Thank you, Mr. Chairman.
Joining me today is Shahrzad Rahbar, from the Canadian Gas Association.
It's my pleasure today to present to you the Drake Landing Solar Community, a project that demonstrates how an integrated energy system using leading-edge technology and using renewable energy is effectively delivering space- and water-heating needs to customers in Okotoks.
I'd like to briefly talk about ATCO Gas. We are an investor-owned utility that provides safe, reliable, cost-effective natural gas delivery service to over one million customers in 300 communities in Alberta. We take great pride in the fact that our employees live and work in our communities and improve the quality of life in the communities we serve. As well, as an investor-owned utility, we are regulated by the Alberta Utilities Commission.
The objective of this project was to demonstrate the feasibility of using seasonal storage of solar thermal energy to provide 90% of a home’s annual space-heating requirements. There are 52 homes in the Drake Landing community. A long-standing barrier to this technology has been the acceptance of solar thermal technology in cold climates, as the sun is noticeably absent during the winter season. Short days, cloudy skies, and snow-covered solar panels are examples of those barriers. This project demonstrates how the effective integration of energy-efficient technologies with seasonal thermal energy storage can overcome these barriers.
This project is built on a foundation of a district heating system designed to store underground the abundant solar energy during the summer months and distribute energy to each of the energy-efficient-built homes for their space-heating needs in the winter. In addition, solar panels have been installed on each home to provide 60% of its annual domestic hot water requirements.
I'll give you an overview of the project itself. Drake Landing Solar Community is the first major implementation of seasonal solar energy storage in North America. It is unprecedented in the world in that it is designed to provide 90% of each home's space-heating needs through solar energy. At the time of construction, it was the largest subdivision of R-2000 homes in Canada. Each is 30% more efficient than a normal home.
The major partners in this project were the Government of Canada, through NRCan; the Government of Alberta; the Federation of Canadian Municipalities; the Town of Okotoks; ATCO Gas; Sterling Homes, the home builder; and United Communities, the developer of the subdivision.
The next slide shows how this system works. Detached garages were built behind the homes. They were connected through breezeways. There were four sets of these garages built. Mounted on those garages were arrays of solar panels, a total of 800 solar panels. District energy loops were built. There's a solar collector loop that gathers all the energy off those solar panels and takes it down to an energy centre, which is really the heart and the central hub of the entire system. Right beside that energy centre is a borehole seasonal thermal storage field.
In the summer months, solar energy is gathered from those solar panels. They have a glycol-water mixture. It goes into the central heating system, heats the water in these large storage tanks, and then stores the energy in the borehole field.
In the winter months, the energy is still gathered off the solar panels. It runs through the energy centre. It is supplemented by the stored energy in the energy field. It provides heating, heats the water, and sends that water supply through the homes. It heats the homes using an air handling unit, which replaces traditional furnaces.
On the next page, you can see that the solar collectors during the winter months will generate about 50% of the house's needs for energy. Forty percent comes from the borehole thermal energy field, and 10% comes from a natural gas boiler that's in the central energy building for backup.
The next page shows the reduction in GHG emissions that this system provides over a traditional natural gas heating system. Each home reduces its GHG emissions by 5.5 tonnes, and so for the whole community, it's 286 tonnes per year.
This being a demonstration project, there were some significant challenges. First and foremost was the initial capital cost of building this system. It was $7.1 million, which equates to over $136,000 per home. Without some significant government funding, this project would not be possible. It is difficult to convince private companies to invest in high-risk and high-cost projects such as Drake Landing unless there are financial incentives established at both the federal and provincial government levels.
Another difficulty is the coordination between developers, builders, municipal planners, and all levels of government to make this system happen. In addition, there's the skepticism of the consumers. They don't know much about these types of systems. They don't know about the costs, the operations and maintenance, or the reliability and longevity. As for people investing and paying $136,000 more, it wouldn't be possible.
The location also would be a challenge. Okotoks was selected for this project because it is located in a part of Canada that is among those receiving the most hours of hours of sun per year. It's equivalent to Miami. As well, the Town of Okotoks has developed the sustainable Okotoks initiative, which mandates that sustainable principles be applied in all town operations and services.
This is an R and D project. With it, there are inherent unknowns. This is the first time this concept has ever been used on single-family homes. Similar developments in Europe used multiple-family projects, but this is the first time for single-family homes. Ninety per cent is the goal for services provided by solar energy.
From an operations and maintenance perspective, there are also challenges. We needed to train and to gain expertise in our operations with our local staff. That was an issue we needed to develop.
We also had to understand what maintenance was going to be required for the system. There are some unique materials used in this project. For example, the pipe in which this water flows is an insulated steel pipe. If something were to happen, if someone were to put a hole in it, as has happened once so far, resources have to be flown in from Ontario for repair. We need to develop local expertise in order to make this sustainable in the long term.
Our next page shows you that we feel the role of a gas utility is quite significant in these projects. We have a long-standing service. We've been offering services in energy delivery for almost 100 years in Alberta, so we've come to this with reliability and safety as the cornerstone of our operations.
We're also environmentally focused in providing new initiatives. As an example, ATCO Gas recently opened a new operating centre in Viking, Alberta, where we are using geothermal technology to heat our own new building. We want to learn about these technologies and we are committed to reducing our carbon footprint.
We believe that natural gas utility companies are appropriate vehicles to provide alternative energy due to the companies' long track records of providing safe, reliable service to Canadians. Also, the utility model of delivery will bring credibility to these alternative energy projects.
Finally, there is the role of the federal government. It's with federal support that we can replicate these systems in other communities in Canada. Private industry wants to be involved in the alternative energy market; however, the risks and costs of these technologies are still too great. If the federal government would like to encourage this development, they should consider playing an integral role in developing these new technologies with a two-pronged approach.
First is funding: investing in these new green technologies to advance knowledge, reduce costs, and ultimately create a new self-sustaining industry. Second is adjusting government program funding criteria to encourage integration. On policy, the federal government role means introducing favourable fiscal policies, like the accelerated capital cost allowance for integrated systems requiring high upfront capital costs, as well as developing building and housing energy codes that consider full fuel efficiency and encourage fuel flexibility.
I can tell you that at the end of the second season of storing solar energy, which was to the end of July 2008, the houses in the Drake Landing solar project received 55% of their total annual heating needs from solar energy. We're only two years into storing energy, so we believe we're ahead of schedule.
This project is something that we're very proud of, and we know it has a future in Canada.
Thank you.