Speaker: Jim Wren
Date: November 19th, 2020
Jim Wren has 12 years of experience working in the field of financing municipal projects and programs across Canada. He comes from a diverse educational background, with a BA focused in Financial Economics from Carleton University and a Mechanical Engineering Technology diploma focused in Automotive Manufacturing from Georgian College.
Since 1901, the Federation of Canadian Municipalities (FCM) has been the national voice for Canada’s local governments. The Federation helps to shape the national agenda and connect local governments across Canada. The Green Municipal Fund (GMF) has been operated by the FCM for 20 years, supporting municipal sustainability projects across Canada. It has provided a total of C$ 946 million of funding, leading to emissions reductions of 2.7 million tonnes of greenhouse gases.
The GMF primarily provides funding through grants, though the fund also combines loans with grants to provide further support. Funding is available to any Canadian municipal government and their project partners. In order to obtain funding, these projects undergo a rigorous review. They are evaluated using a variety of criteria, including environmental benefits, social benefits, transformative potential and more.
The GMF operates across five core sectors: energy, waste, brownfields, transportation, and water. As of 2019, the fund has also taken up efficiency financing and sustainable affordable housing. In this presentation, Mr. Wren focused on energy projects. He provided several examples of energy-related projects supported by the GMF:
- A pilot project assessing the viability of an electric vehicle car-sharing program in the city of Plessisville, Quebec
- The installation of solar-powered water heating systems for homeowners in Halifax, Nova Scotia.
- A district heating system that captures and recycles heat from the existing diesel-generator-powered electricity system in Iqaluit, Nunavut.
- The construction of a new biofuel plant outside of Edmonton, Alberta. The plant uses non-recyclable municipal solid waste as its fuel.
- A new net-zero energy firehall in Vancouver, British Columbia.
- The installation of a microgrid in North Bay, Ontario. The microgrid includes solar panels, electric vehicle charging stations, main buildings, and more, operated by a smart grid controller.
- A microgrid in the city of Summerside, Prince Edward Island.
More recently, the GMF has begun to also focus on community efficiency financing and sustainable affordable housing. Taking on these new sectors is key to municipal sustainability, since more than 80% of Canadian homes were built in or before 2005. Improving the energy efficiency of these older buildings can lead to massive energy savings and emissions reductions, as well as lower utility bills for residents. These programs therefore create financial products such as rebates and financing to undertake energy upgrades. This not only improves the performance and affordability of homes, but also increases the comfort of residents.
Specific financing mechanisms vary but can include property assessed clean energy programs (PACE), utility on-bill financing, or direct lending. Each mechanism is distinct and has different benefits and costs. PACE programs are typically led by municipal governments and are charged to the property rather than the owner. On the other hand, on-bill financing is led by utilities and the charges accrue to the owner on their utility bill. Lastly, direct lending is often led by financial institutions, some of which offer preferred financing for energy upgrades.
Mr. Wren emphasized that a lot of innovation is occurring at the municipal level and moving forward the GMF will likely continue to broaden its focus to include the most current technologies. This may include hydrogen or small modular nuclear reactor projects at the municipal level.
Q: Do you use net present value to assess projects?
A: For private sector projects we do typically use net present value, but for municipal projects we often look at social benefits as well. It can be hard to combine the social, environmental, and economic aspects of a projects in one metric. We do sometimes fund projects with a negative internal rate of return because the social and/or environmental benefits are significant.
Q: How are risk assessments conducted? Particularly for large projects?
A: We use risk assessment grids such as a strengths, weaknesses, opportunities, and threats (SWOT) analysis. There are many different types of risk which must all be assessed, and our peer reviewers rate the levels of risk associated with each project according to their respective experiences.
Q: Do you factor in the embodied carbon associated with renovation projects? Or are you only looking at operating emissions?
A: We only use operating emissions, though it would be great if we could account for embodied carbon as well. However sometimes the data is hard to find or does not yet exist so including this can be extremely difficult.
Q: What are the barriers to financing the total electrification of public transport? In Ottawa for example.
A: There are a few. A big one is technology adoption. Technology is typically adopted in a curve and you cannot change an entire market at once, it is done over time. Information sharing and technology diffusion is making a massive difference in adoption, but you cannot dictate the technology preferences of a region. You can only provide information and evidence to policymakers.
Q: For the retrofitting of affordable housing, how is energy use reduction measured? Is energy modelling done beforehand? Or after?
A: Energy modelling is done both before and after. Usually, a test like the blower door test is performed to evaluate potential and realized energy savings. For larger buildings modelling is used.
Q: Has FCM funded projects in the Arctic to help reduce dependence on diesel-generated power?
A: Yes, we have. The Iqaluit project previously discussed is a prime example. There are not too many and they are often more complex to implement but we are hoping to fund more Arctic and Indigenous projects moving forward.
Q: Where are some other hydrogen hubs in Canada?
A: One is in Bruce County, Ontario. They have an excess supply of power so are exploring the production of hydrogen through electrolysis. There are also initiatives across central and western Canada which are in the initial stages.
Q: Other than the focus on municipalities, how does the work of the GMF differ from that of Sustainable Development Technology Canada (SDTC)?
A: This goes back to the curve of technology (from development to commercialization). SDTC typically starts funding projects earlier than the GMF. The fund focuses on technologies which have already proven to be commercially viable, while SDTC tends to focus on emerging innovations.
Q: Smaller communities do not always have the capacity to go through complex applications and funding mechanisms, does the FCM have support for communities to help with this?
A: We do have personnel at the FCM to help with this. We also try to facilitate peer learning, so those who have already completed a successful application can help others.
Precis completed by Silke Popescu, MA Sustainable Energy student.
Learn more on the Green Municipal Fund website.