Buildings account for 55% of Toronto’s emissions today, more than any other sector. Decarbonizing these buildings is key to a clean energy economy — yet comes with challenges and potentially increased costs.
Join us as we examine what strategic approaches are needed to transform this area and forge a viable pathway to net-zero emissions. Our expert panel will discuss solutions that could help us reach our targets, such as district energy, renewable natural gas and hydrogen, ground- and air-source heat pumps and building retrofits.
Speaker 1: (silence).
It takes an energy mix to meet Ontario's future needs affordably and reliably. That's why we're advancing low carbon solutions, greening the natural gas supply with breakthrough technologies. See how we are leading Ontario's clean energy transition.
Faisal Kazi: Good morning, everyone. Welcome to another addition of Board of Trade's Power Breakfast Series. I'm Faisal Kazi, the President and CEO of Siemens Canada, and vice chair of the board's energy transition committee. A group of business leaders determined to see our region continue its leadership in the energy sector. I am really excited for this morning's panel discussion which will explore how Toronto's building can be upgraded to minimize their carbon emissions. Before we continue. It's important that we reflect on the history of this land. Toronto is home to diverse First Nation Inuit and Métis people. Though you could be watching from anywhere, the board's offices are located on the traditional territory of many indigenous nations. Reconciliation is vital to any conversation about energy and climate future, and we must acknowledge, respect and ensure that any conversation about climate change indigenous people are indispensable partners in this journey.
I also have a few housekeeping notes. First, a recording of today's event will be available at supportbusiness.bot.com under webinars and videos. Secondly, if your video is lagging, please switch to a lower bandwidth stream option. Also if you need help, you can click the button request help and you will get some technical support. Finally, this Power Series is made possible by presenting sponsors, Ontario Power Generation and serious partners, Bruce Power, Enbridge, Hydro One, SNC-Lavalin, the University of Toronto and the Power Workers' Union. As well, all broadcasts of this type are supported by the board's principles sponsors The Globe and Mail, Scotiabank, SNC-Lavalin, and the University of Toronto. Thank you very much to all our sponsors. Now let's dive into today's topic. Conversations about climate change often fixate on the transportation sector, cars or power plants with relatively little tension given to buildings. Yet buildings account for 55% of Toronto's emissions, far outstripping the impacts of any other sector.
This is why today's conversation matters. The stakes are high, but the public knowledge is low. Not only must we decarbonize our buildings while keeping costs reasonable, but we must raise awareness of this issue among everyday people. Why? Residential dwellings account for 60% of building emissions. So if we are to solve this problem, public buy-in is essential. Now the city of Toronto has all already shown leadership in this space. In December, the city council approved a bold strategy to reach net zero greenhouse gas emissions by 2040. The strategy aims to cut emissions from existing buildings in half by 2030. Torontonians from all backgrounds with also benefit from city's commitment to removing regulatory barriers that slow down building retrofits as well as more robust financing for deep retrofits. However, we all know retrofits are only one part of our toolkit. Another equally important part is the need to modernize our fuels.
There are many ways this can be done. For example, by switching to renewable natural gas, connected to district energy systems or using heat pumps. Now, digital technologies can also significantly help in optimizing energy and space usage. Also, renewably sourced nano grids and micro grids would definitely play a role. The solutions in this space are not easy to implement, and we must admit, nor are they cheap. That is why we need leadership and innovation which would allow us to make a substantive change that respects the budget of the government, but also the families, the households. Our panel today is comprised of exactly those type of leaders. Before we hear from them, I'd like to introduce Andrea Brown, Ontario Power Generation's director of business development. Andrea has been with OPG for 17 years with the prior positions in the company involving substantial responsibilities in regulatory affairs and environmental initiatives. Thank you, Andrea, for OPG's support for this event series and for being here with us today. With this, I'll pass it on to you.
Andrea Brown: Thank you very much and good morning. It is my pleasure to welcome you to this morning's virtual Power Breakfast Series hosted by the Toronto Region Board of Trade. My name is Andrea Brown, and as Faisal mentioned, I'm the director of business development at Ontario Power Generation. Our team is primarily responsible for business development streams, such as energy storage, pump hydro and future growth opportunities that support a low carbon economy. On behalf of OPG, we are proud to be the presenting sponsor of this virtual series, and I'm really looking forward to today's discussion. At Ontario Power Generation, we are committed to fighting climate change and have up the climate action plan centered on two goals. To be a net zero carbon company by 2040, and to help the economies where we operate achieve net zero by 2050. The Ontario electricity system has seen a lot of change in 15 years.
Having phased out coal generation, it now accounts for less than 3% of Ontario's total greenhouse gas emissions. Effectively addressing the climate change crisis requires decarbonizing the remaining carbon in 10 sectors, such as transportation, buildings and industrial processes. A large part of our plan is focused on electrification of transportation as it accounts for 35% of carbon emissions, through our subsidiaries, Ivy and PowerON, we are advancing electrification of passenger vehicles, fleets, and transit. In partnership with Hydro One, we created the Ivy Charging Network. Which once complete, will be one of Ontario's largest, most connected EV charging networks. Allowing you to travel confidently across the entire province, including the north. Through PowerON Energy Solutions, we're tackling complex electrification projects, such as providing the charging infrastructure to power the Toronto Transit Commission's entire bus fleet by 2040. That's in partnership with the TTC and Toronto Hydro. This represents North America's largest transit electrification project.
