ELECTRIFYING PROGRESS
Technology and Carbon Pricing Advance Fuel-Switching By Barbara Carss CLIMATE, COST AND CAPACITY pose fuel-switching challenges for building owners looking to curb greenhouse gas (GHG) emissions in line with Canada’s target for a 40 to 45% reduction below 2005 levels by 2030. Industry panellists contemplating the electrification of mechanical systems during a recent Canada Green Building Council (CAGBC) conference in Toronto acknowledged that the leap to net zero comes with varying degrees of difficulty from region to region across the country. For example, British Columbia’s lower mainland enjoys the twin advantages of a clean electricity grid and milder winter temperatures that generally don’t compromise the effectiveness of air-source heat pumps. Elsewhere, the arrival of new technologies and ongoing replacement of fossil-fuel-fired power generation with renewable sources are expected to ease the transition to low-carbon heating and domestic hot water systems, but that’s occurring on a patchwork of timelines. A carbon price on pace to reach $170 per tonne by 2030 and the potential for other regulatory and investment-related
14 July 2022 | Canadian Property Management
imperatives are now reshaping conventional cost-benefit analyses. Yet, even as the commercial real estate industry is urged to readjust priorities from incremental improvements with quick paybacks to bigticket, deep retrofits, energy efficiency continues to be a preferred gateway to decarbonization for many companies pursuing emissions reduction targets. “One of the goals along with heating electrification is to reduce the amount of heat we need. It seems like now we’re talking about carbon, carbon, carbon, carbon, but energy efficiency is still very much the first thing that we focus on,” affirmed Ariel Feldman, Director of Sustainability with Choice Properties REIT. “You still need to take all those steps first because, from the owner’s perspective, electrification is not necessarily going to pay back. You might spend more money up front and you might spend more money on the operations side. That’s not a very good business case to start from.” That said, he maintains business cases should no longer be anchored in the supposition that a boiler has a 30-year life cycle. Speaking at the REMI Show in early
June, Jeff Ranson, Director of Energy, Environment and Advocacy with the Building Owners and Managers Association (BOMA) of Greater Toronto, hammered home the same message. “If you’re comparing the cost of zero carbon with your current operating costs, that’s a false equivalency because your current building operations may not be possible in the future. Business as usual may not exist, and probably won’t exist,” Ranson submitted. “We’re not typically factoring in changes to the asset value whether or not your building is aligned with carbon targets. We’re not factoring carbon pricing. We’re not factoring in policy risk.” “The sticks are coming,” Steve Kemp, a principal with RDH Building Science, warned CAGBC conference attendees. INCENTIVES AND OBSTACLES In British Columbia, there’s now one such stick intertwined with a carrot. Since the release of the provincial budget on February 23, 2022, the provincial sales tax (PST) on gas-fired heating and cooling systems has jumped from 7% to 12%, while heat pumps are now exempt from PST.
