Enwave Energy Corporation – Deep lake water cooling system

Location: Toronto, Canada

Population: 2,731,571 [Provincial capital city area]

Climate: Humid Continental

Duration: 2004 – 2004

Sector: District Energy

Funding sources: Public – Private Sector

City networks: C40

Savings: Energy reduction by up to 90%.

Solutions: The largest district cooling from renewables in North America.

Multiple benefits: Greenhouse gases emissions (GHG) reduction, the supply of a sustainable solution as well as the decrease of electrical demand and consumption.

Enwave Energy Corporation, a private corporation owned by Brookfield Asset Management (since 2012) and formerly jointly owned by the City of Toronto government and the Ontario Municipal Employees Retirement System (OMERS) [source], was formed after the restructuring of the Toronto District Heating Corporation (TDHC) in 1999.

In July of 1999, TDHC was restructured as a share capital corporation, having two shareholders, 57% of the TDHC was bought by OMERS and the City retained 43% [source]. In March 2000, TDHC changed its name to Enwave District Energy Limited [source].

The “hybrid public-private” business model served as the catalyst for implementing the city’s Deep Lake Water Cooling (DLWC) system, planned since the early 1980s but challenged by a lack of major private investment.

Objective – To create an efficient and sustainable deep-water cooling system.

Solutions – Enwave’s DLWC, integrated with the city’s drinking water system, became operational in July 2004 and it is the largest district cooling system from a renewable resource in North America.

More precisely, Enwave’s DLWC consists of a steam system and a Deep Lake Water Cooling System that uses water from Lake Ontario to provide cooling to over 80 buildings including critical care facilities, government buildings, data centers, universities, and commercial and residential towers, within the Toronto’s downtown core [source]. Three high-density polyethylene (HDPE) pipes are positioned along the natural slope of the bottom of Lake Ontario to pump water from a depth of 83 meters to the Toronto Island Filtration Plant. There, the cold water is processed, then directed to Enwave’s Energy Transfer Station at the City’s John Street Pumping Station. At this stage, the cold lake water passes through heat exchangers to chill the closed-loop water supply used by Enwave. Once the energy transfer process is complete, the lake water is then carried into the City of Toronto’s potable water system [source].

Funding – The original $200M+ construction costs were funded by the TDHC (with funding from OMERS and the City), and there may have been some federal funding provided to support a portion of the construction costs.

Innovation – 1) The system supplies an extensive list of downtown Toronto businesses and buildings with an alternative to conventional air cooling—one that is sustainable, cost-effective and efficient; 2) The DLWC system is a revolutionary cooling solution and by far the largest DLWC system in the world. At its capacity, the DLWC will provide enough cooling for 100 commercial towers in downtown Toronto, saving the city money and providing an effective, efficient and sustainable solution to air cooling [source].

Success factors – 1) The success of the private-public partnership was driven by an early recognition of the opportunity for partnership through the connection of the drinking water and water for cooling supply. The involvement of the City of Toronto as investor and promoter helped create confidence in the project; 2) The adaptation of local regulations (i.e. exemption from water extraction fees) also helped ensure the project’s viability while securing long-term benefits for the City of Toronto as well as revenues from the project’s later privatization.

Significant outcomes:

• A 74% reduction in GHG emissions from the conventional configuration;
• A decrease in plant electrical requirements of approximately 81% [source];
• It is estimated that the DLWC system can reduce energy consumption by up to 90% in contrast to conventional air conditioning [source];
• The system also increases employment opportunities, improve outdoor air quality and increase the supply of potable water with a clean water source.

Synergies with local policies:

• Toronto’s Sustainable Energy Strategy targets a clean, reliable and affordable energy supply that meets Toronto´s environmental, economic, social and consumer needs in 2050 and beyond. Besides, it also sets an 80 % reduction in GHG emissions by 2050 (from 1990 levels), while maintaining energy reliability and affordability;
• ToCore Downtown Energy Strategy identifies immediate and long-term actions to improve Downtown’s energy performance and it sets out a series of actions that will achieve reductions in overall GHG emissions, addresses constraints within the electricity distribution grid, and it also seizes opportunities that come with growth and intensification to leverage investments in district energy and other low-carbon energy solutions;
• TransformTO is Toronto’s ambitious climate action strategy, it lays out a set of long-term, low-carbon goals and strategies to reduce local GHG emissions. By 2030, a reduction target of GHG is set at 65% (based on 1990 levels) and net-zero by 2050, or sooner.

Political alignment:

• Pan-Canadian Framework on Clean Growth and Climate Change includes a pan-Canadian approach to pricing carbon pollution and measures to achieve Canada’s 2030 target of a 30% reduction below 2005 levels of GHGs emissions;
• Canadian Energy Strategy (2015-2017) enables a cooperative approach to sustainable energy development that enhances the ways that energy is produced, moved and used in Canada;
• The Clean Fuel Standard plans to achieve up to 30 million tonnes of annual reductions in GHG emissions by 2030, making a significant contribution toward exceeding Canada’s target of reducing national emissions by 30% below 2005 levels by 2030.

Marketability:  Based on the city characteristics, including regulatory powers, financing capacity, risk tolerance and the degree of access to low-cost finance, the city can choose the right ownership structure and business model. The wholly public model is particularly suitable for cities with strong financing capability, whereas the hybrid public-private and wholly private models enable cities to leverage private investments with lower risk to the municipal government, while keeping a certain degree of involvement in or oversight of the project.