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Deep Retrofit Program Could Fix Every Canadian Building by 2035, Supply Enough Electricity for 10 Million EV’s

Taking on an audacious “national retrofit mission” would enable Canada to upgrade every building in the country by 2035, eliminate their fossil fuel consumption by 2050, make energy poverty a thing of the past, and free up 50 terawatt-hours of electricity for other uses—enough to eliminate 60 million tonnes of carbon pollution per year if it were used to power 10 million electric vehicles, according to new analysis released this week by Efficiency Canada.

But it’ll only get done with a mass, deep energy retrofit program that goes far beyond incremental efficiency improvements from standard energy efficiency programs—including the C$5,000 energy retrofit grants announced by the Trudeau government last month, write Efficiency Canada Policy Director Brendan Haley and Corporate Knights Research Director Ralph Torrie.

“The climate emergency requires the deployment of zero-carbon solutions at an unprecedented scale, speed, and level of performance,” Haley and Torrie say in the introduction to the report. But the need to hit those markers in the buildings sector extends far beyond the sector itself.

“The urgency lies in the need to eliminate fossil fuel use in buildings themselves, while also achieving energy savings to free up Canada’s existing renewable energy resources to decarbonize other sectors, such as transportation, industry, and heating in new buildings.”

The dramatic electricity savings projected in the report vary by province, depending on the electricity sources currently in use and the prevalence of highly inefficient electric resistance heating, which would be replaced by heat pumps. The savings are “concentrated in Quebec, but aggregate building electricity consumption declines in every province except Alberta and Saskatchewan, and the moderation of electricity growth made possible by deep retrofits increases the feasibility of achieving and maintaining a carbon-free electricity grid.”

Efficiency Canada is urging supporters to “tweet a mighty tweet” to Natural Resources Minister Seamus O’Regan Jr., Environment Minister Jonathan Wilkinson, and Infrastructure Minister Catherine McKenna, encouraging them to read the report and launch a #RetrofitMission for Canada.

The report calls for a bold, audacious, multi-disciplinary, but realistic mission to reduce the cost of building retrofits by at least half, complete extensive energy efficiency improvements with heat pump installations in two to five days, and meet a high standard for building durability, ability to maintain heat in emergency situations, and indoor environmental quality.

Haley and Torrie lay out two scenarios for bringing deep retrofits to the country’s estimated nine million homes and 480,000 commercial buildings. On an “emergency response timetable for addressing climate change,” the work ramps up quickly through the 2020s and is done by 2035. A more modest, 2050 scenario works at “a slower, almost linear implementation rate,” but “both schedules reflect unprecedented rates of building retrofit activity”.

Either way, it’s a stark contrast with current practices that would take about 142 years to get through the entire residential building stock, and about half as long for commercial buildings.

The quicker option is actually the less expensive one—with a total price tag of $580 billion through 2035, rather than $972 billion through 2050, but a higher cost per year. “These are significant capital expenditures, but they are of the same order of magnitude as the $80 billion Canadians spend annually on building renovation or the $57 billion spent on fuel and electricity,” the report notes.

Those costs would be shared by government funders and private investors. But the big difference is in the way the money is spent and the pace of learning and innovation that Haley and Torrie look forward to, based on a technology transformation that has become a day-to-day success story in the climate and energy community.

“Clean technologies like wind, solar, and batteries have witnessed dramatic cost reductions because of policies and business models that promoted and exploited technological innovation and economies of scale,” they write. And in energy efficiency, “there are significant opportunities to trigger learning by doing, producing, interacting, and using to see similar dynamics in high-performance building retrofits.”

Already, “there are a variety of innovation pathways that could increase the performance of building retrofits. These include the use of integrated design and project delivery, prefabrication of building facades and HVAC systems, mass customization tools that manage distinct building characteristics with greater ease, aggregation of retrofit projects into single portfolios, the increased use of digital technologies, and better ways to meet building user needs,” Haley and Torrie say.

But “exploring these innovation pathways and new models demands a new policy approach. Our current policy frameworks emphasize static cost-benefit analyses to select retrofit solutions, and then provide rebates and financing within the confines of existing market structures. This has locked building retrofits into a level of performance that either achieves shallow energy savings or makes deep energy saving achievements high-cost, niche projects.”

The report sets out a distinctly different vision.

“By 2035, we will have retrofitted all of Canada’s existing building stock to eliminate the direct use of fossil fuels and made our buildings zero-carbon ready, via a high level of energy efficiency and use of a decarbonized energy supply,” Haley and Torrie write. “Building retrofits will also contribute to the decarbonization of transportation and industry by redirecting existing clean energy resources away from energy waste.”

And meanwhile, “our buildings will be better prepared for extreme weather events brought on by climate change and become more comfortable, healthy, and productive places to be. In the process, Canada will have eliminated energy poverty and created high-quality housing conditions for Indigenous peoples.”

Haley and Torrie base their analysis on Energiesprong (energy leap), a mass retrofit model developed in the Netherlands in which:

• Project management for multiple buildings is assigned to a single market development team rather than loaded onto individual owners;

• Energy savings and home comfort improvements are guaranteed rather than estimated;

• Users are treated like a community rather than individual buyers;

• New supply chains and markets are “shaped via high-volume orders for integrated measures, with manufacturing offsite”;

• Project costs are repaid out of the energy savings they produce.

In the Netherlands, Energiesprong started out in social housing, where building designs are largely standardized, agencies own and operate relatively large numbers of units, and the need for energy and cost savings was obvious. Now, Haley and Torrie say, “the model is expanding into other building types, such as commercial offices, schools, and care homes.”

In Canada, they cite a half-dozen projects that are beginning to adapt the approach, including the Pembina Institute Reframed Lab, The Atmospheric Fund’s Retrofit Delivery Centre concept, Sustainable Buildings Canada’s net-zero energy program platform, Nova Scotia’s ReCover Initiative and Whole Housing Energy Retrofit Envelope project, Edmonton’s Sundance Housing Rehabilitation Project, and Ottawa Community Housing’s PEER project.

The report earned some timely and high-profile coverage from Globe and Mail climate columnist Adam Radwanski, with a summary that landed on the front page of the Globe’s Report on Business. While the analysis “might get the most attention for [its] eye-popping dollar figures,” he writes, “the report’s more compelling takeaway is its argument that rather than just subsidizing already available renovation options, the government should attempt to reshape the market itself.”

That level of ambition “could quickly scare off a government that has to date preferred easily implementable and politically popular incentives, such as new grants of up to $5,000 toward energy efficiency investments such as heat pumps and window replacements,” Radwanski adds.

“But policy-makers should heed the report’s underlying premise that continuing in the current manner will bring only modest emissions reductions at inefficient costs. And they should be enticed by its suggestion of potential economic opportunity through developing energy efficiency solutions that could be shared with other countries (especially those that also need to heat buildings through cold winters) in a decarbonizing world.”

[Disclosure: The Energy Mix publisher Mitchell Beer was a peer reviewer for the report.]