LINKING MITIGATION AND ADAPTATION GOALS IN THE SECTOR

A Case Study Synthesis Report

2015

A Case Study Synthesis Report 2

Ontario Centre for Impacts and Adaptation Authors: Resources (OCCIAR) OCCIAR at MIRARCO (Laurentian University) is a Annette Morand university-based resource hub for researchers and Community Adaptation Coordinator OCCIAR stakeholders and provides information on [email protected] impacts and adaptation. The Centre communicates the latest research on climate change impacts and Ryan Hennessey adaptation, liaises with partners across to Utilities Specialist encourage adaptation to climate change and aids in the Energy Solutions Centre development and application of tools to assist with [email protected] climate change adaptation. The Centre is also a hub for climate change impacts and adaptation activities, events Jeremy Pittman and resources. PhD Candidate www.climateontario.ca University of Waterloo [email protected]

Yukon Energy Solutions Centre (ESC) Al Douglas The Energy Solutions Centre is a branch of the Yukon Director Government's Department of Energy, Mines and OCCIAR Resources. The mandate of the branch is to encourage [email protected] improvements in energy efficiency and the adoption of more forms of . To accomplish this mandate, the branch participates in the design of energy policies, and delivers energy programs and projects that enhance the environmental, economic and social of the territory. Their clients consist of Yukon citizens, other government departments, First Nations, municipalities and businesses. www.energy.gov.yk.ca

Please cite this document as: Morand, A., R. Hennessey, J. Pittman and A. Douglas. (2015). Linking Mitigation and Adaptation Goals in the Energy Sector: A Case Study Synthesis Report. Report submitted to the Climate Change Impacts and Adaptation Division, Natural Resources Canada, 122p.

This project was made possible with the support from Natural Resources Canada through the Adaptation Platform

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TABLE OF CONTENTS

1.0 Introduction ...... 4 1.1 Climate Change Impacts on the Canadian Energy Sector ...... 5 1.2 Exploring the Intersection of Adaptation and Mitigation ...... 6 1.3 Defining Adaptation/Mitigation Actions in the Energy Sector ...... 7 2.0 Overview of Adaptation/Mitigation Case Studies ...... 9 2.1 Canadian ...... 9 2.2 International ...... 11 3.0 Co-Benefits ...... 13 3.1 Reduced Competition for Resources ...... 13 3.2 Reduced Influence of Uncertainty ...... 14 3.3 Increased Harmonization of Project Outcomes ...... 14 3.4 Improved Social License ...... 15 4.0 Tools for Accessing Adaptation/Mitigation Co-Benefits ...... 17 5.0 A Case for Linking Adaptation and Mitigation in the Energy Sector ...... 21 6.0 References ...... 24 APPENDIX A: Adaptation/Mitigation Case Studies ...... 27

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3 Linking Mitigation and Adaptation Goals in the Energy Sector

LINKING MITIGATION AND ADAPTATION GOALS IN THE ENERGY SECTOR

A CASE STUDY SYNTHESIS REPORT

1.0 Introduction

Climate change, and the risks associated with it, is of increasing concern for the Canadian energy sector. The sector is well positioned to respond to climate change, both through GHG mitigation and adaptation to current and future risks. Climate change mitigation is important to limit the degree of climate change as a whole, while adaptation is required to respond to current and future risks to energy. While either approach can yield successful climate change risk reduction, when harmonizing adaptation and mitigation, “responses can complement each other and together can greatly reduce the risks of climate change” (IPCC, 2014). Interest in the nexus between adaptation and mitigation and exploring potential synergies, or co-benefits, between the two approaches is growing (Pachauri & Reisinger, 2007).

The co-benefits of adaptation and mitigation have been more demonstrated in theory, and less is known about how benefits appear in reality. Also, little has been published on how the energy sector specifically can implement these two approaches and derive benefit. This research aims to identify and evaluate opportunities to integrate climate adaptation and mitigation within the Canadian energy sector. A compendium of 6 national and 5 international case studies have been developed that illustrate how adaptation and mitigation activities can result in mutual co-benefits that promote the advancement and attainment of both GHG reduction and adaptation resilience objectives.

This report introduces select climate change impacts on the Canadian energy sector, explains what adaptation/mitigation actions look like in the energy sector, and discusses the intersection or ‘nexus’ of adaptation and mitigation. We also summarize more broadly, the lessons learned from the co-benefits evident in the 11 case studies to demonstrate ideas and concepts for integrating the two areas of interest in practice.

The results are generally geared towards energy sector planners, engineers, and policy-makers and provide general recommendations on how to improve the integration of adaptation and mitigation in the Canadian energy sector. By establishing a basis from which to promote adaptation and mitigation

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co-benefits (or win-win solutions that reduce GHG emissions while enhancing resilience), this project aims to improve the Canadian energy sector’s ability to generate a fulsome response to climate change.

1.1 Climate Change Impacts on the Canadian Energy Sector

Climate change is expected to lead to continued increases in temperature, region-specific variability in precipitation and an increase in the intensity and frequency of extreme weather. More regional impacts will include higher levels and storm surges, coastal erosion, , permafrost thaw, increased precipitation variability, and ice storms (Kenward & Raja, 2014; Romero-Lankao et al, 2014; Policy Research Initiative, 2009; Lemmen et al, 2008). The cumulative impact of these stresses could lead to decreased water availability and stress, with resulting implications including service interruptions across the entire , including the oil and gas sector (Policy Research Initiative, 2009; Shaeffer et al, 2012). For example, is dependent on water availability, and therefore the future of hydropower is highly dependent upon future changes in precipitation patterns and extreme weather events (Dorner et al, 2013; Faust et al, 2014).

There is a significant economic cost to all sectors that goes along with the disruption of stemming from extreme weather, including lost output and wages, spoiled inventory, delayed production, as well as inconvenience (US Executive Office of the President, 2013). Extended power outages can interrupt the flow of clean water and solid waste removal from municipal water treatment facilities, cause hospitals to lose power and access to clean water, and result in businesses having to close, affecting sales and profitability (Kenward & Raja, 2014). Disruptions to the energy system can have significant effects on other critical services such as communications, transportation and human health (Dorner et al, 2013). To put this into perspective, the average annual cost of power outages caused by severe weather in the United States is estimated to be between $18 and $33 billion per year, but can cost much higher for years with record breaking storms. Superstorm Sandy, which struck the Eastern Seaboard of the United States in 2012, cost the U.S. economy between $27 and $52 billion (US Executive Office of the President, 2013).

In addition to addressing rising climate change vulnerability, the energy sector is currently struggling to address issues like aging infrastructure, capitalizing on changing technologies, and meeting energy demands of a growing (Canadian Association, 2014). The Canadian electricity sector is expected to invest $11 billion in infrastructure renewal each year for the next 20 years simply to replace its existing assets (Canadian Electric Association, 2011a, 2011b), while the Conference Board of Canada projects that an investment of $350 billion will be required for Canadian electricity infrastructure between 2011 and 2030 (Baker et al, 2011; Canadian Electricity Association, 2011a; Coad et al, 2011).

Aging infrastructure is more susceptible to climate change impacts and severe weather events (Davis & Clemmer, 2014; US Executive Office of the President, 2013; Romero-Lankao et al, 2014). Studies show that small increases in weather and climate extremes can result in large increases in damage to existing

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infrastructure (Auld & MacIver, 2007). As a result, it is an opportune time for the energy sector to be thinking about how to reduce its overall contribution to climate change (through mitigation efforts) and increase its resilience to future climate impacts (through adaptation strategies).

1.2 Exploring the Intersection of Adaptation and Mitigation

To date, the energy sector has focused its attention on actions that either mitigate GHG emissions or help the industry adapt; yet, there A “co-benefit” is an additional is benefit in implementing strategies that accomplish both. A benefit beyond the initial number of actions undertaken to reduce GHG emissions can have increases in resilience direct or indirect benefits that also increase the resilience of the (adaptation) and reductions in energy sector to help ensure safe, secure and uninterrupted energy GHG emissions (mitigation). supply. Once established, these actions have mutual co-benefits and Policies, programs or projects can be a more cost-effective way to respond to climate change in the with co-benefits can be a more energy sector. cost-effective way to respond to climate change in the energy The adaptation/mitigation space is defined by those strategies that sector. harness the synergies between climate change adaptation and climate change mitigation. These synergies emerge from technology and resources, policy development, and access to credible information and/or credible decision-makers (Yohe, 2001). The resilience of the energy sector can also be improved by integrating adaptation and mitigation. Such activities can decrease the likelihood of a risk or the severity of its consequences by working to improve the response of energy sector infrastructure to environmental stresses while also improving its efficiency (McAllister, 2011; Jones et al, 2007). The resulting co-benefits, derived from the optimization of synergistic adaptation/mitigation responses, can improve the ability of the energy sector to implement programs to respond to climate change. The synergies between adaptation and mitigation therefore define the adaptation/mitigation space while anticipated co-benefits that can be derived from it establish its value.

The value of these co-benefits to the energy sector to implement climate change solutions can be far reaching. An extensive literature review resulted in the identification of four main co-benefits:

1) Reduced competition for resources both within the sector and with other land-users; 2) Reduced influence of uncertainty on policy development and project design; 3) Increased harmonization of project outcomes that achieves multiple ends; and 4) Improved social license for energy project implementation.

These co-benefits will be necessary to respond to the emerging challenges that must be addressed by the energy sector in the coming decades. These decades, as described by Canadian Electricity Association in their Vision 2050, will be transformative and require the Canadian energy sector to address the multiple long-term objectives with limited resources (Canadian Electricity Association, 2014).

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Challenges of institutional complexities, varying perspectives, and insufficient opportunities could limit any benefits that could emerge from the integration of adaptation and mitigation (Klein et al, 2005). Such challenges will be exacerbated by increased competition between adaptation and mitigation goals as climate change further reduces the availability of some resources, especially water, and places increasing strain on infrastructure (Vine, 2012). How aspects of climate change adaptation and mitigation are integrated will be very important, given that how systems develop is important to their effectiveness, to ensuring the energy sector can optimize any benefits derived from the climate change program or policy development going forward.

1.3 Defining Adaptation/Mitigation Actions in the Energy Sector

A scoping exercise conducted at the outset of the project enabled the identification of actions in the energy sector to integrate adaptation with mitigation. The results of this scoping exercise were supported by a literature review and subsequently adopted as a basis for reviewing and categorizing case studies to identify the net benefit of integration.

Adaptation and mitigation were very simply defined at the beginning of the project. Adaptation was defined as actions that increase the resilience of a sector, region, company or government to those vulnerabilities associated with climate change. One important aspect of this definition was that the benefits of adaptation are typically felt locally. Mitigation was defined as actions that manage anthropogenic emissions. The benefits of a mitigation action were Figure 1: Conceptual Understanding of the Adaptation/Mitigation Space established as global in scale.

A conceptual understanding of the adaptation/mitigation space (Figure 1) was subsequently derived from the two common elements of these definitions:  They both refer to actions with outcomes at a global or local proximity or geographic scale.  They are intended to manage human systems to control either vulnerability or .

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The fundamental utility of this approach was the articulation of two theoretical areas where the characteristics of adaptation/mitigation benefits differ. The literature suggested that these areas are ones that contribute to the capacity of the energy sector to respond to climate change, or the ability of the energy sector to respond to impacts, or its resilience.

Similarities between adaptation and mitigation were also established based on their attributes. The definition for adaptation was expanded to include an “array of potential responses ranging from purely technological, through behavioural, to managerial, and to policy” (Brunner & Lynch, 2010:47). Similar attributes were established for mitigation by UNEP (2014), which stated that managing carbon emissions uses “new technologies and renewable , making older equipment more energy efficient, or changing practices or consumer behaviour”. The overlap of attributes between adaptation and mitigation was later refined based on the of Yohe (2001) and Winkler et al (2007) yielding a generalized matrix for categorizing solutions in the adaptation/mitigation space (Table 1).

Table 1: Adaptation/Mitigation Contribution Matrix

Contribution to Mitigation

Technological Behavioural Managerial Policy

to Technological

Behavioural

Adaptation Managerial

Contribution Policy

A working definition of adaptation/mitigation solutions was subsequently developed from the conceptual scoping exercise and the established inter-relationship between identified attributes.

Adaptation/mitigation solutions in the energy sector have broadly been defined as activities that change the technologies utilized to provide goods and infrastructure OR alter consumer or corporate behaviour OR inform managerial practices OR develop policy that alter the energy sector activities sufficiently to achieve a combination of reduced local vulnerability and a reduced contribution to global .

This working definition established the basis for identifying adaptation/mitigation actions in the energy sector, the type of solution identified, and the attributes to be discussed within each case study.

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2.0 Overview of Adaptation/Mitigation Case Studies

In order to illustrate how adaptation and mitigation activities can result in mutual co-benefits which promote the advancement and attainment of GHG reduction and resilience objectives in the energy sector, a compendium of national and international case studies was developed (see Appendix A). The following section provides a short description of the 6 Canadian (C) and 5 International (I) case studies. Table 1 provides an overview of where each case study falls on the adaptation/mitigation contribution matrix.

Table 2: Adaptation/Mitigation Contribution Matrix for all 11 Case Studies

Contribution to Mitigation

Technological Behavioural Managerial Policy

Technological C2 C1

Behavioural

Adaptation Managerial I5 I2 / I3 C5

Contribution to Contribution Policy I4 C4 C3 / C6 / I1

2.1 Canadian

C1: Lower Churchill Hydroelectric Generation Project Newfoundland and Labrador (NL) Development a hydroelectric power generation facility at Muskrat Falls in Labrador will enhance the amount of clean, renewable electricity in the province of Newfoundland and Labrador. The project will connect Newfoundland to the North American grid for the very first time and will help to displace fossil as power sources while simultaneously increasing , improving local air quality, providing opportunities for energy export, and increasing local employment and business opportunities.  Go to this case study

C2: Hydrogen Assisted Renewable Power (HARP) Bella Coola, British Columbia (BC) The HARP system is a demonstration project that determined the feasibility of storing excess renewable energy in remote communities isolated from the provincial electricity grid in order to increase energy efficiency and cost-effectiveness of a community’s energy system and reduce the reliance on diesel . The HARP system allows remote communities to increase the stability, reliability and security of their while also reducing GHG emissions, improving local air quality, reducing energy costs, and creating local employment opportunities.  Go to this case study

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C3: Climate Change and Emissions Management Fund (CCEMF) Alberta (AB) Alberta was the first jurisdiction in North America to pass climate change legislation in 2007, requiring large GHG emitters to reduce their emissions according to specific targets set by the province. Emitters who cannot meet targets contribute to the CCEMF which supports investment in and clean technologies aiming to reduce Alberta’s GHG emissions and improve its ability to adapt to a changing climate. By including both mitigation and adaptation in the same fund, competition for resources between adaptation and mitigation is reduced.  Go to this case study

C4: First Nations Power Authority (FNPA) Saskatchewan (SK) FNPA is a not-for-profit corporation that helps build capacity of Saskatchewan First Nations to participate in the province’s power sector. FNPA’s focus on renewable energy production in remote areas will help produce a more resilient power generation and transmission system while simultaneously reducing GHG emissions, as well as providing jobs and climate-smart development opportunities for Saskatchewan First Nations communities.  Go to this case study

C5: Markham District Energy (MDE) Markham, (ON) MDE is a utility owned by the City of Markham and a clear leader in district . MDE currently operates a number of Combined and Power (CHP) thermal energy plants. Introducing district energy to Markham increases the reliability and resiliency of the local energy system while simultaneously increasing energy efficiency, thereby reducing GHG emissions, while also increasing economic growth, energy self-sufficiency, energy redundancy, the flexibility of the system to allow for use of alternative fuels, and the flexibility in the way local energy is managed.  Go to this case study

C6: Independent Power Production and Micro-Generation Policies Yukon (YK) The Yukon government’s Energy Strategy for Yukon sets out government goals, strategies and actions for energy efficiency and conservation in the Yukon over the next 10 years. It outlines how electricity will be purchased from independent power producers and how individuals will be allowed to connect renewable energy sources to the grid (micro-generation). These policies incent investment in renewable energy projects and increase the mitigative and adaptive capacity of Yukon, which in turn can be utilized to reduce reliance on fossil fuels, improve local energy security, increase the social capacity of new energy generating projects, and enhance the ecosystem benefits available to residents.  Go to this case study

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2.2 International

I1: Green Roof Incentives Basel, Switzerland The City of Basel has a long history of green roofs. A combination of financial incentives and building regulations has helped the City achieve the highest percentage of green roof area per capita in the world. Green roofs increase the insulation properties of buildings and reduce while simultaneously improving stormwater management and reducing the effect. Basel’s green roofs also help to conserve regional , improve water quality, provide financial benefits to building owners and local businesses, and add additional urban green space.  Go to this case study

I2: Sustainable Energy Production Borough of Woking, England, UK Woking is considered the most energy efficient local authority in the UK, spending the last few decades successfully implementing small- and large-scale renewable and sustainable energy projects, including Combined Heat and Power (CHP). Using the CHP distributed energy system increases the security of Woking’s energy supply and independence from the national grid in the event of a power outage. Woking has reduced its levels of GHG emissions while simultaneously increasing the resilience and reliability of its energy system, offering competitive energy prices, providing affordable energy for social housing residents, increasing system efficiency, all while creating profits that are reinvested back into energy efficiency within the community.  Go to this case study

I3: Plant Project Chena Hot Springs Resort, Alaska, USA The Chena Hot Springs Resort became the first business in Alaska to install a geothermal power plant in 2006. The introduction of renewable energy in a remote northern community not only reduces the dependence on diesel fuel for energy use, but also improves self-sufficiency in terms of energy and food production, reducing the dependence on imported resources that are susceptible to the impacts of climate change. There are also significant cost savings when switching from diesel fuel to geothermal.  Go to this case study

I4: Plan New York, New York, USA NYC released its Green Infrastructure Plan in 2010 in order to help manage stormwater within the city and meet two overarching goals: better water quality in NYC Harbour and creating a livable and sustainable NYC. Green infrastructure is able to capture and store stormwater runoff, thus reducing the amount of water entering sewer systems (saving energy

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costs associated with pumping and treating the water and GHG emissions) and reducing the amount of urban flooding. Green infrastructure also helps to reduce pollution to local water bodies, improve local air quality and public health, increase the amount of green space for recreation and wildlife, and mitigate the urban heat island effect.  Go to this case study

I5: Project Washington, District of Columbia, USA Pepco is the energy company responsible for delivering electricity to Washington, D.C. and is a well recognized leader in smart grid technology. The Smart Grid Project in Washington, D.C. modernizes the using new infrastructure such as meters, monitors, wires and switches. The smart grid provides Pepco with more visibility into the electricity grid and its operations in order to increase the reliability and resiliency of the grid, while simultaneously providing customers with the tools necessary to increase their energy efficiency and reduce their energy demand, thereby reducing GHG emissions.  Go to this case study

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3.0 Co-Benefits

Co-benefits provide the value for integrating adaptation and mitigation in the energy sector. Four main co-benefits were identified from the literature review at the onset of the project (refer to section 1.2):

1) Reduced competition for resources both within the sector and with other land-users; 2) Reduced influence of uncertainty on policy development and project design; 3) Increased harmonization of project outcomes that achieves multiple ends; and 4) Improved social license for energy project implementation.

In this section we describe each of these co-benefits and provide evidence that they are readily identifiable in the case studies. It is the assumption of this report that each co-benefit can be derived from those interfaces between adaptation and mitigation that exist in each project, and that sufficient interfaces exist within a project for all four co-benefits to be derived from. A potential project could therefore be optimized to yield all four co-benefits and subsequently optimize the value to be derived from it.

3.1 Reduced Competition for Resources

Competition for resources within the energy sector will likely grow as human and capital constraints build over time (Hulme et al, 2009). Incorporating both adaptation and mitigation goals within one policy, program or project can help to reduce this competition for resources within the energy sector, avoiding the possible duplication of effort and cost should they be treated separately (Warren, 2011).

For example, the Climate Change and Emissions Management Fund (CCEMF) in Alberta captures the regulatory penalty from those who cannot meet targets for emissions reduction to help the province reduce its GHG emissions and adapt to a changing climate by supporting innovative research projects. Using these funds to support innovation for both adaptation and mitigation projects helps to decrease the competition for resources. Chena Hot Springs Resort was the first location in Alaska to install a geothermal power plant, successfully reducing the community’s dependence on diesel generators. The managerial decision to explore cheaper forms of electricity reduces the consumption of financial resources and enables them to be invested elsewhere, such as building local greenhouses in order to increase .

Case studies characterized by this co-benefit:  C3: Climate Change and Emissions Management Fund (CCEMF)  C4: First Nations Power Authority (FNPA)  C5: Markham District Energy (MDE)  I2: Sustainable Energy Production  I3: Geothermal Power Plant Project  I5: Smart Grid Project

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3.2 Reduced Influence of Uncertainty

The quantifiable outcomes of GHG emission reduction over the short term can be utilized to overcome the more significant uncertainties usually associated with climate change adaptation. The decreased uncertainty and associated project risk results from the much narrower scope and systems functioning of GHG management projects (which are much better understood and easier to build a business case on), and can thereby emphasize the short-term and demonstrable outcomes of mitigation projects. When combined with an adaptation project, which typically yield benefits over a long timeline through significant assumptions, these demonstrable outcomes can reduce the uncertainty associated with the nature and timing of climate change and its impacts, subsequently leading to an improved case for adaptation (McAllister, 2011). Including both adaptation and mitigation goals in an energy project can therefore reduce the influence of uncertainty on policy development and project design and better enable adaptation projects to be implemented.

For example, the HARP ‘proof-of-concept’ project in Bella Coola, BC demonstrated opportunities for both adaptation and mitigation to climate change, although adaptation was not an explicit goal of the project. The project ultimately had a goal of reducing the dependence on diesel generators and overall GHG emissions, yet it also helped to increase the stability and reliability of the community’s energy system – which advances climate change adaptation. Additionally, green roofs developed in Basel, Switzerland were driven by energy savings and advancing climate change mitigation. Yet, green roofs also provide adaptation measures such as moderating stormwater and local ambient air temperatures. Thus, the uncertainty in adaptation decisions can be reduced by placing the emphasis on the relative certainty available in mitigation decision-making processes which are made possible through the quantifiable attributes of mitigation.

Case studies characterized by this co-benefit:  C1: Lower Churchill Hydroelectric Generation Project  C2: Hydrogen Assisted Renewable Power (HARP)  I1: Green Roof Incentives  I2: Sustainable Energy Production

3.3 Increased Harmonization of Project Outcomes

The harmonization of climate change responses within implementation objectives can help achieve multiple ends. Some adaptation solutions in the energy sector can lead to increased GHG emissions (mal-adaptation), while some mitigation solutions may increase the sectors vulnerability to extreme weather events (mal-mitigation). Increased awareness of the adaptation/mitigation space could reduce the likelihood of mal-adaptation and mal-mitigation if harmonized (McAllister, 2011).

The Yukon government had equally important mitigation and adaptation goals in mind when it developed the Independent Power Production and Micro-Generation Policies. The policies aimed to harmonize the long term objectives of reducing Yukon’s while increasing its adaptive

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capacity. The Saskatchewan First Nations Power Authority (FNPA) showed how competing priorities can be balanced to address climate change from both an adaptation and mitigation standpoint. While the main drivers and mandate of the FNPA pertains to the development of economic opportunities for First Nations, the benefits of climate change responses are clear and will serve the First Nations and the province writ large.

Case studies characterized by this co-benefit:  C1: Lower Churchill Hydroelectric Generation Project  C2: Hydrogen Assisted Renewable Power (HARP)  C3: Climate Change and Emissions Management Fund (CCEMF)  C4: First Nations Power Authority (FNPA)  C5: Markham District Energy (MDE)  C6: Independent Power Production and Micro-Generation Policies  I3: Geothermal Power Plant Project  I4: Green Infrastructure Plan

3.4 Improved Social License

The harmonization of climate change responses may also lead to improved social license to operate for energy projects. That is, the payback from mitigation actions is improved by direct contributions to resilience (adaptation) and sustainability (Veneman & Rehman, 2007). Highlighting the adaptive element of a mitigation project has been demonstrated to reduce public resistance by demonstrating immediate air quality and recreation benefits (Veneman & Rehman, 2007).

For example, the cases of Basel, Switzerland and New York City involved the development of green roofs and green infrastructure, respectively. Not only do these types of projects advance both adaptation and mitigation, they also result in additional environmental, social and economic benefits. Many of these additional benefits help to improve the social license of the projects, including opportunities for workforce development, improved quality of life, improved local air quality and public health, and increased amount of green space for recreation and wildlife. The Smart Grid project in Washington, D.C., specifically smart meters that collect, measure, and analyze energy usage data in order to identify power outages and provide notification, can provide energy users with useful information. In emergency situations, such as Superstorm Sandy, smart meters can help utilities focus resources on the areas of the city most affected by extreme weather, allowing managers to respond more effectively to public need, thus highlighting a connection to improved social license.

Case studies characterized by this co-benefit:  I1: Green Roof Incentives  I2: Sustainable Energy Production  I4: Green Infrastructure Plan  I5: Smart Grid Project

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Evidence of all four potential benefits were present in the case studies, although no case study demonstrated more than two, suggesting that each project could potentially yield further value to the owner if purposefully framed to achieve climate change outcomes. Further, while establishing the near- term benefits of the co-benefits should improve the business case for a climate change (or sustainability) project, few of the case studies were undertaken with the objectives of building resilience (i.e. adaptation) or reducing emissions (i.e. mitigation).

To optimize the conclusion of this report we next turn to the case studies to derive key lessons for implementing climate projects in the energy sector in order to inform our discussion of optimizing the immediate value of project implementation, while also achieving climate change outcomes that benefit the energy sector over the long-term.

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4.0 Tools for Accessing Adaptation/Mitigation Co-Benefits

This section highlights some of the key lessons evident in the case studies that inform the implementation of energy sector projects that achieve climate change outcomes. Each key lesson identifies a tool that can be utilized to improve the business case of climate change projects. Each lesson is supported with context directly from the case studies.

1) Policy is important for achieving adaptation/mitigation responses to climate change in the energy sector. The policy instruments of any administration; municipal, First Nation, provincial/territorial, and federal, are critical to fostering adaptation and mitigation. These instruments can be utilized to prescribe regulations that require climate change actions, or provide incentives that foster market development, and can ultimately provide tools to combine adaptation and mitigation responses in the energy sector and others.

For example, the City of Markham introduced a policy that requires City Council and senior staff to promote district energy. This is reinforced through the city’s current Official Plan which encourages the evaluation and consideration of district energy in new development and reinforces it in current areas. Since introducing district energy systems helps to increase the reliability and resiliency of the local energy system while simultaneously increasing energy efficiency, the policy contributes to both adaptation and mitigation goals.

The Building and Construction Law in Basel, Switzerland was amended in 2002 requiring all new and renovated flat roofs to have green roofs. This not only has adaptation benefits (by reducing the risk of urban flooding through stormwater retention and reducing the urban heat island effect), but mitigation by enhancing the thermal properties of buildings which increases energy efficiency, thereby reducing GHG emissions.

The Basel, Switzerland and New York case studies identify how green roofs can reduce GHG emissions (e.g. by enhancing the thermal properties of buildings and decreasing the energy needed for heating and cooling) and increase adaptation (e.g. by increasing stormwater storage/management thus reducing the risk of urban flooding, and reducing the urban heat island effect). Green roofs and other forms of urban greening are examples of no-regrets actions that can fulfill multiple objectives; thus municipalities can play a big role in reducing energy consumption and demand by integrating policies or regulations that promote the development of green infrastructure.

Additionally, municipalities can introduce policies that promote the inclusion of district energy systems, as in the Markham, Ontario and Woking, UK case studies. For example, Markham, Ontario recently introduced a policy that requires City Council and senior staff to promote district energy, and Markham’s current Official Plan encourages the evaluation and consideration of district energy in new development and reinforces it in current areas. Provisions for district energy in high level

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municipal plans and policies related to growth and land use planning will lead to GHG reduction and improved resilience.

2) Strong leadership can play an important part in contributing to both adaptation and mitigation in the energy sector. As is evident in the case studies, strong leadership can be pivotal in the success or failure of a project. Leadership is a benefit of itself, and early adopters are often rewarded for experimentation, although having a champion to reduce concerns is often a key attribute for success. For example, the leadership shown by the owners of the Chena Hot Springs Resort in Alaska was integral in 1) obtaining partners to provide support for the project; 2) installing the geothermal generators at the resort despite the marginal economics associated with the energy source; and 3) leveraging the benefits provided by the generators to build adaptive capacity, despite the obvious business risk associated with each action.

In Saskatchewan, the First Nations Power Authority is a model of leadership from First Nations and provides the mechanisms for fair and inclusive participation of Saskatchewan First Nations in the energy sector. This leadership provides capacity for those First Nations who participate in renewable energy projects, ultimately generating benefits related to climate change adaptation.

In Woking, UK, Council identified the need to reduce GHG emissions and combat climate change and developed the first Energy and Environmental Service Company in the UK in order to increase capacity. The sustainable energy achievements in Woking are a direct result of the political leadership from the Council members who made energy efficiency and sustainability a priority. This dedication to sustainable and renewable energy enabled Woking to reduce its levels of GHG emissions while also increasing the resilience and reliability of its energy system.

3) Assembling effective partnerships is critical for financing technology projects that yield adaptation and mitigation benefits. Many of the projects were government funded, with some involving public/private partnerships. For example, in order to address the high capital cost of building its first district energy system, the City of Markham, Ontario partnered with the Federation of Canadian Municipalities’ Green Municipal Fund, Infrastructure Ontario and private lenders, along with contributing its own resources from the Federal Gas Tax rebate. The owners of the Chena Hot Springs Resort in Alaska developed a geothermal power generation station with support from the U.S. Department of Energy and a grant from the Alaska Energy Authority, and partnered with a private company that designed, assembled, tested and installed the power plant at Chena. These types of partnerships and the resulting funding equations help to lessen the financial burden on any individual partner.

4) Previous or current energy/cost saving projects can use funds to re-cycle back into adaptation and mitigation projects. Climate change legislation in Alberta requires large GHG emitters to reduce their emissions according to specific targets defined by the province. One of the options for companies that cannot meet their targets is to contribute to the Climate Change and Emissions Management Fund (CCEMF). These funds are then used to support investment in innovation and

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clean technologies that aim to further reduce Alberta’s GHG emissions and improve its ability to adapt to climate change. The idea of penalizing the companies that cannot meet specified GHG reduction targets and using that money to further research adaptation and mitigation could be implemented in any jurisdiction. The influence of policy and regulations can help incentivize behaviour change to drive companies towards reducing GHG emissions.

Additionally, the Borough of Woking used revenues saved as a result of municipal energy efficiency projects to reinvest in the community year after year to continuously improve overall energy efficiency. From this, the Council was able to save money and raise capital for energy infrastructure development, including its two energy service companies.

5) Investment options will create opportunities for adaptation and mitigation. It is clear from the Bella Coola, BC case study that there are adaptation and mitigation benefits associated with increasing energy storage capacity. The hydrogen energy storage system and Microgrid control system tested in Bella Coola, BC was able to increase the efficiency of the intermittent, and unpredictable nature of the run-of-the-river hydropower facility by storing excess electricity during off-peak periods to use during periods of high-demand, thus reducing the dependence on diesel generators in Bella Coola. The introduction of energy storage can allow a community to increase the stability, reliability and security of its energy supply while simultaneously reducing GHG emissions, improving local air quality, and reducing energy costs for residents.

6) A strong business case helps incent both adaptation and mitigation goals into energy sector projects and policies. Strong business cases do exist to support adaptation and mitigation projects and many of the case studies demonstrate paybacks or returns on investment. The City of Markham views its district energy system as a business; as investments start to slow over the long- term the system will generate a significant cash flow for the city. The Muskrat Falls Hydroelectric Power Generation project in Newfoundland and Labrador will produce enough electricity to meet domestic needs and presents an opportunity for the province to sell excess power to the North American market.

Smart meters installed in Washington, D.C. as part of the Smart Grid project have helped streamline operations, which improve the efficiency of and reduce utility costs associated with equipment failure, meter reading, as well as operation and maintenance costs. The Chena Geothermal Power Project in Alaska highlights the low cost of the power generation equipment and the feasibility of producing low cost electricity. Even though the initial installation costs of geothermal power may be higher than conventional heating and cooling systems, the costs can be recovered over a relatively short period through energy savings, particularly in remote communities that rely on diesel fuel.

Additionally, New York City is focused on increasing the amount of green infrastructure across the city with its Green Infrastructure Plan because it has clear cost-savings when compared to

19 Linking Mitigation and Adaptation Goals in the Energy Sector

traditional grey infrastructure, including reductions in capital costs, operation expenses, land acquisition costs, repair and maintenance costs, and infrastructure replacement costs. These cost savings, along with the long list of co-benefits, makes for a very strong business case for green infrastructure.

