On a former farm in the hamlet of Embro, just west of Woodstock, Ont., builders are putting the finishing touches on a row of six townhomes that come, perhaps a bit unexpectedly, with a full complement of climate features intended to radically cut their carbon consumption.
Constructed on spec by Langlois Ecohomes and not yet on sale, the dwellings have been built to Passive House standard, meaning they are fitted out with thick walls packed with insulation, few thermal breaks, triple-glazed windows and, notably, don’t use natural gas. Such buildings can reduce emissions by up to 90 per cent compared to conventional dwellings.
“For us, it’s been quite a few years in actualizing this project,” says president John Langlois, who runs the small family-owned firm with his daughter, Nicole, the general manager, and son, Marc, who oversees site management and excavation.
Aiming for Passive House-grade performance, they acknowledge, has been challenging: local contractors aren’t trained in Passive House construction techniques and the cost of materials exceeded their pro formas. “It hasn’t been as smooth as we would have liked,” John says. Still, as Nicole points out, it’s a seller’s market and they’re confident about the project, which has generated a steady stream of inquiries.
The Langloises, however, have a larger goal: the townhomes sit on the edge of a 70-acre farm that they own, and are in the process of converting into what they say will be a “net zero” community of detached houses. And they are looking to fit out another smaller development site with a geo-exchange system as an alternative to natural gas.
In the latest in a series of red alerts, the International Panel on Climate Change this week released a report predicting irreversible warming without drastic and almost immediate cuts to fossil fuel use. The report comes half a year after the International Energy Agency concluded that limiting temperature increases to 1.5 degrees by 2030 would require significant investments in energy efficiency, electrification and clean energy innovation.
Despite all the attention trained on global warming and Canada’s contribution to it, Nicole says that building low-emission housing remains a significant challenge, which, she adds, “is a strange oversight.” Natural gas hook-ups, mandated by many municipalities and regulated by the provincial government’s energy planners, guarantee decades of carbon emissions from new homes or condos being constructed today, even in places such as the city of Toronto or Oxford County, both of which have declared climate emergencies.
As she observes, “There’s very little emphasis on transitioning away from fossil fuels.”
The Ontario government’s push to sharply accelerate new home construction, in theory, marks a huge opportunity to wean the development industry off its preference for natural gas, especially as electric heat pumps gain wider consumer acceptance.
A growing number of builders, however, are looking at larger-scale geo-exchange systems as an alternative. Geo-exchange technology, also known as geo-thermal, gathers and concentrates energy from deep in the ground to provide heating and cooling.
According to data compiled by the City of Toronto, about 20 such projects, mostly in multi-unit residential or institutional buildings, have been approved since 2018. “Many more are coming this year that have yet come through site plan approval, which is when we would typically start tracking them,” says David MacMillan, a senior City of Toronto energy planner.
A recently approved example: a nine-storey, 71-unit rental building at Parliament near Shuter streets that features a geo-exchange system installed beneath the parking garage. The builder is Core Developments and Subterra Renewables is constructing the geo-exchange infrastructure.
In several cases, he explains, developers are aiming to get ahead of planned energy consumption minimum standards that come into effect later in the decade as part of planned revisions to the Toronto Green Standard. “Geo-exchange systems are helping developers meet emissions levels that won’t be mandatory until 2025 or 2028.”
There’s evidence of this kind of thinking elsewhere in the GTA. Minto Group, for example, in the midst of developing a five-tower complex in Oakville, dubbed North Oak, that will be serviced by a geo-exchange system built, owned and operated by Creative Energy, a Vancouver district energy firm which is providing similar infrastructure for Mirvish Village.
Carl Pawlowski, Minto’s project manager for sustainability, says the geo-exchange system will allow North Oak to reduce its greenhouse gas emissions by 75 per cent. He says Town of Oakville planners have been very supportive, and adds that Minto intends to pursue this kind of low-carbon energy infrastructure in other projects. “The idea is to grow the internal capacity so we can better bring these solutions to market.”
The company is also implementing related low-carbon design features, including integrated photo-voltaic panels, all-electric appliances and balconies constructed with “thermal breaks” – a reference to a means of avoiding one of the most significant sources of energy inefficiency in high-rise buildings, which is heat loss enabled by concrete slab balconies.
Both Mr. Pawlowski and the Langloises say that home buyers are increasingly interested in such features, and the role they play not just environmentally, but as a hedge against the rising cost of gas due to carbon pricing. “People are more and more aware of what they’re spending on gas and electricity,” Mr. Pawlowski says.
The move to spin off the operation of the district heating/geo-exchange system to Creative Energy, he adds, is a way to ensure that the system is properly maintained, something that might not happen if left to the condo corporation and property manager.
As for Minto’s own balance sheet, Mr. Pawlowski points out that on a new project at the scale of North Oak, there’s no reason not to go with geo-exchange. Compared to installing a conventional HVAC system, he says, “it’s cost neutral.”
Despite the huge sums of capital flowing into property development, financing green building projects is still a bumpy proposition. Nicole Langlois says her firm had to scout around for financing, eventually landing with a credit union, Libro, that was willing to extend credit.
The Vancity Community Investment Bank also lends to such ventures, including a $6.4-million portfolio of loans for residential geothermal heating and cooling projects in Kelowna, B.C.
Other sources of green capital have sprung up lately. The federal government’s green bonds program underwrites retrofits and new construction of low-carbon buildings.
A number of REITs have also established low-carbon initiatives. For example, Choice Properties REIT last winter established a green financing framework, and issued $350-million in unsecured debentures in November, 2021. The proceeds have yet to be allocated, the company says. However, Choice is developing a geo-exchange at Mount Pleasant, a Brampton, Ont. project, that will cut carbon by 50 per cent, and a spokesperson says it would qualify.
Dream Industrial REIT established its own green financing frame a year ago. RioCan REIT has issued $850-million in green bonds for its own projects, including The Well, at Front Street and Spadina Avenue in Toronto. And AIMCo Realty, a subsidiary of Alberta’s investment fund, last fall also sold $500-million in unsecured notes, with the proceeds also going to green real estate ventures.
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