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Decarbonizing Canada’s buildings with the Building Decarbonization Alliance
Season 6 · Episode 150
Monday, January 27, 2025 • Duration 01:04:25
Canada's building sector accounts for 30-40% of the nation's energy use. Bryan Fannigan from the Building Decarbonization Alliance joins thinkenergy to share how the sector can align with Canada's emission reduction goals. From policies and grid impact studies to strategies helping steer towards a net-zero status by 2050. Listen in to learn about the practical challenges with decarbonizing existing infrastructures and innovative approaches to support the transition to more sustainable building practices.
Hi. Welcome to think energy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman as I explore the traditional, unconventional and even up and coming facets of the energy industry. If you've got thoughts, feedback or ideas for topics that we should cover, we'd love to hear from you. Please reach out to us at thinkenergy@hydrooottawa.com.
Hi everyone. Welcome back. You really can't overstate the importance of buildings in our lives. We eat, sleep, work, learn and socialize in buildings, among many, many other things, a huge percentage of our lives takes place inside buildings. In fact, most of us probably have to make a conscious effort to actually spend time outside of buildings. I know that I try to make a point of spending time outside every day, and I have to be conscious about it, because it might not otherwise happen, and as a result of that, centrality in our lives, buildings are major users of energy. Some estimates say that around 30 to 40% of energy use in Canada is associated with buildings, and they're also a major source of greenhouse gas emissions. So around maybe 18% or so in Canada, that means that the buildings themselves and the way we build them, the way we heat them, the way we use them, are an important part of our efforts to decarbonize and to further the ongoing energy transition. Supporting this effort is the main goal of the building decarbonization Alliance. Spun out of the transition accelerator, the building decarbonization Alliance is a nonpartisan coalition that works to inspire and inform industry and government leadership, accelerate market transformation and really get the building sector on track to meet Canada's emission reduction goals. They focus on convening conversations, conducting analysis and identifying some of the barriers to building decarbonization, and then working with partners to overcome them. And I think that's a really important part. Joining me today as my guest is Brian Flannagan, who's the executive director of the building decarbonization Alliance. Brian brings more than three decades of leadership and consulting experience all focused around reducing emissions and improving the energy efficiency of the built environment. Prior to joining the organization, he's played leadership roles across a number of different leading energy and environmental consulting firms. He spent time working with the Federation of Canadian municipalities and helped launch the Green Municipal Fund. Brian Flannagan, welcome to the show.
Brian Flannagan 02:47
Thanks for having me. Trevor, this is great.
Trevor Freeman 02:50
So why don't we start kind of right with the basics? Can you give us an overview of the building decarbonization Alliance and the work that you are doing alongside your members?
Brian Flannagan 03:00
Yeah, thanks. Well, you know, as you said at the top of the hour, without kind of repeating the background or there, we're a nonpartisan, not for profit organization whose goal it is to really advance sort of market transformation, thinking about it from the perspective of, you know, creating a prosperous economy for Canada, having buildings that are a place where people want to invest, and the long-term goal is that we got to get them. Get to net zero. Global factors dictate that if we don't act on that, we're going to get left behind. And so, for those purposes, we want to bring the market along and align it toward this goal. And so, this alliance that we have is just that we have partner organizations who support this vision to have the building sector decarbonize between now and 2050 to meet those objectives that are set nationally and internationally, for that matter, and we work with those partners to sort of align the narratives around this and to put in place in the long term, the tools and policies that we need to support that. So, our main approach is really to convene those stakeholders around the issues that we see, to tackle some of the sticky narratives that are there. You know, any market transformation involves incumbents that have lots of good reason to maintain the status quo. So that's a feature of a system that we have to acknowledge, and it's something that we recognize we have to adjust those narratives to really advance, advance the common objective, right? And so, we work with that kind of vision, with our stakeholders, to really try to overcome, identify and overcome the barriers to getting to that goal. We kind of focus on a couple of key areas given, you know, the ability decarbonization space, the ecosystem is vast. Lots of market actors already out there, lots of other not for profits, lots of other organizations that are working really, really hard to advance this as well. And so, we tend to focus on kind of four main areas, making sure that there's policy support at various levels of government, and understanding which policies might be effective and which ones might be less so, and trying to advance the ones that. High leverage looking at the grid impacts of electrifying buildings, because it's undeniable that if you switch from fossil combustion of fossil fuels to electricity, you require a clean electricity system that has to have the capacity and be robust enough to support that. So, we want to be clear about that. We want to really address that in a cogent sort of way, and then really mobilizing and activating the sector to implement these changes and to find the solutions, because many of the solutions are at the intersection of different subsets of the of the sector, whether it's banking and finance or whether it's development community or the utilities, every market actor has a role to play to find solutions. Is very rarely one sub sector that can really act to, you know, to overcome a barrier. And so, we try to work at the intersection of these different groups. And by convening the players, we can roll up our sleeves and kind of get to that. And then, last but not least, you know, this is a very complex sort of question in terms of, how do we get there? What are the pathways? It kind of reminds me of nutrition, medicine, things like that, where, you know, at one instance, it's great to eat eggs, and another instance, terrible to eat eggs, and then it's good. To eat eggs. And then it's good to eat eggs again, because the evidence is shifting right, and we have to follow the evidence. We have to understand that the systems are complex and that various investments in the grid will alter the landscape. And so, we're working really hard to increase the analytical capacity of the sector, to model and to be able to understand how this will really play out when you have exponential sort of technological advancement coming to play. And you know, different investments and different dynamics that are bearing out as the sector decarbonizes, which is, it's really complex, and so we need better tools to be able to grapple with that. So those are the four sort of main areas, and it's a heavy lift. We arrive on the scene with great humility, recognizing that we stand on the shoulder of many, many other organizations who've come into the space trying to take a slightly different approach by bringing all the players together and trying to find some common understanding of how we how we get this done. You know, we have to do something different. We've been doing energy efficiency for four decades, give or take with the programming that we've had, and it's been very effective. I don't think there's any more old T 12 light bulbs anywhere that worked. That's great, but we need to do something different now to get fossil fuels out of the buildings for heating purposes, right? That's the goal.
Trevor Freeman 07:18
I'm glad you brought up the complexity side of things. I think when we look at buildings and decarbonizing buildings at first blush, you can think, Okay, well, change out systems. And you know, there are carbon intensive systems and low carbon systems, and obviously we need the latter, but getting those systems in our buildings, and getting buildings that work well with those systems, and getting tenants that interact with those systems, well, is that complex kind of quagmire? And so really glad you brought that up, and we'll probably talk more about that as we go. I do want to also highlight you mentioned kind of working with other organizations and partners, and specifically, I know you guys are affiliated with but somewhat unique from the transition accelerator. So, talk a little bit about the transition accelerator and how your work with them. Sort of overlaps, but is unique.
Brian Flannagan 08:09
Yeah, absolutely. Well, so we're, we are housed within the transition accelerator. We are basically a branded initiative of the transition accelerator. You know, we could stand alone as our own, not for profit and be separately incorporated, but from an efficiency and a sort of effectiveness perspective, the decision kind of was made to stay within the transition accelerator as an organization and so I think it's very effective, because that allows us to leverage, you know, the communications, knowledge mobilization and broader infrastructure for HR and things Like that of the transition accelerator. So, the transition accelerator, is a Canadian not for profit as well, and its focus is very similar to the BDS focus. However, it's elevated to the to an economy wide level. And so, the transition accelerator is interested in finding pathways to net zero for all sectors of the economy. So, I think transportation, the electricity system itself, decarbonizing the grid, looking at low carbon and Net Zero fuels and how those might impact other sectors, heavy industry and aviation and transportation sectors, as well as looking broadly at the overall state of what is the future economy going to look like. The whole point of this is to position Canada internationally as a global leader in this transition, recognizing that other nations are acting, and we have a competitive position to play. And that has to happen by looking across all the different sectors. And so, the objective is really to set that 2050 vision, identify the pathways for the different sectors of the economy. Buildings are one of which and then to kind of advance the whole thing along recognizing as well. I guess what's really important in all of that is that there's a huge interaction between the different sub sectors, right? So, transportation and buildings are a great example. You know, if everybody electrifies EVs, there's an immediate impact on how we electrify the heating systems in the buildings, and then it has a huge impact on the grid immediately as well. And so. The intent with the transition accelerator as an umbrella organization housing all of these activities, is that we capture those dynamics. And when I talked about the analytical capacity, you know, the models that we're building, the end use models for each of the sub sectors, the ideas that they eventually connect, and they that they are able to have a whole of economy sort of flavor to them. And so, it's been a very, very effective relationship. I think it seems to work well, and that vision and idea seems to be materializing as we get going. It's been two years so far, and I can say that it's been just a fascinating journey to be exposed to those other sector dynamics as well.
Trevor Freeman 10:36
Yeah, I know on this show, we talk a lot about the different parts of, as you said, all of society that need to be decarbonized. Obviously, buildings kind of comes to the forefront often and so specifically around buildings talk us through this maybe kind of a basic question, but, you know, help our listeners understand. Why are buildings so important? Why is the decarbonization of our built environments so important when it comes to decarbonizing all of society?
Brian Flannagan 11:05
Yeah, I mean, that's, that's the, that's the crux of the question, right? Well, there's a bunch of reasons. I mean, if you think about it, the building, this is where we live, right? These are our homes. These are, this is where we go to work. This is our place as a business. From an economic perspective, organizations arrive in jurisdictions for the purposes of meeting their overall objectives, and if you require energy intensive sort of production, or if you want to have a big workforce, you want to house your workforce in buildings that align with your objectives. And increasingly, those objectives feature a low carbon kind of future, right? And so just from that perspective, it's important for us to kind of get aligned with the global trend toward this, to make sure that we have the investments that we need and that we want to attract, and we want to have places where people can live that are aligned with those kinds of values. But from an emissions perspective, it's hard to kind of overstate how important this sector actually winds up being the building sector emits about 90 megatons, give or take, of direct scope one emissions. And if you factor in the grid emissions, that result from being buildings being connected. So, the grids across Canada, it's about 120 megatons. There's digits there that we could go into. But to put it into context, that's about the same as all of the vehicles on the road. So, when we think about how important it is to electrify the fleet of vehicles that we're all driving, the building sector is the same. It's the same level of importance. And if we think about all of the work that we've done to decarbonize our electricity system over the years, eliminating coal plants and those kinds of initiatives that we that we hear, are in the news recently, the building sector emits about twice as much as all of that. And so, the context is that buildings are pretty vast in terms of the overall emissions, and when we think about where those emissions come from, ultimately, it's combustion of fossil fuels for heating our buildings. We're in a cold climate in Canada, case, a lot of energy to heat buildings, and because of the abundance of the resource and a bunch of policy decisions that have been made decades ago, you know, we're in a situation where we've got an abundant and relatively inexpensive source of fossil fuel to heat our buildings. It's about 1500 petajoules, I guess, give or take. And ultimately, we need to move to eliminate that over time, or to largely eliminate it. I mean, I think there's always going to be a bit left in the system. There's, you know, it's, it's a very complex and daunting task, because the building sector itself is very diverse. The buildings last a really long time. It's not like, you know, technology change, where you have, if you want to change a phone, you can upgrade it from one year to the next. It's small. It fits in your pocket. It's easy to manage, but buildings are constructed to last hundreds, 100 years. 50 years is the typical lifespan. But, you know, we have lots of buildings that are very, very old, and it's a slow kind of system to turn over. It's a slow inventory to turn over. So, it's a really big challenge, a lot of a lot of emissions from the sector. And so, it rises to the level of really needing close attention and a different approach than what we've been taking in the past.
Trevor Freeman 14:04
Yeah, and one of the things I like about focusing on the building sector is it's one of those areas where efforts to decarbonize, efforts to improve the way we use energy in our buildings, obviously have some carbon impact, but that's not the only benefit that they have. There are sort of other ancillary benefits that that building owners and tenants can realize as a building goes through a decarbonization process. Talk to us a little bit about some of those other benefits and why a decarbonized building is a better building to be in.
Brian Flannagan 14:39
Yeah. Well, I mean, I guess there's, there's a couple of things. I'll take a step back from it and talk about retrofits and deep retrofits versus regular retrofits, you know, and what it winds up looking like in terms of benefit streams. We've, I think, in the past 40 years or so. I think since the since the 80s, we've been doing retrofits that are ostensibly about reducing operating cost. Ostensibly about making sure that we don't have to build out our energy systems bigger than they need to be. It's always about the avoided cost of energy. That's the way our incentive programs have been set up. And so, we've had lots of projects over the years that make buildings more efficient at consuming the energy that they do consume, which is a really important objective. And so, you get, as I mentioned, all the lighting projects that we've done, and we've done three waves of lighting projects, different fluorescent technologies, and then CFL technologies, and then now led technologies. And those are kind of project-by-project retrofits that happen because the building owner says, well, wow, if I do that, I'm going to reduce my utility costs, and I'm also probably going to save maintenance costs, like LED lighting technology really reduces the maintenance costs associated with taking care of the light bulbs. It's a cost reduction exercise, right? What's different about decarbonization is that we don't really have those cost signals, those pricing signals, are just not the same. It's not the same dynamic anymore. And so, you have to bring into play long term energy and social and governance paradigms. You have to bring in long term pricing signals, long term risk. You have to bring in long term market decision making in terms of the global factors that we were talking about earlier, right? And so, you know, it requires a bit of a vision, and it requires acting on the policy environment that's in place. And in order to really make those projects work, you have to take a much longer-term view. You have to look at the overall state of the capital renewal of the building. You have to look at all of the different systems at the of the building at once. And that's where we get into the term a deep retrofit, right? And so those kinds of projects can yield tremendous benefits when they're undertaken correctly and over time, in an individual building or inner portfolio of buildings, and so we get this bundling effect of things happening all at once to really make the space more comfortable at the end of the day, though, what, what the whole objective needs to be, is just eliminating the fossil fuel combustion. And it happens that when you do that at the same time as doing some other things like envelope work or fenestration, or, you know, better, control systems or demand response kind of technologies, then you get this sort of convergence of factors. And so, you know, we to get to the part about the benefits there. We definitely see long term operating cost savings when, when people switch to heat pump technologies, the heat pump is an incredibly efficient it is an energy efficiency measure itself. It's three times, give or take, more efficient than other approaches. And so, you get that long, long term operating cost savings in most in most of the country. The prices vary across the country, but you do get those obviously, if you're taking that approach and you're managing your portfolio with that your portfolio or your home with that longer term vision, you're getting capital renewal, and you're having maintenance and reliability improvements, and we think that it really improves on the value of the asset over time. It's an area that requires further study, actually, because we don't really know how much more value is baked in. There just haven't been that much track record in Canada of having these kinds of retrofits take place, but the so-called green premium, we think, is there as a real benefit to taking this kind of an approach. And notwithstanding that you know, you're renewing all your mechanical systems, you're taking measures to update the envelope and things, you're going to have a more comfortable, better controlled environment. If you're if you're a commercial building owner that's tenanted, your tenants are going to feel more comfortable. The control of the facility can have less complaints and all this kind of thing. If you're a homeowner, you're going to be in a modern, comfortable home that has a heating system. I mean, fossil combustion systems tend to come on and blow really hot, whereas heat pumps tend to stay kind of fully loaded and steady and have this comfortable people report that it's just a much more comfortable kind of system. And I think, you know, over time, people are going to start to see that this is the way a house should be. We're kind of not there yet. The sex appeal of all of this, in terms of the mindset of especially homeowners, I just don't think is there yet. But we're trying really hard to get to a spot where people look at those, you know, retrofitted systems and those modern systems as being sort of the way that it's supposed to be, and this is how comfortable a home is supposed to feel, right? So those benefits are all there, but I think, as I mentioned, what's less clear is, you know, for a commercial building owner, what exactly is the real ROI to fully embrace this approach? I think those are still areas of further study, and the straight-line connection between those things. I wish it was more, a little bit more clear, but we're working on it. That's a part of a study that we're trying to do to really elucidate those types of benefits as well.
Trevor Freeman 19:31
Yeah. Well, I think that's again, to go back to your first answer of the building the analytical capability of the sector to really understand these benefits that I think we intuitively feel are there, but we need the data to back that up, and we need to be able to quantify it, and I think that's really important to tell those stories to be able to help building owners, help homeowners, help the folks that are making decisions, build the case, to really be able to. Say, Yeah, this is the smart move. It's smart to move in this direction. So, it's great to see that you guys are working on that absolutely. So, you know, we've talked through in the last little bit here, some of the reasons why it is so important to decarbonize our building sector. We've talked through some of the benefits of decarbonizing that building sector. But to your earlier point, we're not there yet. We haven't seen massive steps in this direction. There are clearly barriers to this. There are sort of reasons why building owners might hold back or wait or sort of say, hey, not this time around. I'll do it next time. What are some of those barriers that you've come across in the building sector that kind of get in the way of folks making the decision to decarbonize?
Brian Flannagan 20:43
Yeah, well, that's interesting. You know, there's the framing of the question itself. Is, there's a lot of benefits. It really makes a lot of sense. But why isn't it really happening, right? And the reason for our existence, if this was easy or obvious or self-evident, we wouldn't need organizations like ourselves and you and I wouldn't have to, you know, ruminate and put this information out into the world, it is difficult, and what's promising and what's interesting, before I get into barriers, is that there's a lot of instances where this actually really does make sense, you know, and we don't, I don't know that we necessarily publicize or talk about it enough, but you know, if you're on fuel oil, if you're if you're on the East Coast, where there's a lot of fuel oil still in the system, and your home is heated with fuel oil, it absolutely makes sense to switch out to a heat pump. Now, you know there's a first cost consideration that needs to be born, but thankfully, there are programs that really support overcoming those first cost barriers, but your operating cost savings will be impactful from an affordability perspective. It makes total sense to do it today. And so, anybody that's currently heating with fuel oil should really look at that business case for them personally and their own personal economics. But in most places in the country, if you're on fuel oil, it makes sense to switch right now. You know another case that makes a lot of sense is if you're on electric resistance heating. Many of us are in Quebec. I'm located in Quebec, you reduce your electricity consumption by about two thirds, you're gonna save on your electricity bill. And you know, to boot, you're probably gonna wind up with cooling that you don't already have on. So, there's a real added benefit of having summer cooling, which increasingly a lot of us need, right? And so, there's a lot of times where it’s kind of really does make sense if a homeowner has an existing gas furnace that's aging, and they don't have air conditioning now, and they're finding that the summers are a little bit warm, and they need to replace their furnace. I mean, that's a lot of ifs if this, but I think a lot of people are actually in that situation. If you're in southern Ontario and you need to replace your aging gas furnace, switching to a heat pump for the air conditioning part of it in a hybrid system. It totally makes sense to do you're going to buy the air conditioning unit anyway. You're going to have couple of tons of cooling in your in your building, in your home. You may as well make that a heat pump and run it in the spring and in the fall to offset some of your gas bill. Right? And so, there are instances where it really does actually make sense, but you'll notice that my statements are sort of couched in a lot of if this, if that feels like which comes back to the complexity. That's a hard message to sell to homeowners. Contractors have to be on it. Contractors have to be making these recommendations. And the system is not quite there yet where everybody has this aligned narrative about where it makes sense to do it. So those are the things that I think are making up, making it hopeful. You know, we see, also see university campuses for altruistic sort of long-term vision reasons. We want to be a test bed. We want to be a leader. We want to be example. We want to have our students understand what this new global dynamic is going to be. So, we see, you know, universities like Concordia with a plan for Net Zero to be a net zero campus by 2040 you know, does that, is there an economic reason for that? Like, I think it'd be hard to make a financial case that those investments make sense on their own merit, but it's backed by this real vision to have leadership. And so, the budgets and the financial considerations, those constraints are loosened to allow for that vision to take place. And we see that with municipal governments too, you know, they have a long-term view about their assets, and about community energy planning and those kinds of things. And so, there's lots of reasons why, where it does make sense and where movement is happening, you know, but outside of those kinds of obvious cases, I would say that the primary barrier is ultimately still a financial one. If you look at the different considerations to go into replacing your heating, replacing fossil fuel combustion with heat pump technology, or electric all electric, non-emitting technologies. It's expensive. You know, the first cost is high. And if you, many of us now in the space have gone through the exercise of getting contractor quotes and understanding what the cost of doing it is, the upfront cost can be pretty high relative to just replacing with the status quo. And so that's a real barrier for a lot of Canadians, particularly in the current environment that we're in. You know, affordability, inflation, the pocketbook issues have been at the fore, and so overcoming that initial sort of wait now what? How much is it going to cost? It's a real. Concern. And that's one of the approaches at the BDA is really to try, like, we really can't sugar coat that. We have to actually just get to work out what it's going to take to bring that first cost down. So, things like getting to scale and, you know, having the technologies kind of advance, and having products come in that are less expensive in the marketplace to the scale is just really important.
Trevor Freeman 25:19
If I could jump in that that getting those costs down, is that just a matter of time, or is there something that you in your work, or we in sort of more broadly in society, can do to sort of push that faster, to get those costs down quicker?
Brian Flannagan 25:34
Well, I think accelerating the transformation is the idea. I mean, that's the global statement. So, there's a certain rate at which this might scale, and it's kind of going to be painfully slow. And getting the cost down will be painfully slow. The idea of accelerating it, by putting in place policies, and by aligning all of our kind of narratives, and having people moving toward this objective in a more everybody rowing in at the same time, I think, is the idea accelerating that and bringing it in faster will help us to get to that point. It's an extremely simplified thing to say, but ultimately, that's what we have to do, right? And there's certain things that just are kind of confounding. You know, we sell a lot of air conditioning units. I think it's about 400k by our last estimate. I'm not sure about that, that exact spec, but I think it's about 400,000 air conditioning units in Canada every year. The cost difference to make those heat pumps, from a technology perspective, is the reversing valve in that piece of equipment. It's a couple 100 bucks. We've talked to lots of our manufacturer partners about sort of what this would look like if we weren't buying air conditioners anymore, and instead, we're just putting in heat pumps. So, the incremental cost there's actually quite low. We could probably have a setup where everybody's buying heat pumps instead of air conditioning units for their summer cooling requirements. And then what happens when you do that? Suddenly, you've got 400,000 more heat pumps coming into the market, and you've got 400,000 more installations happening that are heat pumps instead of air conditioning so people are getting used to it, contractors are getting used to it. And those kinds of things can kind of ratchet it up and make a step change, you know. So, I think advancing and getting to scale involves kind of deploying those types of things where there's high leverage and where it's an easier case, and it's kind of some of what the BDA is trying to do is find those things that have this incremental leverage point that really gives us a step change to advance the market transformation in a way that was a little bit faster than it otherwise would be, right? So that's, that's the first cost barrier is, is one, and it's very real. I would hasten to add that in some instances, the buildings also require changes. You know, you have buildings that have a certain electrical configuration for the capacity that is required with the fossil fuel heating system if you're going to add electric capacity, that could necessitate panel upgrades and other service upgrades to the facility. So those costs are also really real, and there's lots of policies, and there's technical standards associated with that that need a close look so that practitioners in the space have clear guidance on when those things are required and not required. And I wouldn't, I wouldn't say the word there yet, in terms of that consistency of approach and consensus on how to do that. But those factors are very real. Those are some of the barriers on the first cost notwithstanding that on the operating cost side, it's, it's also complex, because across the country we have vastly different electricity and natural gas rates owing to the different configurations of the energy systems in each of the provinces, you know. So, we've got provinces like in Alberta, where natural gas costs are extremely low and electricity costs are relatively higher than, you know, next door in British Columbia, the rates are just closer in British closer together in British Columbia. And so, when you're contemplating a switch from one to the other, the gap just isn't as far to jump across. And so those dynamics play out across the country in very real ways. So as a homeowner or as a business owner, the economic drivers are just very different. And so, it's challenging because you can't just make a generalized statement to say, yes, it's less expensive to do this without also adding, if you happen to be in Quebec, it's not true in Alberta, right? So often what we get is confounding messages where people say, well, hang on a second. You said it was affordable, but I'm in Calgary, so it's affordable. Like, yeah, you're right. It's not yet affordable there, and we have to work to address, you know, those are all nuances in the statements that we make that that causes to have to really dig in and differentiate, sort of the different scenarios under which it's beneficial. But that barrier is, is a very real one, and maybe this is the last one that I would add, is that for building owner or portfolio buildings, or for just a homeowner, we just don't have the policy drivers that really align around this idea. You know, the urgency in the sense that this, that there's a movement toward getting this done by having policies at the municipal, provincial and federal level, kind of aligned toward this objective. So, if you look at the different the patchwork of sort of political leanings across the country, there just doesn't seem to be a strong alignment. And so, if you're if you're trying to manage the long-term sort of investments that you're making in a building portfolio, you'd kind of be forgiven for saying, well, wait a minute, this program was in place, or this policy was in place, and now it's not in place. And you know, the carbon tax is a great example of that recently, where you were just seeing the erosion of that idea as a long-term driver to investments. And now, with the current political environment that we're in, it's really just an open question, what is going to happen to the tax at all? And so, from a business perspective, I think that represents a real sort of that uncertainty and policy direction is also a big barrier that we need to we need to get to grip with.
Trevor Freeman 30:44
That's a great way to transition into this next question that I've got for you. So last year, it's 2025, when we're recording this. So, I can say last year now, you guys released a jurisdictional scan on I kind of think, like policy and drivers around building heating decarbonization. So, I want to dive into that a little bit. Let's start by having you talk through some of the key findings of that report. What did you find when you looked across sort of jurisdictions about what's happening with building heating decarbonization?
Brian Flannagan 31:15
Yeah. Well, what's interesting to stand back from for a second is that. So, this report is a jurisdictional scan, and the intent is really to provide a roundup of the various the ways that the various actors at different levels in the policy landscape implement conditions that ultimately reduce emissions in our buildings. Buildings, it's important to note, are largely a provincial jurisdiction. You know, the building codes, the development processes, a lot of the regulatory framework that they operate within the utility framework. So, all the utilities that the buildings are connected to are generally a provincial policy question. And so, when you when you look at what are the policies that are in place, you would expect that provincial policy would would have to lead the way, because buildings are primarily a provincial jurisdiction. Municipal governments have a big role to play when you think of all of the zoning and the bylaws that apply and the development requirements that apply at a municipal level. So, I mean, municipalities actually have quite a lot of power in with respect to buildings, but they are a subset of provincial governments and have to operate sort of at the best of the provincial requirements. And then when you think about the federal level, federal level really doesn't have a whole lot of jurisdictions on buildings. They can set equipment standards, and they can set environmental regulations through the environmental act, but so when you have to kind of stand back from it, and our goal with the report was to say, well, how does this all play it? What does it actually wind up looking like in terms of decarbonization policies? And what we can kind of look at is, how do you actually implement a policy that would reduce emissions? Well, you can focus on the energy source itself, and say, you’re not allowed to have gas in your building. So, this is like a gas band. This is a pretty heavy stick that you would wield, which, which is one way to do it. You can focus on the equipment and say, hey, you're not allowed to have an oil system anymore. So, you're not focusing on the energy source, but you're focusing on the piece of technology itself. You can focus on the energy performance and say, you're building, given the size of your building, or the shape of your building, or what the building is for your building shouldn't use this much energy, or should use less than this much energy. So, you can put a line in the sand there, or you can focus on the emissions and say, similarly, for that size and shape of building, or type of building, your building shouldn't emit more than a certain amount. And what, what our findings are is that it's sort of all of the above out there, you know. And at the municipal level, we see quite a lot of action of different municipalities trying on different sort of approaches for size, and there's no clear trend as to which of those particular mechanisms seems to have favor. It's sort of a bit of a bit of a mix in terms of all of that. But at the highest level, you know, we have the federal government sort of setting a context, or setting the stage with national model energy codes, there's a commitment for them to release an emission-based code. And that's a welcome sort of direction. It's been in the works for quite a while. We have policy in terms of investments for, you know, low-income retrofits, and we have loan programs and those kinds of things that continue to be on the scene with the green building strategy, which is also welcome and really necessary. Actually, when you think about the kind of context that we're in around affordability, we also see some commitment to look at the idea of the equipment and regulating. There's a commitment to put in place a framework to look at regulating some of the equipment. So, there's a little bit of distance in terms of the direct action there, but at least there's some acknowledgement that the federal order can begin influencing the scene I mentioned at the provincial level, that you know, there's a certain that's where the jurisdiction really is for buildings, and this is where we kind of see quite an absence of real progressive policy. What we see in British Columbia, quite a lot of activity, and Quebec, quite a lot of activity, and Ontario, a couple of measures, most notably, I guess, the requirement to report on building energy. So, this is the idea of looking at the energy performance of the buildings. But outside of those three jurisdictions, we don't really see a lot of progressive policy to really act on the idea of carbon emissions directly from buildings. And then at the municipal level, we see in Ontario, the City of Toronto is trying to, is proposing to look at building performance standards, which would be a sort of an energy and emission sort of threshold mechanism. But then in British Columbia and Quebec, we see just a lot more activity, many more municipalities within those jurisdictions trying on different mechanisms for size. We have, like in Quebec, we have Laval in Montreal and Prevost and regional governments as well. So, the Metropolitan Community of Montreal putting in place various tools to try to curb emissions. And in in British Columbia, there's just way more activity. There's a different sort of setup there in terms of what municipalities are and aren't allowed to do. And so, we see like there's Saanich in Vancouver and North Vancouver and Victoria Whistler, all of these municipalities are putting in place various tools to try to direct what the future should hold in terms of building emissions, whether for new construction or for existing buildings. And notably, we also see some interesting, just interesting kind of mechanisms, like in in British Columbia, flight adjustment on taxation, tax relief for heat pump technologies, which isn't it's not a regulatory sort of approach in the true sense of that. But it's an economic lever that I think can be, can be helpful and sort of send the right cumulative signals to allow market actors to kind of act.
Trevor Freeman 36:50
I think, I mean great answer. Thanks for that, Brian. It really does highlight kind of a theme, I guess, if you will, that comes up on the show often of there is no one solution, and you can take that statement and apply it to any part of the decarbonization ecosphere that you want. There's, there's no blueprint for how we're going to do this. It's going to be sort of a mix of a bunch of different policies and strategies and, you know, carrots and sticks and levers and whatever analogy you want to use that we're going to need. And it's interesting to see, as you highlighted different jurisdictions, different parts of the country, are at different spots, and some, you know, further down that journey than others, for different reasons. And again, coming back to your comment about building that analytical capability to really understand what is working and why, and is it, is it specific to this region or this, you know, whatever climate region or economic region, that that policy or that structure works, or is that something that can be applied across a broader swath of the economy or our society? So really interesting. I'm going to cherry pick something here and dive in and say, you know, we talked a little bit about heat pumps. So, heat pumps, obviously, are a super important technology for decarbonizing some aspects of building heating, specifically on the smaller scale. So residential homes are a great example. We really need to see more heat pumps that's going to be one of the main ways that we decarbonize home heating, looking at, sort of what's happening across the country at the various different levels of jurisdiction. Are there specific frameworks or strategies that you think are really essential to support heat pump adoption as an example that we can sort of look at?
Brian Flannagan 38:39
I mean, I think, I think your, your lead into the question is actually the answer that I would have given you know, there is, there just isn't one sort of tool or approach that will universally drive this thing, certainly not when you talk at a national level. A lot of the discourse that we have internally at the BDA is that this is a regional issue. You know, it really is a, I think, at the end of the day, municipal by municipal approach to things, given the local conditions. And when we, you know, we talked about some of the barriers earlier around pricing. So notionally, anybody that's in a jurisdiction with provincial level utility like British Columbia or Quebec has the same pricing, right? But in Ontario, that's not the case. Like local distribution companies have different pricing structures. Just depends on if you're in Ottawa or Kingston, Cornwall or Toronto, it's just the pricing is just different. Now we have gas utilities that are more uniform across Ontario, so that pricing is similar. So, it really winds up being a regional question. And if I said, you know, Trevor, I want to I want to call a contractor and I live in Hamilton, that's a different question than saying, I want to call a contractor and I live in Saskatoon. Is the HVAC industry the same in both of those places? It's just not like the. Capacity of the industry to influence your decision and the knowledge that they have. And by the way, Saskatoon is a heck of a lot colder, right? So, the question of, you know, will this, will this heat pump actually work for me in my climate up in Saskatoon, is a different question than if you're sitting in Windsor, where your cooling load is probably more of a concern these days, right? And so, we have to, I think we have to get away from the idea that nationally, there's going to be one sort of thing that will really wind up driving the change the electricity system and the gas system. The energy systems in each of the jurisdictions are so different, and the local constraints on labor force, the local affordability considerations with the economics of a given industry, if you're in Alberta or if you're in Newfoundland, the socioeconomics are just very different. The affordability questions are more or less pressing across the country, and so I think there isn't one sort of tool or policy that could rule them all. We need a sort of a wide range of different options to look at that recognize those local and regional kind of considerations. And interestingly enough, going back to the transition accelerator and the kind of approach that we take, we actually have a different vertical. We call them verticals. So, the building vertical is one, but we have a different vertical called regional pathways, where we have a whole other team that's just out meeting with jurisdictions at a regional level to try to understand what exactly are those local constraints that impact on the different economic sectors, buildings being one of them, and we tap into that kind of stream all the time. I mean, that said, I don't think you'll let me get away without providing some kind of answer. I do. I do. I do. Really think that the ways that the utility systems are regulated are a big deal. You know, right now, I think it's fairly safe to say that we live in a utility regulatory environment that was geared to accelerate the expansion of the gas system several decades ago, and the pricing and how connections are made, and how that's reflected on the rate base versus the developer. There's a lot of things that are kind of baked in that where it's not really a level playing field. I think equalizing some of those policies across the country would be extremely helpful. I mentioned earlier that our past sort of energy efficiency retrofit environment has been advanced mostly on the idea that we want to avoid the cost of adding new generation. Well, clearly, if we're talking about electrifying our buildings, adding new generation is a given. We have to do that. And so obviously that paradigm doesn't work when we're talking about fuel switching rather than energy efficiency. And so, we need to have that regulatory space around utilities take a different approach to just looking at the avoided costs. And we see this. This is happening, but it's just it's painfully slow, because those sectors are cautious by definition, and they need to be. But we have to have a new set of programs and a new sort of set of economic tests and tool boxes that allow incentives to start flowing for these kinds of retrofit projects based on a new sort of set of business-as-usual scenarios. You know, if we decarbonize only with air source heat pumps, it's going to lead to a certain set of costs and certain set of investments. If we decarbonize with more ground source heat pumps, it's a different set. And there's a difference there in terms of the price and impact on the energy system and rate payers. And so, capturing that dynamic, I think, is really will be, will play an important long-term function outside of that, you know, any mechanism. And this is why that sort of patchwork of municipal tools that are being deployed is interesting. Any mechanism that just sends a signal to the market that emitting carbon from your buildings is going to have a pricing consequence or a consequence in terms of what you can and can't develop. Any of those market signals are helpful, even signals that those things may eventually come into play, like what the federal government has done, that sort of we commit to putting in place a framework to look at the eventual change of the structure. Even those kinds of statements can help influence the narrative around decision making for what future risk looks like to building owners and so, you know, building performance standards, I think, are really interesting. I've seen the difference that it makes in the discourses that we have with players that are in Vancouver, and it the idea that eventually we're going to have to pay more to emit it's a powerful motivator. But I have to hasten to add, you have to make sure that the market can respond. You don't want to have those kinds of policies in place without also making sure that you've got the HVAC industry ready, you've got the labor force to get the job done, because then you have policies that fail, right? So, any of those kinds of policies, I think, are interesting to see implemented and tested and understand the degree to which they actually drive the market.
