Think Energy

Summer Recharge: District Energy: Looking Back & Moving Forward

Jul 18, 2022

The summer heat is in full swing, so let’s revisit why systems like district energy could be a sustainable way to heat and cool communities—ultimately working towards a zero carbon footprint. Jeff Westeinde, President of Zibi Canada and Founding Partner of Windmill Development Group joined thinkenergy to talk about how Zibi, which aims to be Canada's most sustainable development project, embraces district energy and One Planet Living. Relive this episode as part of thinkenergy’s Summer Recharge! 

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Transcript

Dan Seguin  00:06

This is thinkenergy. The podcast that helps you better understand the fast changing world of energy through conversations with game changers, industry leaders, and influencers. So join me, Dan Seguin, and my co host Rebecca Schwartz, as we explore both traditional and unconventional facets of the energy industry. Hey everyone, welcome to the summer rewind edition of the thinkenergy podcast. While we recharge our batteries during these lazy hazy days of summer, we're bringing back some blasts from our podcast past. We'll be reintroducing some of our most popular interviews that garnered a lot of attention and interest. There's been a lot of talk about the future electrification of energy on the path to net zero. The episodes we've selected are very future focused with themes around Green Innovation, renewable energy, and our impact on the environment. So I hope you enjoy the summer rewind edition of today's episode. In the meantime, have a happy summer. And we'll be back on August 15. To kick off another exciting season. Cheers. I'm Dan Seguin from Hydro Ottawa, and I'll be hosting the thinkenergy podcast. So here's today's big question. Are you looking to better understand the fast changing world of energy? Join me every two weeks and get a unique perspective from industry leaders as we deep dive and discuss some of the coolest trends, emerging technologies and latest innovations that drive the energy sector. So stay tuned as we explore some traditional and some quirky facets of this industry. This is the thinkenergy podcast.  Hey, everyone, welcome back. This is the ThinkEnergy podcast. What happens when you use a network of hot and cold water pipes, bury them underground and then use them to efficiently heat and cool buildings - even whole communities, you get something called 'district energy'. And it's not a new concept. A quick search will reveal that its origins can be traced back to the second century BC to the invention of the hypocaust heating systems that powered the hot water bath of the ancient Roman Empire. Famously a hot water distribution system in Chaudes-Aigues, in France, is regarded as the first real district heating system. It used geothermal energy to provide heat for about 30 houses in the 14th century, and the US Naval Academy in Annapolis began steam district heating in 1853. If you're like me, maybe you're wondering why modern civilization did not continue to use this efficient and environmentally sustainable technology more. There are some European countries such as Denmark, where district energy is mandated, but for the most part, it is largely gone the way of ancient Rome and public bathing. The latter is not such a bad thing in my mind, with more and more socially conscious citizens around the globe, district energy is once again seeing a surge in popularity and becoming a preferred method, thanks to its lower and energy efficient operating costs, reduced supply disruptions, and environmentally sound methods of heating and cooling buildings, municipalities and property owners are intrigued by this ancient alternative energy technology. So, here's today's big question: Is the world ready to embrace district energy as a viable means to power our communities? Is the nation's capital ready to have the first one planet zero carbon community district energy system in the country? Well, my guest today is the founding partner of the Thea partnership. One of Canada's most sustainable real estate development companies, as well as the president of Zibi Canada, which aims to be Canada's most sustainable development project. He's also an active investor and entrepreneur in both environmental, clean tech and real estate sector with active investments in solar energy, site remediation, and the beneficial reuse of waste. Dear listeners, please welcome Jeff Westeinde. Jeff, can we start by you telling us a bit about your background, the Zibi project and what drives your passion to build sustainable communities?

