GEOTHERMAL HEAT PUMP SYSTEMS

Market research analysis for residential homes in Alberta

By: Stephen Hanus

Course: Buec 560 Professor: Dr. J. Doucet Date: February 20, 2004

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Table of Contents

Executive Summary .............................................................................................................................. i 1.0 Introduction .................................................................................................................................... 1 2.0 Primary Objectives......................................................................................................................... 1 3.0 Geothermal Energy Profile............................................................................................................ 2

3.1 Background ................................................................................................................................ 2 3.2 Technology................................................................................................................................. 2

4.0 Market Feasibility Analysis in Alberta ........................................................................................ 5 4.1 Target Market Identification ...................................................................................................... 5 4.2 Market Trends ............................................................................................................................ 6

4.2.1 Natural Gas Prices............................................................................................................... 6 4.2.2 Alberta Economy ................................................................................................................ 6 4.2.3 Influence of Market Trends on Geothermal Heat Pump Adoption..................................... 7

4.3 Sustainable Differential Advantage............................................................................................ 8 4.4 Cost-Benefit Analysis................................................................................................................. 9

4.4.1 Installation and Maintenance Expenses .............................................................................. 9 4.4.2 Expected Reduction of Energy Costs ............................................................................... 10 4.4.3 Estimated Cost Recovery Period ..................................................................................... 10 4.4.4 Case Based Sensitivity Analysis....................................................................................... 11

4.5 SWOT Analysis........................................................................................................................ 13 4.6 Existing Retail Suppliers in Alberta ......................................................................................... 15

5.0 Green Power Legislations and Policies....................................................................................... 16 6.0 Discussion and Conclusion .......................................................................................................... 17 7.0 References ..................................................................................................................................... 19 8.0 Appendices .................................................................................................................................... 21

Appendix 1. Natural gas utility bills for a typical Alberta home (2001-2003). ............................. 22 Appendix 2. Cost recovery period using geothermal a heat pump system in a typical Alberta

Home. .............................................................................................................................. 23 Appendix 3. Geothermal heat pump companies in Canada ........................................................... 24 Appendix 4. Distribution of overall (A) and natural gas (B) energy consumption in Canada....... 29

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List of Tables

Table 1. Alberta economic overview in comparison to the Canadian Economy. ............................ 7 Table 2. Cost comparison of installation and maintenance between traditional .............................. 9 Table 3. Cost saving of earth energy heating vs. electrical heating across Canada. ..................... 10 Table 4. Annual average natural gas utility expenses for a typical Alberta home (2001-2003). ... 12

List of Figures

Figure 1. Horizontal closed loop (A) and vertical open loop (B) heat transfer systems. ................. 3 Figure 2. Summer (A) and Winter (B) applications of geothermal energy technology in residential

homes................................................................................................................................. 4 Figure 3. Equipment required for a ground-source heat pump., ....................................................... 5 Figure 4. Geothermal heat pump market segmentation. .................................................................. 5

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Executive Summary

Energy sources other than carbon-based fuels are currently available, but the question remains whether or not these alternative energy sources are economically feasible for broad scale implementation. Geothermal energy is considered one of the most environmentally benign sources of energy available, and is currently being used in a wide variety of markets and geographic areas. Utilization of geothermal energy occurs in several different forms, the most well known form being electrical generation using subterranean superheated steam. The focus of this study, however, is on geothermal heat pump (GHP) technology. This form of geothermal energy employs subterranean fluid-filled pipes to transfer and condense heat from area to another. Geothermal heat pumps have the benefit of heating or cooling buildings, as well as providing hot water. Currently in Canada, there are more than 250 GHP companies and 30,000 installations in residential, commercial, institutional and industrial buildings. Given that in Alberta over 38,000 housing units were built in 2003 alone, there is considerable potential for market growth, and could result in a considerable reduction of emissions typically associated with fossil fuel combustion. The use of geothermal energy is estimated to reduce carbon dioxide emissions by 22 million tons a year. A study across several Canadian cities identified substantial savings in annual energy expenditures for residential homes. For example, in Winnipeg the average annual cost using geothermal energy was $610 in comparison to $1295 per year using electric furnaces. Retailers of geothermal heat pumps claim that buildings using this technology can completely eliminate the need for conventional furnaces. Cost recovery from installation can be less than five years; however, initial installation costs and low energy prices are likely primary cost drivers inhibiting the expansion of geothermal heat pumps in the home heating market. Although Alberta is a net exporter of fossil fuels, there is a need to explore alternative sources of energy in order to address long-term sustainability issues and international agreements, such as the Kyoto Protocol. The primary objective of this research project is to explore the feasibility of GHP implementation in the residential homes market of Alberta. Along with a research summary of geothermal energy and technology, a market feasibility analysis will be presented. This is based on existing information presented in the literature, as well as a sensitivity analysis of cost savings and equipment payback period using natural gas consumption data from a typical Alberta home. Potential amendments to existing provincial government policy pertaining to energy consumption and sustainability in Alberta will also be identified.