We're also exploring green hydrogen production, which has a great potential as a replacement fuel for heavy industry. Essentially, achieving a net zero carbon future will require an all hands on deck approach. This presents a unique opportunity to invest not only in renewables and energy storage, but also in small module reactors and other technologies to ensure Canada meets its net zero emission targets by 2050. OPG believes that nuclear energy must to play a role in achieving Canada and the world's climate change objectives. The stability of clean nuclear power is fundamental to the resilient electricity system that's required to meet these growing system needs.
Our climate change plan acknowledges that the road to net zero won't always be straight, particularly with the coming closure of our Pickering Nuclear Generating Station. Our plan is designed to be flexible and evolve over time. We also believe that as the world advances to the realities of a changing climate, so too will the solutions and policies. Our goals won't be easy to achieve and the way forward won't always be clear. But we're not going to let the lack of perfect clarity stop us from taking action now. I'm now delighted to introduce today's moderator, Laura Zizzo, who's the co-founder and CEO of Manifest Climate. Before I turn it over to Laura, I'd also like to share a quick video on OPG's nuclear teamwork. Thank you very much.
Pelly: Hey, besties. I'm Pelly, a uranium pellet. AKA the nuclear part of Ontario's energy mix. Some of you have asked how we like to spend our time. Group stuff mostly. We're a solid team. Seriously, check my link in the bio for more ways we're working together, like powering our way into a carbon free future. Okay, bye.
Laura Zizzo: Thanks, Andrea. That was cute. I love how you said we just have to take the next best step. Sometimes the climate challenge and crisis is daunting, but it's great to be here with you all to talk about how we can start to address a big part of it, which is buildings. It's my pleasure to moderate this discussion. As mentioned, I'm Laura Zizzo, the co-founder and CEO of Manifest Climate. We are a software as a service company that supports organizations through the climate transformation to better understand, manage and communicate climate related risks and opportunities. I've been working on climate change as a lawyer, as a consultant, and now a technology developer for my whole career. I must say, it's heartening to be having more conversations like this one today, where we understand the urgency of the climate crisis and how businesses are at the heart of this transformation.
In today's discussion, we'll be doing a deeper dive on buildings. We know that the built environment needs to be a major part of our efforts to decarbonize the economy and become more resilient. In Toronto, as we heard, 55 of our missions are from buildings. We all need to be able to understand our role in this transition. It's time to think about the risks and the immense opportunities that await us as we confront a change in climate. I'm very interested in the solutions that support both decarbonization and resiliency. I know our panelists have some good thoughts on that. There's so much to discuss. I won't take any more time. It's my pleasure to chat with our panelists, so I'll do a quick round of introductions and then start the discussion. We have Scott Dodd, who's the Director Of Business Development for Enbridge and has provided project leadership for over $4 billion worth of projects. Including wind and solar generation and gas and electrical transmission.
Welcome, Scott. Next we have Izzy Smith. She's the associate director in Net Zero Buildings and Cities lead at SNC-Lavalin where she develops and delivers net zero strategies for both new build and retrofit construction projects. We have lots to talk about, Izzy. Looking forward to it. Morrigan McGregor is the Vice President, Energy Planning and Development at Enwave. Responsible for overseeing the community energy planning and capital deployment teams. To get us started, I'd like to pose the same question to all of you. We'll go in the order of how I've just introduced you, so Scott and then Izzy and Morrigan. Why is this topic important to you in your organization? It's really helpful to kind of start thinking from a more personal level, but also we think a great deal about our corporate climate journeys. I'm curious as where you would say your organization is on this climate journey and where you see yourselves in the medium term. Scott, over to you.
Scott Dodd: Well, thank you. Good morning, everybody. I think Enbridge, our mission is to deliver the energy people want and need. Energy being critical to standard of living. I think our view is that we're starting this journey. We've got a long way to go and we will continue to work at it. As a company, we've set targets of net zero for our operations by 2050 and a 35% reduction by 2030. But we find ourselves in a unique position because we supply natural gas to a lot of those buildings in Toronto in order to do space heating. We've got to find ways to help them decarbonize while not bankrupting them. So we need to find innovative technologies. We've been working on those technologies with our gas supply through renewable natural gas.
We're blending hydrogen in a project in Markham in order to see how that will work. We continue to work with communities. We just celebrated a 10 year anniversary with Toronto Community Housing, where we've been providing them incentives to reduce their gas use and save costs. Those incentives are equivalent to taking over 550 passenger vehicles off the road. We'll save them just under $8 million over the life of those measures. I think there's lots of complexity, I think in this thing as we move with buildings. We've got to find ways to decarbonize. There's no one answer. It'll be many. I think it's very diverse. We find some communities want natural gas and others would like less. So we find ourselves in a unique position where we're trying to help a lot of people with a lot of different challenges. But we look forward to it and we're going to keep moving forward and continuing to invest in lower carbon technologies in order to help our customers get the energy they want.