Trevor Freeman 44:58
Yeah, I think you've done a great job of, of really helping paint that picture of even a simple challenge, you know, simple in quotation marks, obviously, of getting more heat pumps into more buildings requires different roles at different levels. And so there's that sort of federal role to, you know, again, understand what, what are the levers that a federal government might have knowing that some of the specifics around buildings are not in their jurisdiction, but helping to support predictability when it comes to pricing signals, for example, like a price on carbon, or supporting sort of national workforce training to get more contractors out there to support installations, down to sort of the provincial energy policy level, down to the municipal level of how do municipalities support their citizens, their residents, and making these changes in their buildings and the levers that they have? And I think there's a role for all those levels to play. It's just understanding where are those sorts of sweet spots to put pressure on and to sort of push towards that, that action that ultimately is up to building owners and tenants to take. Great thanks for that. Brian. So, a couple last questions here. As we, as we near the end of our conversation, I do want to take a minute and just sort of put ourselves in the headspace of a building owner. So, someone that has a has a building, let's say, a commercial office building, and is looking to take steps towards phasing out fossil fuel use in their buildings. They want to decarbonize. What are some of the strategies that you've observed in your work that that really do work from that building owner perspective, what are some of those steps that they can take to move towards decarbonizing their building?
Brian Flannagan 46:47
Yeah, it's a good question. I think it depends on who the building owner is. You know, as an if we're talking about a residential kind of homeowner, the idea, I think, is just to start getting start making long term plans and budgeting what this is going to look like, and taking it into a consideration when you're, you know, planning the various renovations that you're going to have at your home. Most people renovate for specific reasons that are outside of just, hey, I want to do the right thing by the environment right lots of my friends, of lots of people in our circles do that. They're the thin edge of the wedge of sort of early adopters that do it for truly altruistic reasons, right? But most homeowners don't operate in that way. And so, the idea is to, you know, really begin looking at, well, how old is my furnace, and when do I think, I might need to replace it? And to start putting in place the decision making early so that you're not caught off guard with a surprise replacement. I think the biggest tragedy right now is that a lot of people are replacing their furnaces because they're in an emergency situation. You know, the heating season is upon us, and you know, a contractor comes and just says, hey, listen, there's no time to start entertaining alternatives. We got to get your system in place. And they replaced within with a like for light gas furnace, and that thing is going to be in place for 1520, years, right? So, we're now at 2045, and so, you know, the urgency of the idea of avoiding those emergency replacements as much as possible is really, really critical. So, for a homeowner, I would say the steps to take are, you know, look at it from a long-term perspective. Where is the industry going in 10 years, if you want to sell your home, is it going to be better or you're going to be better off or worse off if you've got the most modern and best technology in place for your building, can you demonstrate that you've made investments that are in line with this idea? I think those kinds of things are important considerations to make and to begin budgeting forward appropriately. You know, because it is a little bit more expensive on the first cost, programs are difficult to navigate, so it takes time and energy to kind of understand what those program environments are and what you're eligible for grants. But it's sort of that doing that work up front before you get caught off guard is important. And I would say if anybody wants to add an air conditioner, if anybody's contemplating getting cooling to deal with our summer heat situation that's present in many parts of the country. It's really, really beneficial to strongly consider adding a heat pump in that moment, I think, for commercial building owners, you know, it's a similar thing, but it's but it's elevated to a higher sort of long term capital planning exercise, the idea of what we call decarbonization plans, building and portfolio decarbonization plans, this is a field that's really growing among consultants and architect and engineering firms to offer a service to help building owners understand how all these pieces fit together, and to be able to decarbonize their building stock in a logical, sort of sensible way, based on the current state of the building in its overall capital replacement needs, and especially looking for synergies between the bigger projects, like envelope upgrades and the bigger projects having to do with the end of equipment life, making sure that that end of. Life moment is again captured in a similar way to what we just talked about with homeowners, so that you're not in a situation where your choices are limited. And I think, you know, ultimately, a lot of it for bigger portfolio owners, has to, has to come back to some of the ESG kind of impetus. And really trying to understand, in addition to that, what that dream premium would look like for them, you know, and kind of how it aligns with their corporate values and the financial criteria that get baked into the project. And we know that there are a lot of projects, for example, when geothermal systems are put into place, where you're freeing up mechanical space that can then deliver revenue additional revenue streams. And so, the direct sort of cost comparison of before and after isn't necessarily obvious, and that's why having decarbonization plans that try to bring in those value streams as aggressively as possible can really be helpful.
Trevor Freeman 50:57
Yeah, I think I mean, the main takeaway for me from that is, is plan. Think about this ahead of time, do your analysis. And it's something that I know in the work that that I'm involved in here at Hydro Ottawa. It's something we talk to our commercial customers, especially a lot about is spend the time to create the plan so you're not caught off guard. You know what you're going to do. You know what your strategy is, and you can implement it doesn't have to be done overnight, and the context will change, right? You know, new programs will come into play. Existing programs will leave. There will be different times where it makes sense to do different projects. But if you have that plan, if you know what the strategy is, then you're, you're well set up. So maybe one last quick question. You know, the idea of programs coming and going. It's not always a straight path when it comes to policy, and as much as there's been some exciting things happening in the last little while when it comes to policy and the regulatory framework around decarbonization, so we've had a price on carbon in Canada for a while. We know that things ebb and flow, and so we are likely looking at least a federal election this year here in Canada, likely a provincial election here in Ontario, where we're speaking from. And these things can change policy and policy can ebb and flow. How does the decarbonization effort handle changes in policy, changes in prioritization from the different levels of government that we talked about, you know what? What is the strategy when it comes to those changes as we move forward?
Brian Flannagan 52:36
Yeah, it's a great question. I mean, especially, especially in the times that we're in for the listeners. You know, this is the day after Prime Minister Trudeau announced his resignation, and there's a lot that's happening. I think the strategy overall is, it's quite simple, but it's to recognize that this has always been the case. You know, municipal and provincial and federal governments across the country are changing on different timetables all the time, the alignment of sort of ideological approaches to dealing with the climate crisis are in flux, and have been in flux the whole time, you know, and so I think it's incumbent on us, and this is, this is part of the approach that will be saved. The BDA, the building decarbonization Alliance, is trying to take a different approach. I don't know that we're there in terms of truly embodying that Spirit just yet. It's a work in progress. We're still very new, but the idea of really embracing that we have to be able to work with an incumbent of any political stripe or leaning, including gas utilities, who are powerful incumbents here, who have every reason to want to continue what they're doing, we have to find logic and rationale to drive us, commonly toward a net zero objective for all of the international, global competitiveness positioning issues that we talked about earlier. Right? It's not easy to do that, because climate ideology has traditionally sort of been a left leaning ideology, and I think it's difficult to overcome that and work with different ideologies. But you know, when you have a populist sort of idea saying, hey, people can't afford a house, or people can't afford their energy bills, those are statements that resonate with people, and we have to. We can't come along and say, oh no, this is totally affordable, this is easy, this is a slam dunk. You just electrify your building, like spend $20,000 on a heat pump. You should be able to do that like that is not in touch with the reality of what a lot of people feel. So, I think it's the strategy for us is to recognize that we have to be able to truly address those concerns with evidence and with science and with technologies that actually deliver the goods, we think that there's a strong case for many of those things, like cold climate heat pumps work that question. I think that question is largely resolved, and if you don't have exactly the technology that you need put in a hybrid system for now. That's fine in 15 years when you replace it, the cold climate heat pumps then, or even going to be better, you know? So, there are things that we can put to bed, but we have to be able to if that isn't the case, if it's not actually affordable in a given jurisdiction, we can't walk in and say, hey, well, why aren't you guys doing this? This is affordable. It's not and I think those political ideologies often tap into those different elements where we don't have the narrative fully baked as powerfully as we should to counter, you know, whether it's questions of energy system reliability or energy choice is another sort of theme that comes out. You can't tell me which heating system I'm going to use. Well, I don't need to convince you if you already believed that it's just fundamentally better, you know. And we see this with electric vehicles, actually, the transition there has been interesting where the strategy is to say, hey, this electric car is like, way better than an internal combustion car, you know. Credit to Elon Musk for bringing out a vehicle that was just faster than anything else. Any piston head would just look at that and say, oh, my God, the performance is crazy. And sort of having, having those ready answers to really diffuse with conviction and based on actual evidence, to diffuse those messages, I think, is really, really important. And we have a lot of areas of study that are still left. We talked about the green premium earlier, for investments in commercial buildings. We don't really know, you know. And to say, well, if you invest your property value is going to go up, or the asset value is going to increase. It's just, we just don't know that. And so, following the evidence and being able to acknowledge where we don't, where we don't have all of the answers, I think, is important, and then finding the answers and stating them with conviction when it when it does make sense, you know. And I think in the cases that I mentioned earlier, if you're, if you're heating with fuel oil, the affordability question is solved. You should get all fuel oil because that will help you to pay your energy bills, right? And so those kinds of messages, I think, land with any political stripe, if it's back based, and if it actually follows from a logical thread. You know, it's hard to do, but I think it's necessary work if we're really going to get to where we need to go.
Trevor Freeman 57:06
Yeah, and at the end of the day, I mean, the work doesn't stop just because the headwinds get a bit stronger. And you know, the like you said, we got to find those messages that resonate and that makes sense, and then are rooted in fact and rooted in things that really resonate with people. So, I think that's a great place to wrap up the conversation. Brian, I really appreciate your time today. Thanks for joining us. We do always end our chats here with a series of questions to our guests. So, I'm going to put you on the spot here with a few questions, starting with, what is a book that you've read that you think everybody should read.
Brian Flannagan 57:40
Oh, my God, there's so many. I would go with. Outlive. The byline is the science of longevity, and it's by an author called Peter Ottawa, and it's, I think it's just pretty important reading about, you know, the major causes of illness in North America, and strategies that you might deploy to try to live healthier, longer. Pretty cool reading, lots of lots of stuff in there for everybody to take away, I think.
Trevor Freeman 58:09
Yeah, and good time of year for it, the New Year. Everybody's on their health kick right now. So, grab that book and get some ideas. 100% so same question, but for a movie or a show, what's a movie or show that you have watched that you think everybody should take a look at.
Brian Flannagan 58:23
My favorite go to is the Shawshank Redemption. I just can't think of a movie that's represents better storytelling. The cast is incredible. The story is incredible. It moves me every time I watch it. That's just crazy good. So, that's usually at the top of my list. I mean, there's so many. I'm a bit of a movie. But of a movie buff. There's lots and lots. But that one usually, usually rises to the top.
Trevor Freeman 58:47
My kids are getting older, and I'm starting to think about, yeah, what are all those movies that are so good that I just need them to be a little bit older before I can watch with them? So that's definitely on the list.
Brian Flannagan 58:58
100% I've and I've had this. I've had the same ruminations with my kids, when, when is it appropriate? Because there's some very mature themes. But it's a great movie, for sure.
Trevor Freeman 59:08
If someone offered you a free round-trip flight, let's hope for a sort of electrified plane or some sort of carbon offset anywhere in the world, where would you go?
Brian Flannagan 59:17
It's going to be biofuels, by the way, for the airline industry. That's why we need to save all of the biofuels for those harder to decarbonize sectors. When people talk about decarbonizing buildings with biofuels and things like that, it's like, no, no, we have to save them. So that's why electricity, it's a whole that's a whole other aside to the conversation that we had. But yes, I'd, I'd go to New Zealand or in Australia. I think I haven't been, long flight. The great value, and thanks for the free tickets, Trevor, I'll look for them in the mail, but yeah, I haven't been and the idea there's just so many adventures to be had out there, hiking or mountain biking or just exploring the Outback and camping would just be fantastic. It's a lifelong dream. I'll get there eventually.
Trevor Freeman 59:58
Who's someone that you admire? Well, it's just so many different role models. I mean, in in the news recently, I would say, a bit of a news junkie, and so following the war in Ukraine over the last several years has been, you know, heartbreaking, and in many ways, kind of, you know, Volodymyr Zelensky as their leader has been inspirational. And kind of, it's reemerging in the news given the election of Donald Trump again, and you know, the resolve and sort of his beginnings, and how he came into that role, and what he's having to contend with, and the kind of leadership that he's exhibiting. And I'm certain that there's lots of flaws and lots of things that I may not be aware of in the man, but looking at it from an outside observer, based on the news that I'm able to access, oh my goodness. What a leader. Very, very inspirational. Yeah, it is always cool to see examples of just phenomenal leadership in the face of adversity, and there are a few of those throughout history. But yeah, that's definitely a good example of it. Last question, what is something about the energy sector or its future coming up, you know, at the beginning of 2025 here something that you're really excited about.
Brian Flannagan 1:01:04
Yeah, I mean, it's, it's sort of way out there. And I know from an energy future perspective, in terms of generating abundant energy, we've got wind and we've got solar that are, you know, just declining in price and increasing in terms of their capacity to feed electricity systems like that, obviously, is really promising, but something that's had my attention for a really long time is the prospect of eventual nuclear fusion. I know that that's bonkers. It's super expensive. And there's lots of reasons to say, well, come on, Brian, that's never going to really be a solution like that's certainly not going to help us for 2050 and all those things are true. So, things are true. But there's a project that's taking place in France. It's an international collaboration called ITAF, which is building this really huge, the first at scale, sort of example of a nuclear fusion reactor. And the project is fascinating. It's got an amazing website that details and that illustrates in great detail how they're building this thing, and how various countries are bringing different components together, and the technical and engineering challenge of it. It's like a moonshot. And I don't know what it is about that that captures my imagination the way that it does, but seeing that kind of an engineering feat unfolding, and it's like a 30-year project to get the thing done, seems like it's probably going to work by the time they get it finished, computing technology will be sufficient. Will be sufficiently advanced to control the Plasma field, and all these things are kind of lining up. The idea of being able to turn something on and off that's nuclear, without the safety considerations, and having that kind of power emanate from it, basically free energy at the end of the day, quote, unquote, it just captures my imagination in a way that none of the other sort of technologies that we're plugging away with, the reliable things like wind and solar that that's for sure, that's the way it's going to going to go in terms of clean energy. But yeah, that project just there's something about it. Anybody who's listening should look it up. It's it er, that's super cool to see how they've put together the graphics and the story of the of the system, and who knows, maybe, maybe our grandchildren will see that kind of technology helping to power all of the advanced systems that we're going to need in 100 years.
Trevor Freeman 1:03:14
Yeah, I had this conversation with a friend not too long ago about, you know, what is the thing that's happening now that's it's on the periphery. We're not too familiar with it, but in 50 years, people will look back and be like, oh, I wonder what it was like to be aware of the infancy of that thing. And who knows, maybe nuclear fusion is that thing so great example. Well, Brian, I really appreciate your time today. Thanks for joining us and talking through decarbonization of buildings, this massive part of the decarbonization effort that certainly could use all the focus it can get. So, appreciate your time and good to chat.
Brian Flannagan 1:03:50
Yeah, thanks to you. It's been it's been a lot of fun. Keep doing what you're doing. It's been great.
Trevor Freeman 1:03:55
Awesome. Take care. Thanks for tuning in to another episode of the think energy podcast. Don't forget to subscribe wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it feedback comments or an idea for a show or a guest, you can always reach us at thinkenergy@hydroottawa.com
Looking ahead at 2025 clean energy trends
Season 6 · Episode 149
Monday, January 13, 2025 • Duration 19:55
The energy sector is always changing. Episode 149 of thinkenergy explores what to keep an eye on this year. Like political influence. How will the Trump administration's takeover reshape policies across the border? What are the potential impacts of federal and provincial elections here in Canada and Ontario? From energy strategies to affordability to decarbonization efforts. Listen in as host Trevor Freeman uncovers how politics influence the energy sector and what to expect from thinkenergy in 2025.
Holiday Rewind Part 2: Unwrapping the energy transition
Season 6 · Episode 148
Monday, December 23, 2024 • Duration 51:42
The final episode of thinkenergy in 2024 unwraps on the year’s biggest topic: the energy transition. Learn how it’s shaped discussions and actions across the energy sector, as we revisit the most insightful moments from past episodes, including expert insights on sustainable practices, investments needed for future transformations, and the impacts on rural, remote, and urban communities. Tune in for a holiday rewind of how the energy transition affects Canadian consumers, businesses, and the environment.
● Episode 142 (Turning energy consumer interest into action with EY Global):
Holiday Rewind Part 1: Unwrapping the best of 2024
Season 6 · Episode 147
Monday, December 9, 2024 • Duration 38:40
The holiday season is here and 2024 is coming to a close. It’s a good time to reflect, so we’re looking back at five of the top episodes of thinkenergy in 2024. Join your host Trevor Freeman, as he unwraps the year’s most important topics surrounding the future of energy in Canada. Listen in for how experts are guiding change with insightful data and how they’re communicating facts about the climate crisis. Plus, learn about new energy policies and ongoing updates to the electricity grid.
Breaking down Distributed Energy Resources, with Hydro Ottawa’s Trevor Freeman
Season 6 · Episode 146
Monday, November 25, 2024 • Duration 20:39
What are Distributed Energy Resources (DERs)? How important are they to the energy transition? Host Trevor Freeman shares how solar panels, batteries, and small-scale wind turbines are shifting from niche innovations to central figures in reshaping our energy infrastructure. Discover how these tools help reduce reliance on centralized power and empower you to generate and store your own energy, reduce grid dependency, and pave the way for a greener, more efficient, and cost-effective energy future.
Cybersecurity and the energy sector, with Hydro Ottawa’s Jojo Maalouf
Season 6 · Episode 145
Monday, November 11, 2024 • Duration 19:18
Our daily lives are more and more connected online. This includes our utility grids. Jojo Maalouf, Hydro Ottawa’s Director of Cybersecurity and IT Infrastructure, joins thinkenergy to discuss the role of cybersecurity in the energy sector. From cybersecurity threats, like cyber warfare and ransom-seeking hacktivists, to the measures required to defend our energy systems. Plus, how AI both helps and complicates matters. Listen in to learn what’s driving change and the collaboration needed to protect the grid.
The what, where, when, and how of Canada’s energy transition
Season 6 · Episode 144
Monday, October 28, 2024 • Duration 18:59
The energy transition is a big topic on thinkenergy. But what exactly is it? What does it mean globally, in Canada, and to you as an energy user? In this bite-sized episode, host Trevor Freeman unpacks the what, where, when, and how of the energy transition. From energy production and storage to how electrification is implemented in different communities. Listen in to learn about the nuances shaping the energy landscape, including the economic, political, and technological shifts driving change.
Electrifying Canada’s remote communities with QUEST Canada
Season 6 · Episode 143
Monday, October 14, 2024 • Duration 45:02
The climate crisis is a global challenge. But there isn’t a one-size-fits-all solution. While urban centres are driving discussions on electrification and policy, rural and remote communities, including many Indigenous areas, face distinct energy realities. Gemma Pinchin from QUEST Canada joins thinkenergy to share how these communities can engage in the energy transition equitably and sustainably. Listen to episode 143 to learn about the diverse approaches to decarbonization in different global contexts.
Turning energy consumer interest into action with EY Global
Season 6 · Episode 142
Monday, September 30, 2024 • Duration 53:59
Who is impacted by energy? We all are. Regardless of our roles, whether we work in the industry or not, we all use energy in some form or another. And we use it everyday. So, when it comes to energy transition, industry leaders must consider the end user. In episode 142 of thinkenergy, Greg Guthridge and Nicholas Handcock of EY Global share how stakeholders and utilities can better understand the consumer energy experience—and, ultimately, how to develop more informed strategies to the energy transition.
Decarbonizing and electrifying your home, with Sarah Grant of Goldfinch Energy
Season 6 · Episode 141
Monday, September 16, 2024 • Duration 58:47
Most Canadians are eager to combat climate change. But how? One actionable area is reducing emissions from our homes. In episode 141 of thinkenergy, Sarah Grant, founder and co-owner of Goldfinch Energy, shares ways you can reduce your home’s reliance on fossil fuels. Goldfinch Energy is a women-owned, Toronto-based organization offering energy assessments, clean tech roadmaps, and green renovation support services. Listen in to learn about home decarbonization and electrification solutions.
Welcome to thinkenergy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman, as I explore the traditional, unconventional and up and coming facets of the energy industry. If you have any thoughts, feedback or ideas for topics we should cover, please reach out to us at thinkenergy@hydroottawa.com Hey everyone, and welcome back, and welcome to 2025. Happy New Year. I hope you all had a restful and relaxing break. I know I certainly enjoyed a little bit of time off with some friends and family, and it was nice to sort of recharge. But here we are at the start of a new year, at 2025 early January, the whole year is ahead of us, and there's lots of work to do, and being in the energy sector means there's lots of change ahead. On that note, today, we thought we'd dive into some of the areas that we think might shape or influence or be areas to watch for when it comes to energy in 2025. There's no such thing as a quiet or stand still year when it comes to the energy sector, 2025 will be no different. So, we thought we'd take a look at some of the things that we think might sort of hit the headlines or really drive change. So, without further ado, let's dive into those areas. Area number one is politics. So, energy is political, and energy shapes politics, and politics shapes energy, and that's the same every year, but 2025 is shaping up to be a pretty significant year when it comes to political change that might impact energy policy. So, to start with, we are mere days away, a little over a week away as I record this from a new US administration. The Trump administration will take over on January 20, and like any change in administration and what is arguably the biggest economy in the world that will have an impact on climate change policy, energy policy, the flow of goods across borders. You know, there's talk of tariffs between Canada and the US. So just because it is in the United States, that doesn't mean it won't impact us here in Canada, so we'll be looking to see what change that does bring, what how that influences politics and energy policy and the flow of goods and all of those things that can impact what we do with energy. A little bit closer to home however, we also have some change potentially coming here in Ontario, at least, we are looking at potentially two elections this year. So, to start with, there's the federal election. It is very, very likely, almost a sure thing that we will see a federal election in the coming months. Justin Trudeau has recently announced his resignation, which will almost definitely trigger an election. So, we could be looking at a new government, or a new mandate for the existing government. So, what might that mean? Well, if the Liberal Party the current government, manages to get another mandate and remain in power, we kind of know what their priorities are. They've been going down a path for the last little while. They will probably continue to invest in clean energy infrastructure, they will continue to push for net zero goals and look for ways to support others to achieve net zero targets as well. If there's a change in governments, which the polling suggests is likely, and the Conservatives get into power, they are likely to look to prioritize affordability and resource sector competitiveness. They may also adjust timelines for emissions targets as a result of that. The one big thing that's worth mentioning, of course, is the price on carbon. This was brought in by the existing Liberal government, and they stand behind it. The Conservatives are very much campaigning on a platform of getting rid of the price on carbon, the Federal price on carbon that will have significant impact on energy policy and how things move. There are a few previous episodes that you can listen to that talk a little bit about that, and I'm sure we'll talk about it throughout the year as things play out. And finally, in this section, in Ontario, it's very likely that we might see a provincial election as well. All signs are kind of pointing towards a provincial election this year. So what could that mean? Well, similarly, our existing government has kind of made their energy policy known. We know what their focus is. So they are focused on expanding our traditional energy mix, so nuclear, some natural gas, as well as some investments in renewables in order to make sure that the grid can handle growth and electrification in that sort of rising demand that we're seeing. Should we see a change in government to one of the opposition parties? There may be more of a push for more renewable sources and lowering those carbon emissions faster than the current pace of change, at least based on what they are saying. So we'll keep an eye on that and how that comes into play. Obviously, energy is sort of primarily in the provincial jurisdiction here, so a change in government or a new mandate for the existing government would certainly have a big impact on energy policy. So area number one politics, area number two is energy affordability. So Canadians have always cared about affordability when it comes to energy this has been sort of a driver in previous elections, but it is definitely top of mind now, as we are coming out of sort of a wave of inflation, supply chain issues, there's an affordability crisis, sort of across the economy in Canada, for many Canadians. So that definitely applies to energy as well. What does this mean? Well, it certainly will influence the way many people vote in the elections that I just mentioned. So look for Canadians to be wanting to know what those political parties stance is on energy and energy affordability. It may also impact the pace of adoption of decarbonization measures and electrification and some of those energy transition pieces that we're seeing. So if folks are struggling with the affordability of their bill. That means they are not likely to invest in large upfront capital cost items to change that. On the other hand, Canadians will be looking for ways to reduce their energy costs, and so maybe some of these items that might help reduce electricity costs will become more attractive to Canadians, they will also be looking for programs to help them with this, and the province just recently announced their new incentive structures, or the new iteration of save on energy incentive programs called the home renovation savings program here in Ontario, and Canadians will likely want to take advantage of that to help upgrade equipments, make their homes more efficient. There's a commercial stream for that as well, so businesses and institutions will also be looking to take advantage of that to address energy costs. So energy affordability will certainly be a driver, as it often is in 2025. Area number three is decarbonization. So decarbonization is here to stay, and we expect that to ramp up this year, for sure, to continue being a point of importance for Canadians. So the climate crisis won't disappear from the news. As I record this, we're, you know, seeing these really terrible images and stories coming out of the Los Angeles area about wildfires, it seems like that's a perennial thing. We see that every year now, that will continue, and that really does drive people to think about their own decarbonization journeys. We are still in the early stages of adoption for some of this technology. You know, heat pumps, home generation and storage, real deep decarbonization measures were in those early stages. So I don't expect, you know, massive steps forward in the next 12 months, but I think more folks are going to start thinking about and planning for their actions on this, and that's at the both the residential and the commercial level. So here at Hydro Ottawa, we're seeing a lot of our commercial customers take advantage of our Enercan funded Ottawa Retrofit Accelerator program, which really supports that sort of carbon pathway planning, that plan to decarbonization. And I think a lot of folks will start thinking, you know, what's my next move when it comes to decarbonizing? You know, if my furnace is getting to be a little bit old, am I going to put that heat pump in? You know, even if I don't do it in the next 12 months, I want to start thinking about what that looks like. So we expect decarbonization to continue to be a point of focus. We expect it to be a point of topic, you know, in these elections that we talked about, because that climate crisis is in front of our faces, always in the news, and that won't be changing. Area number four is clean electricity, grid modernization and energy efficiency. So in keeping with the previous point, decarbonization, electrification is one of the main tools to decarbonize, and we are moving to changing some of those end uses, from fossil fuel combustion to electricity. So things like heating our homes, our spaces, our water and transportation. You know, how we get around, what we drive, what sort of public transportation we take. The solution to these things, when it comes to climate change, is primarily electricity. So in order to make sure that we have enough electricity and that the electricity we have is clean enough to support that, we will see more movement towards this in this year. So just in December before the end of the year, December 2024, the Federal clean electricity regulations were finalized. And these regulations kind of chart a path to decarbonizing electricity generation in Canada by 2050 you'll notice that that's a change in date. The previous target was going to be 2035 but over the course of the last little while, the federal government has come out and said, yeah, look, we think it's more realistic to set 2050 as a target, so that is the new target. And the federal government's investing significant money behind this. There's $60 billion to help this general move towards decarbonizing our electricity generation, and to make sure that that's done in a way that keeps energy affordable for Canadians. At the same time, utilities across the country will continue to invest in grid modernization. So as well as infrastructure expansion, not just modernization, we're also building and growing our grids to keep up with the pace of change, but we need to also be able to leverage more DER's on the grid, so more distributed energy resources, small scale solar generation, things like that. So we will continue to see utilities make steps in that direction. They will look to levels of government to support those initiatives through programs and funding and regulatory change. So we will continue to see that change in grid modernization. I know it's definitely a big topic for us here at Hydro Ottawa. And finally, in this section, energy efficiency. Energy efficiency is not new. It's been around for for quite a while. In fact, it was the primary focus, kind of before we shifted a little bit more towards thinking about carbon. But we cannot fully decarbonize. We cannot fully electrify without significant energy efficiency. We just won't be able to affordably build the infrastructure we need if we're not using energy in an efficient way. So that will continue to be a focus. And in fact, I mentioned the new incentive programs from the province of Ontario that is very much designed to support ongoing energy efficiency measures. So, we will continue to see that as a focus in 2025 and our final area, area number five, is technology. So there is no year anymore, in fact, maybe there never was where technology doesn't continue to grow and expand and evolve in ways that we couldn't even imagine. And it does seem like the pace of change is picking up, but I think that's kind of normal. So we will see technology that supports or augments the energy transition continue to evolve in 2025 and the ways that technology influenced that really, you know, we have an idea on some of them, and it'll be interesting to look back in 12 months at what we know in December 2025, that we didn't even know here today in January. So a couple specific areas. You know, we're seeing EV technologies continuing to involve we will see continued EV adoption throughout the year. Year over year, over the last five years, you know, EV adoption in Canada has increased steadily. In July of 2024 you know, zero emission vehicles hit almost 14% of market share, we can expect that to continue increasing. As that happens, you know, more charger technology out there, more sort of, not just the physical charger, but the ways that those chargers interact with the grid more control over that to make sure that we're managing charging in an appropriate way. The role of AI is really going to be interesting to watch this year. So AI, of course, is all over the news across all sectors of the economy, but certainly in the energy sector, it has a role to play, and there's kind of two facets to that. The first is the role that AI might play in helping us manage our energy costs, our energy usage, and that's both at the consumer level. So, what will AI help me do in my home, to manage my energy costs, to manage the sort of cleanliness of my energy? Let's say I want to really focus on just, you know, green energy when the grid is at its cleanest and try and avoid it when it's maybe more carbon intensive. What's the role of AI in that this is likely a multi year stretch. I'm not saying that we're going to sort of have all those questions answered by the end of this year, but I think we will see movement in that direction over the course of this year, and then also at the utility level. What's the role of AI in helping utilities manage the grid? You know, understanding where there are feeders that are increasing or that are getting near capacity limits and needing to shift. Again, this is not a 12 month exercise. This is a multi year exercise, but I expect we will maybe see some movement in that direction. The other way that AI and the increasing role of AI will impact the energy sector is just purely from an energy needs perspective, so AI is an order of magnitude higher when it comes to the amount of computing power that is necessary. So that, you know, the kind of stat that gets thrown around is that a chat GPT search uses about 10 times more energy as a standard Google, you know, search, a search engine search. So with all of this stuff going through AI, we're seeing more computing power needed. So that means, you know, bigger, more dense data centers that have larger cooling needs, which means more energy requirements. And, as much as we're seeing electrification drive demand up for electricity AI usage and data center usage is also driving up demand. And, so we're seeing larger load requests. You know, utilities are having to figure out, how do we provide way more power than we've had to previously, to some of these new customers and customers that are wanting it kind of overnight, like, hey, we're ready to build a data center like tomorrow. Can you supply us with a significant amount of power? So that will certainly be a driver. The last little piece of technology that I want to mention there's, you know, we could go on for hours on this topic is when it comes to sort of home generation and storage, especially storage. Solar panels have kind of been around for a while now. We've seen that really precipitous drop in price when it comes to solar technology, and that continues, but home, or sort of behind the meter storage, is really becoming a thing that is more realistic than it has ever been before. So, the incentive programs that I've brought up a couple times here in the province of Ontario now provide an incentive to put in a behind the meter battery in your home, and the role that those will play, we're only just beginning to see, you know, helping customers manage their energy costs. You know, charge that with your solar panels and then use the battery during peak times, or charge it during off peak times and use it during peak times. You know, managing costs redundancy and resiliency, and, you know, helping you out with a bit of a bridge during times of outage will be really important. And you know, we're seeing that at the at the household level, but we're also going to see that on a much bigger scale, at the commercial level. So, commercial customers are also looking at what's the role of battery storage to help them manage costs, and then even one next level, up at the grid level. So, we are seeing large scale battery storage projects that will support sort of grid management, help manage peaks for utilities so that they can, you know, defer or delay or reduce the size of that infrastructure builds, you know, if they can manage to rely on batteries for those handful of times a year when we spike into those peaks, then that helps out with grid planning. So those are some of the technology pieces that we expect to see really kind of flourish or take it to the next level in 2025 again, all of these things are not short term projects, 2025 we'll see some change, but these are, like, multi year things that will go on beyond that. So those are the areas that we think will kind of drive change, or be areas to watch for this year. You can likely expect some conversations on the podcast about that over the course of the year, because certainly they will be making news, and there's some really interesting folks working on some really interesting things when it comes to those areas. But, was there anything that we didn't identify that you're kind of keeping your eye on? Is there anything that you think we should be keeping your eye on, or that you're keeping a look at? Feel free to let us know you can reach out to us at thinkenergy@hydroottawa.com As always, we love to hear your thoughts and feedback. We love to hear kind of your ideas for topics or episodes that we should do or guests that we should have on the show. We're going to continue to explore with format this year. So we'll definitely keep talking to some really smart folks, we will throw out a few more of those kind of explainer episodes where we try to demystify a complex or maybe unseen topic when it comes to the energy sector. But, whatever we do, we look forward to having ongoing conversations with you guys and hearing your feedback, and this is the kind of stuff that we just love talking about. So thanks for listening. Happy New Year, and we look forward to chatting to you next time. Thanks for tuning in to another episode of the thinkenergy podcast. Don't forget to subscribe. Wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback comments or an idea for a show or a guest, you can always reach us at thinkenergy@hydroottawa.com
Welcome to think energy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman, as I explore the traditional, unconventional and up and coming facets of the energy industry. If you have any thoughts, feedback or ideas for topics we should cover, please reach out to us at thinkenergy@hydrottawa.com. Hey everyone and welcome back. Well, we find ourselves here at the tail end of 2024 about to wrap up the year. Hopefully you are all looking at some restful holiday plans, a chance to sort of unwind and decompress after what seems to be the same every year, kind of a busy year. There's always lots going on, but hopefully you're looking forward to some downtime over the holidays. I know I certainly am, as is normal, at the end of the year, we are looking back on the year that was the year that we've just gone through. And I'll say right off the bat that I'm really grateful for this year and this chance to step into the host role of the think energy podcast earlier this year, I took over in March of this year, when the previous host, Dan Seguin, retired, so I'll express my gratitude right off the bat to Dan and team for sort of pioneering this podcast over the previous years and then trusting me to take over the host chair. It's been a really fun journey and fun to kind of engage with our guests on different topics that I'm really passionate about you guys know from listening to this that I really like talking about climate change and energy and the energy transition, and this is a really cool and neat platform to be able to do that. So, thanks to the team for trusting me with that role. One thing we've been doing, as we've been looking back, is trying to figure out, you know, what is the main theme of this podcast here? What do we actually talk about? In our last episode you know that we did a bit of a summary of some of the top episodes from the year, in terms of, you know, interest from you the listener. For this one, what we wanted to do is really embody the theme of the year, and I think it should be no surprise that the theme is the energy transition. I mean, that's kind of the theme of the podcast. I know we touch on other aspects of working in the energy sector, but the energy transition is really the all-encompassing theme or thing that we talk about, and we spend a lot of time on here in this podcast, and so we wanted to bring you some of the episodes that really talk through what that energy transition is, and what does it mean for us. What does it mean for us as energy consumers, as homeowners and people that work and own and run businesses, as people that work in the utility industry and are making decisions about the future of energy? So, we've picked a few clips from the year that we think really embody that. So, get comfy, hopefully you're warm inside, as it's maybe snowy out where you are, maybe not, maybe you're listening from somewhere warm. But get comfy and have a listen to what we think are some of the clips that really embody what this year was about when it comes to the energy transition. To start things off, I think it would be good to and unfortunately, you're going to have to listen to my voice for another little bit longer. It'll be good to start with an episode I did not too long ago, which was really a primer on the energy transition, which really focused on helping everybody wrap their heads around what exactly is this thing that we talk about called the energy transition. So have a listen to this clip from that. And if you're interested, go back and listen to the whole episode. When we think about the energy transition, we probably mostly think of this ongoing shift to cleaner emissions free energy. So EVs over gas cars, heat pumps over gas furnaces, etc. That is definitely part of it. In fact, that's a major part of it. But like most things in life, it's never just as simple as that. The energy transition is a truly fundamental shift in our global relationship with energy, which includes not just what makes our cars go, but everything from how, where and when we generate energy, how, where and when we store and use energy, how we pay for the energy we use, how we finance and pay for energy projects and the systems that we need to do all the things I just mentioned. It will include a shift in what policies and regulatory guidelines and barriers we put in place to protect the public, but that also encourage change that we want to see happen to allow for innovation and advancement. It isn't completely throwing out everything we have and starting from scratch, although some things will disappear, like coal fired electricity generation, for example, but in a lot of areas, it is building on what we've already got at a pace that we haven't seen before, or at least in a very long time. I think that's a key point here. One of the things that makes the energy transition, a change worth noting is the pace of change that we will see. Things have never really been static in the world of energy, from that time when our earliest ancestors first sparked that fire, this is the poetic part that I mentioned earlier, our relationship to energy has never really stood still, but other than a few significant events, the upward trend in sophistication and growth and scope has been fairly linear, gradual, one step after the other, et cetera. It's those exceptions, though, those things that are different from that gradual, linear growth that probably most closely resemble this period of change that has started that we're calling the energy transition. Take the Industrial Revolution, for example. For decades and centuries prior, there had been gradual improvements in how we got around or how we work the fields. Let's say, you know, first by hand, then with tools, maybe a better plow came along. We started using a horse or an oxen to pull that plow, etc. That along comes the steam engine, and all of a sudden, things take off like never before. It wasn't just a matter of swapping out a horse for an engine. It may have started there, but entire economies and aspects of society changed or sprang up where they didn't exist before one change rolls into another and another in quick succession, and before too long, things that couldn't be imagined only decades before are suddenly a reality to a degree, that's what we're looking at today with the energy transition. How far that change goes remains to be seen, but it's pretty clear that we have begun one of those disruptive periods of change that will be looked back on as a major turning point. So yes, the energy transition is about shifting away from greenhouse gas emitting fossil fuels, coal, oil, natural gas, et cetera, to renewable, non-emitting energy sources, solar, wind, hydro, nuclear, etc. But it's also so much more. Even without climate change, our need for energy is growing at an exponential pace. In Canada, we're fortunate in that we have a strong foundation with a relatively decarbonized grid already, so about 80% carbon free nationally, and a diverse mix of hydro, nuclear and renewables like wind and solar. But it's still going to take quite a lot of effort to decarbonize that remaining 20% at a time when, as I keep mentioning, demand is increasing rapidly. In Ontario, our electricity system operator, the ieso, just updated their future demand projections to show that provincial demand will be 75% more or less high by 2050 than it is today. This means we also need to invest in our grid infrastructure to ensure it can handle the increased load, as well as utilizing things like decentralized generation and storage to ensure we don't over build not to mention making sure we can handle more extreme weather. So, I think that's a good place to set the stage for us. But now let's get into some of the real experts on this. And we'll go next to a conversation that I had with Francis Bradley, who's the president and CEO of electricity Canada. Electricity Canada is the sort of national voice of sustainable electricity. Here in Canada, they represent 40 of the largest utility companies. So that's companies that generate, transmit and distribute electricity from coast to coast all across Canada. And Francis and I talked about what level of investment is going to be required in order to accomplish some of those aspects of the energy transition that we talk about. So, here's what Francis had to say about that.
