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The Municipal Role in Accelerating Implementation of Renewable Energy

Accelerating the Implementation of Renewable Energy
Accueil 9 Accelerating the Implementation of Renewable Energy – Protocol 9 The Municipal Role in Accelerating Implementation of Renewable Energy

Purpose and Objectives

The purpose of this section is to help municipalities understand their sphere of influence in supporting RE development in their community. By the end of this section, you should be able to:

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Articulate the significance of a ‘comprehensive’ vs. a ‘minimalist’ approach by municipal government to accelerating implementation of renewable energy

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Distinguish across different roles that a municipality can play to accelerate implementation of renewable energy

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Identify and build upon exemplary cases from municipalities across Canada to support strategic planning and action planning in your own municipality

Background and Significance

The best way to prepare for the future is to help shape it. Community energy planning is a tool to do just that. The push for decarbonization in Canada’s energy system is driving rapid social and technological innovation in the energy sector. Energy production technologies are increasingly decentralized and embedded themselves into local landscapes (e.g., solar panels, wind turbines, and district heating systems), while energy consumption is increasingly reliant on electricity infrastructure (e.g., electric vehicles; electric heat pumps) and renewable fuels (e.g., biomass-fueled heating systems). This is happening alongside an emerging ‘sharing economy’, such as ride sharing and bike sharing programs, that will result in fundamental change to how, where, and by whom energy is consumed in communities. Furthermore, new financial mechanisms are raising new possibilities for ownership and benefits-sharing of energy infrastructure (e.g., green bonds; property assessed energy retrofits; virtual net metering). Community energy planning (CEP) aims to minimize the impacts and maximize the benefits of these structural changes in our towns and cities and neighbourhoods.

Community energy planning is a socially inclusive process to identify and follow pathways for change in the way energy is produced, distributed, and consumed to meet community priorities for environmental and social sustainability. It sets targets for reducing energy-related environmental impacts and energy costs, along with clear actions for how a community, working with and through local government, will achieve those targets. The emphasis of that definition – with and through local government – is to suggest a leadership role for municipalities that is flexible, adaptive, collaborative, and facilitative. In other words, we are not talking about ‘from local government’. The socially inclusive and network-based approach of CEP is what distinguishes it from ‘Municipal Energy Plans’ or ‘Local Energy Plans’, which tend to be top-down and technocratic in their design and implementation and tend to focus on actions within the municipality as a corporation.

It is helpful to think about two distinct perspectives on the role of local government in implementing community energy plans. The first is what we might call a ‘minimalist’ perspective (see Figure below). From this perspective, the role of the municipality is limited to what it can directly control, and emphasis is placed on its own corporate operations and service provision functions such as waste collection, transit, and utilities. A minimalist perspective would focus the attention of the municipality on corporate energy, with limited if any proactive engagement in community initiatives. This view is more likely to understand municipalities as ‘policy-takers’, functioning as a unit of provincial administration. The second perspective is what we might call a ‘comprehensive perspective’ (see Figure below). From this perspective, the municipality also leverages its indirect influence and its capacity over community development more broadly. From this view, municipalities are more likely to become ‘policy-makers’ to the extent that political, financial, and regulatory constraints allow.

Actions emphasized under a minimalist purview are critical. Corporate actions lead-by-example and can help grow the market for renewable energy. And municipal service provision is certainly one primary pathway of direct influence for a municipality to help support renewable energy development. At the same time, municipalities, as a corporate entity, represent a very small proportion of the opportunities for emissions reductions and community benefits that can be achieved through renewable energy development. Further, the barriers to adoption of renewable energy eventually trace back to indirect levers of municipal influence: e.g., land-use planning, development controls, environmental protections, and social license, to name a few. As such, accelerating implementation of renewable energy is only possible when municipalities adopt a comprehensive perspective. Municipal Councils and staff understand this, and at the very least are sympathetic to the comprehensive perspective. The challenge they face is in operationalizing this perspective: what would a comprehensive approach look like? 

