Putting out the fire: How to cleanly heat a cold country that’s hooked on natural gas

Electrify everything. Over the past year, this mantra has become a rallying cry for many climate watchers arguing that a critical step in reducing CO2 emissions is to first turn huge, fossil fuel intensive systems – transportation, space heating, etc. – onto electrical energy. With enough investment in renewable or nuclear energy, an expanded greener grid can then provide the energy needed to keep the economy going.

The process is known as changing fuel. With the increasing market acceptance of technologies such as electric vehicles and electric heat pumps, a fuel switch appears increasingly plausible. “We have to do this really, really quickly,” says Chris Bataille, associate professor at Simon Fraser University, climate policy analyst at IDDRI (L’Institut du développement Permanent et des relations internationales / Institute for Sustainable Development and International Relations), a Parisian -based think tank.

In a cold country in particular, the opportunities related to the electrification of space heating are critical. Heating and cooling buildings accounts for 12.4% of Canada’s carbon dioxide emissions, but in some large cities like Toronto, natural gas for heating buildings accounts for half of all emissions. (Nationwide, 45% of all natural gas is used in residential and commercial buildings.) The reason? Thousands of kilometers of natural gas pipelines run under the streets of major cities, and the gas they carry is cheaper than electricity in some countries.

Decarbonisation through electrical room and hot water preparation

Although large parts of Canada are dependent on natural gas, it has become quite easy for consumers to switch to highly efficient electrical space and water heating. Heat pumps are widely available through Heimreno dealers or HVAC contractors. According to the International Energy Agency (IEA), 20 million heat pumps were purchased worldwide in 2020. “The growth can be seen in all primary heating markets – North America, Europe and North Asia,” states the IEA. “In fact, while heat pumps have become the most common technology in new home construction in many countries, they only meet 5% of global building heating needs.” There are nearly 800,000 heat pumps across Canada, and that total has been steady for a decade, according to the Canada Energy Regulator increased, particularly in Ontario and Quebec.

However, there are few policy incentives or regulatory mechanisms designed to accelerate the transition from natural gas to electrical heating, so the decision remains primarily a consumer decision. In Canada, homeowners can access government grants or subsidies for green energy retrofitting to cover the cost of these devices. Heat pumps cost anywhere from a few thousand dollars to more than $ 10,000, depending on the size of the apartment and other factors. Highly efficient gas stoves cost between $ 3,000 and more than $ 6,000; They also rent gas distributors. Gradually increasing carbon prices will narrow the gap between gas and hydropower tariffs by hundreds of dollars. In addition, heat pumps achieve energy savings due to their efficiency.

Gas utilities continue to invest hundreds of millions of dollars each year in expanding and renewing their gas distribution infrastructure.

-Bryan Purcell, Vice President Policy and Programs, The Atmospheric Fund

One of the huge financial barriers to using electrical space and water heating has to do with the issue of stranded assets. If governments incentivize homeowners or property managers to switch to electrical heating, what happens to all the investments that have gone into building gas distribution networks over the past 30 years? After all, from the 1980s onwards, energy regulators in some regions tried to switch home heating to natural gas because it was cleaner than oil and coal. Today, these assets are on the balance sheets of giants like Enbridge, and governments are reluctant to enact regulations that abruptly turn them into liabilities. (Enbridge’s most recent financial statements value its gas pipelines and related services at $ 12.5 billion, approximately 10% of the book value of its total assets.)

But the complexity of the fuel change goes beyond the balance sheet. If many homeowners switched to electric heating, there would be a huge strain on existing power grids, especially in cities at peak times, says Richard Carlson, director of energy policy at Pollution Probe. “I just don’t see how to upgrade the electrical systems in an urban area,” he says.