Laura Zizzo: That's great. I look forward to talking a little bit more about the move towards electrification and the complexities of that in buildings and how that's connected to the distribution and transmission systems. Also, you kind of brought up this idea of coupling together decarbonization and resiliency. It's so important you think about, well, what do we do when we have big storms and the electricity goes down and we're very dependent on our natural gas generation? We can chat more about that as the day goes on, but thank you for those remarks. Izzy, same question to you. How are you thinking about it? We saw that great video at the beginning, but why is this important to you in your organization and where are you on the journey? How do you fit in? Maybe since you're working as a consultant and engineer, thinking about sort of the folks that you interact with as we think about this question.
Izzy Smith: Yeah, absolutely. I think SNC-Lavalin is a engineering consultancy, as you say. We really have a responsibility towards our clients, our employees, societies. Everything we do and touch has a direct impact on the world around us. I think, as an organization, we've committed to being net zero by 2030, and we've actually updated organizations sort of whole purpose as well, which is really exciting, to engineering a better future for our people and its planet. That's something that really kind of rings true with me. Alongside the 2030 aim, we've kind of set some goals in between them. There's obviously a detailed route map, but we've committed to reducing our Scope 1, 2 and 3 emissions by 60% by 2025 as well. Some really ambitious targets. I think personally, when leadership show that kind of real action against its commitments and it aligns to your individual values as well, which I just think as an engineer, it really allows me to go and have those really open and honest conversations with our clients and supply chains.
Enables us to challenge people, to inspire them and to really kind of openly encourage them to achieve net zero too and come on the journey with us. Which it's really kind of been a shift that I've seen in the language used. Sorry, I think you asked it from a personal point of view as well. To me personally, I'm really excited by the opportunities that buildings and specifically our cities have to play in our net zero journey. I've got a couple facts. Like the World Bank estimates that 80% of economic activity occurs in cities. Research undertaken last year says that smart cities have the potential to generate $20 trillion in economic benefits by 2026 alone. I think around the world, I think we see cities really being the leaders in our reach to net zero. It is where the greatest challenges are for carbon reduction, but I think it's also where we'll find the greatest gains, the innovation, and that will be found in our cities, I think. I mean, 70 to 80% buildings in 2050 already exist today.
So decarbonizing our existing building stock is essential. I think in many cities, this really presents a really fascinating challenge. Especially I think it was mentioned earlier with such a complex and rich history that spans centuries, we really have to protect that when we look at citywide retrofit works. SNC really recognizes the importance of that and we've spent a lot of investment and time really readying our business to maximize the potential for our cities and the role that they have in climate change. We've set up a new kind of global arm to the business, which is called Engineering Net Zero. They're really our vehicle to embedding sustainability and net zero into everything that we do as a company. Their focus is really on kind of, how do you make carbon visible for our project life cycles? How do you measure it and then drive reductions through design, through decommissioning?
I think across kind of all sectors a key element to that approach includes kind of effective data capture, reporting and communication. I think a real key challenge in delivering sustainable and net zero carbon outcomes for industry is that all too often, carbon's really not visible to its users. It's not visible to its stakeholder or its design teams, and how you communicate that to a group is so important. I think that really to effectively reduce carbon, you have to be able to see it. To be able to track it, to be able to proactively make really informed decisions about how you remove it without compromising that wider integrity of a scheme's objectives or desired outcomes. That's kind of the approach that we are really prioritizing.
Laura Zizzo: I love it. What I heard from you, and I wonder if you think this is going too far, is there's almost a professional obligation now.
Izzy Smith: Yeah. [crosstalk 00:21:05]-
Laura Zizzo: Like it's a professional obligation to say, "We won't do this unless we help you decarbonize. We won't do this unless we think about the impacts of climate change." It's so heartening to see leading engineering firms, other professional service providers saying, "We must do this. We're not going to wait for the clients to put it as part of the RFP." It's great that you guys are taking that approach, and I hope we see more of it. Let's talk more about that as the morning goes on. When you're thinking about retrofits, you're talking a lot about retrofits and how we think about that. Where do we get started thinking about retrofits? Is this happening? Is it becoming part of vernacular when we're talking about doing something to building, thinking about how to do it as low carbon as possible?
Izzy Smith: Yeah. Such a great question. I think where we start is a question I get asked most often. I think making carbon commitments is almost the easy part, but how we actually really help industry to deliver against their targets is the challenge. I think our experience undertaking retrofits on multiple very large, sort of very complex different estates globally, really highlighted the need for industry standardization around how we manage data, create those roadmaps and then work with supply chains to deliver the results. The approach that we've created, I'm really proud of it. I might be a little bit biased, but I think it's great. It takes our experience and it's really created what I think is a new kind of industry best practice approach. We call it decarbonomics and it's framed around three really simple steps. First of all, you benchmark, then you roadmap and then you deliver.
Following that process empowers clients to make informed investment decisions around their net zero retrofit and ensures that they've really optimize their roadmaps to make sure that deliver the highest carbon reduction per dollar spent. How do you get the most out of the dollar that you spend? We start by benchmarking. So baselining an estate, it's always the first thing that you should do. Understand where your carbon emissions are. We did some really fascinating research recently, and we found that across multiple estates that we looked at of sort of 20 buildings plus, 80% of an estate emissions are typically only found in about 10 to 20% of their assets. Just knowing that means that you can actually really target the right places where you can have the biggest impact. Benchmarking can be really hard. Often we don't have the right data.
