SES Consulting Inc., ControlTrends Awards Young Gun Emeritus, had the unique opportunity to provide expert witness testimony to the House of Commons, Canada’s Standing Committee on Natural Resources. Click here to view full session. One particularly interesting quote from Brad’s witness testimony: “While much of the focus of government support is on directly supporting energy efficiency projects, I believe one of the most important factors for the success of energy efficiency in B.C. is the presence of programs to support energy managers.”
The following is an extract of Brad’s preliminary testimony:
Hello. It is a great pleasure and a real honour to have the opportunity to address the committee on this topic today.
First, I would like to tell you a little about our company. SES Consulting is based in Vancouver, and we have about 30 employees. We provide services around energy efficiency. Most of our work is engineering-related. We’ve been active in this business for about 13 years, in which time we’ve grown from a one-man operation into the thriving business we are today, with plans for continued growth and expansion. Our revenue growth over this time has averaged something in the order of 15% to 20% per year.
We’re a bit of a different company in that in addition to the usual business metrics, we also set targets and track our performance in achieving GHG reductions for our clients. To date, we have participated directly in the reduction of over 20,000 tonnes of annual GHG emissions for our clients, and over the next 30 years our goal is to achieve cumulative reductions of one million tonnes.
The opportunity to play a role in the solution to climate change is integral to our corporate identity, and it’s a key part of the reason that our employees choose to work for us. The focus of our work is primarily on existing buildings in the commercial and institutional sector across western Canada, with a small amount of work elsewhere in Canada and internationally. Our clients include universities, municipalities, health care organizations and commercial property owners. We count the University of Calgary, UBC, the City of Vancouver, Vancouver Coastal Health, and Telus among our active clients.
To give you a sense of the impact of some of our projects in existing buildings, I want to briefly highlight a couple of projects that I believe demonstrate that a revolution in energy efficiency in existing buildings is achievable—hence the slides.
The first project I want to highlight is the Vancity Savings Credit Union headquarters. We managed to achieve an overall emissions reduction of 76% in this building by essentially using the heat from the data centre in the building to heat the remainder of the building. This project had a six-year payback.
The next project I want to highlight is at the Vancouver General Hospital, in the Jim Pattison south pavilion. Here, we achieved an overall emissions reduction of greater than 2,000 tonnes annually—again, with a six-year payback—through the use of a technology called a heat recovery chiller.
The final project I want to highlight is 888 Dunsmuir, an office tower in downtown Vancouver. This building is on track to achieve a 38% emissions reduction and a five-year payback through updating the building control system and revising the building control strategies.
I’d also like to briefly highlight for the committee our work with the University of Calgary. They were the recipient of strategic infrastructure funding, and they’re on track to achieve emissions reductions of over 24,000 tonnes, with anticipated cost savings of over $3 million per year and a payback under 10 years.
In terms of the economic impact of these projects, the cost of our engineering services is typically a small part—20% or less of the overall project cost. A portion of the remainder is equipment, but the largest component is usually made up of local trade labour—electricians, plumbers, programmers and HVAC technologists—who are responsible for doing the work in the buildings that achieve these savings. Our clients, in turn, benefit from the energy-cost reductions as well as other benefits in improved maintenance, and enhanced occupant satisfaction and marketability of their property.
There’s no doubt that our work benefits enormously from long-standing government support for the energy efficiency sector in B.C. This support includes government and utility incentive programs, B.C.’s carbon tax and funding grants to public sector organizations for carbon reductions.
As you look at how you can provide greater support for energy efficiency at the federal level, the first recommendation I would have for the committee is to have consistent and reliable support. This is almost more important than what that support looks like. In the past, government efficiency programs have often fallen victim to changing political whims. Companies like ours invest a lot in aligning our services to help our clients take advantage of these programs, and it is hugely disruptive when they are suddenly cancelled, often with no warning. This perception of unreliability also makes it more difficult to plan for expansion and to have the confidence to invest in growing our business when we are uncertain as to what kind of support there will be.
Incentive programs, which can be quite effective, seem especially vulnerable to this. It may be desirable to also consider other forms of support that may be more durable—through the tax code, for example.
Second, while much of the focus of government support is on directly supporting energy efficiency projects, I believe one of the most important factors for the success of energy efficiency in B.C. is the presence of programs to support energy managers.
In B.C., both BC Hydro and FortisBC, which are our utilities, provide funding to support energy managers and energy specialists embedded within public and private sector organizations.
The presence of these energy managers is crucial as it creates an internal champion within these organizations to push efficiency projects forward. As this program has matured, we have seen these energy managers move up into senior leadership positions within their organizations, creating broader organizational change and further cementing support for energy efficiency.
When we work outside of B.C., where energy managers are much less common, we immediately notice the difference this makes. We find it much more difficult to get projects completed, even when the business case is extremely attractive.
Both UBC and BCIT have developed programs to support the training of these energy management professionals. These programs have been developed with the input and participation of firms like ours, which help to ensure that the course content is relevant to the real world. We end up hiring many of these program graduates ourselves.
Finally, in terms of regulation, one of the challenges with existing buildings is that they are very difficult to regulate. Stronger building codes—including approaches like the new step code in B.C.—are great tools for new buildings but are limited in how they can apply to existing buildings. Some approaches, like regulating equipment standards, can certainly be effective, but they don’t necessarily do a good job of addressing the whole building performance.
Here though, we can look at other jurisdictions for examples of what has worked. One example I would like to draw to the committee’s attention is Australia’s NABERS program. This is a voluntary national labelling program for buildings that has gained widespread acceptance. It is referenced in state and local legislation there by, for example, requiring mandatory disclosure of energy performance to prospective tenants. Simply the act of making building energy performance transparent and allowing owners and the leasing market to understand where a building stands compared to its peers can be enough to motivate action around addressing efficiency. Australia reports that this initiative is responsible for reductions of over 800,000 tonnes of GHG emissions in the more than 10 years it has been active.
As an important side benefit, Australia has developed a very strong ecosystem of businesses and services to support this work. We now see their expertise being exported globally, with a surprising number of Australian companies in this space present in the North American market.
However, it is by no means too late for Canada and Canadian companies to establish ourselves as international leaders in efficiency. The challenge of making buildings—and existing buildings, in particular—more efficient is one that any country serious about tackling climate change is going to have to address. That represents an enormous market that is largely underserved—with a few exceptions like Australia. We even hear from many Europeans—who are often admired for their progressiveness in this area—that they, too, have tremendous untapped opportunity in their existing buildings.
In conclusion, I firmly believe that there’s a tremendous economic opportunity in further developing Canada’s energy efficiency sector not only in terms of the local impact that energy efficiency projects can have in supporting local investment and jobs and in reducing energy costs and emissions but also in the opportunity to export this expertise around the world.
Simply put, being leaders in developing practical solutions to climate change is good for business.
Thank you.