Jeff Westeinde  05:24

Well, so I guess my background, I always say I'm an entrepreneur. I'm an engineer by training, but entrepreneur by practice. So I've, I've had one, what I call real job in my career, I worked for a company for a little over a year, it quickly became apparent that I was unemployable. So I had to start my own business. And I've always been in the environmental sector. So I started I started my career as an environmental contractor cleaning up industrial messes and some of the wastes of the past. And as part of that, I would watch our clients the way they were cleaning up properties, and then what they would do to redevelop them. And I was pursuing trying to, you know, clean up the environment, make the planet a better place. And yet, so the practices we were using, were actually making it worse. We're trucking contaminated soils. You know, the time I lived in BC, we're picking up soil, putting it in a dump truck and hauling it across the Rocky Mountains into a landfill in Alberta. And nobody can tell me that's good for the environment. So very good. quickly decided that we shouldn't say very quickly but decided while I continue to move up the food chain, and start to buy contaminated properties and start to develop places and communities. And because we were purchasing contaminated properties, the commitment that we had was, let's do better than we've done before. So let's push the envelope about how can we live in a sustainable way? How can we ensure that what we're building today doesn't cause the problems that we're cleaning up on the very site for developing so that's maybe a bit of a background as to you know, why how I got into this and in my passion around, you know, leaving, like, I don't know if you're ever in the wilderness, but there's a rule, leave the campsite better than you found it. And I think that rule, that should be a planet wide rule, and it's historically as you know, as not being so.

Dan Seguin  07:12

Okay, Jeff, you're on the record saying that the way we build communities does not support health, happiness or the environment. What do you mean by that? And how does Zibi differentiate?

Jeff Westeinde  07:28

So, I might even be so bold as to say that, I would argue that most of our planning, especially in North America, is actually shortening the lifespan of our own citizens. And that's because we're so car reliant. We're so socially isolated in the way that we build. So think about a typical suburb. In a typical suburb, if you want to get up and, you know, go get a coffee, buy some milk, bring your kids to school, the very first thing you do is go hop in your car and drive. And that that leads to, you know, the stats that can predict the rate of diabetes, the rate of obesity, the rate of all sorts of other chronic diseases by the postal code you live in, was shocking. So, this car centric suburban lifestyle is not good for you. So that's the health side of it. The happiness side of it, I'll just point to one stat. And that's that you can use, there are statistics that say you can determine the level of happiness of somebody by how many of their neighbors they know by first name. Well, when you live in the suburbs, you know, you might know 2, 3, 4 neighbors, or those people whose kids are your age, or those guys you play hockey with, but you don't have the unexpected collisions as you're walking to the coffee shop or as you're bringing your kids to school. So again, that urban sprawl arguably leads to a lot of source of social isolation. And if something happens to an older person, you fall, you break a leg, even as a young person and you're inside your house. Similarly, you're not looking out your window and seeing people and waving at them and those types of things. So how we build our communities, I think is really important for health, happiness and obviously for environmental sustainability. And what we're doing at Zibi is making sure that you will not be car centric, that you do have these collisions with your neighbors. As you're walking around the neighborhood. We actually have social programming that, you know, we have snowshoe nights and that when Cirque du Soleil comes, we have a night that is just for the residents of Zibi that come, you know those kinds of things to make sure you feel like a part of that community.

Dan Seguin  09:49

How did you discover the one planet system? What can you tell us about it and your goal to build the first one in Canada?

Jeff Westeinde  10:00

Well, so we'll talk about how we discovered it first, and that's good. Myself and my business partners were behind the very first LEED Platinum buildings in Canada. So we built the first LEED Platinum building in BC, Alberta, Ontario, and in the country as a whole and the LEED Platinum building we built in Alberta - I was visiting one day A couple years after we'd built it, and LEED Platinum is literally the Platinum standard, the most sustainable in the lead system. And I watched one of the residents of his LEED Platinum condominium building drive a Hummer SUV into the parking garage, and said, you know, it's great that our building is sustainable, but we really have an impact and how the users are using the building and how they're, how they're living their lives. So we started scouring the planet, literally to say, Well, is there a system that would really impact not only how we build our buildings and how they operate at a point in time, but how do we engage the people, the users that are using those places? So one planet, we get rated on things like health and happiness and social engagement, along with all the other architectural and engineering features of a community. And the way one planet works: very simple. The name says it all we have to live as if we only have one planet. Most people when I say that look at me and sort of go, but we only do have one planet. And we need to remind them that if you live like a typical Canadian, you're using four planets of resources to sustain your unsustainable lifestyle, and Americans using five planets, Europeans using three planets, and all we're doing is stealing from future generations, and the developing world to sustain our unsustainable lifestyles. So one planet really is all about both environmental sustainability, like technical sustainability and social sustainability, with one planet worth of resources, and it's a very holistic program. Very audacious goals, we're going to talk about zero carbon. So as you know, Zibi is in the nation’s capital in Ottawa and Gatineau. You know, we are we are today we're going to be at plus 34 degrees. Six months from now we'll be at minus 34 degrees Celsius and to be zero carbon in this environment. It's the Holy Grail. So achieving one planet is not an easy thing to do very audacious. But that's where we said, No, that's the bar we need to hit, we need to again, leave our campsite better than we came to it.