We have low data maturity and availability. It's often quite limited. We've developed a platform that kind of allows us to plug in those gaps and found our data insights that we're predicting so far are pretty accurate. Once we understand what that portfolio looks like today, we can start evaluating the interventions and scenario modeling. We use sort of an AI approach to developing an optimized roadmap for a specific client. This could be a roadmap that uses rules that are relevant to them. It could be kind of maximizing carbon reduction against maybe an annual capital investment plan. Or it could be undertaking interventions with the best return on investment first to then free up capital for more expensive, complicated interventions in the future. Then finally, the really hard bit is actually then kind of managing the implementation of those investment plans and monitoring and verifying the impact and the effectiveness of the interventions that you've made.
What we try and do then is then we pull that data back and we put it into that benchmark process I mentioned at the beginning. We get smarter over time and we improve the accuracy and kind of the data of our insights, which is really exciting. But when you think about a large estate, some of the projects we're working on across a whole estate are decades even. These are long and complicated programs of work. What we always try and do, and it was mentioned earlier, is that you just get started. We know from experience what the low regret interventions look like. We can try and do those whilst we continue to capture more data and develop those detailed business cases so that we can really just kind of move at pace and not get stuck in that planning cycle. That's kind of our general approach. I think your question was where do we start. I'd say, just get started, but start by understanding where you are today.
Laura Zizzo: Yeah. That's something that Manifest Climate says all the time too, because people are ... We deal a lot with the Task Force on Climate-related Financial Disclosures. It seems daunting. There's all this stuff. We have to put it back. Are our lawyers going to let us do this disclosure? It's like, you're already saying stuff that's irrelevant. Just get started. The low hanging fruit, it's the same thing with the climate challenge more generally, I always get so frustrated that we're spending so much time talking about targets that we're not doing anything, because we're talking about the targets. Let's just know like we have to go down. I love that approach. What's the low hanging fruit?
How do we just do that and then know eventually the low hanging fruit will keep getting there? We'll keep finding more low hanging fruit as we get more smart about this. Before we get to discussion about peak energy, because I know we want to get there, I do want to talk about this role with electrification and resiliency. Because I know you've been thinking a lot about that. How do you think about backup power? How do you think about these things as part of the solution to climate change when we need a more resilient system? I would love your thoughts on that.
Scott Dodd: Yeah. I think our thoughts are along the lines of, you need more than one pathway for resiliency. You have to find ways that work. Maybe that is a natural gas backup in some places, maybe natural gas replacing some other high carbon fuel as you go forward. But if you're betting the farm on just one avenue, that's a risky strategy in general. When you're dealing with climate especially, it's going to get cold here today. It was really cold on Monday. It was minus 20. You want to make sure that you can provide heat, food, shelter. Those kinds of key things in order to move forward. You need to make sure you've got many pathways, you've got resiliency built into that and you're working to reduce the carbon on all of those pathways as you go forward.
From our perspective, the first thing you do, and I agree with Izzy, is you figure out where you are. An energy audit. The more you can reduce off the base, the easier it is going forward. We offer energy efficiency programs to our customers to do that and work with them to find that stuff. So that if you're on a building, if you're improving your insulation, it's probably got a pretty good payback. It's the easy stuff to do. Where we get to the challenge is the next steps and the costs. We have to do this in a cost effective manner because you can have perfectly resiliency, but if you can't afford the energy that you need and want, that's a problem.
It's a balance. We look at those things and we look at giving people options, making sure that we've looked at what they can do, and then we look at the hybrid solutions in many cases. We're running a pilot in London, Ontario with air source electric heat pumps and the natural gas to optimize the system for cost and carbon in order to help people deliver what they need. But still you've got those two energy sources so that there's not such a challenge to one system. We'll continue to do that. Those are the things that you have to do. I think there are many solutions and I think there are many yet to be discovered, and that's the exciting thing about working in this industry. But we got to move forward and just start. The thing you can do is have an energy audit and start ticking off the boxes in your dwellings.
Laura Zizzo: Yeah. Do you think that the cost concerns are legitimate? People say, "I can't."
Scott Dodd: It depends on how far you're going?
Laura Zizzo: Yeah.
Scott Dodd: Yeah. I mean, I think look, costs are all over the place and people's incomes are all over the place, so it's easier for some sectors than others. We have programs for low income communities in order to help them move forward because you don't want to leave anybody behind in this energy transition. That's the key thing. I think there are some things that make sense, but part of the challenge too, is the average person stays in a house approximately seven years in sort of Ontario. The systems that we're putting in place are 15, 20, 40 years. So you've got a bit of a mismatch between what a person wants and what the building needs.
We really have to start thinking of ourselves as stewards of the buildings. That long-term investment that you will get back, hopefully when sell your house or move on to the next one. Those are the things that make us excited as we move forward. That we can work with customers to provide them that pathway. Maybe it's a hybrid solution today and maybe it's a renewable natural gas next, and it goes on and on. It has many paths and it's not linear and we'll see what happens.
