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Environmental and techno-economic analysis of ground source heat pump systems Hanova, Jana 2008

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ENVIRONMENTAL AND TECHNO-ECONOMIC ANALYSIS OF GROUND SOURCE HEAT SYSTEMS  by  Jana Hanova B.Sc., University of Calgary, 2005  A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE  in  THE FACULTY OF GRADUATE STUDIES (Resource Management and Environmental Studies)  THE UNIVERSITY OF BRITISH COLUMBIA August 2008  © Jana Hanova, 2008 i  ABSTRACT Climate change stabilization requires an unprecedented effort to change our current approach to energy production and consumption. While rising energy prices are drawing increased attention to reducing energy demand, heightened concern about the environmental consequences of fuel choice requires that this demand be met at lower emission levels. In Canada, the realization of commitments to our GHG emission goals entails reducing residential energy use - a sector responsible for close to 20 percent of end-use energy consumption. This study focuses on the energy demand and emission levels of space and water heating, since these two components comprise 76 percent of residential energy demand. Ground source heat pumps (GSHPs) are a technology that provides heating at 25 to 30 percent of the energy consumed by even the most efficient conventional alternatives. GSHPs have been identified as the most energy-efficient, environmentally clean, and cost-effective space conditioning systems available. However, their drawbacks have been high capital costs, and uncertainty about whether the electric power used by heat pumps has higher system-wide emissions. This thesis delineates how adoption of GSHPs in the residential sector can help align Canada’s technology choices with commitments made to Kyoto Protocol. The manuscripts delineate conditions under which GSHP systems achieve the largest net emission reductions relative natural gas, heating oil, and electric heat counterparts. Electricity generation methods and emissions embodied in inter-provincial and international electricity trade are shown to significantly affect the emission savings achievable through GSHP. The thesis quantifies how relative fuel prices influence annual operating savings that determine how rapidly the technology can achieve payback. This analysis reveals GSHPs to hold significant potential for substantial GHG reductions at a cost savings relative to conventional alternatives; the time horizons for payback are as short as nine years for average-sized homes, and significantly shorter for larger homes.  ii  TABLE OF CONTENTS Abstract.......................................................................................................................... ii Table of Contents .......................................................................................................... iii List of Tables ..................................................................................................................v List of Figures ................................................................................................................vi Acknowledgements .......................................................................................................vii Co-Authorship Statement ............................................................................................ viii 1  Introduction & Technical Overview .......................................................................1 1.1 Structure .............................................................................................................1 1.2 Thesis Objectives................................................................................................1 1.3 Context ...............................................................................................................2 1.4 Technology Overview.........................................................................................3 1.4.1 The Heat Pump ............................................................................................4 1.4.2 Detailed Schematic of a GSHP System.........................................................5 1.4.3 Loop Types ..................................................................................................6 1.4.4 Coefficient of Performance (COP) ...............................................................8 1.4.5 Environmental Considerations......................................................................9 1.4.6 Availability of Thermal Energy..................................................................11 1.4.7 Applications of GSHP................................................................................11 1.5 References ........................................................................................................13  2  Assessment of Canadian and U.S. Potential .........................................................16 2.1 Introduction ......................................................................................................16 2.2 Methodology.....................................................................................................17 2.2.1 Fuel Choice................................................................................................17 2.2.2 Energy Demand .........................................................................................20 2.2.3 GHG Intensities .........................................................................................20 2.2.4 Operational Savings ...................................................................................21 2.3 Results ..............................................................................................................22 2.3.1 Annual GHG Reductions............................................................................22 2.3.2 Annual Operational Savings.......................................................................25 2.3.3 Additional Capital Investments ..................................................................27 2.3.4 Fuel Price Escalation and Operational Savings ...........................................29 2.3.5 Larger Home Sizes.....................................................................................30 2.4 Emission Reductions and Financial Viability in the U.S....................................32 2.5 Discussion ........................................................................................................35 2.5.1 Averting the Need for Electricity Generation Capacity ...............................35 2.5.2 Performance, and Surficial Geology, and Limiting Factors.........................36 2.5.3 Recommendations ......................................................................................37 2.5.4 Climate Change Implications .....................................................................38 2.6 References ........................................................................................................40  iii  3  Strategic GHG Reduction Through the Use of GSHP Technology .....................42 3.1 Introduction ......................................................................................................42 3.2 Availability of Thermal Resources ....................................................................43 3.3 Emission Reduction Potential............................................................................46 3.3.1 Implications for Reduction Strategies.........................................................48 3.4 Economic Feasibility ........................................................................................48 3.5 Scale Effects .....................................................................................................50 3.5.1 Scale and Emission Savings .......................................................................50 3.5.2 Scale and Operating Savings ......................................................................53 3.6 Discussion ........................................................................................................55 3.7 References ........................................................................................................57  4  Discussion...............................................................................................................58 4.1 Recommendations.............................................................................................59 4.1.1 Fuel and Region Specific Benefits..............................................................59 4.1.2 Overcoming Initial Investment Requirements.............................................59 4.1.3 Building Codes and City Planning..............................................................60 4.1.4 Uniform Standards .....................................................................................60 4.2 Environmental Considerations ..........................................................................60 4.2.1 Importance of Maintaining Thermal Equilibrium........................................61 4.3 Comments on Strengths and Weaknesses of the Thesis .....................................62 4.3.1 Strengths of Thesis.....................................................................................62 4.3.2 Weaknesses of Thesis.................................................................................62 4.4 Future Research ................................................................................................62 4.4.1 In-Depth Assessment of Multi-unit and Larger Homes ...............................62 4.4.2 Drilling Costs in Major Metropolitan Areas................................................63 4.4.3 Return on Investment vs. Payback Period...................................................63 4.4.4 Incorporate costs of GHG Mitigation..........................................................63 4.5 Conclusion........................................................................................................64 4.6 References ........................................................................................................65  APPENDIX A: GHG Intensities....................................................................................66 APPENDIX B: Coefficient of Performance ...................................................................71 APPENDIX C: Operational Savings..............................................................................72 APPENDIX D: Quantitying Savings in the U.S. ............................................................75 References.....................................................................................................................78  iv  LIST OF TABLES Table 2-1. Share of energy sources for space and water heating. ..........................................18 Table 2-2. Net annual marginal growth of space heating system stock. ................................19 Table 2-3. Energy services in an average home....................................................................20 Table 2-4. CO2 intensity of delivered electricity. .................................................................21 Table 2-5. Tons of CO2 averted by using a GSHP system. ...................................................24 Table 2-6. Annual GHG savings potential for GSHP. ..........................................................24 Table 2-7. Annual operating savings of GSHP systems relative to conventional fuels..........26 Table 2-8. The breakeven thresholds of incremental capital costs of GSHP. ........................28 Table 2-9. Emission reductions and operating savings for a 280 m2 home............................30 Table 2-10. Breakeven thresholds of incremental capital costs.............................................31 Table 2-11. Energy mad available by replacing electric heating with GSHP ........................35 Table 2-12. Suitability of GSHP based on surficial geology for major metropolitan areas....37 Table A-1. Emission intensities of generated and imported electricity..................................66 Table A-2. Sensitivity analysis of 3 GHG intensity methods................................................68 Table A-3. Electricity GHG intensities adjusted to include imported electricity ...................69 Table A-4. NERC emission intensities.................................................................................70 Table B-1. COP influence on annual operating savings relative to natural gas. ....................71 Table B-2. COP influence on annual operating savings relative to electric heating...............71 Table B-3. COP influence on annual operating savings relative to heating oil......................71 Table C-1. Natural gas cost comparison matrix....................................................................72 Table C-2. Electric heat cost comparison matrix. .................................................................73 Table C-3. Heating oil cost comparison matrix. ...................................................................74 Table D-1. CO2 intensity of electricity in the United States..................................................77  v  LIST OF FIGURES Figure 1-1. Heat generation systems and GSHP.....................................................................3 Figure 1-2. Simplified refrigeration cycle ..............................................................................4 Figure 1-3. GSHP system in operating in a) cooling, and b) heating mode. ............................6 Figure 1-4. Types of GSHP systems. .....................................................................................7 Figure 1-5. Typical efficiency ranges of GSHP .....................................................................9 Figure 2-1. Market share of space heating systems in Canada, 1990-2004. ..........................19 Figure 2-2. Annual net emission reductions in tons of CO2eq................................................23 Figure 2-3. Annual savings of GSHP relative to three main fuels.........................................25 Figure 2-4. Net Present Value and heat pump savings relative to natural gas in Ontario.......27 Figure 2-5. Fuel price increase scenarios on operating savings in Ontario............................29 Figure 2-6. Emission reduction potential of GSHP in the U.S. .............................................33 Figure 2-7. Annual operating savings of GSHP in the U.S. ..................................................34 Figure 2-8. Projected changes in summer temperature by 2050............................................39 Figure 3-1. Depth dependence of annual range of ground temperatures in Ottawa ...............43 Figure 3-2. Large-scale geothermal and GSHP suitability in the United States.....................45 Figure 3-3. GHG emission reductions of GSHP for 80GJ heating loads. ..............................47 Figure 3-4. Operating savings of GSHP for 80 GJ heating loads ..........................................49 Figure 3-5. Emission reductions of a GSHP system operating at COP 4...............................51 Figure 3-6. Annual operational savings of GSHP electricity prices of 13c/kWh. ..................54 Figure A-1. Electricity Reliability Council Regions .............................................................70  vi  ACKNOWLEDGEMENTS I sincerely thank my thesis advisor and mentor Hadi Dowlatabadi for his guidance, constructive criticism, and comments on my work. I would like to acknowledge Lynn Mueller for providing a practical perspective from his extensive experience in the GSHP industry. I thank Milind Kandlikar and Hisham Zerriffi for their insights and participation on the thesis defense committee.  I gratefully acknowledge Free Energy Solutions Inc. for financial support during my master’s degree. I thank the Natural Sciences and Engineering Research Council of Canada (NSERC) for introducing me to scientific research during my undergraduate degree, as well providing funding for my graduate work.  I would like to thank Hans Schreier from UBC for sharing his groundwater expertise, Ted Kantrowitz from the Canadian Geoexchange Coalition, Kari-Lynn Phillipp, David Flanders, and Lisa Mu for valuable feedback.  I thank my family, friends, and colleagues who have supported me though this journey.  vii  CO-AUTHORSHIP STATEMENT Dr. Hadi Dowlatabadi was instrumental in identification and design of the research, creative/visual representations of the findings, and manuscript revision. Mr. Lynn Mueller provided expert knowledge of heat pumps through his experience in the industry.  My contributions to the manuscripts contained in Chapters 2 and 3 and the thesis include: -  Identification and design of research program  -  Literature review  -  Performing research  -  Data Analyses  -  Manuscript preparation  -  Formatting of thesis and for journal submissions  -  Continual revisions of manuscripts  viii  DEDICATION  To my family, & to those who dedicate their lives to serving humanity.  