Canadian Consulting Engineer

By By Ken Church, P.Eng., Natural Resources Canada    

COMMUNITY POWER advent of district energy systems

Buildings Energy Efficiency/Conservation

In 1973, just 40 years ago, Denmark experienced what might be called a life-altering event. The oil crisis across Europe had the effect of changing the value system of the country. Suddenly Europeans recognized that without a constant supply of...

In 1973, just 40 years ago, Denmark experienced what might be called a life-altering event. The oil crisis across Europe had the effect of changing the value system of the country. Suddenly Europeans recognized that without a constant supply of fossil fuel, the lifestyle to which they were accustomed would cease to exist.

Denmark learned from this and began to change its policies and standards to reflect the increased importance of energy. Energy plans became obligatory, and building owners, developers and municipalities were responsible for the energy that their buildings consumed in terms of both quality and quantity. The notion of “less is more” became the mainstay of design.

Oil shortages, as we know, are not limited to Europe. Canada has experienced its own mini-crises, usually driven by price surges or natural disasters that reduce production. However, here in Canada the holistic approach to urban design when it comes to energy use is still struggling to be realized.

City planners and utilities have an ongoing struggle to find ways to provide their services at an economic price, and although the sprawling subdivision has been a standard practice for many years, their development eats deeply into the municipal coffers. Nowadays both the planner and the utility share the same ideals: they look to increasing the density of developments to offset the cost of infrastructure.


Both planners and utilities agree that the thermal grid is one way to maximize the benefit of intensification. By networking heating and cooling services between building clusters, the grid allows the entire community to make savings in their energy needs, infrastructure requirements and their lifecycle expenses. District energy quickly becomes the central pillar for energy reduction measures in commercial, institutional and apartment buildings. This triangle of opportunity — where the developer, the urban planner and the energy engineer are brought together at the concept planning stages of any development — is critical to energy saving opportunities that benefit all parties.

Benefits are for community at large

As a means of energy distribution, the design of a district energy system is straightforward. One or more plants provide hot water through a network of underground piping to a variety of buildings. Each building then extracts its required heat from the water and returns the cooler water to the plant. The parallel arrangement ensures that each building receives the same supply temperature.

A commonly asked question is: if this approach involves more piping and infrastructure than a stand-alone boiler, then where’s the advantage? To answer there needs to be a shift in focus from the single building to the community at large.

For the building owners, the system provides a service and not a fuel. There is no future capital for equipment and the maintenance is included within the cost of the purchased energy.

The network design involves an aggregation of many building energy profiles, but the diversity of uses lowers the overall demand and maximises the use of the high efficiency equipment. Anecdotally too, the elimination of temperature cycling leads to increased user comfort and lower demand for building energy.

Building owners benefit from the elimination of much of the traditional mechanical hardware, which gives them increased usable space. Architects and the design team gain flexibility in terms of having rooflines uncluttered by bulky chillers and other equipment, and having more vistas and public space.

Much new construction uses LEED accreditation as a target and a property connected to a district energy system that uses a low carbon or renewable fuel source would move the building even further towards a state of net-zero emissions. The Dockside Green development in Victoria, B.C., for example, has a biomass-fuelled district heating system within its LEED Platinum development.

No allegiance to one fuel

It is often said that district energy is new to Canada but in reality this is not the case. Steam-based heating systems have been operational for over 100 years, providing heating to institutions or other government complexes. The system at the University of Toronto, for example, started life in 1911 and the Central Heating System for the Dominion Government Buildings in Ottawa entered service in 1920. Both are still operational. Similar systems exist in London, Montreal, Vancouver and Charlottetown.

Over time, as natural gas became universally available, the economic advantages of using bulk fuel (coal or heavy oil) diminished and systems built after 1980 use water as the heat transfer medium. Around this time, district systems were also recognized more for their environmental benefits and their ability to contribute to local economic development. Currently more than 180 systems operate in Canada with thermal capacities ranging in size from a few hundred kilowatts to almost 200 megawatts.

