructure Bank and Canadian Imperial Bank of Commerce.
This early funding from the Green Municipal Fund plays a “de-risking” role for these projects by laying down groundwork for investors interested in green infrastructure who may find municipal deals complicated or too small otherwise. Since district energy requires substantial capital investment being able to borrow at low rates while providing reasonable security acts as an accelerator here too. The fund finances preliminary tasks like business cases or feasibility studies so when it’s time for large-scale capital injections; these projects come prepared with reliable data plus clearer risk distribution along with promising return potential.
Investors prefer stable long-term infrastructure returns on investment says Ronson: “Once you connect buildings to district energy systems they’re typically connected forever.”
Networked for growth
Cities leveraging networked systems gain additional perks beyond stable power supply or reduced emissions according to Cloutier; they’re also cheaper operationally over time while offering municipalities “more stable long-term revenue streams compared to conventional utility models.”
Markham currently runs two distinct district energy systems featuring four plants-and it’s commissioning another one soon! This new setup will harness warmth generated from an adjacent sanitary sewer line next door using heat exchangers along with industrial heat pumps designed by Ronson himself-to enhance efficiency while delivering returns on investments all through reducing carbon output starting this winter.
Twenty-seven years after shifting towards effective thermal networks-Markham now spearheads broader movements as other cities reconsider methods used for heating/cooling urban centers across North America! As municipalities assess options available-Mac Donald emphasizes that real success hinges on what works best financially speaking-for residents footing bills regularly saying: “It’s definitely beneficial public-wise choosing route involving district energies since they end up being cheaper environmentally friendly solutions ensuring no major impacts affecting utility rates overall.”
The FCM’s Green Municipal Fund (GMF) stands out globally offering financial aid/education aimed towards helping towns reach net-zero goals whilst fostering resilient communities managing approximately $2.4 billion across government-funded programs within Canada itself!
Find out more about how GMF helps mitigate risks tied into climate investments: greenmunicipalfund. ca/invest
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