ix  1  INTRODUCTION & TECHNICAL OVERVIEW  1.1 Structure This thesis provides a systematic multidisciplinary assessment of Ground Source Heat Pump (GSHP) systems and their potential to transform residential energy consumption. This manuscript-based thesis presents two papers that will be submitted to peer-reviewed journals. The thesis is structured in the following manner: Chapter 1 introduces the topic and provides the reader with a technical overview - it also outlines the objectives and provides context for this study. Chapter 2 presents an environmental and techno-economic assessment of GSHP potential in Canada and the United States. CO2 intensity of electricity generation and its implications on heat pump emission savings are also explored. A version of Chapter 2 has been submitted to the journal of ‘Environmental Science and Policy’. Chapter 3 contains a second manuscript, which outlines the principles of thermal resources as well as a widely applicable assessment of the environmental benefits and financial viability of GSHPs. The focus of this manuscript is to enable researchers, industry, and homeowners to assess the suitability of GSHP applications in cold-climate countries worldwide. A version of Chapter 3 will be submitted to the open-source journal ‘Environmental Research Letters’. The concluding chapter discusses the relevance of the research findings, and how to best translate the results into practical strategies that reduce residential emissions.  1.2 Thesis Objectives The objectives of this study are to: -  -  Determine the CO2 content embodied in the electricity used by heat pumps Discuss potential environmental impacts of GSHP Calculate the heating and cooling load of homes in Canada and the US Quantify the annual emission savings of GSHP relative to conventional heating options on a per home basis Quantify the total emission savings achievable by GSHP Identify the annual operating savings relative to other fuels Draw out regions where the most significant emission reductions are possible at lowest cost, and conversely, to identify circumstances under which the use of GSHPs may be questionable Present research results visually make the findings accessible and appealing to a wide audience 1  1.3 Context Climate change stabilization requires an unprecedented effort to change our current approach to energy production and consumption. In Canada, the realization of short and long-term commitments to reduce GHG emissions requires increased sector-based accountability of emissions. One method to effectively to minimize emissions is through reducing residential energy use – a sector responsible for close to 20 percent of the end-use energy consumption in Canada (Fung et al. 2006). Within this sector, space and water heating comprised 76 percent of total residential energy consumption in 2004. (Natural Resources Canada 2006). Currently, the vast majority of this energy is derived from the combustion of non-renewable energy sources (Statistics Canada 2005).  GSHPs are the most energy-efficient, environmentally clean, and cost-effective space conditioning systems available (United States Environmental Protection Agency 1993). By addressing the largest components of residential energy use, Ground Source Heat Pump (GSHP) systems have the potential to play a vital role in meeting Canada’s current heating and cooling energy needs.  Canada has made a commitment to the international community to reduce its emission levels. Given the current climate change context, it is counterproductive to pursue heating technologies that increase the costs of climate change mitigation, while more suitable alternatives are readily available. Policies targeting heating-related emissions within Canada’s fragmented jurisdictional framework have neither been sufficiently developed nor systematically implemented. This study shows that the emissions of various technologies as well as their cost-effectiveness are highly dependent on location; furthermore, this study helps establish region-specific heating technology guidelines that best complement Canada’s goal of nation-wide emission reductions. While the implementation of emission reduction strategies must occur at the provincial level, overarching federal policy direction must exist that helps provinces/regions accomplish residential emission reductions.  This thesis is congruent with the existing body of literature on the benefits of GSHP, but the presented research quantifies the region-specific environmental and fiscal benefits achievable through the use of this technology. Further analysis of this subject is provided in the 2  manuscripts and the discussion, but the remainder of the introductory chapter will lead the reader through a synopsis of GSHP background information, some key characteristics, and several important environmental considerations.  1.4 Technology Overview GSHPs are electrically powered units that provide space and water heating by extracting energy from a source (i.e. underground) and transporting this energy to a heat sink (i.e. inside a home). Unlike their conventional heating system counterparts, GSHPs do not generate heat – the heat pump itself requires electricity to operate, but this electricity is used to facilitate the movement of heat. Heat generation systems such as natural gas systems achieve efficiencies below 100 percent (Figure 1-1a), whereas heat pumps routinely achieve efficiencies above 400% because they facilitate the movement of heat generated underground. Another pivotal advantages of an energy displacement system is the ability to reverse the cycle to provide air conditioning during summer months.  Figure 1-1. Heat generation systems and GSHP. a)  b)  A heat generation system can achieve efficiencies below 100 percent because it converts the energy stored in the fuel into heat through combustion. A GSHP system uses electricity to extract heat from the underground, thereby delivering a larger amount of energy - a GSHP system achieves efficiencies in excess of 100 percent.  3  1.4.1 The Heat Pump A simplified schematic (Figure 1-2) illustrates the four basic stages of a refrigeration cycle. During Stage 1, heat is released as the refrigerant condenses into a liquid – the rejected energy is known as ‘latent heat of vaporization’. In Stage 2, an expansion valve facilitates a pressure drop that causes the liquid to boil. This enables the liquid moving through the evaporation coil to absorb the latent heat of vaporization heat during Stage 3. Cold itself cannot be rejected or removed from a system, energy transfer always occurs from the higher temperature medium to the lower temperature one (Cengel and Turner 2001). As the heat is absorbed into the evaporator coil during Stage 3, the extraction of heat from the surroundings results in a cooling effect of the external environment. The compressor in Stage 4 increases the pressure of the refrigerant cycle thereby allowing the fluid to reject heat to its surroundings in Stage 1.  Figure 1-2. Simplified refrigeration cycle  The most common heat pumps reside in conventional Canadian households under the guise of refrigerators; these popular devices absorb the heat within the fridge and transport it to the back of the fridge where the energy is rejected. Thermodynamically, there is no difference between the well-known vapor-compression refrigeration cycle and the heat pump cycle; both systems absorb heat at a low temperature level and reject it to a higher temperature level (Chiasson 1999).  4  Two types of heat pumps are common on the heating and air conditioning market. The first is the air source heat pump, which has become a conventional alternative in Europe and North America during the 1950s and 60s (Zogou and Stamatelos 1996; Lund et al. 2004). The second type is the ground source heat pump, which is more efficient and provides larger operating savings than the air source counterpart (Healy and Ugursal 1997). Groundwater is a more ideal energy source for heat pumps, since unlike air or surface water, the temperature of groundwater remains constant regardless of seasonal or surface temperature fluctuations (Glass and Lehr 1977). Components specific to a GSHP system are outlined in more detail below.  1.4.2 Detailed Schematic of a GSHP System A GSHP system functions on the basis of the refrigeration cycle, but consists of three loops: 1) the ground loop, 2) the heat pump, and 3) a distribution system inside the home (Inalli and Esen 2004). During winter this process is used to extract energy from the ground loop and reject the heat on the load-side loop (Figure 1-3). During summer months the system can be reversed and it functions in cooling mode, during which excess heat is extracted from the home and transported into the ground, thereby cooling the home (De Swardt and Meyer 2001). GSHP systems can be combined with either forced-air or hydronic energy distribution systems, also known as water-to-air and water-to-water systems, respectively. However, hydronic systems and are inherently more efficient due to water’s superior ability to transport heat.1  1  Water’s specific heat is s greater than that of air by a factor of 4 at 25°C (Kaminski and Jensen, 2005). Specific heat refers to a material’s ability to absorb heat energy – it is the energy required to raise the temperature of one gram of a substance by one degree Celsius.  5  Figure 1-3. GSHP system in operating in a) cooling, and b) heating mode. a)  b)  Source: Chiasson  1.4.3 Loop Types Configurations of GSHP systems can be adapted to suit a variety of site-specific conditions. Closed loop systems, the most common type, rely on fluid circulating in enclosed pipes beneath the ground. Fluid contained in the ground loop is generally a mixture of water and an antifreeze solution such as methanol, ethanol, glycol, or another solution that acts as a freezing point depressant (Sanner 2003).  6  The configuration of the closed underground loop can either be ‘horizontal’ or ‘vertical’. Despite the higher costs associated with drilling, vertical loops (Figure 1-4a) are particularly common in urban environments due to spatial limitations. Typical borehole depths range between 30 and 150m, while the diameters measure about 0.075 to 0.15m (Ozgener and Hepbasli 2006; Meng 2003). Horizontal loops can installed in trench systems if land is available adjacent to a home (Figure 1-4b). A variation of this setup is to place the ground loop into a nearby lake or pond from which the loops can extract sensible heat stored in bodies of water (Figure 1-4c). Maintenance of closed-loop systems is minimal and mostly restricted to circulating pumps, although in rare circumstances the heat transfer fluid can result in corrosion of fittings and other system components (Bloomquist 2000).  Figure 1-4. Types of GSHP systems.  a)  b)  c)  d)  Source: Modified from U.S. Department of Energy  7  In contrast to closed loops, the pipes in open loop systems are not sealed. Water wells extract groundwater from an aquifer,2 and after heat extraction the water is then released at a lower temperature (Figure 1-4d). Open loop installations are the oldest, with the first large (commercial) installations in the late 1940s, and residential installations becoming common in the 1960s (Rafferty 2003). The different environmental considerations of open and closed GSHPs are discussed section 1.4.5.  1.4.4 Coefficient of Performance (COP) GSHPs are attractive alternatives to conventional heating and cooling systems due to their higher energy utilization efficiency (Healy and Ugursal 1997). In Canada, minimum efficiency ratings are currently regulated in a number of jurisdictions (Natural Resources Canada, 2004). Open loop systems are required achieve minimum efficiency ratings of 360 percent (Figure 1-5a), while closed loop systems must be rated to perform at efficiencies of at least 310 percent (Figure 1-5b). GSHP efficiencies are expressed in a Coefficient of Performance (COP), whereby the minimum requirements translate into COP 3.6 and COP 3.1, respectively. Lower to middle range systems use single speed rotary or reciprocating compressors, relatively standard refrigerant to air ratios, but oversized and enhanced-surface refrigerant to water heat exchangers (Natural Resources Canada 2004).3 Mid range units employ scroll4 compressors or advanced reciprocating compressors, while the high efficiency range systems use two-speed compressors and/or variable speed indoor fan motors (Natural Resources Canada 2004). A dual stage system differs from a two-speed compressor system in several ways. A two-speed system can be used when the cooling load is significantly different from the heating load, because two speeds enable one compressor to be used very efficiently at the lower speed. Since a two-speed compressor operating in the high-speed option will result in lower efficiencies, proper sizing will be a very important consideration. Larger homes in very cold climates (with a relatively small cooling load) may be more suited for a dual stage system that uses two separate compressors. Dual stage compressors will maintain constant COPs for both space-conditioning purposes (Geoflex 2007).  2  Aquifers are geological formations consisting of saturated rock containing usable amounts of groundwater; the material must be both porous and permeable (Foster et al. 2002). 3 Rotary screw compressors use rotating helical screws to push the gas into a smaller space, while a reciprocating compressor uses pistons driven by a crankshaft. 4 Scroll compressors use two interleaved spiral vanes to compress gas.  8  Figure 1-5. Typical efficiency ranges of GSHP a) open loop, and b) closed loop systems. a)  b)  Source: Natural Resources Canada  The upper limit of efficiencies lies between COP 4.9 (closed loops) and COP 5.2 (open loops), but GHSPs consistently reach efficiencies above 550 percent under ideal laboratory conditions (Kantrowitz, 2007)  1.4.5 Environmental Considerations Environmental concerns with regard to GSHPs can be categorized by system type (open vs closed loop). This section first explores open loop systems, followed by a discussion of considerations specific to closed loops.  Open loop systems dominated the geothermal heat pump market from 1946 until approximately 1980, when closed loop systems became more readily available (Bloomquist 2000). Open loop systems are less costly to install, but are also associated with higher maintenance levels, and one specific design can even compromise the environmental performance of this technology (Bloomquist 2000). Open loops are sensitive to temperature, pressure, and/or dissolved oxygen level drops, if they are installed in environments 9  susceptible to minor amounts of precipitation of insoluble materials. For instance iron oxides, calcium carbonate, and silica can form as a result of altered levels of biotic activity or chemical reactions (Pennsylvania Department of Environmental Protection 2001). Since the majority of problems are encountered in the injection well, some installers choose to avert these problems by discarding the water above the ground surface. In other words, this practice uses water for its thermal properties and afterwards discards groundwater as waste. Many authorities do not grant licenses for open loop systems that dispose water into a sewer or surface water, and these regulatory objections can be overcome by reinjecting water back into the same aquifer from which the water was withdrawn (Drijver and Willemsen 2001).  The intrinsic value of water by far exceeds the commercial value of its thermal properties alone. In 1999, 26 percent of Canadian municipalities reported problems with water availability, including seemingly wet locals such as Vancouver and Victoria (Environment Canada 2001; Boyd 2003). Groundwater concerns are especially evident in countries outside of Canada, including in countries where GSHP systems are currently being installed at increasing rates. In China, for instance, excessive groundwater extraction related to industrial cooling has caused significant land subsidence, forcing authorities to reinject water back into the aquifer to rectify the problem. While aquifer depletion is generally associated with extraction of large water quantities, the growing number of residential applications of GSHP worldwide requires responsible management strategies of water resources. Four hundred and forty of 669 major cities in China face moderate to severe water shortages, and data collected from NASA and the World Health Organization suggest that 4 billion people will face water shortages by 2050 (Lagod 2007). It is therefore highly advisable to implement international standards to prevent the misuse of water through open loop GSHPs.  The unique concerns facing closed loop installations are associated with the antifreeze fluid added to the ground loop. However, following International Ground Source Heat Pump Association criteria for non-toxicity of antifreezes will avoid concerns about the effects of antifreeze leaks (Pennsylvania Department of Environmental Protection 2001). Extensive reviews of the environmental and health impacts of various antifreeze fluids are documented by Heinonen et al (1998; 1997).  10  Drilling procedures for the purpose of installing both open- and closed-loop systems, must comply with practices5 that prevent surface water from contaminating groundwater, or cross contamination of aquifers (Phetteplace 2007). In Canada, some positive steps have been taken in the direction of ensuring integrity and technical credibility of the industry. The Canadian Standards Association introduced national standards for minimum GSHP requirements in 20026. Recommendations regarding environmental practices of the industry are further discussed in the concluding chapter.  