It’s a Good Thing: District energy gains new converts in our warming world

A centuries-old solution for a greener urban grid, district energy has a B.C. champion in Creative Energy, an offshoot of real estate developer Westbank.

Credit: Creative Energy. Through one of North America’s largest district energy systems, Creative Energy serves about 220 customers in downtown Vancouver

A centuries-old solution for a greener urban grid, this power source has a B.C. champion in Creative Energy, an offshoot of real estate developer Westbank

Cities represent something of a climate paradox. On the one hand, they’re the answer to global warming: more efficient land use (think up, not out) means fewer people commuting, and more land for the farms and forests that sustain us.

On the other hand, cities are energy hogs. Urban centres consume about 75 percent of the world’s primary energy (energy harvested directly from natural resources) and emit between 50 and 60 percent of its greenhouse gases, according to the United Nations. Building operations alone represent 28 percent of global emissions.

As the march toward urbanization continues, we need to find more sustainable ways of powering our cities. And one of those ways is a rather old concept gaining new currency: district energy.

District energy—the centralized generation and distribution of thermal energy, via pipes—has been around for centuries, even millennia (if you count the hot water–heated baths and greenhouses of ancient Rome). But it really came into vogue in the booming cities of Europe and America in the 19th century: a way to more efficiently power a dense community of residences and businesses.

Efficient though it may have been, it wasn’t always green. For decades, coal, oil and natural gas have been fuelling the cogeneration plants that provide much of the district energy. That’s starting to change, especially as residential and commercial developers embrace ESG principles and move toward a net-zero future.

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Vancouver developer Westbank and its founder, Ian Gillespie, saw the potential of a greener form of district energy about a decade ago—not just for its downtown developments (Telus Garden, among them), but for the rest of Vancouver and for cities everywhere. In 2014, Gillespie paid $32 million to buy Vancouver’s Central Heat Distribution—one of the largest district energy systems in North America—and renamed it Creative Energy, committing to convert its natural gas boilers to a lower-carbon fuel.

The man who’s helping him make that happen is Krishnan Iyer, CEO of Creative Energy since 2018. “The typical Creative Energy client is a residential building or office or hospital,” says Iyer, noting that the company serves about 220 customers across more than 45 million square feet of connected real estate in downtown Vancouver. The common denominator is not just dense real estate but intense energy usage: “Health care is a very high-energy endeavour,” Iyer says, pointing to St. Paul’s Hospital as an example. “It has to be worthwhile to put the pipes in the ground to serve those buildings.”

When Central Heat was created in 1968, switching from coal to natural gas was the big upgrade in fuel generation; in 2022, it’s electricity and renewable sources of energy. Creative Energy currently has a proposal before the B.C. Utilities Commission to add two electric steam boilers to its cogeneration plant at 720 Beatty Street. “This will displace roughly 25,000 tons of greenhouse gas emissions every year from downtown Vancouver,” Iyer notes.

When Gillespie bought the company, Creative Energy’s natural gas-powered boilers were pumping out 70,000 tonnes of greenhouse gases annually—the single largest source of GHGs in Vancouver. In recent years, Creative Energy has expanded beyond downtown Vancouver to places such as Horseshoe Bay, Toronto’s Mirvish Village and Seattle, where it signed a deal with Swedish Health Services in December to modernize the health-care giant’s flagship First Hill Campus. Whether in Seattle, Toronto or Vancouver—be it retrofitting old infrastructure, or building sustainability from the ground up—the vision is to expand beyond the singular development and, piece by piece, decarbonize the grid, Iyer says.

“With so much focus on ESG these days, district energy provides—I don’t want to go as far as saying a silver bullet, but it certainly provides a significant solution for greenhouse gas emissions.”

Credit: City of Vancouver