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1.0 Introduction

Energy sources other than carbon-based fuels are currently available, but the question remains

whether or not these alternative energy sources are economically feasible for broad scale

implementation. Several different processes can utilize geothermal energy, and in each case it is

considered one of the most environmentally benign sources of energy available. Geothermal heat

pump (GHP) systems are one source of harnessing renewable earth energy, and will be the focus of

this study. Currently in Canada, more than 30,000 installations have been established in residential,

commercial, institutional and industrial buildings.1 Given that over 38,000 housing units were built

in Alberta in 2003 alone2 and one-quarter of the total energy consumption in Canada is allocated

toward space and water heating or cooling,3 there is considerable market growth potential for

geothermal heat pumps. This is compounded by the relatively large increase in natural gas prices

within the last 10 years.

2.0 Primary Objectives

Although Alberta is a net exporter of fossil fuels, there is a need to explore alternative sources of

energy in order to address long-term sustainability issues and international fossil fuel emission

agreements, such as the Kyoto Protocol. The primary objective of this research project is to explore

the feasibility of GHP technology in residential homes of Alberta. Along with a research summary

of geothermal energy and heat pump technology, a market feasibility analysis will be presented.

Potential amendments to existing provincial government policy pertaining to energy consumption

and sustainability in Alberta will also be identified.

1 Natural Resources Canada. 2004. 2 Statistics Canada. 2004. 3 Natural Resources Canada. 2004.

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3.0 Geothermal Energy Profile

3.1 Background

Energy can be obtained from the earth from four primary means.4 First, GHP systems transfer and

condense heat from the earth into building via fluid filled pipes. Heat pump technology was first

developed at the beginning of the 1900’s, and is essentially the based on the reverse application of

refrigeration systems. The specific application of heat pumps in buildings has been present for over

20 years, and has been installed in over 30,000 buildings in Canada5. In the US, over 500,000

commercial, residential, and public buildings have been installed with geothermal heat pumps

representing approximately 4,000 MW of energy.6 The second form of geothermal energy is similar

to the first system, but the pipes used to transfer energy are situated within wells or natural

waterbodies. Third, steam or hot water found in the earth can be extracted at high pressure to power

electricity generating turbines. This is the most well known form of geothermal energy, and is

currently established along tectonic fault lines in over 60 countries. The world output of geothermal

electricity generation is approximately 51,886 GW, 86% of which is represented by the US,

Philippines, Mexico, Italy, Indonesia, and Japan.7 The final form of geothermal energy utilization

involves the piping of steam or hot water from subterranean sources into buildings to provide heat.

3.2 Technology

Heat transfer technology utilizes heat stored within the earth by means of high-density polyethylene

pipes, called a loop. The loop configuration can vary depending on the system employed (Figure 1):

the loop can be installed either horizontally or vertically; it can be either an open or closed system;

and the loop can be either subterranean or submerged in a body of water, such as a lake or well.

4 Natural Resources Canada. 2004. 5 Ibid. 6 US Department of Energy. 2004. 7 World Energy Council. 2003.

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Horizontal loops tend to be installed two and a half meters below ground. The length of pipe

required depends entirely on the size of building and the rate of heat loss, but generally require a

total length of 100 m or more. Vertical loops are drilled to a depth of 15 m to 100 m, and a typical

1,200 square foot home in Alberta would require four 50 m vertical pipes.8 They are often more

expensive to install, but require less space than horizontal systems. Loops installed in bodies of

water generally require 0.1 ha to 0.2 ha of water surface and a minimum depth of approximately

two meters. Occasionally, large community loops are installed, which are shared by all of the homes

in a neighbourhood.

Figure 1. Horizontal closed loop (A) and vertical open loop (B) heat transfer systems.9

Pipes are filled with a fluid composed of 20% antifreeze (i.e. propylene glycol or methanol) and

80% water for closed loop systems, and only water is used for open loop systems. In both cases, the

fluid is used to absorb and transport the earth's heat. In Alberta, the subsurface temperature remains

at a relatively constant temperature of approximately 7°C10 to 10°C.11 Indoor systems then

concentrate the heat and release it at a higher temperature inside the building using a traditional

duct-based or floor/wall-based system. The utilization of earth energy is more efficient than

8 Personal Communication. Brian Park of Park Geothermal. February 18, 2004. 9 Natural Resources Canada. 2004. 10 Geoexchange. 2003. 11 Personal Communication. Henry Lutz of Global Geothermal Corp. February 16, 2004.

