Geoexchange energy providers are setting ambitious goals as their industry starts to strengthen in the wake of high fossil-fuel costs.
Rick Nelson, general manager of Kelowna-based GeoTility Systems Corp., says the industry hopes to account for 20 or 30 per cent of Canada's energy supply within five to 10 years.
"That would be a very lofty goal," he admits.
Earth energy systems pump underground heat and cold air into and out of buildings, a process also known as geoexchange.
The technology is becoming more popular because it does not emit greenhouse gases. But there is still heavy market resistance because the pumps cost more to build and install than conventional heating and cooling systems.
Nelson will help his sector begin to achieve his aims when he speaks about its future during conference in Calgary.
Companies from across Canada will attend the two-day event, hosted by the Canadian GeoExchange Coalition (CGC), at the Hyatt Regency Hotel on Dec. 10-11.
"I'm hoping that there is more awareness and education," says Nelson. "Those are (my) two goals."
He will participate in a panel discussion on the geoexchange industry's future direction. According to a survey conducted by the Montreal-based CGC in early 2007, the Canadian geoexchange industry has grown by 40 per cent in each of the past two years. The CGC says market activity reports on this year's construction season indicate this year will also see strong growth.
"People are becoming more aware of it," says Nelson. "Also, the biggest reason would be the energy cost of (conventional sources) and the cost savings with (prices of) fossil fuels rising rapidly."
He says initial demand was on the residential side, but the pendulum has swung to the commercial and industrial fronts, and they will likely direct the market's future, because projects are larger and more lucrative.
"I don't think people understand the diversity that's available, which could expand many markets in different (technological) applications and show where the market actually could go," says Nelson, who will speak on that topic during the conference.
Suppliers are seeking more financial assistance from the federal and provincial governments to help make geoexchange systems more affordable to real estate developers and end users. Nelson says he would like to see governments automatically review renewable-energy sources for public projects in order to reduce taxpayer costs.
Unlike some other energy producers, geoexchange developers also want regulations - namely, certification for system builders and installers - to help heighten consumer confidence.
But Nelson says the industry must ensure that it can stand on its own merits without having to depend on government support. He and other providers say there is considerable work to be done before geoexchange systems become mainstays in homes and commercial and industrial buildings across the country.
The CGC has estimated that geoexchange sources now account for less than one per cent of total Canadian energy supply.
Nelson says a new business model is emerging whereby geoexhange companies, including his, are setting up central plants to sell heating and cooling to customers, helping to defray infrastructure costs.
Under the model, real estate developers or builders or strata corporation owners hire a geoexchange company to provide a looping system (essentially underground or underwater pipes), which is the most important - and most expensive - component of a geoexchange system. The company then charges monthly fees in the same manner as a gas or electric company.
He rates Manitoba's geoexchange market as the best in Canada, while B.C., Ontario and Alberta round out the top four.
The federal government provides a $3,500 grant for older homes that are retrofitted to tap into earth energy sources. The Ontario and Saskatchewan governments match Ottawa's contribution to bring the total to $7,000.
Manitoba Hydro offers a $20,000 interest-bearing "earth power" loan to homeowners that can be paid off through monthly utility bills. Hydro-Québec provides a $2,000 grant on old homes and $2,800 on new ones.
CGC president and CEO Denis Tanguay says a convergence of federal and provincial financial assistance has helped to spur the industry's growth, along with high conventional energy costs and new, larger technological applications, among other factors.
"Over time, people see that the technology is affordable and it's working," he says. "It's installed on more of a permanent basis and the market is better as well."
But geoexchange producers would still like more government help on both the financial and regulatory side.
Government funding is only available on projects built by CGC-certified personnel.
The CGC trains and certifies drillers, installers and residential and commercial-project designers.
But there are no rules to prevent unscrupulous operators from taking advantage of customers.
Tanguay says the second annual conference's two primary aims are to help develop new policies that favour earth energy development and present new financial and business models. The conference will alternate east and west every two years so as many federal, provincial and municipal government representatives as possible can attend.
Barry Milner, GeoTility's marketing manager, says Ottawa and the provinces should be doing much more, considering that earth energy systems produce no harmful emissions. Governments can also help by establishing rules for the geoexchange sector.
"One of the biggest problems we have is that our industry isn't regulated," says Milner. "Therefore, there's not a (list of) best practices. Our concern is that there are companies that are starting up in the industry that don't have a lot of the background, that are selling the technology and, if it isn't engineered or installed properly, it doesn't work. It sets the industry back years and years and years."
Dale Bateman, president and CEO of Calgary-based Ener-West Geo-Energy Services Inc., hopes the conference will help create more awareness of the technology and educate people about its benefits.
"The other main (objective) would just be strength within our own industry - cohesiveness," he says.
Bateman will present a review of how geoexchange systems can be applied on a subdivision-size scale. Ener-West completed the first heating and cooling-system project in Fort McMurray in September.
He says the CGC's decision to hold the conference in Canada's oil and gas capital is "very significant" in terms of raising awareness and Alberta's market conditions.
"We feel very strongly that Alberta is one of the most difficult markets (in which to develop earth energy), certainly in North America and probably world wide, given our relatively low gas and (high) electrical pricing," he says. "Geoexchange does not have the same economic advantages in Alberta as it does in even neighbouring provinces, because gas is relatively cheap and electrical is incredibly more expensive."
He adds earth energy has a long way to go before it can become economically viable.
But it has still made considerable advances in the past few years while capitalizing on the rapidly expanding environmental movement.
"It's gone from an idea to the beginnings of a real industry," says Bateman. "I would not say it's established, but it's at the point now where it will become established."
(Monte Stewart can be reached at monte@businessedge.ca)