Dan Seguin  12:35

I was fascinated that this method, 'district energy' dates back, like I think is 3000 or 4000 years to the time of the Roman Empire. What are some of the key benefits of the energy system you're implementing in your community? And why has it taken this long for folks to embrace it with it's being around for so long?

Jeff Westeinde  13:01

Well, like most technological breakthroughs, it is not the technology itself or even the concept itself that gets in the way, its people. So regulators, you know, if you look at how our grid works, say in Ontario, you cannot run a district electrical system. I can't, I couldn't produce energy and give it to my neighbor. Because we have a regulatory body that says you can't do it. And there are good reasons for that it was around safety and security and all those types of things. But we've ended up with all of these barriers, that that would prohibit the transportation and sale of energy. And, you know, I talked about electricity. But what's very interesting at Zibi - our district energy system is just hot and cold water. And there are no regulations currently in Ontario and Quebec, around moving hot and cold water. So that allowed us to start a district energy system. Answer so yeah. Again, the reason I would say you don't see more of them is the regulatory hurdles to implement the district energy system are enormous. However, the benefits are huge. And I'll use a very, you know, high level example that if you were to have a, you know, a Shopify data center, a good Canadian company, unlike Amazon, as a for instance. That is in constant cooling. So it's rejecting heating all the time. Right? And beside it, you have the Nordic spa, another great company that always needs heating, but needs to therefore be rejecting cooling. When you put those two side by side, and they're swapping energy back and forth. So your load is so much less. That's the concept of District energy is that by sharing and you know, a commercial building has different loads than a residential building has different loads than a retail building. By sharing those loads, they have different peaks, either for peak shades, you'd be you have less capital expenditure and you're more efficient. Why is it taking so long? It drives me crazy, but I really do think it's regulation is the key item why.

Dan Seguin  15:13

Aside from regulation, what have been the challenges you encountered bringing this technology to market in Canada? The sight of your one planet community alone, straddling Ontario and Quebec, is really unique. Tell us about the challenges and how your passion has gotten you through.

Jeff Westeinde  15:34

Yeah, I'm not sure how long this podcast is, but I could talk for a week about the challenges. Yeah, as you talked about, we do span the provincial border between Ontario and Quebec. You know, we jokingly say, both sides have a different word for everything. Because one speaks French one speaks English. Even the rule of law is different to one side of the other the legal system. So, you know, we need to repeat everything twice when we do this, but what I'll tell you is, I would say that the way that we've overcome what are just an enormous amount of challenges, I won't even get into what they all are, but it was it was crazy. Boy, when we overcome it was we shared our vision. And actually, I would say was our community's vision of saying, this is where our region started. Arguably, this is where, you know, the roots of our country started was on this site. And when we when we purchased the property was a fenced off locked off contaminated former industrial site that nobody had seen unless you worked at domtar. For probably 100 years, people didn't realize there's a waterfall in the middle of the city. What the community talked about in the vision that we had was no, we need to do something truly world class like something that people would come to our region and say Quebecers Ontarians, Canadians, look at the communities and the places that they create. And with that vision of being world class, we were fortunate that that politicians in the region, federal, municipal and provincial, all endorsed out the community endorse it. So when we started to bump up against bureaucracy and regulations, we were able to remind everybody that our commitment or contract to all of our stakeholders was, we're going to do some world class. Now world class, meaning different, and bureaucracies and regulations exist to enforce the same. So we were able to say, listen, you've got to empower, talk to the politicians, you've got to empower the bureaucrats who are paid to make sure that everybody does everything the same, to say, No, we've got to look at this one differently. We're not looking to do anything unsafe or unreasonable. But there's a better way and we've got to find it. And it was really that vision of world class and the endorsement that we got from all of the public stakeholders who said, yeah, we want to be world class. We don't want to just build another suburb of the City of Ottawa or Gatineau.