Francis Bradley 09:02
I mean, these are, these are great questions in terms of what the investments are going to look like. And so, you know, we're looking at, as I said earlier, doubling the doubling the grid, we're going to need at least two times more kilowatt hours when we get to the future. So, you know, that's the level of investment that we need to be thinking about. There have been different organizations that have tried to kind of get a scope and scale of what that actually looks like. Again, I mentioned the RBC climate Institute last year. It had a study that came out, and I believe they, they peg this at, I think was $2 trillion was the was the amount that they expected this to cost? Where's the money coming from? Well, you know, that's a really good question, and it's one that we've been engaging in for a number of years now. And I'll try not to be, like, totally pedantic on this, but you know, if you can consider from a public policy standpoint, if we believe that expanding the electricity system is necessary to decarbonize the Canadian economy, then essentially, what you're saying is that expanding the electricity system is a public good from, you know, from an economic theory standpoint, if it's a public good, well, then it is something that should be borne by that taxpayer, not the ratepayer, right? And so, you know, part of this discussion is, who needs to bear the costs for building out a clean, non-emitting electricity system so that the rest of the economy can decarbonize. Should it be the electricity customer, or are there parts of this, this core infrastructure, that that are regarded as a public good, and it's something that this paid for by the taxpayer, you know, and we see this in other sectors, other sectors as well, where, you know, certain things are perceived to be public good and their taxpayers supported. And we saw a bit of a recognition and a realization that this made sense to a degree in the federal government's budget in 2023 where, you know, they essentially pledged one in every $8 in new spending was going to clean electricity projects through a variety of needs. You know, the investment tax credits, the Canada infrastructure bank, a number of funding mechanisms. So, I mean that those kinds of dollars from the federal government was a commitment to building infrastructure that really is unheard of at a national level since the Second World War. So, you know, it really kind of moved clean energy and electrification into the category of, well, I guess it's a public good. Because, you know, there's a recognition that if the federal government wants to achieve these policy objectives, it needs to put some federal dollars in. So, you know that determination is and whether it's a public good or not, has been made in favor of the taxpayer versus the rate there. Now, again, you know, you could easily say, well, hang on a second, the rate payer and the taxpayer the same person, except that it doesn't quite work the same way. You know, do we want to attach to the customers’ bills, every single customer, the cost of you knows, this, this expansion of our infrastructure or not. And you know, electricity bills are not something that fall, as taxes do disproportionately on those that are wealthier, right? And so, it is a little fairer. Now, you know, in terms of the specific investments, you know, I think exactly how this is going to happen and how it's going to roll out. Those details are still being worked out by some of our members. But I do want to highlight that, you know, the approach here that we're seeing from the government, which we appreciate, is, you know, a one that is so far technology and agnostic, which we think is the right way to go. So, you know, we there isn't, like, a right way or a wrong way to generate electricity. So, you know, the future that we see is going to be an all of the above future that will encompass wind and solar and nuclear and traditional hydro and and hydrogen and carbon capture and storage and more. Not only does that give us, you know, the greatest flexibility, and gives us the ability to balance different types of generation, dispatchable versus non dispatchable. But it also gives us, you know, overall, a far more flexible system. So, you know, that's the what the future is going to look like. So, to, you know, to give you the short answer, it'll be all of the above, and it'll be probably $2 trillion. You know, I kind of touched on this a couple of times, but No, first and foremost, the energy transition, if you will, as I noted earlier, can't be paid exclusively by the ratepayers, right? You know, this is an overall objective that we have. And so, you know, the infrastructure build is so large that that it needs to be, certainly, parts of it need to be paid through the tax system, and that that is progressive in a way that rates are not progressive to begin with. Now, you know, but boy, addressing vulnerable customers absolutely critical. Now there's a variety of things that that could be tried. You know, in the United States that there's a Low-Income Home Energy Assistance Program that it helps keep families safe and healthy through initiatives that assist families with energy costs this, I think they call it the LIHEAP provides federally funded assistance to reduce the costs associated with home energy bills, energy crises, weatherization and minor energy related home repairs. So you know, a similar initiative in Canada could be there to assist the but the most vulnerable, you know, as you're aware, you know, your most vulnerable customers are the ones that have the least capacity to do things like weatherization, and so, you know, there's an example of a national program that we could look at as a model.
Trevor Freeman 15:16
Francis is spot on there when he talks about not only the energy transitions potential impact on our most vulnerable. So those living in energy poverty areas are struggling with energy affordability, but also everybody who's looking to make improvements to their homes where they live in order to reduce costs and participate in the energy transition. That brings us to my next clip that I'd like to share with you, and that's a conversation I had with Sarah Grant. Sarah Grant's a good friend of mine who also happens to be an expert in her field, which is helping everyday Canadians on their journey to decarbonizing their homes so that they can contribute to Canada's energy transition. Looking at, what are the things you do in a home to decarbonize. How do you go about that? That process, Sarah and her company, Goldfinch energy are based out of Toronto, and I was really great to hear what she had to say about what it takes to decarbonize a home.
Sarah Grant 16:18
Okay, going from large to small so the largest source of emissions in a home is your space heating. Typically, the emissions are about the same as driving a sort of a mid to large sized car. You know, most people drive, on average, 15,000 kilometers a year. The emissions are going to be about the same so that's going to be the biggest one, if someone is looking and they're a little bit overwhelmed, and the best alternative is a heat pump. So these are they come in many different forms, but the most common, and I think the most common scenario for most homes, is if you have forced air, so ductwork and these kind of heat pumps can extract heat from the air outside. A lot of them can work up to minus 30 degrees. So even up to minus 30, they're able to grab latent heat in the air and pump it inside, and then it gets pumped around your house. The cool thing about them is that they can also work in reverse. So in the summer, they act just like an air conditioner. In fact, the technology is very much the same as an air conditioner, just that they work in reverse in the winter too, so they can also cool. So these are called Air source heat pumps. And yeah, if someone has forced air and they have a gas furnace or an air conditioner or both that need to be replaced, an air source heat pump is, a great option. A lot of the folks that we've worked with that have switched we talked about comfort, sort of, some of the side benefits, I would say, of a heat pump is they're typically quieter, if designed and sized and installed properly, they're quieter both the outside and the inside aspects of a heat pump, and the air from the vents is a lot more comfortable. So, we got a heat pump about three years ago, and the first winter we had it installed, my father-in-law came over for dinner one night and just stood in front of the vent, kind of like a cat basking in that warmth, and said, Oh my gosh, this is way more comfortable. It's not that dry, scorched air that a lot of people associate with, with four stairs. So that's, that's an air source heat pump. You can also, there are also ground source heat pumps, but for a lot of you know urban areas, these ground source heat pumps involve drilling into the ground, either horizontally or vertically, to extract heat from the ground. They, they, I have worked with a few homes in sort of more rural areas where it does make sense, but the costs associated with them are, are really high, and often there's not enough space in urban areas, so they're not quite as common. And I'd say, sort of, just to kind of close the conversation on, we'll conclude it on the on the heating side of things, if you do have another source of like heat, maybe it's maybe it's cast-iron radiators or baseboards, there are also heat pumps that can help you as well. So, with cast iron radiators, they're what's called air to water heat pumps. So, they'll the outdoor unit will look similar to someone who has forced air. So, it's an it's going to extract heat from the outside air, and it'll transfer it to water now that can then go through your cast iron radiators, or maybe have in floor heating or what have you. They're not as common, but the technology has existed for a long time in Europe, and there are more products and contractors that I'm working with that are becoming more comfortable with installing this technology. And last there are called ductless heat pumps. So if you don't have ductwork or cast iron radiators, or maybe have baseboards, or maybe there's a space where you know the ductwork just isn't sufficient, these ductless heat pumps can be installed. They can either go on the wall, on sort of these big white boxes. If you've been to Asia, you're probably familiar with them because they exist there, either in the form of heat pumps or or air conditioners, or you can have little floor mounted ones as well, which look a little bit slicker, I suppose, but they do cost a little bit more. So that's heating for hot water. There are kind of two main options if you want to get off of fossil fuels. Usually that's, yeah, um, for most of us, that's with the gas, but there could be propane as well. So, if you want to get off of fossil fuels with your hot water, the heat pump technology exists with hot water as well. Heat Pump hot water tanks is what they're called. Are actually confusingly, sometimes hybrid tanks, because they use heat pump technology, but then also have an electric coil so they operate. They can operate like a simple electric tank if, if needed. And they come with a little like Wi Fi app too. So, they are, like, four times more efficient than a gas hot water tank. So, you will save a little bit by switching to them. But the way they work is they'll extract heat from your basement, actually, so from your basement air and transfer that to the water. So I would say about half the people I work with end up going with them because they have a space where it makes sense. Maybe their basement is large and they can put it kind of in the corner and a big mechanical room or a workshop where they're not going to go into it. So if it, if that heat pump reduces the temperature by two degrees or so, it's not a big deal. But for me, my home is pretty tiny, and we're using every nook and cranny with five of us in it. So we opted for an electric tank and then paired it with a timer so that it only reheats the water overnight when electricity, if you're on time of use, is cheapest, and that's also when our Ontario grid is using the non-fossil fuel related forms of power production, like nuclear and water, so that can work, if you're really lucky, and you have an open an unfinished basement and a good space to install what's called a drain water heat recovery system. These are super cool, very simple technologies that can transfer the heat from any water that you've already used, like from your shower, and transfer it to the fresh water before that fresh water then goes into whatever heating mechanism you have, so they can work with anything, even if you have a gas hot water tank, a drain water heat recovery system is a good way to kind of preheat the water by extracting the heat from the hot water you've already used. A lot of hospitals I know in Toronto are starting to use these kinds of systems as well. So two main options, electric tank, you pump out water tank, and then those drain water heat recovery systems as well, and hot water. So, you know, I said you're heating, heating your house. It's usually about kind of 8080, or so percent of a home emission, home emissions hot water is, is around 15 to 20% just to give an idea of sort of how it fits into the relative picture. But ultimately, I wouldn't say, you know, do one over the other, unless you know, if you have, if you have a hot water tank that's broken, replace that with a with an electric tank or heat pump, hot water tank. Don't, don't just say, Oh, it's only 20% I shouldn't do that one. It's still worth it. Every little appliance that you can get off of fossil fuels is one step closer to then being able to disconnect from the gas utility or what have you, and sets you up for, ultimately, like, a little bit of savings too, because you're no longer paying for that delivery fee to have access to that fossil fuel in your house. So cooking, cooking is cooking is probably, to be honest, like, the most fun of all of these just because, you know, it impacts your daily life. If, like, hot water and heating and cooling are one of those things where you don't like, I don't think about my heat pump unless it's not working properly, which we haven't had an issue with. But, you know, it just sits there and it does, it does its thing, and I'm happy to have it off of fossil fuels. But for cooking, switching, for us switching. We switched from a gas stove to an induction stove about a year ago, and it's amazing. Like, I've got little kids, and I love that. I feel comfortable teaching them how to cook on this stove just because of the way the induction stove works. You're not the whole cooktop doesn't get heated up in the same way you accidentally leave, like a rag or a paper towel on the stove, not going to catch on fire. We did have a few of those incidences with our former gas stove and like, it's really quick. I know that there's a lot of stats and data about how quick you can heat up water, but it's one of those things that you don't believe it until you sort of experience it yourself. So yeah, so we got, we got a nice slick induction stove, because our gas stove was kind of reaching its end of life, and we are starting to smell some of the gas as well, even when it wasn't on, which I know is an issue, that's, that's, you know, something that's, that's hazardous for our help. And you know, there's a lot of research and evidence out there related to like respiratory issues and gas related cooking. So if you do have a gas stove and aren't able to afford to switch now, make sure you're using your exhaust, like your range hood properly, not just when you're using the top, but when you're cooking in the oven too. But yeah, if you're able to switch it out, then you can just really leave here knowing that you're not, you're not using some sort of like fossil fuel to cook with. And so your house is cleaner, and you're making the planet a bit cleaner as well.
Trevor Freeman 25:56
So with that clip, we can all kind of plan out our projects for 2025 and beyond, if we haven't already great to hear that from Sarah again, those are some real, tangible actions that we can take, or we can plan to take in the near future. So the conversation that you just heard with Sarah is really focused around homeowners, but in the context of a kind of an urban setting, you know, you've got access to contractors, you've got access to expertise, you've got access to supply chains. But there are a whole host of people, our neighbors, in our fellow country, people living in remote communities that are just not connected to a national grid or a provincial grid, or even to a natural gas grid. In some cases, I had a really great chat with Gemma Pinchin from Quest Canada, who is leading some research on how rural and remote communities, including many indigenous areas, can engage in the energy transition equitably and sustainably. And we talked about some of the challenges that those areas and communities face. So have a listen to this chat with Gemma Pinchin.
Gemma Pinchin 27:09
Through quest projects, particularly the net zero community accelerator, which works with communities to the end goal is to create community energy and emissions plan we saw, and also through policy work and those kinds of pieces, we saw that there was the net zero transition is sort of chugging along, but there's kind of been a gap. The Transition tends to focus more on the urban context. You know, urban population centers, the big cities, Toronto, Montreal, Vancouver, those kinds of places, and that we saw as leaving out a really big chunk of Canadians. I think the statistic off the top of my head is 1/5 of Canadians live in rural and remote places. So it's not a small statistic. So we wanted to make sure that, as the net zero transition was moving along and progressing, that this large group of Canadians weren't forgotten about, and the net zero transition is going to rely, and has been relying, on rural land, rural populations, you know, to house Renewable Energy for Food production as well as carbon sequestration. So leaving this big group of people out is just kind of inconceivable, I guess. And what quests saw was that this was happening. So we started this research project to sort of make sure that those voices were being heard and considered as Canada moves through the net zero transition. So I think there's this idea that a one size fits all solution for every community, and that solutions that work in urban centers will work in rural centers, and that's just not the case. For example, something obvious like transportation, and my literature review highlighted that within urban centers, the most sustainable option would obviously be public transport. But if you apply that same lens to a rural community. You know, cars are bad, and we shouldn't be using them. Rural communities, it's almost impossible to be sustainable in net zero because they don't have the public transport option. So in that context, looking at it with a different lens, looking at it with a rural lens, you would look at sort of like consolidating car trips or making sure that services like health care and groceries and you know, the things that we take for granted in urban centers, making sure those are close, like they're kept in communities, like a lot of services are kind of moving out of rural communities. And that doesn't necessarily seem like a net zero issue, but when people in those communities have to drive, like, three times as long to get to their doctor, that's a huge, you know, emissions issue, you know. And it's just it was an interesting look at the way that we're even myself, before I was doing this, I was like, well, cars are bad, like, you know, like, gas, cars aren't great for emissions, but the reality is, for rural communities, they need this transportation that there's no there's no other way for them to get around, and it would be incredibly isolating, and you can't function as a society if you're just stuck in your house, you know, so having that different lens, and looking at it in a different context, I think that's really, really important as we move rural communities through this net zero transition. Well, in those communities that aren't connected to, you know, natural gas or the electricity grid, diesel used to be their only option. You know, modern life, we need electricity power like we need to power modern life. You can't have a modern existence without some form of power. So, you know, diesel, they are completely reliant on diesel, the ones that aren't connected. I mean, it's frustrating because there's these communities do tend to be quite far away from the power grid infrastructure. So, it's usually considered economically non-viable to connect those remote communities to the provincial power grids, because these communities are also very small. So it's a small number of people that you would have to spend all this money for the infrastructure to get, you know, the power lines to them and Canada, Ontario, Canada, both of them are very big, so there's many communities that exist quite far away from power lines or existing grid infrastructure. So yeah,diesel just it's kind of been their only option for power to have a modern existence up until, I would say, Now, well, recently. So I think in terms of, I mean, for rural and indigenous communities, I definitely think we need more research like what I'm doing, I think these are voices that haven't necessarily been heard, and if we're going to have an energy transition, we need to include these voices. And I think the best way to do that is to sort of do research like mine and figure out what, what their needs are, and how we can, how we can progress to that next step, there's, I mean, there's some amazing thinking, specifically of like, indigenous organizations that are already doing great work in this, this space, like indigenous clean energy and the Center for Indigenous Environmental Research. So they're, they're already doing this, but just consolidating all of that, that, and having people governments actually listen, I think is really, really important. I think, yeah, those voices just need to be heard and listened to. Otherwise, we're not going to get anywhere. It'll be like you said, like we just putting in technology and then just kind of, like leaving it there, and that's not, it's not going to that's not going to work. We're not going to get anywhere with that, that sort of approach. So making sure you know, local context is understood and local voices are heard.
33:33
And finally, to wrap up this episode, I wanted to share a clip of a conversation that I had with two really brilliant folks from EY Global, Greg Guthridge and Nicholas Hancock. I talked to Greg and Nicholas about the fact that, in the end, we are all end users of energy. It doesn't matter what your role is in the energy transition. It doesn't matter where you live, where you work. We're all consumers of energy, and we all need to live in homes that have heat and cooling in some places of world. We work in buildings that are like that. We need to get around and charge our devices and cook and so we all have a stake in this. We all have a role in this. And my conversation with Greg and Nicholas really talked about their work in helping industry and businesses navigate this energy transition and inspire and influence action amongst all kinds of consumers, because not everybody approaches the energy transition in the same way. And it was really great to chat with Nicholas and Greg about how they see the approach to the energy transition with consumers.
Greg Guthridge 34:41
Yeah, Trevor, I'm glad you brought up the word customer, because we use that word as kind of an overarching term. And let me maybe, if you don't mind, I'll dive in a little bit more on that, because customer is actually, you know, I'll use it on occasion, but it's actually a bit of an old fashioned. And believe it or not, it's that we try to use the term consumer, or, even better, omisumer, when we talk about the participants in the energy experience moving forward. And we're picking these words carefully, because customer kind of implies a one way interaction. Consumer implies that you're dealing with a customer or a participant that's, that's two way that's engaging, you know, in a much more active capacity. And then you get into omnisumer, which is the, what we believe, really the consumer of the future. These are participants that are, you know, multi channel, Multi Product, multi provider, a many to many kind of experience. So you'll hear me use them all interchangeably. But really, what we're trying to convey is that, you know, the good old days of somebody at the end of the value chain just receiving a bill for our energy that they take for granted is disappearing. Now to your actual question, you know, around, you know, the different strata of consumers. We do think of it in terms of, there's residential customers, you know, the mass market, the people at home, and then we have a number of other sort of major categories that, that we think about. There's small and medium businesses, large, commercial and industrial. There's a category which we call mush, which is municipal and universities and schools and hospitals. And then there's a, you know, kind of new categories of consumers that are forming a peer to peer and prosumer, type of consumers that that are trading energy, you know, they've got, they might have electric vehicles or solar or storage, and they're not just consuming electricity for their own benefit. They're actually selling it back into the grid or to others, and, you know, becoming more of a business partner along the way. So the takeaway here is that what used to be a passive, one way customer experience is now leaning into a much more two way, engaged and much more complex consumer experience between the energy provider and their participants. Trevor, I'm going to start the response to this, and then I'm going to hand it over to Nicholas Hancock, who leads our research, to give a bit more of a some color commentary on how we structured our research, but to start up with we, we really, you know, make about four or five years ago, we started to really think about the supply and demand of the energy transition, and a lot of focus around the world is on the supply side, building the infrastructure, building in New, renewable and green and sustainable sources, getting all of the technology to get, you know, cleaner power from one place to another, from an engineering perspective, and what we really started to realize is that as part of the energy transition, if you think about it, we're trying to do a generation of change in just a couple of decades. And on the demand side of this equation, we've got a bunch of very complex consumers, consumers that you know interact and behave irrationally with different behaviors. Some will be very excited about the energy transition. Others will be very reticent, and everything in between. And so in order for the energy transition to accelerate and to achieve the benefits that we're all looking for, we need to find a way to engage the consumer in ways which, frankly, are going to really push the envelope with consumers. So we started our research program, and Nicholas Hancock, who's on, has been leading the charge. And I think Nick, if you don't mind, can you give us a quick overview on the global nature of the research and how we've approached it?
Nicholas Handcock 39:00
Yeah, absolutely. So we started our research program about three years ago, really trying to take a global view mixing regions that are both, some of them really leading out there on the front edges of the energy transition. So we've got countries, for example, like Sweden, that are, you know, kind of further down the path as well as, you know, North America, which is, I would say, a little bit more in the middle. And then we've got some countries that are maybe lagging or taking their own paths in the energy transition, we've included countries like China, Singapore. We included Indonesia last year. So really, a global view of what are consumers kind of thinking in terms of how they approach the energy transition, what sort of products and services are they interested in, and what are the values and preferences that they bring to it when it comes to their energy providers, but also a broader ecosystem of providers that we see emerging out there, you know, who are they really interested in turning to when it comes to advice, when it comes to learning about solutions, purchasing them, and even things like, for example, control over solutions in the home, which when it comes to energy flexibility in the future is really important. We've been exploring how to different consumers approach and feel about this. And so what we did is we developed a survey. We're entering our fourth year of doing that. Now we work with a third party to do those surveys online across the globe. So it is sort of an independent third party that helps us to perform those and then we take those results back and take a look at what we see. And to your point, Trevor around, sort of the voices of the transition we've been looking at, how do some of those different groups break out? What are the different values of different aspects of those consumers out there? Because even sitting around the dinner table, I'm sure everybody can feel we don't all have the same opinions when it comes to energy, and even more so, when it starts to come to things like changes to your home or changes to your vehicles. So that's really what we've been exploring for the last number of years. You know, what we did is, having looked at all these different markets, we found some pretty interesting similarities and the percentages of the population that fit into these five categories. It varies quite significantly, market by market, country by country, geography by geography, but there is some there's a way for us to more simply think about a incredibly complex, fragmented, distributed customer base, residential, mass market customer base into what we think are really simply five different categories. And we the organization of these five categories. We've thought about them from a behavioral perspective, from a value from you know, what's their interests and how do they plan to engage? And sort of in sequence here, I'll talk about the five, and I'll put them in the order of from most active to least active. I'll describe each of these. And the key thing here to keep in mind is that there's no wrong place to be as a residential customer, and you can actually flip around. You can move from one place to another almost overnight. So it's quite a fluid approach here. But the first category is what we call the energy champions. They're the savvy customers. They're actually the customers that have been the first to move and the ones that we see in the news already, they're probably already using new energy products and services in their home. They might have solar on the roof. They could potentially have storage. They might already be using an electric vehicle. We make fun of this category a little bit. They're usually the ones that pre order their iPhone. They might already have a have a have an interest in the new Tesla truck or some other, you know, device. They're absolutely the innovators. They're the early movers, and they're interested in spending time researching. They're going to pay attention to where their energy source is coming from, and they're going to be quite active. So those are the energy champions, the next category is what we call the energy enthusiasts, and this is actually the one that that we have to pay the most attention to. They're the fast followers. They're the energy conscious category. And when they when they observe what the champions are doing, and when they get a bit more comfortable and they start to move, a actually will influence the whole market, and as the enthusiasts maybe slightly a little more cautious, but they're also, you know, the fast followers. So once they can see the value proposition, once they're convinced that the technologies and capabilities are for real, then they're going to move. They may not pre order their iPhone, but they're probably pretty close in terms of thinking about how they're going to advance into the energy market. The next category is the novice category, or the agnostics. And what's interesting about these this category is this segment of customers or consumers. They they're actually, you know, pretty passive. They can see the value proposition. They can see that there's, there's a lot of people taking interest in it. But for a number of different reasons, they're not moving. They're very novice, they're very they're very agnostic, and it's because they're starting to think about other things like, well, all right, I can see that I can save money, or I can do something that will improve the environment, but it's just going to take too much time, or I have other priorities or whatever. So as a as an industry, we need to find a way to kind of activate and excite. We need to make it as effortless and frictionless as possible for this category of consumers to move, and they will move, and they will do things, but they're just influenced by a whole lot of other variables that, that you know, that, that they believe are a higher priority. The fourth category is what we call the bystanders, or the skeptics, and they are the ones that are a little bit they're not, they're bit mistrusting, frankly, of the messaging around the energy transition, around sustainability or environmental and they're probably going to take a fairly skeptic approach to, is this for real? Is it really going to provide me benefit? Is it really going to, you know, advance my personal capabilities. And so what's interesting about this group is they're, they're actually very interested in new energy products and services, but for different reasons. So they're going to want, you know, more control. They're going to want, maybe, off grid capabilities. And so they they're actually as interested as the others, but the way you approach them is going to be very, very different. And the final category are the allies. And this is a, you know, energy is a household necessity, and this category is very dependent. There they might have, you know, income challenges. They might have other challenges that that that we have to look after. It is a critical household service that we provide, and we need to make sure that we look after, you know, the low income, the vulnerable, the medical dependencies that you find in the allies or the dependent category. So the range of consumers across these five will vary. We've got a great little quiz that you can take out there on ey.com or you can go out and answer some questions, and it'll tell you which kind of consumer you are today. But it's yeah, we see that most consumers will fit into one of these five categories and then move from there, depending on what's happening in their life experiences.
Trevor Freeman 46:49
Okay, well, there you have it. I hope that those clips give you a sense of some of the different aspects of the energy transition, what it is and how it impacts all of us. I really encourage you, if you haven't already listened to those, to go back and have a listen to those and other episodes from this year. I think it's been a great year of great conversations, and what I hope comes through, not just the conversations you've heard today, but all the episodes that we have is this idea that there is hope, and that may be kind of a funny thing to hear, but oftentimes, when we're hearing about climate change and the energy transition and the challenges that we face, it can be discouraging, but there's some really great and interesting things happening and some innovation that's happening. And as someone that works in this space, I think it's really important to be aware of the context that we work in, but also be optimistic and to focus on the really cool and great things that we're doing. And I think that that goes across most, if not all, of the guests that I've had on the show this year, really hearing their passion and their hope for what is to come. So have a listen. Take some hope from that as you relax over the holidays, as we round out this year. So as we round out this episode, I do want to give another thanks to all the guests that we've had on the show this year. We certainly couldn't do this without the fantastic and amazing people that we bring on to chat with. Goodness knows, you don't want to just hear me ramble on episode after episode. So really appreciate people taking the time to come and share their thoughts and insights with us. I also want to say a huge thank you to the team that is behind pulling these episodes together. This is a multi person contribution with folks across Hydro Ottawa and our partners that help us pull this together. And I want to especially call out Morgan Barnes for his help and really pulling the content and the feel and the texts together behind these episodes. It's me rambling here behind the microphone, but really Morgan and I work together to pull together what the theme and the thread of these episodes are so big. Thanks to Morgan for his thought leadership in this and his dedication and hard work and helping pull these things together. Morgan, you're the best. Okay, so with that, my team is always kind of after me to answer these rapid fire questions that you often hear at the end of episodes, but they also gave me an out because, because I don't intend to do that. So the out is what is one of my favorite holiday traditions. So I'm going to, I'm gonna pivot and pull that one as we go into the holiday season here. And I think I was reflecting on this, I think one of my favorite holiday traditions, at least in the last little while, as I've kind of built a family and have a growing family, is going and getting that Christmas tree. And a number of years ago now, we moved houses, and it's not a big house. It's a house in Ottawa here, but we have this small part of the back of our house that has a really high ceiling. And so as we were out the first year, we always go to one of those, cut your own cut your own tree farms and cut our tree down, and I had this idea that, Oh, we've got a really high ceiling, so we've got to get a really tall tree. And that kind of started a bit of a precedent now, where I can't go out and get just a little tree anymore. The kids want, well, I say the kids, it's probably more me, but the kids and I both want the that tall tree that kind of scrapes the ceiling as we put it up. So that's always fun trying to find that right tree, the perfect shape to cut it down, to haul it back to the car, and try not to pull too many muscles doing it. So I'd say that's one of my favorite holiday traditions, and then to sit in the house and have that nice, fresh smelling Christmas tree for at least a few weeks. So, that's my favorite holiday tradition. Thanks for joining us in 2024 we really appreciate you listening. We appreciate the conversations. As always, don't hesitate to reach out to us, Thinkenergy@hydroottawa.com Is our email address. We would love to hear from you, love to hear your ideas and thoughts on topics and guests. So there we are at the end of the year, and we look forward to connecting with you again in 2025 where we will be back with more episodes, more guests, more conversations about energy in the energy transition. Thanks so much for listening. Thanks for tuning in to another episode of The Thinkenergy podcast. Don't forget to subscribe wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback comments or an idea for a show or a guest. You can always reach us at thinkenergy@hydroottawa.com
Welcome to think energy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman, as I explore the traditional, unconventional and up and coming facets of the energy industry. If you have any thoughts, feedback or ideas for topics we should cover, please reach out to us at thinkenergy@hydrottawa.com
Hey, everyone, welcome back. Depending on where you live, you may notice that it's getting a little chilly outside. There is actually a couple snowflakes in the air or even on the ground, depending, again, on where you live. Up here in Ottawa, where I am, it's definitely starting to feel like we're getting close to winter, maybe not quite there yet, but like we're getting close to winter, which does seem to be happening later and later every year, because we're near the end of the year, we thought it would be a good idea to kind of look back at Think Energy over the last 12 months, and this has been an interesting year, both for Think Energy as well as for the industry we work in for Think Energy. It's been an interesting year because we transitioned hosts, and that brings me into the picture. So, I took over the hosting chair earlier this year, and I've really had a great time having conversations with folks and getting to dive into topics that either I know a little about, but not the full picture, or sometimes don't even know that much about. So, it's really been fun to do that, and it was fun to look back over the year at the different episodes that I've recorded and get a sense for where we've come with the show. The industry we work in has also been full of changes, and I think that is just the new reality. Every year, at the end of the year, I could probably say, wow, that was a really impactful year., things changed a lot. Hopefully all that change is in the right direction towards this energy transition, towards cleaning our energy and getting off fossil fuels. But like anything, change will be a bit up and down. Today, we're going to look back at the year and highlight some of the moments from our top episodes. These are the episodes that resonated with you, the listener the most, the ones that kind of got the most listens and the most reaction from and it's fun to pull out some of the impactful moments for us from that, from those episodes. So, in the holiday tradition, we're gonna go back and pull out some holiday treats from our from our favorite episodes, if you will. We're going to start by going all the way back to April, when I had the pleasure to chat with David Coletto, the founder and CEO of abacus data. So, David gave us a snapshot of what Canadians are really thinking about when it comes to the future of energy and our planet. This conversation is the perfect starting point for this episode, because it really lays the groundwork for understanding what Canadians think and feel about the energy landscape and how we will move forward. So, what did David's research reveal about how Canadians prioritize climate change amongst all the other things that are vying for their intention? Here's what he had to say when I asked him about evolving attitudes towards this pressing issue.