Laura Zizzo: Yeah. I want to get back to that because there is some interesting funding programs. We can talk about TAF's deep retrofit service. We can talk about some of the things that the city of Toronto is doing to encourage and then linking payback to tax bills. There are some ways that we can overcome those costs if people have access to it. Morrigan, can we see if we can hear you now?
Morrigan McGreg...: Can you hear me now?
Laura Zizzo: Yes. Okay. Fabulous. We've been anxiously awaiting your answer to the first question. Which is, why is this topic important to you and your organization? You know that Enwave has been a leader at a long time, we're thinking innovatively. What are your thoughts on that?
Morrigan McGreg...: Yeah. It better be a good answer considering it's taken me so long to get to it, so I'll try to dig deep here. But I think I really appreciate the question because I think for us really energy in buildings is at the core of what we do at Enwave and from a personal perspective as well. This is a big thing for me in terms of seeing people rally around this and really some of that commitment increasing and hearing this come to the forefront of things. I mean, really from our perspective, over the past half century or more, we've been working with buildings in our districts to provide their energy needs, heating and cooling and power to communities. We've heard, I think from a couple of folks on this call about the stats and in terms of how many emissions come from cities, the impact of that. Then within that, how many emissions come from buildings and what percentage of that is heating and cooling? Which is a significant amount. We know that district energy has a big role to play in helping us on this decarbonization journey.
We take that sort of very seriously in terms of our commitment to be able to affect change. We've worked with our partners for a long time to meet their energy needs. Sort of currently, I would say from a perspective of where we're at, we're right in the thick of it. We're working with a number of partners on new, low carbon developments when we're talking about new building stock. Then on our existing districts, working with our partners to come up with solutions, sort of now, to the point of the conversation earlier in terms of, we have to start somewhere. Coming up with solutions to their near term challenges, both at the building level as well as through modernization and evolution of our own districts. We're actively undertaking that on a regular basis. Really our goal is to continue to be the partner of choice in that net zero transition of these buildings and sort of be able to provide that at a commercially accessible scale. To really be able to start making an impact across the board.
Laura Zizzo: Yeah. Do you see that the core business aspects of decarbonization being central to the business model attracting more people to your organization, both customers or on the business side of things? I'd love kind of to talk about how you see that as core to what you're doing and how that actually positions you in the market.
Morrigan McGreg...: Yeah. I mean, I think so. I think we're seeing the increasing trend in people understanding and starting to see the importance of this and the need to do it, but also the challenges we've touched on a number of times already in sort of the conversation. I do think in terms of a value proposition we're able to offer for our organization and people who are interested in field. I mean, I think we genuinely have that sort of intrinsic sort of value and belief in making this positive difference. I do think that's attractive to people. I think in terms of kind of out in the marketplace, we're seeing that and sort of again, hoping to leverage and work off our existing sort of partnering frameworks and structures we have to be able to come up with the solutions that make sense for each individual case for those buildings and partners in our communities.
Laura Zizzo: Right. You sort of touched on this, but before we go off of you, Morrigan, the district energy generally requires buy-in as you're saying. It's like really just the cross section of organizations coming together to make this happen. Do you think we're more likely to see expansion of existing collaboration or new low carbon district systems coming up?
Morrigan McGreg...: Yeah. That's a very good question. I would say sort of very positively, both. I mean positively from, I think this is a good thing collectively. From an existing system perspective, a real life example, we're currently and have recently expanded our own system here in downtown Toronto, done an Eastern and a Western expansion. As part of that, have integrated a number of evolving technologies and modernizations. We've put in significant thermal storage, as well as our Enwave eco heating. Heat pump plant based solutions to be able to recover waste heat at this district scale. That district scale really makes that possible. As well working with some of our individual building basis, case by case, to sort of deliver customized solutions depending on where building is in its life cycle and retrofit timelines.
Making adjustments to what we're doing and delivering to meet those objectives. I would say that it's very actively underway and we're seeing increasing interest in it and trying to get creative in how we can do that in a commercial way, I think to Scott's comment. He made it at the beginning of this. On the flip side, we're also seeing a continually increasing interest on what we call the new development front, so the new systems you're talking about. Both at what I would call this sort of micro node, several building level, as well as the larger scale developments. There's an increasing recognition, whether it's driven by existing standards that are in place or an anticipation of new standards. As well, a market desire for people to want to start seeing from the end user perspective that commitment actually being put into practice. That we see developers and municipalities coming together to sort of want to actually execute on that vision. So we're working on a number of systems on that new development side to address those areas as well.
Laura Zizzo: That's very exciting. I love what you said around just not wasting things. Like let's figure out how we got waste heat back in a usable form. This idea of the industrial ecology that's coming to play, it's really exciting to see that that is actually becoming commercialized. Izzy, back to you. We've talked a lot about some of the risks, but I think naturally this discussion really is about the opportunities and what we can do now that we've shine a light on all that is required. I want to talk a little bit about the opportunities and benefits. In particular, I briefly mentioned things like TAF's Retrofit Accelerator and ways that there's support to help advance deep retrofits. What are some of the positive spinners that we're seeing when we see the opportunities for retrofits? When you say, just get started and thinking about those risks, but in your experience, what opportunities is that unlocking as well?
