If we want to reduce greenhouse gas (GHG) emissions, carbon pricing is an essential foundation, ideally as simple, predictable, and revenue neutral as possible. However is it – as some economic purists contend -enough on its own to move us to a low carbon economy, or put another way, a clean growth economy?
There are many so-called complementary policies that are a bad idea – inefficient, wasteful, and sometimes counterproductive. However not all of them by any means are a bad idea and some are essential compliments to price signals.
Increasingly there is recognition that the many potential opportunities are to be found in our communities, essentially the municipally governed spaces as well as those managed by indigenous governments where most of us live and work, where we use nearly 60 percent of all the energy Canadians consume and where we generate about 50 percent of our GHGs. Many of these opportunities will become economic due to carbon pricing, but often they will need some nudges from other government actions, such as information programs and building and equipment standards for efficiency and emissions performance.
By far the most important area of policy for the longer term concerns municipal planning. Canada’s long term aspiration is to radically reduce GHGs to zero or close to zero. The only way that we can make that real (practical and affordable) is to reshape our communities to become Smart Energy Communities. Carbon pricing alone cannot do this.
The approach to Smart Energy Communities needs to start with a strategy based on a deep understanding of a given community’s energy profile. What are the community’s energy needs – and not just for electricity which typically accounts for less than a quarter of all demand, but all of it including heat and mobility. Then, what are the options for satisfying those needs in ways that are safe, reliable, affordable, and environmentally sound? What are the options that pay multiple dividends such as lower costs or better air quality as well as GHG reduction? With these questions in mind, we believe that a few basic principles – the ones that underpin Smart Energy Communities – need to anchor any sensible energy strategy. 
The first principle and the one that almost always pays multiple dividends is to reduce the need for energy in the first place through energy efficiency. There are many examples to be found across Canada where a focus on efficiency has produced results that are not only cost-effective but, in the case of buildings, has created spaces that are more comfortable for their inhabitants. One example is the Southwoods Development in Edmonton where Christenson Developments has constructed apartments for seniors that have energy efficiency as one of their main selling points. The Southwoods community offers reduced utility costs through the inclusion of a state of the art geothermal heating system and reduced electrical costs by means of a gas-fired co-generation system.
A particular aspect of efficiency involves using the right form of energy in the right application. In simple terms, energy can be said to have various levels of “quality”, with electricity being the highest quality – flexible and with almost unlimited applications but the move to low carbon will place increasing strains on our power production capacity. With all of the costs and impacts of the full life cycle of energy in mind, from production to use, an energy strategy at the community level should consider where high-quality energy is best used and essential. Beyond that, with all costs accounted for including a price for carbon, the market can most often best determine where lower quality energy such as low temperature air or water might do the job more efficiently and cost-effectively.
Yet another aspect of efficiency concerns the management of heat. Of all the energy that comes into our economy, in all forms whether oil or gas or various ways of generating electricity, more than half ends up as what is known as “rejected” heat, put another way, wasted heat. The biggest single source of rejected heat is internal combustion engines for transportation where capturing waste heat is inherently very difficult. Other sources include power generation and industrial processes where high quality energy is needed for the initial purpose (such as turning a turbine or processing materials), but where a lot of the initial energy remains in the exhaust stream and typically ends up on the rejected energy pile. Here is where communities across Canada have discovered opportunities in combined heat and power (CHP) and district energy (DE) applications. Less obvious opportunities can be found in the capture of the heat in wastewater, a low quality form of heat but potentially still useful and a cost-effective source under the right circumstances. One example of how communities have incorporated CHP and DE is in Cornwall, Ontario. The Cornwall District Energy System uses two gas-fired CHP generators to produce power as well as space heating for two hospitals and 12 local government and commercial buildings. Through the use of this CHP system, the buildings have a thermal efficiency which approaches about 90 percent during winter compared to about 35 percent efficiency for conventional electric only generating plants.
Still on the subject of waste, here too are lots of opportunities to turn what otherwise is simply a burden into an energy opportunity. Canada’s forest industry has been doing that for decades, taking waste wood such as bark and branches and using it to power saw mills and pulp mills. The same principle can be applied in many agricultural operations. Closer to home, municipal solid waste offers energy opportunities including the potential to capture the methane which is an inevitable by-product of waste management operations and inject it as a form of renewable natural gas (RNG) into the already existing natural gas distribution system. This is a good example of a double dividend where an extremely powerful GHG source (methane) that might otherwise be vented to the atmosphere is captured and combusted, making effective use of existing infrastructure and making the gas system inherently more sustainable.