1.4.6 Availability of Thermal Energy Heat transport in aquifers is becoming an increasingly important topic due to recent growth in the use of ground water for thermal applications (Ferguson 2007). The thermal energy stored in water and sub-surface materials originates from various energy sources generated inside the earth (Henning and Limberg 1995; Buffet 2000). Fluid circulated through open and closed loops is able to absorb heat from the earth even in winter months due to the ground’s thermal storage capabilities. Measurements show that ground temperature fluctuations are dampened with depth, and remain relatively constant below a depth of approximately 10 m (Florides and Kalogirou 2006). For this reason GSHP can extract or reject heat at any time of year, provided that the system is properly calibrated not to disrupt the thermal equilibrium of the ground or aquifer. Some misconceptions and further detail on sources for thermal resources are outlined in section 3.2.  1.4.7 Applications of GSHP The primary focus of this thesis is to discuss the potential of GSHPs in the single detached housing market, however, the results of this analysis are transferable to commercial and multi-unit residential applications. Single-detached homes constitute 65% of homes in Canada (Natural Resources Canada 2005), but the adoption of GSHP this home type is slower than other multi-unit residential and commercial installations because significant economies of scale become evident only for larger installations. The aim of this study is to  5  For instance, it is necessary to backfill portions of the borehole with an impermeable grout. Standard CSA-C488 Series-02 covers minimum requirements for equipment and materials selection, site survey, systems design, installation, testing and verification, documentation, commissioning and decommissioning. 6  11  investigate the mechanisms that GSHP adoption by single-family housing segment in order to accelerate the realization of available emission reductions within this housing segment.  While this study aims to identify of the most attractive regions and circumstances for residential GSHP use, this technology has applications beyond heating and cooling of residential buildings. Other uses include (Lund and Freeston 2000; Green and Nix, 2006): -  District heating systems (here listed separately due to scale differences) Crop and lumber drying Industrial processes with heating and cooling needs Horticulture Aquaculture Ice melting on sidewalks, roads and bridges Recreational uses (bathing and swimming) Earthquake monitoring  The Canadian GSHP market is expanding rapidly, but still holds a small market share. Between the years of 2004 to 2006 the total number of units sold is estimated to have almost doubled (1,778 to 3,150), and the total capacity of these units increased as well (Canadian Geoexchange Coalition 2007). Direct utilization of geothermal energy is reported in 72 countries with an installed capacity of 28,268 MWt and annual energy use of 273,372 TJ (75,943 GWh) reported in 2005 (Lund 2005). While the use of GSHPs has been growing, this technology is increasingly being combined with other renewables such as passive solar heating to maximize their performance and environmental benefits (Badescu 2006). Other variations and unique design include using heat from flooded mines that underlie extensive areas of some populated regions. These provide an economically attractive opportunity for extracting low-grade, geothermal energy (Watzlaf and Ackman 2006). Some applications have combined heat exchangers and aquifer thermal energy storage (ATES), whereby the geothermal energy is utilized while preserving the thermal integrity of an aquifer (Allen et al. 2000).  12  1.5 References Allen, D. M., M. M. Ghomshei, T. L. Sadler-Brown, A. Dakin and D. Holz. 2000. The current status of geothermal exploration and development in Canada. Proceedings of the World Geothermal Congress, Kyushu - Tohoku, Japan, June 2000. Badescu, V. 2006. Economic aspects of using ground thermal energy for passive house heating. Renewable Energy 32: 895-903. Bloomquist, G. R. 2000. Geothermal heat pumps five plus decades of experience in the United States. Proceedings of the World Geothermal Congress, Kyushu - Tohoku, Japan, June 2000. Buffet, B. A. 2000. Earth’s Core and the Geodynamo. Science 288(5473), 2007-2012 DOI: 10.1126/science.288.5473.2007 Boyd, D. R. 2003. Unnatural law: Rethinking Canadian environmental law and policy. Vancouver: UBC Press. Canadian Geoexchange Coalition. 2007. Canadian Geoexchange Industry Survey – Summary Analysis Draft. Montreal QC: Canadian Geoexchange Coallition. Cengel, Y. A. and R. H. Turner. 2001. Fundamentals of Thermal-Fluid Sciences. New York, NY: McGraw-Hill. Chiasson, A. D. 1999. Advances in modeling of ground-source heat pump systems. M.Sc. Thesis, Oklahoma State University. De Swardt, C. A. and J. P. Meyer. 2001. A performance comparison between an air-source and a ground-source reversible heat pump. International Journal of Energy Research 25: 899-910. Drijver, B. and A. Willemsen. Groundwater as a heat source for geothermal heat pumps. International Course on Geothermal Heat Pumps Chapter 2.6: 156-66. Environment Canada. 2001. Urban water indicators: Municipal water use and wastewater treatment. Ottawa: Government of Canada. State of Environment Bulletin No. 2001-1. Ferguson, G. 2007. Hetergeneity and thermal modeling of ground water. Ground Water 45(4): 485-90. Florides, G. and S. Kalogirou. 2007. Ground heat exchangers - A review of systems, models and applications. Renewable Energy, article in press, doi:10.1016/j.renene.2006.12.014. Foster, S. D., R. Hirata, D. Gomes, M. D’Elia and M. Paris. 2002. Groundwater Quality Protection: A guide for water utilities, municipal authorities and environment agencies. Washington, DC: The World Bank. Fung, A. S., M. Aydinalp, V. I. Ugursal and H. Farahbakhsh. 2006. A residential end-use energy consumption model for Canada. Halifax, NS: Natural Resources Canada 13  Geoflex. 2007. A geothermal/geoexchange systems tutorial. http://www.geoflexsystems.com/tutorial.htm, accessed January 2007. Glass, T. E. and J. H. Lehr. 1977. Ground-water energy and the ground-water source heat pump. Ground Water 15(3): 244-249. Green, B. D. and G. R. Nix. 2006. Geothermal – The energy under our feet, Geothermal Resource Estimates for the United States. Battelle, CO: National Renewable Energy Laboratory. Technical Report NREL/TP-840-4066. Healy, P. F. and V. I. Ugursal. 1997. Performance and economic feasibility of ground source heat pumps in cold climate. International Journal of Energy Research 21: 857-870. Heinonen, E. W., M. W. Wildin, A. N. Beall, and R. E. Tapscott. 1997. Assessment of antifreeze solutions for ground-source heat pump systems. ASHRAE Transactions 103(2): 747-756. Heinonen, E. W., M. W. Wildin, A. N. Beall and R. E. Tapscott. 1998. Anti-freeze fluid environmental and health evaluation – an update. Proceedings of the Ecostock International Geothermal Conference. Pomona, NJ, March 1998. Henning, A. and A. Limberg. 1995. Das Grundwasser-Temperaturfeld von Berlin. Brandenburgishe Geowissenshaft Beitraege 2(1): 97-104. Inalli, M. and H. Esen. 2004. Seasonal cooling performance of a ground-coupled heat pump system in a hot and arid climate. Renewable Energy 30: 1411-1424. Kaminski, D. A. and M. K. Jensen. 2005. Introduction to thermal fluids engineering. Hoboken, NJ: John Wiley & Sons. Kantrowitz, T. 2007. Pers. com. Canadian Geoexchange Coalition, June 2007. Lagod, M. 2007. We’re running out of water. San Francisco Chronicle, 8 July, E5. Lund, J. W. 2005. Direct heat utilization of geothermal resources worldwide 2005. Geo-Heat Center. Klamath Falls, OR: Oregon Institute of Technology. http://geoheat.oit.edu/pdf/directht.pdf, accessed July 2007. Lund, J. W., B. Sanner, L. Rybach, R. Curtis and G. Hellstrom. 2004. Geothermal (groundsource) heat pumps, A world overview. Geo-Heat Center Bulletin 23(3): 1-10. Klamath Falls, OR: Oregon Institute of Technology. Lund, J. W. and D. H. Freeston. 2000. World-wide direct uses of geothermal energy 2000. Geothermics 30; 29-68. Meng, L. 2003. The application of ground-source heat pump systems in China. Department of Energy Technology. Stockholm: Royal Institute of Technology.  14  Natural Resources Canada. 2006. Secondary energy use and GHG emissions by end-use. Office of Energy Efficiency. http://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/tablestrends2/res_ca_2_e_3.cfm?attr= 0, accessed July 2007 Natural Resources Canada. 2005. Survey of household energy use, Summary report. Ottawa, ON: Natural Resources Canada. Natural Resources Canada. 2004. Heating and cooling with a heat pump, revised edition. Gatineau, QC: Office of Energy Efficiency Ozenger, O. and A. Hepbasli. 2006. Modeling and performance evaluation of ground soruce (geothermal) heat pump systems. Energy and Buildings, 39, pp. 66-75. Pennsylvania Department of Environmental Protection. 2001. Ground source heat pump manual. Harrisburg, PA: Commonwealth of Pennsylvania. Phetteplace, G. 2007. Geothermal heat pumps. Journal of Energy Engineering 133: 32-38. Rafferty, K. 2003. Ground Water Issues in geothermal heat pump systems. Ground Water 41(4): 408-410. Sanner, B. 2003. Current status of ground source heat pumps in Europe. Proceedings from Futurestock 2003, Warsaw, Poland, 2003. Statistics Canada. 2005. Report on Energy Supply-demand in Canada. 57-003-XIE. Ottawa, ON: Statistics Canada U.S. Environmental Protection Agency. 1993. Space conditioning: The next frontier. Washington, DC: Environmental Protection Agency. EPA 430-R-93-004. Watzlaf, G. R. and T. E Ackman. 2006. Underground mine water for heating and cooling using geothermal heat pump systems. Mine Water and the Environment 25(1): 1-14. Zogou, O. and A. Stamatelos. 1998. Effect of climatic conditions on the design optimization of heat pump systems for space heating and cooling. Energy conversion and management 39(7): 609-22.  15  2  ASSESSMENT OF CANADIAN AND U.S. POTENTIAL7  2.1 Introduction Ground source Heat Pump (GSHP) systems hold the twin promises of significant GHG reductions and energy cost savings to consumers. In cold climates such as Canada, GSHPs represent a viable alternative to conventional space heating and cooling systems due to their high operating efficiency, especially during the heating season (Healy and Ugursal 1997). However, the worldwide market diffusion of GSHP systems is growing, but has been limited so far. There are three reasons for this: 1) system designs have not been standardized and actual performance of systems has sometimes fallen short of its promise, 2) their initial capital costs are significant, and 3) economies of scale and scope are rarely exploited.  The goal of this study is to inform the decisions of policy makers, developers, and homeowners about the desirability of GSHP systems for energy services in colder climates. The key criteria for evaluation of desirability used here are lifetime costs and GHG reduction. These vary by location according to the costs of electricity, gas, and oil, the electricity generation mix, the norms in fuel choice used to provide heat, and local geology. Due to the inter-provincial variability of numerous parameters, Canada provides a unique opportunity to explore the extent to which these parameters influence the benefits of GSHP systems. In this study we examine the conditions in each province and territory to provide locally relevant insights into the suitability of GSHPs and their cumulative effect on long-term GHG emission reduction.  7  A version of this chapter has been published. Hanova, J., Dowlatabadi, H. Mueller L. (2007) Ground source heat pump systems in Canada: Economics and GHG reduction potential. Resources for the Future Discussion Papers DP-07-18.  16  2.2 Methodology 2.2.1 Fuel Choice The key elements of this study are energy use patterns, fuel choices, the electricity generation mix, and fuel and electricity costs. Data on household energy use for 2004 are available through the Comprehensive Energy Use Database, Natural Resources Canada (NRCan). We used the available regional data on space and water heating to explore choices for the typical 140m2 (1,500 sqft) house in different Canadian provinces8. The demand for heating and cooling is met using a variety of technologies, some of which are more efficient in converting energy inputs into energy services. Radiant electric systems have end use efficiencies of almost 100 percent; gas and oil fired systems rarely achieve 90 percent efficiency and vary in their efficiency depending on the vintage and design of furnaces being used. The average efficiency of the current furnace stock varies between regions, but ranges from 69 to 77 percent for natural gas, and 63 percent to 74 percent for oil. Conventional cooling systems achieve efficiencies equivalent to a Coefficient of Performance (COP) of 2.7 (NRCan 2005a).  In contrast, heat pumps operate at efficiencies of 300 to 500 percent, which translate into a Coefficient of Performance (COP) between 3 to 5, respectively. Efficiency variations of this technology occur due to a number of variables including soil conditions, hydraulic conductivity, and proper sizing and installation. This study compares mid-efficiency GSHPs with COPheating of 4 (COPcooling of 3.5) to high efficiency natural gas and heating oil systems (Federal Energy Management Program 2001). High efficiency natural gas and heating oil furnaces are classified by NRCan (2005a) classifies 90 and 85 percent efficient, respectively. We use electric heating system efficiencies of 98 percent. These GSHP and conventional system efficiencies will be used throughout the paper, unless otherwise stated. The adoption of the aforementioned heating technologies varies by region, and a summary of these is presented in Table 2-1.  8  The average size of homes in Canada has been growing from 116 m2 for homes built before 1960 to 142 m2 for those built after 2000 (NRCan 2006).  17  Table 2-1. Share of energy sources for space and water heating. Space Heating (%)  Water Heating (%)  Region Natural Gas Electricity Heating Oil Natural Gas Newfoundland 0 35 38 0 PEI 0 2 80 0 Nova Scotia 0 13 68 0 New Brunswick 3 36 29 0 Québec 10 39 21 4 Ontario 74 11 8 64 Manitoba 64 24 1 53 Saskatchewan 86 5 1 78 Alberta 95 3 0 90 British Columbia 69 19 1 52 Territories 8 3 65 0 Highlighted cells indicate the most common technology type in a given region.  Electricity 88 33 61 61 92 33 46 21 9 47 76  Heating Oil 12 65 38 38 0 2 0 1 1 1 24  The market share of space heating systems has been evolving over the past decade (Figure 21). The most prominent trend has been the growing share of high- and medium-efficiency gas-fired systems. Heat pumps have also been gaining ground, but the stock of baseboard electric heat has remained relatively constant. However, these trends at the national level hide significant regional variations in system choice. Table 2-2 presents the average annual installations of new systems, by province. The most common fuel choices over the last five years have been mid- and high-efficiency natural gas and medium-efficiency heating oil furnaces (there has been no significant adoption of high-efficiency oil furnaces).  18  Figure 2-1. Market share of space heating systems in Canada, 1990-2004.  Source: NRCan  Table 2-2. Net annual marginal growth of space heating system stock for detached homes. Region Newfoundland PEI Nova Scotia New Brunswick Québec Ontario Manitoba Saskatchewan Alberta British Columbia Territories  Natural Gas n/a n/a n/a n/a 2,100 76,000 6,300 7,200 30,000 15,000 100  Electric Baseboard 1,700 <100 500 2,100 5,300 900 700 <100 600 800 < 100  9  Heating Oil 300 300 1,200 1,000 3,500 4,100 700 100 400 800 200  Heat Pump 9 100 < 100 500 300 5,800 10,000 400 300 800 1,400 n/a  The majority of these units are air-exchange heat pumps. They offer efficiency gains over conventional systems but operate at high efficiencies over a narrower temperature range, and have a service life that is significantly shorter than GSHP systems.  19  2.2.2 Energy Demand We use a standard energy demand model for a 140m2 (1,500 sqft) home to calculate heating and cooling loads for each region (NRCan 2005b). Since heating load varies on a yearly basis due climactic conditions, energy requirements are adjusted for annual temperature fluctuations in each region using the NRCan Heating Degree Day and Cooling Degree Day Index.10  Space and water heating needs and cooling loads are summarized in Table 2-3.11 Discrepancies exist between energy services used (the energy a customer purchases from a utility company) used and the actual amount of energy required to heat a home (the heating load). These stem from system inefficiencies - the average natural gas furnace operates at ~70 percent efficiency, and therefore its energy use exceeds heating load. Since our goal is to cost out GSHP systems on the basis of energy services delivered, we include air conditioning demands in our calculations since ground source heat operates, as a heating system in the winter, and as an air conditioning system in the summer.  Table 2-3. Energy services in an average home.  