June 17, 2021
Going green: How sustainable energy creates economic opportunities at the local level
From attracting investments and generating new jobs to keeping dollars in the community, planning for an energy-efficient future transforms local economies for the better.
Countries all around the world are attempting to pull the emergency brake on climate change and Canada does not want to be left behind.
Like many of its international counterparts, Canada has adopted a clear legal framework with an ambitious objective: net zero carbon emissions by 2050. To meet these climate goals, policy makers, residents, non-profit organizations and corporations must work together to phase out fossil fuels in favour of sustainable, non-emitting energy sources. With roughly 700 megatons of CO2 produced each year in Canada, there is still much work to be done, but the shift is well underway.
Local governments across the country are embracing the move to clean energies. Yet, they often struggle to identify next steps and take collective action. With more than 25 years of experience in the energy and utility sector, Rob Kerr, Senior Advisor with Quest and consultant, has worked with many communities, assisting them in their transition to smart energy from planning to implementation. For Kerr, one thing is sure: the transition to renewable energies will profoundly transform local economies for the better.
Smart energy keeps dollars in the community
As investors, companies and governments look for clarity in accounting for long-term climate risks and opportunities, they are adapting to the transition of the energy sector from fossil-based systems to renewable energy sources.
Across Canada, municipalities are trying to find their place in this changing energy landscape. Rob Kerr explains, “Local governments and their communities are key to addressing climate change. In the developed world countries, 50 per cent of carbon emissions are under the control of local governments.”
Luckily for municipalities, this transformation brings many opportunities at both the economic and technological level. In North America alone, the photovoltaic market – the technology that converts sunlight into electrical energy – is estimated at US $25 billion and the energy retrofit market is estimated at US $12 billion. The district energy market – the systems that distribute thermal energy to multiple buildings in an area or neighbourhood – reaches well into the hundreds of billions of dollars globally.
“We have witnessed steep curves in sales and manufacturing of energy solutions,” Kerr continues, “and there are new jobs affiliated with these innovations that will have a significant positive impact on local economies. These jobs could be in your community.”
And to achieve maximum positive impact, it is fundamental to adopt a holistic approach that also takes energy efficiency into account.
In Canada, the dollars spent on energy per measure of GDP has historically been very high. In the next five years, the city of Guelph, Ontario, is set to spend one million dollars on energy per year – a colossal amount for a community of 135,000 residents. By leveraging currently available technology, this number could be brought down by 25 per cent.
“If we don’t focus on efficiency, that 25 per cent goes outside of the community to support energy generation and infrastructure elsewhere. By transitioning to smart energy, communities get to keep these dollars local, attract investments and create economic health.”
Leveraging partnerships to attract investments
When it comes to becoming a major actor in climate transition, Kerr says it’s all about actioning the levers that already exist in your community.
“Municipalities often think they’re fully responsible for all aspects of smart energy projects, but governments are just one piece of a collective network. Knowing that takes away a lot of the pressure.”
When planning for a smart energy transition, lack of funding is often the first concern expressed by communities, Kerr says, but there are creative ways for local governments to address that issue. One of them is to form a municipal corporation, a legal entity that allows municipalities to act like businesses, attract investments and partner with companies as long as they keep the community’s interests in mind.
“You have to understand that large energy companies, which are worth huge amounts of money, are also investing in green energies. They are transitioning away from traditional energy systems. Instead, they’re trying to get involved with home retrofit programs and other smart energy projects to stay relevant. They can become your business partners and investors.”
Several municipalities have embraced this solution. In 2011 Sault Ste. Marie, ON, for example, became home of the second largest photovoltaic plant in Canada by leveraging unused land in their community to attract solar energy companies. With limited funding at the time of planning, the city of 73,000 opted to provide land to private energy providers in exchange for capital investment in the project – a resounding success that turned the community into a continental leader in green and renewable energy.
“Ultimately, ‘how much funding do you have?’ is the wrong question. Every community has resources of different types. It’s all about aligning them.”
An incremental transition
Change does not happen overnight, particularly where government is concerned. Kerr acknowledges that there can be a multitude of perceived barriers that can get in the way of municipalities understanding the economic opportunities associated with smart energy planning. As an advisor, he sees his work as articulating where exactly those barriers are and arguing the business case for green energies to get communities on board – a challenging task that has been met with success so far.
“Often, we perceive barriers to be ideological fights, but in fact, they usually result from mismatched paces of transition,” he explains.
Kerr stresses the need to approach change management from an empathetic standpoint. “In Ontario, just like in most Canadian provinces, residents rely on a close to 100-year-old utility system. One hundred years of investing in research, infrastructure and distribution channels. When you come along and say ‘we have to change everything’, you obviously get resistance. We have to respect that because it doesn’t benefit anybody to simply abandon investments that have already been made. That’s why we talk about transition.”
The good news is most municipalities now have an integrated sustainability position, sometimes even a department, within their staff, who are tasked with handling climate adaptation and the transition to renewable energies: “You would be hard-pressed to find a municipality that hasn’t acknowledged the importance of climate change, and that’s a big step in the right direction.”
Rob Kerr is a panelist at the Atlantic Communities Innovation Workshop organized by the Community Solutions Network, a program of Future Cities Canada.
Innovation Workshops are regional virtual events that bring together municipalities, Indigenous communities, municipal networks, academics, and subject-matter experts to connect, share, and ask questions on how to best use data, tools and processes to advance action on emerging issues around smart energy, climate adaptation and resilience, and broadband connectivity. To learn more, sign up on the Community Solutions Portal.