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Sep 20, 2023

Toronto 2030 District: What will it take to decarbonize building operations?

AED professionals are becoming increasingly adept at improving the energy

AED professionals are becoming increasingly adept at improving the energy performance of individual buildings. But meeting global carbon reduction targets will require much more than creating new buildings to higher standards, and retrofitting existing ones piecemeal. In provinces like Ontario, it will mean a wholesale switch away from carbon-intensive natural gas heating systems. While governments must decide what fuel will replace gas, architects need to understand what is coming—as it will influence the way they design in the future, and the advice that they give their clients today.

To better understand what will be needed to achieve a low-carbon future, I’ve been working with the Toronto 2030 District: a private-public initiative with 63 members, including building owners, operators, and investors; service providers like architects, engineers, and suppliers; and community groups like the OAA. The Toronto 2030 District is part of a North American network of 23 similar districts, linked to the non-profit organization Architecture 2030.

Using a downtown Toronto as a testbed, we have taken on the challenge of exploring the "wicked" problem of reducing the operating emissions of buildings, which accounts for some 30% of global GHG emissions. The District's physical area contains most of the building types found in Ontario: low-rise residential, high-rise residential, low-rise commercial and office towers, as well as Ontario's Legislature, two stadia, a hockey arena, two universities, many hospitals, two city halls, hotels and restaurants. We are primarily addressing is what to do about existing buildings, but we also expect the findings to influence regulation and leadership when it comes to new buildings. The Toronto 2030 District's members are not new to greening buildings and have insight into what could work, and what will not.

Finding the right solution

It was once believed building owners could make individual decisions that, when added together, would save the planet: but it's become clear that this idea is not working. Progress has stalled at about 30% operational energy savings. The savings achieved so far have relatively good paybacks, like the widespread implementation of lighting retrofits. However, achieving the next 30% savings will be a lot more costly—involving moves like envelope or mechanical retrofits—and businesses going it alone will be at a competitive disadvantage.

Programs like the LEED rating system have done sometimes performed better, but LEED has penetrated only about 1% of the new construction market, and affected much less of our existing building stock. Even this program has struggled to achieve deep carbon reductions because of its measuring system, based on reference buildings and proposed alternatives, rather than real-world results.

Overall, what we have been doing thus far are essentially random acts of energy efficiency. We have no idea if our efforts are addressing the climate imperative. We are like mountain climbers in a fog at the bottom of a mountain: we know we are going up, but we do not know if our path leads to the summit, or to the top of a foothill (Figure 2). If we are taking actions to reach a target for 2030, then we should be sure the efforts are in line with what is needed to reach the 2050 targets, and will not need to be undone. Nonetheless, what has been done to-date is not wasted. Our experience with LEED projects can be used to imagine what is required to take super-efficiency to scale.

It is becoming clear that what we urgently need is a political solution, rather than a consumer one. There is precedent for the work that needs to happen. In the 1950s and 60s, many governments (including Ontario's) supported the conversion of "city gas" systems to natural gas, and continue to regulate the development and expansion of our natural gas system.

Just as happened then, the new solution will be first and foremost about fuel switching, and next about energy efficiency. In meeting our carbon reduction targets, there is no scenario where natural gas—whose primary component, methane, is a potent greenhouse gas, and which creates carbon dioxide when burnt—can continue to be used to heat buildings. There is no way to capture the resulting CO2 at the building level, and without doing so, we cannot meet the global targets of reducing our carbon emissions to 50 percent below 1990 levels by 2030, and reaching carbon-neutrality by 2050. We need to change fuels.

A new vision

The Toronto 2030 District has already completed a utility data project that accounts for the annual energy use of all 7,216 buildings within its borders (www.toronto2030platform.ca). We are now researching the pathways to creating a decarbonized energy supply that meets the needs of buildings in the District. For this exercise, we chose a process developed by the Transition Accelerator, a Canadian non-profit whose work includes projects in Ontario, Quebec and Alberta (Figure 3). The process is a good fit because, like the District, it is driven by stakeholder engagement and defined goals.

To date, Toronto 2030 District has completed stages 1 and 2 of our Pathways Project—understanding existing systems, and co-developing an alternative vision. The project has arrived at the following guiding vision: "By 2050, Toronto will have net Zero GHG emissions and be a healthy place for all to thrive. Vibrant cultural, entertainment, business, and residential communities will be underpinned by a sophisticated clean infrastructure for essential resources and services. The energy network will be clean, resilient, and create minimal waste."

Notably, this vision is not solely about airtightness, insulation, and efficient fans. We need to recognize the social and economic context for energy efficiency. We need to look for co-benefits—like increased value and comfort—which could pay for improvements. The District encompasses assets that are rich sources of data and ideas that can also be leveraged, like universities, research institutes, building organizations, and government agencies.

Fuel-switching study

Stage 2 of the Pathway Project, our first in-depth analysis, concerns fuel switching scenarios. To switch fuels, we will need to change the heating equipment at each building, as well as providing an energy system that can meet the shifted demand.

The fuels and technologies that are contenders for replacing natural gas are electricity, hydrogen, and renewable natural gas. For electricity, the District looked at different heating technologies: electric resistance heaters, air source heat pumps (ASHPs), and ground source heat pumps. For the gaseous fuels, we also examined different production methodologies: blue hydrogen (created by splitting natural gas into hydrogen and captured carbon dioxide), green hydrogen (produced from water, using renewable electricity), and a hybrid of electricity and renewable natural gas (the latter captured from decomposing organic waste at farms and landfills).

Estimating the cost of the on-site building changes was very challenging. The over 7,000 buildings in the district come in a in a broad variety of shapes and sizes. Further, we wanted to work with real costs for switching out boiler, chiller and rooftop units.

