We are once again in the grips of a heat wave in Metro Vancouver and while a lower order of magnitude than the “Heat Dome” of 2021, it is still several degrees above normal with Environment Canada issuing heat warnings across southwestern BC. This event comes during the extended drought conditions we have been facing all summer long that has feed into the worst wildfire season on record, and record temperatures being posted around the world with our ocean temps also rising to unprecedented levels. This is Climate Change – and it is affecting every aspect of our lives as weather patterns are shifting, and the tragedy unfolding on Maui in Hawaii over the last week underscores this.
In this context, our regulatory environment is shifting on many levels, and the challenges faced by industry are increasingly demanding higher performance levels, lower carbon footprints, and significantly mitigating greenhouse gas emissions. It is essential that we implement the changes required to reduce our impact on the climate as soon as possible but also as soon as practical.
The urgency cannot be underestimated but we must also try to affect changes that are within the scope of what can be achieved given the policy, process, tools, infrastructure, and capacities we have at hand. Many jurisdictions across our catchment have responded by declaring a “climate action emergency” and have adopted “climate action plans” that vary with from one to the next with different thresholds and targets that are both in parallel with provincial policy and often layered on top.
This has resulted in a patchwork of regulation and variance in requirements and costs, and these requirements are often extended or enhanced prior to the last set being broadly affected and or absorbed, and often prior to determining or accommodating any unintended consequences.
One such measure being widely introduced and broadly promoted is the wholesale electrification of space heating/cooling, water heating, and prohibiting the use of natural gas for those purposes with some jurisdictions contemplating further prohibitions on any gas-fired appliances, fireplaces, and accessories such as patio heaters. Moving away from fossil fuels is a goal that we can all relate to and support to realize broad based de-carbonization, but it would be prudent to ensure we use all available “tools” to achieve that goal.
In centering on electrification as a single-source solution, it requires sufficient and effective capacity to be universally available both in terms of power generation as well as capital works and infrastructure. We currently have developments of residential, commercial, and industrial projects of significant scale being delayed or sidelined due to a lack of power to address the higher order of loads being projected, in Township of Langley, Surrey, and Delta among others. As noted in Western Investor:
BC Hydro recently told Glacier Media that power demand is now three years ahead of its existing capacity. It is currently advancing investments and integrating new technologies into the distribution network to make existing resources go farther and serve more customers. BC Hydro is indeed engaged with municipalities, and industry to seek direction and form a means by which to address these challenges and there is the question of cost and who will pay.
With legislation pending to support the densification of our communities to increase housing supply through the provision of laneway homes, suites, and multiplex units it is becoming clear that existing capacities are often insufficient to meet the required specified loads and upgrading those capacities is being downloaded onto individual proponents on a lot-by-lot basis with transformer upsizing or provision of pad-mount transformers that carry six-figure price tags – working against affordable choices.
The status of our electrical capacity is being scrutinized closely by media, industry, utilities, and governments and in a recent article in The Vancouver Sun it is noted that:
“B.C. Hydro has lately projected increased demand for electric vehicles, heat pumps, population growth, industrial development, and the post-pandemic economic recovery. And Premier Eby commented that: ‘The province will require an additional 3,000 gigawatt hours of electricity starting as early as 2028, – That’s enough electricity to power 270,000 homes.’ The anticipated demand is in addition to the coming output of Site C.
Presuming construction remains on schedule, the project is projected to begin delivering about 5,000 GWh of electricity annually starting in late 2025.”
We have seen data that recorded peak energy consumption during the December cold snap of 2021 where consumption posted a record demand for hydro and gas, and wherein electricity from all sources accounted for roughly a third of that load. With the province having announced that LNG processing would now be powered by hydro and continuing to mandate “electric only” in new construction this demand challenge is only increasing.
The utilities are aware of the issues and are working on addressing the problems, and the Federal government last week announced a comprehensive effort to expand and increase our electrical grid and assist utilities across the country with financial support. BC Hydro has an Integrated Resource Plan from 2021 that has just been updated for 2023 and the projections have been extended to reflect the increase in potential demand, but there is no question that meeting demand will be a challenge requiring conservation, additional generating capacity, and expanded and upgraded distribution. The problem lies in the short and medium term as expanding capacity and the grid will take time and we are already well behind the curve.
This brings us back to looking at using “all of the tools in the box”, and prior to creating a prohibitive environment that backs us into a single-source supply scenario where that source cannot keep pace – all options need to be on the table. One of those options is Renewable Natural Gas or RNG. While being referred to as a natural gas it is important to note that it does not stem from fossil fuel sources. RNG is captured as an off-gas generated by landfill sites, sewage waste treatment, agricultural operations, and other sources where if not captured and repurposed those gases will emit directly into our atmosphere as methane which is many times more detrimental than carbon dioxide emitted from gas-fired equipment.
Achieving the highest performance goals of the Energy Step Code, and carbon targets can be realized using 99% efficiency plus rated gas fired equipment and in conjunction with RNG will meet GHG targets. FortisBC has provided natural gas to BC for many years, and is also invested in hydroelectric generation, but Fortis is not a producer of natural gas but rather a conduit for delivery that is integral to meeting our energy requirements. Fortis is transitioning to capturing and delivering RNG and this should be considered as a viable and additional contributor to meeting our decarbonization targets.
