The Village Green

A blog about how Canadians can achieve energy independence by powering down and then powering up the right way.

I spent most of the early part of this Saturday meeting with a new client out in Etobicoke.  It was a great day – not too cold and not too warm – with the wind blowing out of the southwest so I decided to ride my bike the 30 or so kilometers home.  

Passing through my old neighbourhood of Queen Street East I saw that construction is progressing nicely on one of the new glass box mid-rise condos sprouting up like mushrooms in the fertile field of guano that is Toronto’s real estate market.  With a solid wall of glass facing downtown Toronto across the East Donlands, I have to believe the view alone sold for a massive premium in Toronto’s hugely over-heated condo market.  

In addition to placing a huge valuation on marble counter-tops, views, proximity to the downtown core (quite a useful thing in a carbon-constrained future), use of a contemporary colour and design palette, perhaps a slightly higher grade of cardboard-like press-board doors, nice brochures and pretty girls in the sales centre, I wondered if any of the unit buyers considered the energy costs that would be incurred cooling a unit that would operate much like a crematorium by 2 o’clock in the afternoon.  I also wondered if the designer of the project gave any more than a passing consideration to heat gain.  Likely not.  

The buyers of those units are going to be getting a very painful and expensive lesson in passive solar heat gain in the next few years.  In fact, many people will be.  Most will not like the lesson, but in a world marked by fantasy, reality does indeed eventually impinge.   

Doubling electricity prices

In a blog posting late last year, I wondered aloud what people would do if they found their electricity bills doubling over-night.  I wasn’t intending to be overly provocative in asking the question but it’s turned out to be a rather prescient one.  You see, electricity costs will indeed be increasing significantly in the next two years.  

This time last year, the base rate for electricity in Toronto was $0.057 / kWh.  Time-of-day metering will now bring the peak rate to $0.093 / kWh, with prime air conditioning hours in mid-afternoon billed at $0.080 / kWh.  Add in debt retirement and delivery charges (for which Hydro One was given permission this past Friday to raise by 11.6% by January 2011) and we’re trending toward $0.14 / kWh.  Then there’s the HST. 

Many of the purchasers of those glass-box-condo-cum-crematorium units likely didn’t imagine a 40% increase in a key component of their monthly operating costs.  Throw in the fact that the 30 year trend of cheap borrowing is likely over and my suspicion is that many of those purchasers find the “monthly math” no longer works.  How to square the circle?  Many will decide to sell their units.  Spread this across an entire city chock-a-block with buildings never designed for energy efficiency and you have a perfect storm for falling unit valuations.  This will be merely one effect of a larger coming energy storm.  

Blaming green energy, not inefficiency and waste

Already “green energy” is being blamed for the cost increases.  This as opposed to billions of dollars in stranded Ontario Hydro debt and historical cost over-runs of between 200% and 300% for the province’s nuclear fleet.  

In the April 10th edition of the Globe and Mail’s Report on Business, rising electricity prices are being cited as a major threat to Ontario’s industry, with clean energy painted as the culprit. This position is both dis-ingenious and ignores history or at least subjects it to significant revisionism. 

As an energy and high-performance building consultant I’ve met with: 

  • Condominium boards and property operators who had to fight tooth-and-nail with colleagues to approve near-inconsequential proposals to undertake the most basic of audits 

  • Fortune 100 corporations that don’t even know how many HVAC systems they have in their manufacturing plants, never mind having a comprehensive energy efficiency and procurement strategy as an integral part of their operational risk management plan 

  • Homeowners living in houses with un-insulated additions so poorly built that the food in their pantries would freeze in winter 

  • Real estate agents who couldn’t even be bothered to find out how the properties they are selling are heated and cooled 

  • Clients who were advised by their architect or builder that extra insulation “doesn’t pay for itself”

The list is endless but it points to one thing: the problem we are facing is not rising energy prices but rather staggering levels of operational inefficiency and waste.  The energy efficiency of our buildings is analogous to an ATM machine that loses half your money. One would be outrageous and unacceptable, possibly subject to criminal investigation and even a Royal Commission.  The other we casually accept as an inevitability. 

There is a price to pay for everything.  Sooner or later, you will pay.  The only question is, will the method of payment be negotiated and managed?  Or will it be a form of karmic payback rife with consequences, tragic, seen and unforeseen?  

We can choose.  And not choosing is still a choice made. 

April 2010 

Gabriel Draven 

Village Technologies 

p.s. Watch out for the launch of our upcoming down-loadable book, coming soon.