Having a single transmission line over long stretches of land and in vulnerable areas makes energy supply to northern or remote locations extremely vulnerable to the impacts of climate extremes. Vulnerability of transportation routes to these northern/remote locations (such as Bella Coola, BC and Chena, Alaska) threatens the supply of diesel fuel. Creating local sources of energy (geothermal in the case of Chena and hydropower in the case of Bella Coola) can lessen the risk to movement of diesel and lower GHG emissions. Although the two communities are small, the energy activities are scalable to larger communities and transferrable to other remote communities.

While some of these tools may seem obvious, it is important to demonstrate that the means to implement climate change projects do exist, and are being used. When combined with the co-benefits described in Section 3.0, which demonstrate the rationalization for using these tools, a compelling case emerges for integrating adaptation and mitigation in the energy sector.

A Case Study Synthesis Report 20

5.0 A Case for Linking Adaptation and Mitigation in the Energy Sector

Results from the case studies suggest that the energy sector is currently accumulating co-benefits from the interfaces suggested by the literature. These co-benefits demonstrate the immediate value of implementing climate change projects, while each project also demonstrates longer term values that will accrue from the investment, such as improved resilience. The immediacy of the benefits derived from the integration of adaptation and mitigation opportunities in a given energy project constitutes the case for linking them. While the energy sector may be accruing benefits from the potential interface of adaptation and mitigation in their projects, the following recommendations for improving the ability of the energy sector to capitalize on such benefits emerge more from what is not evident in the case studies, than what is:

 In the majority of instances the co-benefits of linking adaptation and mitigation were not well understood in advance of project implementation, yet the identified benefits accrued nonetheless. In some instances neither adaptation nor mitigation was a determining factor in project design, despite the accrual of co-benefits associated with them.  While some co-benefits were derived from projects, the potential benefits were not necessarily optimized to the extent possible. Each case study demonstrates evidence of one, but no more than two, of the four possible co-benefits that were established based on these interfaces. This suggests that the energy sector may not yet be taking full advantage of the array of co-benefits attributable to the synergies between adaptation and mitigation goals where they exist.  Adaptation is less emphasized in the case studies than mitigation. As is evident from the discussion, adaptation can be incorporated into near term actions, and yield immediate benefits to the energy sector. These benefits would accrue in addition to the longer term benefits associated with resilience and/or capacity development.

The following recommendations therefore suggest how these three items can be addressed utilizing the tools identified in the preceding section. The tools identified are: policy, leadership, partnerships, funding streams, investment options, and business case development. Given that these tools were successfully utilized to improve the economics of a project, incorporate aspects of adaptation and mitigation into seemingly unrelated projects or policies, or improve the capacity of an agency to implement a climate change project, they are likely highly valuable for accessing the value of linking adaptation and mitigation in the energy sector.

1) Seek out adaptation/mitigation synergies at the beginning of any new project or policy in order to identify potential co-benefits. This action will ensure all potential interfaces between adaptation and mitigation are identified, strategies for optimizing potential co-benefits are established, and provide the greatest opportunity to leverage the benefits of all four possible co-benefits through any one policy, program or project. Among other advantages, a clear

21 Linking Mitigation and Adaptation Goals in the Energy Sector

linkage between climate change responses and implementation objectives can help achieve multiple ends and clearly identify potential near-term benefits.

2) Clearly anticipate the financial benefits of integrating adaptation and mitigation. These benefits can be identified through the evaluation of investment options and/or the development of a clear business case in support of a policy or program. In this instance, the focus of the investigation would likely be the immediate benefits and reduction of risk that the interface between adaptation and mitigation can provide. The quantifiable attributes of mitigation will likely help to reduce the risk of implementing an adaptation activity (which is often challenged as financially beneficial due to the uncertainty of timing and magnitude of climate change and its impacts), and create the opportunity for adaptation at an early operational stage rather than leaving it as a long-term investment.

3) Where possible, highlight the adaptation/mitigation synergies and co-benefits of a project in order to improve the social license for project implementation. The co-benefit derived from improved social license was not appreciated in many of the projects evaluated. While this may be because it was not necessary to project success, this particular co-benefit does have significant potential to serve energy sector projects going forward, and could certainly be utilized further. Highlighting the adaptive element of a project and how it will increase resilience to climate change over the long-term is likely to improve the social license/acceptability of a project.

4) Do not underestimate the power of leadership in project success. Leadership was demonstrated as an integral factor in overcoming the initial risk of some energy projects. While the co-benefits derived from integrating adaptation and mitigation accrued after effective leadership was demonstrated, it is also important to note that champions often support projects for philanthropic reasons, and may be attracted to a project precisely because it is taking action on climate change. In this instance, the synergies between acting on climate change, in the form of attracting a champion, and the co-benefits derived from integrating adaptation and mitigation may be mutually supporting and improve implementation success.

5) Continue to create funding streams to support climate change actions that integrate adaptation and mitigation. Pricing carbon through various mechanisms (cap and trade, tax and dividend, etc.) can generate funds that can subsequently be used to drive innovation and further action on reducing emissions or adaptation. Incentive programs that support the emergence adaptation and mitigation co-benefits can also be created based on local economics in remote areas. In either instance, by fostering the development of funding streams that purposefully incorporate climate change adaptation and mitigation, funding agencies will be providing the incentive for energy sector projects to adequately investigate such co-benefits and how they can benefit from them.

A Case Study Synthesis Report 22

6) Public-private sector partnerships for research and development can be leveraged to improve adaptation in the energy sector. Many private sector entities are investing in renewable energy projects across Canada. In many instances these entities are seeking public sector partners to improve funding potential or to ensure market penetration. As is evident in the case studies, funding streams are emerging to support such partnerships. These partnerships should be encouraged to take a broader perspective on their projects, including the adaptive benefits that may be derived from new technologies, to ensure that any available opportunities are identified. Such actions could include educational resources or line items included in funding applications.

These recommendations, while high level, suggest how the energy sector can improve the implementation of climate change projects and benefit from the identified linkages between adaptation and mitigation. While often not considered in project planning or communication of outcomes, these benefits can be accrued immediately, while also generating long-term benefits such as economic development and improving natural systems. The interfaces and co-benefits identified can also reduce the risk of adaptation investments, which usually provide a return over a long period, by ensuring that such actions yield a near-term return.

23 Linking Mitigation and Adaptation Goals in the Energy Sector

6.0 References

Audinet, P., J. Amado and B. Rabb. (2014). Management Approaches in the Electricity Sector: Lessons from Early Adaptors. In A. Troccoli, L. Dubus and S. E. Haupt (Eds.), Weather Matters for Energy (pp. 17–64). New York, NY: Springer New York. Doi:10.1007/978-1-4614-9221-4.

Auld, H. and D. MacIver. (2007). Changing Weather Patterns, Uncertainty and Infrastructure Risks - Emergine Adaptation Requirements. Occasional Paper 9. Adaptation and Impacts Research Division (AIRD), Environment Canada. Accessed from www.ipcc-wg2.gov/njlite_download.php?id=7166.

Baker, B., I. Sklokin, L. Coad and T. Crawford. (2011). Canada’s Electricity Infrastructure: Building a Case for Investment. The Conference Board of Canada. Energy, Environment and Transportation Policy. Accessed from www.electricity.ca/media/ReportsPublications/11-257_ElectricityInfrastructure[1].pdf.

Brunner, R. and A. Lynch. (2010). Adaptive Governance and Climate Change. American Meteorological Society. Boston, MA. 404pp.

Canadian Electricity Association. (2011a). How will we power canada’s future? Our Electricity System in Transition. A Canadian Electricity Association Discussion Paper: First Edition. Accessed from www.electricity.ca/media/ReportsPublications/lowFINALCEA_HowWillWePower_E7.pdf.

Canadian Electricity Association. (2011b). The Smart Grid: A pragmatic approach. A “State-of-Play” Discussion Paper Presented by the Canadian Electricity Association. Accessed from www.electricity.ca/media/SmartGrid/SmartGridpaperEN.pdf.

Canadian Electricity Association. (2014). Vision 2050: The Future of Canada’s Electricity System. Canadian Electrical Association. Accessed from www.powerforthefuture.ca/vision-2050/.

Coad, L., T.A. Crawford and A. Macdonald. (2011). Shedding Light on the Economic Impact of Investing in Electricity Infrastructure. The Conference Board of Canada. Accessed from www.conferenceboard.ca/e- library/abstract.aspx?DID=4673.

Davis, M. and S. Clemmer. (2014). Power Failure: How Climate Change Puts Our Electricity at Risk and What We Can Do?. Union of Concerned Scientists. Accessed from www.ucsusa.org/assets/documents/Power-Failure- How-Climate-Change-Puts-Our-Electricity-at-Risk-and-What-We-Can-Do.pdf.

Dorner, D., M. Baroni, C. Besson, C. Hood, F. Kesicki, P. Olejarnik, J. Trueby, K. van Noort, B. Wanner and D. Wilkinson. (2013). Redrawing the Energy-Climate Map: World Energy Outlook Special Report. International Energy Agency. Accessed from www.iea.org/publications/freepublications/publication/WEO_Special_Report_2013_Redrawing_the_Energy_ Climate_Map.pdf.

Faust, E., J.P. Hella, S. Kumar, K.M. Strzepek, F.L. Toth and D. Yan. (2014). IPCC WG II Chapter 10: Key Economic Sectors and Services. Accessed from www.ipcc-wg2.gov/AR5/images/uploads/WGIIAR5-Chap10_FGDall.pdf.

Hulme, M., H. Neufeldt, H. Colyer and A. Ritchie. (2009). Adaptation and Mitigation Strategies: Supporting European Climate Policy. The Final Report from the ADAM Project. Tyndall Centre for Climate Change Research, University of East Anglia, Norwich, UK. Accessed from www.tyndall.ac.uk/sites/default/files/adam- final-report-revised-june-2009.html_.pdf.

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IPCC. (2014). Summary for Policymakers, In: Climate Change 2014, Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Edenhofer, O., R. Pichs-Madruga, Y. Sokona, E. Farahani, S. Kadner, K. Seyboth, A. Adler, I. Baum, S. Brunner, P. Eickemeier, B. Kriemann, J. Savolainen, S. Schlomer, C. von Stechow, T. Zwickel and J.C. Minx (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.

Jones, R.N., P. Dettmann, G. Park, M. Rogers and T. White. (2007). The relationship between adaptation and mitigation in managing climate change risks: a regional response from North Central Victoria, Australia. Mitigation and Adaptation Strategies for Global Change. Vol. 12: 685-712.

Kenward, A., and U. Raja. (2014). Blackout: Extreme Weather, Climate Change and Power Outages. Climate Central. Accessed from www.climatecentral.org/wgts/filetracker.php?file2dl=PowerOutages.pdf.

Klein, R. J. T., Schipper, E. L. F., and Dessai, S. (2005). Integrating mitigation and adaptation into climate and development policy: three research questions. & Policy, 8, 579-588.

Lemmen, D.S., F.J. Warren, J. Lacroix and E. Bush. (2008). From Impacts to Adaptation: Canada in a Changing Climate 2007 . Climate Change Impacts and Adaptation Division, Natural Resources Canada. Accessed from www.nrcan.gc.ca/environment/resources/publications/impacts- adaptation/reports/assessments/2008/10253.

McAllister, L.K. (2011). Adaptive mitigation in the sector. BYU Law Review. Vol. 6(8): 2115-2155.

Pachauri, R.K. and A. Reisinger. (2007). Climate Change 2007: Synthesis Report. Contribution of Working Groups I, II and III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. IPCC, Geneva, Switzerland. Accessed from www.ipcc.ch/publications_and_data/ar4/syr/en/mains5-3.html.

Policy Research Initiative. (2009). Climate Change Adaptation in the Canadian Energy Sector: Workshop Report. Government of Canada. Accessed from www.horizons.gc.ca/eng/content/climate-change-adaptation- canadian-energy-sector.

Romero-Lankao, P., J.B. Smith,D. Davidson, N. Diffenbaugh, P. Kinney, P. Kirshen, P. Kovacs and L.V. Ruiz. (2014). Final Draft - IPCC WGII AR5 Chapter 26: North America. Accessed from www.ipcc- wg2.gov/AR5/images/uploads/WGIIAR5-Chap26_FGDall.pdf.

Schaeffer, R., A.S. Szklo, A.F. Pereira de Lucena, B.S. Moreira Cesar Borba, L.P. Pupo Nogueira, F.P. Fleming, A. Troccoli, M. Harrison and M.S. Boulahya. (2012). Energy sector vulnerability to climate change: A review. Energy. Vol. 38(2012): 1-12.

UNEP. (2014). Climate Change Mitigation. United Nations Environment Program. Accessed from www.unep.org/climatechange/mitigation/.

US Executive Office of the President. (2013). Economic Benefits of Increasing Electric Grid Resilience to Weather Outages. Accessed from www.energy.gov/sites/prod/files/2013/08/f2/Grid%20Resiliency%20Report_FINAL.pdf.

Venema, H.D. and I.H. Rehman. (2007). Decentralized renewable energy and the climate change adaptation/mitigation nexus. Mitigation and Adaptation Strategies for Global Change. Vol. 12: 875-900.

Vine, E. (2012). Adaptation of ’s electricity sector to climate change. Climatic Change. Vol. 111(1): 75-99.

Warren, R. (2011). The role of interactions in a world implementing adaptation and mitigation solutions to climate change. Philosophical Transactions of the Royal Society. Vol. 369(1934): 217-241.

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Winkler, H., K. Baumert, O. Blanchard, S. Bruch and J. Robinson. (2007). What factors influence mitigative capacity?. . Vol. 35(1): 692-703.

Yohe, G. (2001). Mitigative capacity – the mirror image of adaptive capacity on the emissions side: An editorial. Climatic Change. Vol. 49(3): 247-262.

A Case Study Synthesis Report 26

APPENDIX A: Adaptation/Mitigation Case Studies

27 Linking Mitigation and Adaptation Goals in the Energy Sector

The Lower Churchill Hydroelectric Generation Project: Enhancing Renewable Electricity and Reducing GHG Emissions in Newfoundland and Labrador

Focus: Lower Churchill Hydroelectric Generation Project Jurisdiction: Newfoundland and Labrador, Canada Lead: Nalcor Energy Other stakeholders: Emera Inc. and the Government of Newfoundland and Labrador Stage: In development Cost: $8.5 billion Ownership: Public Does it increase resilience or capacity? Resilience

The Lower Churchill Hydroelectric Generation Project will Mitigation: actions that reduce the magnitude or enhance the amount of clean, renewable electricity in the rate of human-induced emissions of greenhouse province of Newfoundland and Labrador (NL), which in turn gases (GHGs). will help displace oil- and -fired power generation in the Atlantic region. Hydropower is commonly known as one of Adaptation: preparing for adverse effects of climate the cleanest forms of energy, and has the ability to play a change by preventing or minimizing impacts or major role in addressing climate change due to its minimal taking advantage of opportunities. greenhouse gas (GHG) emissions.1 The lower Churchill River Resilience: project, programs and policies that in Labrador is one of the best undeveloped sources of increase the resilience of sectors to absorb shocks hydroelectric power in North America. The Muskrat Falls associated with the impacts of climate change (i.e. and proposed Gull Island generating stations will collectively extreme weather events). generate more than 3,000 megawatts (MW) of power and would be able to supply 16.7 terawatt hours (TWh) of electricity per year.2 Upon completion of Muskrat Falls, NL’s 3 electricity supply will stem from more than 98% renewable sources.

The Lower Churchill Hydroelectric Generation Project is being developed in two phases: Muskrat Falls and Gull Island.

Phase One: Muskrat Falls In 2010, Provincial Government owned Nalcor Energy partnered with Emera Inc. and announced plans to develop the Muskrat Falls generation station (“Muskrat Falls”), as well as three transmission links (described below). The development of Muskrat Falls was approved and sanctioned by the Government of NL in December 2012, at which point construction began. The facility is expected to be completed in late 2017 and fully operational the following year. Once the facility is fully operational, Muskrat Falls will provide 40% of its capacity to meet electricity needs in Newfoundland, Emera Inc. will purchase 20% of the power for use in Scotia, and the remaining 40% could potentially be exported for use into Atlantic Canada or New England markets, or simply retained for use in NL. By

A Case Study Synthesis Report 28

2036, it is estimated that the province of NL will need close to 80% of the 4 power at Muskrat Falls to account for additional industrial growth. The existing Churchill Falls Hydroelectric Generating Muskrat Falls includes the construction of: Station is located upriver from 1) An 824 MW hydroelectric . Muskrat Falls is located on the lower the Muskrat Falls location. On Churchill River in Labrador and will be the second-largest average, the facility generates over 34 TWh of energy per hydroelectric facility in the province.5 year. The majority of the 2) The Labrador-Island Link. This link will carry electricity from Muskrat power produced is sold to Falls in Labrador to the Island of Newfoundland, connecting these two Hydro- through a long- parts of the province for the very first time via an electricity system. term power purchase The Link is composed of overland transmission (approximately 1,100 agreement. The agreement km) and underwater cables in the Strait of Belle Isle. expires in 2041. 3) Labrador Transmission Links. Two parallel transmission links will be constructed between Muskrat Falls and the existing Upper Churchill Falls Generating Station in order to transmit power between the facilities.6 4) The Maritime Link. This bi-directional link will connect the Island of Newfoundland to the North American power grid (via Nova Scotia) for the first time in history, enhancing the reliability of NL’s electricity system.7

The current capital costs for Muskrat Falls and the associated transmission links in NL are an estimated $6.99B8, while the costs to Emera Inc. for construction of the Maritime Link are an estimated $1.52M,9 making the total project value $8.5B.

Figure 1: This image shows the main portions of Phase 1 of the Lower Churchill Hydroelectric Generation Project: the Muskrat Falls Generation station, the Labrador-Island Transmission Link, and the Maritime Transmission Link.26

29 Linking Mitigation and Adaptation Goals in the Energy Sector

Once Muskrat Falls is in service, one of the measures of success will be the amount of GHG emissions displaced from the thermal generation plant in Muskrat Falls will eventually Holyrood, NL and the coal-fired power plants in Nova Scotia, as well as the allow for the decommissioning increase in reliability of the electricity system and the availability of power to of the oil-fired generation meet the growing demand in the province of NL. Other standard criteria will station in Holyrood, NL. also serve to measure success, for instance if the project was completed on Forecasts indicate that if time and on budget. Holyrood were to continue operations, between 1.1Mt and Phase Two of the Lower Churchill Hydroelectric Generation Project is currently 3Mt of GHGs would be emitted annually by 2030 (the range in discussion, and would include the construction of a 2,250 MW generating reflects low and high industrial facility at Gull Island. Since Gull Island would produce more electricity than the 27 load growth forecasts). province currently needs, construction of the proposed facility is contingent on securing long-term customers in external markets (e.g. Ontario, the United States via Quebec, etc.).10 There is currently no set date for the development of Gull Island.

Contribution to Climate Change Mitigation and Adaptation

The Lower Churchill Hydroelectric Generation Project will enhance NL’s electricity system by diversifying the energy supply, reducing the reliance on fossil fuels, and using clean energy sources. It is listed in NL’s 2007 Energy Plan and 2005 and 2011 Climate Change Action Plans as one of the ways in which the province will manage its GHG emissions from increased electricity demand, and has the potential to offset GHG emissions from other sources by up to 15 million tonnes per year (Muskrat Falls and Gull Island combined).11

The Muskrat Falls project contributes to mitigation of GHGs through managerial decisions and actions (Table 1). The management decision to develop Muskrat Falls will eventually allow for the decommissioning of the 490 MW oil-fired generation station in Holyrood.12 The closure of the more than 40-year-old facility will reduce GHG emissions by 1.2 million tonnes annually in NL, and will almost eliminate the province’s dependence on imported fossil fuels.13 The construction of the Maritime Link will also allow power from Muskrat Falls to reach Nova Scotia thereby displacing some of the 1,243 MW coal-fired power generation in Nova Scotia. Muskrat Falls also has the potential to displace imported fossil fuels and coal in the Northeastern United States.14 GHG-conscious policies and procedures (anti-idling, fuel consumption monitoring, etc.) have also been implemented during construction of the Muskrat Falls facility. In addition, there will be a reduced contribution of GHGs stemming from decomposing vegetation in a smaller flood reservoir area.15

Table 1: Adaptation/Mitigation Contribution Matrix for the Muskrat Falls Hydroelectric Generation Project

Contribution to Mitigation

Technological Behavioural Managerial Policy

Technological X

Behavioural

Adaptation Managerial

Contribution to Contribution Policy

A Case Study Synthesis Report 30

The Muskrat Falls project utilizes technology that will serve to adapt to a changing climate (Table 1). The Island of Newfoundland’s current electricity According to Nalcor Energy, system is isolated, with a portion of its generation supply coming from Muskrat Falls and Gull Island thermal sources. By connecting Newfoundland and Labrador through the will reduce greenhouse gas transmission link, Muskrat Falls will increase the amount of clean, emissions equivalent to renewable electricity to the island from Labrador and will enhance the taking 3.2 million cars off the road each year.28 system reliability. It will also increase resiliency, as isolated grids are limited in how well they perform and respond under extreme conditions, including climate change. Similarly, the Maritime Link will also increase grid resilience and reliability in Nova Scotia, making the system more adaptable to various stresses, including extreme weather events.

Supply contributions from more intermittent renewable energy sources (i.e. wind, run-of-river hydro) are not as attractive since they may not meet dispatch requirements to meet customer demand. By linking to the North American grid, Newfoundland’s capacity to develop and add renewable electricity to the grid will increase significantly.

Measures of climate change adaptation have also been built into the development of Lower Churchill Hydroelectric Generation Project. Nalcor worked with researchers at Memorial University in St. John’s, NL and used various climate change models to determine the anticipated changes in weather and precipitation patterns in Labrador (e.g. changes in expected runoff, river flows, etc.) and incorporated this information into project design. Furthermore, Nalcor invested $206M towards design enhancements in order to improve the quality and reliability of its transmission links, including further corrosion protection for HVac tower foundations, thereby creating a more robust tower design able to withstand increasingly harsher weather conditions.16

Table 2: Summary of the Contribution of the Muskrat Falls Hydroelectric Generation Project to Climate Change Adaptation and Mitigation MITIGATION ADAPTATION

The managerial decision to develop Muskrat Falls and Introducing the renewable energy into the grid will increase enhance renewable energy in Newfoundland will displace the resiliency and reliability of the electricity system, oil-fired power generation on the Island, as well as coal- especially by connecting Newfoundland to, and bringing fired power generation in Nova Scotia, thereby reducing renewable energy to Nova Scotia. GHG emissions.

 The decommissioning of the oil-fired power  The island of Newfoundland will connect to generation station in Holyrood will reduce GHG Labrador, and the North American grid, for the emissions by 1.2 million tonnes annually. very first time thereby making it more adaptable  The need for additional fossil-fuel power to changing factors such as climate change. generation in the future will be eliminated,  The Maritime Link will increase grid resilience and thereby avoiding related GHG emissions. reliability in Nova Scotia, making the electrical  The project will displace some of the coal-fired system more adaptable to various system power generation in Nova Scotia, and potentially stresses. in the Northeastern United States.

Adapting to climate change and mitigating GHGs were lesser considerations in the development of this project, behind the ever increasing provincial electricity demand. Following a cost-benefit analysis that considered the various electricity choices for NL (e.g. keeping Holyrood and the isolated energy system, adopting wind with

31 Linking Mitigation and Adaptation Goals in the Energy Sector

thermal or wind with battery, etc.) it was decided that developing Muskrat Falls would be the most cost-effective alternative for the province.

Co-Benefits

Introducing additional renewable capacity to the grid not only helps to displace fossil fuels as electricity sources in NL and Nova Scotia (mitigation), it also increases energy security and reliability for Newfoundland by increasing its resilience to a variety of stresses including extreme weather events (adaptation). There are also a number of co- benefits that are apparent: 1) More cost-effective. Developing Muskrat Falls is more cost effective than remaining on an isolated grid system. Since the Holyrood generation plant is over 40 years old, the continued use of the facility would mean increasing maintenance costs, capital investments, upgrades, emission control equipment, etc.17 It is more cost effective to increase renewable electricity sources than to rely on oil-fired thermal generation into the future, particularly when considering changing and unpredictable fuel prices. 2) Reducing risks to human health. Closing Newfoundland’s thermal generation facility at Holyrood will result in a significant reduction in GHG emissions (annual average of 1.1 million tonnes between 2000 and 2012) and a significant reduction in sulphur dioxide emissions (annual average of 11,610 tonnes between 2000 and 2012), benefiting local air quality and reducing potential risks to human health.18 3) Meeting electricity demand. Muskrat Falls will meet the domestic electricity needs of NL and will provide sufficient capacity for future industrial developments in the province. For example, when Muskrat Falls comes online provincial demand is expected to capture 40% of the power generated at the facility. This presents an opportunity for the province to sell excess power to the North American market, potentially displacing existing or planned generation in export markets.19 4) Greater energy exchanges. Muskrat Falls will allow the four Atlantic Provinces to work more closely together on energy related matters. An Atlantic Canada grid linked to neighbouring grids will allow for greater energy exchanges within the region, more economic use of electricity-generating resources, and increased resiliency and reliability of the system.20 5) Increased employment opportunities. A short term co-benefit is the increase in employment and business opportunities to the people of NL during the construction phase. In 2014 more than 1,800 people were working on Muskrat Falls, with numbers expected to rise to 3,300 in 2015.21 Of these workers, many benefit from learning a skilled trade; for example, Nalcor implemented a Labrador/Aboriginal partnership that provided training for Aboriginal people, which they can take forward in future employment opportunities. Once Muskrat Falls is operational, approximately 100 positions will be required to maintain and operate the facility. 6) Increased renewable capacity. As mentioned earlier, the transmission links between Labrador and Newfoundland and Newfoundland and Nova Scotia will increase the capacity to further develop renewable energy sources, such as wind, on the Island for export.22 7) Stable electricity rates. Once Muskrat Falls is in operation, it is expected to generate more long-term stable electricity rates for generations of Newfoundlanders and Labradorians, bringing relatively lower- cost power to homes and businesses.23

A Case Study Synthesis Report 32

Box 1: Synergies Between Climate Change Adaptation and Mitigation in Relation to the Muskrat Falls Hydroelectric Generation Project

The Muskrat Falls project focuses on harnessing renewable energy and connecting Newfoundland to the North American grid for the very first time and will help to displace thermal oil and other fossil fuels as power sources while simultaneously increasing energy security, improving local air quality, providing opportunities for energy export, increasing local employment and business opportunities, and is ultimately the most cost-effective way for future energy supply to the Island.

Lessons Learned

There are three primary ‘climate change and energy’ lessons that stem from the development of Muskrat Falls. Although the development of Muskrat Falls is a significant venture with an equally large budget, it demonstrates how introducing a renewable energy source, driven largely by the need for additional electricity generation capacity and improved reliability, can also respond to climate change challenges by the reduction of fossil fuel sources (reducing GHG emissions) and increasing the reliability and resiliency of a grid (adaptation). With 163,000 MW of undeveloped hydro potential across Canada, it is safe to say that hydropower could play a larger role in Canada’s future .24 Thus, more hydropower could contribute adaptation and mitigation benefits, especially if replacing power from fossil fuel such as coal or connecting an isolated grid (assuming that the environmental costs are not larger than the economic benefits)

Second, development and evaluation of historic and future climate trends provides immense value to a hydroelectric generation project, and can help inform robust design for future weather and climate conditions. It is particularly important to evaluate the changing hydrologic regime and how climate change will influence water supply over the average life span of hydroelectric generation facilities.25 In the case of the Lower Churchill Hydroelectric Generation Project, the relationship with a local university to provide data, analyses and advice on future climate change impacts is an example of the benefits of such partnerships.

Finally, the Muskrat Falls project highlights the fact that climate change adaptation and mitigation are both direct and indirect outcomes of the project even if the impetus stemmed from other reasons. This highlights the fact that climate change considerations can contribute additional reason for the development of similar projects.

Further Information

Nalcor Energy: www.nalcorenergy.com Muskrat Falls: www.muskratfalls.nalcorenergy.com

Contact

Marion E. Organ, M. Eng., P.Eng., PMP Environmental Services Manager, Nalcor Energy Email: [email protected]

Allan G. Douglas Director, Ontario Centre for Climate Impacts and Adaptation Resources (OCCIAR) Email: [email protected]

33 Linking Mitigation and Adaptation Goals in the Energy Sector

References

1 Canadian Electricity Association. Power for the Future: Hydro. Accessed from www.powerforthefuture.ca/electricity-411/electricity-fuel-source-technical-papers/hydro/.

2 Government of Newfoundland and Labrador. Backgrounder – Muskrat Falls. Accessed from www.gov.nl.ca/lowerchurchillproject/backgrounder_3.htm.

3 Nalcor Energy. Environment. Accessed from www.muskratfalls.nalcorenergy.com/environment/.

4 Nalcor Energy. Project Overview. Accessed from www.muskratfalls.nalcorenergy.com/project-overview/.

5 Nalcor Energy. Muskrat Falls Hydroelectric Generating Facility. Accessed from www.muskratfalls.nalcorenergy.com/project-overview/muskrat-falls-hydroelectric-generation-facility/.

6 Nalcor Energy. Labrador-Island Link and Transmission Assets. Accessed from www.muskratfalls.nalcorenergy.com/project-overview/labrador-island-link-and-transmission-assets/.

7 Nalcor Energy. Maritime Link. Accessed from www.muskratfalls.nalcorenergy.com/project-overview/maritime- link/.

8 Nalcor Energy. (2013). Nalcor Energy provides update on the Muskrat Falls Project. Accessed from www.muskratfalls.nalcorenergy.com/wp-content/uploads/2013/03/News-Release_Muskrat-Falls-Project- Update_26Jun2014.pdf.

9 Emera Inc. The Maritime Link Project. Accessed from www.snl.com/irweblinkx/Mobile/file.aspx?IID=&FID=15889999&O=3&OSID=9.

10 Government of Newfoundland and Labrador. (2012). Gull Island: Why not develop Gull Island first?. Department of Natural Resources. Accessed from www.powerinourhands.ca/pdf/GullIsland.pdf.

11 Nalcor Energy. (2013). Lower Churchill Hydroelectric Generation Project Environmental Impact Statement – II Part A: Biophysical Assessment. Accessed from www.muskratfalls.nalcorenergy.com/wp- content/uploads/2013/04/Volume-IIA.pdf.

12 Government of Newfoundland and Labrador. (2012). Environmental Benefits of Closing the Holyrood Thermal Generation Station. Department of Natural Resources. Accessed from www.powerinourhands.ca/pdf/MuskratEnvironment.pdf.

13 Government of Newfoundland and Labrador. Backgrounder – Muskrat Falls. Accessed from www.gov.nl.ca/lowerchurchillproject/backgrounder_3.htm.

14 Emera Inc. The Maritime Link Project. Accessed from www.snl.com/irweblinkx/Mobile/file.aspx?IID=&FID=15889999&O=3&OSID=9.

15 International Rivers. (2014). Greenhouse Gas Emissions from FAQ. Accessed from www.internationalrivers.org/resources/greenhouse-gas-emissions-from-dams-faq-4064.

A Case Study Synthesis Report 34

16 Nalcor Energy. (2014). Backgrounder: Key Factors Influencing Capital Costs. Accessed from www.muskratfalls.nalcorenergy.com/wp-content/uploads/2013/03/Backgrounder_Muskrat-Falls-Project- Update-Key-Cost-Drivers_26Jun2014.pdf.

17 Government of Newfoundland and Labrador. (2012). Environmental Benefits of Closing the Holyrood Thermal Generation Station. Department of Natural Resources. Accessed from www.powerinourhands.ca/pdf/MuskratEnvironment.pdf.

18 Ibid

19 Government of Newfoundland and Labrador. Backgrounder – Muskrat Falls. Accessed from www.gov.nl.ca/lowerchurchillproject/backgrounder_3.htm.

20 Weil, G.L. (2012). The Muskrat Falls Hydro Project: Opportunities and Risks. Atlantic Institute of Market Studies (AIMS) Commentary. Accessed from www.aims.ca/site/media/aims/Muskrat%20Falls.pdf.

21 Nalcor Energy. (2014). Nalcor Energy provides update on the Muskrat Falls Project. Accessed from www.muskratfalls.nalcorenergy.com/wp-content/uploads/2013/03/News-Release_Muskrat-Falls-Project- Update_26Jun2014.pdf.

22 Government of Newfoundland and Labrador. (2007). Section 4: Electricity. In Focusing Our Energy: Energy Plan. Accessed from www.nr.gov.nl.ca/nr/energy/plan/index.html.

23 Nalcor Energy. Muskrat Falls Generation and Labrador-Island Link. Accessed from www.muskratfalls.nalcorenergy.com/.

24 Canadian Hydropower Association. (2014). Five Things You Need to Know about Hydropower: Canada’s Number One Electricity Source. Accessed from www.canadahydro.ca/hydro-facts/hydro-in-5-points.

