District energy is a major part of Vancouver’s effort to reduce its carbon emissions 33% by 2020 from a 2007 baseline, as outlined in its Greenest City Action Plan. The aim of Vancouver’s district energy strategy is to facilitate the conversion of legacy steam heat systems to lower carbon fuel sources and promote the development of new low-carbon systems in high-density areas of the City.

Neighbourhood Energy and Emissions Reductions

Vancouver approaches district energy – which it refers to as Neighbourhood Energy – from a strategic perspective, targeting high density areas of the City where systems are economically viable. The City has a long history with district energy; the first system established downtown in the 1960s provides steam heat to more than 210 buildings to this day.

The City has an ambitious plan to lower carbon emissions by 2020 and considers the conversion and development of Neighbourhood Energy Systems (NES) essential to meet its reduction goal. To achieve the 2020 district energy target reduction of 120,000 tonnes of CO2 emissions per year, existing steam heat systems must be converted to low-carbon energy sources (delivering 95,000 tonnes CO2 emissions reductions) and new systems must be established to serve high-density areas of the City undergoing large and rapid development (delivering 25,000 tonnes C02 emissions reductions).

Identifying Target Areas

Vancouver has developed a Neighbourhood Energy Strategy and supporting Energy Centre Guidelines to frame the City’s strategic approach to district energy. An energy study was conducted to identify target areas of the City that might be viable for NES establishment. Selection criteria included: the service areas of existing steam heat systems and new NES; existing and projected development density; proposed major development projects; and areas with buildings heated by natural gas that could be connected to NES. The three key target areas identified in the energy study were Downtown, the Cambie Corridor, and Central Broadway.

The Downtown Area

Downtown Vancouver features a large established steam heat system (Central Heat Distribution Ltd.) that serves more than 210 buildings and has a carbon emission reduction potential of more than 90,000 tonnes CO2 per year through conversion to a low-carbon energy supply. In addition, there are two new NES (Southeast False Creek and Northeast False Creek) in areas with significant development activity forecast and many existing gas-heated buildings that could potentially be converted to NES supply.

The Cambie Corridor Area

The Cambie Corridor has significant potential for NES due to the opportunity to convert the Children and Women’s Hospital campus steam system to a low-carbon energy source, as well as a number of proposed large developments that will catalyse the establishment of new systems.

The Central Broadway Area

Central Broadway was identified as a target area due to a large number of natural gas-heated buildings that are potentially convertible to NES and existing zoning policy that allows high-density development. It is also adjacent to the Vancouver General Hospital campus steam system and close to the Southeast False Creek Neighbourhood Energy Utility.

Other Areas of the City

The City will continue to work with developers to deliver low-carbon energy systems outside of the three target areas described above. For very large developments, the focus will be on implementing neighbourhood-scale systems. Site-scale options, five of which are currently under development, are explored for smaller developments. Low-carbon outcomes will be supported by continued implementation of Vancouver’s Sustainable Large Development Site Rezoning Policy and Green Building Policy.

Sustainable Large Development Site Rezoning Policy: For any rezoning application for property larger than 80,094 m2 (2 acres) and/or 46,452 m2 (500,000 ft2) of floor area, the applicant must complete a low-carbon energy study. If a cost competitive low-carbon energy supply is available, it must be implemented as a condition of development.

Green Building Policy: For all rezonings, developments must achieve LEED Gold certification, which provides developments with credit for the use of high performance building systems.

Overarching Strategy with a Tailored Approach

Each target area has different heat demands as well as different opportunities for energy supply. Furthermore, existing systems in these areas have different types of ownership (such as private, institutional or municipal), mandate (including public sector facilities versus private sector buildings), and regulation (e.g. utilities that are not municipally-owned are regulated by the BC Utilities Commission, while municipally-owned systems are regulated by municipal Councils). Some target areas are not served by existing systems, and require variances in connection policy. Based on these differences, the City needed to develop specific approaches to each area supported by various policy tools. These tools include:

  • Energy Centre Guidelines: a policy framework that guides the evaluation of and clarifies requirements for new or renewed energy centre projects, enabling the implementation of low-carbon energy supply technologies.
  • Regulatory and Contractual Tools: may include the granting of an exclusive franchise right to a utility provider, rezoning policy and service area bylaws.
  • Cost Competitiveness Measures: to help achieve customer rates that are cost competitive with business as usual, the City proposes a number of options including adjustment to property tax policy for NES utilities, access to senior government grants and capital funding mechanisms.
  • Connection Policy Tools: since NES typically require the investment of capital before buildings are connected, policy tools – such as zoning policy and service area bylaws – are required to help reduce risk sufficiently to enable projects to be financed.

Energy Centre Guidelines
NES require energy production facilities, which are referred to as “energy centres.” Energy centres may make use of a variety of low-carbon energy technologies, such as sewage heat recovery, wood chips, geothermal, and heat recovery from industrial processes. For individual projects, the technology selection is influenced by waste energy source availability, site conditions, and economic, technical and risk considerations. Because energy centres are substantially different from typical forms of urban development, specific policy guidance is required to enable low-carbon development and protect the public interest as it relates to air quality, neighbourhood fit, sustainability of fuel sources and public engagement. The Energy Centre Guidelines will be applied when new energy centres are proposed, for substantial renovations to existing energy centres, and when low-carbon energy technologies are used for industrial processes.

Benefits of the Neighbourhood Energy Strategy

Successful implementation of the Neighbourhood Energy Strategy will result not only in significant C02 emission reductions, but also in reduced reliance on fossil fuels for the City and the adaptability of its energy systems to a wide variety of energy sources. This in turn creates better long-term energy resilience for Vancouver and energy cost stability for communities. It also provides the city with cost-effective opportunities to pursue integrated resource recovery opportunities with sewage, solid waste and other infrastructure systems management.

Next Steps for the City

Implementation of the Neighbourhood Energy Strategy is underway in the Downtown and Cambie Corridor areas. Following a public competitive process, the City has selected a proponent to convert the legacy steam heat system Downtown to a low-carbon source, and expand that system using hot water to serve new building developments and existing gas-heated buildings. In addition, the City has a competitive procurement process underway to identify a utility proponent for the Cambie Corridor area.

Replicability of District Energy Projects

Unlike some energy projects, district energy is not highly dependent on exogenous factors such as the proximity of strong, steady winds or excellent solation. Almost all C40 cities have the ability to undertake a district energy project, so Vancouver’s experience could be replicated in a variety of contexts. Moreover, Vancouver’s excellent strategic planning process provides a useful model for other cities. Vancouver benefits from having some prior steam heat district energy systems in place, although many cities also have hospital or university campus district heating systems that could be similarly converted and expanded to serve adjacent neighbourhoods. Vancouver’s strong growth, a characteristic common to a number of C40 cities, also supports the viability of new district energy systems.


Chris Baber
District Energy
City of Vancouver