Region Newfoundland PEI Nova Scotia New Brunswick Québec Ontario Manitoba Saskatchewan Alberta British Columbia Territories  Space Heating (GJ) Energy Heating Load Used 75 65 60 80 85 75 70 90 115 50 65  50 40 40 60 60 55 55 60 80 40 40  Water Heating (GJ) Energy Used Heating Load  25 25 25 30 30 30 35 35 55 30 20  20 20 20 25 30 25 30 30 40 20 20  Air Conditioning (kWh) Typical A/C GSHP A/C  85 80 150 170 750 980 1,090 570 220 305 225  45 45 80 90 400 530 580 310 120 160 120  2.2.3 GHG Intensities 10  The Heating Degree Day Index is a measure of how relatively cold (or hot) a year was compared with an average year. When the HDD is above (below) 1, the observed temperature is colder (warmer) than normal. A Cooling Degree Day Index below (above) 1 indicates the observed temperature was colder than the average (NRCan, 2006). 11 Climate change and high glass areas combined with solar gain are leading to increasing demand for cooling in new built structures across Canada.  20  Detailed GHG intensities of generated electricity are provided in Canada’s Greenhouse Gas Inventory, and the latest available data are from 2004.12 In order to accurately assess the emissions attributable to heat pump operation in each region, we include emissions embodied in electricity imports in the CO2 electricity intensities (Table 2-4). Data on electricity trade are obtained from the National Energy Board (2005).  Table 2-4. CO2 intensity of delivered electricity. Generation Only (tCO2eq /GWh) Newfoundland PEI Nova Scotia New Brunswick Québec Ontario Manitoba Saskatchewan Alberta British Columbia Territories  21 1,120 759 433 8 222 31 840 861 24 249  Generation and Imports (tCO2eq /GWh) 21 461 751 435 28 229 133 833 844 82 249  Continued discussions on how to best account for CO2 embodied in inter-provincial electricity trade demonstrate the lack of consistency in GHG accounting principles, and this affirms the need for establishing Canada-wide standards dealing with CO2 accounting at the provincial level (Munksgaard and Pedersen 2001). This study follows guidelines established in the GHG Protocol (2007), the most widely used and internationally established GHG accounting standards. However, we explore the implications of two additional methods of accounting for GHGs embodied in imported electricity; further details are provided in Appendix A.  2.2.4 Operational Savings Informing consumers about the economics of GSHP compared to conventional energy systems requires costing out the delivery of energy services. These include standing charges, delivery costs, fuel charges and taxes, as well as equipment purchase and maintenance costs.  12  For some provinces access to electricity related emissions was restricted, as they were made confidential after the year 2000. In these cases 2000 Greenhouse Gas intensities were used.  21  Pricing structures and unit costs are obtainable from online customer resources of utilities operating in each province or territory. The system costs for conventional heating and cooling systems are well established, as are their life expectancy and annual maintenance fees. Even though the installation costs of GSHPs are variable and site specific (i.e. the load and local geology determines the cost of drilling), their reliability and life expectancy are well known. A properly installed ground source heat system has a 25-year life cycle that can be virtually maintenance free, while ground loop piping should last more than 50 years (Geothermal Heat Pump Consortium 2006).  2.3 Results 2.3.1 Annual GHG Reductions The emission reductions achieved by a GSHP system depend on the carbon intensity of the fuel being substituted, as well as the carbon content embodied in the electricity used to drive the heat pump. The emissions reductions for an average Canadian home (area ~140 m2) are illustrated in Figure 2-2. A COP of 4 was used in conjunction with emission intensities that reflect electricity both electricity generation and imports. We outline the attainable savings of GSHPs relative to high efficiency furnaces within each region.13  With the exception of Alberta, GSHP offers moderate to high emission reductions relative high efficiency natural gas throughout Canada (Figure 2-2a). These range from 3t in British Columbia on the West Coast, to 4t in Newfoundland on the East Coast. In Alberta, where the electricity is generated mostly from sub-bituminous coal, the carbon intensity of the electricity is high and GSHP systems do not provide savings relative to 90 percent efficient natural gas furnaces. Here, GSHPs operating at COP 4 become preferable to natural gas furnaces at efficiencies lower than 87 percent.  13  Some heating fuels are not available in all regions, but it is still possible to calculate emission reductions (i.e. Natural gas is not used in the territories, Newfoundland, PEI, and Nova Scotia for heating, while heating oil is not used in the Western provinces).  22  Figure 2-2. Annual net emission reductions in tons of CO2eq.  A transition from heating oil to GSHP is highly advisable in all provinces since emission reductions are evident in all regions (Figure 2-2b). The largest savings occur in Québec, Manitoba, and Newfoundland with annual reductions of 7.6t, 6.5t and 6.2t, respectively.  When GSHPs are compared to electric heating, the most significant GHG reductions occur in regions dependent on coal-based electricity generation (Figure 2-2c). Alberta and Saskatchewan demonstrate dramatic a reduction potential of 22.4t and 16.2t, respectively. Provinces with low carbon electricity (Newfoundland and Québec) achieve low reductions due an already small carbon footprint. Table 2-5 provides further detail on emission reductions in each province.  23  Table 2-5. Tons of CO2 averted by using a GSHP system. Natural Gas (t) Newfoundland 4.0 PEI 1.4 Nova Scotia 0.3 New Brunswick 2.1 Québec 4.9 Ontario 3.3 Manitoba 4.1 Saskatchewan 0.0 Alberta -0.2 British Columbia 3.0 Territories 2.2 Calculations are based on a 140 m2 home.  GSHP Emission Reductions relative to Electricity (t) Heating Oil (t) 0.3 6.2 6.0 3.2 9.8 2.1 7.6 4.5 0.6 7.6 4.1 5.6 1.9 6.5 16.2 2.7 22.4 3.4 1.1 4.8 3.1 3.9  Table 2-6 estimates the total reduction potential based on the average-sized home. Policies targeting increased GSHP adoption with respect to heating oil will have the most effect in the Maritime Provinces. In central and western Canada, the natural gas consumer base dominates the cumulative GHG reduction potential.  Table 2-6. Annual GHG savings potential for GSHP. Total Attainable GSHP Emission Reductions by switching to GSHP from Natural Gas (kt) Electricity (kt) Heating Oil (kt) Newfoundland n/a 20 420 PEI n/a 10 110 Nova Scotia n/a 410 450 New Brunswick 20 670 320 Québec 1,200 550 3,900 Ontario 10,800 2,000 2,000 Manitoba 930 160 20 Saskatchewan 10 250 10 Alberta 0 700 n/a British Columbia 3,300 330 80 Territories n/a 0 70 2 Calculations are based on an average Canadian 140 m home. The table depicts number of households in each region multiplied by the per-home emission reductions relative to each heating technology. In other words, if every home in Canada were to choose GSHP as opposed to conventional technologies, the above emission reductions could be achieved. The fuels holding the largest emission savings potential are shaded  24  2.3.2 Annual Operational Savings GSHPs are gaining an increasing market share in Canada, which attests to their economic viability in heating dominated climates (Phetteplace 2007). Relatively inexpensive electricity costs contribute to their financial feasibility in all regions of the country. As shown in Figure 2-3, the majority of provinces display moderate to large annual savings in operating costs relative to the other available heating options.  Homes in Québec and Newfoundland achieve annual savings in excess of $1,000 relative to all conventional fuels that GSHPs are compared to. Relative cost of natural gas/heating oil and electricity determine the variability of financial payoffs in the remaining provinces. Some regions do not offer either natural gas or heating oil as a mainstream heating option, therefore, provincial level data on fuel costs are not available.  Figure 2-3. Annual savings of GSHP relative to three main fuels.14  14  Figure 2-3 uses May 2007 fuel and electricity price rates.  25  A more detailed description of savings in each region relative to conventional systems is available in Table 2-7. Since COPs are one of the most significant parameters influencing operating savings, we conduct a sensitivity analysis of heat pump efficiencies relative to natural gas, electric, and heating oil – the details of this analysis are presented in Appendix B.  Table 2-7. Annual operating savings of GSHP systems relative to conventional fuels. Annual Operational Savings of GSHP Systems Compared to Other Fuels ($) Natural Gas Newfoundland n/a PEI n/a Nova Scotia n/a New Brunswick 900 Québec 1,500 Ontario 900 Manitoba 800 Saskatchewan 300 Alberta 300 British Columbia 600 Territories n/a 2 Calculations are based on a 140m home.  Electricity 1,600 1,400 1,500 1,600 1,500 1,100 1,100 1,900 2,500 900 2,000  26  Heating Oil 1,100 500 1,000 1,200 1,700 1,500 n/a n/a n/a n/a 600  2.3.3 Additional Capital Investments Although low operating and maintenance costs of GSHP systems translate into attractive lifecycle costs, the initial investment is a critical factor for the economical competitiveness of GSHPs in the heating and air-conditioning market (Diao et al. 2004). Since the upfront costs of GSHP vary on a case-by-case basis, the payback periods for incremental GSHP costs will also differ. We present a method to calculate an estimated payback period using the cumulative savings achieved from annual operation of an average home in Ontario15 (Figure 2-4). Annual savings are discounted at a rate of 7.5 percent (±2.5) to obtain a breakeven threshold for 3 sample payback periods (5, 10, and 20 years). For instance, if we aim for a 5year payback, then the breakeven threshold of a COP 4 system occurs at $3,500 above the cost of a natural gas and air conditioning system; this increases to $3,700 at a COP of 5.16 Figure 2-4. Net Present Value and heat pump savings relative to natural gas in Ontario.  COP and discount rates affect the Net Present Value of annual operating savings. The solid lines represent 7.5% discount rates, and the shaded regions indicate the effect of using a range of discount rates.  15  Ontario homes conventionally heated with natural gas comprise the most significant category to target for GSHP adoption due their cumulative emission reduction potential of 14Mt of CO2eq (Table 2-6). 16 Given the present range of incremental costs, a 140 m2 Ontario home presently cannot obtain payback periods of 5 years, but this example is chosen to illustrate that COPs do not play a vital role at short payback periods.  27  Discount rate variations have little influence on the differences between financial feasibility over a 5-year time frame. However, if we consider 20-year payback period, then discount rates significantly affect the breakeven threshold. For a 20-year payback period, the upper limit of allowable incremental capital costs increases significantly - GSHP could cost over $11,500 more than a conventional system and still provide savings for the homeowner. Varying the rate by ± 2.5 percent yields fluctuations of approximately $3,600.  We include a range of COPs to demonstrate the relationship between the breakeven threshold costs and system efficiency. Our study aims to assist in decisions involving the tradeoffs between a higher COP (and therefore higher operational savings) and the associated capital investment increase. Investing in a system that operates at a COP of 5 in Ontario would make financial sense if the system’s incremental cost does not exceed approximately $1,700 more the costs of a COP 3 system (20 year period, discount rate = 7.5 percent). Figure 2-4 includes a range of actual incremental costs of a GSHP system designed for a home in Ontario. Given these specifications, payback periods relative to natural gas can be expected to occur within 9 years to 18 years. Larger homes will be able to recover larger annual savings, and this will therefore significantly shorten the payback period. Breakeven thresholds vary across the country, as they are dependent on the relative heating fuel and GHSP-related electricity costs. Breakeven thresholds in other provinces are available in Table 2-8. Table 2-8. The breakeven thresholds of incremental capital costs of GSHP.17 Breakeven Threshold Newfoundland PEI Nova Scotia New Brunswick Québec Ontario Manitoba Saskatchewan Alberta B.C. Territories  Natural Gas ($) 5 Years 20 Years n/a n/a n/a n/a n/a n/a 3,700 8,200 5,900 13,300 3,500 7,900 3,400 7,600 1,700 3,800 1,600 3,600 2,500 5,600 n/a n/a  Electricity ($) 5 Years 20 Years 6,900 17,600 6,100 15,200 6,400 16,200 7,100 17,900 6,400 16,100 4,600 11,600 4,800 12,100 8,300 20,800 10,700 26,900 3,700 9,300 8,700 21,900  17  Heating Oil ($) 5 Years 20 Years 5,000 12,600 2,500 6,400 4,400 11,100 5,500 13,900 7,100 18,000 6,400 16,200 n/a n/a n/a n/a n/a n/a n/a n/a 3,100 7,700  To obtain the threshold increment for a 10-year payback period, multiply the 5-year threshold value by a factor of 1.7, and to obtain the threshold for a 15-year period, use a factor of 2.2.  28  2.3.4 Fuel Price Escalation and Operational Savings We take into account possible fuel price-increase scenarios, as savings are dependent on relative prices. Rising electricity costs and stable heating fuel (natural gas/heating oil) prices would result in lower operational savings. Conversely, high fuel price increases and stable electricity costs would increase the economic viability of GSHPs. Figure 2-5 illustrates the effects of small annual price increases over a 10-year timeframe. For instance, case A represents a situation where both the heating oil and electricity prices remain constant. Case B demonstrates the effects of a three percent heating oil price increase and a two percent electricity cost increase. Due to the efficiency ranges of GSHP systems, electricity price increases have a less pronounced effect on annual operating savings. For instance, a 3 percent natural gas price increase in Ontario (at constant electricity prices) would increase GSHP annual operating savings by ~$460/year. However, a 3 percent electricity price increase would cause a ~$140/year reduction of operational savings at constant natural gas prices. This implies that adoption of GSHP significantly reduces the risk involved with uncertain fuel and electricity costs. Detailed information for all provinces and various permutations of fuel price increases are shown in Appendix C (Tables C1-C3).18 Figure 2-5. Fuel price increase scenarios on operating savings in Ontario  18  Prices are variable, but are not forecast to increase drastically in the near future, therefore this analysis assumes small price increase scenarios of1 to 3 percent (Greater Vancouver Regional District 2005).  29  2.3.5 Larger Home Sizes We extend the analysis to include the 27 percent of Canadian homes that are larger than 140 m2 (NRCan 2005b). NRCan’s Survey of Household Energy provides empirical evidence that larger homes have lower energy intensity than smaller homes. For instance, homes larger than 232 m2 use 77 percent of the energy intensity the average house, and this energy intensity adjustment is reflected in our calculations for larger homes. A possible explanation for this negative relationship between heated area an its energy intensity is that many energyconsuming products (i.e. fridges) are considered necessities, and are therefore used by a high proportion of households regardless of their heated area.  Currently GSHP installations are most attractive to owners of larger homes because the payback periods are significantly reduced. Reasons include larger annual operating savings and potentially that the capital investment required for GSHP maybe be more readily available to homeowners in higher socio-economic brackets. Not surprisingly, the environmental benefits of GSHP will also increase, as larger heating loads will yield larger energy and emission reductions. Table 2-9 outlines the emission savings and annual operational savings of a 280 m2 home.  Table 2-9. Emission reductions and operating savings for a 280 m2 home. Natural Gas  Newfoundland PEI Nova Scotia New Brunswick Québec Ontario Manitoba Saskatchewan Alberta British Columbia Territories  Electricity  GHG Savings (t)  Annual Operating Savings of GSHP ($)  GHG Savings (t)  Annual Operating Savings of GSHP ($)  6.2 2.2 0.4 3.3 7.5 5.1 6.3 0.2 -0.3 4.7 3.4  n/a n/a n/a 1,336 2,320 1,355 1,261 524 297 901 n/a  0.5 9.3 15.0 11.7 0.9 6.2 2.8 24.9 34.4 1.7 4.7  2,499 1,960 2,307 2,346 2,450 1,746 1,739 2,970 3,824 1,324 3,081  30  Heating Oil  GHG Savings (t) 9.6 5.0 3.2 7.0 11.7 8.7 10.1 4.2 5.3 7.4 6.0  Annual Operating Savings of GSHP ($) 1,862 979 1,611 2,060 2,702 2,465 n/a n/a n/a n/a 1,120  Table 2-10 summarizes the breakeven thresholds for three different timeframes. Higher annual operating savings of larger homes translate into shorter payback periods and, therefore, higher breakeven thresholds.  