Southeast False Creek Neighbourhood

Location: Vancouver, Canada

Population: 631,486 [city area].

Climate: Oceanic

Duration: 2010-onwards

Sector: District Energy

Funding sources: Public Sector

City networks: C40

Savings: 3,500 tonnes of C02 saved.

Solutions: A district heating network largely based on renewable sources.

Multiple benefits: Reduction of greenhouse gas (GHG) pollution and increase transparency of connection costs and energy tariffs.

In 2010, Vancouver created the Southeast False Creek (SEFC) Neighbourhood Energy Utility, which represents a “wholly public” business model.

 Objective – To turn SEFC into a leading model of sustainable development.

 Solutions – The False Creek Neighbourhood Energy Utility uses waste thermal energy captured from sewage to provide space heating and hot water to buildings in Southeast False Creek, parts of Mount Pleasant, False Creek Flats, and Northeast False Creek.

This recycled energy eliminates more than 60% of the GHG pollution associated with heating buildings.

Funding – The total cost of the project (CAD$32 million, i.e. US$31 million) was fully covered through utility customer rates and the utility was entirely financed by city-raised debt; however, the debt was structured as if the project was financed by 60% debt and 40% equity to demonstrate commercial viability to the private sector and give the city the option to divest in the future without impacts on customer tariffs

Innovation – The SEFC’s district heating network, conceived as a demonstration project, motivated the private development of an additional network, as well as plans for two legacy steam-heat systems’ conversion from natural gas to renewable sources. Today, most of the new district energy investment in Vancouver is coming from the private sector, typically via a franchise agreement with the city to secure low carbon outcomes.

Success factors – 1) The impending 2010 Winter Olympics also assured broader municipal backing for the project and its “wholly public” approach as the best way to guarantee successful delivery; 2) Vancouver was able to adopt the “wholly public” model thanks to its strong access to low-cost finance and its ability to secure grants, which enabled it to implement the project without initial private investment; 3) As the network is publicly owned, it allows for transparent connection costs and energy tariffs, enabling the city to provide information on tariff cost and savings comparisons to building owners (e.g. savings from not having on-site boilers). This helped to build confidence and encouraged new connections from residents and private developers.

Significant outcomes:

• 5,750,000 sq ft Floor area serviced by the False Creek Neighbourhood Energy Utility in 2019;
• 3,500 tonnes of C02 saved;
• 50,000 megawatt hours (MWh) of the total energy produced by the utility in 2019.
• 34 buildings Connected to the utility in 2019;
• 4,920 residential suites Connected to the Southeast False Creek Neighbourhood Energy Utility in 2019.

Synergies with local policies:

• Renewable City Action Plan adopted in 2015, aims to ensure that Vancouver derives all of its energy from renewable sources before 2050;
• Climate Change Adaptation Strategy was adopted in 2012 to promote a vibrant, liveable, and resilient city in the face of climate change;
• Greenest City Action Plan is a strategy for staying on the leading edge of urban sustainability. Its target is to reduce community-based GHG emissions by 33% from 2007 levels, 1,865,000 tCO2e, by 2020;
• Neighbourhood Energy Strategy aims to achieve a district energy target reduction of 120,000 tonnes of CO2 emissions per year by 2020 as outlined in its Greenest City Action Plan [source].

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;
• Canadian Energy Regulator Act purpose is to regulate certain energy matters within Parliament’s jurisdiction;
• 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:  While similar neighbourhood energy systems are commonplace in Northern European countries, at the time of development only three other systems in the world recovered waste heat from untreated sewage: two in Oslo, Norway and one in Tokyo, Japan. Since this time, several other locations have implemented this heat source.