Canada’s Climate Retrofit Mission!
Below is an extract from an article explaining the policy of Building Retrofits and the Net-Zero challenges facing us all over the coming years. At Arguson MultiCon we are exploring and implementing innovative net zero strategies and retrofits that are helping our clients to achieve their targets. We all have a responsibility to ensure a future for the generations to come.
Brendan Haley and Ralph Torrie. “Canada’s Climate Retrofit Mission – Why the climate emergency demands and innovation-oriented policy for building retrofits” 2021
The climate emergency requires the deployment of zero-carbon solutions at an unprecedented scale, speed, and level of performance. This is particularly urgent in the existing buildings where we live, work, play, and convene. 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.
We will not achieve the required greenhouse gas (GHG) and energy efficiency performance from our existing building stock by working within current market structures and policy approaches. Rather than making each retrofit a single project and the responsibility of individual building owners, policymakers must understand the energy efficiency and GHG savings potential from treating buildings as public infrastructure. This perspective invites us to value the national level systemic and societal benefits of retrofitting buildings on a scale and at a pace that is responsive to the climate emergency.
Deploying retrofits at infrastructure scale requires a mission-oriented policy approach, which establishes ambitious goals and invites a bottom-up search for replicable emission reducing retrofit solutions. These solutions will require reshaping the structure of existing retrofit markets to create economies of scale and learning. They will involve the use of new technologies such as prefabricated building façades and all-in-one HVAC systems.
However, new business models and organizational systems are likely to be most important. The new technological and organizational combinations in these retrofit solutions need to achieve larger GHG and energy savings, faster, at lower cost, while increasing the services buildings provide to occupants.
In this report, we define the contours of a climate retrofit mission for Canada. We quantify the retrofit potential and demonstrate the scale required to confront the climate emergency. We consider why the current market and policy structures for building retrofits must be transformed and review promising models and innovation pathways. We then apply a “mission oriented” policy framework to the building retrofit challenge. We define the mission and then propose a way to organize the public sector to achieve it.
Buildings retrofits and the net-zero challenge
There is no pathway for Canada to achieve its greenhouse gas emission targets that does not include deep and widespread energy efficiency improvements to the residential and commercial building stock, combined with phasing out its fossil fuel use.
In this report, we look at the potential for improving the efficiency and electrifying the entire stock of some 10 million buildings in Canada – the “total reserves” of retrofit potential. Using standard databases that characterize the building stock by province, by type, and by energy end use intensities, we develop two scenarios that follow s-curve distributions in the rate of building retrofits accomplished per year, starting with slower growth to allow time for learning and experimentation, followed by a rapid acceleration or take-off. One scenario reflects an emergency response that retrofits the entire building stock by 2035. A second scenario reflects a slower implementation rate with retrofits completed by 2050. Both scenarios include efficiency improvements in lighting and other electricity devices, thermal energy intensity reductions of 40-60% through building envelope upgrades, and conversion of space and water heating to electric heat pumps. Both scenarios assume retrofit costs decline as scale increases, as experienced in other sectors such as solar and wind energy. Further cost sensitives are included to emphasize that the ultimate costs are uncertain and will be determined by the success of a policy approach aiming to increase economies of scale and trigger learning.
In the scenarios, nominal program costs could range from $580 billion to $972 billion, breaking down to $39 to $62 billion annually over 15 years, or $20 to $32 billion annually over 30 years. 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.
Critically, the scenarios show that a comprehensive national building retrofit program enables electrification and decarbonization in other sectors. A retrofit strategy that includes the replacement of fossil fuel heating with electric heat pumps can actually result in net annual electricity savings of 50 TWh. Combining electrification with thermal envelope upgrades decreases heating demand. In addition, several provinces rely heavily on electric baseboards and resistance heating technologies, which can be converted to more efficient heat pumps.
Thus, the full decarbonization of the building stock could increase the supply of clean electricity in Canada rather than drain it. The clean electricity freed up by building retrofits could reduce 60 Mt CO2eq per year if used to power 10 million electric vehicles. The release of clean electricity potential also reinforces the strategic role of greater east-west electricity trade, as retrofits enable hydroelectricity rich provinces to make better use of their existing resources to decarbonize sectors outside their borders with high-value opportunities for electrification.
The potential for buildings to enable emission reductions in other sectors reinforces the rationale for undertaking comprehensive building retrofits at large scale and as rapidly as possible. Yet, this level of retrofit performance is far from what is being achieved under current market structures and policy environments. Our scenarios ramp up to retrofitting 12% of the building stock per year in our emergency response scenario, and 5% per year in the slower scenario. Current rates are below 1% for low-rise residential buildings and 1.4% of commercial building floor area, with retrofits achieving shallow rather than deep energy savings. To achieve better results, we need to transform the way we deliver building retrofits.
A mission to transform building retrofits
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. There are significant opportunities to trigger learning by doing, producing, interacting, and using to see similar dynamics in high-performance building retrofits.
The energiesprong model pioneered in the Netherlands is an approach with the potential to transform building retrofits. This model combines many buildings into large-scale retrofit projects, coordinates the supply chain, uses mass-produced and standardized wall assemblies and mechanical pods, and provides long-term financing and performance guarantees for building owners. The model contrasts with the dominant approach which treats each retrofit project as separate, leaving building owners responsible for managing and financing complex projects.
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 8 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.
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.
We suggest framing retrofit policy as a mission, following the approach popularized by innovation theorist Mariana Mazzucato. This framework calls for defining a mission that is societally relevant, bold and inspirational, with clear direction and ambitious goals. Achieving the mission requires reshaping markets, encouraged by inviting multiple bottom-up solutions and engaging diverse disciplines and sectors to promote learning and dynamic efficiencies.
An ambitious mission, consistent with the urgency of the climate emergency, would aim for a mass retrofit of the building sector by 2035. It would involve eliminating all direct fossil fuel use from the existing building stock, making buildings highly energy efficient so they are ready to convert to zero-carbon energy sources, and contributing to the decarbonization of other sectors by freeing up clean energy resources. Organizing such a mission will require public sector institutions capable of accepting risks, being flexible, and avoiding secrecy to enable ongoing interaction with market participants. The absence of an active strategy to reshape the ways existing retrofit markets work is a policy gap in Canada. We can fill this gap by creating “market development teams” throughout the country, inspired by the energiesprong model. These teams will produce replicable retrofit solutions involving innovations in areas such as contracting, procurement, and demand aggregation. A policy system should then be ready to rapidly 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. 9 accelerate the retrofit solutions that work, mobilizing public investments from entities like the Canada Infrastructure Bank, initiating reforms to policy and regulatory environments, and facilitating knowledge exchange through quantitative data and social networks. A new public sector organization acting as the “retrofit mission leader” will coordinate this retrofit innovation policy system.
Taking on an ambitious climate retrofit mission has significant potential to empower Canada’s larger net zero emission vision, and to create Canadian industrial advantages. Such a mission fits the Canadian need to develop systems for the use of technologies in harsh geographic environments, which previously motivated leadership in long-distance electricity transmission and the extraction of oil from sand. Achieving this mission will build Canadian expertise and enable higher-value deployment of our nation’s existing clean energy resources.
To confront the climate emergency, it is time to launch an innovation-oriented building retrofit mission.
Remainder of the article is at the following link:
Brendan Haley and Ralph Torrie. “Canada’s Climate Retrofit Mission – Why the climate emergency demands and innovation-oriented policy for building retrofits” 2021
https://www.efficiencycanada.org/wp-content/uploads/2021/06/Retrofit-Mission-FINAL-2021-06-16.pdf