Table 2-10. Breakeven thresholds of incremental capital costs.19 Natural Gas ($)  Electricity ($)  Breakeven Threshold 5 Years 20 Years 5 Years Newfoundland n/a n/a 10,100 PEI n/a n/a 7,900 Nova Scotia n/a n/a 9,300 New Brunswick 5,400 13,600 9,500 Québec 9,400 23,700 9,900 Ontario 5,500 13,800 7,100 Manitoba 5,100 12,900 7,000 Saskatchewan 2,100 5,300 12,000 Alberta 1,200 3,000 15,500 British Columbia 3,600 9,200 5,400 Territories n/a n/a 12,500 Calculations based on 280m2 home, COP 4, and a 7.5% discount rate.  20 Years 25,500 20,000 23,500 23,900 25,000 17,800 17,700 30,300 39,000 13,500 31,400  Heating Oil ($) 5 Years 7,500 4,000 6,500 8,300 10,900 10,000 n/a n/a n/a n/a 4,500  20 Years 19,000 10,000 16,400 21,000 27,500 25,100 n/a n/a n/a n/a 11,400  As the demand for GSHP systems continues to increase, economies of scale will reduce the costs. Design and installation capacity increases will also drive additional market adoption. As industry expands, competition within the field will drive profit margins to become more similar to those found in other heating equipment industries, which in turn will make the technology more accessible the average-sized home. Once critical mass of GSHP adoption has been reached, growth could be substantially greater than current patterns indicate (Industry Canada 2003).  19  To obtain the threshold increment for a 10-year payback period, multiply the 5-year threshold value by a factor of 1.7, and to obtain the threshold for a 15-year period, use a factor of 2.2.  31  2.4 Emission Reductions and Financial Viability in the U.S. The methodology used to quantify emission savings and financial viability of GSHPs in Canada can be applied to other countries. To illustrate this, the United States was chosen to further highlight how inter-regional variations of CO2 intensity of delivered electricity and relative fuel prices can influence the suitability of this technology.  The notable difference between the analyses of Canada and the U.S. within the context of this study, is the calculations used to determine heating loads rely on different databases. The U.S Energy Information Administration’s Residential Energy Use Database provides a statistically representative survey of U.S. residential energy consumption - these data were in this analysis. The results of this analysis are featured in Figures 2-6 and 2-7, while the methods specific to U.S. calculations are outlined in Appendix D.  Figure 2-6 demonstrates that varying, but large annual emission reductions are achievable in the majority of states. These reductions become more pronounced with increased home size. However, the benefits of GSHPs versus high efficiency natural gas are questionable in states where delivered electricity is associated with unusually high levels of CO2 emissions. Figure 2-7 also illustrates that operating savings of GSHP vary significantly with fuel choice and home size. These findings quantify the reasons why GSHP systems finding extensive niche in the U.S. residential marketplace (Phetteplace 2007).  32  Figure 2-6. Emission reduction potential of GSHP in the U.S.  Figure 2-6. Emission reduction potential of GSHP in the U.S.  33  Figure 2-7. Annual operating savings of GSHP in the U.S.  Figure 2-7. Annual operating savings of GSHP in the U.S.  34  2.5 Discussion 2.5.1 Averting the Need for Electricity Generation Capacity While heat pumps require electricity for meeting heating and cooling demands, increased adoption of these systems does not implicitly translate into higher demand that might require generation capacity expansion or electricity imports. The characteristics of an approach that would prevent increased demand include a mechanism though which homes that currently rely on electric heating would be retrofitted with GSHP.  Installed electric heating systems are exceptionally compatible with GSHPs due to the hydronic distribution system inside the home. We assess the extent to which each region is capable of supporting GSHPs based on the amount of electricity that could be made available through the conversion of electrical heating systems to GSHP (Table 2-11).  Due to the relatively small portion of electrically heated homes in Ontario (~10 percent), only 45 percent of current housing stock could transition to GSHP without resorting to imports. However, if the excess electricity in Québec (made available by switching to GSHP) were to compensate through exports of this electricity, then Ontario homes could also transition fully to GSHP.  Table 2-11. Energy mad available by replacing electric heating with GSHP  Newfoundland PEI Nova Scotia New Brunswick Québec Ontario Manitoba Saskatchewan Alberta British Columbia Territories  Electricity Available – Electric Heating System Energy Use (GWh) 1,300 15 700 2,000 24,100 10,800 2,000 400 1,100 5,000 15  Percentage of Total Housing Stock Supplied by Available Energy (%) 100 10 65 100 100 45 100 20 10 85 15  Amount of electricity currently used by electric heating systems and the percentage of total housing stock that could convert to GSHP without capacity expansion or imports.  35  2.5.2 Performance, and Surficial Geology, and Limiting Factors A variety of system parameters and their integration affect the performance of GSHPs - these include proper design, sizing, and installation. System designs that take into account a “whole building” approach and incorporate other heating/cooling technologies (solar thermal preheating, thermal storage media, simultaneous heating/cooling applications, on site power, etc.) give rise to another level of complexity, but also increase the savings and efficiency potential (Kantrowitz 2007).  However, even for standard installations a sequentially sensitive approach is required. It is necessary to first establish thermal properties as accurately as possible before proceeding with other stages of the project (Phetteplace 2007). Geological and thermodynamic aspects that should be taken into account during site investigation - include soil/rock properties, groundwater saturation, temperature profiles, soil stability, and thermal diffusivity. An illustration of the complexities involved in this process can be observed in the Western Cordillera (i.e. British Columbia), where soil/rock intervals in a single borehole often vary greatly in terms of drilling difficulty and thermal properties (Canadian Geoexchange Coalition 2004). However, prohibitively high costs of test wells compound these complications for many residential projects. For this reason, there is a great need for accessible and detailed geologic data of a region, the most suitable of which would be compiled from well data and geophysical surveys.  Table 2-12 provides a crude assessment of the conditions that convey a general sense of the surficial geology of the major Canadian metropolitan areas. Surficial maps used for this analysis are two-dimensional and do not characterize the depth and extent of uniformity of the subsurface materials in sufficient detail to estimate precise drilling costs (Greater Vancouver Regional District 2005).  Rock types are classified primarily by heterogeneity and represent very conservative estimates. For instance, till is usually characterized as a straightforward to medium-difficulty drilling medium. However, due to its significant range in particle size, drilling difficulties can be encountered – therefore, till was categorized as having variable drilling conditions. Clay, silt, and bedrock can be classified as providing straightforward drilling conditions, even 36  though different techniques need to be used (Greater Vancouver Regional District 2005). For large scale projects, the American Society of Heating, Refrigerating and Air-Conditioning Engineers recommends site investigations and sample boreholes to objectively evaluate which type of geoexchange system is best suited to a site.  Table 2-12. Suitability of GSHP based on surficial geology for major metropolitan areas. City  Population 20 (million)  Toronto  4.7  Easy 44%  Medium 25%  Variable 31%  Vancouver Montreal Calgary Edmonton  2 1 1 1  41% 37% 25% 78%  30% 8% 4% 0%  29% 55% 71% 22%  Fraction of City Area by Drilling Conditions  Most common rock types  Dominated by sand and silt, and pebbly sand Sand and silt, sand and gravel, till Till, sand and gravel, clay and silt Dominated by till Dominant by silt to sand sized  2.5.3 Recommendations Housing operation is the most energy- and CO2-intensive among all consumer activities (Bin and Dowlatabadi 2005), and of these, space conditioning and water heating are the largest components of housing operation in many societies (Baralas et al. 2004; Eriksson and Vamling 2006). GSHPs can commonly provide these essential energy services at emission reductions of 60 percent relative to the conventional fuel options.  Despite increasing market shares, GSHP systems continue to have large unrealized GHG reduction and financial savings potential across Canada. Regions where heating oil holds a dominant market share, switching to GSHP will yield large reductions on a per home basis. Maritime provinces and Québec could achieve emission reductions of up to 7 Mt if GSHP systems were to replace the current heating oil-heated housing stock. A transition from natural gas to GSHP in Ontario and the western provinces could yield cumulative emission reductions of 21.4 Mt, annually.  Priority locations for GSHP heating and cooling services include regions with large electric heating market shares and where electricity demand will soon surpass generation capacity 20  Central metropolitan area populations are used -Community profiles (Statistics Canada 2001).  37  (i.e. most regions). Furthermore, provinces that demonstrate high increases in electric space heating should also be targeted due to the large emissions associated with electric heating.  Canada’s complex jurisdictional framework and large geographical extent sometimes results in regions facing challenges that can be encountered at the international level. While federal jurisdiction over the energy market relates to international and inter-provincial trade and facilities, provincial governments are responsible for energy production and distribution within the province. Therefore any regulatory initiatives to increase production of renewable energy must be undertaken at the provincial level (Islam, Fartaj, and Ting 2003). Commitment to emission-reduction strategies can be demonstrated through provincial-level incentives for technologies such as GSHP. Increased accountability for emissions embodied in inter-regional electricity trade would set a precedent for regions that need to explore more environmentally sound electricity generation methods.  Furthermore, it is essential for provincial governments to consider infrastructure investments necessary to sustain the GSHP industry – these entail addressing the current shortage of accredited GSHP trades people and installers. Sufficient funding for a unified and nationwide accreditation process and continued development of standardized system design requirements and installation quality (i.e. Canadian Standards Association - Standard C488) would help advance the industry.  2.5.4 Climate Change Implications The effects climate change will become more pronounced in Canada. Figure 2-8 depicts the projected changes in summer temperature by 2050. As summer temperature continue to rise, more homeowners will consider air conditioning as one component of the essential energy services. Additionally, consumers have already started showing increased interest and purchase of environmentally sound heating and cooling options. GSHP can not only meet this rising demand for increased comfort, this technology can meet this demand at emission levels that help stabilize climate change. The effect of a Canada-wide replacement of currently installed heating and cooling technologies with GHSP would result in cumulative emission reductions of 37Mt of CO2eq per year. This presents a 62 percent decrease relative to current emissions associated with residential space conditioning and water heating. GSHPs 38  are a technology with tremendous potential. However, if Canada is to benefit from realizing the potential of this technology, then it is critical that policies influencing residential fuel choices reflect a more visible commitment to climate change adaptation and mitigation.  Figure 2-8. Projected changes in summer temperature by 2050.  39  2.6 References Balaras, C. A., K. Droutsa, E. Dascalaki and S. Kontoyiannidis. 2005. Heating energy consumption and resulting environmental impact of European apartment buildings. Energy and Buildings 37: 429-442. Bin, S. and H. Dowlatabadi. 2005. Consumer lifestyle approach to US energy use and the related CO2 emissions. Energy Policy 33: 197-208. Brock University Map Library. n.d. Canada, Outline Maps. St. Catherine’s, ON: Brock University Map Library. Diao, N., Q. Li and Z. Fang. 2004. Heat transfer in ground heat exchangers with groundwater advection. International Journal of Thermal Sciences 43: 1203-1211. Environment Canada. 2006. National Inventory Report, 1990-2004 – Greenhouse Gas Sources and Sinks in Canada. Annex 9: Electricity intensity tables. http://www.ec.gc.ca/pdb/ghg/inventory_report/2004_report/ann9_e.cfm, accessed March 2007. Eriksson, M. and L. Vamling. 2006. Heat pumps and tradable emission permits: On the carbon dioxide emissions of technologies that cross a tradable emission market boundary. Energy Conversion and Management 27: 3510-3518. Federal Energy Management Program. 2001. How to buy an energy-efficient ground source heat pump. Washington, DC: U.S. Department of Energy. Geothermal Heat Pump Consortium. n.d. Advanced technology can make your home more comfortable now. http://www.geoexchange.org/press/builders.htm, accessed November, 2006. Greater Vancouver Regional District. 2005. Sustainable Energy Technology and Resource Assessment for Greater Vancouver. Vancouver, B.C.: Compass Resource Management in association with MK Jaccard and Associates. Healy, P. F. and V. I. Ugursal. 1997. Performance and economic feasibility of ground source heat pumps in cold climate. International Journal of Energy Research 21: 857-870. Industry Canada. 2003. Situation analysis of the knowledge, competencies, and skill requirements of jobs in renewable energy technologies in Canada. Ottawa ON: Industry Canada. Islam, M., A. Fartaj and D. S,-K. Ting. 2003. Current utilization and future prospects of emerging renewable energy applications in Canada. Renewable and Sustainable Energy Reviews 8(6): 493-519. Kantrowitz, T. 2007. Pers. com. Canadian Geoexchange Coalition, June 2007. Munksgaard, J. and K. A. Pedersen. 2001. CO2 accounts for open economies: producer or consumer responsibility? Energy Policy, 29: 327-334. 40  National Energy Board. 2005. Outlook for Electricity Markets 2005-2006: An energy market Assessment. http://www.nebone.gc.ca/energy/EnergyReports/EMAElectricityMarkets2005_2006_e.pdf, accessed November 2006. Natural Resources Canada, 2006. Energy use Data Handboook Tables, Residential Sector. http://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/handbook_res_ca.cfm?attr=0, accessed November, 2006. Natural Resources Canada. 2005a. Comprehensive Energy Use Database, Residential Sector. http://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/comprehensive_tables/index.cfm?fuse action=Selector.showTree, accessed December, 2006. Natural Resources Canada. 2005b. Survey of household energy use, Summary report. Ottawa, ON: Natural Resources Canada. Natural Resources Canada. 2004. National Summer Temperature Scenario: 2050. The Atlas of Canada. http://atlas.nrcan.gc.ca/site/english/maps/climatechange/scenarios/nationalsummertemp2 050, accessed March 2007. Phetteplace, G. 2007. Geothermal heat pumps. Journal of Energy Engineering 133: 32-38. U.S. Environmental Protection Agency. 1993. Space conditioning: The next frontier. Washington, DC: Environmental Protection Agency. EPA 430-R-93-004.  41  3  STRATEGIC GHG REDUCTION THROUGH THE USE OF GSHP  TECHNOLOGY21 3.1 Introduction As early as 1993 the United States Environmental Protection Agency (EPA) endorsed Ground Source Heat Pump (GSHP) systems as the most energy-efficient, environmentally clean, and cost-effective space conditioning systems available. GSHPs are heat pumps that collect and transfer heat from the earth trough a series of fluid-filled, buried pipes running to a building where the heat is concentrated for inside use (Natural Resources Canada 2002). Heat pumps do not generate heat, but they instead facilitate the transfer of thermal energy from one location (the ground) to where it is needed (indoors). We quantify the achievable GHG reductions based on parameters including heating load, fuel choice, heat pump efficiency, and electricity carbon intensity. We aim to provide a comparative mechanism through which emission profiles of various fuel choices can be explored.  Since the installation of a heating or cooling system is a decision that will affect a homeowner’s comfort and pocketbook for numerous years (U.S. Department of Energy 1999), we outline the conditions under which the environmental and financial benefits of GSHP for individual applications are maximized. While the primary focus of this study is on residential uses of GSHP, the results are transferable to other applications where low-grade heat is desired, e.g., crop and lumber drying, industrial process heating and cooling needs, horticulture, ice melting on sidewalks, roads and bridges (Green and Nix 2006). GSHP has strong economies of scale and our assessment has strong implications for community/city planning and development, but is also relevant to policy makers that seek to reduce residential and commercial building energy use and their associated emissions.  