COVID-19 has brought unprecedented health and safety challenges to communities, and the associated global economic uncertainty has disrupted community services, labour and supply-chains. Over the coming weeks and months, municipalities will continue to actively respond to the current crisis while also leading Canada’s recovery efforts by implementing solutions for long-term economic development. While the GMF Municipal Energy Roadmap was developed before the global pandemic, the local energy opportunities covered in the report are just as valid today and can play an important role in economic recovery and local job creation.
The roadmap identifies a suite of technologies and policies or programs that municipalities can implement right away to have the biggest impact on reducing greenhouse gas (GHG) emissions over the coming decade. The report estimates the potential financial impacts of implementing eight of these energy efficiency and renewable energy technologies at the individual building scale in each province and territory. These estimates are indicative only and are highly dependent on a number of local factors, including local climate, the types of heating fuels used, local energy prices and existing incentive programs, which will affect whether a given project will have a positive or negative return on investment. In all cases, municipalities should undertake specific feasibility studies to assess whether a given solution is right for its community.
The estimates in the report were calculated based on energy prices in March 2019. Given the significant changes in energy markets over the past year, we have revisited the modelling to help municipalities understand how the financial estimates in the report are affected by fluctuations in energy prices. FCM will endeavour to update the roadmap periodically to reflect ongoing shifts in energy markets as well as changes in the broader technology and policy landscape.
Impact of changes in heating fuel prices
The technologies covered in the report reduce GHG emissions in buildings either by using heating fuels or electricity more efficiently, or by replacing them with a lower-carbon energy source. If we assume a 30% decrease in the price of natural gas or heating oil, with electricity prices staying constant, the annualized return on investment (ROI) of specific measures may decrease by as little as <1% and as much as 5%. This depends on whether the measure primarily reduces heating fuel use or whether it also reduces electricity use, in which case the impact would be lower. For example:
Building envelope upgrades in a municipal, commercial or residential building heated with natural gas or oil (mostly heating fuel savings): 2-5% decrease in annualized ROI.
Municipal indoor ice rink upgrades (combination of heating fuel and electricity savings): 0-1% decrease in annualized ROI.