Most of the energy discussion in Canada these days is all about renewable energy but it is striking that up to this point most of the opportunities we have been talking about have involved efficiency one way or another. This should tell us something about the value of approaching the energy issue strategically and knowledgeably as well as the value of viewing our energy options through the community lens.
But through the community lens, we can also see numerous renewable energy options, especially for thermal energy. Energy captured by use of heat pumps, whether ground source or air source is the most obvious potential and one where, again, efficiency is often the foundation so that the heat pump is meeting a much-reduced demand. For instance, the Benny Farm Complex in Montreal was re-developed to have ground source heat pumps and radiant floor heating, a solar domestic hot water system, and heat recovery with high-efficiency boilers. The Forks Market in Winnipeg uses a geothermal system to harness energy stored in the earth, the Assiniboine River and groundwater as well as to capture heat produced in the market itself.
Another potential opportunity respecting thermal energy involves cooling, this time using cold lake or seawater as the source, something that many Canadian communities have access to in abundance. Thermal energy can also be supplied by solar sources, passively such as through building orientation or more actively, using solar thermal systems to raise the temperature of inlet water for heating systems.
As solar technology has evolved in recent years the potential for photovoltaic (PV) systems to be cost-effective is growing steadily. These sorts of systems can be deployed in many different places including on the roofs of buildings. And one thing communities have in abundance is roofs. One of the many successful projects related to thermal solar collectors and PV in Canada is the Drake Landing Solar Community in Okotoks, Alberta. This was the first initiative to use a local distribution system (loop) to collect heat using rooftop solar panels, use on-site solar PV generation (power) to pump the heat and store it underground during the summer months using borehole thermal energy storage so that it could be used for residential space heating during winter months.
The last point leads us to the final principle which involves thinking of our energy grids as strategic resources. The grids – power, gas, and thermal – not only carry energy, but can be used together to balance systems so as to account for the intermittency of renewables, respond to different demand profiles depending on time of day or season and bring into the system energy “resources”, such as landfill gas and waste heat. This principle, in turn, brings us back to the point that the only realistic way to think of the grids and the only realistic way to capture the opportunities we have been describing is by viewing energy through the lens of a community.
A great deal of Canada’s energy conversation of late has been about all the things that we – or some of us – don’t want to build, whether pipelines, power lines, and power plants of all sorts – renewable or fossil. Much of the opposition is organized in communities by community leaders and sometimes it is fair and reasonable, other times not so much.
Our point is that citizens of communities are much more than the people who say no. They are people who need diverse forms of affordable energy for their well being and who quite rightly believe that those energy needs should have a reduced impact on the environment. Communities often have many of the tools needed to ensure our desired future of a clean growth economy.
A sustainable energy future for Canada, such as the one envisioned by the Paris climate change agreement will only come about if it is part of a system of inherently sustainable communities, specifically, Smart Energy Communities. That, in turn, will need acknowledgment and policy support from senior governments.
Unless we get it done where we live and work we will not get it done at all.
 Smart Energy Communities improve energy efficiency, enhance reliability, cut costs, and reduce GHGs. They do this by integrating conventional energy networks (electricity, natural gas, district energy, and transportation fuel) in communities to better match energy needs with the most efficient energy source; integrate land use and transportation planning; harness local energy opportunities; and focus on the importance of energy efficiency for whole communities.
 M. K. Jaccard and Associates. (2010). The capacity for integrated community energy solutions policies to reduce urban greenhouse gas emissions. Prepared for QUEST. Accessed May 24, 2017. Accessible at https://www.questcanada.org/hub/quest-publications.
 The energy decision principles we suggest here are well documented. For more information, see: QUEST. (2012) Fuels & Technology for Integrated Community Energy Solutions. Accessed: May 24, 2015. Accessible at: https://www.questcanada.org/hub/quest-publications. As well, examples of leading practices for Smart Energy Communities can be found on the Smart Energy Communities Atlas, an online repository of smart energy projects, policies, programs, plans, and resources in Canada. Accessible at: https://www.questcanada.org/hub/atlas
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