Dan Seguin  18:08

Now through a marketing lens, how did you position this alternative energy system that provides heating and cooling to your communities' new housing projects? What was the value proposition for prospective buyers and investors.

Jeff Westeinde  18:25

I think the key one, one of the lessons we've learned about sustainability and building sustainable buildings and building sustainable communities, is, most consumers don't, you know, while it's a nice to have being sustainable, it's not something that they're making a purchasing decision around. That's changing. I think more and more people are starting to look at that, but historically hasn't been important. So the key to sustainability is, we need to, we're going to allow you to be much more environmentally sustainable, socially sustainable, without any impact to your lifestyle. So when it comes to district heating and cooling, we said, listen, we're going to deliver you zero carbon district heating and cooling at the same market cost as a carbon based system, and you won't know. If you know you're going to turn your heat on, it's going to get hot, you're going to turn up your cooling on it's going to get cool, and you're not going to pay any more of the market. So that was that batten marketing. I mean, that's a no brainer to everybody that Okay, hold on, I get the exact same as I would get in a carbon based system but I'm zero carbon or more sustainable. That's a pretty easy sell at that point.

Dan Seguin  19:33

Okay, now I'd like to explore design aspects. District energy equipment inside a building occupies about one fifth of the area of conventional systems that boilers and chillers take up. I'm assuming this provides more flexibility in designing your buildings and community. By eliminating traditional HVAC systems, what building design options did this enable you to expand on?

Jeff Westeinde  20:06

There's some easy ones like if you think about rooftop patios, as a for instance, you know, if you have a rooftop patio beside a big chiller that's making a bunch of noise is not a great rooftop. So by  being able to eliminate that equipment. You know, our rooftop patios are much nicer. But really as a place maker, as a developer, the key aspect for us was if you know if you take all of that mechanical and electrical distribution space, and you end up with instead real estate that you can use, it's another added benefit to saying that that district energy makes financial sense or can make financial sense. It wasn't easy to unlock that but can make financial sense. So, so yeah, it obviously the less constraints you have on a building, the more flexibility you have and district is one tool for that for sure.

Dan Seguin  21:06

Now, wondering if you could zero in on the energy distribution system that harnesses excess heat from the Kruger paper mill on the Ottawa River and the temporary thermal plant that was or is built to serve residents businesses in your community.

Jeff Westeinde  21:24

Sure, yeah. So are, you know, like talking about the benefits, or sorry, the rationale behind district that if you have different energy cycles between neighboring buildings, you can share that energy. Our district energy system is actually based on that very same principle that Kruger operates a tissue mill, directly across from Parliament Hill. They, it's a very efficient, very successful mill. But as part of that process, they bring in millions of litres of water a day, heated up to over 40 degrees Celsius. Use it several times in their papermaking process, but then discharge it into the Ottawa River at about 30 degrees Celsius, anywhere from 25 to 30. So what we're doing is saying listen, you're discharging the millions of liters of hot water into the Ottawa River. Why don't we strip that heat so then what we're doing is we're taking it from 25 to 30 degrees down to seven to 10 degrees and discharging out into the Ottawa. River in our heating system or in the heating season. So that's the concept behind it's very rudimentary engineering, it's strictly heat transfer between water. So, so pretty straightforward from that point of view. What the temporary plane that you speak about is our district energy system. That backbone heating system at Kruger is not yet built that's getting built this season. However, we have users in our buildings right now. So, we have temporary plants that are providing that but the infrastructure for the district the pipes in the streets and hot and cold water system is there. So those temporary plants are going to operate for about another year, after which will be on our permanent system.