25 Canadian Electricity Association. Power for the Future: Hydro. Accessed from www.powerforthefuture.ca/electricity-411/electricity-fuel-source-technical-papers/hydro/.

26 Nalcor Energy. (2014). Lower Churchill Project. Accessed from www.nalcorenergy.com/lower-churchill- project.asp.

27 Nalcor Energy. (2009). Information Request No.: JRP.7: Greenhouse Gas Emissions. Accessed from www.rethinkmuskratfalls.files.wordpress.com/2013/03/ir007.pdf.

28 Nalcor Energy. (2014). Lower Churchill Project. Accessed from www.nalcorenergy.com/lower-churchill- project.asp.

35 Linking Mitigation and Adaptation Goals in the Energy Sector

Hydrogen Assisted Renewable Power: Renewable Energy Storage Technology for Remote Communities

Focus: Hydrogen Assisted Renewable Power Jurisdiction: Bella Coola, British Columbia, Canada Lead: Powertech Labs Inc. Other stakeholders: BC Hydro and Power Authority and Stage: Completed (2007-2011) Cost: $6 million Ownership: Private/Public Does it increase resilience or capacity? Resilience

The Hydrogen Assisted Renewable Power (HARP) system was a demonstration project that determined the feasibility of storing excess renewable energy in remote communities Mitigation: actions that reduce the magnitude or isolated from the provincial electricity grid, in order to rate of human-induced emissions of greenhouse increase energy efficiency and cost-effectiveness of a gases (GHGs). community’s energy system and reduce reliance on diesel generators. The project involved the installation of a Adaptation: preparing for adverse effects of climate hydrogen energy storage system and Microgrid Control change by preventing or minimizing impacts or System in Bella Coola, British Columbia (BC) – one of over taking advantage of opportunities. 1 fifty remote communities in the province. Resilience: project, programs and policies that increase the resilience of sectors to absorb shocks Bella Coola is located approximately 400 km north of associated with the impacts of climate change (i.e. Vancouver on BC’s central coast and is home to roughly extreme weather events). 2,000 residents. Bella Coola is a relatively large remote community with a peak power demand of up to 2.5 megawatts (MW). The community relies heavily on diesel generators for power, since its local run-of-river hydroelectric power facility located at Clayton Falls (2.1 MW capacity) does not always supply sufficient energy to meet load requirements.2 Although diesel generators can be reliable sources of energy and generally have low capital costs, they have high operating costs, low levels of efficiency, and emit greenhouse gases (GHGs) that contribute to climate change. In addition, there are high costs associated with transporting diesel fuel to remote locations. For these reasons, it is a priority for many remote communities to reduce their dependence on diesel-fueled power generation.3

Harnessing renewable sources of energy such as wind, solar, or in the case of Bella Coola, hydropower, is a way to limit the use of diesel in remote communities; however, this type of energy generation can be intermittent and unpredictable. Taking into account these challenges, the objectives of the HARP project were fourfold: 1) Demonstrate the viability of storing the excess electricity generated from Clayton Falls during off-peak periods (mostly at night); 2) Demonstrate the ability of the Microgrid Control System to optimize the management of energy generation and storage;

A Case Study Synthesis Report 36

3) Demonstrate the reliability of different energy storage technologies ( and a flow battery); and At the time, the project team 4) Use the findings from the project to inform future installations of was working under the Clean hybrid renewable systems (systems that consist of two or more Energy Act in British sources of renewable energy).4 Columbia, which was one of the drivers of the project. A The HARP project was a partnership between BC Hydro, the owner and number of policy actions were operator of the HARP system in Bella Coola, Powertech Labs Inc., a focused around increasing subsidiary of BC Hydro that provided the consulting services, equipment energy efficiency in remote communities. testing and evaluation of the HARP system, and General Electric, who provided the Microgrid Control System as well as advanced optimization and management software.5 The project was sponsored and co-funded by Technology Canada (SDTC) and the BC Innovative Clean Energy Fund (ICE).6 In total, the cost of the project was approximately $6M.

The impetus of the project stemmed from a number of factors: (1) the high price of diesel and price fluctuations that expose remote communities to high fuel and electricity costs, (2) the impact of fuel transportation and diesel operation on the environment, (3) issues with the intermittency and unpredictability of renewable power, and (4) deliberate attempts to shave off the distinct peaks in power usage. In terms of total power, the HARP system had the capacity to store approximately 200 kilowatts (kW). Even though the system contributing 200 kW was insufficient for the larger (up to 2.5 MW) needs of Bella Coola, the pilot study was designed as a proof-of-concept rather than trying to match the energy needs of Bella Coola.

How the HARP System Functions The HARP system stores the electricity generated by the Clayton Falls facility in two ways: (1) as hydrogen gas stored in high pressure tanks; and (2) a flow battery. To trigger conversion of power into hydrogen and vice versa, the supply and demand of renewable energy (hydropower) was wirelessly monitored by a Microgrid Control System, effectively improving the efficiency of energy management system within the community.7 The hydrogen gas can be stored for as long as needed, and this particular HARP system was able to store enough hydrogen gas to power the community of Bella Coola for 40 hours. Additional storage capacity is possible if warranted. The functions of the HARP system are depicted in Figure 1.

The technology proved to be successful by demonstrating its ability to reduce GHG emissions in the range of 600 tonnes per year through reductions in diesel fuel usage (200,000 litres) and was able to reduce the total operation costs on a typical summer day from $803 to $293.8 The Microgrid Control System was also effective in improving the management of energy systems within the community. The testing period of the HARP system in Bella Coola ended in 2011 due to funding constraints, at which time BC Hydro disassembled the equipment and moved it to another location for further long-term utilization studies. Even though the HARP demonstration project was only operational at Bella Coola for a few years, it was successful in demonstrating the viability of the HARP energy storage technology and provided valuable lessons The HARP technology reduced Bella Coola’s annual for the application of similar systems in other remote communities. diesel consumption by 200,000 litres and reduced The project team faced moderate operational and technological challenges GHG emissions by 600 tonnes while implementing the new technologies in Bella Coola. For instance, the steep per year. and bumpy terrain along the 1,000 km route from Vancouver to Bella Coola made it difficult to transport equipment for use; in fact, some system

37 Linking Mitigation and Adaptation Goals in the Energy Sector

components required additional protection during transportation. As well, the intermittent and unpredictable nature of renewable sources of power meant that the system was not able to run during periods of low- or no-flow periods during the winter months, during which time the system had to revert back to diesel.

Figure 1: The functions of the HARP system in Bella Coola, BC. An electrolyzer splits water into hydrogen and oxygen. The hydrogen is compressed and stored in high pressure tanks while the oxygen is released to the atmosphere. When power is needed, the stored hydrogen is fed into a 100 kW to generate electricity, with hot water as a bi-product, while the flow battery produces an additional 100 kW of electricity which is sent directly to the community.9

Contribution to Climate Change Mitigation and Adaptation

The HARP proof-of-concept project demonstrated opportunities for both mitigation and adaptation to climate change (Table 1). However, the adaptation aspect of the project, though anticipated, was not an explicit goal.

Table 1: Summary of the Contribution of the HARP Project to Climate Change Adaptation and Mitigation

MITIGATION ADAPTATION

The storage technology increased the efficiency of the The storage technology increased the stability and reliability hydropower facility and ultimately decreased the of the community’s energy system. community’s dependence on diesel generators.

 Stored clean and renewable energy as hydrogen  Reduced the risk of power outages during times of gas during non-peak hours for use during times of peak demand. peak demand.  Reduced the community’s reliance on externally  Decreased need for transporting diesel to the sourced fuel.

A Case Study Synthesis Report 38

community, therefore reducing total GHG  Ultimately contributed to the overall resilience emissions. and stability of the community’s energy supply.

The HARP system advanced climate change mitigation in Bella Coola through the development and installation of green (Table 2). The hydrogen energy storage system and Microgrid Control System technology increased the efficiency of the Clayton Falls run-of-the-river hydropower facility and ultimately decreased the community’s dependence on diesel generators. The operation of the fuel cells did not release harmful emissions and allowed – a bi-product of the fuel cells – to be utilized for . This amplified the overall efficiency of the system and further reduced GHG emissions.10 Additionally, reduced diesel consumption resulted in a decreased need for transporting diesel to the community, therefore reducing total GHG emissions.

Since many remote communities often only have one road in and out of the area, they are particularly vulnerable to interruptions due to extreme weather such as rain/floods, snow, storms, etc. Subsequently this presents risk to the supply of diesel to the community. By reducing the dependence on diesel and storing what would have been ‘wasted’ renewable energy for use during times of peak demand, the hydrogen storage technology increased the community’s energy security, while also making the community’s energy supply much more stable and reliable. Therefore, the HARP project contributed to climate change adaptation through advancements in the storage technology in Bella Coola (Table 2).

Table 2: Adaptation/Mitigation Contribution Matrix for the HARP Project

Contribution to Mitigation

Technological Behavioural Managerial Policy

Technological X

Behavioural

Adaptation Managerial

Contribution to Contribution

Policy

Co-Benefits

There were several co-benefits provided by the HARP system in addition to the direct adaptation and mitigation contributions previously described. For example, reducing the need to burn diesel fuel during times of high energy demand improves local air quality and reduces energy costs for residents.11 Another co-benefit is the creation of local high-value employment opportunities; in the case of Bella Coola, two full time positions were required to run and maintain the equipment.

Box 1: Synergies Between Climate Change Adaptation and Mitigation in Relation to the HARP Project

The energy storage capabilities of the HARP technology allowed a remote community to increase the stability, reliability and security of its energy supply while simultaneously reducing GHG emissions, improving local air quality, reducing energy costs for residents, and creating local employment opportunities.

39 Linking Mitigation and Adaptation Goals in the Energy Sector

Lessons Learned

Two main lessons emerge from the demonstration project in Bella Coola. First, the fact that the HARP energy storage and Microgrid Control System were successful provides hope that they can be used as a measure to adapt to climate change in other remote communities. Combined with the level of GHG mitigation, the sum of savings may present a stronger business case for the technology in remote communities. Second, as this proof-of-concept project was in part made possible from government funding through Sustainable Development Technology Canada, it is recommended to establish these types of partnerships with outside funding sources in order to lessen the financial burden on remote communities. Costs of implementing the technology are based on the desired level of energy storage, the availability and variability of renewable resources, and the desired level of diesel replacement, among others. In addition, sunken costs related to development and testing, as well as efficiencies of scale, will dictate the initial level and return on financial investment.

In Canada, there are approximately 300 remote communities that, like Bella Coola, are not connected to a large, stable electrical grid and must generate most of their electricity using diesel generators.12 Since the system considered here works with any type of renewable energy source (including wind, solar and hydropower), remote communities across Canada that have access to renewable energy could apply these lessons as an approach to mitigate and adapt to the effects of climate change.

Further Information

Powertech Labs Inc.: www.powertechlabs.com

Contact

Joe Wong, P.Eng. Project Consortium Manager, Powertech Labs Inc. Email: [email protected]

Allan G. Douglas Director, Ontario Centre for Climate Impacts and Adaptation Resources (OCCIAR) Email: [email protected]

References

1 Powertech Labs Inc. (2011). Hydrogen Assisted Renewable Power System: Displacing diesel in remote communities. Accessed from www.powertechlabs.com/temp/20112439066/HARP_DataSheet_Feb_4_2011web.pdf.

2 Allan, S., J. Wong and W. Jeschke. (2012). Hydrogen Assisted Renewable Power H.A.R.P. – Project Report. SDTC- 2006-1-1092, Final Report Prepared for BC Hydro and Sustainable Development Technology Canada.

A Case Study Synthesis Report 40

3 Glandt, J.D. (2012). Fuel Cell Power as a Source for Remote Communities. Solutions Engineering. Accessed from www.ballard.com/files/PDF/Distributed_Generation/Fuel_Cells_for_Remote_Communities_- _White_Paper_-_Apr_2012.pdf.

4 Grant, A. (2010). Hydrogen Assisted Renewable Power (HARP) Project in British Columbia. Vancouver 2010 Symposium on Microgrids. Powertech Labs Inc. Accessed from www.der.lbl.gov/sites/der.lbl.gov/files/vancouver_grant-sagoo.pdf.

5 Powertech Labs Inc. (2011). Hydrogen Assisted Renewable Power System: Displacing diesel in remote communities. Accessed from www.powertechlabs.com/temp/20112439066/HARP_DataSheet_Feb_4_2011web.pdf.

6 Grant, A. (2010). Hydrogen Assisted Renewable Power (HARP) Project in British Columbia. Vancouver 2010 Symposium on Microgrids. Powertech Labs Inc. Accessed from www.der.lbl.gov/sites/der.lbl.gov/files/vancouver_grant-sagoo.pdf.

7 Powertech Labs Inc. (2011). Hydrogen Assisted Renewable Power System: Displacing diesel in remote communities. Accessed from www.powertechlabs.com/temp/20112439066/HARP_DataSheet_Feb_4_2011web.pdf.

8 Renewable Energy Focus. (2013). Off grid renewables – could this be an end to diesel dependency? Accessed from www.renewableenergyfocus.com/view/31285/off-grid-renewables-could-this-be-an-end-to-diesel- dependency/.

9 Powertech Labs Inc. (2011). Hydrogen Assisted Renewable Power System: Displacing diesel in remote communities. Accessed from www.powertechlabs.com/temp/20112439066/HARP_DataSheet_Feb_4_2011web.pdf.

10 Glandt, J.D. (2012). Fuel Cell Power as a Primary Energy Source for Remote Communities. Solutions Engineering. Accessed from www.ballard.com/files/PDF/Distributed_Generation/Fuel_Cells_for_Remote_Communities_- _White_Paper_-_Apr_2012.pdf.

11 Grant, A. (2010). Hydrogen Assisted Renewable Power (HARP) Project in British Columbia. Vancouver 2010 Symposium on Microgrids. Powertech Labs Inc. Accessed from www.der.lbl.gov/sites/der.lbl.gov/files/vancouver_grant-sagoo.pdf.

12 Ballard Power Systems. (2011). Clean, Reliable Power for Remote Off-Grid Communities. Accessed from www.altenergymag.com/emagazine/2011/08/clean-reliable-power-for-remote-off-grid-communities/1762.

41 Linking Mitigation and Adaptation Goals in the Energy Sector

The Alberta Climate Change and Emissions Management Fund: Investing in Mitigation and Adaptation Initiatives

Focus: Climate Change and Emissions Management Fund Jurisdiction: Alberta, Canada Lead: Climate Change and Emissions Management Corporation Other stakeholders: Government of Alberta and large emitters in Alberta Stage: Implemented – up for renewal on December 31, 2014 Cost: $237 million (to date) Ownership: Public/Private

Does it increase resilience or capacity? Capacity Mitigation: actions that reduce the magnitude or rate of human-induced emissions of greenhouse In 2007, Alberta became the first jurisdiction in North gases (GHGs). America to pass climate change legislation. The Specified Gas Emitters Regulation (SGER), under the Climate Change and Adaptation: preparing for adverse effects of climate change by preventing or minimizing impacts or Emissions Management Act, requires large greenhouse gas taking advantage of opportunities. (GHG) emitters to reduce their emissions according to specific targets defined by the province. Large emitters, Capacity: increasing the sectors’ ability to develop which constitute 50% of the total GHG emissions each year policies, programs or projects thereby building their in Alberta, are defined as companies that emit more than capacity to deal with climate mitigation and adaptation. 100,000 metric tonnes of equivalent (CO2e) per year. Facilities classified as large emitters must reduce their emissions intensity by 12% below their 2003-2005 baseline intensity (i.e., the volume of GHG emissions per unit of production).1 For new facilities, the emissions intensity target is phased in at 2% per year, from a baseline established in the facility’s third year of operation.2 Since implementation began in 2007, the SGER has reduced emissions by 7 megatonnes (Mt) on average each year from business as usual. This is helping Alberta meet its target of reducing GHG emissions by 200 Mt, or 50% below business as usual, and 14% below 2005 levels by 2050, as set out in Alberta’s Climate Change Strategy.3,4

The reasons for which the SGER follows an intensity-based, facility-specific historic baseline system are twofold. First, the facility-specific nature of the regulation assures the inclusion of various facilities and sectors in the regulation (e.g. , petro-chemical operations, fertilizer facilities, cement plants, oil sands facilities, electricity facilities, etc.). Second, the Government of Alberta sought to reduce emissions in a way that would not hinder economic activity; therefore each facility has a performance target (emissions per unit output) so that it cannot reach its target by simply shutting down or cutting back on production.

For companies that cannot meet their targets as set out in the SGER, there are three compliance options: 1) Purchase Alberta-based offset credits;

A Case Study Synthesis Report 42

2) Purchase Emission Performance Credits; or 3) Contribute $15 into the Climate Change and Emissions In Alberta, companies that Management Fund (CCEMF) for every 1 tonne of GHG emissions emit more than 100,000 5 they exceed beyond their allocated limit. metric tonnes of CO2 per year must reduce their The CCEMF was established under the Climate Change and Emissions intensity by 12% below their 2003-2005 baseline Management Act by the Government of Alberta to support investment in intensity. One compliance innovation and clean technologies aiming to reduce Alberta’s GHG emissions option for those who 6 and improve its ability to adapt to climate change. The deliberate creation cannot meet their target is of this fund assured that the money collected would not simply go into to contribute $15 into the general revenue, but rather to further the goals of the SGER thus creating a Climate Change and self-sustaining system for climate change action where funds are reinvested Emissions Management to further reduce emissions or adapt to climate change. Fund (CCEMF) for every 1 tonne of GHG emissions CCEMF contributions are collected by the Government of Alberta and they exceed beyond their 16 transferred twice a year in the form of a grant to the Climate Change and allocated limit. Emissions Management Corporation (CCEMC). The CCEMC is an arm’s-length organization that works independently from government and is responsible for reinvesting the funds from the CCEMF into initiatives and projects that either reduce GHG emissions or help Alberta adapt to climate change.7 In its fifth year of operations, the CCEMC’s mandate is to support the discovery, development and deployment of clean technologies.8 The Minister of Environment and Sustainable Resource Development also has the ability to directly fund projects related to the mandate of the fund, independent of the CCEMC, but use of this ability has been limited to date.

The CCEMF is a strategic investment in a long term process. There is a lot of anticipated growth in the energy sector in Alberta and a great need to develop and apply new clean energy technologies. The CCEMC considers funding projects at various levels of innovation (i.e., from early stage research and development to pilot projects that are near commercialization)9 in the areas of clean energy production, renewable energy, energy efficiency, carbon capture and sequestration, innovative carbon uses, adaptation and reducing GHG emissions from biological sources.10 To date, $503M has been paid into the CCEMF and of that, $237M has been allocated to 90 projects.11 It is important to note that these projects are leveraged by other funding sources (minimum of 1:1, but on average 6:1) in order to spur investment and innovation in adaptation and mitigation projects.

Table 1: Examples of Projects Funded by the CCEMF

MITIGATION PROJECTS

Type of Project Organization CCEMC Funding Project Location Total Project Value

Wintering Hills Fort Suncor Energy Renewable Energy $9,201,063 Battery Storage McMurray, $18,410,000 Inc., Oil Sands Pilot Project AB

Organic Rankine Energy Efficiency Devon Energy $1,951,581 Cycle Waste Heat Conklin, AB $5,850,000 Recovery Project

43 Linking Mitigation and Adaptation Goals in the Energy Sector

Cleaner Energy Saltworks Low Energy Vancouver, Production from Technologies $500,000 Produced Water $2,200,000 BC Fossil Fuels Inc. Treatment

ADAPTATION PROJECTS

Type of Project Organization CCEMC Funding Project Location Total Project Value

Foothills Tree Species Research Adaptation Risk Adaptation Institute/Tree $3,000,000 Alberta $3,000,000 Management Improvement Project Alberta

Alberta Biodiversity Biodiversity Management and Adaptation $2,400,000 Alberta $2,400,000 Monitoring Climate Change Institute Adaptation

Alberta South Bow River Innovates – Saskatchewan and Oldman Energy and River Basin (SSRB) River sub- Adaptation Environment $1,600,000 Adaptation to basins of the $1,600,000 Solutions and Climate South WaterSMART Vulnerability Saskatchewan Solutions Ltd. Project River Basin

* Note that the CCEMC has also funded projects outside of Alberta; however the projects must be applicable to Alberta in some way.

The CCEMC is governed by a Board of Directors tasked with providing leadership, policy development and the allocation of resources to achieve strategic results. The Board is made up of representatives from the public at large and sectors of the economy that have large emitters. The Board also provides access to expertise from the fertilizer industry, mineral manufacturing, chemical producers, academia, conventional oil and gas, government, the pipeline industry, electricity generation, the forest industry and the oil sands.12

Twice a year, the Board identifies opportunities for GHG reduction and adaptation that will maximize the impact of the funds while staying in line with the strategic interests of the Province and the CCEMC. Once the Board chooses a subject area for a particular round of funding The CCEMC follows a (e.g. carbon capture projects, renewable energy technologies, adaptation rigorous multi-step process projects, etc.), they release a call for proposals that outlines the types of projects when choosing projects to they are seeking. The CCEMC then follows a rigorous multi-step process to fund in order to ensure that evaluate each proposal and ensure that the funds are invested in accordance the funds are invested in with its mandate. The process takes approximately eight months from beginning accordance with its to end and involves seven steps. mandate. The process takes approximately 8 months Assembling the initial Board of Directors to reflect a broad range of expertise on from beginning to end and a variety of topics was challenging yet necessary to ensure that funding decisions involves 7 steps. are not swayed by any particular sector. The CCEMC also ensures it has a clear

A Case Study Synthesis Report 44

and structured process for how projects are evaluated and how funding is allocated. This helps overcome issues related to stakeholders lobbying their own ideas for spending the money.

Currently, the CCEMC does not explicitly seek out projects that have both adaptation and mitigation components; rather, they use the CCEMF to fund mitigation projects and adaptation projects separately. The CCEMC tracks their success through the number of projects funded and the amount of GHGs reduced. Tracking the success of mitigation projects is relatively straightforward because reductions in CO2 are easily quantified and reported to the funding agency. In contrast, it is much more difficult to assess the success of adaptation projects since they are very different from one other and do not have common metrics. Therefore, project-specific milestones, intents or goals serve as indicators of success for adaptation initiatives.

Contribution to Climate Change Mitigation and Adaptation

The CCEMF contributes both to climate change adaptation and mitigation through the Climate Change and Emissions Management Act and accompanying Specified Gas Emitters Regulation (SGER) (Table 2).

Table 2: Adaptation/Mitigation Contribution Matrix for the CCEMF

Contribution to Mitigation

Technological Behavioural Managerial Policy

Technological

Behavioural

Adaptation Managerial

Contribution to Contribution Policy X

The CCEMF advances mitigation by funding the development of technologies that will significantly reduce Alberta’s GHG emissions. The funded projects contribute to the research and development of carbon capture and storage, renewable energy, energy efficiency and clean energy production technologies. It is estimated that CCEMC-funded projects will reduce GHG emissions by approximately 10.3 Mt by 2020, which is equivalent to removing roughly 2.1 million cars from the roads.13 Additional reductions are expected due to the broader adoption and commercialization of the clean energy technologies.14

The funds for adaptation projects are not necessarily tied to the energy sector or clean technologies. Instead, these projects focus on understanding the impacts of climate change and evaluating potential management responses related to wildlife, ecosystems, forestry and watersheds (refer back to Table 1).15 The adaptation projects are more research-focused than the mitigation projects and provide opportunities to become long-term initiatives where there is potential for uptake and continuation of the projects beyond the defined CCEMF funding period.

From current and previous research initiatives by both the Alberta government and research institutions, insight into knowledge gaps has been highlighted which help to steer the direction of CCEMF-funded projects. The CCEMF funds projects that will advance understanding of adaptation management for all stakeholders in the province, which include industry, academia, government and Alberta residents.

45 Linking Mitigation and Adaptation Goals in the Energy Sector

While there is no set formula that dictates how funding is allocated between adaptation and mitigation projects, the imbalance is clear: to date, adaptation projects have received $7M in funds in comparison to over $200M allocated to mitigation projects. These strategic decisions are made by the Board of Directors, members of which are often part of industries that are largely interested in mitigation. However, the Board recognizes the importance of adaptation and its relationship with mitigation and plans to review the manner in which funds are distributed in order to increase the CCEMF’s contribution to adaptation in the future.

Table 3: Summary of the Contribution of the CCEMF to Climate Change Adaptation and Mitigation

MITIGATION ADAPTATION

Policy funds the development of clean energy technologies Policy funds adaptation projects that help increase that will significantly reduce GHG emissions in Alberta. resiliency to climate change in Alberta.

 Contributes to the research and development of  Projects help to enhance the understanding of carbon capture and storage, renewable energy, climate change impacts and adaptation on energy efficiency and clean energy production wildlife, ecosystems, forestry and watersheds. technologies, all of which work to reduce GHG  Projects recommend and evaluate potential emissions. management responses to climate change  GHG emissions will be reduced by approximately impacts. 10.3 Mt by the year 2020.  Additional reductions are expected due to the broader adoption and commercialization of the clean energy technologies.

Co-Benefits

The CCEMF was intentionally put in place to maximize the co-benefits of the SGER by using the funds collected from large emitters in Alberta to help the province reduce its GHG emissions and adapt to a changing climate. There are also a number of other co-benefits that arise from the fund. First, the is certainly impacted by climate change (e.g. increasing demand, interruptions to lines, decreasing water supply, etc.) and each area of the energy industry is also in tune with their contribution to GHG emissions. Therefore, there is value in a program like the CCEMF that has a dual focus, and adequately addressed both adaptation and mitigation in one policy. Second, there are many transferrable skills between the adaptation and mitigation projects in terms of administrative efficiency, in particular, project management and coordination (e.g. setting up contracts and planning agreements, administration work, etc.). By including adaptation and mitigation in the same fund, competition for resources between adaptation and mitigation goals is reduced. Finally, the SGER has the ability to include requirements of demonstration of both adaptation and mitigation in their projects; truly a win-win opportunity.

Box 1: Synergies Between Climate Change Adaptation and Mitigation Resulting from the CCEMF

The CCEMF’s purpose is to help Alberta reduce its GHG emissions by investing in clean energy technologies and adapt to a changing climate by funding adaptation research. Addressing both adaptation and mitigation increases the efficiency of the CCEMF by sharing resources.

A Case Study Synthesis Report 46

Lessons Learned

In its six years of existence, the CCEMF in Alberta has demonstrated that policy has an integral role to play in building both adaptation and mitigation capacity. Developing a provincial regulation that requires large emitters to reduce GHG emissions, and penalize those who cannot meet the specified targets, helps to generate the funds necessary to achieve multiple climate change objectives. Due to this purposeful harmonization of outcomes, the CCEMF reduces the competition for human and financial resources for adaptation and mitigation.

Further, CCEMF-funded adaptation projects address Alberta’s capacity to adapt to the changing climate. Projects funded by the CCEMF thus far have supported knowledge development and broadened understanding of risks and benefits of climatic changes in Alberta where funding is minimal through other avenues, such as projects focusing on biodiversity, watersheds, and forestry. Thus, funds for adaptation projects can be focused on understanding the impacts of climate change and evaluating potential management responses where information gaps currently exist.

Further Information

Climate Change and Emissions Management Corporation: www.ccemc.ca Government of Alberta: www.esrd.alberta.ca

Contact

Justin Wheler Climate Change Engineer, Alberta Environment and Sustainable Resource Development Email: [email protected]

Allan G. Douglas Director, Ontario Centre for Climate Impacts and Adaptation Resources (OCCIAR) Email: [email protected]

References

1 CCEMC. About. Accessed from www.ccemc.ca/about/.

2 Leach, A. (2012). Policy Forum: Alberta’s Specified Gas Emitters Regulation. Canadian Tax Journal. Volume 60(4) 881-898.

3 Bankes, N. and E. Wilman. (2014). Summary of Papers and Proceedings from a Workshop on Key Issues in the Design of Carbon Management Policies and Regulations in Alberta, Calgary, January 27 and 28th, 2014.

47 Linking Mitigation and Adaptation Goals in the Energy Sector

Accessed from www.ablawg.ca/2014/02/18/summary-of-papers-and-proceedings-from-a-workshop-on-key- issues-in-the-design-of-carbon-management-policies-and-regulations-in-alberta-calgary-january-27-28th- 2014/.

4 Government of Alberta. (2008). Alberta’s 2008 Climate Change Strategy: Responsibility / Leadership / Action. Accessed from www.environment.gov.ab.ca/info/library/7894.pdf.

5 Government of Alberta. Greenhouse Gas Reduction Program. Alberta Environment and Sustainable Resource Development. Accessed from www.esrd.alberta.ca/focus/alberta-and-climate-change/regulating greenhouse- gas-emissions/greenhouse-gas-reduction-program/default.aspx.

6 CCEMC. (2013). 2012/ 2013 Annual Report. Accessed from www.ccemc.ca/wp-content/uploads/2013/12/CCEMC- 2013-AnnualReport-web-R1.pdf.

7 Leach, A. (2012). Policy Forum: Alberta’s Specified Gas Emitters Regulation. Canadian Tax Journal. Volume 60(4) 881-898.

8 CCEMC. (2013). 2012/ 2013 Annual Report. Accessed from www.ccemc.ca/wp-content/uploads/2013/12/CCEMC- 2013-AnnualReport-web-R1.pdf.

9 CCEMC. (2013). Performance. Accessed from www.ccemc.ca/about/performance/.

10 CCEMC. About. Accessed from www.ccemc.ca/about/.

11 Government of Alberta. Climate Change and Emissions Management Fund. Alberta Environment and Sustainable Resource Development. Accessed from www.esrd.alberta.ca/focus/alberta-and-climate-change/climate- change-and-emissions-management-fund.aspx.

12 CCEMC. (2013). The Board. Accessed from www.ccemc.ca/about/the-board/.

13 CCEMC. (2013). FAQS. Accessed from www.ccemc.ca/apply/faqs/.

14 Ibid

15 CCEMC. (2013). Adaptation Projects. Accessed from www.ccemc.ca/projects/adaptation/.

16 CCEMC. About. Accessed from www.ccemc.ca/about/.

A Case Study Synthesis Report 48

First Nations Power Authority of Saskatchewan Inc.: Capacity-building for First Nations in the Energy Sector

Focus: First Nations Power Authority of Saskatchewan Inc. Jurisdiction: Saskatchewan, Canada Other stakeholders: SaskPower and the Government of Saskatchewan Stage: In Development Cost: ~$2 million Ownership: Private/Public Does it increase resilience or capacity? Capacity

The value and necessity of First Nations participation in the power sector in Saskatchewan has been recognized by First Nations and others for some time. Significant economic Climate Change Mitigation: actions that reduce the growth in resource extraction sectors will require adequate magnitude or rate of human-induced emissions of and reliable supplies of power in rural and remote locations of greenhouse gases (GHGs). the province. These requirements could potentially translate into economic opportunities for Saskatchewan First Nations. Climate Change Adaptation: preparing for adverse Until recently, the capacity of First Nations to develop power effects of climate change by preventing or production projects had been limited due to difficulties minimizing impacts or taking advantage of accessing financing and expertise, despite opportunities to opportunities. develop energy resources in certain locations. In order to overcome some of the challenges associated with First Capacity: increasing the sectors’ ability to develop policies, programs or projects thereby building their Nations power production projects, the First Nations Power capacity to deal with climate mitigation and Authority of Saskatchewan Inc. (FNPA) was created. adaptation.

FNPA is a membership-based, not-for-profit corporation headquartered in Regina, Saskatchewan that works to build the capacity of Saskatchewan First Nations to participate in Saskatchewan’s power sector. With the support of its members, FNPA: 1) Facilitates the development of First Nations‐led power projects and promotes First Nations participation in opportunities with SaskPower (the principal electric utility in Saskatchewan) through a well-defined, mutually beneficial, long-term agreement;1 2) Serves as a point of contact between SaskPower and Saskatchewan First Nations, providing First Nations with access to SaskPower’s knowledge and expertise in the power sector; and 3) Helps First Nations prioritize and choose power production projects that are technically feasible and will provide the most benefit and value in relation to expected costs and most importantly, meet the energy needs associated with expected development. 4) Promotes the development of renewable energy sources to reduce greenhouse gas emissions and support sustainable local energy systems

49 Linking Mitigation and Adaptation Goals in the Energy Sector

FNPA functions through support of its members, who fall into two categories: general and industry. General members are typically First Nations Highlights of the Master communities or First Nations-owned development corporations, while Agreement include: industry members are usually corporations who are involved with various 1) An initial 10 MW set aspects of the energy sector, such as project development, Engineering, aside from SaskPower Procurement and Construction (EPC), process design, equipment provision for renewable energy projects; and project management. There are currently 17 general members and 12 2) Additional future industry members.2 generation opportunities for SaskPower, FNPA and the Government of Saskatchewan signed a FNPA members; and Memorandum of Understanding in 2011 to formalize the partnership

3,4 3) A defined process for arrangement. Subsequently, in June of 2012, FNPA and SaskPower signed evaluating unsolicited 5 the First Nations Power Master Agreement ; a 10 year agreement that First Nation power provides guidance on how the parties will work together to establish an array project proposals.8 of First Nations-led power generation facilities.6 Once operational, the projects developed through FNPA will supply power to SaskPower.