David Coletto 03:24
Coming out of the pandemic, though, and I think the defining mindset up today, which is really important to understand, to then understand why people will be resistant to certain public policy choices on climate, or may not be ready to fully embrace a transition, is that most Canadians right now, and I say most, I mean, like 80 to 90% of them, I believe, have a mindset that's very much tied to scarcity. And that is that is a real shift. And what that means is that a lot of the things that people have come to expect they can get in their lives are either more expensive, harder to find or get or they fear losing what they already have, and those are often tied to issues like housing, the general cost of living, and healthcare. And so that mindset then causes us to view public policy decisions, broader economic forces and our day to day lives to a very different lens than one where I describe as there's plenty of everything, right, and a plenty mindset means I can take risks. I can perhaps pay a little bit more, even if the perception is that I pay more, even if it's not true, in order to achieve other kinds of goals. But when I'm the perception of struggling every day just to get the kind of life I want, or I'm the one in three Canadians who feel like they've completely fallen behind, that is going to make it much harder for me to be persuaded to do things that feel like a big change, or feel like they're going to disrupt my life more than it already is. Now, if we expand that and then we say, okay, so how do we overlay that? Add on to views around the broader issues around climate change, energy transition, I think what's clear in the long-term trends is the vast majority, 90 plus percent of Canadians believe climate change is real and is caused by human behavior. Overwhelming majorities believe that we that's actually a crisis that we have to do something about. And in the shorter term, the last, I would say, 12 to 18 months, as a result of you and me, Trevor, I don't know about you, I grew up in, you know, in Ontario. I never once in my entire life stepped out on a June morning and saw smokey skies and, you know, take my dog for a walk and bring her home, and she smells like smoke. That was never part of my experience. My wife grew up in Alberta, much more likely to happen in in in Western Canada over time. So, I think there's also become a realization that's firmed up, that if we don't do something about this, that it's going to have not just theoretical consequences for the earth, but actual implications for my life. Won't be able to do certain things, my health might be compromised, the value of my property might be at risk, I may not be able to ensure and so that, I think, has created far more desire or demand to see action. But what's muted it, at least in the short term, is that scarcity mindset, where people have basically said, including young people, which is the most fascinating thing, is people often assume younger Canadians are more likely to, you know, say climate change is a priority. For the first time and probably ever that I've tracked this, we now have younger Canadians. If you're under 30, you're the least likely to say climate change is one of your top three priorities. And that's because other issues, like housing, like economic security, like the cost of living, have overtaken them. And so short-term fear of short term scarcity has, at least for now, pushed down fears about the longer term scarcity that climate change will create.
Trevor Freeman 07:00
Super interesting. I really like this conversation with David, because it was really great to get into the psychology of climate action and some of the barriers we need to overcome. I mean, there's a risk of thinking about climate science and the collective action that we have to take as being very scientific and data driven, and a lot of sense as it is, but we are all still people in the mix here, and we need to choose to take action, and how a country and a society, and in fact, that globe chooses to take action is really dependent on how we feel and think about it. So, this was a great conversation, and good to get that insight from David. It really kind of gets us to ask ourselves, what is going to mobilize and motivate the majority of people to take action when their focus is on more immediate needs? And that kind of ties into the next conversation that I want to highlight, which is actually a conversation that my predecessor, Dan Seguin had with Amber Bennett, the deputy director of rec climate, who talked about how we can perhaps move the needle when it comes to a large segment of the population that wants to take action but aren't entirely sure how. So, Amber shed some light on how to engage this movable middle, if you will, those people who believe in climate change, but maybe need that extra nudge to prioritize action. So let's hear what Amber had to say.
Amber Bennett 08:29
I feel compelled to say that I think the term movable middle is used differently by different people. I think when the context of, you know, the work that we do, it kind of comes out of, you know, some of the themes that I was talking about in the last in the last question or last answer. It's this idea that, you know, people are kind of undecided, or they're conflicted about an issue, so they could move either one way or the other, but they're not, at the moment, oppositional, right? So, if you think about, you know, a broader population, there is a segment, you know, of Canadians whose identities are really built around the idea that they don't believe in climate change, they're not going to support, you know, climate action and whatnot. There's also on the other side, a whole group of Canadians whose identity are built around I'm a climate activist and I'm a climate advocate and, you know, and I'm an environmentalist, and so they're on the other side, but most of us just kind of we live in the middle. Some are more well informed than others, but for the most part, people are concerned right in the middle. They have they you know, when they ask yes, we want the government to act, we are highly supportive of it. But when it comes down to it, it's this tension around the fact that, because they may not be well informed, they're not thinking about this. They have many competing priorities. They're kind of undecided, or sometimes they're just conflicted about an issue, right? Because, on the one hand, as an example, yeah, I think we, we absolutely need renewable energy. We need lots of, you know, solar panels. I just don't want them on my house. Or we need lots of, you know, solar renewable solar farms. I just don't want them all over the landscape that I cherish from my childhood. So there are many things that you know are underneath of that are operating underneath for people that kind of create some conflict for them. So, people, so when we talk about the movable middle really, I think what's important is to acknowledge that most people are concerned, they want and they support action, but they're undecided, potentially, about one particular aspect or issue of it, or there's some other kind of thing that's happening for them that's creating a conflict, or they're kind of uninformed. So, you know, I think that you know one example, or rather, I'll back up that uninformed piece is particularly important right now as we see more and more kind of organized misinformation and disinformation, right? So, as an example, when I'm in focus groups, I can predict with very, you know, the lot of certainty. What are some of the kind of key narratives that are going to surface where people are kind of undecided. One of them might be, well, EV batteries are actually worse, you know, for the environment, than, you know, driving a car. Or there's no way that we're going to be able to electrify everything the grids can't support it. Or it may be solar panels actually create more emissions when you produce them than they save in their lifetime. So these kind of, like very dominant or kind of reoccurring pieces of information, and when people who are not thinking about this a lot or deeply as much as maybe you or I or people who are listening to this, so when, when people encounter these, this kind of information or confusion about what are the actual solutions, they really don't know what to think, right? So, like, a third of us sit within that category, right, of I actually don't know how to make sense of the information that that I'm hearing, right, and I don't trust so much of it, because I know that, you know, I know about misinformation. I know that I shouldn't be, you know, trusting everything that I hear, etc. So that's kind of the deal with the movable middle, right? So they're belief climate change is real, they're not climate deniers. They just may be conflicted or undecided or just not, you know, as informed, because they're not thinking about it on a daily basis. So, you know, as an example, when we talk about the challenge, you know, part of this is really, I think, being more clear about the cause of climate change, but also, what are some of the challenges that we're seeing that are related to climate change within our communities. You know, I was listening to a program, CBC program, the other day, and there's an entire community in Newfoundland that's actually moving back from the water. And this is, you know, after the aftermath of of hurricane Fiona and whatnot. So, you know, some of the challenges that we're seeing, what's the challenge that we're trying to overcome? And ideally, I would right size that at a community scale, right? So people feel overwhelmed when it's my personal, individual problem, but if we can begin to talk about this as a community challenge, then people are much more likely to engage because they don't feel like they're in it all on their own.
14:34
Playing into that idea that it takes a village to tackle climate change, let's go to one of our other popular shows this season with our guest, Nicholas Rivers, who's an associate professor of Public Policy and International Affairs from the University of Ottawa. I had a great chat with Nicholas about the role of public policy when it comes to action related to climate change, and we can't really discuss the world of energy in 2024 and not talk about one of the biggest and maybe most misunderstood topics in Canadian energy, carbon pricing. Carbon pricing is one of those things that we all hear about. We all kind of have an idea of what it is, but maybe it's not exactly what we think it is. So, it was really helpful to get Nicholas to break it down for us and to help us really understand it. So, let's have a listen to my chat with Nick Rivers about carbon pricing.
Nicholas Rivers 15:32
Let me start out by saying, What's the point of carbon pricing? Because I think it's not evident for lots of people. It seems like a crazy idea. The basic idea is that we live in a market economy, and a market economy is one where the market responds to the cost of producing something and the desire of people to buy something, and so the market sets the prices, and the market determines how much gets produced in response to the prices, and how much people buy in response to the prices. It's not directed by some other entity, and the market economy tends to work best when the prices of things reflect their costs. So, if I want to go buy some bread, the idea in a market economy is that the price of the bread that I buy should reflect the cost to produce the bread right, the cost of the grains that are used to make it, and the cost of labor and the machines that are required to make it. And if that does reflect the cost, and there's a motivation for the bread maker to make the bread for me and so it'll be there when I want to buy it. And the idea that behind this carbon pricing is that there is a cost to me producing carbon emissions, right? So it the cost is it makes the world a little warmer, and there's a cost in lives and livelihoods and Well Being from climate change, but I don't pay a price, right? I don't pay the cost. I'm not required to pay the cost, because this is a non market good. No one's producing climate change. It's a public good. And so the idea behind carbon pricing is, hey, the market doesn't work for this kind of good. One way we can fix it is by attaching a price to carbon emissions. So it's just like bread. When people, you know, use it, they have to pay the price to reflect the cost. And so that's the kind of basic fundamental. And the idea that economists have had for a long time is that if we properly price carbon emissions, people are going to use an awful lot less of them, because now their actions now their actions reflect the costs. Okay, so, so that's the kind of basic idea behind carbon pricing. Canada has brought in a carbon price federally in 2019 provinces implemented carbon prices, some of them much before that, so Alberta brought in an industrial carbon price in 2007, BC brought in a carbon price throughout all emit for all emitters in 2008 and Quebec as well. So, the federal carbon price now is kind of the law of the land, in the sense that in that 2016 meeting that I mentioned, where the federal and provincial governments agreed about carbon pricing. The agreement was, we should all have a carbon price. Let's like this a level playing field. Let's all do our piece. And the federal government kind of took that message back and developed a federal carbon pricing benchmark, which said, hey, provinces, you can do your own carbon price as long as it's at least, you know, this certain level of stringency. But if you don't do it, we'll bring in our federal carbon price instead. Okay, so provinces have the ability to do something on their own, and if they don't do anything, the federal government will bring in a carbon price. And so what we've got now is a kind of a system that's a bit piecemeal, where some provinces have a their own carbon price, and other provinces have not implemented a carbon price, and the federal government has brought one in their place. The Federal carbon price has two parts. One is a consumer facing part, so for people like you and me, and for people or for for institutions that are not giant emitters, like a university or hospital or a mall, for example, they all are subject to what the federal government calls a fuel Levy and what the rest of us call a carbon tax. Big industrial emitters, like a pulp and paper plant or a steel plant or a big electricity generator are subject to a different scheme. It's still a carbon price, but the way it works is a little different, and it's called an output based performance standard. So I'll speak about each of them briefly on the industry side. The way it works is that each facility that produces a lot of emissions gets a target, and it's usually a same target for everyone in the sector. So the target could be like the target is for a steel sector you got to produce steel with a carbon intensity of less than, say, one ton of carbon per ton of steel that you produce. So they get that target, and if they manage to get their facility emissions below the target, they get a reward in terms of a carbon price. And if they if their emissions are above the target, they have to pay a carbon price.
Trevor Freeman 20:32
A financial reward. So they get some sort of incentive to being below that benchmark.
Nicholas Rivers 20:35
They basically get carbon credits, which have a financial value bet you so you can trade them for dollars. So that's the way it works. On the industry side, on the smaller emitter side, like you and me, it works a little differently. There's a levy on fuels. So any fuel that we might buy, like natural gas or gasoline or diesel, that contains carbon or releases carbon when it's combusted, is in a fee is imposed in proportion to the amount of carbon that's released from that fuel when it's burned. But and you and I are required to pay that fee. Now, we don't pay it directly to government. It's imposed at the retail level, so the you know, the gasoline station will pay the fee on our behalf, but then it'll raise the price of gasoline in the amount of the fee. Gotcha, that's the main part of the system. The other thing with respect to this consumer carbon price is that all that revenue that government collects is put into a pot and then it's rebated back to us. And you've probably heard about this, if you check your bank account, there'll be a Canada carbon rebate in your bank account, or at least, each household will get one, not each person. That's right, so it depends on who files their taxes first in each household who gets the rebate. So you want to be the first in your household to get your taxes done, but the money basically is raised from consumers in proportion to how much fuel they burn, and then the government collects it up and rebates it back to consumers equally for all households. Okay, so a lot of people are confused about this part. It's like, Why? Why would they go to this trouble? Why would they raise money and then rebate it back and this is an important point. This isn't a traditional tax, right? In a traditional tax, government implementing the tax to raise revenue to, you know, buy, build a bridge or to fund a school or something like that. That's not what's going on here. The point of this fuel Levy, or carbon tax is to provide incentives for people to change their behavior, and in particular, it's to fill fix this market failure we talked about earlier, where the cost of carbon emissions isn't reflected in their price. And so when the carbon price gets high, it will make a lot more sense for us as individuals to choose the Low Carbon action as opposed to the high carbon action, save money doing it. And on the rebate side, the rebate side, the rebate is designed so that we don't get punished, we don't lose our you know, we don't become lower income as a result of this. And so it goes back to each of us equally. So no matter whether I do this, you know, whether I take the Low Carbon action or I don't take the Low Carbon action, I get the same amount of rebate back regardless.
23:19
I was really glad to have Nicholas explain carbon pricing to us on that episode and in that conversation, it seems really complex at first, but really when you break it down, it's fairly easy to understand, regardless of how you feel about it. It's not that complex of a topic. So speaking of complex things. Our next highlight takes us really deep into the nitty gritty of electricity grids, which is the world that I live in. So I had this really interesting chat with my colleague, Jenna Gillis, who is the director of distribution engineering and asset management here at Hydro Ottawa. I talked to Jenna about the technological advancements that are happening in grid modernization and more specifically, what Hydro Ottawa is doing on our grid modernization roadmap. Jenna explained how this exercise of modernization is so critical and crucial to get us to that future of energy that we can envision where we electrify things, where there are distributed energy resources, there's more automation. We're more efficient on our grid. In order to get there, there's some work to do. So let's listen to what Jenna had to say about building a grid that's ready for the future and delivering more reliable and sustainable energy.
Jenna Gillis 24:40
So our overall grid modernization strategy is guided by five key objectives. So I'll go through each one of those and give you kind of a high level blurb on what it is that we're trying to achieve with grid modernization. So the first one is enhancing reliability, so the more monitoring. Using devices, you have in the field to understand the state of the grid, the more remote capabilities you have in order to operate and, you know, isolate and restore the better reliability you have. The ultimate goal is moving towards an automated process where you have all of the foundation of the equipment, the communication channels and the auto the analytics to make decisions, and you can get outages restored much more quickly. The next one is what we call flexibility. So adaptive grid flexibility, so we want to make sure that the grid is dynamic to all of these changing energy demands that we're seeing come online. So things like heat pumps or electric vehicles or solar generation or battery we want to provide more options for the connections and be able to have the grid respond dynamically to these changing conditions. Next one we have is fortified resilience and robust security. So resilience is really about the ability to do to withstand disruptions. And I'm talking about that from, you know, a physical asset perspective, but maybe also a technology perspective as well. We want to make sure that we have a good diversity to be able to recover from disruptions. And we know there will always be disruptions, as we've seen, kind of with the weather in the little last little while, and then as we get more and more connected, we need to make sure we're safeguarding assets from cyber threats core to everything we do. We do, we want to make sure that we're thinking about the customer, and so we're looking towards strengthening customer engagement empowerment. So we've talked about, you know, getting more data back from the field and being able to unlock new new ways of doing things, new tools, and providing some of this information back to the customers to help them be better informed about their energy uses and their their low profile and what they want to do with their equipment. And then finally, sustainable decarbonation and renewable energy integration. So we really want to look at reducing our carbon footprint by optimizing our planning and operations processes. So we talked about a little bit about automation, you know, that will reduce our need to roll trucks for crews to physically go out in the field and operate devices. And basically everything above we talked about was, you know, being able to incorporate renewable energy sources. We want to make sure that we have the ability to bring these resources online and leverage them. So hopefully I've done some justification in terms of, you know, mapping out how complex this actually is to deploy. And so our grid modernization roadmap is set out basically a set of initiatives over the next 10 plus years. So we've kind of, you know, got it, got a good handle on the objectives we want to unlock over the next 10 years. And so we've laid out, what do we need to do to unlock those, and what's the timing of that? So we also need to understand that this is going to be dynamic and constantly evolving with, you know, technology or market drivers. So you know, the this roadmap is only as good as it is today, until, you know, something changes tomorrow, and we recognize that this is going to have to be dynamic and evolving. So due to the complexity of it, we decided to basically bucket the program into six different component layers so that we can really get a sense of how one feeds into the next, as I kind of talked a little bit about the pyramid before. So the first one is physical infrastructure. Number two is sensing and measurement. The third is communication. Fourth is data management and analytics. Number five is control and optimization. And then finally, the last, number six is business and regulatory. And so all of our initiatives fit underneath one of those six components. And with all that change, we need to have the right people. We need the right people, we need the right skill set. And some of these skills are things that we haven't done before. So these are new responsibilities, new skill sets, to the organization. And I'm going to put a little plug in here is that we're hiring right now. So take a look at our careers page. If I if I've painted an exciting picture and you want to be a part of this, take a look. We're hiring some of those skill sets today, and this stuff is going to span multiple years, right? So I feel like in the past, we kind of had, you know, like, oh, well, that's a five year program and then, and then you're done. No, like, this is going to be a continuous evolution, and these can span multi years. And I talked about it before. We need to be able to adapt and pivot to meet the requirements of technology and our customers, and we need to expect that. And so we need to build the that ability to stay dynamic through these multi year programs, to make sure that, you know, we maybe we need to change what our grid modernization objectives are halfway through. And that's okay. We can do that.
Teresa Sarkesian 29:39
That was great, and this type of work on the electricity grid will ensure that we have a more robust and sustainable and smart grid that will enable all kinds of innovation, like more rooftop solar, more battery storage, and really empower our customers to be part of the energy solution. You can certain. Finally, count on there being more conversation about this on the think energy podcast. Moving forward, this next year, we're going to dive into even more details about some of the changes that are happening on our grid. So for our last highlight episode of 2024 my guest Theresa Sarkesian, President and CEO of the Electricity Distributors Association, painted this really vivid picture of some of the changes that she's seen over the past 15 years in the industry, and talked about the need to really ramp up electricity production in the years ahead. I think this is a really important one, because it does give us a picture of how far we've come, and reminds us that as much as it feels like we are on the cusp of change and a lot is going to change, looking forward, we can't lose sight of the fact that we've really started to evolve and change already and that some great stuff has already happened. It's a powerful message to close out our year end recap and a reminder that this is a marathon, the energy transition is a marathon, not a sprint, and it's not something that we're going to complete overnight. We're not going to get there in one night. So let's listen to what Theresa had to say. I've been at the association now for 15 years. I'm just marking my 15 year anniversary. So feels really apropos to kind of reflect and look back. So I want to break down my answer into two parts. I'm going to talk to you about some, I guess, just my own personal observations about the electricity system writ large. And then I'm going to talk more about the changes in distribution. But some of the changes that I thought were really quite significant and profound, sort of when I joined the industry in 2009 I joined at a time when there was the Green Energy Act and the province was looking to connect all kinds of renewable energy generation to the electricity grid. So that was fairly significant. Another thing that was happening with the province is that they closed down coal fire generation that was pretty massive. In fact, I think at the time, it was the largest kind of carbon reduction initiative in North America. And I think even to this date today, I think it still is. So it's something that Ontario really has to be proud of. Another thing that you know at the time, I think that was fairly significant. In 2015 is just the expectation of what the demand would be. What was interesting, sort of like the past 15 years, the demand from customers for electricity was actually flat or declining, and that's all changed now, 15 years later, where we're now forecasting massive increases in in demand of energy, which could potentially be doubling in the future. And the other point I'd like to make is just the nuclear renaissance that we're having. I think when I joined the sector in 2009 I'll tell you, I think the public opinion of nuclear was actually quite low, and that's been completely turned around. Lots of geopolitical events around the world, I think, have driven that, and now that nuclear is having a huge Renaissance, and you're seeing, you know, lots of new investments in nuclear, and we're not talking about shutting down reactors anymore. We're talking about refurbishing and expanding. So those are some of the things that I've observed over the last 15 years that have really changed and for local distribution companies, I think what I have seen is a growing expectation by both government and the regulators for electric utilities to do more to both support the grid reliability and meet growing expectation from customers. So I started in the sector in 2009 it was right on the brink of implementation of smart meters and time of use. And what was interesting is that was mandated, and there were very few jurisdictions in the world that actually had mandated smart meters and time of use pricing. So again, Ontario is was one of the first. And so that was a big change for LDCs to move from, you know, smart meters and having to bring in that technology and also support the technology of time of use. I did mention the Green Energy Act at the time, we suddenly had to connect 1000s and 1000s of new solar and wind generation as well. And that was all new. There were no protocols. There were no standards for that. So that was fairly significant as well. And when I kind of fast forward to, I guess, more recently, there have been a lot of changes from government. I think they've really supported our industry. They understand the trust that we have with our customers, and they've implemented a number of new changes in terms of rate structures. They've asked us to implement ultra-low rate pricing that can support overnight electric vehicle charging, and they've also asked us to introduce a green button digital platform that allows customers to download their energy data and share with their parties. For, you know, different assessments and tools for lowering energy costs. But it's all not, you know, unicorns and kittens. There's challenges to for our sector, grid resilience was, you know, not really. People talked about it in 2009 but not like they're talking about it now, because of climate change and we are seeing more frequent storms, causing, you know, obviously outages for the customer, and also significant damage to the distribution grid. And I know that Hydro Ottawa has faced more than its fair share a very disruptive storms over the past few years. We have, yes, I can't remember which Victoria Day weekend or we had. I didn't ever know how to say it the direct show or the direct co direction. So there we were getting storms we've never even heard of before, and unfortunately, I think that is our new normal. So grid resilience is something that we are very concerned about, and we need to make sure we've got the appropriate investments for that. So those are just a few of the highlights that you know when I came into the sector, sort of things that were kind of ramping up, and then what's happening now? But I guess what I could say, the commonality is there's constant change in this sector, and what I'm seeing going forward is that change is going to be accelerated.
Trevor Freeman 36:11
Very cool. So it is really fascinating to think back 15 years ago and imagine that we didn't have smart meters. Our electricity demand was fairly flat and even declining. In some cases, it's so different than the world we're in today, and sometimes it's hard to even look at today. We're constantly looking forward into the future, and so it's important to remember where we've come from. So there you have it, folks, it's been a fascinating year in energy as it is. Every year, as I said at the beginning of this episode, I don't think there will be a year in the near future where we don't look back and say, wow, a lot has changed. A lot has happened. We've looked at everything from kind of the psychology of climate change to the nuts and bolts of grid modernization to the role of policy, and looked back at how our grid has already changed. It's really been a fascinating look back at some of these conversations. So as we wrap up this episode, I do want to extend a really big thank you to all of our amazing guests who have shared their expertise and their passion with us this year. A huge thank you to all of you, the listeners for tuning in and kind of diving into this world of energy with us, and that's really why we do this. It's to engage with you folks. And also we just really like talking about energy. We hope that these stories have kind of sparked your curiosity and ignited your imagination, maybe even inspired you to take some action, whether it's reducing your own carbon footprint, understanding, sort of your own energy needs, or how energy gets to you, supporting clean energy initiatives, or really just taking a bit of a closer look at the world of energy. With us, there is one more episode to come after this. It's going to be a feature on kind of the defining topic of the year. I won't give it away here, but surely you can guess what it is, and we'll chat with you again one more time before the end of the year. Until then, thanks for listening.
Thanks for tuning in to another episode of The think energy podcast. Don't forget to subscribe wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback comments or an idea for a show or a guest. You can always reach us at thinkenergy@hydroottawa.com
Welcome to think energy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman, as I explore the traditional, unconventional and up and coming facets of the energy industry. If you have any thoughts, feedback or ideas for topics we should cover, please reach out to us at thinkenergy@hydrottawa.com.
Hi everyone. Welcome back. Okay, so it's time for another explainer episode. Just as a reminder, I plan to do these from time to time to make sure that everyone is up to speed on some important foundational concepts, things that we talk about often on the show, that maybe we take for granted, that everybody knows what we're talking about. Because this is the kind of thing that's we start to live and breathe every day, and not all of our listeners are there as well. Today, I'd like to quickly go through something we mention a lot on the show, and we probably mentioned it using the acronym DERs, but distributed energy resources, that's the acronym der and I'll probably be referring to them as DERs here on the show from time to time. But so, I wanted to give you a bit of a basis of that. It's something that you've probably heard a number of times. It comes up in a lot of different aspects of our conversations here on the show, DER's are not necessarily brand-new technology. They're not necessarily new things, but their role in our energy transition is evolving and accelerating, and we're going to see a lot more of them as we move forward. So, I think it's important to sort of set that foundation and set the groundwork so that everybody knows what we're talking about here.
So, what are distributed energy resources? Well as the name suggests, they are small scale generation or storage resources that are located at or near the point of consumption, like our homes and our businesses. And before we talk too much about them, I think it's important to understand why they are unlike our traditional energy resources. So, for the last 100 years or so, our energy has been primarily centralized, at least in the case of electricity, especially one of the great engineering marvels of the last century that I know, I've talked about on the show before, and something that we still benefit from today is the centralized electricity grid. So, across Ontario, Canada, North America, there is this vast interconnected grid that brings relatively affordable electricity to customers from large scale, centralized generation. The generation technology of the last 100 years has made the most sense when it was built at a large scale and when it was centralized. So not everybody had a river or waterfall in their backyard for Hydroelectric Generating Station. Not everybody could build a coal or gas fire generating station in their backyard. Nor would we want that, nor would you want to have to have a coal fired generating station in your backyard. So, as we were scaling up our use of electricity in the last century, it made sense to centralize this generation, to build it big, so that it could serve the greatest number of customers and to transmit that electricity to where people used it, these types of projects, and let's include nuclear in there that haven't mentioned that yet. These are large, complex, major public projects. So you're not going to build a bunch of small ones. You're going to want to centralize that for economies of scale and things like that. So that centralized approach has worked well over the last century and will continue to be part of our energy mix moving forward. We're not getting away from centralized generation and our electricity grids. But things are changing. There are now other options on the table, and these other options are set to play a major role in our energy futures. Enter distributed energy resources or DERs. DERs are things like small scale solar or battery storage, in some cases, wind turbines and even your electric vehicle. These technologies mean that some of our energy needs can be met, not just from a distant, centralized generation station, but right from our own rooftops or our driveway. Why is this important? Well, the DERs have a big role to play in our future, and there are many benefits to de ours. So first off, let's put ourselves in the shoes of a homeowner investing in some kind of DER. Let's say solar on the rooftop. Being able to generate your own electricity gives you some control over your energy needs and costs. Think about investing in a DER, as locking in some portion of your energy costs now for the life of that equipment, regardless of what happens to sort of the market rate of electricity and electricity prices over time you've paid for that solar generation, you know what those cost, It's in today's dollars, and you've got that generation for the life of the equipments. And that kind of locks you into that. It gives you some predictability, and it insulates you from sort of what's happening in the market. You also have the opportunity to use your der in conjunction with the rate structure of your utility to really minimize your cost. So, let's say you have a battery and your utility has a time of use rate option, like we have here in Ontario. If you change your battery during an off peak time when electricity is cheap, and use it during a peak time when electricity is expensive, you can really drive your costs down. And all of the electricity you're pulling from a grid, or some large portion of it, can be at that lower off peak cost.
That brings me to my next point, which is the carbon impact of electricity. So, we talk a lot about climate change on the show. We talk a lot about the fact that really what we need to do is drive down our carbon intensity, drive down the amount of carbon we're emitting. And how much carbon is emitted from electricity generation really depends on where you live, but let's take Ontario as an example. Most of our electricity in Ontario is emissions free, so we have a large amount of nuclear. We have a lot of hydroelectricity. We have some large scale solar, a lot of wind turbines, but we do still have gas fired generation. This typically shows up during our peak times when electricity demand in the province is at its highest. So, if you can rely on your der during those peak times, your battery or your solar panels rather than the grid, you are avoiding using more carbon intensive electricity, and if we scale that up to more than just the individual perspective, the more DERs we have that reduce our overall system peaks, the less we have to rely on that carbon intensive gas fired generation, in the case of Ontario, for generation during those peak times. So DERs are a good tool to lower the carbon intensity of our electricity grid. One last point from the individual customer's perspective is resiliency and reliability outages are, unfortunately something that can't 100% be avoided, and that is increasingly so as we experience more extreme weather events related to climate change, DERs, especially when there's a battery involved, can provide some resiliency against those times when there may be a grid outage, even if it's just to power your essentials to buy some time for your utility to work on restoration. It reduces the pressure on you as a customer, when the power is out, you can kind of get by until the utility is able to restore things. So, let's zoom out a little bit. You may be wondering why someone from utility me is going on about the virtues of what you might consider to be a competing technology to our core line of business, which is supplying electricity to our customers. But DERs can actually be a huge help to our grid. And utilities are increasingly looking at how we can best enable DERs in a way that benefits all of our customers, not just those who have the solar panels on their own roofs, but everybody. In fact, at hydro Ottawa, we highlight this in our current strategic direction. We have eight key points in our strategic direction, and point number four is leverage and promote DERs to understand why it's helpful to remember that utilities have to build our grids to serve what you might consider the worst-case scenario or peak demand. This is the time when the draw of electricity from the grid is at its highest, we need to make sure that on those hot, sunny afternoons when everyone's AC is blasting and people are getting home from work or school, starting to cook dinner, starting to watch TV, plugging in their electric vehicles, etc., etc., the grid can handle all of that load, but for much of the time, demand on the grid is actually a lot less. We don't see those peaks all the time, so that means we have to build up to a capacity that isn't always being used, and with the changes that we'll see as a result of the ongoing energy transition, so electrification of heating, more electric vehicles, etc., as well as other driving factors like increased data center demand hands due to AI and the never ending March to digitize our society, we are going to see those peak demand periods, that sort of max pull from the grid get higher and higher under the traditional approach to the grid, the only answer would be to build more and more and with the pace that things are changing at. And have a listen to my last explainer episode on on the energy transition for more on that, relying only on the sort of traditional builds model would be expensive for all stakeholders, including our customers, and it would be hard for us to keep up with the pace of change. Don't get me wrong, our grid does need significant investment to expand meet customer needs. We are going to be building out the grid as we've talked about here, but that is not the only tool we have, thanks to DERs. So, imagine if we could take that peak demand that I've been mentioning, and lower it a bit, or shift some of that load from a peak time to an off-peak time. Doing so would let us get more out of our existing grid assets, and in some cases, even delay or defer some big capital investment, a new transformer, a new substation, for example, DERs will help us do that. So, any individual solar panel or battery may not make the difference, but imagine 10s or hundreds of DERs on a given feeder that might be enough to shave that peak load by a significant amount. So, something like a solar panel can be thought of as a passive benefit to the system, meaning it generates when it's sunny and up here in Canada when it's not covered in snow. So, we get the benefit when the conditions are right, but they may not always be right, so we can't necessarily rely on them all the time. But if you pair that solar array with a battery, or looking a bit into the future with an EV for example, which is basically just a battery with wheels. Now we've got some control, and that control is where the real value lies, and it's with things like batteries and EVs, but also other smart connected devices, like your thermostat, for example. So, there is a future not too far from now, where you might get a signal from your utility saying, Hey, we're getting close to our capacity on your feeder, so we'd like you to switch over to your battery, or we'd like to pause your EV charging for a few hours. Or maybe we want to bump the temperature up on your thermostat by a degree or two, so you're not cooling so much just for the next few hours, and we'll give you an incentive on your bill if you let us do that now, you might say, no, actually, I've got to get that EV charge because I'm about to head off on a weekend road trip or take the kids to soccer or whatever it might be, or no, I'm actually hosting a party tonight, so I don't want to mess with the AC right now. Thank you. So, you can opt out of that call, but most of the time, you'd likely say yes, because Sure, I mean, I'm home for the night, as long as my EV is charged by the morning. I don't care if it happens right now or in a few hours, and what's a degree or two for the next couple hours on my thermostat, I probably won't even notice, and I'll get that credit on my electricity bill, that action, that collective action, multiplied over hundreds or 1000s of customers, can be the difference between having to build new infrastructure like a transformer or even a substation or not, and that has big implications on how much the grid costs and how flexible we are with the solutions that we're putting in place. Those examples that I just gave are kind of focused on the smaller DERs, but there's also a role for large DERs as well. These are things like 10 or 20 megawatt batteries that are playing that same peak load reduction role, but for a large scale industrial or commercial application, for example, think about a massive customer. The same idea, you know, reduce the magnitude of those peaks, but with a single, massive device. So, the ability to manage peaks is extremely beneficial to utility trying to manage the grid, and DERs will be a really big part of that. So, the question may be, why now? Why are we all of a sudden hearing so much more about DERs and seeing the start of what we expect to be a big ramp up of Der installations? As I said at the beginning. I mean, solar panels aren't a new technology. They've been around for quite a while. Batteries are evolving. But as you know, we've had batteries for a while, so there's a couple of reasons behind this. And before we jump into those, there is a caveat here that I am obviously talking to you from Ottawa, Ontario. And so, the context around what I'm going to say here is very Ontario kind of North American specific. There are other jurisdictions in the world, you know, Europe, for example, that are quite a bit further along than us when it comes to DERs, or at least, their approach has been different in a different timeline. So, keep in mind that I'm talking about sort of the local context here. So, the first reason why we're seeing a lot more of this kind, boils down to basic economics and market forces. So, a rooftop solar array 20 years ago was something that could be considered a luxury item. It's extremely expensive and Ontario, at least prior to the feed in tariff program, which launched in 2009 there wasn't really even a great mechanism for recovering your costs, kind of the best you could hope for was, you know, eliminate your electricity consumption from the grid and thereby reduce your cost on your electricity bill, at least for the electricity portion. The last 15 or so years have seen significant changes in that area. So, programs like Ontario's feed in tariff, and then sort of a subsequent evolution into our current net metering option, have created a viable business case for putting solar up at the same time that solar technology and sort of the global value chains around that have evolved and costs have dropped exponentially, so on a global scale, when we look at sort of cost of solar globally, the cost is now about 90% less than it was in 2010 to put solar up on your roof, for example. That is not a small fee. So, think about how significant a drop that is. So that combined with government programs like tax credits, low or no interest financing options for DERs and other energy efficiency measures, and all of a sudden there's a really good business case for putting up solar. Solar, I would say, is the furthest ahead on that journey when you talk about DERs, but battery technology, EVs, et cetera. They're seeing a similar process where they are no longer just super high end luxury items anymore. I mean, you've probably seen this as you look around, you probably see way more EVs out there. You see that green license plate that starts with GeV. We're seeing these technologies become more common, the cost coming down and more accessible for more people. Another main driver is just the need for these types of solutions as part of our energy transition. And again, have a listen to my last explainer episode on the energy transition for more on this. But because of the ongoing climate crisis, as well as increasing demand from things like AI data centers, the need for fast evolution and how we manage our grid, how we support our customers, how we provide the power that's being asked of us, is really critical, and so that's why you'll see government programs that support der technology, and hopefully we'll see even more of Those moving forward. Lastly, what else needs to happen to get there?