Dan Seguin  23:06

In addition to reducing greenhouse gas emissions and improving energy resilience. Is it fair to say that district energy deliver economies of scale in areas with high population? What are some of the short and long term benefits for the owner and end user alike? And how do these factor into the government carbon reduction targets?

Jeff Westeinde  23:33

Well, yeah, so the short term is if you can be more efficient, so if you have dense populations with different energy cycles, so different peaks and whatnot, as we talked about earlier, you need to spend less capital because you're peaking is at a lower level. And you're sharing energy between so that your overall initial energy utilization from the grid or from the gas system is lower because you're sharing more so overall that drives efficiency. And at the end of the day efficiency then drives lower greenhouse gas emissions and ideally, lower and more stable costs because your energy inputs are a lower percentage of the overall district. So say in our case, you if we're harnessing heat from Kruger, there are no escalation in the cost of that heat. It is waste industrial heat that otherwise wouldn't go anywhere. Whereas if we're connected to the Ontario grid, as you know, you know, costs have escalated very significantly. So that energy input if that is our key input, our energy costs are going to be higher. So we're fortunate that again, the combination of we sit in Ontario and in Quebec, so we have two different electrical and two different gas grids. We have waste heat and our cooling is going to come largely from the Ottawa River. So we have low cost inputs with waste heat and Ottawa River cooling. And we have four different grids we can tap into for alternative and for other energy if need be. So that then allows us to control our costs. So again, just an example of how you can drive efficiency and provide more price stability, while at the same time reducing emissions.

Dan Seguin  25:22

Okay. Do alternative energy sources like district energy reduce exposure to fluctuating energy prices? How are the rates/cost determined for residents? Are they comparable to current rates? And are they stable?

Jeff Westeinde  25:41

Yeah, so, yes, not all district energy systems are the same. Obviously, it depends on what those inputs are. But in the case of the Zibi community utility, our district energy system, but then our key inputs are that waste industrial heat and cooling base from the Ottawa River, both of which obviously have are stable. There's there is no Yeah, well, I shouldn't say we have some commercial transactions that go on without but not like the grid that allows us to decrease our reliance on the grid for other inputs. So to answer the question on rates, yes, our rates are comparable to market. And we've actually indexed them to the price of Quebec hydroelectricity. And for anyone that understands electrical grids, I would suggest that in North America, Quebec is likely the most stable grid in all of North America. I would say that it is a national utility for the province of Quebec. And I would say, you know, all Canadians are very proud of our healthcare and if they ever tried to take it away, there'd be riots in the streets. I would suggest that if anybody tried to raise electrical rates in Quebec, similar to what's happened Ontario, there would be even bigger riots in the streets. So, you know, we are expecting that will allow us to provide really stable pricing over the long term to our, to our customers.

Dan Seguin  27:09

Now, how important was it to find a strategic partner like hydro Ottawa, that had more than 100 years of experience and a strong track record to create safe and reliable utility infrastructure?

Jeff Westeinde  27:24

The partnership with Hydro Ottawa was critical. And again, consumer acceptance of that of the district energy system. You know, if you think about reliability if you're a consumer at Zibi, and you said, Okay, well what happens if my heating or cooling goes off? Who do I call if I see, well, you know, I am Jeff and here's my cell phone, you know, call me up at the cottage and I'll see if I can help you. That's not exactly reassuring. When you say 'Well, you call Hydro Ottawa" and they will is not who I would normally, you know, they, they're, they're, you know, the relative reliability stats of Hydro Ottawa better than me, but it's 99.999 something percent uptime, you know, 24 hour response, etc., etc. So, being able to bring that credibility of a utility operator to our district was absolutely critical for overall consumer acceptance and I would even say regulatory acceptance. You know, when we started talking about listen we're going to be moving hot and cold water in the you know energy in the form of hot and cold water around the around our community all municipal officials provincially "Okay, let you know if they did you have experience with this?" when we say well, Hydro Ottawa is our partner, it is an automatic acceptance of all know, okay, you guys are credible we understand let's carry on. So having Hydro Ottawa as a partner has been truly exceptional for us to be able to pioneer this.