District heating bears no allegiance to any one particular fuel or technology and in times of fuel price instability this can be a major advantage to building owners. The customer receives heat from hot water and knows not what the fuel or fuel mix might be. Systems may have a single fuel supply (e.g. the Hamilton Energy Centre or Enwave’s deep lake-water cooling project in Toronto), or they may draw their energy from a variety of technologies (e.g. Lonsdale Energy Centre, North Vancouver or Markham District Energy, Ontario). System operators often consider natural gas, used either directly as in North Vancouver, or indirectly through cogeneration units (Hamilton), as being an interim measure. They also look to other more renewable or local energy sources such as biomass (Revelstoke, B.C), ground source heat pumps (North Vancouver), solar panels (Okotoks, Alberta), or even use heat recovered from anaerobic digesters, or sewer lines (Vancouver’s Southeast False Creek Neighbourhood Utility) or ice chillers (Richmond, B.C.).

Building interface is key aspect of design

The piping design of a district energy system follows conventional engineering practices and generally delivers hot water at 90° C. Some systems referred to as “ambient district energy systems” deliver water at between 10° C and 30° C to the buildings, but they must be coupled to heat pumps to raise that working temperature before use. These systems offer many advantages but require having low electrical prices (as in B.C., Quebec and Manitoba) to be economic and environmentally effective.

Specific standards exist for the instrumentation and metering but not for the insulated piping. Like many fledgling industries, European standards will be used until the market is large enough to warrant a Canadian equivalent.

The piping and the building interface are key parts of the design. The interface, or the energy transfer station, is designed to extract the maximum heat from the minimum amount of district energy water. In this way the operating (pumping) costs are minimized and the system is cost effective.

Reconfiguration of the HVAC systems of buildings on the system is often required regardless of whether their system is hydronic or forced air. The building is considered an integral part of the energy network and not simply a silent customer: a cost-effective district energy system needs an efficient building and a cost-effective building needs an efficient district energy system. Their symbiotic relationship benefits both.

Depending upon the design of the energy transfer station, a building’s HVAC reconfiguration would generally involve increasing the size of coils and increasing the fan throughput. The temperature of the air being circulated will be reduced but the temperature controls throughout the building should not require replacement. Re-commissioning provides the fine tuning. Hydronic systems may require an increased pumping capacity and increased radiator surfaces. Ironically, electrically
heated buildings, whose costs would reduce most from district energy, are rarely connected to district systems since the entire building would require an HVAC refit.

Negotiation is 90% of the game

Currently very little policy or legislation exists to direct the development of these networks. Their holistic approach is beyond the immediate mandate of either gas or electrical utilities, whose programs are often limited by the various utility commissions.

Only in British Columbia with Bill 27 (“Green Communities”) is there a requirement for municipalities to prepare greenhouse gas reduction plans, and in many cases they have selected district energy as a key mechanism to achieve their targets. The bill initiated at least 15 proposed systems in the province, with a potential total value estimated at more than $200 million. Ontario is considering following suit with clauses in their Green Energy Act (Bill 150) which could see a further surge of interest in district energy.

Unlike electrical and natural gas utilities, most district energy system owners do not have to answer to their provincial governments regarding their pricing structure. Connection to the thermal grid is a business arrangement between supplier and building owner and can be a long term contract, thereby stabilizing to some degree the building owners’ operating costs for 10 or more years. The cost savings are passed back to the building owner in terms of reduced operating cost.

Because of the minimal legislation and lack of a single authority over district systems, their design and implementation requires tact and diplomacy. Indeed, the design of district energy networks is often described as 10% engineering and 90% negotiation. In each project, the proponents must discuss and negotiate with the many stakeholders. The majority of new systems are initiated by the municipalities that have the expertise for managing these multi-stakeholder, multi-sector infrastructure projects, but nowadays a new private sector is emerging in this field. These vertically integrated consortia include within their ranks the necessary engineering and marketing expertise. Both parties benefit: the consortium gains a revenue stream and the municipality gains increased community assets, grows employment and the local economy.

So, where is district energy heading? From all indications its growth is strong and getting stronger. District energy is fast becoming a household word in planning circles, not because of the technology, but rather as a tool that leads to more compact urban form and less infrastructure costs. Together, through district energy, planners and engineers can do a lot to shape the communities of tomorrow. cce

Kenneth Church, P.Eng. is the team leader for research into communities in the Housing, Buildings and Communities Group of Natural Resources Canada. Based in Ottawa, he manages research to develop tools, guidelines and best practices for community energy generation and consumption in relation to the urban form. E-mail


Stories continue below

Print this page

Related Stories