B)A)

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combustion furnaces, because less energy is required to move heat from one place to another than it

does to convert one kind of energy into another.12 In summer, the process is reversed, as excess heat

is drawn from the building, expelled to the loop, and absorbed by the earth. The geothermal system

provides cooling in much the same way that a refrigerator keeps its contents cool - by drawing heat

from the interior, not by injecting cold (Figure 2).13

Figure 2. Summer (A) and Winter (B) applications of geothermal energy technology in residential homes.14

The indoor component of geothermal heat pumps (Figure 3) have similar space requirements to

traditional residential furnaces. When equipped with a device called a "desuperheater", heat pumps

can also provide the entire hot water requirement for the home, particularly during the winter

months when the system is operating at a higher capacity. Depending on the system employed,

homeowners may consider maintaining an electric powered hot water tank to supplement their

needs. Thus the GHP system may displace from 50%15 to 100%16 of the hot water supplied from

conventional means.

12 Natural Resources Canada. 2004. 13 Alberta Geothermal Inc. 2004. 14 Ibid. 15 Consumer Energy Center. 2004. 16 Personal Communication. Brian Park of Park Geothermal. February 18, 2004.

A) Summer B) Winter

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Figure 3. Equipment required for a ground-source heat pump.17,18

4.0 Market Feasibility Analysis in Alberta

4.1 Target Market Identification

There is a large potential market for renewable energy in Alberta. There are three primary markets:

residential owners, commercial building owners, and land developers (Figure 4). Success in the

residential home market requires penetration into both the residential homeowner and land

developer markets. These three primary markets encompass several niche markets each.

Figure 4. Geothermal heat pump market segmentation.

17 Global Geothermal Corp. 2004. 18 Energy Outlet. 2004.

Geothermal Heat Pump Market

Commercial Building Owner

Rural Urban

Renovation

Residential Home Owner Land Developer

New Home

Renovation

New Home

Provincial Private

Hospitals

Schools

Office Bldgs.

Office Bldgs.

Manufacturing

Churches

Rural Urban

Residential

Commercial

Residential

Commercial

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4.2 Market Trends

4.2.1 Natural Gas Prices

Over the past 10 years, natural gas prices have increased from a low of $1.20/GJ in 1995, to a high

of $5.87/GJ in 2003.19 This represents an increase in price of 4.74 times in less than a decade, which

has likely resulted in more individuals seeking alternative and more affordable home heating

technology. Although natural gas is a non-renewable form of energy and the current supply of

conventional gas is declining, there is considerable growth opportunity in the potential supply of

unconventional gas. If these reserves are as abundant as expected, and its extraction is economically

feasible, the growth rate of future natural gas prices may be curbed. The price of natural gas is the

primary cost driver affecting the market feasibility of alternative sources of energy for residential

heating.20

4.2.2 Alberta Economy

Alberta has a distinct advantage over many other jurisdictions in Canada and internationally. The

economy benefits from being highly robust and diversified, and the tax regime encourages

international, national and local business investment. The strength of Alberta’s economy is due in

part to the strong natural resources sector. For example, Alberta is currently home to approximately

60% of Canada's lucrative petrochemical industry,21 which injects millions of dollars into the

economy each year. As such, Alberta enjoys one of the highest standards of living in the world. In

particular, some of the Alberta advantages include:

• Third largest provincial economy in Canada;22 • Lowest unemployment in Canada;23 • National leader in job growth;24 and • Strong job market, favourable wages and advantageous tax environment.

19 Alberta Energy. 2004. 20 Personal Communication. Brian Park of Park Geothermal. February 18, 2004. 21 Strathcona County. 2004. 22 Statistics Canada. 2004. 23 Government of Alberta. 2004. 24 Ibid.

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Housing markets are a strong indicator of economic trends. Alberta ranks as the third highest in

Canada in terms of housing starts (Table 1). Correspondingly, Edmonton housing prices in 2003

rose 7.3% for bungalows and 5.8% for two-story homes, with mean selling prices of $140,143 and

$154,786, respectively.25 Similarity in Calgary, the housing market also expressed increased selling

prices for bungalows (i.e. rise of 1.1% to $218,370), a two-story homes (i.e. rise of 6.6% to

$245,732. In addition, Alberta enjoys lowest unemployment rate, and the third highest GDP in

comparison to the rest of the country (Table 1).