Dan Seguin  28:50

Jeff, in addition to district energy, what else is he planning to feature in terms of other advanced technology and innovation to achieve zero carbon living for the residents and tenants on site?

Jeff Westeinde  29:08

Yeah, again, I know your podcast is not that long so I could talk forever about this, but I'll give you some key examples. So you know, again, trying to decrease reliance on carbon based transportation systems. So you know, the personal vehicle. You know, having car sharing, having excellent access to transit, when you're looking at other things that have a carbon footprint, how we build our buildings, the components that go into our buildings, the materials that go into our buildings, some are very carbon intensive. So again, we're targeting those that aren't carbon intensive. Even things like if you look at logistics, you know, when you buy a head of lettuce at the at the grocery store, the carbon it took to get that lettuce to the grocery store is embedded in that very product. So having urban agriculture, you'll see urban gardens, we've got a couple on site now. So all sorts of areas where anywhere where we can target things that are that use carbon to get delivered to or to, as part of the system that we're in. We're looking at incrementally changing all of those things. And those increments when they add up, turn into some big numbers. So that's really our focus.

Dan Seguin  30:27

Jeff, how about we close off with some rapid fire questions? Are you ready to go? What is your favorite word?

Jeff Westeinde  30:36

Serendipity. Yeah, I love serendipity. Because good things happen when you're not paying attention.

Dan Seguin  30:42

What is one thing you can't live without?

Jeff Westeinde  30:46

That was an easy one, my wife, I could be dead without that!

Dan Seguin  30:52

What is something that challenges you?

Jeff Westeinde  30:54

The word "No." I'm not good at taking the word 'No', it's how Zibi exists.

Dan Seguin  31:00

If you could have one superpower, what would it be?

Jeff Westeinde  31:03

I'd love to be a shapeshifter, be able to get inside different systems, different beings and understand how and why they work. I have endless curiosity. So I think being a shapeshifter would be amazing.

Dan Seguin  31:15

If you had to turn back time and talk to your 18 year old self, what would you tell them?

Jeff Westeinde  31:21

First, I would say smarten up and stop doing dumb things. But no, I think the one thing I would say is listen, relax. You know, something that has come to ring true with me, the Roman philosopher Seneca said, you know, "luck happens when opportunity meets preparedness". And I've been very fortunate to be lucky. But there's only one thing I can control in there. I can't control luck, I can't control opportunity. All I can do is control preparedness. So get prepared and just relax, pay attention, good things will happen.

Dan Seguin  31:52

And lastly, what do you currently find most interesting in your sector?

Jeff Westeinde  31:57

I love the fact that public health - so right now, you know, as you know, we're in the middle of a covid pandemic - public health is leading that across our country. But here in Ottawa, it's Vera Etches, I love the fact that our public health officials are starting to be included in our urban planning policies. So in Ottawa, Vera Etches participated in that. So remember I said earlier, you know, the way we plan is shortening the lifespan of our citizens. Public health starting to get involved in that. I'm really hoping that there will be an influence where they'll say, "if we planned communities this way, then here are the health benefits of it. If we do it that way, here's the health benefits." That's not currently happening. So I find that really exciting.   So, you know, we've been talking mostly about the Zibi project, which is one of the many things I do you know, if you go to Zibi.ca, then you can find more about Zibi and if you look to [email protected] anybody that wants to connect they're very good at getting people to me. I'm not much of a social media person, I do have a LinkedIn profile. I don't use it very often. But you can find me on LinkedIn and I'm good at responding to messages there as well.

Dan Seguin  32:41

Well, Jeff, we've reached the end of another episode of The ThinkEnergy podcast, last question for you. How can our listeners learn more about you and Zibi? How can they better connect?  Again, thank you so much for joining me today. I hope you had a lot of fun.

Jeff Westeinde  33:35

Well, this was fun, Dan, and thank you for your interest in Zibi and One Planet. That's fantastic.

Dan Seguin  33:42

Thank you for joining us today. I truly hope you enjoyed this episode of The thinkenergy podcast. For past episodes, make sure you visit our website HydroOttawa.com/podcast. Lastly, if you found value in this podcast, be sure to subscribe. Cheers, everyone.