Izzy Smith: Yeah, I think it's a really great question and I think it's really essential particularly to my clients that we're able to really articulate the benefits of retrofit really clearly. Because knowing the impacts of climate actions on kind of environment, society and the economy, it's really critical to making better policy choices, as you mentioned, and kind of convincing a wide range of urban stakeholders that the upfront cost of retrofitting buildings is worthwhile and talking about kind of that social value that comes with it. I think beyond on the kind of benefits of carbon, obviously kind of climate impacts that retrofit can have, and the resilience that comes with that, and the future proofing, it improves the health of [inaudible 00:39:47] as well.
I think we spend 90% of our time in buildings. It feels like I've spent a lot more in the last few years, but so much time in buildings and poor kind of indoor environments can have such a significant impact on our physical and our mental health, our wellbeing, and our kind of economic productivity as well. On a large scale, big, large scale retrofit, this can reduce healthcare costs, can generate jobs, addresses energy, poverty, reduces asset maintenance costs. But it does that, that increased productivity and it's even been shown to kind of improve the way that we educate people as well and people's ability to learn as children and things like that as well. It's so important that we get that indoor environment correct as well as addressing the climate and energy crisis.
I think probably one of the biggest benefits as well, by thinking about it as a deep retrofit, thinking about it as a kind of systems of systems approach that we should take to addressing the climate change, is the reduced load it will have on our national infrastructure. Reducing the need for kind of future expenditure on new energy generation also helps manage the peak loads. Which I know we've talked about today and it comes with its own complications. To me, it's really about kind of fitting it into that bigger picture of the benefits that it brings to wider society.
Laura Zizzo: Awesome. Well, that's a good segue to the next question to Scott on peak loads and peak energy. Let's talk about that. How do we solve for peak energy? What mix of solutions are you seeing to help satisfy that need?
Scott Dodd: Yeah. I mean, I think first of all, we have to look at energy as one as opposed to several segments. That's part of the first thing. But if you look at the electrical grid and electrification needs to happen more. That's part of our path to zero. But part of the challenge with space heating is it's a seasonal load. It's winter based. It gets cold and it's on electrical equivalent. It can be up to three times the amount of the electrical capacity. If you want to electrify that all at once, you've got a huge capacity requirement. You want to, a, reduce that first before you do it. Then you want to find other ways to do it, whether that's through combined heat and power, where you are using the carbon maybe for a greenhouse, and you've got the heat for the greenhouse, and you've got the power. You're doing other things and working on it, whether it's using hybrid systems in order to reduce your GHGs overall and work those things forward.
We really got to take a mini path solution to this if we just go, as I said, with the one solution. But you start by reducing your base. I think as Izzy said, that reduces your future requirements as we go forward. Because anytime you build something new, there are additional costs, and add costs lead to additional operating costs. You have to manage that prudently. I think it's an interesting thing. I think that conservation is part of the pathway. It's the easiest in my way, but deep energy retrofits are sort of the next one where you can get more conservation. But again, you have a cost and you've got to find ways to work with the parties to do that. Then you've got to decarbonize what you've got, so the RNG solution makes sense.
We work with the city of Toronto where biogas, which was flared previously, is now converted into renewable natural gas. Put back in the grid and they use it to power their garbage trucks. you've got a bit of a circular economy. You got to find solutions like that. We work with Toronto Western Hospital and Noventa to scavenge heat off of a large sewer main in order to take that heat and move it over to the hospital to reduce their space heating requirements. Those are the things that we can do. I think we just have to do many of them and figure out which ones we can work and how do we drive it down to the scale of the individual single family dwelling. Which is a large component of this carbon challenge that we have. That's where we have to be able to find technologies that we can adopt on a mass scale and work with them in order to give them energy at an affordable cost that's decarbonized.
Laura Zizzo: Yeah. It's like we know what needs to happen. Now we just need to do it and get all of us rowing in the same direction. We know it doesn't make sense to keep wasting. We need to use that and it's great to see those technologies coming. I love those examples that you gave. But speaking of getting us all rowing in the right direction, we know that there's $130 trillion need to move towards net zero globally. Morrigan, this one's to you, and then others can pipe in as well. How do we unlock the potential of investment to facilitate the transition we need? What are your thoughts on that?
Morrigan McGreg...: Yeah. That's a very good question. I think in my mind, there's really two pieces of the puzzle there that we need to sort of get our minds around. One I would frame up as really how do we turn that into a value add proposition? We keep talking about commercialization, so how do we make this actually attractive to the market? We're seeing, like I said, I mentioned previously, there's sort of an increasing interest and an increasing desire amongst sort of various stakeholders to see this happen. That just there's a natural drive to increasing that marketability. I think the stuff we typically talk about is sort of the various incentive types. I can call them softer heart incentives. Things like standardization certifications that can actually allow you to sort of put arms around that and sort of make it, again, I'll use the word marketable to sort of end users.