The solution to that Rubik’s Cube requires regulatory innovation, investments in renewable energy, and a sense of urgency. “If you find yourself in a hole,” said Bryan Purcell, vice president of policy and programs for the Atmospheric Fund, “the first thing you have to do is stop digging. Gas utilities continue to invest hundreds of millions of dollars each year in expanding and renewing gas distribution infrastructure, increasing the risk of asset stranded and related financial disruption. They will do this until there are clear political signals for a transition from fossil gas. “

The potential for the use of biogas

Purcell and others believe that a short-term solution is for governments to require gas companies to increase their use of renewable natural gas (RNG), which is produced by methane emissions from water treatment plants, landfills, or agricultural waste. In BC, for example, regulators have been allowing energy distributors to add up to 5% RNG to their natural gas since 2017. “If we get a significant share of RNG in the gas supply as soon as possible, the useful life of the gas infrastructure can be extended without affecting our climate commitments,” says Purcell.

Some environmentalists disagree: “There may be a niche role for really low-carbon biogas for things that cannot easily be electrified,” says Keith Stewart, energy analyst for Greenpeace Canada, “but when it comes to space heating, biogas is an effort from an established one Operators to maintain the infrastructure lock-in by blocking the alternative[s] that can achieve zero greenhouse gases. “

Bataille and Carlson believe that the real solution is structural. Advances in fuel conversion would result from combining electricity and natural gas policy and regulation into a single integrated system that focuses on managing thermal energy to minimize emissions. “We have to stop regulating gas and electricity separately,” says Bataille.

Case in point: gas supply companies are not obliged to offer customers financial incentives to replace disused gas stoves with electric heat pumps. In Quebec, however, Hydro-Québec and Énergir, a gas utility, announced a partnership earlier this summer to incentivize the transition to hybrid systems for customers who rely solely on natural gas for heating. These use heat pumps that switch to gas in very cold conditions. (The efficiency of cold heat pumps drops at very low temperatures, especially below -20 ° C.) The program aims to reduce CO2 emissions from buildings by 540,000 tons by 2030. “Quebec is one of the first places to do this,” says Bataille.

Industry is pushing against bans on gas connections

There are other important policy levers. Municipalities could, for example, require new buildings to install fully electric heating systems instead of gas network connections. Since Berkeley in 2019, municipalities in California, Colorado and Washington State, as well as parts of the UK, have banned gas connections for new buildings.

Given that much of the built form that will exist in 2050 has not yet been built, such regulations make a highly effective policy to reduce emissions. But they have also attracted opposition from the gas lobby. Industry-backed pro-gas front organizations, as well as unions representing pipe makers and other craft trades, have created war chests to combat these mandates, according to a recent report in the Washington Post.

In Canada, the Canadian Gas Association is also launching its own scaremongering campaign: “Policy-driven electrification,” warned a brief report, “could increase total energy costs between $ 580 billion and $ 1.4 trillion in 2020 and 2050 over the 30 years. “

University of Toronto political scientist Matthew Hoffmann at Scarborough, co-director of the Munk School’s Environmental Governance Lab, says such reforms point to the importance of building social and economic interest groups around the fuel switch. Measures such as mandatory disconnections, he says, “have the potential to dull the political opposition”.

However, Carlson at Pollution Probe notes that the real flaw is not the lack of adequate regulation, but the lack of a thermal energy strategy that sets the high-level policy framework. Neither Ottawa nor the provinces have developed long-term plans that couple the expansion of renewable energies with incentives for fuel switches and gas shutdowns. It is no coincidence that CO2 reduction in the Canadian building sector has stalled for years. As Carlson notes, even the most recent changes – such as new energy-efficient building codes – will bring only modest improvements by 2030.

Of course, time has become the enemy, especially in complex, networked systems such as building energy, which depend on massive infrastructure networks and therefore don’t turn a penny. For this reason, proponents say that policymakers must immediately start developing and implementing measures that provide a clear path to electrical heating, but that do not ruin the natural gas sector, whose distribution networks are still needed to generate heat energy that is difficult to access to supply – electrification of sectors such as heavy industry.

Hoffmann adds that governments should use all of these approaches rather than attempting pilot projects or incremental reforms. “We are at a crisis level where there is no time to make that kind of decision,” he says. “We are now in an as well as world.”

Toronto-based journalist John Lorinc writes about cities, sustainability and the economy.

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