FNPA focuses largely on renewable energy technologies both on- and off-grid. They are particularly interested in developing power projects for industrial operations and northern and remote communities. FNPA is a young organization and without any operational power projects, is strengthening the capacity of First Nations to build renewable energy projects.

Although there are currently no operational power projects, the FNPA has begun developing its first 10MW of power generation by setting up a solar demonstration project in Swift Current, and planning three projects with First Nations communities in Saskatchewan’s Far North. FNPA has also been working towards the development of the Meadow Lake Centre, which is expected to be operational in 2015.

Since the FNPA is in the early stages of project development, there has been minimal monitoring to date. However, given the focus and objectives of FNPA, success will be measured using indicators of First Nations community development and well-being. For instance, once these indicators are developed they could be used to measure economic returns from the production projects, changes in individuals’ livelihoods, or access to essential community services (e.g. electricity, health and recreation). Additional examples of potential indicators include: number of projects developed; volume of GHG emission reduced; number of First Nations communities involved; changes in employment rates in First Nations communities; percentage change in power service reliability to remote communities; number of homes with access to sustainable energy; number of homes off the grid; and many others.

Financial sustainability is one challenge facing FNPA. Currently, FNPA has two sources of funding: membership fees and government. First Nations maintain membership through a $500/year membership fee, while other corporations and governments have annual membership fees based on revenue. FNPA is also subsidized by government. Sustaining FNPA into the future will require developing sources of interim and long term funding to build future project revenues (e.g. additional grants, project development, and membership fees) in order to maintain and improve the benefits that the organization provides as it moves to a more self-sustaining business model.

A second challenge involves the preferred scale of new renewable energy projects by SaskPower. First Nation communities are relatively small communities spread out across the province, and would likely prefer small-scale renewable energy projects located at the community level. However SaskPower has a preference for large-scale

A Case Study Synthesis Report 50

projects, as they are easier to manage and integrate into the existing grid. As a result, FNPA is challenged with balancing the needs and preferences of First Nations communities and SaskPower.

Contribution to Climate Change Mitigation and Adaptation

In addition to building capacity within the First Nations to get involved in new power projects, contributions to GHG reduction at the FNPA has been recognized through managerial activities. As new renewable projects arise at FNPA, reliance on fossil fuel-dependent generation will subside (Table 1). Currently, FNPA functions as a bridging organization to help individual First Nation communities across Saskatchewan become engaged in the power industry and develop renewable energy projects, which will have future climate change mitigation benefits. In particular, FNPA’s role could lead to considerable, but yet to be estimated, reductions in greenhouse gas (GHG) emissions in the future. These GHG emission reductions could be realized through a shift away from the reliance on fossil fuels for power production in remote communities or through the development of greenfield renewables such as wind, solar, bioenergy and hydro.

Table 1: Adaptation/Mitigation Contribution Matrix for FNPA

Contribution to Mitigation

Technological Behavioural Managerial Policy

Technological

Behavioural

Adaptation Managerial

Contribution to Contribution Policy X

The member-driven policy mandate of the FNPA contributes to power grid resilience and increased adaptive capacity in Saskatchewan. Their activities encourage the decentralization and diversification of power production thus lessening the vulnerability of power infrastructure to the impacts of extreme weather7 and improving reliability of power supply, notably in remote locations. FNPA also provides a mechanism for First Nations to 1) contribute to the diversification of Saskatchewan’s power supply; 2) bring new sources of power to previously un- or under-serviced First Nation communities; and 3) strengthen the economies of smaller, remote communities through training, employment and renewable power business opportunities.

The FNPA will also implement electrical grid infrastructure enhancements such as microgrid, smart-grid and other distributed generation technologies. These technologies will manage the electricity from a number of power generation technologies with greater efficiency, allowing for a greater power fleet diversity and, as detailed above, a greater number of power generation options to rely upon when dealing with climate change impacts or stressors to the electrical grid. These initiatives are expected to demonstrate the benefits of distributed generation for the energy supply mix, while maintaining reliable electricity supply for users.

Although recognized as important, adapting to climate change has not been the primary driver for development of the FNPA. FNPA was created to improve First Nations participation in the energy sector, ensure that First Nations benefit directly from the future development of power production projects, and provide effective linkages between the main players in Saskatchewan’s power industry (e.g. SaskPower, other developers, federal and provincial government agencies) and First Nations communities. Within this set of drivers, climate change

51 Linking Mitigation and Adaptation Goals in the Energy Sector

mitigation has also been a direct focus of FNPA through the development of Saskatchewan’s renewable energy sector.

Table 2: Summary of the Contribution of FNPA to Climate Change Adaptation and Mitigation

MITIGATION ADAPTATION

Will help First Nations communities access the expertise and Policy mandate will help improve the adaptive capacity of resources they need to develop renewable energy projects. the power production system by promoting decentralization of the grid and the diversification of power generation types.

 Will shift reliance away from fossil fuels for energy  Will contribute to the adaptive capacity of First production across the Province of Saskatchewan. Nations communities by improving their access to  Could lead to considerable, but yet to be resources. estimated, reductions in GHGs in the future.  Will maintain reliability, build needed redundancy, and improve resiliency within the electricity grid.

Co-Benefits

FNPA provides a mechanism for development of renewable energy projects. This provides adaptation/mitigation co-benefits through power supply resiliency and GHG emissions reduction. Additional benefits of improved access to local power, such as reduced vulnerability to the impacts of extreme events on power infrastructure, are also achieved through the FNPA.

Box 1: Synergies Between Climate Change Adaptation and Mitigation in Relation to FNPA

FNPA’s focus on renewable energy production in remote areas will help produce a more resilient power generation and transmission system while simultaneously reducing GHG emissions and providing jobs and climate-smart development opportunities for Saskatchewan First Nations communities.

Lessons Learned

There are four main lessons that can be learned from this case study. First, FNPA demonstrates a successful model for community engagement. FNPA acts as a bridging organization and point of contact to provide a conduit and concentration of information to build capacity within First Nations who wish to participate in the power production sector. Such an organization provides the basis for developing effective and efficient relationships between individual First Nations and key players in the sector (e.g. SaskPower).

Second, sustainable funding is a necessity to support FNPA’s efforts. The organization will be seeking ways to broaden its financial support base in order to be less dependent on government funds, as power production projects become operational. Long project development periods (3-20+ years) will make continued government support necessary, if benefits are derived from new, and operating renewable energy projects. Alternative financing mechanisms, including renewable energy certificates, property assessed clean energy (PACE), and community-funded renewable energy projects, could also be pursued.

A Case Study Synthesis Report 52

Third, the FNPA is a model of leadership from First Nations and provides the mechanism for fair and inclusive participation of Saskatchewan First Nations in Saskatchewan’s energy sector and growing economy. This leadership, in turn, provides capacity for the direct participation of First Nations in climate change mitigation projects and provides associated benefits related to climate change adaptation.

Fourth, FNPA demonstrates how competing priorities can be balanced to address climate change from both an adaptation and mitigation standpoint. While the main drivers and mandate of FNPA pertains to the development of economic opportunities for First Nations, the benefits of climate change responses are clear and will serve the First Nations and the province writ large.

Further Information

First Nations Power Authority: www.fnpa.ca

Contact

Phone: (306) 359-3672 Email: [email protected]

Allan G. Douglas Director, Ontario Centre for Climate Impacts and Adaptation Resources (OCCIAR) Email: [email protected]

References

1 FNPA. (2014). About. Accessed from www.fnpa.ca/about/.

2 FNPA. (2014). Membership. Accessed from www.fnpa.ca/membership/.

3 FNMR. (2011). Annual Report of the Ministry of First Nations and Métis Relations, 2010-11. Government of Saskatchewan, Regina, SK. 30 p.

4 SaskPower. (2011). Energizing Growth: SaskPower Annual Report 2011. SaskPower, Regina, SK, 132 p.

5 SaskPower and FNPA. (2012). First Nations Master Power Agreement. SaskPower and FNPA, Regina, SK, 12 p.

6 FNPA. (2014). About. Accessed from www.fnpa.ca/about/.

7 Sauchyn, D. and S. Kulshreshtha. (2008). Prairies. In Lemmen, D., F. Warren, J. Lacroix and E. Bush. (Eds) From Impacts to Adaptation: Canada in a Changing Climate 2007. Government of Canada, Ottawa, ON, p. 275-328.

53 Linking Mitigation and Adaptation Goals in the Energy Sector

8 Eggerman, C. (2013). First Nations Power Authority of Saskatchewan and SaskPower launch innovative new program for renewable energy projects. Accessed from www.renewableenergylawyer.blogspot.com/2013/03/first-nations-power-authority-of.html.

A Case Study Synthesis Report 54

Markham’s District Energy Systems: Using Locally-sited Combined Heat and Power to Increase Energy Efficiency

Focus: Markham’s District Energy Systems Jurisdiction: Markham, Ontario, Canada Lead: Markham District Energy Inc. Other stakeholders: City of Markham Stage: Operational/In Development Cost: >$150 million Ownership: Public Does it increase resilience or capacity? Resilience

Instead of relying on energy produced externally (i.e., outside their community or province), many communities across

Canada are now looking towards district energy as a way to Mitigation: actions that reduce the magnitude or achieve greater energy security, reduce greenhouse gas rate of human-induced emissions of greenhouse (GHG) emissions, manage rising energy prices, increase gases (GHGs). economic competitiveness, and achieve financial benefit through the sale of electricity.1 District energy is classed as Adaptation: preparing for adverse effects of climate change by preventing or minimizing impacts or thermal energy (steam, hot water or chilled water) that is taking advantage of opportunities. produced at central plants and distributed to surrounding buildings via closed-loop, underground piping distribution Resilience: project, programs and policies that 2 systems known as ‘thermal grids’. increase the resilience of sectors to absorb shocks associated with the impacts of climate change (i.e. Markham District Energy Inc. (MDE) is a thermal energy extreme weather events). utility owned by the City of Markham and was founded in

2000. MDE has become a leader in new district energy system development and currently operates four energy centres in two distinct areas of the city known as Markham Centre and Cornell Centre. The energy centres also incorporate Combined Heat and Power (CHP) or ‘co-generation’ technology. Markham is currently the only Canadian municipality to own and operate two district energy systems within city borders.

The CHP facilities operated by MDE recover the waste heat from The City of Markham is located directly -fueled electricity generation and use it to heat and cool 3 north of Toronto and has a population buildings within these two urban centres. By simultaneously of just over 300,000, which is expected producing electricity and thermal energy from one fuel source, there to reach 444,000 by the year 2031. In are substantial gains in energy efficiency.4 More than 60% of the order to meet the growing energy City’s energy consumption is used to heat and cool buildings, thus needs associated with an increase in the energy distributed by MDE is primarily for space heating, hot population and employment growth, 5 water and . As a result of district energy, the need the City is planning to add to their list for boilers, furnaces, chillers and air conditioners in connected of centres that receive district energy.33 buildings is eliminated and replaced with heat exchangers. Buildings that are commonly connected to a thermal grid include commercial

55 Linking Mitigation and Adaptation Goals in the Energy Sector

buildings, condominiums, hotels, sports facilities, universities, and others.6 QUICK FACTS ABOUT MARKHAM’S DISTRICT ENERGY Markham Centre SYSTEMS In 1994, Markham City Council approved the Markham Centre Secondary Plan, which provided the framework for transforming greenfield lands in  Owned by the City of the centre of Markham into a sustainable downtown core.7 In the late Markham  Two district energy systems 1990’s it was the unique combination of Ontario power industry de- are up and running at: regulation, the 1998 ice storm, and interest from IBM Canada to locate a 1) Markham Centre major facility in Markham, that provided the impetus for the city to (2000) 8 2) Cornell Centre develop a district energy system along with its new downtown core. (2012)  MDE is made up of: At current, Markham Centre has three thermal energy plants: the Warden o Four Energy Plants Energy Centre which includes an 8.5 MW CHP, Clegg Energy Centre and (3 at Markham Centre, 1 at Cornell Birchmount Energy Centre which includes a 3.0 MW CHP that provide Centre) 2 heating and cooling to over 744,000 m of building space in Markham o Hot water and Centre, with another 279,000 m2 of buildings in various stages of chilled water construction. When complete in the year 2028, Markham Centre will distribution systems 2 o Large grid of include over 2,700,000 m of mixed-use buildings and will be home to underground 41,000 residents and 39,000 employees. At full build-out, district energy is thermal pipes (~30 forecast to reduce GHG emissions by 50% (exceeding 100,000 tonnes km of pipe) 9 o 15MW CHP fleet annually) over conventional development.

Cornell Centre Development of the Cornell Centre grew out of a unique opportunity through the expansion of the Markham Stouffville hospital expansion in 2007. The hospital’s original heating and cooling assets were nearing end of life and the expansion along with plans to develop the Cornell Centre, presented the perfect opportunity to consider building a new district energy system. As a result, in 2012 Markham opened its second district energy system to serve Markham Stouffville Hospital and the surrounding area known as Cornell Centre.10

Designed in the mid-1990’s and covering 250 acres, Cornell Centre is a high-density, mixed-use community with a retail core. Currently, MDE serves over 93,000 m2 of building space in Cornell Centre. When fully developed, the Centre will be home to over 10,000 residents and 10,000 employees, with over 930,000 m2 of residential, commercial and institutional buildings.11 Cornell Centre has one thermal energy plant: the Bur Oak Energy Centre that includes a 4 MW CHP facility.

Challenges and Successes Building owners are not obligated to connect to Markham’s district energy systems, however 100% of new building projects have connected due a variety of factors: 1) the system is very reliable – with Markham Centre demonstrating 99.998% heating reliability and 99.997% cooling reliability; 2) it reduces life cycle costs – building owners do not need to purchase their own boilers or chillers, resulting in reduced upfront capital costs with less financial risk; 3) increased comfort and convenience – building operators can control their own indoor environments and the system reduces vibration and noise pollution associated with traditional heating and cooling systems; and 4) architectural design flexibility – the district heating system frees up space that would otherwise be taken up by boilers and chillers, thus allowing building developers to use what would have been wasted space.12

A Case Study Synthesis Report 56

Development of the district energy systems in Markham was driven by the desire to increase community energy resilience and decrease the dependency on external energy sources. The notorious ice storm of 1998 did The City of Markham is the not affect Markham directly, yet the and City Council recognized the sole shareholder of MDE and they view the district advantages of having a local energy platform that would increase energy energy system as a resilience and reduce dependency on the Provincial electricity grid in times business; a long-term, very of outage. patient investment. Over the long-term as the system Markham’s district energy systems have proven successful (including is built out and the reducing GHG emissions, increasing resilience and attracting investment to investments start to slow, Markham), yet there were challenges associated with their development. this will generate a One such challenge is the high capital cost of distributed, underground significant cash flow for the thermal grids that provide the heating and cooling. The upfront cost to build city.

Markham’s first district energy plant at Markham Centre and bring energy to its first customer was approximately $16M, with subsequent spending exceeding $100M to build additional energy plants and infrastructure.13 To tackle the high capital costs, the City of Markham developed a funding partnership comprised of the Federation of Canadian Municipalities’ Green Municipal Fund, Infrastructure Ontario and private lenders, along with the City’s equity position stemming from a portion of its Federal Gas Tax rebate.

Even though funding such capital intensive projects can be a challenge for municipalities, Markham regarded its district energy systems as a business decision with carefully calculated long term return on investment. As the systems mature over the next ten years, the City will realize a stable return on its invested capital. Over the long- term the district energy systems will generate a significant cash flow for the city, thus providing a sound business investment.

Incentives to develop district energy systems in most Canadian provinces are limited, with no significant policy drivers in place. Yet, some municipalities are taking the initiative to move district energy forward in their respective communities through policy. Markham recently introduced a policy that requires City Council and senior staff to promote district energy and Markham’s current Official Plan (adopted by City Council in December, 2013) encourages the evaluation and consideration of district energy in new development and reinforces it in current areas.14 The Plan explicitly states that a district energy system, with one or more CHP facility, is the preferred option in specific areas where the City is developing higher density communities.15 Funded by the Ontario Ministry of Energy, Markham has also embarked on a Municipal Energy Plan (to be completed in 2016), which will identify opportunities to achieve net zero energy, water, waste and emissions by 2050.16

Since MDE is a non-regulated utility where customers are not mandated to connect to the service, breaking the comfort of traditional energy was also challenging. At the onset, the building community resisted the new process and protocols associated with district energy systems in construction of new buildings. The City and MDE took steps to explain the benefits of the district energy system in order to win them over. MDE customers were also resistant to signing on, but again the City took steps to respond to their objections and educate them on the benefits of connecting. As a result, Markham Centre now has a 100% sign on level.

In the future, MDE plans to follow in the footsteps of European communities with district energy systems and move into fuel switching. Currently, Markham uses natural gas to produce their heating; however, MDE is actively

57 Linking Mitigation and Adaptation Goals in the Energy Sector

exploring opportunities to switch a portion of the energy source from natural gas to renewables (e.g. solar thermal, and ). This fuel switch has the potential to reduce GHG emissions by up to 70% below business as usual.

Contribution to Climate Change Mitigation and Adaptation

Markham advances climate change mitigation through changes to policy that helps promote further development of district energy systems (Table 1). Markham’s new Official Plan sets out policies to guide future development in order to manage growth, and provides a policy framework for City Council decisions. It contains a policy for the City to evaluate the option of district energy in new development and reinforce it where it currently exists.17 Specifically, policy 7.2.3.10 states that City Council must “work in partnership with MDE to provide leadership in the design, development and use of community energy systems in Markham and to promote Markham as a demonstration site for new technologies addressing climate change and energy.”18

The two district energy systems currently reduce GHG emissions by more than 17,000 tonnes annually which represents a 50% reduction from business as usual and is equivalent to removing 4,300 cars from the road.19 Combined Heat and Power (CHP) is a key factor in this reduction, as it produces considerable heating energy by recovering waste heat from the power plants, thereby increasing the energy efficiency of fuel use.20

MDE also has the capacity to store thermal energy, which helps to mitigate greenhouse gases. To demonstrate, during the summers of 2010 and 2011 MDE’s thermal tank stored 3,600 megawatt hours (MWh) of heat recovery from CHP operations, which was then discharged to meet the community’s heat load at night. This process avoided the use of 432,000m3 of natural gas; equivalent to 852 tonnes of GHGs.21

Table 1: Adaptation/Mitigation Contribution Matrix for Markham’s District Energy System

Contribution to Mitigation

Technological Behavioural Managerial Policy

Technological

Behavioural

Adaptation Managerial X Contribution to Contribution Policy

In terms of adaptation, communities that use locally-sited CHP generators are often able to maintain power and heating during emergency situations (e.g. ice storms and other weather events that disable the main electricity grid).22 This is possible because district energy systems operate independently from the larger utility grid and can produce their own power if the electric utility grid goes offline. As well, district energy systems typically use a network of underground pipes and wires, which are less likely to be affected by storms than above ground utility lines and poles.23 As evidence of the resiliency of its energy system, Markham’s district energy system continued to function during the infamous 2003 blackout that left 10 million people in Ontario without power.24

With extreme weather events expected to occur more frequently as a result of climate change, it will be critical for utility systems to recover from unexpected outages in a timely manner.25 In the event of a major power outage that leads to a state of municipal emergency, MDE works with the local distribution company to redirect power to

A Case Study Synthesis Report 58

certain key facilities (e.g. city hall, high schools, regional hospitals, community centres). With Markham’s power usage peaking at 400 MW in a day, not enough energy is produced by the CHP fleet in order to maintain power to the whole city; therefore, power is strategically managed in order to heat and power over 372,000 m2 of select building space that could be used as emergency reception centres.26 Therefore, Markham’s district energy system advances climate change adaptation through changes to managerial practices (Table 1).

Table 2: Summary of the Contribution of Markham’s District Energy System to Climate Change Adaptation and Mitigation MITIGATION ADAPTATION

Policy requires City Council to encourage the evaluation and Utility companies can strategically manage which facilities consideration of district energy in new development and receive power (usually prioritizing hospitals and emergency reinforce it where it currently exists. centres) during large grid outages.

 Markham’s two district energy systems currently  Provides resiliency to critical service providers reduce GHG emissions by 17,000 tonnes annually during times of outage. (50% from business as usual).  District energy systems use a network of  Combined Heat and Power (CHP), energy underground pipes and wires that are less efficiency and energy storage are all contribute to exposed to intense weather events. GHG reduction.

Co-Benefits

Markham’s district energy system was developed to both increase the reliability and resiliency of local energy systems to intense weather (adaptation) and to increase efficiency of fuel use through the recovery of waste heat (GHG mitigation).

A number of co-benefits stem from the district heating/cooling system. These include: (1) a contribution to local economic growth and development by attracting large companies (such as IBM and Bell Canada in Markham) and residential developers who seek reliable energy supply; (2) increasing energy self-sufficiency by sheltering customers from market volatility; (3) increasing energy redundancy by supplying backup power in the case of provincial grid outages; (4) technological flexibility in the system allowing for use of alternative fuels; and (5) flexibility in the way local energy is developed and managed in response to local conditions and opportunities (i.e., peak demand).27,28

Box 1: Synergies Between Climate Change Adaptation and Mitigation Resulting from Markham’s District Energy System

Introducing district energy systems to the City of Markham increased the reliability and resiliency of the local energy system while simultaneously increasing energy efficiency, thereby reducing GHG emissions. Co-benefits include increasing economic growth, energy self-sufficiency, energy redundancy, the flexibility of the system to allow for use of alternative fuels (fuel switching), and the flexibility in the way local energy is managed.

59 Linking Mitigation and Adaptation Goals in the Energy Sector

Lessons Learned

Municipalities play a significant role in the planning, support and initial launch of district energy systems.29 District energy companies (like MDE) can be solely private, wholly owned by the municipality, or a form of public-private partnership. Regardless of the ownership structure, success is derived from strong working relationships between municipalities and the district energy companies to ensure that the benefits provided by district energy systems are identified and maximized in municipal plans.30

Municipal policy can play an integral role in pushing district energy forward at the local level. Markham did this in reverse, creating MDE and its district energy systems first before developing the municipal policy; yet, provisions for district energy could benefit from being included in high level municipal plans and policies related to growth and land use planning.31 High capital costs and longer payback periods can often cause angst to undertake district energy systems at the municipal level. Support and patience, and a clearly defined vision from mayor, Council and City can help the process proceed to fruition.

Finally, district energy providers should be engaged in municipal planning and decision-making processes in order to take advantage of opportunities to coordinate infrastructure development into land-use planning.32 Breaking the status quo of using traditional energy systems is often a challenge when developing district energy systems; therefore it is crucial that a professional and knowledgeable team be in place to identify and communicate to municipal staff, developers and customers, the benefits of district energy.

Further Information

Markham District Energy: www.markhamdistrictenergy.com City of Markham: www.markham.ca

Contact information

Bruce Ander President and CEO, Markham District Energy Inc. Email: [email protected]

Graham Seaman Senior Manager, Sustainability Office, City of Markham Email: [email protected]

Allan G. Douglas Director, Ontario Centre for Climate Impacts and Adaptation Resources (OCCIAR) Email: [email protected]

A Case Study Synthesis Report 60

References

1 Brown, S.J. The Potential for District Energy Systems to Contribute to Municipal Climate Change Mitigation and Adaptation: Lessons from Hamilton and Markham. Canadian Institute of Planners, Poster. Accessed from www.cip-icu.ca/Files/Resources/DISTRICTENERGY_POSTER_E.

2 Markham District Energy Inc. District Energy: The Basics. Accessed from www.markhamdistrictenergy.com/district-energy-101/.

3 Ander, B. and J. Baird. (2007). District Energy: Fuelling sustainable development in Markham Centre. Municipal World. August, 2007. Accessed from www.districtenergy.org/assets/CDEA/Case-Studies/Markham-Center- Ander-MunicipalWorld-Aug2007.pdf.

4 Canadian Electricity Association. Electricity Fuel Source Technical Papers: . Accessed from www.powerforthefuture.ca/electricity-411/electricity-fuel-source-technical-papers/cogeneration/.

5 Ander, B. (2011). District Energy/Combined Heat & Power. Presentation at . Accessed from www.sei.info.yorku.ca/files/2012/04/Bruce-Ander.pdf.

6 Markham District Energy Inc. District Energy: The Basics. Accessed from www.markhamdistrictenergy.com/district-energy-101/.

7 Markham District Energy Inc. Serving Markham Centre. Accessed from www.markhamdistrictenergy.com/serving- markham-centre/.

8 Ibid

9 Ander, B. (2007). Markham District Energy: Putting the Urban in Suburban. International District Energy Association Case Study. Accessed from www.districtenergy.org/assets/CDEA/Case-Studies/Markham-District- Energy-5-29-07.pdf.

10 Markham District Energy Inc. Who We Are. Accessed from www.markhamdistrictenergy.com/who-we-are/.

11 Markham District Energy Inc. Serving Cornell Centre. Accessed from www.markhamdistrictenergy.com/serving- cornell-centre/.

12 Markham District Energy Inc. Our Customers. Accessed from www.markhamdistrictenergy.com/who- benefits/customers/.

13 Ander, B. (2007). Markham District Energy: Putting the Urban in Suburban. International District Energy Association Case Study. Accessed from www.districtenergy.org/assets/CDEA/Case-Studies/Markham-District- Energy-5-29-07.pdf.

14 Ander, B. (2013). Cornell Centre, Ontario: Markham’s continuing commitment to district energy, CHP and city building. District Energy Association. District Energy, Third Quarter 2013. Accessed from http://markhamenergy.pixelshopdesign.net/wp-content/uploads/2014/03/IDEA-3Q13-Cover-Story-1.pdf.

61 Linking Mitigation and Adaptation Goals in the Energy Sector

15 Ander, B. (2014). Personal Correspondence. October 23, 2014.

16 Seaman, G. (2014). Markham’s Municipal Energy Plan. Presentation for the Municipal Leaders Forum Working Group, June 27 2014. Accessed from www.cagbctoronto.org/files/Markham's%20Municipal%20Energy%20Plan.pdf.

17 Ander, B. (2013). Cornell Centre, Ontario: Markham’s continuing commitment to district energy, CHP and city building. District Energy Association. District Energy, Third Quarter 2013. Accessed from http://markhamenergy.pixelshopdesign.net/wp-content/uploads/2014/03/IDEA-3Q13-Cover-Story-1.pdf.

18 City of Markham. (2013). Chapter 7: Transportation, Services and Utilities. In: City of Markham Official Plan – Part 1. Accessed from www.markham.ca/wps/portal/Markham/BusinessDevelopment/PlanningAndDevelopmentServices/OPZoning /new-official-plan.

19 Ander, B. (2007). Markham District Energy: Putting the Urban in Suburban. International District Energy Association Case Study. Accessed from www.districtenergy.org/assets/CDEA/Case-Studies/Markham-District- Energy-5-29-07.pdf.

20 Markham District Energy Inc. Home. Accessed from www.markhamdistrictenergy.com/.

21 Ander, B. (2011). District Energy/Combined Heat & Power. Presentation at York University. Accessed from www.sei.info.yorku.ca/files/2012/04/Bruce-Ander.pdf.

22 Markham District Energy Inc. Our Community. Accessed from www.markhamdistrictenergy.com/who- benefits/community/.

23 Fitzgerald, M. (2014). When the Power Goes Out, Microgrids Keep Electricity Flowing. The Wall Street Journal. Accessed from www.online.wsj.com/articles/SB10001424052702304831304579544200059257532.

24 Ander, B. (2007). Markham District Energy: Putting the Urban in Suburban. International District Energy Association Case Study. Accessed from www.districtenergy.org/assets/CDEA/Case-Studies/Markham-District- Energy-5-29-07.pdf.

25 Markham District Energy Inc. Who Benefits. Accessed from www.markhamdistrictenergy.com/who-benefits/.

26 Markham District Energy Inc. Who We Are. Accessed from www.markhamdistrictenergy.com/who-we-are/.

27 Ander, B. (2007). Markham District Energy: Putting the Urban in Suburban. International District Energy Association Case Study. Accessed from www.districtenergy.org/assets/CDEA/Case-Studies/Markham-District- Energy-5-29-07.pdf.

28 Brown, S.J. The Potential for District Energy Systems to Contribute to Municipal Climate Change Mitigation and Adaptation: Lessons from Hamilton and Markham. Canadian Institute of Planners, Poster. Accessed from www.cip-icu.ca/Files/Resources/DISTRICTENERGY_POSTER_E.

29 Markham District Energy Inc. Our Community. Accessed from www.markhamdistrictenergy.com/who- benefits/community/.

A Case Study Synthesis Report 62

30 Brown, S.J. The Potential for District Energy Systems to Contribute to Municipal Climate Change Mitigation and Adaptation: Lessons from Hamilton and Markham. Canadian Institute of Planners, Poster. Accessed from www.cip-icu.ca/Files/Resources/DISTRICTENERGY_POSTER_E.

31 Ibid

32 Ibid

33 Ander, B. (2013). Cornell Centre, Ontario: Markham’s continuing commitment to district energy, CHP and city building. District Energy Association. District Energy, Third Quarter 2013. Accessed from http://markhamenergy.pixelshopdesign.net/wp-content/uploads/2014/03/IDEA-3Q13-Cover-Story-1.pdf.

63 Linking Mitigation and Adaptation Goals in the Energy Sector

Yukon’s Independent Power Production and Micro- Generation Policies: Building Capacity for Decentralized Clean and Renewable Energy in the North

Focus: Independent Power Production and Micro- Generation Policies Jurisdiction: Yukon, Canada Lead: Government of Yukon Stage: Independent Power Production Policy = in development, Micro-Generation Policy = complete Cost: Independent Power Production Policy = to be determined, Micro-Generation Policy = $100,000 over first 10 years Ownership: Public Does it increase resilience or capacity? Capacity

The Yukon government released the Energy Strategy for Mitigation: actions that reduce the magnitude or rate of human-induced emissions of greenhouse Yukon in 2009. The Strategy sets out government goals, gases (GHGs). strategies and actions for energy efficiency and conservation, renewable energy, electricity, oil and gas, and energy choices, Adaptation: preparing for adverse effects of climate which provide direction for the development, management change by preventing or minimizing impacts or and use of energy in Yukon over the next 10 years. The taking advantage of opportunities. Strategy outlines both the mechanisms by which 1) electricity Capacity: increasing the sectors’ ability to develop will be purchased from independent power producers policies, programs or projects thereby building their (Independent Power Production) and 2) individuals will be capacity to deal with climate mitigation and allowed to connect renewable energy sources to the grid adaptation. (Micro-Generation), as priority actions. IPP and micro- generation projects will add to Yukon’s current energy mix, which is dominated by hydro-generating capacity, supplemented by back-up thermal generation. Four Yukon communities, Watson Lake, Old Crow, Swift River, and Burwash Landing/Destruction Bay are currently isolated from the main Yukon hydro-based grid. These communities are currently powered by local thermal generators that use diesel for fuel. Watson Lake may be fuelled by a combination of diesel and natural gas using fuel blending technology.

To collect public input on these two priority actions, the and Independent Power Production Discussion Paper was released for public consultation between November 2009 and February 2010. As a result of suggestions from the public, the Yukon government decided to separate the two policies within the Strategy. As a result, the Micro-Generation Policy was developed from the feedback on net metering and approved in advance of the Independent Power Production (IPP) Policy on October 23, 2013. Public consultation and formal review of the IPP Policy is still ongoing.

A Case Study Synthesis Report 64

Micro-Generation Policy The Micro-Generation Policy allows Yukon residents to reduce their home “Micro-generation is a term used to describe the small- energy consumption by incorporating decentralized renewable energy scale generation of electric generating technologies such as solar (PV) or wind. This power by individuals, small option allows a home or business owner to export surplus energy to the businesses and/or electrical grid at rates established by the Yukon government’s Micro- communities to meet their Generation Incentive Program, which currently runs at $0.21/kilowatt hour energy needs. This small- (kWh) for connected electricity exports (Figure 1) and $0.30/kWh for those scale energy generation can isolated communities that continue to be powered solely by diesel be used as an alternative or generation. The rates are predicated on the avoided cost of new power to supplement power used 1 generation in the territory and reflect the greater expense of powering from the grid.” communities with fossil fuels. “IPP is not about privatizing public utility assets; it is The Micro-Generation Incentive Program is only available to those projects about providing with a generating capacity of up to 5 kilowatts (kW) for customers utilizing a opportunities for non-utility shared transformer, and less than 25 kW for customers utilizing a single entities to generate new transformer. Projects with a nameplate capacity of up to 50 kW will be power that can assist the considered on a case by case basis by the utilities and will be subject to a utilities in meeting the demand for affordable, detailed review of the project’s infrastructure capacity, a process made reliable, flexible and clean necessary by the limitations of Yukon’s various isolated grids. 2 .”