I received an email last week from Michael Liu, Regional Energy Solutions Manager for the Lower Mainland for FortisBC and he offered comments on some of the actions being contemplated in Metro Vancouver and outlined where FortisBC stands and their commitment to realizing our decarbonization goals. I offer this communication as received:
You may have seen a series of Glacier Media news articles by Stefan Labbe on recent municipal meetings (Metro Vancouver, City of Vancouver and Nanaimo) on preventing the use of natural gas in new buildings and redactions made to the BC Renewable and Low-Carbon Gas Supply Potential Study. As these reports may cause you or your members to have questions or concerns related to our efforts to provide low-carbon energy I wanted to provide you with the following statement that provides perspective that was not included in the reports.
FortisBC is committed to reducing fossil fuel use and is actively seeking out practical paths forward. We also believe an affordable and practical path forward to achieve timely emission reductions and reduce fossil fuel use requires increasing the supply of renewable and low-carbon gases* as well as electricity. We share the urgency to move quickly on climate change and believe to make progress we need to have accurate information about British Columbia’s unique energy networks. That means understanding our province’s realistic and affordable access to potential supply of electricity as well as renewable and low-carbon gases.
As part of that effort, FortisBC partnered with the BC Bioenergy Network and the BC Ministry of Energy, Mines and Low Carbon Innovation to study the supply potential and production cost of renewable and low-carbon gases in B.C., Canada and the United States. During the standard review process, the steering committee composed of the BC Bioenergy Network, the Ministry of Energy, Mines and Low Carbon Innovation and FortisBC agreed to edits to sections of the report that were out of scope, inaccurate and could not be substantiated by data reviewed during the study. For example, the idea that British Columbia could more easily or affordably meet climate targets by electrifying instead of using renewable or low-carbon gases cannot be substantiated without studying the cost of developing the infrastructure required to produce and deliver the additional electricity. This fact is highlighted by recent academic studies in British Columbia at UBC, SFU, and UVic.
The transition away from fossil fuels will require capacity for delivering electricity as well as renewable and low-carbon gases. As a company that has both gas and electric utilities, FortisBC is proud to be at the forefront of this work, including record investment in renewable energy and energy efficiency. We will continue to work diligently to reduce fossil fuel use as quickly as possible in collaboration with our customers and the communities we serve.
• FortisBC uses the term renewable and low-carbon gas to refer collectively to the low-carbon gases or fuels that the utility can acquire under the Greenhouse Gas Reduction (Clean Energy) Regulation, which are: Renewable Natural Gas (RNG or biomethane), hydrogen, synthesis gas (from wood waste) and lignin. FortisBC’s RNG portfolio currently includes only Renewable Natural Gas. Other gases and fuels may be added to the program over time. Depending on their source, all of these gases have differing levels of lifecycle carbon intensity. However, all of these gases are low carbon when compared to the lifecycle carbon intensity of conventional natural gas. The current burner tip carbon intensity of RNG is 0.29gCO2e/MJ and the current RNG portfolio lifecycle emissions are -22gCO2e/MJ. This is below B.C.’s carbon intensity threshold for low-carbon gases of 36.4 gCO2e/MJ set out in the 2021 B.C. Hydrogen Strategy.
It is important to note that FortisBC too does not have the capacity to meet all of our energy needs with RNG or even with natural gas, but RNG has a role to play in the transition to a new energy landscape and represents an option that meets the desired goals and can augment the shift to electric filling the gaps and mitigating the loads and stresses that our electrical grid will have to accommodate. There is also a significant role for RNG to play in retrofitting existing lower performance installations embodied in our existing housing stock that contributes the majority of the carbon footprint generated by housing.
The climate emergency dictates the urgent need for immediate action at all levels and it must embrace all the available resources focused on achieving this goal. We need to support and continue to find the means to apply all renewable technologies toward decarbonization including solar, wind, tidal, geo-thermal, and more and employ the solutions that suit the circumstances, are most efficient, practical, and cost effective. Keeping an open mind and supporting a variety of solutions rather than backing into any ideological corners may likely lead to tangible results faster.
We encourage you to click through the references noted, familiarize yourselves with “all of the available tools” and information, and work with energy advisors and other professionals to provide the highest and best uses and choices for your clients to achieve the targets and goals of the Step Code, decarbonization, and GHG initiatives. It is also important to message this to all jurisdictions to avoid being trapped in solutions that are too narrow, unsustainable, and can exasperate the affordability of housing.
HAVAN continues to work with CHBA BC and CHBA to advocate for all levels of government to work together to address the challenges of the housing industry including zoning restrictions, density limits, and NIMBYism.
Looking to stay up-to-date on Metro Vancouver’s residential housing industry? Sign up for Ron’s weekly Monday Morning Briefing and other HAVAN emails here.
QUICK BITES …
- CHBA National has released their 2023 Q2 Housing Market Index and the index reflects an increase in builder confidence with both single and multi-family builders reporting to drive an index rating hovering around 40 points which is up from Q1 at around 24 points.
- BC Housing has provided the New Homes Registry Report for July 2023 and overall, the number of registrations is down in the 25% range for Multis and 30% for Singles across the province. The numbers are still fairly robust as they are being measured against record totals of 2022. The report breaks down genre and region in detail. Sales are showing signs of rebound that may be reflected in next month’s report.
- To illustrate that DCC’s and government charges are not unique to BC please see this opinion piece from Mike Collins Williams the CEO for West End Home Builders Association that covers the Hamilton Wentworth region west of Toronto. Mike’s comments and observations could be applied to our jurisdiction as well.
