Getting the geothermal ball rolling
The Toronto Star: Tyler Hamilton, Energy Reporter - Nov 26, 2007
If everybody agrees the technology is great, why is nothing being done?
There was an informal lunch last week in the executive dining room of RBC Financial, organized by Corporate Knights editor Toby Heaps. The purpose of the small get-together was to discuss ways to spur the large-scale deployment of geo-exchange energy systems for the heating and cooling of buildings.
A number of stakeholders were represented, among them RBC, Manitoba Hydro and Hydro One, but commercial builder The Remington Group, geothermal utility start-up GeoXperts and carbon offset champion Zerofootprint also shared their views.
As discussion unfolded, one thing became clear: All saw the tremendous potential for mass deployment of geo-exchange technology, both as a way to reduce greenhouse gas emissions in Ontario and as a way to save owners of buildings and homes a bundle of money over time.
Geo-exchange technology, also known as low-temperature geothermal, provides heating and cooling by taking advantage of constant temperatures two metres or more below the Earth's surface. It's renewable and free of greenhouse gas emissions, and while it requires electricity to operate, it considerably reduces the fossil fuels or power required to operate conventional heating and cooling systems.
"I think we're on to something, and I think it's the way of the future," said Richard Tripodi, vice-president of Remington's high-rise division.
Ron Dembo, founder and chief executive of Zerofootprint, said there are 140,000 new buildings being constructed in Canada each year and about 700,000 homes in Ontario still heated with electricity, making them prime candidates for geothermal.
Locally, hundreds of schools across the GTA have a mandate to be green and a need for energy savings - which could be in the order of 30 per cent a year if existing systems were enhanced with geothermal technology.
"They would do geothermal now if the ducks were lined up, and there's no good reason the ducks aren't lined up," said Dembo.
Commercial buildings in general are a massive opportunity. There are 395,000 commercial buildings across Canada that together account for about 15 per cent of energy use nationwide, according to a report released Friday by Sustainable Development Technology Canada. We're talking schools and universities, office buildings, retail outlets, warehouses, hospitals and restaurants.
About 40 per cent of those buildings were built more than 35 years ago based on construction techniques, technologies and standards that would never pass muster today in terms of energy efficiency. More than two-thirds of the energy used in these buildings - largely electricity and natural gas - goes toward space heating, cooling and hot water.
If embracing geothermal is a no-brainer, then why isn't it happening? Why all the talk, all the agreement, but no action?
"It's because of institutional barriers," said Dembo, explaining that a combination of government bureaucracy and a lack of access to capital tend to block or discourage action.
You can add lack of political will, outdated building codes and standards and inertia to the list. Major stakeholders - property developers and financial institutions and governments - are also working in silos and not properly communicating their needs to each other.
"People continue to sell what they know. There's a huge knowledge gap here," said Dembo.
Ojan Jamkhou, vice-president of business development at RBC, and Nelson Switzer, the bank's senior manager of corporate environmental affairs, were hearing the message and agreeing. It was an important issue for RBC, they said. They want to play a role. They welcomed the opportunity.
Their response intrigued Tripodi. "It's a funny thing, you mention you are into this business but we don't know about it," he said, speaking on behalf of Remington and other developers in the market. "You have to educate builders."
The session ended with a challenge. Dembo proposed that RBC back a $100 million pilot project that would aim to retrofit 30 schools in Toronto with geothermal systems.
The point of the exercise would be to test a funding model that would provide easy and cheap access to retrofit capital and prove to the bank that it's a business opportunity that could be replicated and expanded into billion-dollar funds aimed at different sectors.
RBC accepted the challenge. "Let's make it happen," said David Moorcroft, senior vice-president of corporate communications at the bank. "That's the bottom line."
It was a short, insightful and productive session, the kind of constructive gathering that should be happening in offices across the country, and should be expanded to include ways of renewing our aging municipal infrastructure in sustainable ways.
The Federation of Canadian Municipalities announced last week that 79 per cent of our roads, bridges, water systems and other vital infrastructure have exceeded their rated service life. Fixing them will come with a $123 billion price tag, the federation argued. It warned that "signs of collapse" are all around us and "catastrophic failures" are an ongoing risk.
Now, this seems like a gloomy, depressing report - if you choose to view it that way. But if we're forced to act, why not see it as a tremendous opportunity? If we have to replace this infrastructure, let's use the greenest and cleanest of technologies. Let's make what we refurbish and rebuild as efficient andsustainable as possible, and let's create local, high-paying jobs and markets in> the process.
The economic upside isn't lost of the nation's top CEOs.
"Meeting the climate change challenge will impose significant costs on Canadians, but also offers huge opportunities," according to a policy directive released last month by the Canadian Council of Chief Executives, representing a list of high-profile CEOs too long to mention.
"The key is to make the right decisions about what investments in the short term will produce the greatest returns both now and over the long haul, for Canada's economy and for the global environment."
What's needed, they said, was clear and consistent policy and quick action. There's no room anymore for dithering. No time for political games.
More of us should be issuing challenges to government and the private sectors. And like RBC, more powerbrokers of our economy need to be taking those challenges on.