Independent Power Production (IPP) Policy The IPP Policy differentiates itself from the Micro-Generation Policy based on project size; projects with a nameplate capacity of over 50 kW will be considered under the IPP Policy.

The IPP Policy will apply to two levels of energy generation. Tier 1 will be for smaller projects and will have an aggregate generation cap of 2 megawatts (MW) for projects connecting to the Yukon Integrated System, and 300 kW in Watson Lake, due to concerns about infrastructure limitations in that community. Tier 1 projects will be restricted to renewable energy sources such as wind, hydro, geothermal, biomass and solar. Tier 1 projects will be able to take advantage of a standard form contract and pre-approved rate.

Tier 2 projects, or those with a generating capacity of over 2 MW or any projects built in the remaining isolated communities (Old Crow, Burwash Landing/Destruction Bay, and Swift River), have been classified differently from Tier 1 projects because of the transmission limitations of Yukon’s grid. These projects will be assessed on a case- by-case basis by Yukon’s two franchised electric utilities (Yukon Energy Corporation and ATCO Electric Yukon) and will require individual regulatory approval from the Yukon Utilities Board to proceed. Tier 2 projects will include natural gas generation in addition to renewable energy generation. The IPP Policy will use the same method of calculating benefits (using avoided costs) of generation and the same rate incentive structure as the Micro- Generation Policy.

Development of the IPP and Micro-generation policies was driven by anticipated growth in electricity demand. Residential and commercial demand is anticipated to grow at a rate of 2.26% based on 2011 trends and exceed Yukon’s current hydro generating capacity by the early 2020’s. Industrial demand, comprised primarily of mining operations in the territory, could exceed Yukon’s hydro generating supply at any time. Any demand not met through hydro must be met with thermal (diesel or natural gas) generated electricity at a much higher cost per

65 Linking Mitigation and Adaptation Goals in the Energy Sector

kilowatt. Subsequent drivers of these policies include managing the cost of energy to support economic development, managing residential energy rates, and enhancing the renewable energy portfolio of Yukon.

At the time of policy development, the Yukon government had in mind both mitigation goals (i.e., increasing the use of renewable energy and reducing fossil fuel consumption) and adaptation goals (i.e., increasing the use of local, diversified and resilient energy sources), each perceived as equally important. This high level support helped to drive the policy development in a more traditional top-down fashion with appropriate financial incentives.

Success of the IPP can be seen through an example of a local renewable energy generation project near Atlin, British Columbia (shown in Figure 1). The run-of-river hydro project at Pine Creek constructed by the Taku River Tlingit Nation demonstrates a small-scale (2.1MW current generating capacity) renewable project that has 1) eliminated the need for power generation from diesel in the community, 2) increased the communities resiliency to extreme weather events and power outages, 3) substantially reduced the community’s greenhouse gas (GHG) emissions, 4) contributed to local employment, and 5) yielded health benefits.

Figure 1: Power provision to Yukon communities. Yukon communities that receive power from hydro are connected by the Yukon Integrated Grid (blue, red, green and purple lines).3

A Case Study Synthesis Report 66

Development and implementation of the IPP also has inherent challenges. For instance, the previous definition of a ‘public utility’ meant that even small producers/generators were subject to more stringent regulations. Amendments to the Yukon Public Utilities Act, specifically related to regulatory exemptions for smaller producers, have removed barriers for micro-generation and smaller independent power producers, and enabled a greater diversity of power production options to be explored in Yukon.

The Yukon government has developed a program to track uptake of the policy. Over the long-term, the success of the Micro-Generation Production Incentive Program will be measured by 1) reductions in electrical demand, 2) reductions in consumption of diesel fuel and 3) the number of new micro-generation projects within the Territory. The number of new micro-generation projects in its first year has exceeded the initial uptake estimates by more than 100%. These results will help determine the effectiveness of the incentives, and advise their potential adjustment.

The Yukon government is in the process of approving the IPP Incentive Program, and indicators similar to those of the Micro-Generation Incentive Program will determine the effectiveness of the incentives on program uptake.

Contribution to Climate Change Mitigation and Adaptation

Both the IPP and Micro-Generation Policies demonstrate opportunities for mitigation and adaptation to climate change (Table 1).

Table 1: Summary of the Contribution of the IPP and Micro-Generation Policies to Climate Change Adaptation and Mitigation

MITIGATION ADAPTATION

Policies reduce the reliance of Yukon communities on diesel Policy helps to build redundancy in the grid by diversifying fuel by enabling the construction of renewable energy the resources utilized to generate electricity. generation projects.

 Encourages investment in renewable energy  Increases use of renewables should hydropower generation projects by incentivizing and resources be affected by climate change. encouraging the development of renewable  Generating stations built close to communities will energy projects to offset more GHG-intensive allow for faster access and repair during outages, energy sources in Yukon thus increasing local and system-wide resilience to extreme weather.  Increases adaptive capacity through local economic development, skills training, and new employment opportunities.

The IPP and Micro-Generation Policies are intentionally designed to help reduce emissions of GHG in Yukon. Both policies catalyze investment in the Yukon renewable energy market and enable the construction of new energy generation projects by establishing an avoided cost of electricity, interconnections standards, purchase power agreement principles, and regulated rates.

Both policies increase the redundancy in Yukon’s electrical generation and transmission capability by diversifying the resources utilized to generate electricity and by decentralizing generating stations. Increased use of

67 Linking Mitigation and Adaptation Goals in the Energy Sector

solar/wind/biomass resources can provide generating alternatives, should Yukon’s hydropower resources be negatively affected by shifting precipitation patterns and increased evaporation rates stemming from climate change.

Decentralizing the generating stations and increasing redundancy on the grid will also improve transmission reliability by de-emphasizing the contribution of any one generating station to the territory’s total load. Generating stations built within close proximity to communities will also be easier to access and repair during outages, thus increasing local and system-wide resilience to extreme weather. Transmission losses will also be reduced, improving the efficiency of the transmission system.

The policies will enable residents, First Nations, municipalities, and private sector companies to invest in the local energy generating projects by providing an incentive through the avoided cost of diesel to the grid. Financial investments, skills development, and jobs created by these projects provide a net benefit to local economies, thereby creating more resilient communities by increasing the resources available for responding to increased variability in the local climate/environment. The policies also enhance the capacity to adapt to climate change not through direct increases in resiliency, but rather they enable and incent alternative energy projects.

Table 2: Adaptation/Mitigation Contribution Matrix for the IPP and Micro-Generation Policies

Contribution to Mitigation

Technological Behavioural Managerial Policy

Technological

Behavioural

Adaptation Managerial

Contribution to Contribution

Policy X

Co-Benefits

The adaptation/mitigation co-benefits generated by these policies were anticipated. The objective of these policies is to reduce GHG emissions (i.e., mitigation) and utilize local, diversified, renewable energy sources in order to make the grid more reliable and resilient, which contributes to climate change adaptation. The major co-benefit provided by the policies is that they reduce the barriers for entry into the electricity market for the private sector and encourage investment in renewable generating technologies in Yukon.

Additionally, the policy aims to harmonize the long term objective of reducing Yukon’s carbon footprint while increasing its adaptive capacity. Examples of such harmonized objectives include:  Infrastructure renewal and expansion to meet the growing energy needs of Yukon.  Local economic development and skills and training coupled with improved local energy security.  Enhanced social licence for renewable energy projects that reduce environmental degradation from electricity generating and increase long-term ecosystem benefits such as improved air quality or recreational opportunities.

The long-term benefits are expected to emerge as new renewable energy projects come on-line.

A Case Study Synthesis Report 68

Box 1: Synergies Between Climate Change Adaptation and Mitigation Resulting from the IPP and Micro-Generation Policies

The focus of these policies on incentivizing investment in renewable energy projects increases both the mitigative and adaptive capacity of Yukon. This capacity in turn can be utilized to reduce reliance on fossil fuels, improve local energy security, increase the social capital of new energy generating projects, and enhance the ecosystem benefits available to Yukon residents.

Lessons Learned

Three main lessons can be drawn from the Micro-Generation and IPP Policies. First, policy can be an essential building block to develop capacity building necessary for achieving resilience. In the case of the two policies, such resiliency outcomes include improved transmission reliability, diversified economic development potential and job creation. Second, the case study demonstrates that these policies can be harmonized to achieve both adaptive and mitigative objectives. Such complementary objectives are anticipated as a direct outcome of the policies in the form of renewable energy projects that both reduce GHG emissions and increase local energy security. Third, this harmonization can be purposeful. By recognizing that climate change adaptation was a possible outcome early in the policy development process, the Yukon government has demonstrated that adaptation does not have to be an onerous or expensive process. More specifically, adaptation was included in the policy costs adopted by the government for the implementation of mitigation policies, and required no additional capital to implement.

Further Information

Micro-Generation: www.energy.gov.yk.ca/microgeneration.html Independent Power Production: www.energy.gov.yk.ca/independent_power_production.html

Contact

Yukon Energy Solutions Centre Phone: (867) 393-7063 Email: [email protected]

Allan G. Douglas Director, Ontario Centre for Climate Impacts and Adaptation Resources (OCCIAR) Email: [email protected]

References

1 Yukon Government. (2014). Micro-generation. Energy Solutions Centre. Accessed from www.energy.gov.yk.ca/microgeneration.html.

2 Yukon Government. (2014). Independent Power Production. Energy Solutions Centre. Accessed from www.energy.gov.yk.ca/independent_power_production.html.

69 Linking Mitigation and Adaptation Goals in the Energy Sector

3 Next Generation Hydro. (2014). Yukon’s Electrical Grid. Accessed from www.nextgenerationhydro.ca/resource- centre/yukons-transmission-and-generation-facilities/.

A Case Study Synthesis Report 70

Financial Incentives and Building Regulations for Green Roofs: Increasing Energy Efficiency and Combating Climate Change in Switzerland

Focus: Green roof incentives Jurisdiction: Basel, Switzerland Lead: City of Basel Stage: First Subsidy Program (complete 1996/1997), Second Subsidy Program (complete 2005/2006), Building and Construction Law (ongoing since 2002) Cost: 2.5 million Swiss Francs Ownership: Public/Private Does it increase resilience or capacity? Resilience

The City of Basel, Switzerland has a long history of green roofs and currently boasts the highest percentage of green Mitigation: actions that reduce the magnitude or roof area per capita in the world with more than 1.2 million rate of human-induced emissions of greenhouse gases (GHGs). square metres of rooftop area covered with vegetation as of 1 2014. With a population of 195,000 people, and located on Adaptation: preparing for adverse effects of climate the border between Switzerland, and France, the change by preventing or minimizing impacts or success of Basel’s green roof tendency is driven by a taking advantage of opportunities. combination of financial incentives and building regulations.2 Resilience: project, programs and policies that

increase the resilience of sectors to absorb shocks Throughout the 1970s, green roofs became popular in many associated with the impacts of climate change (i.e. parts of Switzerland and were designed to provide additional extreme weather events). insulation value, thus reducing heating (energy savings), but also as a way to increase biodiversity conservation.3 Green roof construction continued throughout the 1980s, mainly as pilot projects. In the mid-1990s, the Department of

Environment and Energy conducted a public poll to determine the level of support for an electricity tax to fund development of energy saving measures. With no strong public opposition to the idea, Basel introduced a regulation which placed a 5% surcharge tax on customer electricity bills which was then put into the Energy Saving Fund. The Fund was subsequently used to finance various Basel is a canton energy saving projects, including two green roof subsidy programs (first in 1996/97, and (state) of Switzerland later in 2005/06).4 with its own constitution, The European Unions’ ‘Year of ’ in 1995 provided impetus for legislature, Basel’s first green roof subsidy program5. The program was developed by the city’s government and courts. Therefore the Department of Building and Transport and designed to stimulate awareness of, and city has the ability to interest in green roofs by offering 20 Swiss Francs per square metre of installed green 6 implement local roof on local homes and businesses. Approximately 1 million Swiss Francs were regulations.45 allocated for subsidies during this first program, and within 18 months over 120 green roofs were built in Basel (an area equal to 8 football fields).7 The primary objective of

71 Linking Mitigation and Adaptation Goals in the Energy Sector

the subsidy program to increase the insulation of existing buildings (energy savings), but other positive effects were identified (i.e. benefits to human health and well-being, reduced stormwater runoff and reduced overheating in the summer months.8

Box 1: Green Roofs

Green roofs are passive cooling techniques that absorb/reflect incoming solar from buildings, thus improving the insulation properties of the structures and ultimately reducing annual energy consumption.46 It is estimated that some green roofs have been known to reduce surface temperature by 30-60°C and ambient temperature

by 5°C, when compared to conventional black 47 Photo courtesy of: Stephan Brenneisen roofs. Green roofs are popular strategies as they offer a number of other benefits to buildings and the surrounding area, including: reduced stormwater flows, improved urban air quality, a reduction in the urban heat island effect, habitats for wildlife, and an extended roof life.48 There are two main types of

green roofs: intensive and extensive. Extensive green roofs have a shallow soil depth and are unable to support many types of vegetation, whereas intensive green roofs (although more expensive to install) have deeper soils and are able to support a diverse array of plant species and animal life.49

Many of the green roofs constructed in Basel during the first subsidy program were extensive in nature (see Box 1); however, a study conducted by Dr. Stephan Brenneisen, a green roof expert at Zürich University of Applied Sciences in Wädenswil (ZHAW), revealed that more complex green roof systems (i.e. those with increased soil depth and quality) have the ability to increase local biodiversity. The results of this study, in combination with the success of the first subsidy program, led Basel to pass an amendment to its Building and Construction Law (paragraph 72) in 2002. The law now states that all new and renovated flat roofs in Basel must be greened, and developers must follow a series of guidelines for green roof construction in order to effectively support biodiversity and species conservation.9,10 When new developments are approved, building owners are now provided with detailed instructions on how to maximize the nature conservation properties of their green roof and have direct access to a green roof expert, which is funded by the government.11

The recognition that green roofs provide valuable species habitats and support Although the original nature conservation objectives was one of the main drivers for Basel’s second purpose of the first green green roof subsidy program (2005/06).12 This program offered a total of 1.5 roof subsidy program was million Swiss Francs for subsidies through the Energy Saving Fund. Due to the energy savings, research change in green roof guidelines which required green roofs to be more intensive found that birds and in nature, recipients received a higher subsidy amount to account for the invertebrates benefited difference in cost (between 30 and 40 Swiss Francs per square metre of installed from the roofs as well, green roof). The subsidy program was strictly dedicated to renovating existing including species at risk. roofs (as new, flat-roofed buildings had been required by law to have green roofs installed as of 2002).13

A Case Study Synthesis Report 72

The two subsidy programs resulted in the development of 1,711 extensive green roof projects and 218 intensive green roof projects; approximately 23% of Basel’s flat roof area.14 As a result of the awareness generated during the subsidy programs, along with changes to the building law, green roof construction continues in Basel to this day. As of 2014 there is over 1.2 million square metres of green roof in Basel, making up approximately 30% of the city’s flat roof area. The subsidy programs were administered by the Canton of Basel with support from the national Department of Environment and Energy. The City consulted with a number of local stakeholders to develop the green roof initiatives, including local business associations, horticulture association, green roof association, other non- governmental organizations, and various city departments.15 This engagement, consultation and cooperation during the development of the subsidies and regulations have significantly limited any backlash from the builders16, and installing green roofs is now Figure 1: Graph depicting green roof growth (m2) in Basel, Switzerland from 1970 to 17 2010; including the first and second green roof subsidy programs held by the city in considered standard in Basel. 50 1996 and 2005, respectively.

Energy Savings Around half of the primary energy consumption in developed countries comes from heating and cooling buildings. Green roofs are considered a great way to improve the insulation properties of a structure and help reduce that energy load.18 Some studies show that energy savings from green roofs can vary between 15 and 45% of annual energy consumption, mainly from lowering cooling costs.19

Green roofs incur energy savings by reducing heat loss from buildings during colder months, reducing heat gain during warmer months, and stabilizing internal temperatures year-round.20 As well, green roofs are capable of storing water and minimizing the amount of stormwater reaching sewer systems, thus resulting in additional energy savings (see Figure 2). For example, rainwater in Basel drains from urban areas into a waste water processing plant where it is cleaned and released back into the Rhine River.21 Basel’s green roofs help to decrease the amount of water reaching stormwater outflows by delaying peak runoff and lowering the overall amount of flow. By decreasing the peak rainwater flows, less stress is placed on the stormwater system and energy is saved as a result of a reduced need for water processing.22

Basel’s green roof incentives have played a large part in increasing energy efficiency within the city with 4 gigawatts (GW) per year of energy savings during phase one, and an additional 3.1 GW per year for the second

73 Linking Mitigation and Adaptation Goals in the Energy Sector

subsidy program. In total, green roofs contribute energy savings of 7.1 GW annually throughout Basel.23 Since air conditioning systems are currently uncommon in private residences in Switzerland, energy savings are mainly from reducing heat energy during winter months.24

Contribution to Climate Change Mitigation and Adaptation

Since the beginning of the 20th century, the frequency of rainstorm events in northern Switzerland have increased by 15-70% and climate projections estimate a 2.5°C increase in average summer temperatures by the 2050s. The construction of green roofs across the city will help Basel deflect some of the more extreme changes in weather.25 Figure 2: A traditional roof (left) and a green roof (right). Green roofs provide rainwater storage and heat absorption, resulting in reduced strain on conventional stormwater infrastructure and more insulation from While originally designed as a method to 51 incoming solar radiation. conserve energy, green roofs have now been recognized as a crosscutting technology that provides multiple benefits and can help meet the challenges of climate change through mitigation of greenhouse gases (GHGs) and increasing Basel’s resilience to climate change impacts through adaptation (Table 1).26

Table 1: Summary of the Contribution of Basel’s Green Roof Initiatives to Climate Change Adaptation and Mitigation

MITIGATION ADAPTATION

Basel’s green roofs enhance the thermal properties of new Basel’s green roofs increase the rainwater storage and heat and existing buildings, thereby increasing the energy absorption abilities of buildings and decrease the urban efficiency of cooling and heating systems in extreme heat island effect in the city. temperatures.

 Decreases the energy needed for heating and cooling  Reduces the risk of flooding in the event of heavy buildings, thereby reducing the associated GHG rainfall through stormwater retention and helps emissions. ease the stress on conventional stormwater  Increases the vegetation present on roofs, thereby infrastructure. reducing carbon dioxide and pollution through plant  Reduces the urban heat island effect and ambient respiration. air temperatures within the city.

In the case of Basel, what advanced climate change adaptation and mitigation were changes to policy (Table 2). The amendment to the city’s Building and Construction Law in 2002 states that developers are not only required to install green roofs on all new flat-roofed buildings, but must also follow a particular set of guidelines; ultimately resulting in the increased thermal properties of city buildings. With less energy consumed in the winter to heat buildings, energy efficiency has increased and as a result, GHG emissions are reduced.27 The reduction in energy

A Case Study Synthesis Report 74

consumption will vary by structure and depends on the substrate depth of the green roofs; however the changes to the Building and Construction Law in 2002 now dictates that substrate depth must be a minimum of 10 cm.28

Basel’s green roofs also come in the form of an adaptive response to the impacts of climate change. The roofs help manage larger amounts of precipitation, improve water quality through natural filtration, and reduce additional localized warming through reduced urban heat island effect.

Climate change is expected to increase the frequency and intensity of summer storms leading to flooding in urban areas. In urban contexts, larger amounts of hardened surfaces can lead to higher peak stormwater flows which can lead to downstream flooding and pollution. Green roofs reduce runoff by reducing peak flow rates and volumes, which ultimately reduces the strain on stormwater infrastructure within an urban area.29 Some studies show that green roofs can reduce annual stormwater run-off an average of 50-60%, including peak runoff.30 Additionally, traditional building construction absorbs sunlight and up quickly during the day, releasing the radiation back into the atmosphere at night, which increases local air temperature; this is known as the urban heat island effect – the tendency for cities to be warmer than the surrounding areas. The soils and vegetation on green roofs help to insulate buildings, and minimize the contribution to increased local air temperature.31

Both of these adaptive benefits of green roofs contribute to the overall resilience of Basel to current and future climate change impacts. Therefore, policy is an important driver in the positive impacts green roofs have on both climate change adaptation and mitigation.

Table 2: Adaptation/Mitigation Contribution Matrix for Basel’s Green Roof Initiatives

Contribution to Mitigation

Technological Behavioural Managerial Policy

Technological

Behavioural

Adaptation Managerial

Contribution to Contribution Policy X

Co-Benefits

In addition to the direct adaptation and mitigation benefits, there were several co-benefits provided by the installation of green roofs in Basel: 1) Conserving biodiversity. Basel’s green roofs create habitats for plants, birds and invertebrates that may have been impacted by previous land-use changes. For example, a species count on a green roof in Basel found 79 beetle species and 50 spider species, of which 13 of the beetle species and 7 of the spider species were listed as endangered. Ground-nesting birds are also found to use the green roofs.32 2) Financial benefits for building owners. Green roofs can extended the life of roofs that are no longer exposed to adverse weather conditions such as wind, UV rays and temperature fluctuations; sometimes doubling the lifetime of a conventional roof. Green roofs can also increase the value of a property and draw higher rental rates.33 These financial benefits for property owners can be a convincing argument when introducing the idea of green roof installation.34

75 Linking Mitigation and Adaptation Goals in the Energy Sector

3) Financial benefits for local businesses. Local businesses can profit from the sale of green roof material and supplies. It is estimated that for every 1 million Swiss Francs worth of green roof subsidies in Basel, 13 million Swiss Francs were invested in the local green roof construction and material business.35 4) Additional urban green space and public health. Green roofs create additional urban green space for Basel residents and help to reduce outside noise pollution; which can also increase property values and improve public health. As well, urban vegetation has been known to remove pollutants from the air and improve air quality.36 5) Water quantity and quality. Green roofs are able to retain stormwater (thereby decreasing peak loads during heavy rainfall events) and filter out contaminants (thereby improving the quality of water reaching the watershed).37

Box 2: Synergies Between Climate Change Adaptation and Mitigation in Relation to Basel’s Green Roof Initiatives

Green roofs increase the insulation properties of buildings and reduce energy consumption (mitigation) while simultaneously improving stormwater management and reducing the urban heat island effect (adaptation). Other benefits include conserving regional biodiversity, improving water quantity and quality, providing financial benefits to building owners and local businesses, as well as adding additional urban green space and vegetation, which can improve human health in a number of ways.

Lessons Learned

The significant advances in green roof coverage in Basel demonstrate a number of lessons for application to a North American context as a response to climate change. The governance and legislative autonomy of Basel has allowed the city to make changes to its building regulations that enable green roofs and ultimately mitigative and adaptive responses to climate change. It is possible that a more restrictive governance framework would not allow for such sweeping changes for building codes.38 Basel’s successful incentive program, policy, regulation and guidance also offer a unique lesson which may not be simply transferred to the North American context. Offering a large local financial incentive may not be feasible, and appetites for a levee, surcharge or fee on consumer’s electrical bills may also encounter backlash. This incentive model may be best recognized through a partnership with electrical or water utilities to raise revenue.39 Nonetheless, Basel’s comprehensive suite of mechanisms, from financial incentives to statutory regulations, along with an information campaign and engagement of local stakeholders, ensured a wide uptake of green roofs within the city.40,41 In fact, many developers would likely not have begun installing green roofs without the financial incentives and building regulations set out by the city.

The success of the subsidy programs was due in part to close cooperation between the municipal authority and biodiversity experts, architects, construction and landscape planners, green roof companies and contractors.42 Involving all pertinent stakeholders from the beginning ensured that all questions or concerns were addressed. The subsidy programs also contributed to increased awareness of, and education about, green roofs in the community. The messages included demonstration of the wider benefits (e.g. local businesses profited from sales of materials and supplies, building owners saved energy and money, and the city of Basel received worldwide recognition).43

Finally, in the case of Basel, goals for adapting to climate change can be compatible with those for mitigation, even if not explicitly by design at the onset of the project. This case provides an example of how adaptation can occur as a result of actions that were originally aimed at saving energy and climate change mitigation. Therefore, green roofs and other forms of urban greening are example of both co-benefits and no regrets actions that can fulfill multiple objectives, including climate change adaptation and mitigation.44

A Case Study Synthesis Report 76

Further Information

Basel Office of Environment and Energy (in German): www.aue.bs.ch/energie/foerderbeitraege/daecher-basels- solarkraftwerk/abgeschlossene-aktionen/flachdach.html

Contact

Dr. Stephan Brenneisen Professor of Geography, Zurich University of Applied Sciences ZHAW Email: [email protected]

Allan G. Douglas Director, Ontario Centre for Climate Impacts and Adaptation Resources (OCCIAR) Email: [email protected]

References

1 Kazmierczak, A. (2013). Innovative ways of supporting the establishment of green infrastructure in cities: collaboration of local authorities with investors and property owners. In: Bergier, Tomasz, Kronenberg, Jakub and Lisicki, Pawel eds. Sustainable Development Applications 4. Nature in the City: Solutions, Sendzimir Foundation, pp. 98-109.

2 Kazmierczak, A. (2014). Combining climate change mitigation and adaptation: Green roofs in Basel, Switzerland. In: Prutsch, A., T. Grothmann, S. McCallum, I. Schauser and R. Swart. (2014). Climate Change Adaptation Manual: Lessons Learned from European and other industrialised countries. Routledge, pp. 233-237.

3 Ibid

4 Banting, D., H. Doshi, J. Li, P. Missios, A. Au, B.A. Currie and M. Verrati. (2005). Report on the Environmental Benefits and Costs of Green Roof Technology for the City of Toronto. Prepared for the City of Toronto and Ontario Centres of Excellence by Ryerson University. Accessed from www.toronto.ca/legdocs/2005/agendas/committees/ren/ren051123/it003a.pdf.

5 Brenneissen, S. (2008). From Pilot to Mainstream: Green roofs in Basel, Switzerland. Proceedings of the Sixth International Greening Rooftops for Sustainable Communities Conference. Accessed from www.greenroofs.org/grtok/policy_browse.php?id=63&what=view.

6 Brenneisen, S. and D. Gedge. (2012). Green Roof Planning in Urban Areas. Encyclopedia of and Technology. Vol (2012)4716-4729.

7 Ibid

77 Linking Mitigation and Adaptation Goals in the Energy Sector

8 Brenneissen, S. (2008). From Pilot to Mainstream: Green roofs in Basel, Switzerland. Proceedings of the Sixth International Greening Rooftops for Sustainable Communities Conference. Accessed from www.greenroofs.org/grtok/policy_browse.php?id=63&what=view.

9 Lawlor, G., B.A. Currie, H. Doshi and I. Wieditz. (2006). Green roofs: a resource manual for municipal policy makers. Ottawa: Canada Mortgage and Housing Corporation. Accessed from www03.cmhc- schl.gc.ca/catalog/productDetail.cfm?cat=46&itm=21&lang=en&fr=1417202554104.

10 Kazmierczak, A. (2013). Innovative ways of supporting the establishment of green infrastructure in cities: collaboration of local authorities with investors and property owners. In: Bergier, Tomasz, Kronenberg, Jakub and Lisicki, Pawel eds. Sustainable Development Applications 4. Nature in the City: Solutions, Sendzimir Foundation, pp. 98-109.

11 Brenneissen, S. (2008). From Pilot to Mainstream: Green roofs in Basel, Switzerland. Proceedings of the Sixth International Greening Rooftops for Sustainable Communities Conference. Accessed from www.greenroofs.org/grtok/policy_browse.php?id=63&what=view.

12 Brenneisen, S. and D. Gedge. (2012). Green Roof Planning in Urban Areas. Encyclopedia of Sustainability Science and Technology. Vol (2012)4716-4729.

13 Brenneissen, S. (2008). From Pilot to Mainstream: Green roofs in Basel, Switzerland. Proceedings of the Sixth International Greening Rooftops for Sustainable Communities Conference. Accessed from www.greenroofs.org/grtok/policy_browse.php?id=63&what=view.

14 Brenneisen, S. and D. Gedge. (2012). Green Roof Planning in Urban Areas. Encyclopedia of Sustainability Science and Technology. Vol (2012)4716-4729.

15 Brenneissen, S. (2008). From Pilot to Mainstream: Green roofs in Basel, Switzerland. Proceedings of the Sixth International Greening Rooftops for Sustainable Communities Conference. Accessed from www.greenroofs.org/grtok/policy_browse.php?id=63&what=view.

16 Kazmierczak, A. (2013). Innovative ways of supporting the establishment of green infrastructure in cities: collaboration of local authorities with investors and property owners. In: Bergier, Tomasz, Kronenberg, Jakub and Lisicki, Pawel eds. Sustainable Development Applications 4. Nature in the City: Solutions, Sendzimir Foundation, pp. 98-109.

17 Brenneissen, S. (2008). From Pilot to Mainstream: Green roofs in Basel, Switzerland. Proceedings of the Sixth International Greening Rooftops for Sustainable Communities Conference. Accessed from www.greenroofs.org/grtok/policy_browse.php?id=63&what=view.

18 Castleton, H.F., V. Stovin, S.B.M. Beck and J.B. Davidson. (2010). Green roofs; building energy savings and the potential for retrofit. Energy and Buildings. Vol 42(10): 1582-1591.

19 Foster, J., A. Lowe and S. Winkelman. (2011). The Value of Green Infrastructure for Urban Climate Adaptation. The Center for Clean Air Policy. Accessed from www.ccap.org/assets/The-Value-of-Green-Infrastructure-for- Urban-Climate-Adaptation_CCAP-Feb-2011.pdf.

A Case Study Synthesis Report 78

20 Castleton, H.F., V. Stovin, S.B.M. Beck and J.B. Davidson. (2010). Green roofs; building energy savings and the potential for retrofit. Energy and Buildings. Vol 42(10): 1582-1591.

21 Boller, M. (2004). Towards sustainable urban stormwater management. Water Science and Technology: Water Supply. Vol 4(1): 55-65.

22 Berndtsson, J.C. (2010). Green roof performance towards management of runoff water quantity and quality: A review. Ecological Engineering. Vol 36(4): 351-360.

23 Kazmierczak, A. (2013). Innovative ways of supporting the establishment of green infrastructure in cities: collaboration of local authorities with investors and property owners. In: Bergier, Tomasz, Kronenberg, Jakub and Lisicki, Pawel eds. Sustainable Development Applications 4. Nature in the City: Solutions, Sendzimir Foundation, pp. 98-109.

24 Brenneisen, S. and D. Gedge. (2012). Green Roof Planning in Urban Areas. Encyclopedia of Sustainability Science and Technology. Vol (2012)4716-4729.

25 Kaźmierczak, A. and J. Carter. (2010). Adaptation to climate change using green and blue infrastructure: A database of case studies. Manchester: University of Manchester. Accessed from www.grabs- eu.org/membersArea/files/Database_Final_no_hyperlinks.pdf.

26 Brenneisen, S. and D. Gedge. (2012). Green Roof Planning in Urban Areas. Encyclopedia of Sustainability Science and Technology. Vol (2012)4716-4729.

27 Shepard, N. (2010). Green Roof Incentives: A 2010 Resource Guide. DC Greenworks. Accessed from www.dcgreenworks.org/wp-content/uploads/2012/07/dc-greenworks-2010-survey-of-green-roof-incentive- policies.pdf.

28 Kazmierczak, A. (2013). Innovative ways of supporting the establishment of green infrastructure in cities: collaboration of local authorities with investors and property owners. In: Bergier, Tomasz, Kronenberg, Jakub and Lisicki, Pawel eds. Sustainable Development Applications 4. Nature in the City: Solutions, Sendzimir Foundation, pp. 98-109.

29 Brenneisen, S. and D. Gedge. (2012). Green Roof Planning in Urban Areas. Encyclopedia of Sustainability Science and Technology. Vol (2012)4716-4729.

30 Foster, J., A. Lowe and S. Winkelman. (2011). The Value of Green Infrastructure for Urban Climate Adaptation. The Center for Clean Air Policy. Accessed from www.ccap.org/assets/The-Value-of-Green-Infrastructure-for- Urban-Climate-Adaptation_CCAP-Feb-2011.pdf.

31 Brenneisen, S. and D. Gedge. (2012). Green Roof Planning in Urban Areas. Encyclopedia of Sustainability Science and Technology. Vol (2012)4716-4729.

32 Brenneisen, S. (2006). Space for Urban Wildlife: Designing Green Roofs as Habitats in Switzerland. Urban Habitats. Vol 4(1): 27-36.

79 Linking Mitigation and Adaptation Goals in the Energy Sector

33 Shepard, N. (2010). Green Roof Incentives: A 2010 Resource Guide. DC Greenworks. Accessed from www.dcgreenworks.org/wp-content/uploads/2012/07/dc-greenworks-2010-survey-of-green-roof-incentive- policies.pdf.