As well as the typical sort of financial incentives to sort offset the cost of some of the work that we're talking about at the building level. I think those are key pieces of the puzzle. I think the other piece that we need to think about that's equally important is then the part two is the pathway of how do we actually do that? We can have all the great things in place, but then how do we actually execute on them? Which is where I think a lot of sort of the challenge is now. I think from our perspective of our example, that's one of the areas that we want to focus on. I used that phrase earlier sort of being a partner of choice, but that's exactly it. There's various buildings in various stages of their life cycle, various things that need to happen, various challenges, various individual circumstances. I think what we need to do is find ways to create pathways to evolution that work for buildings in these various stages I'm describing.
Just to give a more concrete example of that, I talked about decarbonization of the network. Maybe there's buildings that are sort of in a certain phase of their life cycle and we can contribute with them to the lowering carbon emissions through our ongoing modernizations of our own systems and some of the technologies I talked about. Then buildings that are at a more advanced level of retrofit, where we can really sort of harness some of those more advanced technologies, some of the things that Scott was talking about. I think it's having that optionality and sort of that tangible path that can be provided to buildings and end users to be able to actually make advancements to various stages depending on where they're at in their process. I think that's key.
Laura Zizzo: Yeah. I love that. It's not taking this for granted, but actually having a specific business view of some of these very important challenges. A lot of these things we just see are kind of cost centric, but not part of something that you can optimize. I think that that is really interesting going forward. Now, we have some great questions from listeners coming in, so I'm going to try to take some of these. I'm not sure who's best suited to answer this one, but I'll pose it to you all. We have a question about, can building still heat with natural gas and reach net zero? I don't know if there is an answer to this or if it's more of a debate, but what's your view on that? Can you have net zero and still use natural gas to heat? Who wants to take that one?
Scott Dodd: I can start. I mean, net zero doesn't mean absolute zero. It means over the life of the year or the measure period, you're at net zero. If you're producing solar energy and exporting it to the grid, you're creating a credit for you. You can use natural gas as part of the solution. You can also green natural gas. Renewable natural gas has a potentially zero carbon input. Hydrogen in natural gas blending also reduces the carbon intensity. You have pathways, and I think those are the things that you can do. Obviously you're going to try to use less. Less is the first thing, and then you can work in greening it as you move forward.
Laura Zizzo: Any other thoughts from the other panelists on that question?
Izzy Smith: Yeah, it's interesting. I'm based in the UK, you may told from my accent, but in the UK, the answer to that question would be no. Our gas grid, it's not very good. I think probably you guys are much better at greening your gas grid. In the UK, there is a solution that looks at blending hydrogen and hydrogen in the long run. But particularly for the commercial sector or non-residential sector, I would always recommend moving to an alternative heat source, a fossil fuel free heat source. But I mean, that's the UK. I don't know enough about your solutions in Toronto, but it's interesting to see how it might differ from country to country as well.
Laura Zizzo: On sort of that vein, there's also a question about where are the best suited building projects for geothermal or ground source heat pumps. If want to look at moving away from that fossil fuel heat, we know that one of the solutions is geothermal and ground source heat pumps. How do you know it's the right spot to try that? Who can answer that?
Morrigan McGreg...: Yeah. Maybe I'll jump in there. I mean, it's a good question. I think there's sort of the overarching sort of simple checklist of location and feasibility and all that kind of stuff. Then I think once you work through that, I mean, one of the things we're trying to do, and I talked about commercialization, is really putting some clarity around that. I think once you sort of tick those boxes in terms of environment and general infrastructure availability, what we're trying to do is sort of make that accessible across a wide range in portfolio of buildings. That it really is sort of commercial across a big portfolio. Even the sort of single family home, smaller building, that Scott was mentioning earlier, we've got some work underway there from a geo perspective. I think broadly speaking, the answer is, it's applicable across a wide portfolio of building types. We're showing and continually proving out that we can make that work across a range of environments and continuing to try to evolve that model.
Laura Zizzo: Awesome. Any other comments from Izzy or Scott on that question?
Scott Dodd: Yeah. I mean, we've invested in some geothermal projects and pilot projects and usually they're easiest when they're greenfield as opposed to a retrofit. Just because you can get access and do all the work prior to putting in any foundations and that kind of thing. But there is new technology, as others have said, that's coming along that has some smaller footprints. You can actually do it and you can start moving forward. I think it depends on the specifics of your location. Obviously you don't want to be drilling a geothermal hole through the Toronto transit authority subway or anything like that, but it's where you can do it and makes sense.
Morrigan McGreg...: Yeah. I guess-
Laura Zizzo: Right. Scott ... Go ahead.
Morrigan McGreg...: I was just going to say, and further to build on that, I guess one other point is you talked about geothermal and you talked about heat pumps, I think is part of that question. I mean, Scott alluded to this earlier, but we talked about ways to recovery and other ways to sort of employ similar technologies where you maybe don't have, as he was saying, sort of the benefit of being able to drill under a foundation or et cetera.
Laura Zizzo: Great points. Scott, sticking with you for a bit, there's a question that came in around water heating. If we move to instantaneous on demand electrical source heat for water, can a grid take it? Is that a good solution? There's some questions around the viability of that. Is that the solution for water heating?