Table 1. Alberta economic overview in comparison to the Canadian Economy.26 Alberta Canada Economic Indicator

2002 2003 Provincial Ranking 2002 2003

Real GDP (%) 1.7 2.5 3 3.3 2.0 Unemployment Rate (%) 2.5 2.6 1 2.2 2.0

Housing Starts 38,754 36,171 3 205,034 218,426

4.2.3 Influence of Market Trends on Geothermal Heat Pump Adoption

The strong economy may be either a blessing or curse for the expansion of GHP technology and

other sources of ‘green’ energy. High incomes and abundant job opportunities likely discourage

Albertans from choosing alternative sources of energy since the majority of the population can

afford current energy prices. In contrast, a segment of the population may be able and willing to

either upgrade their current heating systems or purchase new homes with green power technology

already installed, which typically have higher initial capital costs than traditional systems. As

indicated by the high number of housing starts in the province, there are likely considerable

opportunities to penetrate the land developer market, and individuals wanting to build a custom

home. Given that all forms of geothermal energy utilization are actively used in both industrialized

25 Royal LePage. 2004. 26 Statistics Canada. 2004.

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and developing countries alike, other factors appear to influence the widespread adoption of this

form of energy in Alberta.

As previously mentioned, gas prices are likely the primary driver of the GHP market in Alberta.

Given that natural gas prices have only recently increased, the market only recently has observed a

need to seek non-conventional heating systems. As long as gas prices continue at the current price

or higher, the demand for GHP technology will increase.

4.3 Sustainable Differential Advantage

In order to determine the market feasibility of any product or company, there must be a clear

derivation of the sustainable differential advantage. Below is a listing of these advantages as they

pertain to geothermal heat pump:

• GHP systems reduce total energy consumption and costs up to 70%27,28, and 100% of the natural gas consumption;29

• Initial costs of running gas lines to new homes built in rural areas could be avoided altogether;

• The system can provide hot water needs for homes; • Requires relatively little electrical energy to operate the heat pump; • The system can be reversed to provide cooling thereby reducing air conditioning costs; • Reduces combustion of fossil fuels and subsequent emissions (e.g. reduced a average of 6

tones of CO2 per year per home);30 • Minimal maintenance costs; • Long life expectancy (20 years)31,32 compared to traditional furnaces (15 years)33 and the

underground piping used in the system is often guaranteed to last 25 to 50 years34 and are expected to last 50 to 75 years.35

• Extremely safe, since no fuel is burned or requires storage; • Individuals with severe allergies, sensitivity and/or respiratory illnesses will benefit from

this emission-free system;

27 Natural Resources Canada. 2004. 28 Dwight’s Drilling and Geothermal. 2004. 29 Personal Communication. Brian Park of Park Geothermal. February 18, 2004. 30 Dwight’s Drilling and Geothermal. 2004. 31 Personal Communication. Brian Park of Park Geothermal. February 18, 2004. 32 Personal Communication. Henry Lutz of Global Geothermal Corp. February 16, 2004. 33 Ibid. 34 Consumer Energy Center. 2004. 35 Energy Outlet. 2004.

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• Constant low-level emission of radiant heat eliminates drafts and temperature fluctuations within the building;

• The heat pump system technology is relatively well developed and reliable; • The operation of GHP systems are very quiet; and • This technology adds value to homes.

As a result of these core benefits, customers tend to be highly satisfied with the performance of the

GHP system. More than 95% of GHP owners would recommend a similar system to their friends

and family36.

4.4 Cost-Benefit Analysis

In order to assess the market feasibility of geothermal heat pumps, a cost-benefit analysis from the

perspective of potential clients is required to determine whether or not customers would be willing

to buy this technology.

4.4.1 Installation and Maintenance Expenses

The first component of this cost benefit analysis is to determine the costs of GHP equipment,

installation, and maintenance over time. In Table 2, a comparison of these costs is made to a

traditional natural gas furnace system designed for a typical home.

Table 2. Cost comparison of installation and maintenance between traditional Geothermal Heat Pump Natural Gas Furnace Equipment & Installation $15,000 to$30,000* $2,200ψ Maintenance $90 every year **

$130 every 3 years*** $130 every 3 years ψ ψ

Equipment Replacement Loop Piping: >50 years Pump & Condenser: > 20 years

15 years

* Includes the labour and materials for installation of a loop system along with associated heat pump equipment. ** Costs include annual calibration and inspection *** Costs represent duct cleaning ψ

Costs represent 8 hours of labour for two workers, and the 100,000BTU furnace ψ

ψ

Costs represent duct cleaning and calibration

36 Consumer Energy Center. 2004.

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4.4.2 Expected Reduction of Energy Costs

As can be expected, the primary benefit of the earth energy system is long-run reduction of energy

costs as compared to traditional combustion furnaces and electric air conditioners. The amount of

actual savings reported in the literature generally varies from approximately 25% to 70%.37,38,39,40,41

However, most GHP retailers state that 100% of the natural gas needs for home heating can be

eliminated. A study conducted in several cities across Canada shows that the annual savings in

electrical expenses for residential homes ranged from 53% to 68% (Table 3). The marginal savings

of nine percent achieved Halifax appears to be somewhat of an outlier compared to the literature.