Research

Figure 2 below provides a framework for thinking about what a comprehensive approach would look like. This typology is based on insights from governance theory and administrative theory, along with practical experiences described in the international body of literature on community energy planning and local energy management. On the left of the continuum, the role taken by a municipality involves direct market participation: i.e., the municipality is considered an ‘implementer’, which largely falls under the purview of corporate energy management. As we move to the right of the continuum, the role shifts to ‘facilitator’: i.e., the municipality leverages its resources, authority, and influence to drive projects and programs throughout the community, beyond its corporate sphere. The roles identified here are not mutually exclusive, meaning that a single program might require a municipality to play multiple roles. For example, the green standard program in Toronto, Ontario (described below) would fall under “Regulate” (setting a standard to which developers must comply in order to receive permission to proceed) as well as “Invest” (an indirect investment by forgoing revenue through reduced development charges, which incentivizes developers to exceed the standard).

Figure 2: A typology of the roles of local government in accelerating implementation of RE

Below, you can find examples and case studies of municipal actions that fall under each of these categories. The resources provided below are entry points into these ideas. Think of this as a warehouse of innovative policies and programs through which we are trying to speed up the process of policy diffusion. To compile these case studies, we undertook an extensive review of publicly available documents combined with targeted informational interviews with key stakeholders. The list of case-studies below can serve as a sort of ‘menu’ of options for practitioners to define the role of their municipality relative to their targets and / or ongoing programs. We also provide detailed information that can be used to support your own program design, and as evidence with which to make a compelling case to your Executives and Councilors.

Municipality as Implementer

Markham District Energy, Markham Ontario

Ontario’s Municipal Act grants municipalities the power to establish Municipal Service Corporations for the purpose of providing a “system, service or thing that the municipality itself could provide”, which includes local utilities. The City of Markham has leveraged this authority to establish a municipally owned thermal utility, called Markham District Energy, which is currently the only municipally owned district energy utility in Canada to have two systems operating within the same municipal border. As an instrument of the municipality, a strong connection is made between local / urban planning and energy planning / investments. This connection is critical since the economics of DE are strongly dependent on settlement patterns (distribution of the heat load / customers), as well as securing easements to install piping systems and other infrastructure. 

Another example of this model is Énergie Kapuskasing Energy, which focused on rooftop solar during Ontario’s feed-in-tariff program.

Downtown District Heating System, Prince George, B.C

Prince George uses a slightly different model compared to Markham to implement district energy in its downtown core. Here, the City owns and operates the system directly, rather than through a subsidiary corporation, and entered into a 10-year supply agreement with Lakeland Mills Ltd for 5MWt in the form of hot water, heated by burning residues from the mill. A backup natural gas fired system was installed as insurance against supply disruptions and / or changes to Lakeland’s operations. 
For more examples of bioheating systems across Canada, see ici. The following examples are notable: 

Rooftop solar on municipally owned property

The first step in this is a careful inventory of assets that could support solar energy systems (PV or thermal). There are a wide range of ownership models that might work to get to implementation, described at this link. Virtual net metering will enable creative financing of these options through community-wide ownership.

Municipality as Investor

Shepard Landfill Solar Project

The project was built on contaminated lands, capped 10 years prior, turning a ‘brownfield’ into a ‘brightfield’. The City of Calgary invested $1.4M of the $8.46M project cost, in partnership with the Alberta Municipal Solar Program and ENMAX Energy Corporation. The City’s investment came from their Sustainable Building Partnership Program, which received initial funding in 2008 from the Alberta Government’s Municipal Sustainability Initiative. This is an example of a ‘green revolving fund’ – using an initial investment, multiple City business units collaboratively plan and deliver a range of projects and recycle their returns into new opportunities. The Shepard Landfill project was one such project. In 2012, the SBP program was institutionalized as a ‘Transforming Government’ initiative.

Toronto District Heating Corporation / Enwave

The City of Toronto invested in TDHC when it was privatized in 1998. The TDHC was renamed to Enwave in 1998 and built the Deep Lake Water Cooling System in 2004 to provide cooling to large buildings in the downtown core through a close-looped system that exchanges heat with cold water that is drawn from over 270 feet below the surface of Lake Ontario. The City sold its 43% stake in 2012 and Enwave is now owned by Brookfield Asset Management who is currently expanding the deep lake system.

