More than 650 Canadian municipalities have declared a climate emergency, and many have set a goal to reach net zero by 2050. Since buildings are one of the largest carbon emitters, municipalities are challenged with developing corporate net zero standards to find ways to optimize building energy efficiency for all their municipal-owned facilities.
You might ask, what is a net zero building? A net zero emissions building either produces no emissions or produces enough emissions-free renewable energy to offset emissions from all energy used in the building annually.
The pathway to net zero involves a combination of energy conservation, electrification, on-site renewables deployment and low-carbon retrofits. Building Automation Systems (BAS), energy-efficient equipment, and commissioning practices play a pivotal role in conservation efforts. To achieve net zero, facilities need to switch from using fossil fuels like natural gas to electricity, and harness heat pump technology, geothermal technology, and renewable natural gas. All of this is complemented by electricity generation from renewables like solar and wind.
But isn’t it costly to build a low-carbon building? A new low-carbon building requires a higher upfront cost, but it is still lower than the cost of building now and fuel-switching later. Additionally, for existing buildings, fuel-switching when existing heating systems reach end-of-life minimizes the cost and instead becomes an incremental cost premium on top of a required end-of-life systems replacement. That is why incorporating net-zero considerations into Asset Management and Capital Planning is crucial. This was demonstrated in the Zero Carbon Whitby Costing Study – a framework to develop and implement GHG reduction actions in municipal buildings from the bottom up, where aligning capital and operating budgets with emission reduction targets showed a positive business case over 2022-2050. While the net zero plan requires 16% more per capital funding as compared to the business-as-usual capital cost, the total savings from operational (avoided) costs will be 29% (to be achieved by 2050), which will pay back for the increased capital costs. The study demonstrated that decarbonizing Whitby’s operation saves $1.66 for every $1 invested.
The cost premium for building a new low-carbon building now is lower than the cost of undertaking a low-carbon retrofit later. Because the new building systems installed now will not likely reach the end of service life before 2050 (large HVAC systems tend to last for 30+ years), additional lifecycle investment may be required to replace systems early. Moreover, a future cost burden is associated with the increase in fossil fuels alongside carbon prices and a limited renewable natural gas (RNG) supply. Therefore, building new facilities to net zero emissions now is the most cost-effective long-term investment choice.
Municipalities can use a Revolving Reserving Fund to implement their Corporate Net Zero Plan. Revolving funds are an internal capital pool dedicated to funding energy efficiency, renewable energy, and/or sustainability projects that generate cost savings. A portion of those savings is then used to replenish the fund (i.e. revolved), allowing for reinvestment in future projects of similar value. Revolving funds have been found to result in increased implementation of actions and are used by municipalities such as Whitby, Hamilton, Toronto, Guelph, and Caledon.
Decarbonizing our buildings requires ending the use of natural gas, gasoline and diesel, which is also fiscally responsible. In the long run, net-zero-carbon buildings are more efficient, cheaper to run, and increase resilience to extreme weather events and the reliability of electricity supply in cities with unreliable or overloaded power grids. Therefore, developing and implementing corporate net-zero plans is the best way to achieve municipal corporate climate commitments.
You can watch the City of Barrie and the City of Burlington webinar recordings to learn more about their municipal, corporate net zero efforts.
By Desi Stefanova, Outreach Manager