Table 3. Cost saving of earth energy heating vs. electrical heating across Canada.42 City Average earth

energy costs per yearAverage electrical

energy costs per year Annual reduction of

costs per year* Toronto $330 $1,000 67%

Vancouver $225 $695 68% Winnipeg $610 $1295 53% Halifax $355 $390 9%

*If costs of cooling and domestic water heating were included, then the margin of cost savings would increase.

4.4.3 Estimated Cost Recovery Period

A review of the literature also suggests that the cost recovery period for initial GHP purchase and

installation ranges varies from two to 10 years.43,44 This range depends entirely on the cost of initial

installation, maintenance and energy requirements to operate the equipment in comparison to

traditional means.

37 Natural Resources Canada 2004. 38 US Department of Energy. 39 Consumer Energy Center. 2004. 40 Alberta Geothermal Inc. 2004. 41 Geoexchange. 2004. 42 Natural Resources Canada 2004. 43 Natural Resources Canada. 2004. 44 US Department of Energy. 2004.

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4.4.4 Case Based Sensitivity Analysis

A typical Alberta home was used as the basis for a 25-year sensitivity analysis that identifies the

cost saving and cost recovery period using a horizontal loop GHP systems as compared to a

traditional conventional natural gas furnace. In should be noted that given the scope of this study,

this sensitivity analysis is a more coarse filtered approach than what is actually used by GHP firms.

However, the precision of this analysis is fine enough to produce meaningful results. The house

used in this study was a 30-year-old 2,200 square foot bungalow (1,100 square foot main floor and

1100 square foot unfinished basement), located in Hinton, Alberta. Three years of natural gas utility

bill data from 2001 to 2003 were used for the analysis (Appendix 1). Overall, this house consumed

168 GJ of energy per year (Table 4), which is similar to the provincial average.45 The average price

of natural gas was $5.55/GJ, and the total annual average natural gas bill was $1,390.67. In order to

conduct the sensitivity analysis, all variable costs were adjusted accordingly: Variable cost of

delivery averaged approximately 21% of the cost of gas, municipal fees averaged approximately 8%

of the cost of gas, and GST represented 7% of the total bill.

Two primary criteria were manipulated to determine the payback period of GHP systems compared

to traditional natural gas furnace systems. First, natural gas prices were increased at $1/GJ

increments from $3/GJ to $10/GJ. Second, the predicted energy consumption reductions were

manipulated. Three scenarios were used given that a conventional gas system was still required, but

would the gas consumption was reduced by 30% 50% or 70% to reflect energy reductions presented

in the literature. In each case, the fixed and variable costs associated with natural gas were varied

accordingly. In addition, a simulation was conducted given a 100% reduction of natural gas, with all

associated fees being eliminated. A broad range of gas prices and percent energy reduction was

45 Energinfo Residential 1997.

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used as a means of including extreme scenarios and to ensure that wide range of possible outcomes

would be produced and compared.

Table 4. Annual average natural gas utility expenses for a typical Alberta home (2001-2003).

Utility Charges Breakdown Annual Average Energy Used 168.13 GJ

Price/GJ $5.55/GJ Fixed Cost of Delivery $147.67

Cost of Gas $922.02 Variable Cost of Delivery $165.39

Municipal Fees $64.80 GST $90.80 Total $1,390.67

By varying the expected price of natural gas and the estimated percent reduction of energy

consumption, a variety of timelines for payback were created (Appendix 2). However, an

assumptions was made that all costs did remained static after year one. Although this is a limitation

of the analysis, the reality of accurately predicting the actual fluctuations of variable costs is outside

the scope of this study. Nevertheless, the analysis produced results that were somewhat comparable

to the literature.

The cumulative operating costs to install, run, and maintain a conventional system ranged from

approximately $31,500 (at $3/GJ) to $72,400 (at $10/GJ) after 25 years. Depending on the

estimated energy savings using the GHP system, total cumulative costs over 25 years ranged from

approximately $23,290 (at 100% natural gas energy reduction) to $72,400 (at 30% energy reduction

and $10/GJ). The best-case scenario was achieved if the house heating system was fully converted

to a GHPsystem, where cost recovery occurred between seven and 17 years and would result in

approximately $8,200 to $49,100 total savings after 25 years. Full cost recovery was not achieved

only in extreme cases (i.e. low natural gas price and/or low estimated percent reduction of natural

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gas requirements). A conservative scenario of $6/GJ natural gas price and 70% reduction of natural

gas requirements produced a cost recovery period of 17 years and a total cost savings after 25 years

of $6,500 when compared to a conventional natural gas furnace system. In comparison, a scenario

of $6/GJ and 100% reduction of natural gas produced a cost recovery period of 11 years and a total

cost savings after 25 years of $25,717 when compared to a conventional natural gas furnace system.