34 Kazmierczak, A. (2013). Innovative ways of supporting the establishment of green infrastructure in cities: collaboration of local authorities with investors and property owners. In: Bergier, Tomasz, Kronenberg, Jakub and Lisicki, Pawel eds. Sustainable Development Applications 4. Nature in the City: Solutions, Sendzimir Foundation, pp. 98-109.

35 Ibid

36 Shepard, N. (2010). Green Roof Incentives: A 2010 Resource Guide. DC Greenworks. Accessed from www.dcgreenworks.org/wp-content/uploads/2012/07/dc-greenworks-2010-survey-of-green-roof-incentive- policies.pdf.

37 Boller, M. (2004). Towards sustainable urban stormwater management. Water Science and Technology: Water Supply. Vol 4(1): 55-65.

38 Kazmierczak, A. (2014). Combining climate change mitigation and adaptation: Green roofs in Basel, Switzerland. In: Prutsch, A., T. Grothmann, S. McCallum, I. Schauser and R. Swart. (2014). Climate Change Adaptation Manual: Lessons Learned from European and other industrialised countries. Routledge, pp. 233-237.

39 Lawlor, G., B.A. Currie, H. Doshi and I. Wieditz. (2006). Green roofs: a resource manual for municipal policy makers. Ottawa: Canada Mortgage and Housing Corporation. Accessed from www03.cmhc- schl.gc.ca/catalog/productDetail.cfm?cat=46&itm=21&lang=en&fr=1417202554104.

40 Kazmierczak, A. and J. Carter. (2010). Basel, Switzerland: Building regulations for green roofs. In: Adaptation to climate change using green and blue infrastructure: A database of case studies. University of Manchester. Accessed from www.grabs-eu.org/membersArea/files/Database_Final_no_hyperlinks.pdf.

41 Kazmierczak, A. (2014). Combining climate change mitigation and adaptation: Green roofs in Basel, Switzerland. In: Prutsch, A., T. Grothmann, S. McCallum, I. Schauser and R. Swart. (2014). Climate Change Adaptation Manual: Lessons Learned from European and other industrialised countries. Routledge, pp. 233-237.

42 Hutchins, A. Climate Change and Green Roofs – The example of three cities. Biotope City Journal. Accessed from www.biotope-city.net/article/climate-change-and-green-roofs-example-three-cities.

43 Lawlor, G., B.A. Currie, H. Doshi and I. Wieditz. (2006). Green roofs: a resource manual for municipal policy makers. Ottawa: Canada Mortgage and Housing Corporation. Accessed from www03.cmhc- schl.gc.ca/catalog/productDetail.cfm?cat=46&itm=21&lang=en&fr=1417202554104.

44 Kazmierczak, A. (2014). Combining climate change mitigation and adaptation: Green roofs in Basel, Switzerland. In: Prutsch, A., T. Grothmann, S. McCallum, I. Schauser and R. Swart. (2014). Climate Change Adaptation Manual: Lessons Learned from European and other industrialised countries. Routledge, pp. 233-237.

45 Lawlor, G., B.A. Currie, H. Doshi and I. Wieditz. (2006). Green roofs: a resource manual for municipal policy makers. Ottawa: Canada Mortgage and Housing Corporation. Accessed from www03.cmhc- schl.gc.ca/catalog/productDetail.cfm?cat=46&itm=21&lang=en&fr=1417202554104.

A Case Study Synthesis Report 80

46 Castleton, H.F., V. Stovin, S.B.M. Beck and J.B. Davidson. (2010). Green roofs; building energy savings and the potential for retrofit. Energy and Buildings. Vol 42(10): 1582-1591.

47 Foster, J., A. Lowe and S. Winkelman. (2011). The Value of Green Infrastructure for Urban Climate Adaptation. The Center for Clean Air Policy. Accessed from http://ccap.org/assets/The-Value-of-Green-Infrastructure-for- Urban-Climate-Adaptation_CCAP-Feb-2011.pdf.

48 Hutchins, A. Climate Change and Green Roofs – The example of three cities. Biotope City Journal. Accessed from www.biotope-city.net/article/climate-change-and-green-roofs-example-three-cities.

49 Lawlor, G., B.A. Currie, H. Doshi and I. Wieditz. (2006). Green roofs: a resource manual for municipal policy makers. Ottawa: Canada Mortgage and Housing Corporation. Accessed from www03.cmhc- schl.gc.ca/catalog/productDetail.cfm?cat=46&itm=21&lang=en&fr=1417202554104.

50 Brenneissen, S. (2012). Green roofs – key factors in habitat design: substrates, light weight solutions, species groups and diversity. Presentation for the International Scientific Meeting for Green Roof Research. Accessed from www.helsinki.fi/henvi/yvv/sciencedays12/16042012_05_Brenneisen.pdf.

51 Groundwork Sheffield. (2014). Green Roof Guide. Accessed from www.greenroofguide.co.uk/.

81 Linking Mitigation and Adaptation Goals in the Energy Sector

The Borough of Woking: Distributed Sustainable Energy in the United Kingdom

Focus: Sustainable Energy Production Jurisdiction: Borough of Woking, England, UK Lead: Woking Borough Council Other stakeholders: Thameswey Ltd., Thameswey Energy Ltd. and Xergi Ltd. Stage: Ongoing Cost: ~ £77 million Ownership: Public/Private Does it increase resilience or capacity? Resilience

The Borough of Woking is a local government district in the west of Surrey, England. The town is located approximately 50 km southwest of London, England with a population of approximately 95,000. Woking’s dedication to sustainable Climate Change Mitigation: actions that reduce the energy makes it one of the most energy efficient local magnitude or rate of human-induced emissions of 1 greenhouse gases (GHGs). authorities in the UK. Most energy systems across the UK are dependent on the national grid and natural gas as power Climate Change Adaptation: preparing for adverse supplies, yet Woking Borough Council (“Council”) – the key effects of climate change by preventing or policy decision-making body within the borough, made up of minimizing impacts or taking advantage of 36 elected councillors – has spent the last few decades opportunities. successfully implementing small-scale sustainable energy projects. Woking’s approach to local energy systems involves Resilience: project, programs and policies that supplying customers with Combined Heat and Power (CHP) increase the resilience of sectors to absorb shocks on a private wire network, as well as offering energy and associated with the impacts of climate change (i.e. 2 extreme weather events). environmental services for both public and private sectors.

Using the CHP distributed energy system increases the security of Woking’s energy supply and independence from the national grid in the event of a power disruption (e.g. during extreme weather events).3

In the early 1990s, a public survey found that residents of Woking considered sustainable energy to be a very high priority in the community.4 Since the economic and environmental concerns associated with energy use were so high on citizen agendas5, Council developed an Energy Efficiency Policy with a target of increasing energy efficiency within Council buildings through small-scale energy projects such as building insulation upgrades, transition to energy efficient light bulbs, installation of daylight sensors, etc.6 Council developed a funding mechanism where revenues saved as a result of these energy efficiency projects were reinvested in the community, year after year to further improve overall energy efficiency. From this, Council was able to save money and raise capital for energy infrastructure development, including its two energy services companies: Thameswey Ltd. and Thameswey Energy Ltd.7 Woking has implemented successful small-scale community energy projects since the mid-1990s. However, in order to achieve on a large-scale what the Council was already successfully doing at a small-scale level, it had to

A Case Study Synthesis Report 82

break away from the constraints on capital spending posed by central 8,9 Distributed energy is thermal government and set up its own company to manage its energy services. energy (hot water and chilled Therefore in 1999, Council set up an Energy and Environmental Service water) that is produced at Company (EESCO) called Thameswey Ltd. – the first of its kind in the UK.10 central plants and distributed to surrounding buildings via Thameswey is wholly-owned by Council and provides financial, managerial and closed-loop, underground administrative services for energy and environmental projects.11 Since it is a piping distribution systems 42 local authority company, Thameswey was still subject to central government known as ‘thermal grids’. capital controls. Therefore, in 2000 Thameswey set up the first unregulated public/private joint venture energy services company, called Thameswey Energy Ltd., in order to escape capital controls and allow for the large-scale implementation of decentralised energy projects in Woking, primarily with private finance.12,13 In the UK, Councils were allowed a maximum 20% ownership in companies, therefore Thameswey Energy brought together the local authority with a Danish partner, Xergi A/S, which owns 80% of the company and provides CHP expertise.14

Woking’s Distributed Energy Centres Over the past 15 years, Thameswey Energy has been designing, financing, building and operating sustainable energy services both within and outside Woking using distributed energy centres and renewable energy installations such as photovoltaic and fuel cell generation. Thameswey Energy’s energy centres include efficient CHP engines to generate electricity and hot water for heating – a method that is over 50% more efficient than conventional electricity and heat generation.15 As a publically owned company, the profits generated by projects in Woking are cycled back to Thameswey and Thameswey Energy in order to facilitate further energy and environmental projects within the community.16

Woking has a successful network of local generators that power, heat and cool municipal buildings and social housing.17 The system includes: 1) The first small-scale combined heat and power (CHP) and heat-fired absorption chiller in the UK. Built in 2001, the CHP generation station is located near Woking Town Centre and produces 1.46 MW of power, 1.4 MW of heat-fired absorption cooling, and 163m3 of thermal storage. The energy is distributed over six building complexes via private pipe systems and a private wire network.18 CHP is fueled by natural gas and provides efficiencies of 80-90% as compared to coal-fired power stations and national grid systems, which can have efficiency rates of 25-35% at the point of use.19 This higher efficiency rating is the main driver behind reducing GHG emissions.20 There are now eleven small-scale CHP sites owned and operated by Thameswey within the borough. 2) The first local authority housing private wire residential CHP systems. The generation stations are connected to customers through a series of private electricity wires that are owned and operated by Thameswey Energy.21 The private wires allow electricity to be sold directly to the end users, avoiding transmission and distribution losses/charges through the national

grid/distribution networks.22 Since their inception, 3) Some of the first domestic photovoltaic (PV)/CHP installations in the Woking’s energy UK. Of the eleven small-scale CHP in Woking, 7 incorporate PV companies have enabled installations. Using these two types of sustainable energy sources an 800% increase in together is extremely efficient, as the PV’s generate maximum generation capacity electricity in the summer while CHP maximizes electricity generation in within the borough.43 the winter. PV capacity in the borough is currently 1890 kilowatts (kW).

83 Linking Mitigation and Adaptation Goals in the Energy Sector

4) The first cell CHP system. Woking Park is home to a fuel cell CHP system that supported the heating, cooling and power system for the publicly owned Leisure Lagoon/Pool in the Park, the adjacent Woking Leisure Centre, as well as the lighting in Woking Park. The project included the first commercially operated 200 kW fuel cell CHP plant in the UK, which generally generates 50% more electricity than conventional methods with significantly lower GHG emissions levels.23 5) Other technologies that increase energy efficiency. The Council installed a geothermal for a sports pavilion, a rainwater harvesting system in Woking Park that helps reduce water treatment energy consumption, as well as off-grid PV/wind powered lighting systems in three locations across the community.24 Woking also has thermal storage capabilities with a capacity of about 7 to 8 hours of Photo courtesy of: Thameswey Ltd. storage. Figure 1: CHP plant in Woking Town Centre.

Thameswey Energy also operates an energy centre with a capacity“Southwest of 6 megawatts renewable (MW) agency” in Milton Keynes, a community north of London. It is estimated that the investment in sustainable and renewable infrastructure in Woking and Milton Keynes combined has been approximately £77 million over the past twenty years.

Challenges and Successes Higher capital costs associated with CHP systems can be a deterrent to new-build connections. In 1994 when the drive toward sustainable energy began in Woking, most banks were unwilling to provide loans for sustainable projects due to their long investment return periods (approximately 30 years). To overcome this challenge, the Borough is able to borrow funds from the British Treasury who then loan it to Thameswey at a 2% differential fixed interest rate for up to 50 years. Woking introduced a planning policy that mandated CHP connections for all new development in proximity of an existing or proposed CHP station or district heating network, unless the developers can demonstrate a better economic alternative for reducing GHG emissions.25

Despite the hurdles, the distributed energy system in Woking is a clear demonstration of success. In 2010, Thameswey Energy saved its 170 business and over 900 domestic customers more than 1,400 tonnes of GHG emissions by supplying them with low carbon energy generation.26 In 2013, Thameswey Energy was able to generate more than 15 gigawatt hours (GWh) of energy from its CHP facilities. In Woking, there is a shortage of affordable housing due to the limited amount of land for development and high property prices. As a result, fuel poverty (when a household finds it too expensive to heat their home) is a serious issue in the community.27 Woking’s CHP system is able to meet its own electrical demand and export surplus power (a minimum of 30%) over the public wire system to social housing residents at a very low cost.28 As of 2007, nearly 98% of connected housing properties were heated for only 10% of income or less (for sheltered housing) or £10 per week or less (for non-sheltered housing).29

A Case Study Synthesis Report 84

Contribution to Climate Change Mitigation and Woking Borough Council Adaptation took a political lead and developed its own Climate Following a report on the dangers of climate change prepared by the Change Strategy in 2002. Council’s Energy Manager in the early 2000s, the Council’s focus shifted from improving energy efficiency and fuel poverty, to reducing greenhouse gas Between 1990 and 2012, (GHG) emissions and combating climate change.30 In 2002, the Council’s Woking reduced its CO2 equivalent emissions by original Energy Efficiency Policy was replaced by the Climate Change Strategy 33%, taking the Borough for Woking and since then, the Council has introduced a number of well on its way to reach the innovative measures to reduce GHG emissions, adapt to climate change, and goal of reducing GHG promote sustainable development – not only for Council buildings, but for emissions by 80% by 2050. the Borough as a whole.31

As part of its Climate Change Strategy, Council is working with businesses and residents to tackle climate change in ten key areas/themes, including energy. The Strategy covers all of the Borough’s energy uses and their resulting GHG emissions, including power, heat, water, waste disposal and transport.32 The sustainable and renewable energy projects present in Woking, along with other energy efficiency measures, have been intentionally developed and/or implemented to reduce GHG emissions.33 These energy savings have already reduced carbon dioxide (CO2) emissions by 33% in the borough; however the key target is to achieve an 80% reduction in CO2 34 emissions by 2050. In 1990, it was estimated that Woking produced 895,440 tonnes of CO2 per year; the goal therefore is to reduce that amount to 179,088 tonnes of CO2 per year by 2050. Woking is well on its way to reaching this goal. Between 1990 (when the Council began implementing energy efficiency measures) and 2012, GHG emissions were reduced by 33% in the community.35

The outcomes of reduced GHG emissions in Woking stemmed from management decisions for the energy sector (Table 1). When the Council first sought to reduce GHG emissions and increase energy efficiency as a priority for the community back in the late 1990s, they developed the UK’s first Energy and Environmental Service Company (Thameswey) and public/private joint venture Energy Services Company (Thameswey Energy) in order to increase sustainable distributed generation capacity within the borough. This managerial decision has allowed the borough to increase its generation capacity by 800% since 2000.36

Table 1: Adaptation/Mitigation Contribution Matrix for Woking’s Sustainable Energy Initiatives

Contribution to Mitigation

Technological Behavioural Managerial Policy

Technological

Behavioural

Adaptation Managerial X

Contribution to Contribution Policy

The way in which the Council manages Woking’s energy system also responds to climate change through adaptation in the community. The eleven current operating CHP units have decentralized power generation within

85 Linking Mitigation and Adaptation Goals in the Energy Sector

the community which has increased the redundancy in the grid and the reliability of the energy system, as compared to a single generating station or sourcing from the national grid power supply. During power outages, the distributed energy system allows for a switch to ‘island generation’ mode which allows businesses and residents who are connected to the private wires to continue using power with only a short interruption while the system disconnects from the larger grid and restarts.37 In other words, increasing the community’s energy self-sufficiency decreases its reliance on the grid, making it more resilient to power interruptions that are expected to increase as a result of climate change (i.e. increasing extreme weather events).

Table 2: Summary of the Contribution of Woking’s Sustainable Energy Initiatives to Climate Change Adaptation and Mitigation MITIGATION ADAPTATION

The Council developed Thameswey Ltd and Thameswey Distributed energy generation increases the redundancy on Energy Ltd to help increase distributed generation capacity the grid, making Woking’s energy system much more within the borough and provide the community with an reliable, and much more sustainable. efficient and reliable source of energy.

 Sustainable and renewable energy projects  The energy system can switch to ‘island implemented throughout the community, along generation’ mode during power grid outages, with energy efficiency initiatives, reduce GHG which allows businesses and residents to continue emissions. using power.  Between 1990 and 2012, Woking was able to  Increasing the community’s energy self-sufficiency reduce GHG emissions by 33%. decreases its reliance on the grid, making it more resilient to power interruptions.

Co-Benefits

Woking’s distributed sustainable energy system increases system efficiency and reduces GHG emissions while simultaneously increasing the reliability of the system. In addition, higher efficiency and lower cost CHP allows Thameswey Energy to sell 30% of the energy produced back to the community, providing affordable heat and electricity to social housing residents.38 Secondly, the decentralized energy sources create power in close proximity to where it is consumed, thus the community is spared transmission losses associated with transmitting electricity over long distances. Finally, the 2% differential interest rate on the loan between Thameswey Energy and the Council provides the Council with £1.8 million a year of revenue, which goes to support local services. With recent reductions in grants from central government to local Council’s in the UK, this arrangement provides a much needed financial boost to the community.

Box 1: Synergies Between Climate Change Adaptation and Mitigation in Relation to Woking’s Sustainable Energy Initiatives

Due to its dedication to sustainable and renewable energy, the Borough of Woking has reduced its levels of GHG emissions while simultaneously increasing the resilience and reliability of its energy system, offering competitive energy prices, providing affordable energy for social housing residents, increasing system efficiency, all the while creating profits that are reinvested back into energy efficiency within the community.

A Case Study Synthesis Report 86

Lessons Learned

Woking’s achievements in sustainable energy are a direct result of the political leadership from the Council members, who made energy efficiency and sustainability a priority in the borough.39 It is through their leadership and dedication that Woking is now recognized as being one of the most energy efficient local authorities in the UK. Entering into a private/public partnership allowed the Council to move forward with decentralized energy. In the case of Woking, the development of Thameswey and Thameswey Energy helped to avoid central government constraints on capital spending, allowing the distributed generation capacity in the borough to increase by 800%.

By decentralizing its energy system and avoiding costs associated with using the national grid, Woking was able to fund its power generation facilities and private wire system that deliver low GHG emission electricity at competitive prices.40 Using the savings from Woking’s energy efficiency projects to raise capital for energy infrastructure development proved to be successful, as it allowed revenues to be reinvested year after year to further improve energy efficiency in the community.41

Creating building policies that encourage developers to connect to the local CHP energy supply is also beneficial. As a result of higher costs, developers of new buildings are often not interested in connecting to CHP unless they are required to do so. As a result, Woking introduced a policy that requires all new developments in proximity to an existing or proposed CHP station or district heating network to connect, unless the building developers can demonstrate a better economic alternative for reducing GHG emissions.

Further Information

Borough of Woking, UK: www.woking.gov.uk/planning/service/energy Thameswey Ltd: www.thamesweygroup.co.uk Thameswey Energy Ltd: www.thamesweyenergy.co.uk

Contact

John P. Thorp Group Managing Director, Thameswey Energy Ltd Email: [email protected]

Allan G. Douglas Director, Ontario Centre for Climate Impacts and Adaptation Resources (OCCIAR) Email: [email protected]

87 Linking Mitigation and Adaptation Goals in the Energy Sector

References

1 Woking Borough Council. Fact Sheet 1: About Woking and the Borough Council. Accessed from www.woking.gov.uk/environment/climate/Greeninitiatives/climatechangestrategy/climatechangecasestudy. pdf.

2 Thorp, J.P. (2011). Delivering Affordable and Sustainable Energy: The results of innovative approaches by Woking Borough Council, UK. Greenleaf Publishing.

3 Moreland Energy Foundation. Renewable Energy Case Study: Woking, UK. Accessed from www.mefl.com.au/activity-areas/sustainable-energy-supply/item/368-renewable-energy-case-study-woking- uk.html.

4 Diolettas, S. (2005). Distributed Energy Resources: Prometheus of Renewable Energy. Thesis for the Degree of Philosophy Doctorate, Universidad Politécnica de Cataluña. Accessed from http://web10420.aiso.net/documents/reporto_sd_prom.pdf.

5 Thorp. J.P. and L. Curran. (2009). Affordable and Sustainable Energy in the Borough of Woking in the United Kingdom. Bulletin of Science, Technology & Society. Vol. 29(2) 159-163.

6 Sustainable Now. (2010). Good practice case on Sustainable Energy Communities. Accessed from www.localmanagement.eu/download.php/dms/champ/CDP/Case%20studies/Woking%20- %20Establishing_an_Energy_Services_Company.pdf.

7 Woking Borough Council. Woking Borough Council. Accessed from www.woking.gov.uk/environment/climate/Greeninitiatives/sustainablewoking/wbc.

8 . Woking Borough Council’s Joint Venture Project. Accessed from www.westsomersetonline.gov.uk/getattachment/Environment/Climate-Change/Climate-Change- Strategy/Climate-Change-Appendix-11.pdf.aspx.

9 Energie-Cités. (2003). Private wire systems for delivering electricity to tenants. International Energy Agency DSM Implementing Agreement, Municipalities and Energy Efficiency in a Liberalised System. Accessed from www.energy-cities.eu/db/woking_566_en.pdf.

10 Thorp, J.P. (2011). Delivering Affordable and Sustainable Energy: The results of innovative approaches by Woking Borough Council, UK. Greenleaf Publishing.

11 Sustainable Now. (2010). Good practice case on Sustainable Energy Communities. Accessed from www.localmanagement.eu/download.php/dms/champ/CDP/Case%20studies/Woking%20- %20Establishing_an_Energy_Services_Company.pdf.

12 Energy Saving Trust. Woking Borough Council’s Joint Venture Project. Accessed from www.westsomersetonline.gov.uk/getattachment/Environment/Climate-Change/Climate-Change- Strategy/Climate-Change-Appendix-11.pdf.aspx.

13 Regen SW. Woking Borough Council Energy Services Company. South West Renewable Energy Agency. Accessed from http://regensw.s3.amazonaws.com/1271676202_325.pdf.

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14 Thorp. J.P. and L. Curran. (2009). Affordable and Sustainable Energy in the Borough of Woking in the United Kingdom. Bulletin of Science, Technology & Society. Vol. 29(2) 159-163.

15 Thameswey Energy. (2014). Welcome to Thameswey Energy. Accessed from www.thamesweyenergy.co.uk/.

16 Sustainable Now. (2010). Good practice case on Sustainable Energy Communities. Accessed from www.localmanagement.eu/download.php/dms/champ/CDP/Case%20studies/Woking%20- %20Establishing_an_Energy_Services_Company.pdf.

17 Jones, A. Woking: Local Energy. Accessed from www.mefl.com.au/online- library/external-1/78-woking-local-sustainable-community-energy-1/file.html.

18 Woking Borough Council. Woking Borough Council’s Thameswey Joint Venture Project. Accessed from www.woking.gov.uk/environment/climate/Greeninitiatives/sustainablewoking/jointv.pdf.

19 Woking Borough Council. Local Sustainable Energy Systems. Accessed from www.woking.gov.uk/environment/climate/Greeninitiatives/sustainablewoking/lses.pdf.

20 Thorp. J.P. and L. Curran. (2009). Affordable and Sustainable Energy in the Borough of Woking in the United Kingdom. Bulletin of Science, Technology & Society. Vol. 29(2) 159-163.

21 . (2006). Decentralising energy – the Woking case study. Accessed from www.greenpeace.org.uk/media/reports/decentralising-energy-the-woking-case-study.

22 Regen SW. Woking Borough Council Energy Services Company. South West Renewable Energy Agency. Accessed from http://regensw.s3.amazonaws.com/1271676202_325.pdf.

23 Woking Borough Council. Woking Park Fuel Cell CHP. Accessed from www.woking.gov.uk/environment/climate/Greeninitiatives/sustainablewoking/fuelcell.

24 Thorp. J.P. and L. Curran. (2009). Affordable and Sustainable Energy in the Borough of Woking in the United Kingdom. Bulletin of Science, Technology & Society. Vol. 29(2) 159-163.

25 Woking Borough Council. (2014). Sustainable Energy in Development. Accessed from www.woking.gov.uk/planning/service/energy.

26 Thameswey Ltd. (2014). Thameswey Energy Ltd. Accessed from www.thamesweygroup.co.uk/thameswey-group- companies/thameswey-energy-ltd/.

27 Woking Borough Council. Fact Sheet 1: About Woking and the Borough Council. Accessed from www.woking.gov.uk/environment/climate/Greeninitiatives/climatechangestrategy/climatechangecasestudy. pdf.

28 Regen SW. Woking Borough Council Energy Services Company. South West Renewable Energy Agency. Accessed from http://regensw.s3.amazonaws.com/1271676202_325.pdf.

29 Woking Borough Council. (2008). Climate Change Strategy. Accessed from www.woking.gov.uk/environment/climatechangestrategy/climatechange.pdf.

89 Linking Mitigation and Adaptation Goals in the Energy Sector

30 Energy Saving Trust. Woking Borough Council’s Joint Venture Project. Accessed from www.westsomersetonline.gov.uk/getattachment/Environment/Climate-Change/Climate-Change- Strategy/Climate-Change-Appendix-11.pdf.aspx.

31 Woking Borough Council. Fact Sheet 1: About Woking and the Borough Council. Accessed from www.woking.gov.uk/environment/climate/Greeninitiatives/climatechangestrategy/climatechangecasestudy. pdf.

32 Thorp. J.P. and L. Curran. (2009). Affordable and Sustainable Energy in the Borough of Woking in the United Kingdom. Bulletin of Science, Technology & Society. Vol. 29(2) 159-163.

33 C40 Cities. (2011). De-centralizing energy generation in Woking, U.K. slashed the city’s CO2 emissions by 82%. Accessed from www.c40.org/case_studies/de-centralizing-energy-generation-in-woking-uk-slashed-the-citys- co2-emissions-by-82.

34 Thorp. J.P. and L. Curran. (2009). Affordable and Sustainable Energy in the Borough of Woking in the United Kingdom. Bulletin of Science, Technology & Society. Vol. 29(2) 159-163.

35 Ibid

36 Jones, A. Woking: Local Sustainable Community Energy. Accessed from www.mefl.com.au/online- library/external-1/78-woking-local-sustainable-community-energy-1/file.html.

37 Greenpeace. (2006). Decentralising energy – the Woking case study. Accessed from www.greenpeace.org.uk/media/reports/decentralising-energy-the-woking-case-study.

38 Thameswey Energy Ltd. How we generate your energy. Accessed from www.thamesweyenergy.co.uk/pages/about_us.php?id=13.

39 Thorp, J.P. (2011). Delivering Affordable and Sustainable Energy: The results of innovative approaches by Woking Borough Council, UK. Greenleaf Publishing.

40 Greenpeace. (2006). Decentralising energy – the Woking case study. Accessed from www.greenpeace.org.uk/media/reports/decentralising-energy-the-woking-case-study.

41 Woking Borough Council. Woking Borough Council. Accessed from www.woking.gov.uk/environment/climate/Greeninitiatives/sustainablewoking/wbc.

42 Markham District Energy Inc. District Energy: The Basics. Accessed from www.markhamdistrictenergy.com/district-energy-101/.

43 Jones, A. Woking: Local Sustainable Community Energy. Accessed from www.mefl.com.au/online- library/external-1/78-woking-local-sustainable-community-energy-1/file.html.

A Case Study Synthesis Report 90

Harnessing Geothermal Power in Chena Hot Springs, Alaska: Reducing the Reliance on Diesel Fuel and Increasing Energy Security

Focus: Geothermal Power Production Location: Chena Hot Springs Resort, Alaska, USA Lead: Chena Hot Springs Resort Other stakeholders: Kaishan Industries, United Technologies Corporation (former), Chena Power, Alaska Department of Energy, Alaska Energy Authority Stage: Complete Cost: $3.5 million Ownership: Private Does it increase resilience or capacity? Resilience

Geothermal is a very clean source of energy, and is considered more reliable when compared to other 1 Mitigation: actions that reduce the magnitude or renewable energy sources such as tidal, wind and solar. rate of human-induced emissions of greenhouse Research has shown that the state of Alaska has more gases (GHGs). geothermal resources than any other state in the US, but few of the resources are being harnessed for power generation. A Adaptation: preparing for adverse effects of climate prominent exception is Chena Hot Springs Resort, which change by preventing or minimizing impacts or became the first location in Alaska to install a geothermal taking advantage of opportunities. power plant in 2006. Resilience: project, programs and policies that increase the resilience of sectors to absorb shocks Chena Hot Springs Resort is located in the Monument Creek associated with the impacts of climate change (i.e. Valley in the upper region of the Chena River, approximately extreme weather events). 96 km northeast of Fairbanks, Alaska.2 The Resort is a privately owned facility and is home to one of the thirty hot springs in Alaska.3 Since 1907, the Resort has been used extensively for recreational bathing, and the area has grown to include a small community of private residences (including employees and guests).4 The Chena Hot Springs community is considered ‘semi-remote’, as it is served by a paved road from Fairbanks and is located 53 km from the nearest electric grid. As a result, Chena deals with many of the same infrastructure challenges facing numerous remote communities, such as: maintaining power generation facilities, phone and internet services, sewage and municipal waste disposal, road maintenance, and emergency medical and fire equipment.5

Electricity in the Alaskan interior comes at a very high price compared to other US states, and even other areas of Alaska, and frequently reaches $1 per kilowatt (kW).6 As with many remote communities, Chena Hot Springs Resort was dependent on diesel generators to supply power to the community, with an average load of between 180 kW and 380 kW.7 This was a very expensive way to provide power. For example, over $365,000 was spent on fuel at Chena Hot Springs Resort in 2005 alone (with an average price of $2.46 per gallon delivered). Since the largest operational expense at Chena is for power generation, high diesel costs motivated the consideration of

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alternative energy sources at the Resort.8 The early leadership demonstrated by management at Chena Hot Springs Resort, initially to offset the cost of diesel In 2007, the project generated power, led directly to the Geothermal Power Demonstration Project at generated 3 million the Resort. kWh of clean geothermal power In 2004, the owners of Chena Hot Springs Resort decided to advance geothermal and displaced generation based on their understanding of the technology. While they were aware 224,000 gallons of of the economics of the Project, the primary motivator for utilizing geothermal diesel for an technologies was the personal appeal of using renewable power and reducing the estimated savings of $550,000.27 carbon footprint of the facility. With the nearest electrical grid over 50 km away and diesel generators burning through $1,000 a day, the owners of Chena Hot Springs Resort saw an opportunity to innovatively lead from the bottom-up .9

The owners, through support from the U.S. Department of Energy, were presented with an opportunity to work with United Technologies Corporation (UTC) to demonstrate UTC’s existing Air-Air PureCycle® technology on the geothermal resource at Chena Hot Springs Resort. The Department of Energy subsequently awarded funding to UTC who completed the design of the power plants, assembled them, tested them, and installed them at Chena Hot Springs Resort.10 One of the more important aspects of the Project is that Chena’s geothermal plant generates power from a well that is 216m deep with a maximum temperature of 74°C, making it the lowest temperature geothermal resource to be used for commercial power production in the world.11 The geothermal resource at Chena is considered to be a low-temperature resource, which requires the use of specialized generators to economically produce power, and UTC was able to provide the necessary technology to harness the power from this low-temperature resource.

In 2006, UTC installed two 200 kW (ORC) geothermal power plants at Chena Hot Springs Resort. The specific objective of the Chena Geothermal Power Project was to demonstrate the low cost of the power generation equipment ($1,300 per kilowatt hour (kWh) installed) and the feasibility of producing electricity at a cost of less than $0.05 per kWh from a low-temperature geothermal resource with 98% availability.12 Chena Power, a subsidiary of Chena Hot Springs Resort, was created in order to operate and maintain the geothermal power plants at the Resort.13

Box 1. How the Geothermal Technology Works

UTC’s PureCycle® is designed to produce 200 kW of electric power from waste hot gas sources 28 between 260°C and 538°C. Since the geothermal water at Chena Hot Springs never reaches the boiling point of water, a traditional steam driven turbine could not be used. Instead, a binary (secondary) fluid that has a lower boiling point than water is passed through a heat exchanger with 74°C water from the geothermal wells. Heat from the geothermal water causes the binary fluid Photo courtesy of: Chena Hot Springs Resort to turn into vapour which drives the turbine. Moderate-temperature is the most common geothermal resource; therefore most geothermal 29 power plants will use binary cycle plant in the future.