To stand in for the building stock, we developed a set of 13 representative building occupancy typologies, each with typical floor plates and mechanical systems, to approximate the averages for the District's building stock. We used public Energy Use Intensity (EUI) data for each occupancy type, and cross-checked this against actual consumption measures from our earlier data platform project. The result is a realistic, if approximate, model of how the District's buildings are consuming energy, and the mechanical systems needed to support this.

In the analysis, we then replaced each typical mechanical system with appropriate equipment for the new fuels. We obtained current prices from an equipment supplier, and included soft costs and the cost of borrowing in our replacement estimates. Then, we translated this into square foot costs for each building type, which building owners could use to estimate their own costs and the impact on their businesses.

To estimate future utility bills, we calculated the amount of heat currently made by burning natural gas in each building type, and calculated how much electricity, hydrogen, or electricity and renewable natural gas (in a hybrid system) would be needed to generate the same amount of heat. We worked with a variety of reports and estimates to develop fuel costs that reflect the costs to generate the fuel and to build the needed energy plants, including carbon capture and storage in the cases where natural gas is the base fuel.

Adding together the capital costs and the fuel costs results in a total per-square-foot cost. This showed that blue hydrogen is the cheapest replacement for the combustion of natural gas. This is followed by a hybrid of air source heat pumps and renewable natural gas, then ground source heat pumps, then electric resistance heaters, then air source heat pumps on their own, and finally, green hydrogen. Figure 4 shows the average cost per square foot across the eight most common building typologies.

Looking at this figure suggests that the decision is clear. But not so fast: cost is only one consideration. We also need to consider the potential for cost changes, as well as the likelihood we can make the system conversion before 2050.

Making the Right Choice

The least expensive fuel in the chart, blue hydrogen, currently has no system for delivery to a building. For the District analysis, we based our equipment costs on a British study that pegs the costs at similar prices to gas equipment, but the reality is that hydrogen-based equipment cannot be purchased today. There are no hydrogen codes or standards, no hydrogen safety detectors available to install in furnace rooms, and no-one making or selling hydrogen boilers. We assume that some natural gas lines could be repurposed, but some would have to be replaced, and the switchover must be done neighbourhood-by-neighbourhood, so new gas equipment will be replaced alongside end-of life equipment.

We can easily make blue hydrogen in Canada, since it is made from natural gas, paired with carbon capture and storage. It offers a 90% reduction in emissions compared to natural gas. For a zero-carbon solution, we would need to switch to green hydrogen—the most expensive fuel in our analysis.

If we converted to electricity using heat pumps, we have an existing grid with enough excess capacity to start conversion today. The impact of conversion on the grid and on electricity rates is moderate, because revenue to the system will expand as demand grows. And while the system currently burns gas in Ontario, there is viable technology to make it 100% carbon-free.

All the heat pumps we costed can be purchased today; there is a clear supply chain. Electrical safety standards, codes, and equipment are in place and fully developed. Plus, heat pumps are coming down in price as the market grows. Some estimate that in the next eight years, prices will drop 30% if there is a market for the equipment.

Renewable natural gas is limited by the availability of biomass. Current estimates are that the maximum we could produce would be 20% of the amount of natural gas we use today. This is enough for a switch to a hybrid system. Our current gas distribution system can deliver renewable natural gas right away: all the safety codes and equipment are in place, and the supply chain is strong. Unfortunately, biomass will be in high demand for aviation fuel and industrial uses, which could push up prices.

Figure 5 summarizes these factors.

For all fuel types, the effort required to convert our systems is enormous—in the order of our efforts to mobilize for WWII. Enbridge Gas has 3.8 million customers to be converted in Ontario alone. This is 131,000 customers each year if we started this year… which we can't, because we are missing a plan and the political will to develop one.

Our conclusion? In the coming years, natural gas will cease to be used in buildings. When it comes to alternatives, there is no clear winner. Still, we have a clearer idea of the magnitude of the costs, which could be reduced with building energy efficiency measures. The next stage of the District's analysis is an efficiency study, followed by an integrated plan, to be completed by the end of this year.

Conclusion

"The scale of the challenge is huge, but that does not make achieving the goal impossible," writes U.S. political scientist Roger Pielke Jr. "What makes achieving the goal impossible is a failure to accurately understand the scale of the challenge and the absence of policy proposals that match that scale."

Architects and engineers do not make the final decisions about how to spend a building owner's money—let alone driving larger policy changes—but it is our job to offer informed choices and insights to our clients. At minimum, we should stop calculating the net present value of energy savings measures based on today's cost of natural gas. Instead, we should offer a sensitivity analysis including the potential years of available natural gas. We should offer envelope retrofits as a more expensive, but less risky option as they will serve all the future pathways.

Whatever energy systems Canada ends up choosing, the only thing we know for sure is that to address the global climate challenge, the era of burning cheap natural gas in buildings must end.

Sheena Sharp is founder and principal of Coolearth Architecture. She is a former president of the Ontario Association of Architects (OAA), and a past chair of the OAA's Sustainable Built Environments Committee (SBEC).

The Toronto 2030 District research team for the fuel-switching study includes Co-Chair Julia McNally, Independent Electricity System Operator (IESO); Co-Chair Sheena Sharp, Coolearth Architecture; Bruno Arcand, Carleton Universit;, Peter Halsall, Purpose Building; Anton Kogan, SvN Architects & Planners; James Meadowcroft, Carleton University; Birgit Siber, retired principal, DSAI; Cara Sloat, Hammerschlag & Joffe; Geneva Starr, Purpose Building; Victor Tulceanu, BDP Quadrangle; and Svetan Veliov, Arup.