So, I've kind of painted this picture of widespread DER adoption. It's everywhere we're utilizing it. You know, utilities are making use of The DERs that are out there. That is not today's context, but I'm hopeful that it's sort of tomorrow's context, that we're on the cusp of that what needs to happen to get there? Well, one of the big things is grid modernization. So I'll take this opportunity to give another plug to the episode that I did with hydro Ottawa's Jenna Gillis earlier this year about our own grid modernization efforts. But essentially, we need to evolve our grid technology and the sort of system office technology, you know, that's where we control the grid and our own IT infrastructure, how we communicate with our devices, to the next level, which will allow us to do the kinds of things with DERs that I mentioned earlier, and as I talked about with Jenna, our efforts towards this are underway. This is a real project. This isn't sort of a concept that we're thinking of this is something we're doing that's underway. It's ongoing, and we're preparing ourselves for a de our future. That's one of the reasons why we're doing this, one of the reasons, finally, there continues to be a role that governments at all level can play to further incentivize and enable DERs, whether that's through incentives or subsidy programs, or updating existing regulations and rate classes, so that the business case for DERs makes sense in sort of the areas or applications where they will benefit the grid and all customers. There's a role to be played there government and those conversations are underway. There are der working groups in Ontario that we're a part of, and we're hopefully going to see more movement on that as we move forward. So hopefully that gives you a sense of what DERs are and why they're so important, why that acronym comes up on this show so frequently amongst our guests and the conversations that we have, they really are just one more tool in our energy toolbox that we will use to build that smart, clean, connected energy future that we talk about on this show so often. They are one of the ways that we're going to get there, and a big part of that.
So, thanks for listening. As always, send us your thoughts and feedback. Let us know topics that you want to hear about. We'd love to hear from you, and thanks for being a part of this conversation. Take care everyone.
Thanks for tuning in to another episode of the think energy podcast. Don't forget to subscribe. Wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback comments or an idea for a show or a guest. You can always reach us at thinkenergy@hydroottawa.com
Welcome to think energy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman, as I explore the traditional, unconventional and up and coming facets of the energy industry. If you have any thoughts, feedback or ideas for topics we should cover, please reach out to us at thinkenergy@hydrottawa.com Hi everyone, welcome back. It won't be a surprise to anyone listening that our energy systems, like much of the rest of our lives, are becoming more and more connected and more online than ever before. Let's just take a look at our own personal lives. We've got apps that can control multiple aspects of our homes. For example, for my phone, I can adjust temperature, set points and fan speed heating and cooling in my house, I can turn on or off lights, both inside and outside. I can look and see who just rang my doorbell, even if I'm in another city, and I can check and see where my vehicle is, whether it's charging or not. And I can even turn it on all from my phone. And I would consider myself like middle of the road in terms of how connected and online I am. There are even further examples of this in some of those ultra-connected homes. This is part of our fast paced and constant evolution towards invenience and using technology to find solutions to problems that we didn't always know existed, and maybe they didn't actually exist. We've all heard that term, the Internet of Things, referring to this ultra-connected world where it's not just people talking over the internet, but our devices and systems are talking as well. I was absolutely floored when I was doing some research on this podcast to find out that this term, the Internet of Things, was first used 25 years ago, in 1999 when I first wrote the text for this. I put a placeholder in to say, oh, it's been around for over 10 years. And then when I actually did my research, it's over 25 years. Think about how far we've come since that idea was thought of in 1999 how different life is today than 1999 our energy systems and our utility grids are undergoing a similar transition. I talked about this a little bit with Hydro Ottawa's Jenna Gillis in a previous episode about grid modernization. So go back and have a listen to that. If you haven't already, we are adding more and more data points to our grids, and that includes sensors, smart switches, fault detectors, smarter meters, etc., etc. Even for hydro Ottawa, a local distribution company with around 350,000 customers, we are talking about many times that number of smart devices in the coming years, all connected, all trading data between themselves and our central systems and the smart folks who run them now, there is a ton of upside to this transition, and that's why we're doing it. More data leads to better decision making, a better view of what's happening, whether that's during an outage or at times when the grid is heavily utilized. It lets us get more out of the equipment we have, react and adjust to the needs of our customers, and react and adjust to the needs of the grid. It will lead to faster restoration during outages, and sometimes that restoration will be automatic without having to roll a truck. It will allow us to better integrate distributed energy resources like small scale solar and storage and other things into our grid for the benefit of our customers and the grid. There is no question that this is a move in the right direction, and hydro Ottawa is leaning into this aspect of the energy transition to build a smarter grid for our customers. However, it does highlight something that has long been a priority for us, cyber security. With so many connected devices, with so much data out there, we need to be extremely vigilant and rigorous with our digital security. Cyber-attacks on utility infrastructure are not theoretical. In 2015 and 2016 attacks on the Ukrainian power grid resulted in large scale power outages in that country, as we increasingly rely on electricity for so many aspects of our lives, attacks like this, whether by nation states or bad actors seeking financial gain, can have devastating consequences. Luckily, this is something that has been a priority for us for many years, and as the threats become more sophisticated, so too do our strategies to protect our systems and our grid from those attacks. Joining me today to talk about this is Hydro Ottawa's director of cybersecurity and IT infrastructure. Jojo Maalouf, JoJo, welcome to the show.
Jojo Maalouf 04:46
Thanks for having me.
Trevor Freeman 04:47
All right, so Jojo, cyber security is a little bit of a buzzword that a lot of folks have probably heard in a bunch of different contexts. Help us unpack it a little bit. What do we actually mean when we talk about cybersecurity threats and cybersecurity prevention, I guess?
Jojo Maalouf 05:05
Very good question, right? So, I mean, let's kind of simplify things, so we obviously have these adversaries, right? And these adversaries are trying to get into organizations networks. We hear a lot of the sensitivity or the criticality of information, so they're trying to obtain that information. And, you know, can they look at potentially monetizing that? Really what we're kind of trying to do, or what cyber security is, is, if you think about it, we have these bad guys, these adversaries. They're trying to get into organizations they possess or introduce some sort of level of risk. What we are trying to do as people in cyber security is defend those organizations from those risks and those adversaries. So, in order for us to do that, we need to put together a program. We need to make sure we have the relevant controls in place, because, at the end of the day, what we're trying to do is mitigate that risk to an acceptable level where the business can run.
Trevor Freeman 06:07
Yeah, totally. And who are these threats coming from? Like, we hear a lot about state sponsored groups for profit, hackers. There's sort of that hacktivists, kind of ideologically driven group. Who are we worried about in the in the energy industry?
Jojo Maalouf 06:20
You know, it's very good question. I think, to be honest, you, I think we worry about all of them. I think from from our perspective, threats are threats. And obviously, depending on the magnitude of those threats and where they're coming from, they could potentially possess or introduce a different type of risk. But the reality is, they all introduce a level of risk. Yes, we are worried about state sponsored entities. You know, we've seen what's happened throughout the years. It started out in Stuxnet with Iran in 2010 we've seen what's happened with Ukraine in 2015 the end of day, what are we trying to protect? We're trying to ensure that a cyber-attack doesn't actually impact our ability to deliver power to our customers. What we are seeing now in the industry, obviously, is that adversaries are understanding that they can really monetize this, right? So, we're seeing the exponential growth of ransomware throughout the years. I remember back in 2016 when a major Canadian university was asked to pay a think approximately a $35,000 ransomware. Where we looked at that in comparison in 2024 where the average cost of a ransomware attack is just under $5 million. So, it's a billion dollar industry, right? And it's only growing. You know, I'd say the threats are coming everywhere, but you're definitely seeing the monetization aspect of it growing exponentially.
Trevor Freeman 07:51
Yeah. So, I guess from our perspective, it really doesn't matter what the motivation is. If someone's getting into our systems and sort of impacting our ability to do what we do doesn't matter what the motivation is. It's a problem for us, and we try and guard against it.
Jojo Maalouf 08:05
Correct. I think, I think people are very highly motivated now, whether it's for it's ransomware, whether it's state sponsored, I think entities, or I would say adversary, sorry, are definitely highly motivated. And it doesn't really change our approach. So, you know, the energy sector needs to make sure that they do what they can to protect the systems.
Trevor Freeman 08:23
Yeah, fair enough. So, we've talked in the past on the show, and in my intro, I talked about grid modernization, and this sort of evolution of our grid, and the technology on our grid to have more and more connected devices out in the field, and the amount of data that's flowing on our grid is increasing. Obviously, there are many benefits to this, but inherently that brings a degree of risk as well. Can you talk to us about the risk that their grid modernization brings, and sort of how we're thinking about that?
Jojo Maalouf 08:58
So, Trevor, I think you said it well when you said more and more devices are connected now. So really, what ends up happening every time we add a device that's connected, it increases the organization's risk profile. So ideally, what we want to be able to do is we want to manage exactly what that those entry points into potential organizations are. So, every time I add a device, I have to think that it increases that attack surface to a degree. So, I mean, you've talked about what grid modernization can do. There are many capabilities I think that's going to benefit organizations. But I think as this happens, we need to ensure that cybersecurity risks are managed to ensure that that risk profile is managed to an appropriate level.
Trevor Freeman 09:48
How prepared is the energy industry to respond to and to recover from a major cyber-attack, if one were to happen on the power grid?
Jojo Maalouf 09:57
Honestly, I think that the energy sector as well. Prepared as a critical infrastructure entity, the energy sector has the benefit of dealing a lot with government partners. So, I think what you want to do as an organization is you want to build that trust, that ecosystem of partners, whether it is through public and private relationships. But I'd say from a critical infrastructure perspective, there are very good relationships with the industry, very good relationships with government partners. I think testing organizations resiliency has been in play now for many, many years. But I think from a cyber perspective, I think it's something where organizations continue to be prepared, continue to do some of the appropriate testing, you know? And I'll be honest, I say it's, it's, you never want to be complacent, right? And I think what we've learned over the years is threats are evolving. Threats are changing. The industry is always going to be susceptible to attacks.
Trevor Freeman 11:00
Are we collaborating and working with other stakeholders? I mean, both at the sort of other utility level, you mentioned, governments and regulatory bodies, are we collaborating with those other entities? And sort of in line when it comes to cybersecurity?
Jojo Maalouf 11:15
There is a lot of collaboration that occurs within the industry, whether it's in Ontario, you'll see now that the regulator, the Ontario Energy Board, you know, there is the Ontario cybersecurity framework that has been in play now since around 2018 even at the national level there. Here are many different bodies where, you know cybersecurity, like critical infrastructure protection is paramount, as discussed regularly, and then obviously there's the government agency. So, there's a lot of collaboration that goes whether it's from the provincial, the National, and then the government side as well. And I mean, I think you need those relationships, right? You need those partnerships to help.
Trevor Freeman 12:02
Yeah, we're not we're not a lone utility kind of figuring out on our own. We're working with our partners and our peers to figure that out. The other kind of area of emerging technology that I want to talk about is, AI, artificial intelligence and sort of machine learning. Are we using those technologies? Or do you see us using those technologies in the future to sort of enhance the cyber security of our grid and our assets?
Jojo Maalouf 12:29
Yeah, I mean, I think obviously artificial intelligence, machine learning, seems to be the 2024 theme. The reality is, is a lot of technologies have already adopted, whether it's AI or machine learning, into their into their solutions. You know, I think the whole Gen AI aspect is growing, and it's something that I think is going to benefit everybody in the industry as well. The unfortunate thing is, is that I think adversaries are going to be able to use these technologies as well. You know, whether it's to paint a better picture of an organization, maybe to customize some attack patterns, but I think it's something where we have to embrace the technology. We have to use it in our, I would say, in our toolkit, but we're very much cognizant of the fact is that adversaries are going to be using these, these tool sets as well to potentially target organizations within the energy sector.
Trevor Freeman 13:33
And are there specific things that you know, speaking as the local distribution company, specific things that our customers can do or should be aware of? What's the role of our customer when it comes to cybersecurity?
Jojo Maalouf 13:46
It's a very good question. I mean, from a from a customer's perspective, I think customers need to realize the importance of their information. So, I mean, the reality now is a lot of adversaries are targeting people directly because they want their information. Their information. Their information is valuable. So, I think as a customer, what they want to make sure they do is that they do what they can to protect their information. So, some very simple steps that they can do make sure you have a complex password that only you know, that's not easily guessable. The other thing is, you don't want to use that password across multiple systems. So, what's the best way for you to be able to manage all your passwords? Invest in a password manager. There are free solutions out there. There are other really good solutions that are at a fraction of a cost as well as that password. What you want to make sure you do is you have multi factor authentication attached to it. What that really means is it's a second level of authentication that's going to challenge you to make sure you are who you say you are. It could just be an application that's installed on your phone. Think those are really some really good ways that you know a customer can use to protect themselves. I think even investing in credit monitoring is really good because. Is the last thing you want to do is an adversary to target you, steal your information, then all of a sudden, are starting to open up accounts in your name, right? So credit monitoring is another really important one. So, I mean, I think those are some really basic ones, but I think that they can go a long way to protecting a customer from threats. There are some really good online resources that they can use. Public Safety Canada has their get cyber safe website that provides a lot of information for, you know, everyday residential people or customers, sorry, steps that they can take to protect themselves.
Trevor Freeman 15:33
And for our listeners that kind of are thinking like, Oh, I feel like I've heard that before. I think you're right. You have it is those basic steps that really can protect us. And just so that everybody knows this is a focus of us internally as well, all employees of Hydro Ottawa also have a focus on what can we as employees do in order to make sure we're protecting our systems, we're protecting our data, and all the things that JoJo mentioned when it comes to password integrity, conscious of protecting our data. We're focused on that on a day-to-day basis as well. Jojo, thanks very much for taking the time to talk us through this. It's something that is maybe a bit adjacent to the energy transition, but so important as we increasingly digitize our grid, digitize our systems, as I mentioned, add more data points. We can't sort of leave cybersecurity behind. So, I really appreciate you taking the time to join us today, as our listeners know, and as you know, we always end our interviews with a series of questions to our guests. So I will jump right into those. Jojo, what's a book that you've read that you think everybody should read?
Jojo Maalouf 16:39
Yeah, good question. I'll give you two books, especially within the context of cybersecurity. You know, we did briefly mention Stuxnet. A really good book is by Kim Zetter. It's called Zero Day, and it basically depicts what happened with Stuxnet. Really informative. It's actually really good read. It's not necessarily technical, but just goes to show kind of how cyber warfare was actually built. Another really good one is from Andy Greenberg. It's called sandworm, a new era of cyber war in the hunt for the Kremlin's most dangerous hackers. Another really good read as well. So, I think those are two books, I would say, in the cybersecurity context, that I think are really good reads.
Trevor Freeman 17:29
Nice. Same question. But for a movie or a show, is there a movie or show that you think everyone should have a look at?
Jojo Maalouf 17:36
I'm actually really into Yellowstone these days, right? So, I'm gonna give that props.
Trevor Freeman 17:41
Nice. That's a good one. If someone offered you a free round-trip flight anywhere in the world, where would you go?
Jojo Maalouf 17:48
Good question, I think right now where I am, I'd probably go anywhere, either in the Alps or in the Dolomites, to ski.
Trevor Freeman 17:56
That's awesome. And our last question, what is something about the energy sector or its future that you are particularly excited about?
Jojo Maalouf 18:04
To be honest with you, I What really interests me and what I'm really excited about is, think the evolution in change into we are now a technology company, And I think what we're where the energy sector is grow is, is moving towards, is really exciting. You know, I think over the years, it's been a very siloed approach to the way services are driven or given where I find now, its very technology focused, right? And I think that's very exciting times.
Trevor Freeman 18:39
Very cool. Well, JoJo, I really appreciate your time today, and you sharing your insight with us, and thanks for coming on the show.
Jojo Maalouf 18:46
Thank you, Trevor, it's great being here.
Trevor Freeman 18:50
Thanks for tuning in to another episode of The think energy podcast. Don't forget to subscribe wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback comments or an idea for a show or a guest. You can always reach us at think energy@Hydroottawa.com.
Trevor Freeman 00:00 Welcome to think energy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman, as I explore the traditional, unconventional and up and coming facets of the energy industry. If you have any thoughts, feedback or ideas for topics we should cover, please reach out to us at thinkenergy@hydrottawa.com
Hi everyone and welcome back. Okay, so today is going to be a little bit different than normal. I mentioned in our first episode following the summer break that we'd be trying out a few new things, and this is one of them, we're going to periodically mix up the format and deliver kind of a shorter, bite sized episode. Every once in a while, the goal of these episodes will be to provide a little bit of an explainer or context setting information on a topic that either we reference and refer to often, but maybe haven't explicitly explained, or to maybe demystify some aspect of energy in the utility sector that can be overlooked or generally goes unseen from the outside. So for example, you know, what does that line item on my bill actually mean, or something like that? How we fill that shorter time slot may vary, but one of the formats will be just kind of me waxing on, hopefully poetically, hopefully not too mundane about the issue. I promise to keep it as short and succinct as I can think today is going to be probably on the longer side of that short and succinct window, but I will do my best. So what's on Trevor's mind for today? It shouldn't surprise you that it's the energy transition. Obviously, listeners of previous episodes will have heard me use that term probably in almost every episode since I took over the helm here at think energy. I think it's likely that if you're listening to this podcast, you've got a pretty good idea of what we mean by that, or a general sense, at least, but there is some nuance to it that I think is worth picking apart for a few minutes, and I always want to make sure that we are also welcoming to new people into the conversation who maybe don't know what that is, and so this would be kind of a good explainer for that.
So with that rather verbose intro, let us dive in. When we think about the energy transition, we probably mostly think of this ongoing shift to cleaner emissions free energy. So EVs over gas cars, heat pumps over gas furnaces, etcetera. That is definitely part of it. In fact, that's a major part of it. But like most things in life, it's never just as simple as that. The Energy Transition is a truly fundamental shift in our global relationship with energy, which includes not just what makes our cars go, but everything from how, where and when we generate energy, how, where and when we store and use energy, how we pay for the energy we use, how we finance and pay for energy projects and the systems that we need to do all the things I just mentioned, it will include a shift in what policies and regulatory guidelines and barriers we put in place to protect the public, but that also encourage change that we want to see happen to allow for innovation and advancement. It isn't completely throwing out everything we have and starting from scratch, although some things will disappear, like coal fired electricity generation, for example, but in a lot of areas, it is building on what we've already got at a pace that we haven't seen before, at least in a very long time. And I think that's a key point here. One of the things that makes the energy transition a change worth noting is the pace of change that we will see. Things have never really been static in the world of energy, from that time when our earliest ancestors first sparked that fire, this is the poetic part that I mentioned earlier, our relationship to energy has never really stood still. But other than a few significant events, the upward trend in sophistication and growth and scope has been fairly linear, gradual, one step after the other, etcetera. It's those exceptions, though, those things that are different from that gradual, linear growth that probably most closely resemble this period of change that has started that we're calling the energy transition. Take the Industrial Revolution, for example. For decades and centuries prior, there had been gradual improvements in how we got around or how we worked the fields. Let's say, you know, first by hand, then with tools, maybe a better plow came along, and we started using a horse or an oxen to pull that plow, et cetera. Then along comes the steam engine, and all of a sudden, things take off like never before. It wasn't just a matter of swapping out a horse for an engine. It may have started there, but entire economies and aspects of society changed or sprang up where they didn't exist before one change rolls into another and another in quick succession, and before too long, things that couldn't be imagined only decades before are suddenly a reality. To a degree, that's what we're looking at today with the energy transition. How far that change goes remains to be seen, but it's pretty clear that we have begun one of those disruptive periods of change that will be looked back on as a major turning point. So yes, the energy transition is about shifting away from greenhouse gas emitting fossil fuels, coal, oil, natural gas, etcetera, to renewable, non-emitting energy sources, solar, wind, hydro, nuclear, etcetera. But it's also so much more. The World Energy Council Secretary General and CEO Angela Wilkinson put it best when she said, we're actually looking not at one energy transition, but multiple transitions plural, because there are many diverse pathways to a sustainable energy future. So, there is the aforementioned shift away from fossil fuels for space, water, heating and transportation. A very large portion of that fuel switch will be to electricity, which means we also need to decarbonize how we produce electricity. Phase out coal, nearly all-natural gas, the remaining diesel generation in favor of non-emitting energy sources that I just mentioned. We will also see more distributed energy resources, so things like small scale solar and battery storage and more programs like demand response to manage when we use energy. And there are also other items that I highlighted at the beginning, our financial mechanisms, our regulatory and policy framework, all the interconnected pieces that go along with this. Now, if you'll permit me just a couple more minutes, I do want to touch on a few more aspects of this. The first is, why? Why is this transition happening? One major, overwhelming driver, of course, is the climate crisis. This isn't the episode to fully pick that apart and define it, but suffice to say, climate change is and will continue to be, a signature global crisis of this century, and it is driven primarily by fossil fuel usage, the energy transition and all its various aspects and parts, is a big part of the strategy to slow and stop Climate change and to limit its impacts to what is already baked in. But other things are driving this too. As we continue to digitize our lives, another major disruptive change that probably is worth its own conversation, and as tools like AI evolve, our need for energy is growing faster than ever. We can't meet those needs with the business-as-usual approach. The energy transition helps us deal with this rising demand, regardless of the reason, whether it's for electrification or large, dense data centers that are needed to run things like AI. There are also considerations like energy security and the benefits of decentralizing at least some of our energy sources. And finally, air quality considerations are a major push to reduce harmful emissions and replace that energy with clean, non emitting sources. Listeners in Ontario who are say around my tenure as kind of that oldest millennial age group will remember smog days in Ontario, which no longer exists, mostly because we moved away from coal fired generation, a bit over a decade ago. There are other parts of the world that still see really poor air quality, and shifting away from fossil fuel combustion will go a long, long way to addressing that. Now, the energy transition is not all sunshine and grassy meadows. It is a hard journey with challenges and obstacles to overcome. To start with, time is tight, and that is an understatement. We lost our chance, which could have started as early as 50 years ago, for this to be a slow and easy process, we need to move fast. Our climate is changing rapidly around us, and we are not on track to reduce emissions at the pace we need to. We haven't been keeping up with past targets and goals for reductions, and so we really need to pick up the pace. And like I mentioned earlier, even without climate change, our need for energy is growing at an exponential pace. In Canada, we're fortunate in that we have a strong foundation with a relatively decarbonized grid already, so about 80% carbon free nationally, and a diverse mix of hydro, nuclear and renewables like wind and solar. But it's still going to take quite a lot of effort to decarbonize that remaining 20% at a time when, as I keep mentioning, demand is increasing rapidly. In Ontario, our electricity system operator, the IESO, just updated their future demand projections to show that provincial demand will be 75% more or less higher by 2050 than it is today. This means we also need to invest in our grid infrastructure to ensure it can handle the increased load, as well as utilizing things like decentralized generation and storage to ensure we don't over build not to mention making sure we can handle more extreme weather. Just to give you a sense of what all that means, I'll remind you of an episode we did a few months ago with Jenna Gillis, Hydro, Ottawa's manager of distribution system integration, about our grid modernization roadmap, which is a 10-year plan to modernize our grid to make sure it can support. Support the kinds of things we're talking about here today. And I encourage you to go back and have a listen to that if you haven't already. To zoom out a bit, the energy transition is also very political as any major disrupter in society would be. There are differing viewpoints on the tools and tactics, the carrots and sticks, if you will, with which to enable change, differing viewpoints about the pace of change that we should be aiming for, and differing viewpoints even about where we ultimately end up when it comes to energy, and that is true within each jurisdiction, so within Ontario and within Canada and between jurisdictions at a more geopolitical level. So, to find alignment to make progress in these areas, these are not easy tasks. Have a listen to my earlier episode with Nicholas Rivers from the University of Ottawa for more thoughts on that and on the role that governments and policy makers can and should be playing. Now, as urgent as the need for change is, as exciting as the benefits might be, and as appealing as the vision for a smart, clean, connected energy future can appear, we can't just plow ahead without also considering the consequences and impacts of our choices. The energy transition will be disruptive, and there are a lot of good things about that, but let's not forget the root of that word, disruption, disturbance, things we know today, systems we have today will be upended, will need to change and adapt and quickly, and there are people who rely on those systems. In Canada, we have an entire industry, a substantial portion of our economy, that is associated with fossil fuel extraction and processing, and that's just one example for the transition to work and to actually move forward, it has to be fair and equitable and just for everyone. People and communities whose livelihoods are going to be upended need to be supported. The energy transition is also not free. Another massive understatement. All this change that I've been talking about here costs a lot of money. For Canada to reach net zero by 2050 it could require an estimated $2 trillion in investment. Now there are a lot of benefits to that, absolutely. I'm not saying that's not a worthwhile investment, but it's worth thinking about. So, we already have affordability challenges for many of our neighbors. We have institutions like healthcare, education and housing struggling to hold up under the pressure of the pandemic that we just experienced, inflation, supply chain issues, underfunding, all these different things. This transition has to happen in a way that, again, allows everyone to benefit and participate in it, regardless of their income levels, in a way that doesn't cause those other institutions to crack and crumble.
You'll notice I'm not talking any specific solutions to this, and I guess that's the benefit of sitting in the host chair. I get to bring other smart people on to talk about that. But I do want to highlight that in this little talk here. Going back to the World Energy Council that I mentioned earlier, they also note the concept of the energy quadrilemma. So as in more than a dilemma, a quadrilemma. What they mean by that is that the transition needs to be just, so ensure fairness for everyone through the process needs to be orderly, so making sure that we approach things in a structured and efficient manner. It needs to be inclusive, so ensuring that everyone has an equal voice in the decision-making process, and it needs to be equitable, making sure that everyone has access to affordable, reliable and clean energy. It's worth noting here that our current system doesn't yet provide this. In my previous episode with Gemma Pinchin from Quest Canada, we talked about the number of rural and remote Canadians relying on diesel generators, for example, for their energy needs, because they're not connected to a grid and they don't enjoy all the benefits that come with that not everyone has the same access to energy across the country today, and that is its own challenge that needs to be solved as we go through this energy transition.
So, as we get close to wrapping this up, let's talk about the how, what will enable us to realize this transition that we've been talking about. To start with, we need to scale up. We have heat pumps, EVs, renewable generation and battery storage today, those are major pieces in the energy transition, but we need more can we need it faster, and most of all, we need it cheaper. We've seen this drop in costs for things like solar already. If you look at the cost of solar from, you know, let's say 15, 10, five years ago to now, it's dropped precipitously. But we need that across all aspects of the transition. And this happens naturally in some cases, but we also need to speed it along with both policy and market forces. So the more demand for heat pumps, the more get made, the cheaper it is to make them. We need public awareness. We need to collectively recognize the importance and urgency for action so that we can make decisions whether that's what vehicle that. Or what project to tackle in our homes, or what we demand of our political representation that will drive us in the right direction. On that note, we need clear and consistent policy from all levels of government that will support and encourage the energy transition, and we need the appropriate levels of investment from our various levels of government to make this transition possible, Again, listen to my conversation with Nicholas rivers for more thoughts on what that might look like. And we need leadership, leadership from our governments, but we also need to look at ourselves as how can we show leadership Canada and Canadians can punch above our weight class, so to speak, by setting an example for others to follow, and by developing policies, programs and technologies, even to serve and guide others. So, to wrap it up, as I come to a close here, the energy transition is a little bit bigger than just fuel switching. It definitely is that, but it's more. It's a long, tough road, but we're on it no matter what it started, and it will continue, and it's also full of exciting possibilities and opportunities.
Now, I hope this summary wasn't too vague. That was, it was meant to be high level, and again, I'm going to play the host card here and point to past and future episodes to dive deeper into specific aspects of this. But what I will say is that I'd love to hear from you. If you have thoughts about what we cover on the show, what we're not covering that you think we should be reach out to us. Thinkenergy@hydroottawa.com, I'd love to hear from you. Love to get your thoughts on this. Feel free to let us know what you think about this kind of format. If this works for you and you want to see kind of more of these explainers. Great. That's awesome. If you want to reach out to us and say, I think that was maybe just a little bit too much, Trevor, I get it. That's okay. I won't be offended or too offended. Now, I normally wrap up my episodes with a series of questions for my guests. Since I don't have a guest today, I won't make you listen to me sharing all of my answers, but I will leave you with a book recommendation. And I have to be honest here, I'm taking a rather dangerous step of recommending a book that I haven't actually read yet, but it is next on my list when I finish what I'm reading now, and it came highly recommended to me, and I'm really excited to read it. It's a book called, What if we get it right by Ayanna Elizabeth Johnson. It's a collection of essays and poetry and conversations that really gives some optimism about what could be when it comes to climate change and the energy transition, it is an exercise in not letting the sometimes-disheartening aspects of the climate crisis keep us from dreaming about the possible and to have hope and faith in the future that we can solve these challenges, we can realize the benefits of this energy transition that we talk about and that we know are possible. So, I'm really excited to read it soon, hopefully it lives up to my recommendation and the recommendation that was given to me for it when I wanted to let you know about it as well.
So thank you, as always, for joining. Thank you for letting me and the team here try out this different format. Definitely let us know what you think about it, and keep checking back in for more great conversations with great leaders in the energy world. I promise I will be bringing guests back onto the show. It won't just be me talking. There will be some great ones coming up. So, thanks very much, and check back next time.
Thanks for tuning in to another episode of The Think Energy podcast. Don't forget to subscribe wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback comments or an idea for a show or a guest. You can always reach us at thinkenergy@HydroOttawa.com
Hi. Welcome to think energy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman as I explore the traditional, unconventional and even up and coming facets of the energy industry. If you've got thoughts feedback or ideas for topics that we should cover, we'd love to hear from you. Please reach out to us at thinkenergy@hydroanawat.com, everyone, welcome back. Climate change is truly a global issue, and that is true in really every sense of that word. I mean. Carbon emissions come from literally everywhere humans live in the world. Climate impacts are felt across the globe, with no regards to borders, and as a result, the ongoing energy transition, which is one of the main tools we're using to address the climate crisis, also needs to be global, unfortunately, and as I've talked about several times on this show and a bunch of different contexts, there's really no overarching global solution that can be applied everywhere. Of course, electrification is one of the main strategies in most cases, and that can be applied in all different parts of the world, but exactly how electrification is deployed, what technology is going to be used in, what specific use cases, what government policies are going to work. There is by no means a one size fits all approach to those questions. Local context is so important when it comes to the energy transition, and that's a big part about what today's conversation is about. I'm going to assume that, like me, most not all, but most listeners of this show live in or adjacent to or very near an urban center of some sort. I certainly do. I live in Ottawa, the capital of Canada, as such, when we talk about the various technologies or policies or approaches, we probably do so with an urban lens. The things that we're thinking of when we're talking about this stuff is in that kind of urban context. But that isn't everybody's reality. Rural and remote communities have a very different relationship with energy than urban centers in Canada, at least, there are over 280 communities which are home to around 200,000 people who aren't connected to the broader electrical or natural gas grid. The process of decarbonization represents unique challenges for these communities and for these Canadians who get their energy in a very different way from the rest of us. And another aspect of this is that there are also often overlaps between what I'm referring to here as rural and remote communities and indigenous communities, and proper, meaningful engagement with indigenous communities is an extremely important step in making sure that the energy transition is equitable and just for everyone, not to mention as the original stewards of the land most of us live on, we can learn a lot from indigenous communities about how we can exist on this land in a way that is not detrimental to the land and to our own health and well-being. To that end, I'm really excited today to have Gemma Pinchin from Quest Canada on the show to help us pull this apart a little bit and understand this context a bit better. Gemma is a senior lead of research and projects at Quest, and is responsible for the motivating Net Zero action and rural and remote communities research project. Gemma Pinchin, welcome to the show.
Gemma Pinchin 03:42
Thank you so much for having me.
Trevor Freeman 03:44
So why don't we start Gemma by having you tell us a little bit about yourself and how you came to be working in the role you're in, and also what quest Canada does.
Gemma Pinchin 03:54
Sure. Yeah. So I come from a background in research and policy and kind of like a number of areas. Most recently, I was working with the IESO. I was working on their indigenous relations team, really, in indigenous energy planning and capacity building. So, I have a master's in globalization and international development, and a bachelor's in history. So, a bit of a varied background. I've sort of worked in a bunch of roles, but I've always sort of had an interest in the climate crisis and how communities are really facing that and dealing with that. So, I joined quest in early 2023 and I was really drawn to their mission. It was really inspiring for me. So, the quest is a national charity that focuses on helping communities on their pathway towards net zero. So, they've been around since 2007 and they facilitate connections, empower community champions and advise decision makers. So, we really, we develop tools and resources and convene a variety of working. Groups and also provide advice to decision makers. So, Quest's mission, the one that I was inspired by, is to encourage, assist and enable communities to contribute to Canada's net zero goals.
Trevor Freeman 05:13
And your particular focus, if I'm not mistaken, is on sort of rural and remote communities. How did you, why is that your focus? How did you end up there?