A Case Study Synthesis Report 92

The technology developed by UTC can work with any type of heat source with a minimum of 38°C temperature differential between the heat source and sink. Oil and gas is one example. Since oil and gas wells are quite deep and are warmed by the earth’s internal temperature, ‘waste’ water that is extracted with the oil and gas is hot enough to generate power directly, without impacting oil and gas production.30

Chena’s geothermal power plant facilities provide sufficient power for the entire resort (44 buildings, some over 1,858 m2) and have reduced the cost of power from $0.30 per kWh to approximately $0.05 per kWh. This reduction in the price of power allowed new developments to move forward at Chena. For example, a 465 m2 year-round geothermally-heated greenhouse was built in 2006 to supplement existing agricultural greenhouse production at Chena.14 One of the goals at Chena Hot Springs Resort is to become a self-sustaining community, and an important part of that vision is to increase their independence in food production.15 Greenhouses at the Resort produce locally grown hydroponic lettuce, tomatoes, cucumbers, peppers, fodder and small fruits for the restaurant, employees and livestock.16 Chena Hot Springs Resort has an overall goal of providing all food consumed on site from their greenhouses. The greenhouses feature the largest LED array in the world.

In addition to growing food, Chena Hot Springs Resort is currently experimenting with a range of technologies to further increase the energy security of the resort, and to demonstrate how local resilience can be increased. Current experiments reported by the Resort include the production of hydrogen using an electrolytic cell, reindeer herding, and the use of onsite animal waste for compost. Chena Hot Springs Resort provides regular educational tours to showcase their demonstration projects. Fifty-thousand tourists and 15,000 students visit the facility each year. Chena Hot Springs Resort also hosted the United States Department of Agriculture Committee on Controlled Environment Technology and Use NCERA/NCR-101 Annual Meeting in 2014.

The total capital cost of the power generation project was $3.5M which was offset by a $246,288 grant from the Alaska Energy Authority. The majority of costs incurred were associated with the drilling of geothermal wells, but did not include any exploration costs (which were partially covered under the Department of Energy grant). In order to save money during the Project, numerous recycled components were used (including 1,280 m of pipeline and a 1.5 MWh UPS system). The Project offset 143,914 gallons of diesel in 2013 for a total savings of $529,604 (average 2013 cost of diesel provided is $3.68/gallon).17

Contribution to Climate Change Mitigation and Adaptation

The Chena Hot Springs Geothermal Power Project demonstrates opportunities for both GHG mitigation and adaptation to climate change (Table 1).

The Geothermal Power Project advances climate change mitigation at Chena Hot Springs Resort by introducing a new technology that is able to harness the low-temperature geothermal source thus displacing the GHG-intensive diesel fuel. Chena’s geothermal power plant has been operating with 95% availability since the first unit was installed in 2006 and has pushed diesel generation to a supplemental backup generation source for the site.18 The installation of the geothermal modules has resulted in a 50% reduction in gallons of fuel purchased at Chena Hot Springs Resort, thereby reducing the associated greenhouse gas (GHG) emissions.19 For example, 1,007,398 gallons

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20 of diesel were offset between 2006 and 2013 (avoiding approximately 10,226 tonnes of CO2). It was reducing the reliance on diesel fuel that drove the Chena Geothermal Project.

Table 1: Summary of the Contribution of the Chena Hot Springs Geothermal Power Project to Climate Change Adaptation and Mitigation MITIGATION ADAPTATION

The introduction of geothermal power technology has The Geothermal Power Project increases energy and food pushed diesel generation to a supplemental backup security at Chena Hot Springs Resort. generation source at Chena Hot Springs Resort, reducing the amount of GHG emissions.

 UTC’s geothermal technology is able to harness the  UTC’s geothermal technology provides a reliable low-temperature geothermal source at Chena Hot source of energy to the community, reducing the Springs Resort in order to provide the community with dependence on diesel fuel. This has significance due to sufficient power. the potential impacts to fuel transport in the north as a  The geothermal power source is much more cost- result of climate change. effective and reliable than other renewable energy  The decision to build a year-round greenhouse at sources. Chena Hot Springs Resort to produce locally-grown  Chena Hot Springs Resort has reduced the amount of produce has increased food security within the fuel purchased by 50%, which reduces the amount of community, reducing the susceptibility of food GHG’s released and reduces costs. transportation to the impacts of climate change.

A significant challenge facing remote northern locations, such as Alaska, is food security. While 6,070,284ha (15 million acres) of soil in Alaska is suitable for farming Alaska currently imports approximately 98% of its food, which is often shipped through long supply chains, arriving by air, barge or truck.21 Agricultural production to date at Chena Hot Springs Resort has demonstrated that Alaska can take a more active role in supplying its own food even with current seasonal limits on the growing season. It can increase security by reducing Alaska’s reliance on food imports thus reducing the greenhouse gas emissions and cost associated with importing food, and providing economic diversification in remote areas.

Over the past 50 years, Alaska has warmed twice as fast as the rest of the US, seeing an increase of ~2°C. A continuance of this warming suggests that climate change will improve local growing conditions and enable Alaskans to take advantage of new opportunities if the skills and interest in agriculture are present. Degrading permafrost has the potential to damage or decrease reliability of single arteriole roads that lead to and from remote communities, thus threatening the supply of food imported from more southerly locations.22 As well, since both production and transportation of imported food is energy-intensive, Alaskans are susceptible to the price of imported-food fuel costs. Introducing locally grown produce at Chena Hot Springs Resort and using clean and renewable to power the local greenhouses, the community has improved its adaptive capacity by changing its relationship to agriculture thus fostering local resilience.

Chena Hot Springs Resort is also contributing to the adaptive capacity of Alaska by openly sharing the work that they do. Facility tours for professionals, students, and the public contributes the human capital of the state and shows a path forward for adapting to climate change while at the same time reducing the GHG contribution of the local area by taking a diesel generator offline. Diesel generation in remote communities is a significant contributor to greenhouse gas emissions in remote northern areas.

A Case Study Synthesis Report 94

None of the contributions to regional adaptation or mitigation made at the Chena Hot Springs Resort would have been possible without the managerial direction provided by its owners. The leadership provided by the Resort was integral in obtaining partners, installing the geothermal generators despite the marginal economics associated with the energy source, and then leveraging the benefits provided by the generators to build adaptive capacity through the innovative means described above. This leadership constitutes the nexus between adaptation and mitigation observed in this case study (Table 2).

Table 2: Adaptation/Mitigation Contribution Matrix for the Chena Hot Springs Geothermal Power Project

Contribution to Mitigation

Technological Behavioural Managerial Policy Technological

Behavioural

Adaptation Managerial X

Contribution to Contribution Policy

Co-Benefits

Introducing geothermal energy production at Chena Hot Springs Resort demonstrates clear synergies between climate change mitigation and adaptation responses, as the technology reduces the use of diesel fuel for power generation thereby reducing GHG emissions, while simultaneously increasing energy and food security within the semi-remote northern location. One of the most important co-benefits of the geothermal power plants is the cost- savings involved from reducing the use of diesel fuel. For example, without the cost-effective geothermal power production, it would be much too costly to maintain the greenhouses at Chena and to continue producing locally grown fresh produce year-round.23

Box 2. Synergies Between Climate Change Adaptation and Mitigation in Relation to the Chena Hot Springs Geothermal Power Project

Introducing renewable energy production in a remote northern community not only reduces the dependence on diesel fuel for energy use (mitigation), but also improves self-sufficiency in terms of energy and food production, reducing the dependence on imported resources that are susceptible to the impacts of climate change (adaptation). There are also significant cost savings when switching from diesel fuel to geothermal.

Lessons Learned

Leadership is integral to an effective response to climate change. The owners of Chena Hot Springs Resort are early adopters of a low-temperature geothermal resource that they have leveraged to innovate in a number of sectors, including technology research and development and food production. Implementing the range of projects reported by the resort demonstrates that the owners of the Hot Springs are not risk averse, and notably, have become global leaders in a number of fields from a remote area with limited resources on hand.

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Private sector innovation is important to effectively manage climate change. As a private sector entity, the Hot Springs Resort has been able to respond to opportunities in a dynamic and flexible manner. Going forward, as the landscape responds to the effects of changing temperature and precipitation regimes, such flexibility will likely become very important. Private sector leadership should be fostered to the extent possible in order to ensure emerging opportunities can be exploited.

The fact that the geothermal technology implemented at Chena Hot Springs Resort was successful provides confidence that it can be used as a measure to adapt to climate change in other remote or semi-remote communities. Combined with the reduction in GHG emissions and the associated cost savings, it presents a strong business case for the technology. Although the initial installation costs of geothermal power may be higher than conventional heating and cooling systems, the costs can be recovered within a shorter period through energy savings, particularly in those semi-remote areas that rely on diesel fuel. The technology used at Chena Hot Springs Resort can also be adapted to work in locations with no geothermal resources, operating off of other industrial waste heat sources.24

Geothermal energy is a largely untapped resource in Canada due to various reasons including up-front drilling risks and limited government interest and support. However recent research outlines the vast amounts of low- temperature geothermal energy potential in Canada.25 Geothermal energy at these levels, combined with the technology displayed at Chena Hot Springs Resort, clearly present opportunities to produce tens of thousands of Figure 1: Geothermal potential in Canada at a depth of 250m. Some of the best locations for geothermal in Canada are in British Columbia, Alberta and Saskatchewan (2009).31 megawatts of electricity.26

Further Information

Chena Hot Springs Resort: www.chenahotsprings.com Chena Power: www.chenapower.com

Contact

Bernie Karl Owner, Chena Hot Springs Resort

A Case Study Synthesis Report 96

Email: [email protected]

Allan G. Douglas Director, Ontario Centre for Climate Impacts and Adaptation Resources (OCCIAR) Email: [email protected]

References

1 Bogo, J. (2008). Geothermal Power in Alaska Holds Hidden Model for Clean Energy. Popular Mechanics Article. Accessed from www.popularmechanics.com/science/environment/4245896.

2 Benoit, D., G. Holdmann and D. Blackwell. (2007). Low Cost Exploration, Testing, and Development of the Chena Geothermal Resource. GRC Transactions. Vol. 31, 2007. Accessed from http://pubs.geothermal- library.org/lib/grc/1025209.pdf.

3 Alaska Energy Wiki. (2012). Chena Hot Springs Resort (Geothermal). Access from www.energy- alaska.wikidot.com/chena-hot-springs-resort-geothermal.

4 Chena Power. (2007). 400kW Geothermal Power Plant at Chena Hot Springs, Alaska. Final Project Report Prepared for Alaska Energy Authority. Accessed from www.akenergyauthority.org/Content/Programs/AEEE/Geothermal/Documents/PDF/FinRepChenaGeoPlant09 .pdf.

5 Ibid

6 Ibid

7 Alaska Energy Wiki. (2012). Chena Hot Springs Resort (Geothermal). Access from www.energy- alaska.wikidot.com/chena-hot-springs-resort-geothermal.

8 Chena Power. (2007). 400kW Geothermal Power Plant at Chena Hot Springs, Alaska. Final Project Report Prepared for Alaska Energy Authority. Accessed from www.akenergyauthority.org/Content/Programs/AEEE/Geothermal/Documents/PDF/FinRepChenaGeoPlant09 .pdf.

9 Bogo, J. (2008). Geothermal Power in Alaska Holds Hidden Model for Clean Energy. Popular Mechanics Article. Accessed from www.popularmechanics.com/science/environment/4245896.

10 Holdmann, G. (2008). The Chena Hot Springs 400kW Geothermal Power Plant: Experience Gained During the First Year of Operations. Geothermal Resources Council Transactions. Volume 31, 515-519.

11 Chena Hot Springs Resort. Fact Sheet on: The Chena Geothermal Power Plant. Accessed from www.chsr.squarespace.com/storage/documents/Powerfactsheet.pdf.

12 Holdmann, G. (2008). The Chena Hot Springs 400kW Geothermal Power Plant: Experience Gained During the First Year of Operations. Geothermal Resources Council Transactions. Volume 31, 515-519.

97 Linking Mitigation and Adaptation Goals in the Energy Sector

13 Chena Power. (2012). About us. Accessed from www.chenapower.com/about-us/.

14 Chena Power. (2007). 400kW Geothermal Power Plant at Chena Hot Springs, Alaska. Final Project Report Prepared for Alaska Energy Authority. Accessed from www.akenergyauthority.org/Content/Programs/AEEE/Geothermal/Documents/PDF/FinRepChenaGeoPlant09 .pdf.

15Chena Hot Springs Resort. Chena Fresh. Accessed from www.chenahotsprings.com/chena-fresh/.

16 Chena Hot Springs Resort. ChenaFresh: America’s northernmost commercial year-round greenhouse at Chena Hot Springs Resort. Accessed from www.chenahotsprings.com/storage/Chena%20Fresh%20Fact%20Sheet%20v3.pdf.

17 Bogo, J. (2008). Geothermal Power in Alaska Holds Hidden Model for Clean Energy. Popular Mechanics Article. Accessed from www.popularmechanics.com/science/environment/4245896.

18 Chena Power. (2007). 400kW Geothermal Power Plant at Chena Hot Springs, Alaska. Final Project Report Prepared for Alaska Energy Authority. Accessed from www.akenergyauthority.org/Content/Programs/AEEE/Geothermal/Documents/PDF/FinRepChenaGeoPlant09 .pdf.

19 Alaska Energy Wiki. (2012). Chena Hot Springs Resort (Geothermal). Access from www.energy- alaska.wikidot.com/chena-hot-springs-resort-geothermal.

20 Karl, B. Chena Power Reservoir Management at Chena Hot Springs. Presentation. Accessed from www.uaf.edu/files/acep/Rural%20Energy%20Conference_Bernie.pdf.

21 Meter, K. And M. Phillips Goldenberg. (2014). Building Food Security in Alaska. Commissioned by the Alaska Department of Health and Social Services, with collaboration from the Alaska Food Policy Council. Accessed from www.akfoodpolicycouncil.files.wordpress.com/2013/07/14-09-17_building-food-security-in-ak_exec- summary-recommendations.pdf.

22 Union of Concerned Scientists. (2009). Backgrounder: Alaska. Accessed from www.ucsusa.org/sites/default/files/legacy/assets/documents/global_warming/us-global-climate-change- report-alaska.pdf.

23 Bogo, J. (2008). Geothermal Power in Alaska Holds Hidden Model for Clean Energy. Popular Mechanics Article. Accessed from www.popularmechanics.com/science/environment/4245896.

24 Chena Power. (2007). 400kW Geothermal Power Plant at Chena Hot Springs, Alaska. Final Project Report Prepared for Alaska Energy Authority. Accessed from www.akenergyauthority.org/Content/Programs/AEEE/Geothermal/Documents/PDF/FinRepChenaGeoPlant09 .pdf.

25 Grasby, S.E., J. Majorowicz and M. Ko. (2009). Geothermal Maps of Canada. Geological Survey of Canada Open File 6167. Natural Resources Canada. 35p.

A Case Study Synthesis Report 98

26 Bogo, J. (2008). Geothermal Power in Alaska Holds Hidden Model for Clean Energy. Popular Mechanics Article. Accessed from www.popularmechanics.com/science/environment/4245896.

27 Chena Power. (2007). 400kW Geothermal Power Plant at Chena Hot Springs, Alaska. Final Project Report Prepared for Alaska Energy Authority. Accessed from www.akenergyauthority.org/Content/Programs/AEEE/Geothermal/Documents/PDF/FinRepChenaGeoPlant09 .pdf.

28 Ibid

29 Chena Hot Springs Resort. (2014). Geothermal Power. Accessed from www.chenahotsprings.com/geothermal- power/.

30 Ibid

31 Grasby, S.E., J. Majorowicz and M. Ko. (2009). Geothermal Maps of Canada. Geological Survey of Canada Open File 6167. Natural Resources Canada. 35p.

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New York City’s Green Infrastructure Plan: Managing Stormwater, Decreasing Energy Demand, and Increasing Resilience

Focus: New York City Green Infrastructure Plan Jurisdiction: New York, New York, United States Lead: New York City Department of Environmental Protection Implementation cost: $5.3 billion by 2030 (both green infrastructure and grey infrastructure costs) Ownership: Public Does it increase resilience or capacity? Resilience

New York City (NYC) is the most populous city in the United States with approximately 8.4 million residents.1 As a highly urbanized area, nearly three-quarters of the city’s surface is impervious, comprised of rooftops, streets, sidewalks, and other hardscaped areas. As a result, a significant amount of stormwater runoff is generated during rain events that Mitigation: actions that reduce the magnitude or eventually make its way to the sewer system.2 rate of human-induced emissions of greenhouse gases (GHGs).

In NYC, approximately 70% of the sewer system is Adaptation: preparing for adverse effects of climate ‘combined’, meaning that it handles both sanitary change by preventing or minimizing impacts or wastewater from homes and businesses as well as taking advantage of opportunities. stormwater runoff.3 The combined flow is conveyed through Resilience: project, programs and policies that a system of pipes until it reaches one of the city’s 14 increase the resilience of sectors to absorb shocks wastewater treatment plants.4 Some rain events can cause associated with the impacts of climate change (i.e. the combined sewer systems to fill to capacity. In order to extreme weather events). avoid street and property flooding and protect the wastewater treatment plants, the untreated combined flow is discharged into local waterways. This is called a Combined Sewer Overflow (CSO).5

Under normal operating conditions, an average of 1.3 billion gallons of wastewater is produced every day in NYC.6 Just one inch of rain across the city can result in approximately 5.26 billion gallons of additional stormwater7, placing tremendous stress on the sewer system. In some parts of the city, it takes only one-tenth of an inch of rain 8 to overwhelm the combined sewer system. In its most recent report, the NYC On average, 29.8 billion gallons Panel on Climate Change states that NYC can expect to see an increase in annual of untreated water is released mean precipitation of between 4 and 11% by 2050, and 5 and 13% by 2080 9 annually into NYC waterways (relative to the 1980 base period). NYC must prepare for these increases in as a result of CSO’s.49 precipitation and adapt its already vulnerable stormwater infrastructure to safeguard against overflows and subsequent risks.10

Garrison, N. and K. Hobbs. A (2011).Case Study New SynthesisYork, New ReportYork: A 100 case study of how green infrastructure is helping manage urban stormwater challenges. In Rooftops to As of 2000, the U.S. Clean Water Act requires municipalities to comply with a policy developed by the U.S. Environmental The Green Infrastructure Plan has 5 key Protection Agency that states that municipalities must reduce components: or eliminate CSO-related pollution problems. In 2005, the New 1) Build cost-effective grey infrastructure; York State Department of Environmental Conservation issued a 2) Optimize the existing wastewater system; Consent Order for NYC to reduce the number of CSOs in order 11 3) Control runoff from 10% of impervious to improve the water quality of local waterways. The 2005 surfaces through green infrastructure; Order included a series of large underground tanks and tunnels 4) Institutionalize adaptive management, to store combined flow until after the rain event when the model impacts, measure CSO’s, and wastewater treatment plants could then treat the flow. The monitor water quality; and 50 NYC Department of Environmental Protection (DEP) began 5) Engage and enlist stakeholders. investigating other ways to manage stormwater in the city and in 2010, released the NYC Green Infrastructure Plan.

The Plan aims to reduce stormwater runoff by optimizing cost-effective “grey” infrastructure (e.g. increasing in-line storage, raising weirs in regulators, sewer cleaning) and building “green” infrastructure” (e.g. bioswales, blue roofs, green roofs).12 Studies have shown that green infrastructure is more cost-effective and a less energy intensive strategy to manage stormwater than traditional grey infrastructure (e.g. tanks and tunnels), and can result in immediate environmental, economic and social benefits.

The NYC Green Infrastructure Plan builds upon NYC’s existing municipal plans that already reference green infrastructure, such as PlaNYC 2030 (2007) and the Sustainable Stormwater Management Plan (2008). These plans involved green infrastructure pilot programs and concluded that green infrastructure was feasible in many areas of the city and could be more cost-effective than certain large infrastructure projects.13 As a result, the Green Infrastructure Plan was developed in order to show that green infrastructure was a viable and cost effective solution for CSO mitigation.14

Box 1: Green Infrastructure

Green infrastructure includes green roofs, blue roofs, permeable pavement, bioinfiltration such as rain gardens and constructed wetlands, bioswales and stormwater greenstreets, as well as rain barrels and reuse systems. Green infrastructure promotes the natural movement of water by collecting and managing stormwater runoff from streets, sidewalks, parking lots and rooftops and directing it towards engineered systems that feature soils, stones and vegetation. This process prevents or slows stormwater runoff from entering the combined sewer system in NYC.51

Photo courtesy of: DEP

Beyond stormwater management, green infrastructure provides additional benefits, making it even more attractive for municipalities. For example, green infrastructure can improve water

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and air quality, reduce the urban heat island effect, reduce energy bills and greenhouse gas emissions, increase property values, provide additional space for recreation, and improve the visual quality of neighbourhoods.52 As part of the Green Infrastructure Plan, an analysis was undertaken which estimates that every fully vegetated acre of green infrastructure would

provide total annual benefits of $8,522 in reduced energy demand, $166 in reduced CO2 emissions, $1,044 in improved air quality, and $4,725 in increased property value in NYC.53

The Green Infrastructure Plan consists of 5 key components, one of which is to capture the first inch of rainfall on 10% of the impervious areas in combined sewer watersheds through detention and infiltration techniques by 2030. By doing so, it is estimated that CSOs will be reduced by approximately 1.5 billion gallons per year.15 In order to implement the Plan, the DEP initiated the Green Infrastructure Program. This 20-year program is being led by the Mayor’s Office and DEP, in collaboration with many other city departments and agencies. The DEP estimates that the Green Infrastructure Program to capture stormwater on 10% of the impervious areas in the combined sewer watersheds will cost approximately $2.4B in public and private funding for green infrastructure projects, as well as $2.9B in upgrades to grey infrastructure.16

The strategies used to meet the 10% goal will vary depending on the type of land use.17 The DEP found that there are significant opportunities to incorporate green infrastructure in 52% of the city that is serviced by combined sewer systems (much more than is needed to meet the 10% capture goal). The remaining 48% of combined sewer area consists of existing development where stormwater retrofits would be doable, but more difficult and expensive to implement.18

Green Infrastructure and Energy Green infrastructure can reduce energy costs associated with reduced water pumping and treatment.19 In the United States, the energy used for the treatment and transport of water accounts for approximately 4% of annual energy consumption.20 Infiltration features such as rain gardens and bioswales help to reduce the amount of water reaching sewer systems, thereby reducing the amount of electricity required to pump and treat water.21 By avoiding the construction of tanks and tunnels, which require the use of energy to pump water back to the treatment plant, green infrastructure can eliminate energy use all together. Other green infrastructure strategies such as wetlands, whether natural or artificial, can treat stormwater passively and eliminate the need to use energy to move and treat water. Water harvesting and reuse practices (i.e. rain barrels and cisterns) can also help to capture rainfall that would have otherwise entered the sewer system.22

Green infrastructure can also contribute to reduced heating and cooling in buildings.23 Green roofs and increased vegetation in the public right of way, such as trees, have been proven to make individual buildings more energy efficient by increasing insulation properties and reducing the energy needed to keep indoor areas warm during the winter months. The shading and insulation provided by green infrastructure can also help to reduce the local ambient air temperature at a community scale (urban heat island effect), thus reducing the energy needed to keep indoor areas cool during the summer.24,25

Prior to the development of the Green Infrastructure Plan, NYC had already recognized the capacity of natural systems to protect water quality, mitigate flooding, and provide habitat and green space in the densely-developed cityscape. For example, the Staten Island Bluebelt Program was designed to allow rainwater to drain naturally over 14,000 acres of wetlands which has saved over $80M in conventional sewer costs.26

A Case Study Synthesis Report 102

Contribution to Climate Change Mitigation and Adaptation

NYC’s Green Infrastructure Plan utilizes technology (Table 1) to spawn energy savings that enhance GHG mitigation. By replacing the proposed expansion of tanks and tunnels with the development of green infrastructure, the energy that would have been needed to pump and treat wastewater is not consumed. Green infrastructure helps to naturally capture and infiltrate stormwater that would have otherwise reached the sewer system. The bulk of NYC’s electricity is generated using natural gas27, which means that reducing electricity leads to a direct reduction in natural gas consumption and fewer GHG emissions (the average emission rate in the U.S. from 28 natural gas-fired generation is 1,135 pounds of CO2 per megawatt hour (MWh) of electricity).

Additionally, green infrastructure reduces energy consumption from buildings, as green roofs and urban vegetation, such as street trees, can increase the insulation properties of structures.29 Approximately 75% of NYC’s GHG emissions come from the energy used in buildings.30 With less energy consumed in the winter to heat buildings and in the summer to cool buildings, energy efficiency is increased and as a result, GHG emissions are reduced. Furthermore, the construction of green infrastructure reduces the carbon footprint of the city, as it requires less transportation and fewer materials than traditional grey infrastructure during the construction phase.31

Table 1: Adaptation/Mitigation Contribution Matrix for the NYC Green Infrastructure Plan

Contribution to Mitigation

Technological Behavioural Managerial Policy

Technological

Behavioural

Adaptation Managerial

Contribution to Contribution Policy X

The Green Infrastructure Plan advances climate change adaptation through the use of policy, as the Green Infrastructure Plan commits NYC to implement green infrastructure technologies in order to capture one inch of rain on 10% of the impervious areas within combined sewer areas of the city (Table 1). The climate adaptation benefits of green infrastructure are generally related to its ability to moderate the expected increases in extreme precipitation or temperature.32 Green infrastructure helps to manage stormwater runoff and reduce the number of CSOs, contribute to and flood prevention, and reduce ambient temperatures and the urban heat island effect.33 According to the U.S. Environmental Protection Agency, green infrastructure can also improve human health and air quality, decrease energy demand, reduce capital cost savings, increase carbon storage, increase habitats for wildlife, create open space for recreational purposes, and increase land values by up to 30%; all of which play a part in adaptation.34

Although building additional holding tanks for stormwater is an accepted climate change adaptation strategy, the stormwater will eventually need to be pumped back to a treating facility, which requires energy.35 Green infrastructure, on the other hand, reduces the overall amount of stormwater entering sewers through natural infiltration and retention, thereby reducing flood-related impacts while also reducing energy costs.36 Since there is a high degree of uncertainty around how climate change will impact the United States in the future, including NYC, one of the benefits of the Plan is that it follows an adaptive management approach that accommodates an

103 Linking Mitigation and Adaptation Goals in the Energy Sector

iterative, flexible decision-making process. Green infrastructure, for example, can be replaced and/or expanded at a reduced cost to grey infrastructure, and is therefore more flexible over time.37

Table 2: Summary of the Contribution of the Green Infrastructure Plan to Climate Change Adaptation and Mitigation

MITIGATION ADAPTATION

The projects implemented as a result of the Green The Green Infrastructure Plan enhances water retention and Infrastructure Plan are able to capture and store infiltration capacity within the city, thereby reducing the stormwater runoff, thus reducing the amount of water amount of urban flooding, while also decreasing the urban entering sewer systems. This helps to save energy and heat island effect. reduce GHG emissions.

 Decreases the need for wastewater treatment, thereby  Reduces the risk of flooding in the event of heavy reducing energy costs and GHG emissions associated rainfall through stormwater infiltration and retention. with energy generation.  Reduces the urban heat island effect and ambient air  Green roofs and street trees help to reduce energy temperatures within the city, reducing impacts to consumption from city buildings, thereby reducing human health. GHG emissions associated with energy generation.  Increases the vegetation present in urban areas, thereby reducing carbon emissions and pollution through plant respiration.

Co-Benefits

In 2013, the DEP performed an extensive literature review in order to further investigate the co-benefits associated with green infrastructure. The initial findings suggest that more extensive research and site-specific work is required in order to quantify the co-benefits of the Green Infrastructure Plan and draw conclusions. The DEP’s upcoming research and development program is going to help address data gaps in the literature review and monitoring.38 Although the DEP is in the early stages of identifying and measuring benefits associated with the Green Infrastructure Plan, the following list represent some of the potential environmental, social and economic co-benefits:  Urban heat island effect mitigation;  Better building insulation, resulting in reduced energy consumption and energy bills;  Improved air quality and public health;  More urban habitats for pollinators and wildlife;  Improved visual quality of neighbourhoods and increased property values;  Increased space for recreational purposes;  Decreased number of CSOs and improved water quality;  Increased water conservation and reduced wastewater treatment needs;  Reduced costs associated with water treatment and pumping; and  GHG reductions from and reduced energy needs.

A Case Study Synthesis Report 104

Additionally, the development of green infrastructure creates opportunity for workforce development and improved quality of life.39 Green infrastructure can help decrease the amount of contaminants entering regional water bodies (including pathogens, suspended solids, nutrients and toxins), as water travelling through green infrastructure is naturally filtered.40 As well, by increasing the infiltration and retention within an urban area, green infrastructure can help minimize the extent of flood damage to public and private property.41 The Federal Emergency Management Agency (FEMA) estimates that 25% of the $1B in annual damages caused by flooding in the U.S. is linked to stormwater.42 Green infrastructure can substantially reduce the overall amount of water entering local sewer systems and reduce flooding-related impacts.43

The DEP estimates that after the 20-year period, residents of NYC will have received between $139M and $418M in additional benefits through reduced energy bills, increased property values, improved health and reduced 44 carbon dioxide (CO2) emissions.

Box 2: Synergies Between Climate Change Adaptation and Mitigation in Relation to the NYC Green Infrastructure Plan

In addition to saving energy and reducing GHG emissions, the Green Infrastructure Plan brings benefits to NYC in the way of healthier water bodies, cost savings from reduced wastewater treatment and pumping, improving local air quality and public health, increasing the amount of green space for recreation and wildlife, and helping to mitigate the impacts of extreme precipitation events (flooding) and increasing local air temperatures (urban heat island effect).

None of these additional benefits would accrue from an all-grey-infrastructure strategy consisting of tanks, tunnels and expansions, since they are only utilized during extreme precipitation events.45 Additionally, green infrastructure projects can be constructed and maintained at a much lower cost than grey infrastructure projects, resulting in a strong business case for green infrastructure. For example, the overall cost of the Green Infrastructure Plan will be approximately $5.3B, $1.5B less than the $6.8B it would require for an all-grey- infrastructure strategy.46

Lessons Learned

The main goal of the Green Infrastructure Plan is to reduce the occurrence of CSOs and improve local water quality, as stated in the Consent Order issued by the New York State Department of Environmental Conservation. Yet the DEP also described the many benefits that green infrastructure provides to New Yorkers, including environmental, social and economic benefits. These co-benefits are inherent in green infrastructure implementation and by describing the benefits the DEP was able to gather wider support for the Green Infrastructure Plan. The NYC Green Infrastructure Plan also provides an example of how urban greening and stormwater management projects are often aligned with climate change adaptation and mitigation goals, and synergies can be achieved even though they may not be an explicit goal of a project.

When compared to grey infrastructure, green infrastructure shows clear advantages in terms of cost-savings, including reductions in capital costs, operation expenses, land acquisition costs, repair and maintenance costs, and infrastructure replacement costs. 47 These cost savings, along with the long list of co-benefits, create an appealing business case for incorporating green infrastructure into urban areas. Even if the co-benefits provided by green infrastructure were ignored, the direct savings from avoided grey infrastructure installation costs and the avoided costs of treating CSOs make a strong case for green infrastructure.48

105 Linking Mitigation and Adaptation Goals in the Energy Sector

Further Information

NYC Department of Environmental Protection: www.nyc.gov/html/dep/html/home/home.shtml NYC Green Infrastructure Plan: www.nyc.gov/html/dep/html/stormwater/nyc_green_infrastructure_plan.shtml

Contact

Alan Cohn Director, Climate Program, Bureau of Environmental Planning and Analysis, NYC Department of Environmental Protection Email: [email protected]

Margot Walker Director, Capital Planning and Partnerships, Office of Green Infrastructure, NYC Department of Environmental Protection Email: [email protected]

Allan G. Douglas Director, Ontario Centre for Climate Impacts and Adaptation Resources (OCCIAR) Email: [email protected]

References

1 New York Department of Environmental Protection. (2010). NYC Green Infrastructure Plan: A Sustainable Strategy for Clean Waterways – Executive Summary. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/NYCGreenInfrastructurePlan_ExecutiveSummary.pdf.

2 New York Department of Environmental Protection. (2014). Stormwater. Accessed from www.nyc.gov/html/dep/html/stormwater/index.shtml.

3 New York Department of Environmental Protection. (2013). The State of the Sewers 2013. Accessed from www.nyc.gov/html/dep/pdf/reports/state-of-the-sewers-2013.pdf.

4 New York City Department of Environmental Protection. (2009). New York City’s Wastewater Treatment System. Accessed from www.nyc.gov/html/dep/pdf/wwsystem.pdf.

5 New York State of Environmental Conservation. (2008). Wastewater Infrastructure Needs of New York State. New York. Accessed from www.dec.ny.gov/docs/water_pdf/infrastructurerpt.pdf.