21  A version of this chapter has been published. Hanova, J. and H. Dowlatabadi 2007. Strategic GHG reduction through the use of GSHP technology. Environmental Research Letters 2(4) 1-8.  42  3.2 Availability of Thermal Resources Surface ground temperatures are affected by meteorological factors including incoming solar radiation (insolation), snow cover, air temperature, precipitation and thermal properties of soils. The aforementioned factors fluctuate between summer and winter months, however, temperatures below 10m are relatively constant. Figure 3-1 illustrates two simplified schematics of ground temperature fluctuations, at various depths in Ottawa (Canada).  Figure 3-1. Depth dependence of annual range of ground temperatures in Ottawa, Canada.  Sources: Williams and Gold (1976); National Research Council of Canada (2003)  43  Fluctuation in the upper few metres can be estimated using sinusoidal functions (Hillel 1982; Marshall and Holmes 1988; Wu and Nofziger 1999). The surface temperature penetrates with decreasing intensity into the ground, and the speed and depth to which the heat is transported depend on the thermal conductivity of the subsurface (Henning and Limberg 1995). The diurnal changes affect the ground to a depth of 0.3-0.8 m, while annual penetration of temperature fluctuations is generally less than 10 m (Farouki 1986).  Contrary to a common presumption in some reference material, GSHPs do not work by exploiting the ability of the earth to absorb sun’s energy as heat. This misconception is most likely held because approximately 51 percent of insolation is absorbed by land and oceans (National Aeronautics and Space Administration 2005). While surficial sediment temperatures more directly affect horizontal ground loop systems, heat pumps in these configurations extract energy from the subsurface despite insolation variations, instead of because of them.22  Surficial temperature fluctuations induced by solar radiation are superimposed on a constant and larger scale heat flow that originates inside the earth (this energy source is not susceptible to cloud cover, weather, or climatic influences). The depths at which temperatures stabilize indicate the interface at which seasonal influences are fully overwhelmed by the heat flowing to the surface from inside the Earth. The energy generated inside the earth, originates from numerous sources such as the decay of radioactive elements (Henning and Limberg 1995), and the release of gravitational potential of descending material (Buffet 2000).  22  Unlike GSHPs, air source heat pumps are primarily dependent on incoming solar radiation, and are therefore affected by air temperature fluctuations.  44  The temperature naturally increases with depth in the earth at a rate known as the geothermal gradient (~30ºC/km). This rate varies, and tectonically active regions are associated with higher heat flows. These areas are identified as having high-grade geothermal resources, which can be mined and utilized for electricity generation (Figure 3-2). However, since GSHPs reach very shallow depths (generally not exceeding 60m), GSHPs performance or efficiency are independent of the heat transfer intensity of these gradients (Green and Nix 2006; Geothermal Education Office 2000).  Figure 3-2. Large-scale geothermal and GSHP suitability in the United States.  Sources: Green and Nix (2006); Geothermal Education Office (2000)  Parameters influencing GSHPs are soil/rock thermal conductivity, hydraulic properties each soil layer, meteorological data, system design, and daily heating and cooling loads. GSHPs may not be feasible in all locations if the site-specific soil properties or drilling conditions are not ideal.  While site investigations determine the local suitability of GSHP, this technology must also meet additional categories of feasibility. The technology must provide environmental benefits through emission reductions and it must be economically profitable, these are discussed in the subsequent sections.  45  3.3 Emission Reduction Potential In order to assess environmental feasibility of heat pumps, we compare the emissions associated with heat pump operation to conventional heating systems emissions. Heat pumps use electricity to move heat from underground into a home.  The overall potential for GHG reductions is determined by lifecycle emissions of each energy source, and the efficiency of energy conversion used to meet heating loads. Natural Gas produces emissions of 50 kgCO2/GJ, while heating oil has is associated with emissions of 73 kgCO2/GJ. The emissions associated with electric heating are dependent on electricity generation sources.  We assume radiant electric elements achieve efficiencies close to 100 percent, with natural gas and oil systems achieving efficiencies of 95 and 85 percent, respectively (for both space and water heating). Using these efficiencies, we assess the environmental performance of GSHP for an annual heating Load of 80 GJ, the average Canadian heating load for a single detached home. Using the data provided in Figure 3-3, one can estimate annual emission reductions given any COP and CO2 intensity of delivered electricity. The CO2 intensity of the electricity consumed should include generation, transmission and distribution losses, as well as emissions associated with electricity imports.  Relative to natural gas and heating oil, the threshold of electric CO2 intensity at which heat pumps become environmentally feasible varies with efficiency levels of both conventional and GSHP systems. Unlike the comparison to natural gas or heating oil, emission reductions available through GSHP relative to electric heating increase substantially in regions where electricity contains a higher CO2 content.  46  Figure 3-3. GHG emission reductions of GSHP for 80GJ heating loads.  47  3.3.1 Implications for Reduction Strategies Fuel switching from natural gas and heating oil systems will yield the largest environmental benefits where the CO2 intensity of electricity is low. Conversely, GSHPs achieve especially high levels of emission reductions relative to radiant electric in regions where CO2 intensity of electricity is highest. The following observations can serve as guidelines for policies that most effectively target specific market segments to achieve the largest possible emission reductions through the use of GSHP technology.  Several trends can be drawn from the emission reduction profiles of GSHP: (1) In each scenario an increase in heat pump efficiency (Coefficient of Performance) will result in larger emission reductions. (2) Relative to both natural gas and heating oil – an increase in CO2 intensity of delivered electricity will decrease emission reductions (3) Relative to electric radiant heating – regions with very polluting electricity generation methods benefit most by replacing this heating system type with GSHP (4) Homes with larger heating loads correspond with higher emissions and GSHP offers larger emission reduction potential  3.4 Economic Feasibility GSHP is economically feasible if the electricity costs required to drive the heat pump provide annual operating savings relative to conventional system costs. To quantify the range of annual savings, we compare GSHP operating costs to those of conventional space and water heating systems (Figure 3-4). We assume an average COP of 4 and demonstrate the variation of savings for a typical detached home (heating load of 80 GJ/yr). Using the most recently available price data23 from the U.S. Energy Information Administration (2007), we illustrate that significant savings can be recovered in most countries. In regions where electricity prices are significantly higher than natural gas costs the financial returns of GSHP are questionable. GSHP systems are preferable to electric and heating oil systems in all countries for which data are available.  23  Prices include taxes and are based on the most currently available data (ranging from 2004 to 2007).  48  Figure 3-4. Operating savings of GSHP for 80 GJ heating loads  49  A country’s location within the financial incentive spectrum will vary depending on expected fuel price changes over the lifetime of the system. Countries where regional pricing differences exist, such as in Canada, some locations may be more suitable for GSHPs than others. The illustrated graphs in Figure 3-4 also allow home and business owners to anticipate the effects of fuel price fluctuations on GSHP feasibility.  The payback period of GSHPs for residential application typically ranges between <10 and 20 years, varying with capital investment costs and a region’s fuel prices, and relative fuel price increases. After the payback threshold has been reached, the GSHP continues to provide annual operating savings for until the end of the lifetime of the system. After the payback period, GSHPs generate a return on investment exceeding typical investment options offered to average homeowners. Increased property value and the high return on investment are considerations that could by systematically incorporated into mortgage assessments.  3.5 Scale Effects 3.5.1 Scale and Emission Savings Both annual operating savings and GHG emission reductions increase with larger heating loads. In this section we explore how economies of scale affect the environmental and fiscal performance of GSHP. The threshold at which GSHP becomes environmentally advisable is directly related to the CO2 content of electricity used by the heat pump, its COP, and the efficiency of the conventional heating system (Figure 3-5). Interestingly, the threshold itself is independent of heating load relative to natural gas and oil heating systems. Relative to 95 percent efficient natural gas furnaces, GSHP systems operating at COP 4 provide emission savings at electricity CO2 intensities below 762 t/GWh (Figure 3-5a). Relative to 85 percent efficient heating oil furnaces this CO2 electricity intensity threshold is crossed at 1235 t/GWh (Figure 3-5b). Heat pumps always reduce emissions relative to electric heating, but GHSP is particularly advisable in regions/countries with CO2–intensive electricity generation (Figure 3-5c).  50  Figure 3-5. Emission reductions of a GSHP system operating at COP 4.  51  Calculating GHG savings for COPs and furnace efficiencies other than those outlined above can be derived from equations (1) through (3).  GHG Savings = Conventional Fuel Emissions " Heat Pump Emissions  Conventional Fuel Emissions = !  Heat Pump Emissions =  HL * FI Eff *1000  (1) (2)  HL * 278 * EI COP *1000000  (3)  !  !  Where HL represents the Heating Load in GJ, FI is the CO2 Intensity of Fuel in kgCO2/GJ, Eff is the conventional heating system efficiency in percent, COP is the efficiency of the heat pump, and EI is the CO2 Electricity Intensity in t/GWh. The emission reductions of GSHP systems relative to natural gas and heating oil are given in equation (4).  GHG Savings =  !  HL $ FI 0.278 # EI ' " & ) 1000 % Eff COP (  (4)  Using similar calculations for electric heat, we can calculate the emissions reductions relative to electric heating with equation (5).  GHG Savings =  !  HL " EI $ 1 1 ' # & ) 3600 % Eff COP (  (5)  Rearranging equation (4) we can solve for a CO2 intensity threshold of electricity at which GSHP becomes environmentally preferable to natural gas or heating oil. The threshold calculation is given in equation (6).  EI =  FI " COP 0.278 " Eff  (6)  !  52  3.5.2 Scale and Operating Savings Scale effects are also evident in annual operational savings of GSHP systems, as larger heating loads tend to correspond with larger annual savings. Using 13 c/kWh24 as the baseline for price comparisons, we illustrate the annual operational savings of GHSP (Figure 3-6). Relative to this specific electricity price, GSHP becomes feasible at a natural gas price of 8.58 $/GJ, and heating oil costs of 7.67 $/GJ.  With regard to electric heating, electricity prices can vary slightly depending on the amount of electricity consumed. Smaller amounts of electricity (ie. by the heat pump) can have a larger unit price than large quantities, such as those required by electric heating. We include electricity unit price variations for completeness.  24  13 c/kWh is the median electricity price of countries shown in Figure 3-4.  53  Figure 3-6. Annual operational savings of GSHP electricity prices of 13c/kWh.  54  The minimum natural gas or heating oil price required for GSHP to be cost effective can be calculated using equation (7).  Fuel Price =  !  Elec Price " 2.78 " Eff COP  (7)  Where the Fuel Price is given in $/GJ, Elec Price represents the electricity price in c/kWh, Eff is the furnace efficiency in percent, and COP is the heat pump coefficient of performance. A more general formula can be used to calculate the annual operational savings for natural gas or heating oil, as given by equation (8).  Savings =  HL " Fuel Price HL " 2.78 " Elec Price # Eff COP  (8)  !  3.6 Discussion Surveys by utilities illustrate a high level of customer satisfaction with GSHPs compared to conventional systems, 25 i.e. more than 95 percent of all GSHP users would recommend a similar system to their friends and family (U.S. Department of Energy 1999). This technology also allows homeowners to actively contribute to climate change mitigation – sense of empowerment that environmentally conscious owners describe to be rewarding.  The more quantifiable benefits can be observed when emissions of conventional heating technologies are contrasted to GSHP. Conventional radiant electric heat (when not combined with GSHP) has the potential to be the most polluting of the compared heating technologies.  Larger homes use more energy and are therefore responsible for higher emissions than average sized homes. An option that could be explored is the introduction of emission  25  GSHP systems provide increased comfort by eliminating hot/cold spots and temperature fluctuations.  55  standards that would require homeowners of larger homes significantly reduce their Carbon footprint through technologies such as GSHP.  Tapping into the environmental and fiscal benefits that GSHPs offer in the residential sector is only possible if government policies and business strategies affecting homeowners’ fuel choices reflect preference toward technologies with long term environmental and economic benefits.  56  3.7 References Buffet, B. A. 2000. Earth’s Core and the Geodynamo. Science 288(5473), 2007-2012 DOI: 10.1126/science.288.5473.2007 Farouki, O. T. 1986. Thermal properties of soils. Series on rock and soil mechanics 11. Clausthal-Zellerfeld: Trans Tech Publications. Geothermal Education Office. 2000. U.S. Geothermal Potential Slide 108. http://geothermal.marin.org/geopresentation/sld108.htm accessed April2007. Green, B. D. and G. R. Nix. 2006. Geothermal – The energy under our feet, Geothermal Resource Estimates for the United States. Battelle, CO: National Renewable Energy Laboratory. Technical Report NREL/TP-840-4066. Henning, A. and A. Limberg. 1995. Das Grundwasser-Temperaturfeld von Berlin. Brandenburgishe Geowissenshaft Beitraege 2(1): 97-104. Hillel, D. 1982. Introduction to soil physics. New York: Academic Press. Marshall, T. J. and J. W. Holmes. 1988. Soil Physics. 2nd ed. New York: Cambridge University Press. National Aeronautics and Space Administration. 2005. The Earth Radiation Budget Experiment. http://asd-www.larc.nasa.gov/erbe/ accessed May 2007, accessed March 2007. National Research Council of Canada. 2003. Ground Temperatures Institute for Research in Construction. http://irc.web-t.cisti.nrc.ca/cbd/cbd180e.html, accessed April 2007. Natural Resources Canada. 2002. Ground Source Heat Pumps, Heating and cooling your home from the ground up. Ottawa, ON: Natural Resources Canada. Energy Resources Branch M27-01-1386E. U.S. Department of Energy. 1999. Geothermal heat pumps make sense for homeowners. Office of Geothermal Technologies. Washington, DC: National Renewable Energy Laboratory. DOE/GO-10098-651. U.S. Energy Information Administration. 2007. International Data. U.S. Department of Energy http://www.eia.doe.gov/emeu/international/, accessed May 2007 U.S. Environmental Protection Agency. 1993. Space conditioning: The next frontier. Washington, DC: Environmental Protection Agency. EPA 430-R-93-004. Williams, G. P. and L. W. Gold. 1976. Ground Temperatures. Canadian Building Digest. Ottawa, ON: National Research Council. CBD-180. Wu, J. and D. L. Nofziger. 1999. Incorporating temperature effects on pesticide degradation into a management model. Journal of Environmental Quality 28(1): 92-100.  57  4  DISCUSSION  The results of this study are congruent with the existing body of literature on the advantages of GSHP over conventional heating and cooling systems, specifically with respect to efficiency and overall operating costs (Chiasson 1999). This study supplements previous work in the field by highlighting the importance of understanding region-specific environmental and financial dimensions of GSHPs.  