Although switching to a GHP system is cost effective in most realistic scenarios conducted in this

study, it is clear from the cost savings perspective that a system that totally eliminates the need for

natural gas is the best alternative for the consumer, even if the system costs slightly more to install

initially.

4.5 SWOT Analysis

SWOT analysis involves the examination of strengths, weaknesses, opportunities and threats for a

particular product or company within a given market. The strengths of GHP technology have been

discussed in the ‘Sustainable Differential Advantages’ section. Four primary weaknesses currently

inhibit the growth of GHP systems within the residential market. First, the initial costs of

installation of GHP systems are considerably higher than for traditional furnace systems, ranging

from approximately $15,000 to $30,000 or more depending on the size of building and the type of

equipment installed. Second, there is only a moderate incentive for individual homeowners to

switch their current heating systems at existing natural gas prices over the short-term. Current

heating expenses are relatively affordable for most Albertans; therefore reducing the intrinsic

motivation to make drastic improvements to existing heating systems. In addition, no provincial

program currently exists that encourages the use of GHP systems. Third, homeowners locked into

mortgages and other long-term loans are likely cautious about spending additional funds on

upgrading their existing systems, and may not qualify for the additional loans that would be

required for the initial capital investment. Owners of older homes are also unlikely to upgrade their

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current heating system, given that other major renovations are also required, and the likelihood of

realizing the long-term benefits of an upgraded system are less likely. Finally, this technology is

still in the early adoption phase of the market cycle although heat exchange systems have been

available for over 20 years. This is likely the result of low natural gas prices that have remained

below $2.00/GJ prior to 1998. As a result, the majority of Albertans have not demanded or sought

information about the potential cost-benefit of switching from conventional to geothermal energy.

This increases the perceived risk and increases switching costs that inhibits a market shift from the

well established and natural gas furnace system to the largely unknown GHP system.

In terms of opportunities, there is great potential for market expansion as a result of increasing gas

prices. Within the last ten years, the intrinsic motivation of potential customers to explore

alternatives to natural gas heating systems has risen. One of the greatest opportunity lies within the

rapidly expanding rural subdivision market. This market segment are typically well educated and

financially secure, who may be more likely to demand green sources of power. In addition,

establishing natural gas lines in rural areas is a significant expense that could be avoided using GHP

systems. Both individual homeowners and land developers alike should be the primary targets for

the rural subdivision market. Nevertheless, private individuals building their homes in both rural

and urban areas have the highest propensity to incorporate geothermal heat pumps as opposed to

homeowners that considering upgrading/renovating their existing home. Another potential source of

market growth may result as a result of increased profile and concern of fossil fuel emissions, such

as CO2, NOx and SOx. As such, public interest in non-conventional forms of energy may increase.

Finally, more people are becoming interested in air conditioning system, especially among the aging

population. Thus the idea of a home that is kept cool in the summer, warm in the winter, and

supplies hot water year round all by a single system adds great value for GHP systems, especially

when building a new home.

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Several threats to the GHP market also exist. The first and foremost threat is the reduction of

average natural gas prices. At current prices, homeowners are willing to consider non-conventional

heating systems, but there is still not a large surge of interest. Thus a downward trend and

stabilization of prices below $3/GJ would likely deter potential customers from adopting

geothermal heat pumps. Second, a downward trend in the economic and business cycles would

threaten to reduce growth opportunities. Given that strong economies are associated with housing

starts, and the majority sales are currently for new homes, a reduction in housing starts would likely

also reduce the demand for geothermal heat pumps. Third, the reduction of traditional furnace

system installation and maintenance fees, improvement in efficiency, and increased life expectancy

of traditional furnace systems are threats to the expansion of the geothermal heat exchange market.

A final threat is the development of a new heating system that is cheaper and more efficient than

either traditional or heat pump systems.

4.6 Existing Retail Suppliers in Alberta

Currently, there are over 250 firms in Canada46 that either install or manufacture geothermal energy

products, most of which are small and privately owned. In descending order of number of GHP

companies located in each province, Ontario had the most number of firms (103 firms), followed

by: British Columbia (34 firms), Manitoba (24 firms), New Brunswick (23 firms), Nova Scotia (17

firms), Quebec (14 firms), Alberta (11 firms), Prince Edward Island (9 firms), Saskatchewan (8

firms), and Newfoundland (7 firms). Certain markets appear to be relatively well covered,

particularly in Ontario and British Columbia. Some markets, including Alberta, appear to be have

potential for firm entry. Given that heat pumps require regular maintenance, adequate geographic

coverage will be essential to maintain customer relations and reduce costs associated with travel.