Scott Dodd: I mean, water heating's got several ways. You can use a heat pump technology in order to reduce the requirement. You can go to instantaneous natural gas, which will also give you an uplift. It's a journey of several things. Generally, the more instantaneous it is, the better it is in terms of resiliency. But you also create a greater peak because you need it at that exact moment. That's part of the challenge when you move it all to electrification. So you have to manage that. There are other ways that you can look at where if you can store. I think others have talked about thermal storage. One of the ways is you heat up water and it's stored in a large insulated container and then you have it available when you need it. Those are the ways that you can do it. Electrification of water heating is one way, but I think you have to look at the specifics of the building and there may be easier ways to get a bit better bang for your buck, so to speak.
Laura Zizzo: Interesting. Izzy, do you have anything from your experience on water heating and how best practices for that that could help our audience with those questions?
Izzy Smith: Yeah. I mean really quick, similar to what Scott was saying, I mean, it depends on the situation, but commonly I'd recommend some form of heat pump with top up with direct electric. If you pair that with thermal storage, then you can get the benefit of delaying that peak load so you can heat it up over time rather than stressing out the grid too much. Very similar to what's Scott was saying, I think.
Laura Zizzo: Great. Well, I mean, we're coming up to the end of time. In the last couple of minutes together, maybe some closing thoughts on, when people are thinking about buildings moving forward, how to integrate this into their climate journey in making sure that they're making good decisions in every step of the way around retrofitting their buildings, thinking about building it right from the first time and not wasting. We'll ask for a round of closing thoughts starting with you, Scott.
Scott Dodd: Yeah. I think the first thing that I would say is, get an energy audit if you have an existing building and if you're designing a new building. We have programs and architects and others have programs where they'll take you through an energy system evaluation. We call it Savings by Design with one of our programs. But figure out your baseline and then with that comes the opportunity to see where you can move things. The first action is, get your baseline and then start moving the easy stuff, because it's only going to get more expensive. The sooner you do it, the more you're operating savings can help pay for future retrofits.
Laura Zizzo: Yeah. Great advice. Izzy, over to you for some final thoughts.
Izzy Smith: Yeah. I mean, honestly, I'm a architect and engineer by background. Honestly, new builds net zero was the easy bit generally speaking. There are some fantastic precedents out there of where it can be achieved for not an extreme cost uplift. There really aren't any excuses anymore for us not meeting those challenges. I think over the next sort of decade or so, we'll see a lot less new build and a lot less investment and time and industry knowledge kind of going towards refurbishment and retrofit.
Laura Zizzo: Yeah. We've got a long way to go though. I'm sitting here in the downtown Toronto and I see a lot of cranes around me and I don't think they're thinking about net just yet. They have no excuses, but they're still not doing it. Morrigan, over to you for some final thoughts.
Morrigan McGreg...: Yeah. I think a couple key messages, we've probably got a theme here is, I mean, think early about this in your process. Even if you don't know exactly what to do, just make sure it's on the radar so that you can seize the opportunity and figure out which path you need to go down. Izzy and Scott have laid it a couple here in terms of new builds and retrofits. Then I would say, number two, overarching to really make things to tangible and talk, go into practice is sort of reach out. There's a number of experts around and a number on this call, but I've mentioned about partnering and solution opportunities. I think that's key to sort of make that outreach to figure out what your options might be. I think it was Scott who's mentioned earlier, is there's many pathways to get there and people need to recognize that and have an open conversation about what the right path for the right situation is. I think those are the two sort of overarching key things I would leave with.
Laura Zizzo: Great. I think we've heard a lot of the same similar themes. It's great when there's some alignment with experts on a panel, but the one that I'm leaving with is, there's no excuses and do the next best step. Faisal, back to you for some closing remarks. Thank you to all the panelists for a great discussion today.
Faisal Kazi: Yeah. Thank you very much to all the panelists for sharing your insights. I'm so glad that all of you could join and our attendees could learn from your complimentary thoughts. For me, it's really heartening to see that all your big companies are taking real action. I loved Izzy's comments of saying making the commitment is the easier part. Now implementing it will require a lot of effort action, and of course it will costs a lot. For me, my takeaway is I think we need to bring in ingenuity. We need to think out of the box, if you want to make it a economically viable transition, and we need to encourage different kind of solutions. I also learned from your discussion that there is no one silver bullet, so we will have a mixture of all different kind of solutions we'll have to work together. I also see that we should treat it as one overall system, integrate. For example, the distributed energy systems all into one and try to optimize that.
Finally, no one entity can solve this challenge. I think all the governments, the private sector, the public sector, the universities, research institutes, we all need to work together to combat climate change. It's real and action is required. Once again, thank you for you all. As a wrap up, I would like to once again thank our sponsors for making this discussion possible. I want to express special gratitude to OPG as the presenting sponsor. I invite everyone now in the audience to visit the board's website to see future events that are lined up. In particular, I'll draw your attention to the board's day long Workforce Summit happening on Tuesday, March 29th. The summit will bring together top thought leaders and decision makers around the team of the workforce. Ensuring that today's increasingly competitive battle for attracting global talent our region continues to come out on top. To learn more and for the Workforce Summit, I suggest that you look at the board's program and you can visit bot@ C-O-M com/events. Until then, you all have a great day. Bye-bye.