Decarbonizing buildings is a necessary step to achieve net-zero emissions. Countries that take climate change seriously are introducing clean-heating requirements. Stand-alone fossil fuel heating systems will no longer be installed as early as 2024 in Germany and 2026 in the Netherlands.

In Canada, the federal government has for decades ratcheted up the requirements for the energy efficiency of heating systems and is developing regulations to transition off fossil fuels in its upcoming green buildings strategy.

A mix of technologies can accomplish this task, and electric heat pumps are expected to play a leading role. Heat pumps are energy-efficient because they use only a small amount of electricity. Advanced versions can function and supply heat down to -30 C.

A regulatory framework for clean building heating will have unique complexities, but policymakers can draw the following three lessons from policies in other sectors.

Lesson one: show you are serious about the final goal

Governments at all levels establish aspirational goals, but mandatory rules are more likely to be taken seriously. A good example comes from zero-emission vehicle mandates. The federal government started with targets to achieve 100 per cent zero-emission vehicle sales and later created regulations to achieve it. Likewise, some provinces have published aspirational targets for zero-emission vehicles, but only B.C. and Quebec have introduced sales mandates and are on track to meet their goals.

The lesson for buildings is that the federal government must establish a regulation with a firm date after which all heating systems in Canada must be emission-free. The sooner that happens, the easier it will be for business models, supply chains and energy systems to reorient.

Lesson two: define a regulatory path with early action

A rule that takes effect a decade or more in the future provides a weak signal for change and misses opportunities to capture immediate emission-reduction and cost-reduction benefits. A regulatory path takes immediate action, while creating momentum to meet the final goal.

For example, British Columbia set a goal to make all new buildings net-zero by 2032 and has since updated it to zero emissions by 2030. The B.C. energy step code outlines interim steps requiring higher levels of energy performance. The regulation empowered local governments to incentivize or require builders to meet the higher steps sooner. Clean-heat policy designers could learn from this example: Create early mandatory rules as the first steps in a regulatory path.

Requiring all new air conditioner sales to be heat pumps could be an early mandatory rule. A few additional low-cost components make such units provide heat as well. An immediate point-of-sale requirement would give every Canadian purchasing a new air conditioner the ability to supplement their existing heating system with a more efficient heat pump and create near-term benefits for greenhouse gas emission reductions and cost savings.

Creating separate regulations by building type is another lesson from the B.C. energy step code. Clean-heating mandates should first separate new from existing buildings because new buildings can be designed for high energy-efficiency and decarbonized heat.

For existing small residential buildings, the focus might be on requiring that every sale of a new heating system include a heat pump or other clean-heat technology. The regulations can then require progressively more energy-efficient and lower-carbon systems. Outlining future performance standards will give heating, venting and air conditioning (HVAC) contractors a tool to market advanced systems to customers, alongside insulation and air-sealing improvements that prepare for a properly sized heating system.

Larger commercial building owners manage more complex HVAC systems with different elements and replacement timelines. Whole-building energy-efficiency and GHG performance requirements provide building owners with the flexibility to meet standards through incremental heating and cooling system changes, as well as options such as better insulation, air sealing and energy management.

Lesson three: manage unknowns by exploring all solutions

Perhaps the trickiest aspect of decarbonizing heat is managing extreme cold. When temperatures plunge, air-source heat pumps become less efficient and backup systems work to maintain indoor temperature. This could create challenges for electricity grid operators dealing with demand surges from future fully electric systems, or with GHG emissions from systems with fossil fuel backup.

Most Canadians live in places where back-up heating systems will operate during a relatively small part of the heating season. In Toronto, Canada’s largest city, the temperature dropped below -20 C during only 0.3 per cent of the heating hours between 2018 and 2022. Saskatoon gets much colder but, even there, the temperature dropped this low only during 9.7 per cent of the relevant hours. Thus, cold-climate heat pumps can reduce GHGs from heating systems and the cost of operation for the vast majority of times and places.

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However, we still need to figure out how to decarbonize heating when temperatures plunge. The concern that heating electrification will create demand spikes echoes debates about renewable electricity producing supply drops and ramp-ups. More than a decade ago, many people feared that system operators would not be able to manage variations in wind and solar availability, which would make renewable regulations impossible to achieve. But today, electricity systems can integrate much larger shares of renewables than originally anticipated and are still exploring the feasibility of fully renewable electricity.

Jurisdictions such as California are figuring out how to reconfigure electricity grids for large amounts of renewables alongside grid-stabilizing technologies such as batteries. The regulatory policy involves establishing guardrails so that electricity supply is not dependent on any single backup technology, and then inviting multiple actors to explore a diversity of solutions while providing transparent information on real-world performance.

A policy framework to manage clean-heating peak demands could also be based on exploring all solutions with security guardrails in place.

Home decarbonization requires tailored policies

Rising electricity demand will complicate electrification and decarbonization

One electric peak-demand solution involves existing natural gas distribution networks. Quebec’s electricity and gas utilities are promoting electric heat-pump systems backed up by natural gas furnaces that turn on when it gets really cold. However, there is an active debate over other solutions, the potential scarcity of low-carbon fuels and the risk of becoming locked into natural gas infrastructure and fossil fuel use.

To avoid becoming solely dependent on fossil fuel backup, policymakers could view the existing fuel distribution network as a guardrail that enables an active exploration of multiple peak-reduction solutions. There is no shortage of solutions because the space for innovation encompasses several technologies working over the entire electricity network.

For example, air-source heat pumps can be combined with better insulation and air sealing to reduce heating demands. Clean-heating solutions that do not produce major peaks include geothermal heat pumps and district heating. Strategic times to power up and then store energy in electric car batteries, hot water heaters and thermal storage systems for industry and the home can be chosen. Heat pumps themselves provide some flexibility to increase heating before cold periods in energy-efficient buildings that can maintain indoor temperatures for several hours or days. There are numerous ways to make electricity demands smarter and more flexible at the level of the home electric panel, neighbourhood and the interconnected electricity grid.

At this stage, policymakers do not need to decide if the electrification versus low-carbon fuel pessimists or optimists are right. They should focus on developing a regulatory framework that enables exploration of all possible solutions, while continuing momentum toward the decarbonization goal.

The upcoming green buildings strategy could encourage provincial regulatory frameworks that explore a diversity of clean-heating configurations with unique peak demand solutions, supported by a federal platform for information-sharing and research assistance. This approach would hedge against unfriendly surprises for our electricity systems or potential shortages of low-carbon fuels, while inviting friendly surprises from the smart management of energy demand.

A transformative goal that requires immediate action

The green buildings strategy must create momentum for cleaner heat. Policymakers need to clarify the final goal, enable early action with a regulatory path, and safely explore all solutions to achieve full decarbonization.

Transitioning our buildings off fossil fuels is complex, but lessons from other sectors suggest there is no need to let complexities get in the way of doing what is feasible now to make meeting that transformative goal possible.

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Brendan Haley
Brendan Haley is Efficiency Canada’s director of policy research and an adjunct research professor at Carleton University’s School of Public Policy & Administration. He is also a policy fellow with the Broadbent Institute. Twitter @br_haley

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