Through a systematic assessment, this research identifies conditions under which GSHP provides the largest benefits. These advantages are dependent on a confluence of parameters ranging from the heating load and CO2 intensity of delivered electricity, to thermal properties of the subsurface and installation practices. As this technology continues to reach maturity, it is important to understand that in isolated instances the benefits of GSHP relative to high efficiency natural gas can be questionable. The manuscripts identify locations where the CO2 content of electricity is prohibitively high, and GSHP systems are suitable only if they are combined with other environmentally clean electricity energy sources.  However, the implications of this study reach beyond assessment of GSHP. For instance, this study highlights that it is highly advisable for regions presently dependent on coal-generated electricity (ie. Alberta, Canada) to discontinue the use electricity as a fuel option for space and water heating. Federal and provincial governments must critically examine available residential heating options and ensure that these fuel choices are harmonized with Canada’s commitment to climate change mitigation.  Adoption of GSHPs in the residential sector can dramatically influence Canada’s emission profile within the context of the Kyoto Protocol. To illustrate the potential of this technology, it is valuable to examine its total emission savings potential. Based on the average home, if by 2010 all homes in Canada were to use GSHP in place of conventional heating and cooling technologies, approximately 30 Mt of CO2 emissions could be averted. Canada’s policy-asusual emissions projections indicate that emissions in 2010 will be in the range of 765 Mt, while the Kyoto protocol target is 199 Mt lower than this amount (Natural Resources Canada  58  1999). Emission reductions of 30 Mt represent 15 percent of the discrepancy between our actual and pledged emission levels – reductions of this magnitude are achievable through the use of GSHPs in the residential sector alone. While complete market penetration of GSHP by 2010 does not lie within the realm of possible scenarios, this scenario illustrates the extent of the currently unrealized GSHP potential.  4.1 Recommendations Due to GSHPs position in the technology adoption continuum, it is imperative to design a policy structure that will effectively integrate GSHPs into the market while ensuring this technology reaches its maximum potential for environmental effectiveness. Recommendations are listed below.  4.1.1 Fuel and Region Specific Benefits This analysis reveals conventional fuel sources are not the most effective way of meeting residential heating and cooling needs. The magnitude of environmental and fiscal benefits of GSHP is substantial, but varies with location. As outlined in detail in the thesis, factors such as system type and efficiency, CO2 intensity of delivered electricity, COP, heating/cooling load, and heating load factor into the extent to which GSHPs are advantageous over conventional systems. Through an understanding of the different environmental and financial impacts of alternative fuel sources, decision makers can provide policy direction that will encourage the most suitable heating and cooling technology.  4.1.2 Overcoming Initial Investment Requirements Given that the payback periods of GSHP systems are shorter than their lifespan, the systems start generating a steady stream of ‘income’ (relative to conventional heating technologies). Since that there is a large net financial gain by the end of a GSHP system’s life, the long-term costs of carbon mitigation are negative. This establishes GSHP to be an attractive investment option within the continuum of long-term emission reduction strategies. It is imperative for governments to recognize that reducing heating and cooling energy needs through GSHP is an easily accessible and cost-effective means to help realize GHG reduction commitments. It is also essential that policies be designed to target the reduction of the initial capital  59  investment in order to allow for the long-term cost savings to be realized. Furthermore, another beneficial step would be for banks and credit unions to factor in the cost of GSHP systems into mortgages and account for reduced heating and cooling costs in monthly payment calculations (Harris 2004).  4.1.3 Building Codes and City Planning City planning and building departments should require all new development proposals to include GSHP, except where geological considerations are not suitable for GSHP (Harris 2004). The advantages of GSHP are site-specific, but mandating that GSHP be considered alongside other heating and cooling options prior to approval of projects will result in increased adoption of environmentally sound building technologies.  4.1.4 Uniform Standards As the industry experiences further growth, it is essential that professional standards are met and continuously refined. Newly formed and potentially inexperienced companies need to provide design and installation of systems that adhere to best practices so that the reputation of the industry remains in good standing. In the U.S., GSHP regulations show no uniformity between individual states – most states simply apply their water well regulations to open loop systems, and the status of regulations for closed loop systems are currently disorganized (De Braven 1998). Many industry professionals call for non-prescriptive, but firm international standards that provide industry with minimum requirements for materials and installation procedures.  4.2 Environmental Considerations Overall, GSHPs offer tremendous environmental benefits, but they also have potential for compromising these through poor design or installation practices. Extracting water purely for its thermal properties and disposing of the aquifer water as “waste”, does not meet the standards for best practice.  While groundwater extraction by a single family home is unlikely to overwhelm the recharge rate, the compounding effect of multiple residential installations withdrawing and discarding 60  water from one aquifer could yield to aquifer depletion. Land subsidence due to large amounts of fluid withdrawal from aquifers has occurred in numerous regions throughout the world and has been extensively investigated both quantitatively and qualitatively in previous studies (Chen et al. 2002).  For instance, in the United States several aquifers are being mined at a rate far exceeding the rate of natural recharge. Similar overuse situations exist in many western aquifers - in British Columbia, overdrafting is causing significant water user conflicts, land subsidence, and even saltwater intrusion in some of the coastal areas. (Robar and Brentwood 2004).  Groundwater disposal as waste after GSHP use compromises this technology’s environmental performance (and public perception thereof). Policies reflecting responsible groundwater management should ensure that renegade GSHP installers do not have the opportunity to compromise the good environmental standing of this technology.  4.2.1 Importance of Maintaining Thermal Equilibrium If improperly installed, GSHP systems are associated with adverse consequences beyond water shortage concerns. Disruption of thermal equilibrium is a complication that occurs if the rate of heat extraction exceeds the thermal conductivity and heat transport mechanism associated with water flow (i.e. advection). In general, groundwater flow mitigates some of the effects of heat extraction and is therefore beneficial to the thermal performance of GSHPs, since water flow has a moderating effect on borehole temperatures in both heating and cooling modes (Diao, Li, and Fang 2004). However, the single most important factor that determines the whether an aquifer remains in equilibrium is the net heat removed form or injected into the aquifer; secondary factors include well and heat pump design, and thermal and geological properties of the aquifer (Warner and Algan 1984).  Although concerns thermal depletion generally apply to industrial-size installations, residential projects with a high density of thermal extraction should utilize evaluation techniques such as those commonly applied to maintaining thermal equilibrium in ATES applications (Aquifer Thermal Energy Storage). These include numerically based models  61  with input data characterizing system geometry, the thermal characteristics of the ground and pipe, and undisturbed ground temperature during the operation of the system (Florides and Kalogirou 2006).  The combination of GSHP with other alternative technologies such as passive solar heating offers promising solutions to high-density GSHP applications without degrading the thermal integrity of the subsurface or aquifers.  4.3 Comments on Strengths and Weaknesses of the Thesis 4.3.1 Strengths of Thesis -  The applied multidisciplinary approaches are capable of capturing the current state of this technology more accurately than a unidimensional analysis  -  This thesis developed models that can be used to assess the suitability of GSHP in Canada, the US, and cold-climate countries worldwide  -  It exposes how regional fuel choices and varying price structures affect the benefits of GSHP  -  Elements of this research were designed with the intent of enabling a wide audience (homeowners, policymakers, and industry) to access technical information about GSHP  -  It introduces accountability into inter-provincial electricity trade by documenting how embodied emissions affect the environmental impact residential emissions  4.3.2 Weaknesses of Thesis -  The results in Chapter 2 are dependent on the accuracy of databases upon which the heating load and emission calculations are based on  -  The pragmatic, yet theoretical nature of this assessment cannot replace in situ assessments  -  The extent to which the findings presented in this thesis represent real-life performance is heavily reliant on design and installation quality  4.4 Future Research 4.4.1 In-Depth Assessment of Multi-unit and Larger Homes GSHP installations in multi-unit and commercial/institutional buildings currently provide the largest financial and environmental benefits. Studies quantifying these benefits would help us gain understanding of the full potential of GSHP in Canada and the United States. Findings 62  presented in this research show that within single-detached residential housing market, GSHP applications are particularly suitable for larger homes. However, the author does not in any way endorse the construction of above-average sized homes due to their exceptional suitability for GSHP. This study attempts to point out the necessity for these homes to reduce their emissions through technologies including GSHP. Greater focus needs to above-average sized homes in research design on residential energy consumption can more effectively target emissions resulting from these houses. Valuable research would include identification of effective regulatory and market mechanisms that would result in emission reduction strategies for the residential market. Possibilities include: -  Mandate that homes above 3000 sqft adopt alternative energy sources to meet their additional energy needs  -  Set provincial residential emission standards on a per home basis  -  Delineate limits for residential luxury emissions provide high financial disincentives for not adopting green technologies to meet superfluous demand  4.4.2 Drilling Costs in Major Metropolitan Areas Drilling costs are often the most expensive portion of a GSHP project. Developing maps of approximate drilling costs (for vertically configured loop systems) would greatly assist in preliminary estimates used to identify GSHP potential within metropolitan areas.  4.4.3 Return on Investment vs. Payback Period GSHPs need to be assessed in greater financial detail when it comes to achieving return on investment after the capital costs have been paid off. This approach could redefine the way building industry and investors respond to perceived financial risks and incentives of GSHP.  4.4.4 Incorporate costs of GHG Mitigation Conducting a study that showcases the true costs of heating and cooling technologies would be valuable. This could be achieved if the GHG mitigation costs are incorporated into the initial costs of each technology. Heating and cooling technologies are associated with varying emission levels, and therefore each fuel choice places a different financial burden on the government responsible for reducing these emissions. A sensitivity analysis with respect to various GHG price structures could be instrumental in exposing costs of these externalities.  63  4.5 Conclusion Climate change mitigation demands an unprecedented effort in curbing energy consumption and the associated GHG emissions. Currently 29 percent of all greenhouse gas emissions in Canada result from space and water heating of residential and commercial areas; the majority of this energy is derived from the combustion of non-renewable energy sources (Natural Resources Canada 2006). This trend occurs worldwide in climates similar to those of Canada. For example heating of buildings consumes about 25 percent of the primary energy used in the EU (Zogou and Stamatelos 1998).  This purpose of this thesis is to present information on the environmental repercussions of meeting residential energy demands, and finding the most ideal fuel choice solutions. Presently, our residential energy technology choices and policies are not compatible with our articulated goals of emission reductions. Canada is in need of a mechanism that will serve as a tool that initiates realignment of our actions towards our nationally embraced environmental values reflected in a commitment to climate change mitigation. Therefore, the introduction of emission levels as crucial assessment criteria into the selection of residential energy technologies is proposed.  64  4.6 References Chen, C., S. Pei and J. Jiao. 2003. Land subsidence caused by groundwater exploitation in Suzhou City, China, Hydrogeology Journal 11(2): 275-287. Chiasson, A. D. 1999. Advances in modeling of ground-source heat pump systems. M.Sc. Thesis, Oklahoma State University. De Braven, K. 1998. Survey of geothermal heat pump regulations in the United States. Proceedings of the Ecostock International Geothermal Conference. Pomona, NJ: March 1998. Diao, N., Q. Li and Z. Fang. 2004. Heat transfer in ground heat exchangers with groundwater advection. International Journal of Thermal Sciences 43: 1203-1211. Florides, G. and S. Kalogirou. 2007. Ground heat exchangers - A review of systems, models and applications. Renewable Energy, article in press, doi:10.1016/j.renene.2006.12.014. Harris, N. 2004. Groundsource Heat. British Columbia Sustainable Energy Association. http://www.bcsea.org/sustainableenergy/groundsourceheat.asp, accessed July 2007. Lund, J. W., R. G. Bloomquist, T. L. Boyd and J. Rener. 2005. The United States of America country update, Proceedings of the World Geothermal Congress 2005. International Geothermal Association. Natural Resources Canada. 2006. Secondary energy use and GHG emissions by end-use. Office of Energy Efficiency. http://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/tablestrends2/res_ca_2_e_3.cfm?attr= 0, accessed July 2007 Robar, S. F. and M. Brentwood. 2004. Managing common pool groundwater resources: An international perspective. Westport, CT: Praeger Publishers. Warner, D. L. and U. Algan. 1984. Thermal impact of residential ground-water heat pumps. Ground Water 22(1): 6-12. Zogou, O. and A. Stamatelos. 1998. Effect of climatic conditions on the design optimization of heat pump systems for space heating and cooling. Energy conversion and management 39(7): 609-22.  65  APPENDIX A: GHG INTENSITIES Detailed electricity GHG intensities can be found in the Government of Canada Greenhouse Gas Inventory (2006). Using electricity trade data from the National Energy Board (2005), we found that the amount of electricity trade between provinces and the United States affects a region’s CO2 intensity. Incorporating these data are essential, as GHG electricity import intensities have an effect on the emissions associated with heat pump operation. We compare three possible methods of estimating a region’s comprehensive emissions intensity (Table A1). Emissions associated with heat pump operation in each province depend on whether we focus on electricity carbon intensity of 1) generated electricity and net imports, 2) the marginal units of electricity imported, or 3) the average carbon intensity of local generation and imports.  