Gemma Pinchin 05:21
Yeah, so through Quests projects, particularly the net zero community accelerator, which works with communities to the end goal is to create community energy and emissions plan we saw, and also through policy work and those kinds of pieces, we saw that there was the net zero transition is sort of chugging along, but there's kind of been a gap. The transition tends to focus more on the urban context. You know, urban population centers, the big cities, Toronto, Montreal, Vancouver, those kinds of places and that we saw as leaving out a really big chunk of Canadians. I think the statistic off the top of my head is 1/5 of Canadians live in rural and remote places. So, it's not a small statistic. So, we wanted to make sure that as the net zero transition was moving along and progressing that this large group of Canadians weren't forgotten about and the net zero transition is going to rely, and has been relying on rural land, rural populations, you know, to house Renewable Energy for food production as well as carbon sequestration. So, leaving this big group of people out is just kind of inconceivable, I guess. And what quests saw was that this was happening. So, we started this research project to sort of make sure that those voices were being heard and considered as Canada moves through the net zero transition?
Trevor Freeman 07:03
Great. Yeah. I mean, it's, it's one of the reasons why I'm excited to have you on the show today is to talk about that. And as I mentioned in the intro, even this conversation that I often have on on this show tends to focus more on those kinds of urban centers, or features of the energy transition that are more often found in urban centers. How does the traditional grid interact with our customers, things like that? So, I'm excited for this, for this conversation today, I think it'd be helpful before we really dive into it, to define what is a rural and remote community. So maybe let's start with that. What do you consider a rural and remote community and maybe go into what is unique about their energy needs and priorities compared to those in the urban centers.
Gemma Pinchin 07:49
So, my research will, I've completed a literature review, and then I'll be going on and doing work in communities, work with 15 communities. So, I kind of, at the beginning, I was trying to figure out how to define rural, because it's going to be, or it is currently across Canada research project. So, I was trying to figure out if there is a, you know, standardized definition. But it turned out that every single province had a different province and territory has a different definition of rural or remote, and even stats can in order to be considered a rural community, you have to be under 1000 people. But that felt a little bit too small. When I moved to Canada, I grew up in a rural community that had a population of 3000 and it felt very, very rural. So, I felt that was going to be a bit of a barrier for a lot of rural communities, not all rural communities, but, you know, rural communities have varying different population amounts, and then the population for the remote cities for example, like white horse or Yellowknife. They're considered remote due to how far away they are from everything else, but they have quite large population bases for the territories. So, for the sake of my research, we decided on a population cap of 30,000 which is quite large, but we wanted to be able to include those remote cities if they were willing to be a part of the research. And then I really decided that rural communities were in were best placed to sort of define whether they considered themselves rural. I live in, I live outside of Toronto, so I'm not currently live in a place where I would consider it rural, and I think communities themselves are in the best place to define themselves as rural. So that's kind of, it's a little bit vague, but that's kind of what, what we ended up going with. And then in terms of needs and priorities of these communities. Compared to urban centers, a big one is getting energy to communities, particularly remote communities. A lot of remote communities are reliant on diesel or fossil fuels, still, because getting in Ontario, the grid is fairly clean, but some communities just do not have access to it because they're so far away and so remote. So transportation to rural communities is probably one of the biggest differences, I guess. And then the types of emissions are also very, very different. So urban centers, it tends to be, you know, buildings and like cars and things like that. Whereas for rural centers, there's not as many buildings, obviously. So they have transportation to and from is a really big one, and then from the big sectors, so agriculture, mining, those kinds of pieces. Yeah, those are kind of the biggest differences, I would say.
Trevor Freeman 10:58
And as all the examples you gave were kind of in the Canadian context, and that's going to be the basis of going to be the basis of most of our conversation today, but I do know that you did spend some time looking at the international context, and obviously rural and remote living is not a uniquely Canadian thing. Of course. What did you learn through your kind of literature review on energy challenges internationally?
Gemma Pinchin 11:21
Yeah, so for this research, I hoped to sort of just focus on the Canadian context when I just started out, but there wasn't as much readily available literature I would be able to base an entire literature review on. So, while this is sort of a great justification for my ongoing research to be able to do a literature review. It was a little bit frustrating, so I decided to open it up to the usual comparator countries, so the UK, the US, Australia, and then Europe more broadly. And I found that the energy challenges and opportunities, I found that they were quite similar, like, even in the UK. I grew up in the UK, so I'm pretty aware of the sort of differences geographically between Canada and the UK, but everything's much closer together. But still, there is still this, like, big rural, urban divide, and there's still, like, remote communities in the UK, even though that they're not Canada remote, but you know they're still, they're still quite remote when you sort of apply a UK context to it, the biggest challenges and opportunities that I saw was that there needs to be a real consideration for rural needs and not just apply the same lens as urban needs onto that obviously, though we need to use rural space for renewable energies that's sort of across the board, is going to be something that everybody needs, and the costs of the net zero transition to be a barrier for rural communities. So, something I found a little bit interesting that I hadn't considered before was that for diesel dependent communities, that there was such a high cost associated with diesel fuel that there wasn't any extra money left over to fund the net zero transition. So it was kind of, I'd never really considered it that way, that you're spending all this money on this fuel and that's kind of eating up all of your energy costs. There's nothing left over to be able to fund this transition, and that there's this trust in diesel, because it's been what's been working for however long, for like a small, tiny community in Australia or Canada or the US or wherever. You know, it's kind of nerve wracking to give up that piece that's been working for years and years and years and take a risk on this new technology that might not be as effective in in their perception as how diesel has been.
Trevor Freeman 13:57
Yeah, I mean, that's interesting in that I see a lot of parallels between that context and other contexts, including the urban context of we are comfortable with what we know. We are comfortable with the things that we have seen working and experienced working to get us to work and back, or get the kids to school, or heat our homes Exactly. And as soon as someone starts talking about this new thing that we don't really know that that makes us a bit nervous. So, it's interesting that that that applies regardless of where you are. What are some you know, for a lot of our listeners, I think are probably more familiar with the urban context, what are some misconceptions that you have heard or that you've come across when it comes to the energy needs and capabilities of rural and remote communities.
Gemma Pinchin 14:48
So, I think there's this idea that a one size fits all solution for every community, and that solutions that work in urban centers will work in rural centers, and that. Just not, not the case. For example, something obvious like transportation, my literature review highlighted that within urban centers, the most sustainable option would obviously be public transport. But if you apply that same lens to a rural community, you know, cars are bad, and we shouldn't be using them rural communities. It's almost impossible to be sustainable in net zero because they don't have the public transport option. So in that context, looking at it with a different lens, looking at it with a rural lens, you would look at sort of like consolidating car trips or making sure that services like health care and groceries and you know, the things that we take for granted in urban centers, making sure those are close like they're kept in communities, like a lot of services are kind of moving out of rural communities. And that doesn't necessarily seem like a net zero issue, but when people in those communities have to drive like, three times as long to get to their doctor, that's a huge, you know, emissions issue, you know. And it's just, it was an interesting look at the way that we're even myself, before I was doing this, I was like, well, cars are bad, like, you know, like gas cars aren't great for emissions. But the reality is, for rural communities, they need this transportation that there's no there's no other way for them to get around, and it would be incredibly isolating, and you can't function as a society if you're just stuck in your house, you know. So having that different lens and looking at it in a different context. I think that's really, really important as we move rural communities through this net zero transition.
Trevor Freeman 16:51
Yeah, it highlights a point that I know has been made here before, of the energy transition, regardless of where you are, requires a holistic approach. It requires some pretty nuanced thinking, and I think you're highlighting a really great example of that, of it's not just a piece of technology or it's not just a program that's going to resolve this problem for us, there are sort of cascading impacts of this, and primary health care provider shortage in rural communities is directly correlated to higher emissions in those communities and like, that's an interesting picture to paint and something that's important for us to remember. So, you mentioned this earlier, kind of the stats around how many people actually live-in rural communities, I think you said one in 20. That's over 200,000 people that are kind of not connected to, or this is a different stat I'm pulling here. Sorry. This is the number of people not connected to sort of the traditional electricity grid or to the natural gas grid here in Ontario. Talk us through a little bit more you mentioned, kind of the reliance on diesel in those communities. Talk us through sort of the unique challenges when you're not connected to the electricity grid. You don't have that transmission line coming into your community. What is the role that those traditional fuel sources, like diesel, for example, play in those communities?
Gemma Pinchin 18:12
Well, in those communities that aren't connected to, you know, natural gas or the electricity grid, like diesel used to be their only option. You know, modern life, we need electricity power like we need to power modern life. You can't have a modern existence without some form of power. So, you know, diesel, they are completely reliant on diesel. The ones that aren't connected. I mean, it's frustrating, because these communities do tend to be quite far away from the power grid infrastructure. So it's usually considered economically non-viable to connect those remote communities to the provincial power grids, because these communities are also very small. So, it's a small number of people that you would have to spend all this money for the infrastructure to get, you know, the power lines to them, and Canada, Ontario, Canada, both of them are very big, so there's many communities that exist quite far away from power lines or existing grid infrastructure. So, yeah. So yeah, diesel just, it's kind of been their only option for power to have a modern, modern existence, up until, I would say now, well, recently.
Trevor Freeman 19:27
Yeah, that's a great lead into kind of the next part of this is what comes next, if we're, if we're trying to get off of diesel, for example, for power generation, if, sort of the economics and the feasibility of bringing the traditional power grid to remote communities isn't really feasible. What role do other technologies play? And I'm thinking of obviously, like on site, renewable generation or storage, like, what's the option for these communities?
Gemma Pinchin 19:54
So that would kind of be entirely dependent on each community’s context, I guess what renewable energy would work there. So, on site, renewable energy is obviously one of the better solutions for diesel dependent communities. But what works in one community might not work in another community. So, you know, solar might work really well. You obviously have to have the right amount of sunlight, but then maybe less so in Ontario, but like, tidal energy for a coastal community might work better, you know? So, it's kind of dependent, and that's a big thing that came out of this research, is that there's not going to be a one size fits all. We can't just say all diesel dependent communities are now having a solar micro grid, and that's what's going to happen. Like you can't do that, but I do know of from my previous life working with indigenous energy planning and energy capacity in Ontario, there are some really cool examples of communities that were slash, are diesel dependent, that have implemented solar micro grids or are implementing, I don't know where, where they're at now, but as a way to get off diesel. And it is, there were some really cool projects that I got to kind of have a tiny little part of it was just a really interesting project to lessen their reliance on diesel.
Trevor Freeman 21:19
So you mentioned indigenous communities, and obviously, when we're talking about rural and remote communities, a lot of those are indigenous communities, or have a higher amount of indigenous population. Talk through the importance of indigenous engagement when it comes to planning and implementing projects like renewable energy projects, that's like a whole extra layer of complexity to some of this. Tell us a little bit about that space.
Gemma Pinchin 21:50
Yeah, so any project that touches indigenous land needs to have robust indigenous engagement. It's, it's their land. They need to, need to be engaged and listened to. It's really an issue of decolonization and decolonizing the energy grid, because it's returning that power that should have remained with them all the time. It's returning that to indigenous communities. And I think it's really important from a culturally obviously, to protect indigenous cultural sites and practices, but also from like a protection of the land. I think the statistic is that 80% of all biodiversity is currently protected by indigenous peoples globally. So, the number is huge. And so, if we're going to be doing any sort of work that's potentially disrupting some sort of biodiversity or anything like that. I think having those voices included is really, really important as we try to fight the climate crisis and any engagement with indigenous people and needs to be really robust, like it actually has to go somewhere. You can't just engage with indigenous people and then just go and do whatever you want. You've got to listen and act on what you're hearing. It's important for decolonization and reconciliation and biodiversity and indigenous culture as well.
Trevor Freeman 23:13
I mean, I think it's just highlighting what engagement actually is and what it isn't. And engagement is not going in and doing a really slick presentation on here's the solution, here's what we're going to implement. It's starting the conversation before the solution is developed, and saying, what is the context within which we're working? What are, what is this community bringing in terms of knowledge and experience? And so how can that local knowledge and expertise be sort of integrated into the decision making and really leveraged to identify appropriate solutions? I mean, you talk about that stat of how much of our protected biodiversity is really on indigenous land or indigenous controlled land, there's no question that there's a knowledge and an expertise there that can be leveraged for this talk us through what that looks like in terms of a strategy for resolving some of these energy challenges.
Gemma Pinchin 24:10
Yeah from my research, this could be indigenous communities or non-Indigenous communities. It kind of counts for everything. What I really found was that there was this push to do sort of a top down, bottom-up approach at the same time. So, the local community was really needed to implement the local context like I've been saying, No, there's no one size fits all, so understanding how to implement these solutions locally needs to come from the local context. But at the same time, we do need a national strategy that has the flexibility in order to provide that sort of like umbrella guidance for what what the local context kind of like. Needs to be achieving, but having that flexibility and that openness to allow local communities to figure out what works best for them in that context. And I don't, I don't really know what that that looks like beyond like that vague framework, but I think empowering local communities to have the, you know, the ability to tailor the solutions to their community is really, really important, because we cannot have a one size fits all solution, but we do need that sort of national guidance, otherwise there won't be that empowerment like that. There needs to be some sort of overarching body or government or whatever that looks like to provide that power to communities, because usually they're small communities, they can't just act and go off roguely on their own. So yeah, so really, that top down, bottom-up approach is really important.
Trevor Freeman 25:54
Is this also an opportunity, is the engagement process when it comes to resolving energy challenges, an opportunity for economic growth. For sort of, is it like a vehicle for that? Is it a vehicle for job creation? For example, in these communities?
Gemma Pinchin 26:14
Do you mean engagement in itself, or just the net zero transition?
Trevor Freeman 26:19
I mean, I think both. Yeah, it's like the engagement process and then the implementation and the solutioning process as well.
Gemma Pinchin 26:25
Yeah. So, I definitely think both would be an opportunity for job creation engagement. There would need to be sort of a community contact, which I sort of foresee being a funded role, funded by who? I'm not sure, but having, having that as a, you know, a paid position, I think would be, is really important as well, to bring funds into the community, to really solidify that. You know, energy companies, or whoever's doing the engagement, they're committed to community, building up the community, and then in terms of economic growth from the energy transition, I think this is a huge opportunity for job creation in rural, remote and indigenous communities. I think a key piece of that, though, is that there needs to be training programs for not because, not only do we need to build, you know, these renewable energy structures, we also need to be able to upkeep and maintain them as we're going along. So, you know, once the solar farm, or whatever it is, is built, there needs to be training for communities to be able to provide maintenance to these structures. But and even from a like on a smaller scale, sort of heat pumps, or having people who usually work on furnaces to be trained on how a heat pump works, so they're able to sort of facilitate that net zero transition. On a smaller scale, there needs to be training provided in rural communities, because we're seeing now that like people are wanting to transition over to, say, heat pumps, but there's not anybody locally who has any expertise on what that what that means, or what that looks like, or how, how to install that. There's only the, you know, the furnace guy. There's not in these rural and remote communities and indigenous communities. There's not anybody providing the, I mean, there's, there's no one there that knows how to do it or how to train people on it. So, if we want to capitalize on job creation, then we need to train people in how to do this. There was also, in my literature review, like one of the things, one of the key things that was looked at was, sort of the carbon sequestration and agriculture. And in agriculture, there was this issue that came up where farmers are now expected to not only provide enough food to sustain our society, they're now also expected to have like a plan for carbon sequestration on their land, but without any training or support of what that looks like and how, how that would work with their farm. So making sure that these tactics that we have, we're training the people locally on how to undertake them and how to keep them going.
Trevor Freeman 29:33
it's interesting. I'm having this I don't know what the word is, let's call it flashback. So, I started my career actually working in international development. I worked in rural Zambia. Oh, cool on water and sanitation. And this conversation you and I are having right now mirrors that conversation. This is going back about almost 20 years now. Of the number of you know well-meaning international funders that came. Into rural Zambia or rural Africa or other parts, and bunked down boreholes and wells and pumps to provide clean water, and then walked away. And three months later, a small little part breaks on that pump, and there's no one around to fix it. Yep, you can't use it. There's no supply chain to provide that washer, that not it. It's the it's almost frustrating. I mean, it is frustrating, I shouldn't say almost frustrating that it seems like such a simple, a simple thing to make sure that solutions implemented are supported in the way that a piece of technology needs to be supported, if it's in downtown Toronto, it still needs to be supported out in the rural community as well. And exactly, who better to support it than the people that live there.
Gemma Pinchin 30:48
Exactly, it's also, it also saves money, because, yeah, you don't have to shuttle someone out from the Toronto's of the world into like, five hours. Five hours is minimum. But like, you know, like, five hours outside of the city to be able to work on these, you know, wind turbines or heat pumps or whatever, the technological solution is, building capacity within local communities is always, it's always going to be a benefit.
Trevor Freeman 31:16
I think that the positive thing is that there's a there's this understanding, I think, that we need capacity building across the board. When it comes to the energy transition, we don't have enough heat pump technicians, heat pump installers, people that know how to do solar and storage. So, we already need to solve this problem when it comes to training people, we just need to make sure that includes our rural and rural communities, our indigenous communities, all these things, exactly. So that brings us to an interesting next question, which is, what's the role of the government here in making sure that this energy transition also works for rural and remote communities?
Gemma Pinchin 31:57
Yes, I've touched on this a little bit, but I definitely think that getting back to my umbrella approach, having sort of policy frameworks that work to empower local decision making and local action, I think that's the role of the provincial and federal governments, is what I'm thinking of. And then funding, funding is a huge piece for rural, remote and indigenous communities. Like I said, there's just not any extra, like in my example earlier, about, you know, diesel generation having to pay all that money to get diesel into the community. There's nothing extra to fund any sort of renewable energy technology. So these funding programs are crucial for these small communities to be able to break away from what they've been doing. They're kind of currently just like floating around the status quo. And that's, that's where they're at having funding available is, is a really key part, really key role, sorry, that federal and provincial governments can play. And then I also think training existing, like we just spoke about, but also training specific for people that work in fossil fuel industries. I think if we were going to have a just transition, we can't just leave people who have been working their whole lives on I'm thinking more Alberta, but people who have been working on oil rigs their entire lives, or in the oil and gas industry their entire lives, and now we're saying we need to move away from that, so we can't just abandon those people. So, making sure there's some sort of like retraining programs or anything like that. I think is a really key role for governments to play.
Trevor Freeman 33:44
For anybody out there who's kind of keeping score here, that's another example of the need for holistic like well thought out process and programs. Is not just about plunking a piece of technology and it's about, as you say, exactly, what do we do with folks who are in industries that are declining as a result of the energy transition? Yeah, you mentioned the financial aspect of this and the role that the government can play, you know, in helping get over that initial capital cost burden. Is there a particular structure or approach? Do you think that would uniquely work for rural and remote communities, or is it kind of similar to incentive programs that work across the board no matter where you are?
Gemma Pinchin 34:31
So, I think grant programs are a really great way for rural and remote communities and indigenous communities to be able to access funding for the initial capital cost. And then in terms of structure, I think, something that I've heard a few times now is that making sure that the application, if we're doing sort of a grant structure that I was thinking, or anything that that needs, sort of like an application reporting. Requirements, making sure that those requirements are not so onerous that it deters communities from applying. So, if we're thinking of a tiny community that has one person working on, you know, climate and energy and 12 other things that are on their desk, it doesn't make sense for them to have this like, hugely onerous task of applying, and then if they get it, you know the reporting structure, it's sort of impossible, and it makes it inaccessible. I heard a story of a community who they had to hire and consultant in order to provide a piece of the information that was needed just for the application, that doesn't even guarantee that you're going to get the funding. So not only you might not get the funding, and then you'd be out however much money it took for you to hire that consultant. So that kind of huge the burdensome applications and reporting is not going to work for rural, remote and indigenous communities like the Toronto's can, like they have the money to be able to hire consultants to do those that work, and it doesn't really affect them. But if you have a tiny budget, and it's just you doing this work, having, you know, not having the capacity in house, and then having to pay someone for funding that you may not get, it's just going to prevent people from applying. So having that, yeah, just making sure that the structure is reflecting the realities that exist in rural, remote and indigenous communities, is really important.
Trevor Freeman 36:32
Yeah, and speaking from experience of having applied for funding programs, as well as administering programs Once we've received funding, and that's both in my kind of current life as well as in past life, it can be a really big lift. And obviously there's a role for due diligence and scrutiny and making sure funds are spent effectively. But if it's a barrier for some segments of our society, that's a problem. The other thing I think I'd mention is, like the time it takes sometimes to learn about process apply for this funding. You know, those, those large, urban, sort of entities that have resources, can jump on this stuff really quick, and often by the times the smaller communities or smaller entities get around to it, the funding is all allocated and gone. And so I think protecting, protecting that in the process is pretty critical.
Gemma Pinchin 37:34
Yeah, and having, having specific funding streams that are only for rural and remote communities and indigenous communities, I think is really important as well.
Trevor Freeman 37:45
Yeah, absolutely. So, Gemma, it's, it's great that you have this, this approach and this, this view of of the challenge facing these communities. But obviously there's a lot of stakeholders involved that kind of need to adjust and align and figure this out. How do we make sure that those connections are happening, that all these different stakeholders, be it government or some of the technology or service providers as well as community members? How do we overcome that disconnect when it when it comes to this approach?
Gemma Pinchin 38:18
Yeah, so that's a huge, huge issue that I saw through this research and continue to see and my answer might be a bit fluffy bunny, but I really think that communication is a key thing. I don't think that all of I think the way that we're approaching it right now is very, very siloed, and everyone's kind of just doing their little part, making sure that we have communication between them, I think, is sort of the, the first, most basic step, you know, breaking down those silos and then having structures that support working together. So again, in that, maybe in that umbrella approach, having policies that support people working together, as opposed to having, you know, this, like competition, or, you know, this is my work, and I'm, I don't, I don't need to work with you, because it's not in my, like, exact purview, having, a structural system that makes sure that we're able to break down those silos, because we're not going to get anywhere if we don't. We need to make like we've been talking about, the holistic approach. We need to make sure that all of the stakeholders, and like everybody, is really working on this.
Trevor Freeman 39:39
Yeah, absolutely. What do you think our next steps are? What do you think is the sort of the most critical next step to ensure that we are moving in this direction, that we're actually going to start to see some progress here?
Gemma Pinchin 39:50
So I think in terms of, I mean, for rural and indigenous communities, I definitely think we need more research like what I'm. Doing. I think these are voices that haven't necessarily been heard, and if we're going to have an energy transition, we need to include these voices. And I think the best way to do that is to sort of do research like mine and figure out what their needs are, and how we can how we can progress to that next step. There's, I mean, there's some amazing thinking, specifically of like indigenous organizations that are already doing great work in this, this space, like indigenous clean energy and the Center for Indigenous Environmental Research. So, they, they're already doing this, but just consolidating all of that, that and having people governments actually listen, I think is really, really important. I think, yeah, those voices just need to be heard and listened to. Otherwise, we're not going to get anywhere. It'll be, like you said, like we just putting in technology and then just kind of, like leaving it there, and that's not, it's not going to work. We're not going to get anywhere with that, that sort of approach. So, making sure, you know, local context is understood and local voices are heard.
Trevor Freeman 41:15
Yeah, well, as we kind of wrap our conversation here, I guess, thank you for the work you're doing, and for elevating those voices and making sure that we're pulling, we're pulling that front and center in the conversation of the energy transition. And so, thanks to you and to Quest.
41:31
Thank you.
Trevor Freeman 41:33
So, we always wrap our interviews with a series of questions just to learn a little bit more about you. So, we'll dive right into that. Okay, what is a book that you've read that you think everybody should read?
Gemma Pinchin 41:45
So, this is my, my favorite book. It's called The Secret Life of Addie LaRue by Victoria Schwab, or V Schwab, and its a, it just, it's a really, it's a novel, and it's a really beautiful look. It's kind of fantasy. There's like a fantasy element, but it's a look at human connection and what it means to be known, and those, those kinds of pieces. And it's really beautifully written. And I just really love it.
Trevor Freeman 42:15
What about a movie or a show that you think everyone should watch?
Gemma Pinchin 42:20
So, there's a French film. It's called Portrait of a Lady on fire, and it's really beautifully done. The sound editing, there's like, no, no. It sounds weird, but there's like no music in the backgrounds, really. But there's pieces where music is played, and it's really poignant, and it's a it's a love story between two women, and it's just, it's really, it's really gorgeous and heartbreaking and all of the things I love.
Trevor Freeman 42:49
Yeah, that sounds awesome. If someone was to offer you a free round-trip flight anywhere in the world, where would you go?
Gemma Pinchin 42:54
I'd go to Japan. That's where my fiancé and I are planning to take our honeymoon. So, we're kind of like looking into that and getting really excited about it. So that's where I would go.
Trevor Freeman 43:07
That's awesome. Who is someone that you admire?
Gemma Pinchin 43:09
My fiancé, she's just the strongest, she's kind. She's really practical, which is a really admirable quality, I think, for me, but also, you know, she's really empathetic, and, yeah, she's just a really magical person.
Trevor Freeman 43:29
Good answer. And to wrap it up, what is something about the energy sector or the energy transition that you are particularly excited about?
Gemma Pinchin 43:36
I'm really excited to see, sort of, the continued empowerment of local communities as we move through the energy transition, and how they're going to be able to move their communities through this climate crisis by looking at things you know, holistically the energy transition, but also, you know, biodiversity, nature based, carbon sequestration, and then also tying in sort of that holistic approach with, you know, healthcare and those pieces to better the community as a whole.
Trevor Freeman 44:09
Well, it'll be nice to as always as all parts of the sector. It's great to see success stories, and it'll be really great to see success stories in the space as well. So exactly, I'm also excited about that. Jeb, I thanks so much for your time today, and thanks for sharing your research with us. And like I said, elevating those voices, I really appreciate it.
Gemma Pinchin 44:29
Thank you for having me on.
Trevor Freeman 44:31
Thanks very much. Take care. Thanks for tuning in to another episode of the think energy podcast. Don't forget to subscribe. Wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback comments or an idea for a show or a guest. You can always reach us at thinkenergy@hydroottawa.com
Music. Hi. Welcome to think energy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman, as I explore the traditional, unconventional and even up and coming facets of the energy industry. If you've got thoughts feedback or ideas for topics that we should cover, we'd love to hear from you. Please reach out to us at thinkenergy@hydroottawa.com, Hi everyone. Welcome back. Something I try to do on this show is to make sure that we're looking at the energy transition from a number of different perspectives. So, we obviously touch on the technologies that will be part of that transition, whether that's heat pumps or EVs or some of the grid technology that utilities like hydro Ottawa are beginning to roll out to modernize our grid. We also look at the overall governance and policy structure that guides our you know, societal energy decisions, how we choose to go about using energy, making energy, etc., in our society, the role of the various stakeholders on the grid gets touched on understanding kind of who the players are. There's a bit of an education piece here of knowing who all the complex players are in this, in this kind of system. And one thing that we've touched on before that I think is really important to keep bringing to the forefront is the end users of energy. And frankly, that's all of us, no matter what other roles in the transition we might play. We're all end users. We all need to heat our homes and workplaces. We all need to move around in some manner. We need lights, we need to cook, we need to charge our devices. And we don't really want to have to worry about those things. We want that to be smooth and easy and how we as end users of energy are experiencing and interacting with and in some cases, taking a leadership role in the energy transition. That's really important, because we need all those things, and we want all those things to be smooth. It's important for our utility companies to understand and to take that into account when we're planning our and I'm speaking as a member of utility. Now, when we're planning our strategies and programs and products, we need to take into account, how does this impact our end users of energy? How are they going to experience this? So, my talk today is with Greg Guthridge and Nicholas Hancock of EY global. Greg is EY Global's powering utilities customer experience transformation leader and Nicholas leads EY research program that's called navigating the energy transition. Both of them ultimately help various stakeholders, including utilities, better understand consumer values, their preferences and their aspirations for their energy experience, which ideally will lead to more informed strategies and approaches to the energy transition for those decision makers, whether that's at the policy or the regulatory or the kind of utility implementation level. So, I'm really excited to talk to Greg and Nicholas today and hear their insight into the work that they've been doing. Greg and Nicholas, welcome to the show. Thanks, Trevor, great to be here. Thanks for the invitation to share our perspectives today. Sure. So, I always like to start getting to know a little bit from our guests of how they got into the energy space. And Greg not to kind of put you on the spot or embarrass you, but you've been named as one of consulting magazine's 25 consultants for excellence in energy, which is a rather lofty sounding title. I understand. You have several patents in the US for energy efficiency and demand management analytics. Tell us a little bit about your journey and how you came to be in the energy space.
Greg Guthridge 04:00
Yeah. Trevor, it was really interesting my journey. You know, it's, you can think of it a little bit as an accidental process here. I didn't leave college thinking that I would be a consumer person in the energy space. In fact, I also, I thought for a long time that utilities were kind of a boring and dusty part of the energy ecosystem. I wanted to be in marketing or in manufacturing, or someplace, you know, considerably more sexy. But what's interesting is, you know, what an amazing journey into what I believe is kind of the center of the universe. Now, you know, energy is everything for us, and I can't think of a more interesting and dynamic place to be at the moment as we think about how we're going to transition to a cleaner, safer, more secure energy system in the future. So, it's been, it's been fascinating to kind of make my way down this path, but I'm super happy to be right at the center of what I think is one of the most, most critical elements of our society and our economy moving forward.
Trevor Freeman 04:00
Absolutely and my goodness, if, if I ever meet that person who you know 20, 30, years into their career, is doing what they thought they would do at the end of college or university, I feel like I'd strike a gold mine. But now let's pivot over to EY global, and the work that EY does in the energy sector, specifically the role when it comes to the energy transition, tell us a little bit about what EY is doing in that space.
Greg Guthridge 05:39
Oh, Trevor, it's fascinating. EY has really taken a very progressive approach to helping our clients, a broad swath of clients, from industry to manufacturing to energy to utilities, you name it, across the spectrum. Really imagine you know how their capabilities; their value propositions and their customer experience need to evolve. Of course, I I represent the customer element of the EY practice in utilities and in resources, but we have experts that that can help with everything from infrastructure to generation to renewables, to audit and tax and financial services, and you name it. In the customer space, we're really laser focused on helping our clients think about and imagining. You know that if you think about it, the typical utility to date is, is the is the product of over 100 years’ worth of development. Most utilities were formed in the Edison era, many, many years ago, and they have a big challenge on their hands. They've got to find a way to kind of evolve not only their business and operating models, but also their regulatory and their customer experiences to really form fit to the future, and that EY is right at the center of offering a whole gamut of different capabilities across the spectrum, across their value proposition, to help them through that, that transition.
Trevor Freeman 07:15
Now you use the word customer, I assume you're talking about that end user of energy, that end user, of, you know, electricity, in the context of our conversation today is, do you differentiate between sort of that residential user, someone in their home and powering their appliances, versus, you know, medium, commercial business, versus those large, mammoth users at the data center level?
Greg Guthridge 07:39
Yeah, Trevor, I'm glad you brought up the word customer, because we use that word as kind of an overarching term. And let me maybe, if you don't mind, I'll, I'll dive in a little bit more on that, because customer is, is actually, you know, I'll use it on occasion, but it's actually a bit of an old-fashioned term, believe it or not, it's, we try to use the term consumer, or, even better, omni-Sumer, when we talk about the participants in the energy experience moving forward, and we're picking these words carefully, because customer kind of implies a one-way interaction. Consumer implies that you're dealing with a customer or a participant that's two way that's engaging, you know, in a much more active capacity. And then you get into omni-Sumer, which is the what we believe, really the consumer of the future. These are participants that are, you know, multi-channel, Multi Product, multi provider, a many to many kinds of experience. So, you'll hear me use them all interchangeably, but really, what we're trying to convey is that, you know, the good old days of somebody at the end of the value chain just receiving a bill for our energy that they take for granted is disappearing. Now, to your actual question, you know, around, you know, the different strata of consumers. We do think of it in terms of, there's residential customers, you know, the mass market, the people at home, and then we have a number of other sorts of major categories that that we think about. There are small and medium businesses, large, commercial and industrial. There's a category which we call mush, which is municipal and universities and schools and hospitals. And then there's a, you know, kind of new categories of consumers that are forming peer to peer, and prosumer, type of consumers that that are trading energy, you know, you know, they've got, they might have electric vehicles or solar or storage, and they're not just consuming electricity for their own benefit, they're actually selling it back into the grid or to others and becoming more of a business partner along the way. So, the takeaway here is that what used to be a passive one way. Customer experience is now leaning into a much more two way engaged and much more complex consumer experience between the energy provider and their and their participants.
Trevor Freeman 10:14
Yeah, and I don't want to paint the picture that this is unique to the energy space or the utility space, because so many different industries we hear about it all the time are being disrupted by changing technology, changing customer preferences. But I think it's really true in the utility space that as you described, the customer, or the consumer of even 20, 30, years ago, doesn't really exist anymore. Is fast becoming kind of out of date, and that whole landscape is changing drastically as we move forward. And so, all the things that we're going to talk about next are kind of in the context of we're looking forward, and we don't necessarily have a great model in the past to tell us, what is that relationship with a customer going to be 20 30, years down the road, because it's changing so rapidly,
Greg Guthridge 11:02
you betcha,
Trevor Freeman 11:04
just to throw one more one more variable at you, it's not just the different types of customers that a company like EY global is dealing with, because you work across the globe in many different jurisdictions, you're also dealing with different regional challenges when it comes to the energy transition. You know, energy typically is a at least partially or fully regulated sector. You're dealing with different regulatory bodies, different governments. Tell us how you approach that difference. And so obviously, as our listeners know, I'm sitting here in Ontario. Has got a pretty complex regulatory environment. How do you tailor your services or your advice to your customers or to your clients in those different areas?
Greg Guthridge 11:51
Yeah, fascinating question, Trevor, and you're absolutely right. The regulatory models, the products and services, even the consumer bases, they vary dramatically. You know, market by market, country by country, region by region. At EY, we take a kind of a two-pronged approach. The first is that, you know, there's more similarities than there are differences. When you kind of peel back the curtain and you look at the basics, and the basics are, we have to find a way to provide to help our utility clients provide the most effective, affordable and safe and secure, reliable energy. And from a consumer perspective, that really leans in on a couple of key pillars that don't vary anywhere that affordability, value based, cost effectiveness of operations, revenue growth and along the way. Let's make this as engaging as possible for consumers and employees, so the basic building blocks actually don't vary that much around the world. What does vary is whether you're regulated or not your products and services vast differences in the kinds of products and services that really resonate with consumers. And that doesn't just go for regional differences. It also goes for just variations in demographics and other, you know, social kind of variations that you see with consumers. And in that case, EY takes a very, you know, client centric approach. So, we take our building blocks that we believe are fairly universal, and then how we implement those in a particular region or with a particular utility, that becomes a much more unique and custom process, where we work really closely with the client to be as centric as possible in in thinking about for this particular utility in this particular market, what's going to make the best sense and what's your priority? So, it's a bit of a combination of trying to use standard building blocks, but then apply it in the most customized process imaginable.