Municipality as Regulator

City of Toronto Green Standard (see also the Town of Whitby Green Standard)

UNE green standard sets sustainable design requirements for new developments in a tiered system. The lowest tier sets the standard, and the standard is increased over time (i.e., ‘Tier 2’ becomes the new ‘Tier 1’) to ensure that today’s best practices become tomorrow’s standard practices. Developers are incentivized to exceed requirements – i.e., to meet performance standards in Tiers 2-4 – through the Development Charge Refund Program. In other words, the program blends regulatory powers with indirect investment, to the extent that the program involves planning and development charge by-law changes, while deferring revenue in favor of encouraging investment into sustainable building practices and technologies. The program rewards performance and is therefore agnostic to technologies – it is a type of ‘flexible regulation’. Currently, the development charge refund is equal regardless of how far a development goes beyond the standard, but the City is currently considering options to index the refund to performance achievements. In addition to measures taken for energy efficiency and to encourage active transit, a primary component of the performance standards is on-site renewable energy and / or renewable energy readiness. Current ‘Tier 2’ standards include: 

  • Buildings are designed to accommodate connections to solar PV or solar thermal
  • Design on-site renewable energy systems to supply a minimum of 5% of the building’s total energy load from solar PV, solar thermal or wind, or 20% from geo-exchange

Saint John Green Energy Zoning By-law Amendments

Zoning by-laws are used to provide protection against RE development in parks and environmentally sensitive areas, while also bringing clarity to developers in terms of which sites they should focus on, and the conditions under which a project is likely to be approved at a given site. The zoning by-law amendment, which is coupled with a municipal plan by-law amendment, creates a new defined area called a ‘green zone’. The intent is to provide opportunities for green energy development outside of ‘primary development areas’ (PDA), namely, ‘Rural Resource Areas’ including Parks and Natural areas. With some restrictions on municipal park lands and other environmentally sensitive areas, Rural Resource Areas can be re-zoned a ‘green zone’ which defines design standards related to site access, setback distances, screening (aesthetics), and decommissioning. Green energy is not considered a permanent use, which enables creative land-use opportunities: e.g., decommissioning a project and reverting a site back to its original state. Saint John’s bylaw amendment occurred in conjunction with the development of the Burchill Wind Energy Project at an industrial park.

City of Vancouver – Zero Emissions Building Plan

L' ZEBP includes a suite of policies and bylaws for new builds, rezonings, and existing buildings, that set limits on emissions and energy use for buildings which will be reduced/more restrictive over time. Recent updates to these policies and bylaws are working to ensure that all new and replacement heating and cooling systems are zero emissions by 2025, and set the stage for increased electrification through heat pumps, as well as targeted implementation of district energy systems. This is one of four ‘big moves’ that were identified in the Climate Emergency Response Plan that was adopted in 2019.

Local Improvement Charges / Property Assessed Clean Energy

Municipal Acts across many provinces have been amended to allow energy efficiency retrofits and site-level renewable energy generation to be eligible for ‘local improvement charges’ (LIC). The LIC is a financing option, through which the costs to undertake eligible activities are paid back by the property owner monthly as an added special surcharge on the property tax bill. There are no upfront costs to the property owner, and the loan is tied to the property rather than the individual. In Canada, the longest-standing programs using LICs to finance energy generation and efficiency are the Solar City program launched in Halifax Regional Municipality in 2012, and the Home Energy Loan Program (HELP) et Hi-RIS program, both of which the City of Toronto launched in 2014. This study of LIC programs provides an overview across the Canadian and US context, along with a risk assessment and set of resources for program design. An LIC-based retrofit program may be delivered directly by the municipality, or a municipal services corporation, or by a 3rd party that is either completely or partially independent of the municipality. In any case, the municipality must pass enabling legislation by amending relevant by-laws to allow expanding criteria for the use of the LIC mechanism accordingly. The Ontario Climate Consortium, working with the City of Vaughan, have published model by-laws for the Ontario context. The by-laws behind Halifax’s Solar City program are ici.  Berwick, Nova Scotia has also moved forward with LIC-based financing for commercial buildings, the first of which moved forward in March 2020.