46 Earth Energy Society of Canada. 2004. http://www.earthenergy.ca/dir.html#park. Retrieved on February 19, 2004.

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5.0 Green Power Legislations and Policies

Alberta is currently developing a strategy to reduce CO2 emissions as a result of the federal

ratification of the Kyoto protocol. Residential homes currently account for approximately 17% of

the total energy consumption in Canada and 27% of the natural gas consumption (Appendix 4).47

Since over 38,000 homes are built annually in Alberta and 64% of residential energy consumption

is allocated toward space heating, it is clear that considerable reductions of fossil fuel energy

consumption and energy costs would be incurred by private home owners who utilized GHP

technology. Nevertheless, Albertans and the provincial government have been relatively slow to

support such forms of energy. With international agreements, such as the Kyoto protocol, there may

be an increased interest and need to employ green power technology, such as geothermal heat

pumps. Currently in Alberta there is no legislation or policy that provides incentives to convert from

traditional fossil fuel heating systems to green power-based systems. However, other jurisdictions

around the world have well-developed incentive legislation and policies that encourage the use and

conversion to green energy.

In contrast, the US has established a wide diversity of programs in nearly every state in order to

encourage the renewable energy.48 Most of these programs encourage the use of green power by

means of an average 4% interest rate reduction on loans by required to acquire and install renewable

energy technology, such as geothermal heat pumps. The Long Island Power Authority (LIPA) offers

rebates of $600-$800 per ton for new installations and $150-$250 per ton for retrofit installations of

geothermal heat pumps. In Oregon, the Residential Energy Tax Credit program provides an income

tax credit of $0.60/kWh when homeowners purchase a closed-loop GHP system. This translates into

a savings of $1,500 per year. This statute allows residents to claim an income tax credit of up to

47 Statistics Canada. 2004. 48 Geoexchange. 2004.

17

$1,500 that is transferable to the next seven years if it is not claimed within the first year. Another

example of an income tax incentive is in Idaho. Here, taxpayers receive an income tax deduction of

40% of the cost of a geothermal device used for heating or electricity generation over the course of

four years. Taxpayers can apply this 40% deduction in the year in which the system is installed and

can also deduct 20% of the cost for three years thereafter. The maximum deduction in any one year

is $5,000. In some states, the power companies themselves offer incentives. For example, the

Alabama Power Company offers loans, financing options and rebates to its residential customers for

closed-loop geothermal heat pumps installed by certified contractors. Finally, some programs

provide funds to help construct energy efficient commercial and institutional buildings up to

$50,000, such as the New Construction Program established in New York.

6.0 Discussion and Conclusion

GHP systems offer a unique source of renewable energy that has yet to gain a strong foothold in the

residential home heating market of Alberta. Certainly the cost of installing the loop is prohibitive,

and many lots are not large enough to accommodate horizontal loop systems. When installing a

GHP system, there is generally no need for a back-up natural gas furnace, which results in a highly

efficient and cost-effective scenario. In doing so, fixed and variable natural gas furnace costs are

avoided altogether. Beyond the long-term cost savings of energy bills and overall reduction of fossil

fuel emissions, the value added component of GHP technology is the combined benefits of space

heating, space cooling and water heating, thereby eliminating the need for three unique appliances

in the home. Of particular interest is the growth potential in the rural and urban custom home

market. This is due to the increased popularity of rural subdivision living and strong economic

factors (i.e. home construction, and employment rates) currently present in Alberta. As indicated by

the number of firms present in Alberta compared to the rest of Canada, this province appears to be

18

relatively slow to embrace GHP technology. However, if natural gas prices continue to increase this

trend could change.

Although this study was limited to the residential home heating market, benefits of GHP systems

tend to increase with the size of the building. As a result, there is a tremendous growth commercial

building market. The primary requirements for success GHP systems in Alberta would be continued

increases in gas prices, increased awareness marketing often associated with technology in the early

adoption phase of the market cycle, penetration into the home and land developer market, and the

establishment of government incentive programs. Geothermal heat pumps are an exciting

technology that will likely be much more common in Alberta homes in the years to come.

19

7.0 References

Alberta Energy. 2004. http://www.energy.gov.ab.ca/gmd/gas/agrp.asp. Retrieved on February 16, 2004.

Alberta Geothermal Inc. 2004. http://www.albertageothermal.ca/pages/about1.htm. Retrieved

Jan 21, 2004. Consumer Energy Center. 2004. http://www.consumerenergycenter.org/homeandwork/

homes/inside/heatandcool/heatpumps.html. Retrieved on January 31, 2004. Dwight’s Drilling and Geothermal. 2004 http://www.dwightsgeothermal.com. Retrieved on

February 3, 2004. Earth Energy Society of Canada. 2004. http://www.earthenergy.ca/dir.html#park. Retrieved on

February 19, 2004. Energinfo Residential. 1997. http://www.dal.ca/~creedac/newsletter/pdfs/n-2-2.pdf. Sept vol 2:2.