Trevor Freeman 14:06
Yeah, and then, just speaking from experience, working at the sort of, you know, distribution utility level, right down, I guess you can say on the ground, with the customers. It's then our challenge at the utility to take that insight, to take that learning and figure out how to apply it or how to use it to support our specific customers, consumers, individually. So great, great to break it out like that. Okay, I want to ask you about EY's voices of the energy consumers initiative, and this is some research that you did and trying to help us understand who is out there engaging with energy, and what are they thinking. Trying to profile some of these individuals a little bit. It reminds me of that technology adoption curve that folks may be familiar with, and able to identify where they fall on that curve. So. Tell us about or give us an overview of that, of that initiative, and what you're trying to understand from that.
Greg Guthridge 15:07
Trevor, I'm going to start the response to this, and then I'm going to hand it over to Nicholas Hancock, who leads our research. To give a bit more of some color commentary on how we structured our research. But to start up with we really about four or five years ago, we started to really think about the supply and demand of the energy transition. And a lot of focus around the world is on the supply side, building the infrastructure, building in new renewable and green and sustainable sources, getting all of the technology to get cleaner power from one place to another, from an engineering perspective. And what we really started to realize is that as part of the energy transition, if you think about it, we're trying to do a generation of change in just a couple of decades. And on the demand side of this equation, we've got a bunch of very complex consumers, consumers that you know interact and behave irrationally with different behaviors. Some will be very excited about the energy transition. Others will be very reticent, and everything in between, and so in order for the energy transition to accelerate and to achieve the benefits that we're all looking for, we need to find a way to engage the consumer in ways which, frankly, are going to really push the envelope with consumers. So we started our research program, and Nicholas Hancock, who's on, uh, has been leading the charge. And I think Nick, if you don't mind, can you give us a quick overview on the global nature of the research and how we've approached it?
Nicholas Handcock 16:52
Yeah, absolutely. So we started our research program about three years ago, really trying to take a global view, mixing regions that are both, some of them really leading out there on the front edges of the energy transition. So, we've got countries, for example, like Sweden, that are, you know, kind of further down the path as well as, you know, North America, which is, I would say, a little bit more in the middle. And then we've got some countries that are maybe lagging or taking their own paths in the energy transition. We've included countries like China, Singapore. We included Indonesia last year. So really a global view of what are consumers kind of thinking in terms of how they approach the energy transition, what sort of products and services are they interested in, and what are the values and preferences that they bring to it when it comes to their energy providers, but also a broader ecosystem of providers that we see emerging out there, who are they really interested in turning to when it comes to advice, when it comes to learning about solutions, purchasing them, and even things like, for example, control over solutions in the home, which, when it comes to, you know, energy, flexibility in the future is really important. We've been exploring how do different consumers approach and feel about this. And so, what we did is we, develop a survey, we're entering our fourth year of doing that. Now we work with a third party to do those surveys online across the globe. So, it is sort of an independent third party that helps us to perform those and then we take those results back and take a look at what we see. And to your point, Trevor around, sort of the voices of the transition we've been looking at, how do some of those different groups break out? What are the different values of different aspects of those consumers out there? Because even sitting around the dinner table, I'm sure everybody can feel we don't all have the same opinions when it comes to energy, and even more so when it starts to come to things like changes to your home or changes to your vehicles. So that's really what we've been exploring for the last number of years.
Trevor Freeman 18:41
Yeah, great. So, you've identified five different, let's call them archetypes or types, you know, profiles, if you will. You call them your eco energy profiles. Can you walk us through each of the five and give us a little summary of you know who that person is, or who that individual is that fits within that profile?
Greg Guthridge 19:01
Sure. Trevor. You know what we did is, having looked at all these different markets, we found some pretty interesting similarities, and the percentages of the population that fit into these five categories, it varies quite significantly, market by market, country by country, geography by geography, but there is some there's a way for us to more simply think about a incredibly complex, fragmented, distributed customer base, residential mass market customer base, into what we think are really simply five different categories. And we the organization of these five categories. We've thought about them from a behavioral perspective, from a value from you know, what's their interests, and how do they plan to engage? And sort of in sequence here, I'll talk about the five, and I'll put them in the order of from most active to least active. I'll describe each of these. And the key thing here to keep in mind is that there's no wrong place to be as a residential customer. And you can actually flip around. You can move from one place to another almost overnight. So, it's quite a fluid approach here. But the first category is what we call the energy champions. They're the savvy customers. They're actually the customers that have been the first to move and the ones that we see in the news already. They're probably already using new energy products and services in their home. They might have solar on the roof. They could potentially have storage. They might already be using an electric vehicle. We make fun of this category a little bit. They're usually the ones that pre order their iPhone. They might already have a have a have an interest in the new Tesla truck or some other you know, device. They're absolutely the innovators. They're the early movers, and they're interested in spending time researching. They're going to pay attention to where their energy source is coming from, and they're going to be quite active. So those are the energy champions. The next category is what we call the energy enthusiasts, and this is actually the one that that we have to pay the most attention to. They're the fast followers. They're the energy conscious category. And when they when they observe what the champions are doing, and when they get a bit more comfortable and they start to move, they actually will influence the whole market. And as the enthusiasts maybe slightly a little more cautious, but they're also the fast followers, so once they can see the value proposition, once they're convinced that the technologies and capabilities are for real, then they're going to move. They may not pre order their iPhone, but they're probably pretty close in terms of thinking about how they're going to advance into the energy market. The next category is the novice category, or the agnostics. And what's interesting about these this category is this segment of customers or consumers. They they're actually, you know, pretty passive. They can see the value proposition. They can see that there's, there's a lot of people taking interest in it, but for a number of different reasons, they're not moving. They're very novice, they're very they're very agnostic, and it's because they're starting to think about other things, like, well, all right, I can see that I can save money, or I can do something that will improve the environment, but it's just going to take too much time, or I have other priorities or whatever. So as a as an industry, we need to find a way to kind of activate and excite. We need to make it as effortless and frictionless as possible for this category of consumers to move, and they will move, and they will do things, but they're, they're just influenced by a whole lot of other variables that, that you know, that that they believe, are a higher priority. The fourth category is what we call the bystanders, or the skeptics, and they are the ones that are a little bit they're not, they're a bit mistrusting, frankly, of the messaging around the energy transition, around sustainability or environmental and they're probably going to take a fairly skeptic approach to is this for real? Is it really going to provide me benefit? Is it really going to, you know, advance my personal capabilities? And so, what's interesting about this group is they're, they're actually very interested in new energy products and services, but for different reasons. So, they're going to want, you know, more control. They're going to want, maybe, off grid capabilities. And so, they, they're actually as interested as the others, but the way you approach them is going to be very, very different. And the final category are the allies. And this is a, you know, energy is a household necessity. And this category is very dependent. There they might have, you know, income challenges. They might have other challenges that that that we have to look after. It is a critical household service that we provide, and we need to make sure that we look after, you know, the low income, the vulnerable, the medical dependencies that you find in the allies or the dependent category. So, the range of consumers across these five will vary. We've got a great little quiz that you can take out there on ey.com or you can go out and answer some questions, and it'll tell you which kind of consumer you are today. But it's yeah, we see that most consumers will fit into one of these five categories and then move from there, depending on what's happening in their life. Experiences.
Trevor Freeman 25:02
I agree. I'm glad you brought up that quiz, because I know I spent a bit of time going through it and just reading the descriptions. I was pretty sure I knew where I fit in that, and the quiz kind of made me realize, yeah, it can change from time to time. It can change from answer to answer, and depending on what it is. So, it's interesting. And for our listeners, if you have a chance, check it out. You can just, I don't know, Google EY eco energy profiles, and it'll come up, I'm sure. Thanks for explaining that, Greg. And my next question is, why? Why does it help us to have these profiles in mind as we approach the energy transition as the utility industry, as energy providers out there in the sector?
Greg Guthridge 25:44
Oh, good question. Trevor, yeah. What's the point of all of this? Why? What are we trying to do? And here's the thing, we can't approach the consumer base as one homogenous group of people. That's insane, if you think about it. No other industry would do that there that you have, we have to target our messaging, our value propositions, even our customer interaction channels, so that we can appeal to the lifestyles and the interests and the behaviors and the overall approach for each of these different customers. So, a spray and pray one size all approach won't work. What we need to do instead is be as tailored as we can. And what we're suggesting is we don't have to we don't have to go crazy here. We don't have to have hundreds and hundreds of different kinds of customer segments. We can really gravitate around five that really cover 80% of the customer base very, very well, and this will help the utility in many ways. It will help them think about and target their programs, their products, their services, so that they're not wasting a lot of time and effort promoting to one customer base or one segment something that just isn't going to resonate, they can start to vary their propositions and their interactions for products, programs and services accordingly. We think it'll help save money, and it will help the effectiveness of the targeting with these customer bases in a much more thoughtful manner.
Trevor Freeman 27:21
Great during your research. Did anything really jump out at you as notable or surprising, you know, unexpected when it comes to those, those beliefs or that, those values that people hold when it comes to energy? Did anything really stick out, as you know, worth noting?
Greg Guthridge 27:39
Great question, and there's a couple of observations that we've had in the research that that sort of drift to the top fairly quickly. The first is that sustainability and environmental messaging only really applies to a third of consumers. The majority of consumers are actually much more motivated by other creature comforts when they're when they're buying products and services. And so, while it's an it's important for us to, for us, for the industry, to share environmental and sustainable products and services and the benefits of those we also need to augment that with other buyer values that the actually the majority of customers still prioritize. And this is, you know, convenience, comfort, control, price, affordability, reliability, those are the bedrocks. And what we found is just leading, just leading with a sustainable message probably is limiting the appeal of the products and services. And so, if we can make sure that we always really kind of tailor our messaging with a broad swath of buyer values, we're probably going to appeal to more consumers. So that's the first thing that we found relatively surprising, and it doesn't, it's not actually surprising, if you think about it, because, you know, environmental and sustainable messages is really kind of an intangible benefit for most people. It's and what we need to do is really find ways to be much more concrete and tangible and real around benefits that customers can touch and feel and smell immediately in that as they make their investments in their energy experience. That's the first thing. The second is that when we look at the consumer base, we need to remind ourselves that the old guard, the you know, the Generation X and the generation Ys are now being replaced with the millennials and generation zeds, and they want something different from their energy provider. They're not particularly in the space where they're going to benefit from the same things that the generations previous to them. And they're going to want more subscription based pre pavement pay as you go, kind of capabilities. They're going to be much more digital in their interactions. And they're, you know, we need to make sure that we're designing the energy experience of the future for the future, and not for the traditional segments of or, you know, age stratification that we've got in the past. So, we need to hand the baton over to the millennials and the generations that who will ultimately decide the success of the energy transition.
Trevor Freeman 30:33
Yeah, I think it really does highlight the need, you know, both of those kinds of last two explanations, the need for us and the utility sector to really be empathetic to who our customers are and to what they're thinking and how they approach things. And we've talked before on this show about not just holding our own values and approaching things with our own values, but understanding what our customers values are and kind of meeting them where they're at. And I think your research just highlights the importance of that as well. You also wrote an article where you noted that most energy consumers kind of feel like they're already doing everything they can to shift their behaviors and habits when it comes to energy consumption. And that's not to say that they don't recognize there's more that can be done, but they feel like they are giving it their all. You know, they can't afford to do more, or they don't have the time to do more that they're kind of maxed out. You know, 70% of, I think, respondents to your to your survey, said that they're not willing to spend any more time or money to do more. And you've come up with these three A's of energy, and I'd like you to talk us through what those three A's are?
Greg Guthridge 31:43
Sure. Trevor, yeah, definitely. We it's consumers are telling us that. You know, based on their current environment, their current economics, their household experience, that they're pretty much doing everything they can. If you take that eco score, you'll find out pretty quickly that there's all kinds of things that we're expecting consumers to do. Consumers really do. Need to change their lifestyle. Businesses need to change their business practices in ways that are really going to push the envelope beyond most people's comfort zone. So we've got a bit of a challenge here, which is the research is clear. Consumers are saying we're already doing everything we can, and we can see that there's all kinds of things that that we still need to do up and down the value chain. I'm going to hand this back over to Nicholas to give us a little bit more of an overview of the three A's and how we use the three A's and thinking about how we're going to appeal to consumers in a much more thoughtful way. So over to you. Nicholas,
Nicholas Handcock 32:45
Thanks, Greg. Yeah, the three A's is something that is really what's the foundation of the energy experience to really bring along everybody. And I think one of the key ones we mentioned a little bit here is affordability, and it's come up in our survey. Is increasingly important in the last couple of years, as we've seen practically across the globe. Prices of everything have gone up, but at prices of energy have also gone up, and we see a lot of consumers saying that they're feeling quite stretched when it comes to their home bills and their energy bills. And in fact, most people say they can't even absorb a 10% increase in their energy costs. And so affordability is kind of on edge and on top of people's minds. But then we also see consumers really interested in things like prepaid energy or more subscription based energy type services. So I think you know, when it comes to affordability, we're not always able to lower the prices that there is a fact that energy requires an investment, but there are maybe more innovative and creative ways that we can work with consumers to help them manage that affordability. And that's one of the key points, is, how do we think about that in new and different ways and get more creative and work with our regulators to really to do that? The second piece of the second A is access. And, you know, access to the products and services, access to the benefits of the energy transition, have been maybe rather narrow. To date, there's been a smaller group of folks who have been able to afford an electric vehicle or afford to put solar or battery storage on their homes or install a heat pump, and start to see some of the savings. And what we see is a lot of consumers are starting to say that they're feeling a bit left behind by the solutions that are out there today in the energy transition. So when it comes to access, there's an idea of kind of equity, and how do we make this a bit more equitable and have solutions available to all? And again, I think it requires a bit more creativity. Some of some things like community solar or even community wind farms that we see popping up in the UK, are interesting solutions to help more people come along, and then you've got a lot of subsidies or rebates and things available, but not everybody knows about those so there's a role to play to help educate consumers, make sure they're aware of it, but also just make it an easy experience for them to access those things, because we see that that can often be a challenging experience. And then the final one, Greg, you mentioned appeal. That's our final A which is, how do we actually these different kinds of consumers out there that we've. On the residential side, but we've also got small, medium businesses, which are very diverse across different sectors, and then on the commercial, industrial side, different types of companies looking for really different kinds of solutions to achieve their goals. And how do we actually appeal to all of these different organizations and customers? And you know what it is that's important, is that, and you said it, Trevor, how do we appeal to the values that they've got to really what they're looking for in terms of outcomes, and it's going to be different for everybody. So it requires a much more targeted and tailored approach to thinking about consumers and that empathy to really understand what's important to them, what's important to their business, and what's important to kind of the bottom line for those large business customers as well, and make it really you know, appealing energy can be fun. We see it in some other markets that you know, for example, power shop in New Zealand's always one of my favorites. They're really a fun brand that's all about prepay energy and a digital customer experience with really fun social media. How do we start to make it fun, for example, for consumers who do want to engage, and how do we make it just dead simple and set and forget for consumers that want it that way as well. So that's really the three A's that we see as the foundation of this future energy experience.
Trevor Freeman 36:07
Thanks for that, Nicholas, I appreciate it, and I think that it kind of leads into the next question that I have. You've already addressed it a little bit, but you also talk about how energy providers are really good at investing in technology. We're good at knowing kind of, let's call it the nuts and bolts, or the poles and wires of energy. We know how to get those electrons, in the case of electricity, out to our consumers. And as we look at the energy transition, there's almost this, like knee jerk reaction to say, Yeah, okay, well, more poles, more wires, more transformers. But there's this whole human element of the energy transition that also needs attention and needs to be invested in. Can you expand a little bit on that human element, and how utilities and energy stakeholders can kind of lean into that to help address some of these challenges?
Greg Guthridge 37:00
Oh, Trevor, great question. And you know, if you think about it, energy is, is it's taken for granted, for by most people, it's, it's, it's just there. And when it's not there, you become incredibly irrational. So you switch from being rational to irrational in record time at the very moment, but your power's out. And there is another interesting element to energy it. If you think about if you look at customer interactions, 70% of customer interactions are actually negative with their utility. And it's not, it's not the utility's fault. Usually, it's just a negative experience. My power is out. I can't pay my bill. I'm moving house, which is one of the top 10 most stressful events in people's lives. All of these thing’s kind of add up to, you know, a negative and irrational interaction around energy. It's when it's on and it's working and it's affordable, great, no problem. But when anything goes wrong, you see consumers kind of switch to being quite irrational, very, very quickly. And what's interesting is, if you think about the customer experience, and I don't you know, historically, it's we've designed this, you know, with engineers and financiers involved in the process. And it's, it is, it's very methodical, and it's, it's very logical, but is it really suited for irrational consumer behavior? Maybe, maybe not, especially when we start to think about the new distributed energy and all these new kinds of products and services that are coming down the path. This leans us into the kind of so what which is we probably would benefit as an industry if, if every utility and every organization hired a behavioral scientist, somebody who's really, you know, very savvy and in these, in these different kinds of customer segments or profiles, and how and what those customers really value, and how they're going to interact. And start to tailor as best we can. We don't want to overdo it, but we, you know, tailor and form our product services and interaction channels for these different consumer bases, that would be a, you know, that will be necessary, and we see that we're inspired by what's helped happen in telecommunications and cable and some of the other service home service providers, how they have really leaned in on A much more behavioral approach to their consumer base.
Trevor Freeman 39:42
Yeah, and, I mean, I guess, keeping with the theme of three chunks of threes, you kind of expand and you take that into these three areas of action that energy providers can take to help their consumers on that journey, as we talked about and you even make the note of saying the companies, energy companies, have to do everything all at once quickly. We can't sort of pick and choose when it comes to rethinking the way we're engaging with our customers, our consumers. So help me understand these three areas of actions that that are so critical for energy companies?
Greg Guthridge 40:20
Yeah, again, I'm going to hand this over to Nicholas in a moment. The you know, the message is that, again, we are we're trying to accelerate an energy transition measured in decades rather than in generations, and so we've got to walk and chew gum at the same time. And that utilities are immensely complex organizations that are already doing that, obviously. I mean, we're the infrastructure and the complexity to deliver, you know, electricity and natural gas to consumers is an Herculean activity already, and what we're suggesting is it's going to be even more complex now as we try to engage consumers in in, you know, these three key areas. So Nicholas, over to you, just to give a quick overview on what some of those key priorities are that we all have to juggle simultaneously.
Nicholas Handcock 41:12
Yeah, you bet. And it's, you know, it's probably overly simplified, but to get it down to threes, I think the first one that we talked about is really thinking about reinventing the basics. And I know, Greg, it's one of your favorite things to talk about, spring cleaning that you know, a lot of utilities are really the product of, you know, 100 years of history and of built-up complexity and taking a step back and saying, how do we really simplify a lot of our internal processes? How do we simplify and automate things to help the employee experience, but also flip that lens to the customer side? How do we make things as effortless and easy as possible for customers, really, across every kind of interaction that we could be having with them? You know, focusing on like one and done, we really finished. Finished, start, finish. What we start when it comes to customer experience, so that reinventing of the basics and that comes also to areas like outage and reliability, where we see that being more and more important in a lot of places. How do we think back to that experience and make it really the best that it can be? I think the second area, we call it onboarding of the new which is, how do we make you know, consumers? How do we go and engage them and really more of a personalized way? How do we tailor things to the best that we can in a cost effective manner, and really start to bring in those new programs and products and services that we want to take to customers and have that new messaging for them, and build a new kind of relationship, as Greg said, meeting customers where they are, and creating a new kind of connection point with customers when it comes to energy. And the final thing is really thinking about scaling for the outcomes that we're trying to achieve. And there's a lot of things to focus on here. I think a lot of utilities have gotten stuck in pilot mode when it comes to a number of things, whether it be new programs or new products and services or things like new technology, like artificial intelligence. And what we see is that the time for sort of pilots and testing is really over. Consumers and the energy transition are moving forward very quickly, and it's time to really reach for scale when it comes to things like introducing new technologies to make experiences better, to simplify, but also scaling those new products and services in a way that's going to be effective for a future that has sort of mass adoption. We're moving beyond the early adopters. And now we need to think about moving from pilots to scale. And so that scaling for outcomes is really the third place to focus on.
Trevor Freeman 43:29
Yeah, and that's a great I like kind of ending up there that looking at, what does this look like when we move past that pilot stage, past that Imagineering stage, if you will. And that's kind of where I want to wrap things up today with my last question. And I'm going to put you guys on the spot a little bit here and ask you to, you know, think about those stakeholders in the energy sector that you're working with. You know, knowing your reach is global, who are doing a really good job of this, who are further down this path towards the transition than others are, and what does it look like, both for that, both for that kind of utility actor, as well as the consumer, when you've got an energy sector, when you've got an energy system that is closer to where it will be in this future that we've been talking about than where we are today, with maybe some of those lagging actors. What does that look like? What is it like to have an energy sector that's really through the transition, if you will, or close to that?
Greg Guthridge 44:33
Oh, Trevor, yeah, let's, let's pull out our, our, our little crystal ball, and see what the future is here. The future is ubiquitous energy. The future is consumers who are multi product, multi-channel and multi provider, and who have a connected ecosystem of energy devices that they can override and control, but are also. So simple and automated in many ways, they we have simple, clear too easy to understand billing and payment capability that's fully integrated, and we're providing a convenient, effortless and frictionless experience, both for residential customers, for the mass market, as well as for businesses, we're leaning in on new energy load growth, whether that's, you know, data centers and any number of other things, and we're leaning in on this convergence of the home and the automobile, which is going to be a fascinating transition in the future. So how and what that is going to look like in the future is going to vary dramatically for different utilities, and the duration that it will take will also vary dramatically. That's really where we're headed, and it's super exciting to see this, this unfolds across the globe.
Trevor Freeman 46:04
I think it's helpful to try and get in that headspace from time to time, because we spend a lot of time talking about where we are now and the challenges we face and the big things that have to happen, and we talk about the solutions as these kind of nebulous things, but really thinking of what's the day to day, like when we get through this energy transition, or when we move further than we are today, I think is helpful to give us that I don't know, call it hope for where we want to be in the energy sector. So to wrap up our conversation today, I always ask our guests a series of questions, just to help kind of get to know you and get out of this space for a little bit. So given that there's two of you, I'll just throw the questions out there, and either one of you can answer. You can fight over who gets to answer or who has to answer. I'll leave that up to you. So, to start us off, what is a book that you've read that you think everyone should read?
Greg Guthridge 46:56
Oh, what an interesting question. And it's interesting. We have a we actually have a book club at EY, a monthly book club, and we've covered, I very kind of different book. And what's fascinating is, after two or three years of having a an internal book club at EY, my favorite book isn't even on the list yet, and it's actually called the future we choose. And the author is Christine Figuerellis. I think I might have heard her last name, but the future we choose, and it's a really optimistic book on the future of how we can navigate. It presents the challenge ahead, but also gives us hope and optimism in how we're going to navigate that that transition. So great, great little book, a good read, nonfiction to some extent, and worth a quick, worth a quick read.
Nicholas Handcock 47:58
I'm surprised you didn't, didn't pick it, Greg, because I know this is one of your favorites, but I thought I'd thrown out as one that I think everyone should read is that it's a bit of an older book, The Effortless Experience, by Matt Dyson, and it's, you know, it's all about customer experience and how most customers really just want the simplest customer experience possible. And that's really what moves the needle, is making it easy and effortless for people, and even proactively making it so they don't have to connect and contact us. And I think as utilities, it's a good one to think about. As the experience gets more and more complicated, how do we actually make it simpler?
Greg Guthridge 48:30
Yeah. Nicholas, you named it that's, that's, that's, you know, for years, that's been one of my favorite books. So yeah, the effort listed customer experience. Matt Dyson, great book.
Trevor Freeman 48:42
Both of those are great I love the idea of holding on to that hope and optimism and then that sort of practical look at, how do we how do we let customers have the easiest experience with us as possible? Both of those are great choices. So, the next question is kind of the same, but for a movie or show what's a movie or show that you think everyone should have a look at?
Greg Guthridge 49:04
Oh, yeah, Trevor, we've all, you know, we all survived the pandemic with all kinds of different media options here. And, you know, actually, during covid, one of the movies that resonated with me was this was a book or was a movie called The biggest little farm. I don't know if you've heard of it, but it's a it's a fascinating sort of journey around sustainability. And you know the creativity that those residential customers can take. It's, it's fun, it's light, it's a good Friday evening kind of movie, if you know what I mean. So have a chance. Check it out. I think it's four or five years old now, but it's called the biggest little farm,
Trevor Freeman 49:52
Perfect. My next question is, now, now both of you guys’ travel, I think, a fair amount, so this is either going to be an easier or harder question for you to answer, but if someone gave you a free round-trip flight anywhere in the world, where would you go?
Greg Guthridge 50:07
Well, that's easy for me. I'd probably go to either New Zealand or Italy. New Zealand because of the amazing environment and landscape, and it's just it's such a beautiful part of little pocket of the world, and Italy for its food, that would be easy. Nicholas?
Nicholas Handcock 50:24
I think I would jump on a plane to Japan. Greg and I both spent some time working there as the market and energy was liberalizing. And it's such a unique and interesting place that I just absolutely love and sort of on the nerdy side, from the energy side of things, it's very interesting where you've got, you know, subway companies and things selling electricity in Japan, which is, you know, different and unique from a lot of places in the world.
Trevor Freeman 50:48
So cool. I mean, I've done a bit of traveling as well, and I think those, those things that you guys both highlighted. I mean, food, for sure, is phenomenal to go somewhere else and experience different food. And nothing really beats good Italian food in Italy, but also those examples that you brought up Nicholas, of just different ways of doing things that we don't consider or don't seem to fit within our culture here, that maybe we should be looking at. And yeah, I love kind of seeing those examples and hearing about those examples. So, both great, great answers. Okay, so to wrap it up, then, what is something about the energy sector or its future that really excites you, that you're really pumped about
Greg Guthridge 51:27
I'm excited that we are approaching the energy experience from a technology and operations, a consumer lens, and you can see a future, an Ubiquitous Energy Future, where consumers are much more active in their experience. They're benefiting from that experience. We don't we can do this. We can make it affordable, we can make it reliable, and we can make it much more convenient for consumers in the future. So it's just going to be fascinating to see this convergence of technology, of societal along with all these new products and services kind of converging together. And you know, there's a lot of other industries and sectors, from, you know, manufacturing to industrials to automotive that that will play an increasingly interesting role as this convergence occurs in the marketplace. So it's just going to be fascinating to be a part of.
Nicholas Handcock 52:33
Yeah, and I think piling, piling onto that, Greg, I think it's really exciting that the spotlight is on the energy sector. You know, it's in the headlines in the news. My family and my friends asked me about it and asked me about topics that are related to my work, which probably five years ago they thought was very boring, and now it's getting exciting. I think it's also really exciting when it comes to thinking about the talents, the investment, the innovation that we can attract to the sector. We're already starting to see it startups and things having really creative new solutions coming to the energy sector that maybe used to focus elsewhere. So I think there's just so much innovation and change coming. It is really, really exciting for the future.
Trevor Freeman 53:12
Great. Well, I think that's a pretty phenomenal place to wrap up with, with that little pump of optimism. Nicholas and Greg, I really appreciate your time, and this was a great conversation. Thanks for sharing your insights, and appreciate you coming on the show.
Greg Guthridge 53:24
Trevor, thank you very much. Appreciate your time today.
Nicholas Handcock 53:27
Yes, thanks, Trevor.
Trevor Freeman 53:29
Great. Take care, guys. Thanks for tuning in to another episode of the think energy podcast. Don't forget to subscribe. Wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word as always, we would love to hear from you, whether it's feedback comments or an idea for a show or a guest. You can always reach us at thinkenergy@hydroottawa.com
Welcome to think energy, a podcast that dives into the fast, changing world of energy through conversations with industry leaders, innovators and people on the front lines of the energy transition. Join me, Trevor Freeman, as I explore the traditional, unconventional and up and coming facets of the energy industry. If you have any thoughts, feedback or ideas for topics we should cover, please reach out to us at thinkenergy@hydroauttawa.com, hi everyone, and welcome back. And welcome back from the summer. As you know, think energy paused over the summer, and hopefully you got a break over the summer as well, time to rest and be rejuvenated. There were certainly times of that for us here. I was able to get out and do some camping and canoeing with the family, which, if you're not from Canada, if you're if you're not in Ontario, there's some fantastic camping and canoeing spots here, so come and check them out. But it was also a busy summer. Things, some things do slow down, and others just seem to fill in that empty space in the calendar. So, we've been busy and hard at work. One of the things we've been doing is spending some time thinking about what this next season of think energy has in store. There are lots of great topics to explore, lots of interesting and smart people out there to talk to the world of the energy transition and energy in general is not slowing down. In fact, it's picking up steam quite a bit. So, lots to dive into this season. We may take a different approach on some topics, on some episodes. We might try out some new things. So yeah, come along for the ride. So today, for our first episode of the season, we're going to kick things off with something close to home, and you will forgive me for that very intended and poor pun, because we're talking about home decarbonization and electrification. We know that most Canadians want to do something about climate change. The data shows us this, and you can go back and listen to my conversation with David Caletto from abacus data for more information on this. We want to live in a society that isn't producing harmful emissions that are jeopardizing our future, but it often feels like so much of that is out of our control. So when it comes to climate action, what we often look to is those things that are in our control, which, for those fortunate enough to own their own homes, is the emissions that result from where we live and, by extension, for somehow we get around the city, so our vehicles, even that action, however, can be daunting if we don't know where to start and we don't know what our options are, and we're relying on contractors, or tradespeople who tend to take maybe a more traditional, fossil fuel based approach. There are great contractors out there, but sometimes it's hard to find them, so today we're going to explore that a little bit. Now I do want to throw a quick caveat out there to say that this conversation is really through the lens of kind of a single family or semidetached home, and through the lens of those that either own their own home, or at the very least have some decision making. Power for that home. Decarbonizing multi-unit buildings like apartments or condos or decarbonizing for renters, is a whole different but equally important conversation that I do plan on tackling at another time. So my conversation today is with Sarah Grant, who is the co-founder and co-owner of Goldfinch energy. Goldfinch energy is a Toronto, Ontario based, women owned small business that is dedicated to helping Canadians reduce their homes reliance on fossil fuels. They offer energy assessments, clean tech roadmaps and green renovation support services. Sarah has degrees in engineering and computer science. She's held leadership roles in renewable energy and local food systems, and is a certified energy advisor. And is really someone who's just passionate about tackling climate change and passionate about talking about it as well. So, I think you're going to enjoy the conversation today. Sarah, welcome to the show.
Sarah Grant 04:21
Thanks for having me
Trevor Freeman 04:22
so. Full disclosure to our listeners here, Sarah and I have actually known each other for quite a long time. And I was trying to do the math there, I think it's like getting close to 20 years now, and we know each other from a different line of work. We both were in international developments and worked overseas for a while. So, I think my first question is, tell us how you came to be in the home energy business. That's a bit of a shift from international development. And then tell us a little bit about what Goldfinch energy does.
Sarah Grant 04:53
Awesome. It is true. It is a bit of a shift, although I have always been interested in big, big problems that the world is facing, and working in international development, yeah, I guess 20 or so years ago, I could already see the impacts of the climate crisis, working with subsistence farmers, hearing them tell the stories of how they would plant and um, reigns weren't as predictable as they had been before. And so, when it was time for me to come back to Canada live a bit closer to family, it was something that I was always interested in, and felt like it was another global problem that I could start working on more locally, more specifically, sort of how Goldfinch was born was, to some extent, out of the pandemic. So, some goodness came out of that. Early in the spring, I was working in another sort of climate focused endeavor, a nonprofit that it was clear wasn't going to do very well with the pandemic ongoing, and a friend actually approached me and said, hey, I have this idea. She herself had been working in the sort of climate change world and had had a furnace die, and had asked about heat pumps, and was just laughed at. So, she ended up with a oversized, gas guzzling furnace to continue to heat her home and knew she could have done better. So, Goldfinch energy was sort of born out of that idea that we're not alone. Many of us want to do something, and our homes are a large portion of our individual commissions. If you are lucky enough to own a home, that is, and there are small steps, big steps you can take. All of it matters. And so that's Goldfinch. So, we then, early on, decided, in order to help people, it was going to be useful to become energy advisors. So, I took some training. Actually, it's a really interesting program the federal government through Natural Resources Canada administers the, I guess, the industry of being an energy advisor. And so, there are sort of two exams you take. And so, we studied in 2020, and launched Goldfinch energy with the idea that, after doing some market research as well that, you know, what was really going to be helpful was being able to help people sort of break down the complexity of what's going on with their homes, what they can do to address the climate change crisis. And also, you know, with a home, it's also not just about that. It's about maybe making it a bit more comfortable, or maybe there's a planned renovation that someone might want to do to change the layout, what have you. And so, we establish golden energy to help people make their homes better for the planet and for themselves.
Trevor Freeman 07:52
Great. Yeah, it's, I think I hear that a lot from folks, and it's in my own experience of, you know roughly that you want to do the right thing, you know, roughly that, yeah, I want to, you know, reduce carbon, but I don't know how. And the answer I'm going to get from my average contractor is not going to point me in that direction. I'm hoping that we're seeing some change, and folks like you guys are maybe pushing that a little bit, but it's great to know that there's organizations out there that can provide that direct support. So, I mean, what we're talking about today is pretty much home electrification, or, let's say, home decarbonization. And so, let's pull apart what that looks like. And there's probably a few different scenarios of how a homeowner could approach this work. There's the one that you described where your furnace kind of dies in the middle of January, which is my own experience a number of years ago. And you have to make a really quick decision. But let's park that scenario for now. Let's talk about if you have time, if you know you want to do this, and you can start planning now, what where do you start? And, oh, you know, looking through the services that you guys provide, you have the energy assessment, the cleantech roadmap, talk us through some of those tools that you use to help people kind of start their decarbonization journey.