Norfolk County Rooftop Solar Building Permit Streamlining

Streamlining building permits is an effective way to expedite private investment into rooftop solar systems (PV and thermal). Here is an example from Norfolk County. The City of Guelph used a similar approach, reducing permitting costs for rooftop PV from an average of $800 to $75 – one factor that helped the city reach 50% higher uptake of solar PV than the provincial average throughout the Province’s microFIT program period.

Municipality as Encourager

Halifax Regional Municipality Environmental Performance Officers – Clean Energy Specialists

Halifax Regional Municipality has established two new positions with a core responsibility to “design and deliver clean energy programs and projects for the organization and the community”. The overall objective is to support implementation of their regional climate strategy that incorporates mitigation and adaptation targets. In theory, these positions will enhance institutional capacity to encourage and catalyze the implementation of renewable energy.

Town of Okotoks Master Development Plan

Local planning policies rarely include a clear guiding strategy on the policy approach to renewables. The Town of Okotoks provides a commendable exception. The 2020 draft version of their Municipal Development Policy includes a clear vision statement with emphasis on partnership building, along with a series of principles and policies through which to execute that vision: 

Okotoks is a leader in net zero carbon energy and encourages innovative solutions to carbon energy consumption in building design, energy sources. We develop partnerships to deliver renewable energy and all our energy comes from non-polluting, renewable sources. We eliminate fuel poverty while sharing information on energy education programs for individuals, companies, and institutions. -Town of Okotoks, Draft MDP

Regional Municipality of Durham Strategic Plan

The Regional Municipality of Durham has embedded renewable energy into its strategic plan; it does not stand separate from efforts to modernize municipal services and objectives more broadly. In fact, the first state goal of the strategic plan reads as follows: “Accelerate the adoption of green technologies and clean energy solutions through strategic partnerships and investment”. This sends a clear signal to the public and to possible implementation partners that the Region is dedicated to facilitating renewable energy development.

Public-facing energy mapping tools

In our section on resource assessments, we provide examples of energy mapping activities that can raise awareness and support implementation planning. Another example comes from Google’s Project Sunroof which is making its way to the Canadian market in a partnership with MyHEAT. Another strong example is from a company called Mapdwell which has mapped rooftop solar potential across many cities, including New York City. These tools are primarily homeowner facing and are embedded into websites that connect homeowners with companies that offer site-assessments, project design, installation, and financing. These tools are also becoming detailed enough that they also serve prospective developers in identifying viable leads. A longer list of energy mapping tools developed by municipalities can be found ici.

Key Takeaways

The specific role (action/level) pursued by a municipal government is dependent on a range of factors, all of which need to be considered before pursuing a particular line of implementation planning:

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Administrative context, including their fiscal position and the authority granted to them by provincial governments

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Political context, including the political leanings of Council and community as it relates to the role of local government broadly and the risk aversion of Councillors and the electorate relative to specific projects and initiatives.

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Technology of interest, because each technology has a different set of opportunities and challenges which require different forms of support and steering

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Governance context, to the extent that the role of a municipality should change in relation to the role of other key actors, such as utilities, other orders of government, community organizations, and so on.

Many of the examples of municipal implementation involved supports from a rapidly changing regulatory and financial context. In other words, many of those case studies would have limited relevance over time and across Canada. As such, we have only selected case studies that communicate innovative implementation models that could be replicated across space, time, and technologies. 

Our research has revealed a wide range of levers/actions available to municipalities beyond municipal implementation of renewable energy. Many of these options – and especially those under ‘regulate’ – are relatively less resource-intensive in terms of financial resources and engage with a much larger set of opportunities. In separate sections, we will dig deeper into three of these actions: raising awareness and encouraging investments through resource assessments et public engagement; revising municipal land-use regulations; and drive project development through collaborative implementation.