6 Garrison, N. and K. Hobbs. (2011). New York, New York: A case study of how green infrastructure is helping manage urban stormwater challenges. In Rooftops to Rivers II: Green strategies for controlling stormwater

A Case Study Synthesis Report 106

and combined sewer overflows. Natural Resources Defense Council (NRDC). Accessed from www.nrdc.org/water/pollution/rooftopsii/files/rooftopstoriversII.pdf.

7 New York Department of Environmental Protection. (2012). The State of the Sewers 2012. Accessed from www.nyc.gov/html/dep/pdf/reports/state-of-the-sewers.pdf.

8 Garrison, N. and K. Hobbs. (2011). New York, New York: A case study of how green infrastructure is helping manage urban stormwater challenges. In Rooftops to Rivers II: Green strategies for controlling stormwater and combined sewer overflows. Natural Resources Defense Council (NRDC). Accessed from www.nrdc.org/water/pollution/rooftopsii/files/rooftopstoriversII.pdf.

9 NASA. (2015). NASA Science Leads New York City Climate Change 2015 Report. News Article. Accessed from www.nasa.gov/press/goddard/2015/february/nasa-science-leads-new-york-city-climate-change-2015- report/#.VOZH8y5kCBE.

10 New York Department of Environmental Protection. (2010). NYC Green Infrastructure Plan: A Sustainable Strategy for Clean Waterways – Executive Summary. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/NYCGreenInfrastructurePlan_ExecutiveSummary.pdf.

11 New York State Department of Environmental Conservation. (2015). New York City CSO. Accessed from www.dec.ny.gov/chemical/77733.html.

12 C40 Cities. (2012). Case Study: The NYC Green Infrastructure Plan. Accessed from www.c40.org/case_studies/the-nyc-green-infrastructure-plan.

13 Ibid

14 New York Department of Environmental Protection. (2010). NYC Green Infrastructure Plan: A Sustainable Strategy for Clean Waterways – Executive Summary. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/NYCGreenInfrastructurePlan_ExecutiveSummary.pdf.

15 Ibid

16 New York Department of Environmental Protection. (2010). NYC Green Infrastructure Plan: A Sustainable Strategy for Clean Waterways. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/NYCGreenInfrastructurePlan_LowRes.pdf.

17 New York Department of Environmental Protection. (2010). NYC Green Infrastructure Plan: A Sustainable Strategy for Clean Waterways – Executive Summary. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/NYCGreenInfrastructurePlan_ExecutiveSummary.pdf.

18 Ibid

19 American Rivers, Water Environment Federation, American Society of Landscape Architects, and ECONorthwest. (2012). Banking on Green: A look at how Green Infrastructure can save municipalities money and provide

107 Linking Mitigation and Adaptation Goals in the Energy Sector

economic benefits community-wide. Accessed from www.asla.org/uploadedFiles/CMS/Government_Affairs/Federal_Government_Affairs/Banking%20on%20Gre en%20HighRes.pdf.

20 Goldstein, R. and W. Smith. (2002). Water & Sustainability (Volume 4): U.S. Electricity Consumption for Water Supply & Treatment - The Next Half Century. EPRI, Palo Alto, CA: 2000. 1006787. Accessed from www.circleofblue.org/waternews/wp-content/uploads/2010/08/EPRI-Volume-4.pdf.

21 American Rivers, Water Environment Federation, American Society of Landscape Architects, and ECONorthwest. (2012). Banking on Green: A look at how Green Infrastructure can save municipalities money and provide economic benefits community-wide. Accessed from www.asla.org/uploadedFiles/CMS/Government_Affairs/Federal_Government_Affairs/Banking%20on%20Gre en%20HighRes.pdf.

22 Ibid

23 Gaffin, S., C. Rosenzweig, L. Parshall, D. Beattie, R. Berghage, G. O’Keefe and D. Braman. (2006). Energy Balance Modelling Applied to a Comparison of White and Green Roof Cooling Efficiency. Accessed from www.buildingreen.net/assets/cms/File/GaffinetalPaperDC-0009.pdf.

24 Rosenzweig, C., W. Solecki, L. Parshall, S. Gaffin, B. Lynn, R. Goldberg, J. Cox and S. Hodges. (2006). Mitigating New York City’s Heat Island with Urban Forestry. Accessed from www.giss.nasa.gov/research/news/20060130/103341.pdf.

25 American Rivers, Water Environment Federation, American Society of Landscape Architects, and ECONorthwest. (2012). Banking on Green: A look at how Green Infrastructure can save municipalities money and provide economic benefits community-wide. Accessed from www.asla.org/uploadedFiles/CMS/Government_Affairs/Federal_Government_Affairs/Banking%20on%20Gre en%20HighRes.pdf.

26 Rosenzweig, C., Major, D.C., Demong, K., Stanton, C., Horton, R., and Stults, M. (2007). Managing climate change risks in New York City’s water system: assessment and adaptation planning. Mitigation and Adaptation Strategies for Global Change. 12: 1391-1409.

27 New York City. (2013). Chapter 6: Utilities; in A Stronger More Resilient New York. Accessed from www.nyc.gov/html/sirr/downloads/pdf/final_report/Ch_6_Utilities_FINAL_singles.pdf.

28 United States Environmental Protection Agency. (2013). Natural Gas. Accessed from www.epa.gov/cleanenergy/energy-and-you/affect/natural-gas.html.

29 American Rivers, Water Environment Federation, American Society of Landscape Architects, and ECONorthwest. (2012). Banking on Green: A look at how Green Infrastructure can save municipalities money and provide economic benefits community-wide. Accessed from www.asla.org/uploadedFiles/CMS/Government_Affairs/Federal_Government_Affairs/Banking%20on%20Gre en%20HighRes.pdf.

A Case Study Synthesis Report 108

30 New York City. (2015). Energy and Buildings: Energy Efficiency. Accessed from www.nyc.gov/html/planyc/html/sustainability/energy-efficiency.shtml.

31 New York Department of Environmental Protection. (2010). NYC Green Infrastructure Plan: A Sustainable Strategy for Clean Waterways – Executive Summary. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/NYCGreenInfrastructurePlan_ExecutiveSummary.pdf.

32 Foster, J., Lowe, A., and Winkelman, S. (2011). The value of green infrastructure for urban climate adaptation. The Center for Clean Air Policy. Accessed from http://ccap.org/assets/The-Value-of-Green-Infrastructure-for- Urban-Climate-Adaptation_CCAP-Feb-2011.pdf.

33 Ibid

34 Ibid

35 New York Department of Environmental Protection. (2010). NYC Green Infrastructure Plan: A Sustainable Strategy for Clean Waterways – Executive Summary. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/NYCGreenInfrastructurePlan_ExecutiveSummary.pdf.

36 American Rivers, Water Environment Federation, American Society of Landscape Architects, and ECONorthwest. (2012). Banking on Green: A look at how Green Infrastructure can save municipalities money and provide economic benefits community-wide. Accessed from www.asla.org/uploadedFiles/CMS/Government_Affairs/Federal_Government_Affairs/Banking%20on%20Gre en%20HighRes.pdf.

37 New York Department of Environmental Protection. (2010). NYC Green Infrastructure Plan: A Sustainable Strategy for Clean Waterways – Executive Summary. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/NYCGreenInfrastructurePlan_ExecutiveSummary.pdf.

38 New York Department of Environmental Protection. (2014). NYC Green Infrastructure: 2013 Annual Report. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/gi_annual_report_2014.pdf.

39 Ibid

40 New York State of Environmental Conservation. (2008). Wastewater Infrastructure Needs of New York State. New York. Accessed from www.dec.ny.gov/docs/water_pdf/infrastructurerpt.pdf.

41 Odefey, J., Detwiler, S., Rousseau, K., Trice, A., Blackwell, R., O’Hara, K., Buckley, M., Souhlas, T., Brown, S., and Raviprakash, P. (2012). Banking on Green: A look at How Green Infrastructure Can Save Municipalities Money and Provide Economic Benefits Community-Wide. A Joint Report by American Rivers, the Water Environment Federation, the American Society of Landscape Architects and ECONorthwest. Accessed from www.asla.org/uploadedFiles/CMS/Government_Affairs/Federal_Government_Affairs/Banking%20on%20Gre en%20HighRes.pdf.

109 Linking Mitigation and Adaptation Goals in the Energy Sector

42 American Rivers, Water Environment Federation, American Society of Landscape Architects, and ECONorthwest. (2012). Banking on Green: A look at how Green Infrastructure can save municipalities money and provide economic benefits community-wide. Accessed from www.asla.org/uploadedFiles/CMS/Government_Affairs/Federal_Government_Affairs/Banking%20on%20Gre en%20HighRes.pdf.

43 Ibid

44 Garrison, N. and K. Hobbs. (2011). New York, New York: A case study of how green infrastructure is helping manage urban stormwater challenges. In Rooftops to Rivers II: Green strategies for controlling stormwater and combined sewer overflows. Natural Resources Defense Council (NRDC). Accessed from www.nrdc.org/water/pollution/rooftopsii/files/rooftopstoriversII.pdf.

45 New York Department of Environmental Protection. (2010). NYC Green Infrastructure Plan: A Sustainable Strategy for Clean Waterways – Executive Summary. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/NYCGreenInfrastructurePlan_ExecutiveSummary.pdf.

46 Ibid

47 American Rivers, Water Environment Federation, American Society of Landscape Architects, and ECONorthwest. (2012). Banking on Green: A look at how Green Infrastructure can save municipalities money and provide economic benefits community-wide. Accessed from www.asla.org/uploadedFiles/CMS/Government_Affairs/Federal_Government_Affairs/Banking%20on%20Gre en%20HighRes.pdf.

48 Ibid

49 Garrison, N. and K. Hobbs. (2011). New York, New York: A case study of how green infrastructure is helping manage urban stormwater challenges. In Rooftops to Rivers II: Green strategies for controlling stormwater and combined sewer overflows. Natural Resources Defense Council (NRDC). Accessed from www.nrdc.org/water/pollution/rooftopsii/files/rooftopstoriversII.pdf.

50 New York Department of Environmental Protection. (2010). NYC Green Infrastructure Plan: A Sustainable Strategy for Clean Waterways. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/NYCGreenInfrastructurePlan_LowRes.pdf.

51 New York Department of Environmental Protection. (2014). NYC Green Infrastructure Program. Accessed from www.nyc.gov/html/dep/html/stormwater/using_green_infra_to_manage_stormwater.shtml.

52 New York Department of Environmental Protection. (2010). NYC Green Infrastructure Plan: A Sustainable Strategy for Clean Waterways – Executive Summary. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/NYCGreenInfrastructurePlan_ExecutiveSummary.pdf.

53 New York Department of Environmental Protection. (2010). NYC Green Infrastructure Plan: A Sustainable Strategy for Clean Waterways. Accessed from www.nyc.gov/html/dep/pdf/green_infrastructure/NYCGreenInfrastructurePlan_LowRes.pdf.

A Case Study Synthesis Report 110

The Washington, D.C. Smart Grid Project: Modernizing the Grid to Increase Energy Efficiency and Grid Resilience

Focus: Washington, D.C. Smart Grid Project Jurisdiction: Washington, D.C., United States Lead: Pepco Holdings Inc. Other stakeholders: Pepco, consumers, smart meter manufacturers, other service providers Stage: Ongoing Cost: $92,753,369 (Federal share: $44,580,549) Ownership: Public Does it increase resilience or capacity? Resilience

Pepco Holdings Inc. (PHI) is one of the largest energy delivery companies in the Mid-Atlantic region of the US, serving roughly 2 million customers across Delaware, the District of Columbia (D.C.), Maryland and New Jersey. Pepco, a subsidiary of PHI, is well recognized as a leader in smart grid technology. Smart grids modernize the electrical grid, using existing wires, transformers and substations along with new electricity infrastructure such as meters, monitors, wires and Climate Change Mitigation: actions that reduce the switches.1 Smart grids also utilize innovative two-way magnitude or rate of human-induced emissions of information communication systems within the grid and greenhouse gases (GHGs). provide valuable energy cost and usage information to Climate Change Adaptation: preparing for adverse customers, system performance information to operators, effects of climate change by preventing or and can facilitate the deployment of renewable energy 2 minimizing impacts or taking advantage of alternatives. opportunities.

One of Pepco’s initiatives, the Smart Grid Project in Resilience: project, programs and policies that Washington, D.C., was initiated during the 2008-2009 increase the resilience of sectors to absorb shocks recession when the United States Federal government was associated with the impacts of climate change (i.e. seeking ways to infuse money back into the economy. The extreme weather events). American Recovery and Reinvestment Act included many provisions to help stimulate the economy, one of which was investments in smart grid technology. Poised to follow its strategic plan, ‘Blueprint for the Future’ and with support from its subsidiaries, PHI found further impetus from Federal coffers and secured a $168M Smart Grid Investment Grant, of which $45M was allocated to D.C., and launched the smart grid project in the Washington, D.C. area.

The main features of the Smart Grid Project in Washington, D.C. include: 1) Advanced Metering Infrastructure (AMI). This includes 284,000 smart meters installed in residential and commercial locations throughout Pepco’s D.C. service territory as of December 31, 2014. Pepco uses these smart meters to collect, measure, and analyze energy usage data in order to identify outages and to provide customers with detailed energy usage information. AMI is the technology that supports demand

111 Linking Mitigation and Adaptation Goals in the Energy Sector

response, load control, time-based rate programs, critical peak 3 rebates, and reduces the overall cost of meter operations. Advanced Metering 2) Distribution automation system. The system includes substation smart Infrastructure (AMI) is devices, automated distribution circuit reclosers/switches, and designed to provide network and substation transformer monitors, all of which work Pepco and its customers together to help detect and isolate faults more accurately, reduce the detailed electricity usage information that, when number of power outages, and ultimately improve reliability and combined with demand operational efficiency.4 response programs, helps 3) Communications infrastructure. This includes all of the components of customers reduce the wireless AMI mesh network, which has the ability to route traffic electricity usage and peak through the AMI meters. Pepco has designed the system to route demand.38 distribution automation traffic through battery-backed wireless communication devices to ensure it remains energized during power outages.5 4) Advanced electricity service options. This includes a web portal for Pepco customers to access data on their energy consumption collected from their smart meters. The web portal also allows customers to control programmable communication thermostat (PCTs) that were offered as part of the smart grid project.6 5) Direct load control devices. Over 27,000 load control devices deployed in D.C. allow Pepco to cycle off and on air conditioners during peak demand periods in the summer months, which also helps customers manage their electricity costs.7

Implementation of the smart grid technology in Washington has improved electrical service reliability and power quality, improved customer service, reduced costs from equipment failures, reduced GHG emissions, reduced meter reading costs, reduced operating and maintenance costs, and reduced truck fleet fuel usage. Over the past two years, PHI’s reliability performance has been the highest in their reporting history with over 6,000 customer outages prevented in 2013, and over 2,900 customer outages prevented in 2014.8,9 The elimination of manual meter reading has also saved Pepco $2M in 2012 and 2013 combined.10

Box 1: Hurricane Sandy

Hurricane Sandy brought devastation to the east coast of North

America in 2012, going down as one of the most costly hurricanes

in United States history. More than 8.5 million households and

businesses were without power, which in Pepco, with over

278,700 activated smart meters, was able to restore power to all 39 impacted customers within 48 hours of the storm hitting. No

Power signals from the meters allowed Pepco to promptly

pinpoint where there were existing outages and advanced 40 switches automatically re-routed power around the trouble areas. By identifying outages

automatically or by remote operators, Pepco is able to reduce the time it takes to restore power to

minutes, hours or days, rather than the weeks it could take repair crews to restore circuits 41 manually. To put this into perspective, Pepco has avoided 26,000 customer outages and 3.2

million outage minutes (roughly 2 hours per affected customer) since the Smart Grid Project began in 2012.42

A Case Study Synthesis Report 112

Reducing Energy Demand Pepco expects that a large portion of the energy reductions associated from the smart grid will come from the Energy Management Tools available to customers. The tools are a range of AMI-sourced information that are available to help customers understand their energy use and to raise awareness of ways to save energy. They include:  Customer education on ways to save energy and the benefits of doing so.  Communications reminding customers to save energy and the benefits of doing so in terms of the environment and cost savings.  Daily energy use charts and historical energy use charts on customer energy bills.  Online tools including energy use analysis, bill-to-date information, hourly energy usage charts and historical data, and calculators to help customers identify ways to save energy.  Paper energy use reports that provide data similar to the online tools for those customers who are not online-tool users.11

Additionally, those customers with central air conditioners or heat pumps are eligible to participate in Pepco’s Direct Load Control program called “Energy Wise Rewards”, which began on March 30, 2012. This is a peak- demand management program that offers customers a web-programmable thermostat or an outdoor switch that allows Pepco to reduce electricity use by cycling air conditioners/heat pumps off and on for short periods of time. The thermostat can save customers up to 10% on heating and cooling costs, and participants noticed little, if any, temperature change in their homes. In 2014 there were 23,746 active participants in the Energy Wise Rewards program, and it is estimated that there was a reduction of approximately 19.6 MW of electricity.12

Prior to launching the AMI project, Pepco developed a detailed Customer Education Plan which included information on the objectives and messages for each phase of the customer education process. The goals of the plan included informing customers about the installation of smart meters, benefits of smart meters, and how to use the information provided by smart meters to better understand energy use. Pepco has undergone quantitative and qualitative research in order to track a wide range of metrics to measure the effectiveness of the Customer Education Plan.13

Contribution to Climate Change Mitigation and Adaptation

Climate change responses, either through reduction of GHG’s or adaptation, were not the primary driver of this energy initiative. Instead, Pepco was driven to provide customers with more information on their energy use for efficiency gains, provide customers with more control and insight into energy usage, create the right platform for customers to make the right energy choices that reduce the system load, and increase the integration of distributed generation (e.g. rooftop solar). Thus, the Smart Grid Project advances GHG mitigation primarily through changing customer behaviour (Table 1).

As mentioned above, the AMI technology is able to generate more detailed usage data which informs the customers of consumption patterns.14 With access to information about their energy consumption in real-time, customers can manage their energy use and make smarter energy choices that reduce their peak load and their overall electricity consumption; ultimately reducing the demand on the grid and associated GHG emissions.15,16 The AMI system also has the ability to implement time-of-use pricing and peak demand programs that encourage and reward customers for reducing their electricity use during periods of peak demand.17

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Smart grids also help utility companies facilitate the integration of renewable energy into the electricity system due to its AMI technology.18,19 Renewable energy such as solar and wind is ‘intermittent’, meaning that energy is only produced when the sun is shining or when the wind is blowing. Traditionally, system operators would need to meet demand without knowing if/when enough renewable energy would be available during that time, which could potentially lead to grey outs. Smart grid technology provides system operators with continuous, real-time information on how the renewable energy systems are operating and provide full control over electricity flow at all endpoints on the system.20 By doing this, the utility company can balance the intermittent nature of renewable in a more efficient way. As well, traditional electricity networks were designed to bring power generated from central generation stations to consumers; smart grids accommodate two-way electricity flow to and from consumers that have renewable generation capacity.21 Net metering and net billing also become easier to implement because smart meters can record energy flow in each direction.22 The integration of small-scale renewable electricity sources located close to customers can provide benefits such as reduced energy losses and GHG emissions, and enables more individuals/communities to produce power.23 Once established, distributed renewable energy sources can help balance supply and demand, and improve power quality and reliability.24

Additionally, Pepco’s ability to remotely communicate with smart meters allows the utility to identify individual outages helping to reduce the unnecessary dispatch of repair crews (i.e. truck rollouts), which also contributes to 25 the reduction in GHG emissions. For example, Pepco estimates that 19 tonnes of CO2 emissions were avoided in 2013 due to the decrease in truck and vehicle dispatches to manually fix power outages (equivalent to taking 3.7 passenger cars off the roads each year).26

Table 1: Adaptation/Mitigation Contribution Matrix for Washington, D.C.’s Smart Grid Project

Contribution to Mitigation

Technological Behavioural Managerial Policy

Technological

Behavioural

Adaptation Managerial X

Contribution to Contribution Policy

In the United States, severe weather is the number one cause of power outages and costs the economy billions of dollars each year.27 With the number of extreme weather events expected to increase in frequency and intensity under a changed climate, the number of power outages is also expected to rise.28 It has been suggested that completely hardening a power system to withstand extreme weather events would be nearly impossible, therefore power engineers are now looking towards more holistic approaches focused on ‘grid resiliency’.29 This includes upgrading power poles to harder materials, trimming trees near power lines, upgrading aging infrastructure, as well as more “Unlike grid hardening, resiliency technological approaches such as using smart grids so operators measures aren’t intended to prevent can quickly reconfigure the system when parts of the grid lose damage from extreme weather; rather, power.30 they minimize the impact of any damage by enabling electric facilities to continue Washington, D.C. receives much of its energy from the North operating and promoting a rapid return American grid, thus fixing line breaks is integral to building to normal operations after damage and 43 resilience. The smart meters installed throughout the Washington, outages occur.” D.C. have increased the resiliency of the system to handle stresses

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from extreme weather events as they help identify areas of the city with the greatest need during emergency situations.31 Pepco has the ability to “ping” meters to help determine whether a customer has electric service, contributing to more efficient power outage restoration and reduced truck rolls. Thus, the Smart Grid Project advances climate change adaptation by changing the way electricity is managed during power outages and emergency situations (Table 1).

Although considered outside of the Smart Grid Project, Pepco and D.C. have agreed to a 50/50 cost share a $1B undergrounding project that will bury up to 60 high voltage power lines that have historically been the most impacted by severe weather and overhead related outages.32 This will work to harden the system and help the grid become more resilient to extreme storm events.

Table 2: Summary of the Contribution of Washington, D.C.’s Smart Grid Project to Climate Change Adaptation and Mitigation

MITIGATION ADAPTATION

Smart grids allow customers to access information about Smart grids and their associated smart meters allow for their energy consumption in real-time (which can encourage more visibility into the system and its level of function to behaviour change), while increasing the ability of renewable pinpoint the issues thus helping expedite power restoration. resources to enter the grid, while simultaneously increasing the overall efficiency of the electrical grid.

 Customers are active participants in deciding how  Smart meters increase the resiliency of the system and when to use their energy, allowing them to to handle stresses from extreme weather events. make smarter energy choices in order to save  In emergency situations, smart meters can help energy and money, and ultimately reduce GHG utilities focus resources on the areas of the city emissions. most affected by extreme weather.  Smart grids provide for a better integration of renewable energy sources into the grid.  Remote meter readings reduce the number of truck rollouts.

Co-Benefits

By modernizing the grid through advanced metering infrastructure (smart meters), communication infrastructure, advanced electricity service options, direct load control devices, as well as a distribution automation system, utilities are now able to resolve outages and restore the grid much faster than before (increased resiliency/adaptation) while providing customers with information on their energy use for efficiency gains (reducing energy demand/mitigation). In addition to the direct adaptation and mitigation benefits, there are several co-benefits provided by the development of smart grids: 1) Reduced costs. Streamlined operations improve the efficiency of electricity delivery and reduce utility costs associated with equipment failure, meter reading, as well as operation and maintenance costs. Smart grids help to eliminate unnecessary truck rolls (which can be expensive due to vehicle maintenance, fuel, employee wages, etc.). 2) Renewable integration. Net metering and net billing become easier to implement because AMI smart meters can separately record flows of energy in each direction.33 Integrating small scale renewable generators supports the grid by increasing redundancy and diversifying the energy sources used.34

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3) Local economy. With faster recovery times from power outages, local businesses will be able to reconnect to power much faster than before, potentially leading to cost-savings from spoiled inventory or lost sales. 4) Employee benefits. The Pepco D.C. Smart Grid Project created 206 full time equivalent jobs since inception.35 Smart grids also improve employee safety as less truck rollouts reduce the number of times employees are subjected to hazardous conditions.36 5) Human safety. By quickly and efficiently identifying problems on the grid and redirecting power around them, Pepco is able to reduce the length of power outages and quickly restore power to homes. This is especially beneficial to vulnerable (e.g. the elderly, children, etc.) during periods of extreme heat or cold. 6) Improved customer service. Smart grids allow for proactive outage notification and faster outage response and restoration. This results in higher customer satisfaction and improved relations with the regulator, community, etc.37 7) Tamper Detection. Smart grids are able to better detect unaccounted for energy usage, including detection of electricity theft.

Box 2: Synergies Between Climate Change Adaptation and Mitigation in Relation to Washington, D.C.’s Smart Grid Project

The Smart Grid Project provides Pepco with more visibility into the electricity grid and its operations in order to increase the reliability and resiliency of the grid, while simultaneously providing customers with the tools necessary to increase their energy efficiency and reduce their energy demand, thereby reducing GHG emissions. This synergy between climate change adaptation and mitigation is coupled with many other co-benefits to the local utility company and its employees, customers, local businesses and the community at large.

Lessons Learned

Educating customers on the benefits of smart grids is an important aspect of the project and can involve a significant amount of effort. Customers often do not have the same level of knowledge about kilowatt hours as they would about miles per gallon; therefore a variety of communication tactics are needed to increase the awareness and understanding of smart grid technologies throughout the general public. Within its Customer Education Plan, Pepco used a blend of traditional door-to-door mail and online outreach tactics to reach different customer groups. With more information at hand, customers are more likely to change the way they consume and manage energy within their households.

Many of the objectives of smart grid technology also provide climate change response benefits within the energy sector (i.e. grid resilience, reducing energy demand and peak demand, reducing GHG emissions, allowing for renewables to enter the grid, providing the opportunity for distributed generation, being able to better manage the grid). Furthermore, there is a strong business case for smart grids as they result in cost savings in a number of ways.

Further Information

Pepco: www.pepco.com Pepco Holdings, Inc: www.pepcoholdings.com/smart-grid-program

A Case Study Synthesis Report 116

Contact Ghirmay Berhe Engineer, Pepco Holdings, Inc. Email: [email protected]

Allan G. Douglas Director, Ontario Centre for Climate Impacts and Adaptation Resources (OCCIAR) Email: [email protected]

References

1 Environmental Commissioner of Ontario. (2014). Smart From Sunrise to Sunset: A Primer on Ontario’s Evolving Electricity Grid. Accessed from www.eco.on.ca/uploads/Reports%20- %20Background,%20Discussion,%20Roundtable/2014%20Smart%20Grid%20Primer.pdf.

2 Stewart, R. (2011). Smart Grid Progress and Plans. Presentation to the Washington Council of Governments. Pepco Holdings, Inc. Accessed from www.mwcog.org/uploads/committee- documents/bV1fV1xb20111117083545.pdf.

3 U.S. Department of Energy. (2013). Pepco – District of Columbia: Smart Grid Project. 2009 American Recovery and Reinvestment Act, Smart Grid Investment Grant, Project Description.

4 Ibid

5 Ibid

6 Ibid

7 Ibid

8 Pepco Holdings, Inc. (2014). 2013 Annual Report to Stockholders. Accessed from www.phx.corporate- ir.net/External.File?item=UGFyZW50SUQ9MjI2NjczfENoaWxkSUQ9LTF8VHlwZT0z&t=1.

9 U.S. Department of Energy. (2013). Pepco – District of Columbia: Smart Grid Project. 2009 American Recovery and Reinvestment Act, Smart Grid Investment Grant, Project Description.

10 Ibid

11 Pepco. Personal communication. February 9, 2015.

12 Ibid

13 Ibid

14 Pepco. (2014). Smart Grid 101. Accessed from www.pepco.com/education-and-safety/smart-grid-101/.

117 Linking Mitigation and Adaptation Goals in the Energy Sector

15 National Energy Technology Laboratory. (2010). Understanding the Benefits of the Smart Grid. Accessed from www.netl.doe.gov/File%20Library/research/energy%20efficiency/smart%20grid/whitepapers/06-18- 2010_Understanding-Smart-Grid-Benefits.pdf.

16 Pepco. (2014). Smart Grid 101. Accessed from www.pepco.com/education-and-safety/smart-grid-101/.

17 Ibid

18 International Renewable Energy Agency. (2013). Smart Grids and Renewables: A Guide for Effective Deployment. IRENA. Accessed from www.irena.org/DocumentDownloads/Publications/smart_grids.pdf.

19 Pepco Holdings Inc. (2014). Smart Grid Program. Accessed from www.pepcoholdings.com/smart-grid-program/.

20 International Renewable Energy Agency. (2013). Smart Grids and Renewables: A Guide for Effective Deployment. IRENA. Accessed from www.irena.org/DocumentDownloads/Publications/smart_grids.pdf.

21 Environmental Commissioner of Ontario. (2014). Smart From Sunrise to Sunset: A Primer on Ontario’s Evolving Electricity Grid. Accessed from www.eco.on.ca/uploads/Reports%20- %20Background,%20Discussion,%20Roundtable/2014%20Smart%20Grid%20Primer.pdf.

22 Stewart, R. (2011). Smart Grid Progress and Plans. Presentation to the Washington Council of Governments. Pepco Holdings, Inc. Accessed from www.mwcog.org/uploads/committee- documents/bV1fV1xb20111117083545.pdf.

23 Environmental Commissioner of Ontario. (2014). Smart From Sunrise to Sunset: A Primer on Ontario’s Evolving Electricity Grid. Accessed from www.eco.on.ca/uploads/Reports%20- %20Background,%20Discussion,%20Roundtable/2014%20Smart%20Grid%20Primer.pdf.

24 Ibid

25 Pepco Holdings Inc. (2014). Smart Grid Program. Accessed from www.pepcoholdings.com/smart-grid-program/.

26 Pepco. (2014). Advanced Metering Infrastructure Annual Report. Potomac Electric Power Company, Formal Case No. 1087, Order No. 16930, June 2, 2014.

27 Pepco Holdings, Inc. Fact Sheet: Environmental & Sustainability. Accessed from www.pepco.com/uploadedFiles/wwwpepcocom/ClimateChangeFactSheet.pdf.

28 Ibid

29 Abi-Samra, N.C. (2013). One Year Later: Superstorm Sandy Underscores Need for a Resilient Grid. Accessed from www.spectrum.ieee.org/energy/the-smarter-grid/one-year-later-superstorm-sandy-underscores-need-for-a- resilient-grid.

30 Ibid

31 Reeves, D. (2014). Faster Restoration with Smart Grid. Accessed from www.silverspringnet.com/article/faster- restoration-with-smart-grid/#.VIYRu2cZOno.

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32 Pepco Holdings, Inc. (2014). 2013 Annual Report to Stockholders. Accessed from www.phx.corporate- ir.net/External.File?item=UGFyZW50SUQ9MjI2NjczfENoaWxkSUQ9LTF8VHlwZT0z&t=1.

33 Stewart, R. (2011). Smart Grid Progress and Plans. Presentation to the Washington Council of Governments. Pepco Holdings, Inc. Accessed from www.mwcog.org/uploads/committee- documents/bV1fV1xb20111117083545.pdf.

34 Sunderhauf, S. J. Roman, J. Cadoret and D. Pirtle. (2009). Solar Panels and the Smart Grid in the Pepco region. Accessed from www.solardecathlon.gov/past/pdfs/09_workshops/09_panels_grid.pdf.

35 Pepco Holdings Inc. (2014). Smart Grid Program. Accessed from www.pepcoholdings.com/smart-grid-program/.

36 National Energy Technology Laboratory. (2010). Understanding the Benefits of the Smart Grid. Accessed from www.netl.doe.gov/File%20Library/research/energy%20efficiency/smart%20grid/whitepapers/06-18- 2010_Understanding-Smart-Grid-Benefits.pdf.

37 Ibid

38 U.S. Department of Energy. (2013). Pepco – District of Columbia: Smart Grid Project. 2009 American Recovery and Reinvestment Act, Smart Grid Investment Grant, Project Description.

39 Silver Spring Networks. (2013). Whitepaper: How the Smart Grid Makes Restoration Faster and Easier for Utilities. Accessed from www.silverspringnet.com/outage/pdfs/SilverSpring-Whitepaper-Outage.pdf.

40 Ibid

41 Abi-Samra, N.C. (2013). One Year Later: Superstorm Sandy Underscores Need for a Resilient Grid. Accessed from www.spectrum.ieee.org/energy/the-smarter-grid/one-year-later-superstorm-sandy-underscores-need-for-a- resilient-grid.

42 Boyce, K.C. (2014). How the Smart Grid Underpins Community Resilience. Accessed from www.whatissmartgrid.org/featured-article/how-the-smart-grid-underpins-community-resilience.

43 Abi-Samra, N.C. (2013). One Year Later: Superstorm Sandy Underscores Need for a Resilient Grid. Accessed from www.spectrum.ieee.org/energy/the-smarter-grid/one-year-later-superstorm-sandy-underscores-need-for-a- resilient-grid.

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A Case Study Synthesis Report 120

T HE ONTARIO CENTRE FOR CLIMATE IMPACTS AND ADAPTATION RESOURCES (OCCIAR)

935 RAMSEY LAKE ROAD

SUDBURY, ONTARIO

CANADA

P3C 2C6

WWW .CLIMATEONTARIO.CA

121 Linking Mitigation and Adaptation Goals in the Energy Sector