Sarah Grant 09:16
So, this is a great question. The best way to start is just by getting a sense of where your home is now. A lot of the homes that I work in, I'm based in Toronto, are 100 plus years old. So, you know, when they were first built, didn't have any insulation. They leaked like a sieve. They were probably heated with wood or some type of fossil fuel. And you know, different expectations were had and over the over the decades, often homes have had a myriad of homeowners and renovations or no renovations. So, an energy assessment is a way for someone to better understand what's going on with their home right now and our clean tech roadmap, then segues from that and helps goes deeper into okay, I now know where my home is losing heat, where you know how efficient or not it is, what levels of insulation exist in behind the walls and in the attic, and you know how drafty it is. There's a cool tool that we use to measure that, the clean tech roadmap, then puts that assessment and translates that into helps people translate that into a plan that they can then ideally act on. So, this plan includes details like, Okay, what you know if you are going to be renovating the basement, stay and want to finish that space. What are the recommended insulation materials that you should use? And how should you treat water? Because, you know, often basements are a little bit below the water table. So, what does that look like? How can we better air seal that space to make it less drafty as well? And maybe you're going to be touching the heating or the hot water. So, what are the options there? What are some contractor names? So, it's really designed to give people all the tools that hopefully they may need if they have the time to not only understand where their home is at, but what they can do and then even have everything at their fingertips to start to seek out quotes and start to take action on their home in the way that's best suited to them. So, some homeowners are able and fortunate enough to kind of do everything in one big bell swoop of, you know, a big, big renovation, perhaps, or, you know, over a few months’ time, able to kind of get, get everything off the list. A lot of the homeowners that we work with aren't in that sort of circumstances. A lot of homeowners who just bought a house, so the house is new to them, but maybe 100 years old. And so, having that clean tech roadmap in their hands then allows them to sort of say, Okay, well, what? What do we want to do this year and the next year, and I've had people that, you know, we worked with four years ago, have who have come back to me a few years later and said, Okay, well, now we're ready to do this? Can you help us which, which is so great, so it's designed to sort of meet people where they are, where they are, with their goals, with their budget and their lifestyle. Because not everyone can afford to kind of do all the you know the right things all at once.
Trevor Freeman 12:24
Yeah, so, I think like having someone in to one understand what's there, because not everybody knows exactly what's in their house, as you said, and then have that plan. That doesn't mean you have to implement the plan today all at once, but knowing you know when this piece of equipment goes or when I work on this part of the house, here's what I'm going to do, here's the things I need to consider. And having that kind of in your back pocket. Or when you do that work is super helpful. You touched on something else that I want to ask you about, which is, you know, oftentimes when we think about decarbonizing our homes or changing out big pieces of equipment. Of course, we're thinking of, you know, our heating system, our cooling system, our hot water system, but you mentioned a couple other things. So, what are some things to address before getting into those big equipment purchases? You know, changing out your furnace. What should what should you do in advance of that?
Sarah Grant 13:20
I mean, first and foremost, you know, if you have a home and you have issues with water, with mold, those are kind of, you know, structural issues. Those are aspects that tend to, you know, they're top of the list. But, you know, assuming, let's assume, you know, we're talking about homes that kind of don't have those pressing needs. Some of the some of the items that are ideal to address before electrifying are involve making your home better at keeping the heat in. So that's really comes down to just insulate, more insulation where you can, to the extent that you can, and reducing air leakage. So, a lot of people are familiar with insulation. Usually, most contractors these days, if someone's renovating a kitchen, will find a way to add some insulation. Reducing air leakage is still, I would say, not as much on a contractor's radar as it would be ideal. A lot of the green contractors and architects that I work with, it's sort of as important, or even more important, and to us it is as well. So, in the winter, the insulation for your house is kind of like your sweater, and if you don't have any sort of windbreaker, you're going to have a lot of air leakage. So, the air leakage for your home is kind of like adding a windbreaker. Sorry, I started to talk about it like with homeowners, like there are different levels of air leakage. So, level one just involves walking around with a caulking gun and doing what you can to seal up the gaps and the cracks, maybe around the windows. In the window trim, maybe along the baseboards. People often have a good sense of some of the larger sources of air leakage, because they feel drafty, and so that's kind of level one, air leakage. Level two could involve maybe doing a little bit more in the basement, around what's called the rim joist. So, if you look up in your basement and your basement is unfinished where the sort of the ceiling joists meet the walls, those are often a huge source of air leakage. And there's a lot that can often be done to reduce air leakage there. And there are different products. I don't know if we want to get into that today, but I'll just leave it at that for now. And level three is if you are going to be replacing the siding from the outside or from the inside, gutting your house, adding an air barrier, which is a material that serves to reduce the air leakage. Overall, it is like wrapping your house in a big windbreaker. If someone is able to do that, if you're able to say, if you have siding on the outside of your house that you need to be replaced. Adding an air barrier can have the most significant impacts in terms of reducing air leakage. So, you asked, sort of, where should someone start? I think, you know, it does come back to a lot of people I find replace their siding or replace their windows, maybe more for esthetic reasons, or they have reached their end of life. But reducing air leakage, doing what you can if you're replacing your siding, to also add insulation, isn't always on people's minds. So again, back to having that plan. If you have a plan, if you know, okay, when I need to redo my flat roof or redo my siding or redo my windows, I'm going to be thinking about these extra pieces that will ensure that I'm going to take a few more steps to make my house do a better job of keeping the heat in, by adding more insulation, by reducing air leakage. Those are great, great first steps when possible.
Trevor Freeman 16:54
And the added benefit, I think, of that, and this is important for people to know, is there's a huge comfort impact there. I mean this, we're not even really talking yet about energy savings and carbon you will just have a more comfortable home if it's less drafty, if it holds the heat in better, keeps the heat out in the summer, and that is one of the drivers for some of these changes that we're talking about here today. It's not just because you really care about climate change, it's also because you want a more comfortable and efficient home.
Sarah Grant 17:25
100% I think that comfort just like someone having a broken furnace. Well, maybe not exactly, but similar to, I think, is can act as that trigger, as that motivator, to push people. So I do often have people calling and saying, Hey, like, can you come and do a consult? Because we don't often use the third floor of our house. It's just not as comfortable. And so we'll figure out what's going on and help people make a plan to address that. And ideally, you know, I find when I'm able to do that, I'd rather help someone make a better use of existing space than help them plan out an addition. Um, I have sometimes ended up talking people out of an addition, because upon sort of discussing their house real, we've realized, okay, like they don't use their basement because it's unfinished, it's dark, it's damp, it's, you know, it's the scary, cobwebby place. And so we develop a plan that involves adding more sunlight and making it comfortable, making it not so damp and scary, and that helps. They're already heating that space. It's sort of a space that you're already sort of half there. And so energy wise, you're making an improvement, and have avoided making your house bigger, which is maybe required, but it can be avoided, is better too.
Trevor Freeman 18:49
Okay, so I want to dive into the things that probably people are most familiar with when we talk about reducing our own fossil fuel consumption in a home. And so these are your big users, like how you heat your space, how you heat your water, and for some people cooking. So especially those first do space heating and water heating. The majority of Canadians at least use some kind of fossil fuel to heat their homes, especially here in Ontario. So that's typically natural gas cooking is a little bit more of a mixed bag, but there's a lot of gas cooking out there. So maybe talk us through what would be the sort of low to no carbon option for each of those three things.
Sarah Grant 19:31
Great, okay, going from large to small. So the largest source of emissions in a home is your space heating. Typically, the emissions are about the same as driving a sort of a mid to large sized car. You know, most people drive, on average, 15,000 kilometers a year. The emissions are going to be about the same so that that's going to be the biggest one, if someone is looking and they're a little bit overwhelmed, and the best alternative is a. Heat pump. So these are they come in many different forms, but the most common, and I think the most common scenario for most homes is if you have forced air. So ductwork and these kind of heat pumps can extract heat from the air outside. A lot of them can work up to minus 30 degrees. So even up to minus 30, they're able to grab latent heat in the air and pump it inside, and then it gets pumped around your house. The cool thing about them is that they can also work in reverse. So, in the summer, they act just like an air conditioner. In fact, the technology is very much the same as an air conditioner, just that they work in reverse in the winter too. So they can also cool. So these are called Air source heat pumps. And, yeah, someone has forced air and they have a gas furnace or an air conditioner or both that need to be replaced. An air source heat pump is, is a great option. A lot of the folks that we've worked with that have switched, you know, you talked about comfort, sort of some of the side benefits, I would say, of a heat pump is they're typically quieter if designed and sized and installed properly, they're they they're quieter both the outside and the inside aspects of a heat pump, and the air from the vents is a lot more comfortable. So we got a heat pump about three years ago, and the first winter we had it installed, my father in law came over for dinner one night and just stood in front of the vent, kind of like a cat basking in that warmth, and said, Oh my gosh, this is way more comfortable. It's not that dry, scorched air that a lot of people associate with poor stairs. So that's, that's an air source heat pump. You can also, there are also ground source heat pumps, but for a lot of you know urban areas, these ground source heat pumps involve drilling into the ground, either horizontally or vertically, to extract heat from the ground. They I have worked with a few homes in sort of more rural areas where it does make sense, but the costs associated with them are really high, and often there's not enough space in urban areas, so they're not quite as common. And I'd say sort of, just to kind of close the conversation on we'll conclude it on the on the heating side of things, if you do have another source of like heat, maybe it's, maybe it's cast iron radiators or baseboards. There are also heat pumps that can help you as well. So with cast iron radiators, they're what's called air to water heat pumps. So they'll the outdoor unit will look similar to someone who has forced air. So it's an it's going to extract heat from the outside air, and it'll transfer it to water. Now that can then go through your cast iron radiators, or maybe have insular heating or what have you. They're not as common, but the technology has existed for a long time in Europe, and there are more products and contractors that I'm working with that are becoming more comfortable with installing this technology. And last there are what's called ductless heat pumps. So if you don't have ductwork or cast iron radiators, or maybe have baseboards, or maybe there's a space where the ductwork just isn't sufficient, these ductless heat pumps can be installed. They can either go on the wall, on sort of these big white boxes. If you've been to Asia, you're probably familiar with them because they exist there, either in the form of heat pumps or air conditioners, or you can have little floor mounted ones as well, which look a little bit slicker, I suppose, but they do cost a little bit more. So that's heating for hot water. There are kind of two main options if you want to get off of fossil fuels. Usually that's yeah, for most of us, that's with the gas, but there could be propane as well. So, if you want to get off of fossil fuels with your hot water, the heat pump technology exists with hot water as well. Heat Pump hot water tanks is what they're called. Are actually, confusingly, sometimes hybrid tanks, because they use heat pump technology, but then also have an electric coil. So, they operate, they can operate like a simple electric tank, if, um, if needed. And they come with a little like Wi Fi app too. So they are, like, four times more efficient than a gas hot water tank. So you will save a little bit by switching to them. But the way they work is they'll extract heat from your basement, actually, so from your basement air and transfer that to the water. So, I would say about half the people I work with end up going with them because they have a space where it makes sense. Maybe their basement is large and they can put it kind of in the corner and a big mechanical room or a workshop where they're not going to go into it. So, if it, if that heat pump reduces the temperature by two degrees or so, it's not a big deal. But for me, my home is pretty tiny, and we're using every nook and cranny with five of us in it, so we opted for an electric tank and, um. And then paired it with a timer so that it only reheats the water overnight when electricity, if you're on time of use, is cheapest, and that's also when our Ontario grid is using the non-fossil fuel related forms of power production, like nuclear and water. So that can work if you're really lucky and you have an open an unfinished basement and a good space to install what's called a drain water heat recovery system. These are super cool, very simple technologies that can transfer the heat from any water that you've already used, like from your shower, and transfer it to the fresh water before that fresh water then goes into whatever heating mechanism you have. So, they can work with anything, even if you have a gas hot water tank, a drain water heat recovery system is a good way to kind of preheat the water by extracting the heat from the hot water you've already used a lot of hospitals I know in Toronto are starting to use these kinds of systems as well. So two main options, electric tank, you pump out water tank, and then those drain water heat recovery systems as well, and hot water. So, you know, I said you're heating, heating your house. It's usually about kind of 8080, or so percent of a home emission, home emissions hot water is, is around 15 to 20% just to give an idea of sort of how it fits into the relative picture. But ultimately, I wouldn't say, you know, do one over the other, unless you know, if you have, if you have a hot water tank that's broken, replace that with a with an electric tank, or heat pump hot water tank. Don't, don't just say, Oh, it's only 20% I shouldn't do that one. It's still worth it. Every little appliance that you can get off of fossil fuels is one step closer to then being able to disconnect from the gas utility or what have you, and sets you up for, ultimately, like a little bit of savings too, because you're no longer paying for that delivery fee to have access to that fossil fuel in your house. So cooking, cooking is cooking is probably, to be honest, like, the most fun of all of these just because, you know, it impacts your daily life. If like, hot water and heating and cooling are one of those things where you don't, like, I don't think about my heat pump unless it's not working properly, which we haven't had an issue with. But, you know, it just sits there and it does, it does its thing, and I'm happy to have it off of fossil fuels. But for cooking, switching, for us, switching. We switched from a gas stove to an induction stove about a year ago, and it's amazing, like I've got little kids, and I love that. I feel comfortable teaching them how to cook on this stove, just because of the way the induction stove works, the whole cooktop doesn't get heated up in the same way you accidentally leave, like a rag or a paper towel on the stove, not going to catch on fire. We did have a few of those incidences with our former gas stove. And, like, it's really quick. I know that there's a lot of stats and data about how quick it can heat up water, but it's one of those things that you don't believe it until you sort of experience it yourself. So yeah, so we got, we got a nice flick induction stove, because our gas stove was kind of reaching its end of life, and we were starting to smell some of the gas as well, even when it wasn't on, which I know is an issue, that's, that's, you know, something that's, that's hostages for our help. And, you know, there's a lot of research and evidence out there related to, like respiratory issues and gas related cooking. So, if you do have a gas stove and you aren't able to afford to switch now, make sure you're using your exhaust, like your range hood, properly, not just when you're using the top, but when you're cooking in the oven too. But yeah, if you're able to switch it out, then you can just break a little easier knowing that you're not, you're not using some sort of like fossil fuel to cook, cook with, and so your house is cleaner, and you're making the planet a bit cleaner as well.
Trevor Freeman 29:11
That's definitely one of those other benefits of going down that path. And everyone we're in a similar vein, I cook with electric resistance now, but our stove is near its end of life, and I've excited to get that induction stove, because everybody I talked to just sort of says it's one of the coolest things that you can add to your kitchen. So, I'm excited about. One other big source of fossil fuels in our daily lives that people will be familiar with, obviously, is, is our cars, how we drive, how we get around. Most folks still have an internal combustion engine car, and we know that for people that are going to switch to an EV if they can, the preferred choice to charge is at home. People want to be able to charge their vehicles at home. So what are some considerations when it comes to owning an EV at your house, as you're trying to decarbonize
Sarah Grant 30:06
Awesome. I'm glad you asked this question, because I was trying to figure out a way how to bring up electric like capacity in a home, knowing that you know, if you do electrify every appliance in if someone does electrify every appliance in their house, they may not need to upgrade. A lot of us are on 100 amp service, and I was able to, you know, install an induction stove switch from gas to induction switch from a gas hot water tank to an electric tank with that drain water heat recovery system and a timer switch from a gas furnace to a heat pump. And we had 100 amps, and we're fine with that. We didn't have any breakers trip or anything. And I've worked with a lot of homes where that's the case. I should just say, even before someone's going to switch to an EV though, the kind of the two main aspects, two main elements that may require an upgrade, would be an EV charger and, um, electric backup, resistance heating. So with a heat pump, they are amazing for so many reasons I've kind of already talked about they're more comfortable, they're quieter. You know, climate fighting machines that work on electricity, but they're not like electric baseboard heaters. They're using one unit of electricity to generate about three units of heat. So they're great. Their capacity isn't as high as as a gas furnace or our propane furnace may be. So if that's the case, and if your house, you haven't been able to do all the things you can to insulate and to reduce heat loss, then the largest heat pump may need to come with an electric resistance heating and these can, if they're working, can draw a lot of electricity. So the way this works with a heat pump is, on a cold day, the heat pump is going to always operate. And then if your thermostat notices, hey, my house isn't able to stay as comfortable. It's not getting to whatever, you know, 22 degrees, it'll then ask for the electric resistance oil to turn on and give a boost to the heat pump. So, um, you're not going to generate like, your bills aren't going to be excessive, like they would be if someone's heating with just electric heating, but larger electric resistance heating requires a pretty big breaker, like a 40-amp sort of thing. So, if, if that's the case, then that may be something that triggers you into the okay, maybe I need to upgrade to 200 amps EV chargers as well. They come in many different forms. We actually I'm just at my in laws cottage, and my father-in-law, very generously, installed an EV charger here, because we were lucky enough to purchase an EV a few months ago and so he put in one that's also on a 40-amp breaker, but you can get ones and put it on a 30 amp breaker, you put on a 50 amp breaker. So with upgrading and with switching everything to electric, I find that's an area that I think things still are evolving and changing. You know, I typically, I was previously doing sort of a what a lot of electricians or HVAC contractors would do with just sort of adding up all the all the aspects on the panel and sort of saying, Okay, well, if you're running your stove and your heat pump and your hot water all at once, here's sort of based on those breakers, here's how much electricity you're going to draw. And if that number is greater than 100 Okay, someone should upgrade which, which tends to be a little bit conservative. So, what we are now doing is, if you have the ability to access your electricity bills and look at sort of your hour-by-hour consumption, there is a way that homeowners can actually figure out, kind of like, what's my peak, what's my worst? Like, draw, I'm probably not using the right terms here, but, um, but. Or you could actually simulate that and just, you know, on a, on a like a really hot day, turn on make sure your air conditioner is running. Turn on. You all your, you know, your dryer, your electric stove, whatever kind of make it the worst-case scenario that you could reasonably see happening in your house and then go on and log into your utility data. And there's a way that you can look at like hour by hour, and it'll tell you your draw and based on that, if you look up online, there's a way to sort of translate that kilowatt draw into amps. And what I've found when I translate people's draw into amps is that like someone who's on 100-amp panel, who's got, you know, their electric dryer and their air conditioner and their induction stove running typically draws between 20 and 40 amps. That's way below the 100 amp. Environment and so upgrading, this is a long winded way of saying upgrading everything you know, from fossil fuels, switching your car, getting an EV charger, may or may not require you to upgrade to 200 amps, but if you have the ability to sort of do a little bit of research online, try and figure out what your draw is, so that, because you may not actually need to upgrade alive, find a lot of contractors are somewhat conservative and are telling people to upgrade before they necessarily need to. And the cost to upgrade can be around five or so $1,000 so at least what I've seen in Toronto and so that kind of cost can actually turn people off.
Trevor Freeman 35:42
Yeah. So, I that's a great point to bring up Sarah. And I think we, we see that, of course, with our customers a lot as well. And I think it's important to know that the quick and easy way to determine if you need a panel upgrade is, as you said, to add up the numbers on the breakers, and if you if you're bumping over 100 yep, that's a panel upgrade. But that's not necessarily the most accurate way, because it's rare that we use the full amount of each breaker. And so looking at your utility data, or having your electrician, your contractor, help you, look at your utility data, can tell you that you maybe don't need a panel upgrade, that you can operate all this equipment that we're talking about on your 100 amp panel, and most utilities in Ontario, at least, I know for you in Toronto, and definitely for any of our listeners in our service territory in Ottawa, you can access Your hourly utility data online through whatever portal you have with your utility. So definitely go and check that out
Sarah Grant 36:47
if you end up realizing that your kind of on the cusp and you may need to upgrade. One of the other things that you could do instead is install a smart switch. So, there are products of their levatron is one that I know of. There are even smart panels that give you at your fingertips through a phone app, the ability to sort of say, oh, okay, I want to charge my car, so maybe I'm going to, sort of not let people draw electricity from other aspects in my home, or vice versa, you can kind of turn off and on your car charger. You can even run your whole panel as well. So, sort of the smart switching aspect is a way that, if you're kind of on that cusp, can enable you to avoid a service upgrade and also get some really cool data at your fingertips as well about your electricity consumption.
Trevor Freeman 37:42
Yeah, I'm really glad you brought that up, and I've seen those as well. They're super exciting. And, you know, as a kind of a data nerd, it'd be awesome to have that granular data. And what's every circuit in my house doing? But I think at its most basic, it's basically saying, yeah, like, you can't run your electric clothes dryer and charge your EV at the same time. So it kind of forces one or the other, you know, and whatever slot in whatever piece of equipment you want there, which keeps you under that, that threshold for your panel, no matter what, even if all your things add up to more, you're still going to stay under because it won't let them go on the same time. So that's a great piece of technology. So, I want to quickly ask you about electricity generation and storage, where probably, if anybody kind of wanders around, you're seeing more and more solar panels on roofs. We're hearing more about home battery storage, although that hasn't quite taken off widespread yet, but it is out there. So how would something like that factor into a homeowner's plan?
Sarah Grant 38:42
Yeah, I think that typically, it's kind of one of the later aspects for a homeowner plan. So you know, if you were listening and you're someone who is interested in doing what you can to reduce your carbon footprint, you know the largest things you can do, the single largest thing is to install a heat pump. Get your heating off of off of fossil fuels, and install a heat pump. And, you know, do what you can to reduce your heat loss by adding insulation, making it less leaky. Solar panels are a fantastic complement to that, and I find they, you know, we include them in a clean tech roadmap, and we show people the impact. And some people do choose to do them first just because they're excited, and it is, to some extent, an investment in reduction of your energy bills. So, you know, the sooner you can get the panels on your roof, the sooner you can start to save and no longer spend, you know, and to some extent, also solar panels, at least in Ontario, they're producing their peak amount of electricity at a time when we're using our electricity grid in Ontario, mostly as nuclear and water. But you. Uh, you know, during peak times, we do have some gas power plants that their benefit is to kind of come on quickly and produce electricity really quickly, so that we can make up that that time, say, five o'clock on a really hot August day when everyone comes home from work or six o'clock and turns on their air conditioner and, and, and, but at that same time, solar panels are in peak production. So, you know, I know, I'm sure you've had other podcasts to discuss, sort of our electricity grid, so we don't need to get into more details. But you know, it is something that each can do to offset and reduce that sort of gas peak your plant consumption by putting panels on the roof. And I think a great aspirational goal for everyone would be to be net zero. Just as you know, I know, City of Toronto has a net zero goal as a city overall, so getting each home to net zero would certainly one way to achieve that goal. So there's some savings involved for us. We put panels on, like four years ago, and based on how much we're saving per year and how much we spent, we'll have saved as much in electricity as we spent in 11 to make up the cost in 11 years’ time, the cost the return on investment, isn't as great now because we were able to leverage a federal rebate that is no longer available, but For so that'll probably extend the return on investment. For many people to sort of 15 to 20 years’ time frame. The reduction in use of our gas peaker plants is another, another benefit and, um, no, I'd say the other like, sort of the pleasant side, again, comfort benefit for us, although I wouldn't say invest in it only for this. It's kept our house more comfortable in the summer. So these solar panels are absorbing the sun's energy, the sun's heat. So it's now no longer the sun's no longer cooking our roof as it used to. And although we did add insulation there, the panels are way more effective at just absorbing that energy. And so our second floor is able to stay a lot more comfortable as well. As far as sort of storage goes, You're right. I'm starting to see more and more batteries. But you know, a few years ago, I hadn't seen really any, any in people's homes. The costs, I know, and sort of the thread tape involved in getting them approved was still quite high. But they are a fantastic option if you do have solar panels, or if you're someone who's concerned about making your house more resilient in the event of a power outage, they're a good option to have, obviously, better than, better than a gas generator, which would be the alternative if you want some form of energy on hand in case the grid goes down. But yeah, this is sort of, I would say, if you're thinking about your house and where solar panels and storage could fit in, I would probably put them sort of later on the list. Again, decarbonize by getting, like, electrify everything in your house as much as possible. Do what you can to insulate and air seal, and if you're lucky enough to have a little bit left over solar and storage are great as well.
Trevor Freeman 43:04
Yeah, it's that's a great way to put it. I certainly look at them as supporting tools to someone looking to decarbonize and electrify their house. To your point, you don't get a lot of carbon reduction just from solar, partly, especially in Ontario, because our grid is primarily clean, primarily carbon free, but during those peak solar production hours, that's also typically our peak emission hours from the grid in Ontario. But what solar panels and storage, to a lesser extent, can do is give you some predictability in your energy costs. So, you're kind of locking some portion of your energy cost in the day you put those panels on, and if electricity prices increase, you've got that predictability based on what you put on your roof. So just getting close to the end of our conversation here today, Sarah, I want to ask you two more questions. One, I alluded to this at the beginning, and as did you there are those scenarios where you haven't done any planning or prep. You know that maybe decarbonizing or moving to a more modern piece of equipment is something you want to do, but you haven't done any work on that, and it's January, and all of a sudden there's no heat coming from your furnace. And you get someone to look at it and they say, yep, you need a new one. What can you do? In that sense, are there contractors out there who can turn around and put a heat pump in as quick as they can put a furnace in? Or are we not there yet? What's kind of on the horizon for folks in that situation?
Sarah Grant 44:36
Yeah, there are a lot of contractors out there who can put in a heat pump as quickly as they would a gas furnace. The rebate program that the federal government offered, which is unfortunately no longer available, did a lot of work to, I would say, get homeowners asking contractors about heat pumps, and that then got a lot of contractors on board with installing key pumps. And. And I'm finding actually, right now, we're in a good space, because a lot of manufacturers brought in a lot of stock, and so there's actually an excess of a supply of heat pumps, so the costs have come down a little bit, which is nice in the absence of rebate. So, yeah, the installation itself is, you know, if you're replacing a gas furnace with heat pump, it's no more or less complicated, to be honest, typically should take about, you know, just into two days, or maybe just under, like, you know, one, a full day, and sort of, and then some. And I would say the sort of the biggest, the biggest lost opportunity is, is, you may not, you may not have a contractor that feels comfortable getting you all the way off of gas. So I find a lot of contractors are more comfortable with recommending what's called a hybrid system, where you would have a heat pump and a gas furnace installed in your house. And in this case, the heat pump will always get the first opportunity to provide heating in a house, but then the gas furnace will kick on. Um, at some point. And I find in this case, like the heat pumps are, tend to be a little bit undersized, and so they may not, it's a bit of a lost opportunity. They may not be able to heat as long into the winter as if it was sort of the right size for your home. And you know, instead of the heat pump going all the way, which is the case if you get all the way off of fossil fuels, it'll switch over to the gas furnace as needed. So just like a hybrid car, you know, with a battery and gas in the car itself, this sort of system is still a great step in the right direction, though. So certainly, if you're stuck in the middle of a winter night or a hot summer's day and you've got no cooling or no heating call around, and you know, if you don't like the first answer, if you have still, there are still some contractors that are misinformed about heat pumps and will sort of say, Oh, well, they don't work greater. But I would say, for the most part, in the last four years, things have changed dramatically, and contractors are now on board, and because they have an excess of supplier are eager to, eager to sell them and install them.
Trevor Freeman 47:05
That's great to hear. And I think the important thing there is you're not going to know unless you ask, and if you don't get that answer the first time, you know, take another couple calls. Try call around, because there are, there are contractors out there who can support you in that. And kind of like you said, this is, you know, when you're replacing your major heating equipment in your house, that's your once in a kind of 10-to-15-year period, if not longer, to get that right. And if you lock yourself into something you didn't really want, then it's hard to hard to change course a few years down the road. So, take the time if you can, to ask those questions. Okay, last question for you here, before we wrap up, I want to zoom out a little bit and talk about just the overall process of retrofitting more homes. You know, you made the point earlier. There's a lot of homes out there. If we can start moving all these homes off fossil fuels, it's going to go a long way towards hitting our climate goals. How do we speed that process up? What programs or regulations or policies have you seen, or would you like to see that and kind of encourage these transitions?
Sarah Grant 48:13
Oh, I love that question. Yeah. I mean, if I had a magic wand and could change things, I would definitely like to see more, more incentives, more zero interest financing out there. You know, the homes that I've seen that have been able to get all the way off of fossil fuels, install solar panels, do what they can to insulate were able to access in the city of Toronto anyway, a zero-interest loan that went up $225,000 came with its own $10,000 incentive. They also accessed what is no longer available, the up to $10,000 incentives. So up to 20k of incentives, zero interest loan, those like of the homes that we work with, they're about 20% that have achieved that kind of like the got to sort of net zero, significant energy reduction, and we're able to, you know, access that level of financing and rebates. Those programs are not available anymore. Or at least, the City of Toronto offers their low interest loan. It's no longer zero interest, and doesn't have the incentives anymore. So that typically showed me that, you know, it's possible, but we do need more financing and support in place for people. You know, there's a there are a lot of great models in Europe and in Germany, the energy sprawl model exists where basically big like panels can be installed on the outside of people's homes that have insulation, that have an air barrier, that kind of come with the Windows already well installed those sort of options as well. If, if, if feasible, can also do a lot to accelerate our rate of decarbonizing or electrifying in in Canada. In that regard, there's a lot happening in the sort of the low income Social. Housing space. And I feel very honored or privileged to be just a small actor in that space and collaborating with many fantastic actors that are not only sort of retrofitting a large number of homes, at least in Toronto, but also treating it as an opportunity to sort of help think about how we can get to scale and how we can accelerate this and so they are changing contractors mindsets and impacting the availability of stock and supply. So, yeah, we need, we need, we do need more policies and support and levers in place, and then, as well, the sort of the contractor industry, there's a lot of training and support that's also needed. So it's a big, it's a big, exciting problem with lots of opportunity, but, yeah, lots of work to happen in order for us to achieve our net zero goals.
Trevor Freeman 50:50
Yeah, I think we have seen that there's a role for funding and financing to help lower that initial barrier of some of this, you know, still fairly nascent technology, although it's becoming more commonplace, but there is a role for those programs, and when they are in place, you know, your experience has shown they work, you're seeing more projects go through when there are funding and financing programs compared to when there aren't. So it's good to know that the programs work, and we just need to see more of them, so that's great. Okay, Sarah, we always wrap up our interviews with kind of a series of questions that I pose to all guests. So as long as you're ready, I'll dive right in. What is a book that you've read that you think everybody should read?
Sarah Grant 51:35
That is a great question. That's fun. I'm an avid reader, so it's hard to it's hard to answer this, to be honest, one book that comes to mind that I think everyone should read is called Ishmael. It's a book about a talking gorilla, and it it definitely changed the trajectory of my life. I read it when I was about 20 years old, I think, and in, you know, studying to become an electrical engineer, thinking about my next steps. I was in my last year of university, so maybe I was a bit older, but, yeah, it's a fantastic book that has, I think, still stood the test of time. I come back to it every few years and reread it.
Trevor Freeman 52:18
Awesome. I could be wrong here, my memory is hazy, but that rings a bell. I feel like maybe many, many years ago, you told me about that book. It's possible. I think we, for those of you who don't know this international development thing, Sarah and I did. A lot of us went through that path of being an engineering school and deciding there's got to be something more out there, and I want to have an impact in a different way. And that took a lot of us down to different courses in our lives. But if someone offered you a free round trip flight anywhere in the world, where would you go?
Sarah Grant 52:54
Okay, I hope that they're going to offset the emissions, if they're offering or I will offset the emissions, where would I go? I mean, I've always wanted to go to so assuming it's a carbon neutral flight, I've always wanted to go to New Zealand, and I used to play rugby. So I would definitely go catch a few rugby games and watch the All Blacks do their traditional Māori dance and hike the hills and the mountains and just sort of see the, see the landscape in New Zealand.
Trevor Freeman 53:29
Who is someone that you admire?
Sarah Grant 53:32
Okay, so, I mean, this is going to get real, really quick, so I would say, you know, I this is and a bit cheesy, but I'm going to say my kids, I've got three, and they're six, eight and 10, they're all very aware of their role in the world. They go to an alternative school, so perhaps that's part of it, but I just think perhaps it's also just being a kid of this age. And they are the reason we bought an electric car sooner than we could afford, because they started crying when we would go in the gas car, and they were concerned about the emissions. And so, I admire my kids. I admire their awareness and their ability to speak up when, when, when something happens. A few months ago, my partner came out to all of us as a trans person, and this is where I said it was going to get real, pretty quick, because my kids have taken it so well, like, they've taken it in stride. They've My daughter has embraced it. She's like, Oh my God. Now I have two moms I can, like, I'm not the mom that's going to take her to get pedicures, but she now has a mom that can take her to get pedicures. So, it's, I guess what I'm saying is, there was their awareness. and their resilience is astounding.
Trevor Freeman 55:03
Yeah, that's awesome. Thanks for sharing both of those things, and I echo that and seeing the way that my kids and kids you know that are aware of this stuff really find ways to identify their role in this and find ways to sort of advocate, even without knowing all the big picture and knowing all the nuance to it. And maybe that's even better, that they're just going based on kind of hard and what they know. So that's fantastic. Thanks for sharing that. Our final question here, before we wrap is, what is something about the energy sector or the work that you do, or something that you see coming in the near future that you're really excited about.
Sarah Grant 55:48
So there's so much to be excited for. So, um, one thing that is that is giving me a lot of excitement is, is the low income, the social housing work that I'm involved in because, because of the potential to help accelerate things, because we're all working in a very different way, I think traditionally, you know, and in any space, there's a lot of competition, but all of us who are working, whether It's I'm working with some architects, with some contractors, the owners, their land trust organizations, of these buildings, everyone is operating with the idea that, you know, we should be collaborating. And so there's a lot of knowledge sharing, a lot of investing in each other's awareness and connections. And, you know, it's net it's net positive. It's resulting in a lot more than if we were kind of just, like, holding our cards close and being like, Oh, you hired me to do this, and I don't want to tell you how I did it, because then maybe you're not going to hire me next time I'm happy, if I get worked out of a job to some extent. And what it means for gold trench energy is that we need to kind of keep adapting. Like, four years ago, the conversations I was having with homeowners are very different from the conversations now, and that's amazing, because four years ago, people didn't, lot of people didn't know about heat pumps, and I know that's still the case, but a lot of people that were hiring us didn't know, and now, four years later, they do, and so that evolving knowledge and enhancing Understanding and the fact that there are people out there who are working in a collaborative manner, I think that's going to get us a lot farther, faster, and honestly, it's just way more fun to collaborate with people.
Trevor Freeman 57:32
Yeah, totally. I echo that. I've said it on this podcast before. That one thing I've noticed having been kind of in this space now for close to 15 years in the sort of energy building sector, it feels like things are moving faster and more widespread. There are more people that are aware of the need to decarbonize. There are more people working on that. There are more people working on it in different ways, which is really exciting to see. So that's something definitely that I'm also quite excited about. So Sarah, it's been great chatting today. Thanks so much for sharing your experience and telling us a little bit more about what you do. And yeah, I really appreciate you taking the time to chat.
Sarah Grant 58:15
You're welcome. Thanks for having me.
Trevor Freeman 58:17
Thanks, Sarah, thanks for tuning in to another episode of The thinkenergy podcast. Don't forget to subscribe wherever you listen to podcasts, and it would be great if you could leave us a review. It really helps to spread the word. As always, we would love to hear from you, whether it's feedback, comments or an idea for a show or a guest. You can always reach us at thinkenergy@hydroauttawa.com