Table A-1. Emission intensities of generated and imported electricity. Provincial Generation Only (tCO2eq /GWh)  (1) - Generation and  (2) - Net Imports Only Emission Intensity (If Imports > Exports) (tCO2eq /GWh) (tCO2eq /GWh) Newfoundland 21 21 21 PEI 1,120 458 433 Nova Scotia 759 759 759 New Brunswick 433 433 433 Québec 8 17 66 Ontario 222 222 222 Manitoba 31 31 31 Saskatchewan 840 838 693 Alberta 861 857 585 British Columbia 24 35 507 Territories 249 249 249 Shaded cells indicate regions where significant change in intensity occurs (Imports – Exports)  (3) - Generation and All Imports (tCO2eq /GWh) 21 461 751 435 28 229 133 833 844 82 249  Method 1 (Table A-1) accounts for only the amount of net imported electricity. In a scenario where British Columbia (BC) and Alberta engage in electricity trade, and BC imports exceed those of Alberta, the carbon intensity of the only the net importer (BC) is affected. This approach is consistently used when calculating electricity related emissions in Prince Edward Island (PEI). This province imports 96 percent of its electricity from New Brunswick, while only 4 percent is internally generated. Its internal electricity intensity is therefore extremely 66  skewed, and is not representative of the emissions resulting from electricity use in PEI. Using this approach, a given province can buy and sell carbon-intensive electricity, but its GHG intensity is affected by these transactions only if imports exceed exports (if exports exceed imports, then the carbon intensity remains the same). The underlying assumption for Method 1 is that internally generated electricity is used up within the province, whereas purchased high carbon electricity is then sold. In other words, a province that generates clean electricity and purchases coal-generated electricity would then not be selling low-carbon electricity, but would be exporting the electricity and embodied carbon emissions that this province purchases. This method is not adopted in the paper because the underlying assumptions are not satisfied in real-life electricity use and trade transactions.  Method 2 illustrates an approach where only the emissions embodied in marginal electricity imports are used to calculate the emissions associated with GSHP use. Using this methodology, PEI’s electricity carbon intensity, for example, would be equivalent to that of New Brunswick, since an additional heat pump unit would increase the requirement for imported electricity. Assumptions underlying this method include that provinces will continue to remain net importers of electricity. This method assumes that all new GSHP installations require electricity imports, and therefore, for the purposes of assessing emissions associated with GSHP operation, the carbon content of the imported electricity is used.  Method 3 combines the carbon intensity generated internally with the emissions embodied in electricity imports to produce an overall emissions intensity. Method 3 is used in this article for GHG-related calculations. The values are representative of 2004 emissions, however, new capacity expansions in each region may not follow past patterns, as coal plants are planned in BC while wind and nuclear flourish in Ontario.  A sensitivity analysis of the three methods and their effect on the overall GHG reductions for a 140m2 home is provided in Table A-2, while Table A-3 outlines the calculations of Method 3. In Table A2 contains an additional column (Gen) illustrates GHG reductions of GSHPs if only internally generated electricity was used.  67  Table A-2. Sensitivity analysis of 3 GHG intensity methods. Emission reductions of GSHP relative to Natural Gas (t)  Electricity (t)  Heating Oil (t)  Method Gen (1) (2) (3) Gen (1) (2) (3) Gen (1) (2) (3) Newfoundland 4.0 4.0 4.0 4.0 0.3 0.3 0.3 0.3 6.2 6.2 6.2 6.2 PEI -0.3 1.8 1.9 1.8 14.6 6.0 5.6 6.0 0.5 3.2 3.4 3.2 Nova Scotia 0.9 0.9 0.9 0.9 9.8 9.8 9.8 9.7 2.0 2.0 2.0 2.1 New Brunswick 2.6 2.6 2.6 2.6 7.6 7.6 7.6 7.6 4.5 4.5 4.5 4.5 Québec 5.0 5.0 4.8 4.9 0.2 0.3 1.3 0.6 7.7 7.7 7.4 7.6 Ontario 3.5 3.5 3.5 3.5 3.9 3.9 3.9 4.0 5.6 5.6 5.6 5.6 Manitoba 4.5 4.5 4.5 4.2 0.6 0.6 0.6 1.8 6.9 6.9 6.9 6.5 Saskatchewan 1.0 1.0 1.7 1.1 16.2 16.2 13.4 16.1 2.6 2.7 3.5 2.7 Alberta 1.1 1.1 2.9 1.2 22.8 22.7 15.5 22.3 3.3 3.3 5.6 3.4 British Columbia 3.3 3.3 1.7 3.1 0.3 0.5 6.7 1.1 5.1 5.0 3.1 4.8 Territories 2.4 2.4 2.4 2.4 3.1 3.1 3.1 3.1 3.9 3.9 3.9 3.9 This analysis illustrates the differences in emission reduction potential the intensity of generation, and 3 calculation methods, expressed in tons of CO2equiv. Note that PEI’s electricity internally generated electricity accounts for 4% of total energy consumption, therefore PEI’s electricity intensity is generally not used for GHG emission calculations.  68  Table A-3. Electricity GHG intensities adjusted to include imported electricity26  Newfoundland PEI Nova Scotia  Emission Intensity (t/GWh) 21 1,120  Generation (GWh) 43,599 49  759  11,624  433  19,295  8  174,951  222  155,847  31  32,501  840  17,488  861  60,443  24 249  61,951 1,049  New Brunswick  Québec  Ontario  Manitoba  Saskatchewan  Alberta  British Columbia Territories  Import Source Québec New Brunswick New Brunswick US Total Québec US Nova Scotia Total Ontario US New Brunswick Newfoundland Total Manitoba US Québec Total Saskatchewan US Ontario Total Alberta US Manitoba Total British Columbia US Saskatchewan Total US Alberta Total N/A  26  Imports (GWh) 16 1,124 268 40 308 66 44 216 326 9,086 3,459 1,248 29,750 43,543 1,539 7,887 3,209 12,635 190 2,555 84 2,829 328 1,083 326 1,737 1,145 367 641 2,153 7,000 951 7,951 N/A  Total Energy (GWh) 43,615 1,173  Adjusted Intensity (t/GWh) 21 464  11,932  751  19,621  433  218,494  31  168,482  274  35,330  132  19,225  833  62,596  891  69,902 1,041  80 255  Emissions embodied in electricity imported from the United States were NERC region averages, as this was the method recommended by the BC Integrated Electricity Planning Committee (2005).  69  Electricity trade in North America occurs between interconnected regions that as identified by NERC, the North American Electric Reliability Corporation (Figure A-1). Canadian provinces are affiliated with the following reliability councils: -  British Columbia and Alberta – Western Electricity Coordinating Council (WECC)  -  Saskatchewan and Manitoba – Midwest Reliability Organization (MRO)  -  Eastern provinces - Northeast Power Coordinating Council (NPCC)  Figure A-1. Electricity Reliability Council Regions  Emissions intensities used in this study for electricity imports from WECC, MRO and NPCC areas are listed in Table A-4.  Table A-4. NERC emission intensities. Region Total Generation (GWh) Total Emissions (t) Emission Intensity (t/GWh)  WECC  MRO  NPCC  667,200  179,000  254,600  338,417,000  164,557,000  119,864,000  507  919  471  Source: Environmental Protection Agency (2007)  70  APPENDIX B: COEFFICIENT OF PERFORMANCE Table B-1. COP influence on annual operating savings relative to natural gas. Annual Operating Savings ($) Coefficient of Performance COP 3 COP 3.5 COP 4 COP 4.5 COP 5 New Brunswick 700 800 900 900 1,000 Québec 1,400 1,400 1,500 1,500 1,600 Ontario 800 800 900 900 900 Manitoba 900 800 800 900 900 Saskatchewan 100 200 300 400 400 Alberta 0 200 300 400 400 British Columbia 500 600 600 600 600 Note: Average sized home, heating requirements/sqft outlined in paper, May 2007 prices. Regions where natural gas is not commonly used are not included.  Table B-2. COP influence on annual operating savings relative to electric heating. Annual Operating Savings ($) at Coefficient of Performance COP 3 COP 3.5 COP 4 COP 4.5 Newfoundland 1,400 1,500 1,600 1,700 PEI 1,200 1,300 1,400 1,500 Nova Scotia 1,300 1,400 1,500 1,500 New Brunswick 1,400 1,600 1,600 1,700 Québec 1,400 1,500 1,500 1,500 Ontario 1,000 1,000 1,100 1,100 Manitoba 1,000 1,100 1,100 1,200 Saskatchewan 1,700 1,800 1,900 2,000 Alberta 2,200 2,300 2,500 2,600 British Columbia 800 800 900 900 Territories 1,800 1,900 2,000 2,100 Average sized home, heating requirements/sqft outlined in paper, May 2007 prices  COP 5 1,700 1,500 1,600 1,800 1,600 1,200 1,200 2,000 2,600 900 2,100  Table B-3. COP influence on annual operating savings relative to heating oil. Annual Operating Savings ($) at Coefficient of Performance COP 3 COP 3.5 COP 4 COP 4.5 COP 5 Newfoundland 1,000 1,100 1,100 1,100 1,200 PEI 400 500 500 600 600 Nova Scotia 800 900 1,000 1,000 1,100 New Brunswick 1,000 1,100 1,200 1,300 1,400 Québec 1,500 1,600 1,700 1,700 1,800 Ontario 1,400 1,500 1,500 1,600 1,600 Territories 400 500 600 700 800 Average sized home, heating requirements/sqft outlined in paper, May 2007 prices. Regions where heating oil is not commonly used are not included.  71  APPENDIX C: OPERATIONAL SAVINGS Table C-1. Natural gas cost comparison matrix - fuel price increases and annual savings. Operating savings of GSHP at various electricity escalation rates ($) Natural Gas Cost Escalation  0%  1%  2%  3%  0% 1,000 900 800 1% 1,100 1,100 1,000 2% 1,300 1,300 1,200 3% 1,500 1,500 1,400 Québec 0% 1,600 1,500 1,500 1% 1,800 1,700 1,700 2% 2,000 2,000 1,900 3% 2,300 2,200 2,200 Ontario 0% 900 900 800 1% 1,100 1,000 1,000 2% 1,200 1,200 1,100 3% 1,400 1,300 1,300 Manitoba 0% 900 900 800 1% 1,000 1,000 1,000 2% 1,200 1,100 1,100 3% 1,300 1,300 1,200 Saskatchewan 0% 400 400 300 1% 600 500 400 2% 700 600 500 3% 800 800 700 Alberta 0% 400 400 300 1% 500 500 400 2% 700 600 500 3% 800 700 700 British 0% 700 600 600 Columbia 1% 800 700 700 2% 900 800 800 3% 1,000 1,000 900 Average sized home, heating requirements/sqft outlined in paper, May 2007 prices.  700 900 1,100 1,300 1,400 1,600 1,800 2,100 800 900 1,100 1,200 800 900 1,000 1,200 200 300 500 600 200 300 400 600 600 700 800 900  New Brunswick  72  Table C-2. Electric heat cost comparison matrix - fuel price increases and annual savings. Operating savings of GSHP at various electricity escalation rates ($) 0%  1%  2%  Newfoundland 1,700 1,900 2,100 PEI 1,500 1,700 1,800 Nova Scotia 1,600 1,800 1,900 New Brunswick 1,800 1,900 2,100 Québec 1,600 1,700 1,900 Ontario 1,100 1,300 1,400 Manitoba 1,200 1,300 1,500 Saskatchewan 2,000 2,300 2,500 Alberta 2,600 2,900 3,200 British Columbia 900 1,000 1,100 Territories 2,100 2,400 2,600 Note: Average sized home, heating requirements/sqft outlined in paper, May 2007 prices.  73  3% 2,300 2,000 2,100 2,400 2,100 1,500 1,600 2,700 3,500 1,200 2,900  Table C-3. Heating oil cost comparison matrix - fuel price increases and annual savings. Operating savings of GSHP at various electricity escalation rates ($) Heating Oil Cost Escalation  0%  1%  2%  3%  Newfoundland  0% 1% 2% 3%  1,200 1,400 1,600 1,900  1,200 1,400 1,600 1,800  1,100 1,300 1,500 1,700  1,000 1,200 1,400 1,700  PEI  0% 1% 2% 3%  600 800 900 1,100  600 700 800 1,000  500 600 800 900  400 500 700 800  Nova Scotia  0% 1% 2% 3%  1,100 1,300 1,400 1,600  1,000 1,200 1,400 1,600  1,000 1,100 1,300 1,500  900 1,100 1,300 1,500  New Brunswick  0% 1,400 1,300 1,200 1% 1,600 1,500 1,400 2% 1,800 1,700 1,700 3% 2,100 2,000 1,900 Québec 0% 1,800 1,700 1,700 1% 2,000 1,900 1,900 2% 2,200 2,200 2,200 3% 2,500 2,500 2,400 Ontario 0% 1,600 1,500 1,500 1% 1,800 1,800 1,700 2% 2,000 2,000 1,900 3% 2,300 2,200 2,200 Territories 0% 800 700 600 1% 900 800 700 2% 1,100 1,000 900 3% 1,300 1,200 1,100 Note: Average sized home, heating requirements/sqft outlined in paper, May 2007 prices.  74  1,100 1,300 1,600 1,800 1,600 1,800 2,100 2,400 1,400 1,700 1,900 2,100 500 600 800 1,000  APPENDIX D: QUANTITYING SAVINGS IN THE U.S. The US Residential Energy Consumption Survey (RECS) contains data from a sample of approximately 5,000 households that are statistically selected to represent the 107 million households in the United States at the time of the survey (the most recently available data is from the RECS survey conducted in 2001). Using this database, it is possible to calculate the average energy requirements of various regions in the United States. This analysis focuses on single attached and single detached homes, since these dwelling types comprise 76% of US households (US Census Bureau 2005). The database is divided into 3 levels of categories according to 1) census regions, 2) Heating Degree Day (HDD) clusters, and 3) home size.  The first step involves separating data into four regions using U.S. Census categorization (West, Midwest, South and Northeast). The dataset is then subdivided into climate clusters containing samples of specific Heating Degree Day ranges (1000-2000 HDD, 2000-3000 HDD, etc). Due to climactic variations within the geographical layout of census divisions, some regions do not contain all possible HDD ranges. The Northeast Census Region, for example, only contains states with annual temperatures above 4000 HDD. Within the database, specific household locations are masked to protect the privacy of surveyed households, and only the census region and division of any given household are provided. The five largest states - Florida, Texas, New York State, California and Alaska - are identified in the survey and these states are analyzed separately.  In order to estimate energy used for space and water heating for a specific home size, the household categories are divided into a final subset by home area (ie. 3000-4000sqft, 40005000sqft, etc.). For each subset, space and water heating and air conditioning energy consumption are analyzed separately. Outliers above the 95 percentile are removed from the dataset.  We contrast the savings of GSHP relative to a 90% efficient natural gas system, a 98% efficient electric system, as well as a heating oil furnace operating at 85% efficiency. To obtain net GHG emission reductions, GSHP emissions are simply subtracted from the emissions of conventional heating systems. The CO2 intensity of electricity was calculated for each state from the Emissions and Generation Resource Integrated Database (U.S. 75  Environmental Protection Agency 2007) and is available in Table D-1. It is important to note that emission reporting to the EPA is voluntary, and that emissions associated with electricity production may not be complete.  To calculate cost savings we use current (May 2007) year-to-date price data was obtained from the U.S. Energy Information Administration (2007a; 2007b; 2007c). In states where the use of heating oil is minimal (ie. Nevada - 1%, Illinois - 1%, etc) we use the national price average to obtain an estimate of heating oil costs.  76  Table D-1. CO2 intensity of electricity in the United States eGRID 2004 Alaska Alabama Arkansas Arizona California Colorado Connecticut Delaware Florida Georgia Hawaii Iowa Idaho Illinois Indiana Kansas Kentucky Louisiana Massachusetts Maryland Maine Michigan Minnesota Missouri Mississippi Montana North Carolina North Dakota Nebraska New Hampshire New Jersey New Mexico Nevada New York Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Virginia Vermont Washington Wisconsin West Virginia Wyoming  Total Generation (GWh) 6,527 137,328 51,825 98,898 192,810 47,865 32,563 7,503 215,131 126,725 11,413 43,240 10,734 191,864 127,362 46,781 94,530 91,692 46,891 52,053 18,864 118,374 52,381 87,222 40,337 26,776 126,186 31,342 32,009 23,893 55,680 32,940 37,553 137,437 148,076 60,641 51,526 214,662 4,838 97,834 7,510 97,578 380,659 38,212 76,379 5,470 101,548 60,543 90,026 44,807  Total Emissions (Tons) 3,610,850 89,170,715 33,174,715 60,271,433 67,521,916 47,532,473 12,279,200 6,766,288 145,001,520 87,968,286 9,443,135 42,013,951 772,582 110,778,055 133,604,381 43,753,706 96,943,071 55,070,532 28,747,714 33,653,280 7,279,799 83,611,983 41,578,073 82,049,736 28,416,834 21,058,639 76,835,963 37,395,379 24,055,889 9,309,461 19,844,217 32,808,310 29,530,258 62,338,427 131,711,020 52,334,635 11,742,575 130,537,293 2,590,683 44,750,212 4,563,840 61,767,470 280,096,255 40,520,255 46,229,502 18,978 18,275,216 51,852,709 89,482,632 51,023,824  77  Emission Intensity (t/GWh) 553 649 640 609 350 993 377 902 674 694 827 972 72 577 1,049 935 1,026 601 613 647 386 706 794 941 704 786 609 1,193 752 390 356 996 786 454 889 863 228 608 535 457 608 633 736 1,060 605 3 180 856 994 1139  References Environment Canada. 2006. National Inventory Report, 1990-2004 – Greenhouse gas sources and sinks in Canada. Annex 9: Electricity intensity tables. http://www.ec.gc.ca/pdb/ghg/inventory_report/2004_report/ann9_e.cfm, accessed March 2007. Integrated Electricity Planning Committee. 2005. Information Sheet #5 - Characterizing environmental attributes of non-firm market imports. BC Hydro provincial electricity planning committee meeting 5. July 12-14, 2005. http://www.bchydro.com/rx_files/info/info25853.pdf, accessed April 2006. National Energy Board. 2005. Outlook for Electricity Markets 2005-2006: An energy market Assessment. http://www.nebone.gc.ca/energy/EnergyReports/EMAElectricityMarkets2005_2006_e.pdf, accessed November 2006. North American Electric Reliability Corporation. 2007. Regional reliability councils. North American Electric Reliability Corporation. http://www.nerc.com/regional/ accessed February 2007. U.S. Census Bureau. 2005. American Community Survey. B25024. http://factfinder.census.gov/servlet/DTTable?_bm=y&-geo_id=01000US&ds_name=ACS_2005_EST_G00_&-redoLog=false&mt_name=ACS_2005_EST_G2000_B25024 Accessed May 2007. U.S. Energy Information Administration. 2007a. Average retail price of electricity to ultimate customer by end-use sector, by state. http://tonto.eia.doe.gov/dnav/pet/pet_pri_wfr_a_EPD2F_PRS_cpgal_w.htm Accessed May 2007. U.S. Energy Information Administration. 2007b. Natural gas prices. http://tonto.eia.doe.gov/dnav/pet/pet_pri_wfr_a_EPD2F_PRS_cpgal_w.htm Accessed May 2007. U.S. Energy Information Administration. 2007c. Weekly heating oil and propane prices. http://tonto.eia.doe.gov/dnav/pet/pet_pri_wfr_a_EPD2F_PRS_cpgal_w.htm Accessed May 2007. U.S. Energy Information Administration. 2001. Residential Energy Consumption Survey. http://www.eia.doe.gov/emeu/recs/, accessed April 2007. U.S. Environmental Protection Agency. 2007. Emissions & generation resource integrated database, http://www.epa.gov/cleanenergy/egrid/index.htm, accessed May 2007.  78  

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