Retrieved Jan 21, 2004. Energy Outlet. 2004. http://www.energyoutlet.com/res/heatpump/gshp.html. Retrieved Jan 31,

2004. Energy Solutions Alberta. 2002. http://www.energysolutionsalta.com/default.asp?V_DOC_ID=

1039. Retrieved on Jan 21,2004. Geoexchange. 2003. http://www.geoexchange.org/index.htm. Retrieved on Jan 31, 2004. Global Geothermal Corp. 2004. http://www.globalgeothermal.com/technology/index.htm.

Retrieved on February 16, 2004. Government of Alberta. 2004. Weekly economic highlights: Week ending February 6, 2004.

http://www.alberta-canada.com/statpub/pdf/weekly.pdf. Retrieved February 16, 2004/ Royal LePage. 2004. http://www.royallepage.ca/aboutus/press/oct092001/alberta.htm. Retrieved

on February 3, 2004. Natural Resources Canada. 2004. http://www.canren.gc.ca. Retrieved on Jan. 19, 2004. Sourceguides. 2004. http://energy.sourceguides.com/businesses/ byGeo/byC/Canada/byP/

geotherm/geotherm.shtml. Retrieved on February 3, 2004. Statistics Canada. 2004. http://www.statcan.ca/english/Pgdb/manuf05.htm. Retrieved on January

19, 2004.

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Strathcona County. 2004. http://www.strathconacounty.com/business/futureoutlook.html. Retrieved on Jan 19, 2004

US Department of Energy. 2004. http://www.eere.energy.gov/. Retrieved on January 29, 2004. World Energy Council. 2003. http://www.worldenergy.org/wec-geis/publications/reports/ser/

geo/geo.asp. Retrieved Jan 21, 2004.

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8.0 Appendices

22

Appendix 1. Natural gas utility bills for a typical Alberta home (2001-2003). Variable Costs Fixed Cost

Month Year Energy Used (GJ)

Gas Price($/GJ)

Cost of Gas Municipal Fee (~8% of cost of gas)

GST (7% of total costs)

Variable Delivery (~21% of cost of gas)

Fixed Delivery

Total Bill

Jan 2001 16.74 6.62 $110.78 $7.36 $10.31 $17.23 $11.87 $157.55 Feb 2001 18.87 8.77 $165.53 $10.35 $14.50 $19.42 $11.87 $221.67 Mar 2001 13.63 8.77 $119.56 $7.65 $10.72 $14.03 $11.87 $163.83 Apr 2001 15.71 8.77 $137.71 $8.72 $12.21 $16.16 $11.87 $166.50 May 2001 8.39 8.77 $73.60 $4.95 $6.93 $8.63 $11.87 $105.98 Jun 2001 6.30 8.47 $53.36 $3.77 $5.28 $6.48 $11.87 $80.76 Jul 2001 4.16 4.95 $20.60 $1.93 $2.71 $4.28 $11.87 $41.39

Aug 2001 3.12 4.95 $15.45 $1.61 $2.25 $3.21 $11.87 $34.39 Sep 2001 4.15 4.95 $20.55 $1.93 $2.70 $4.27 $11.87 $41.23 Oct 2001 15.66 4.95 $77.53 $5.55 $7.77 $16.11 $11.87 $118.83 Nov 2001 17.93 3.14 $56.23 $4.55 $6.38 $18.45 $11.87 $97.48 Dec 2001 32.53 3.18 $103.32 $7.80 $10.93 $33.10 $11.87 $167.02 Jan 2002 25.18 3.54 $89.06 $6.52 $9.13 $23.04 $11.87 $139.62 Feb 2002 23.11 3.54 $81.74 $6.04 $8.46 $21.15 $11.87 $129.26 Mar 2002 30.46 3.61 $109.93 $7.86 $11.01 $27.88 $11.87 $168.34 Apr 2002 18.87 4.31 $81.34 $5.74 $8.04 $17.36 $11.87 $122.91 May 2002 9.43 4.43 $41.74 $3.21 $4.51 $8.67 $11.87 $68.85 Jun 2002 4.18 3.54 $14.78 $1.57 $2.21 $3.85 $11.87 $33.75 Jul 2002 3.13 2.23 $6.98 $1.12 $1.58 $2.88 $11.87 $24.06

Aug 2002 4.18 2.00 $8.36 $1.24 $1.73 $3.85 $11.87 $26.50 Sep 2002 12.60 4.13 $52.01 $3.92 $5.49 $11.59 $11.87 $84.01 Oct 2002 16.81 5.04 $84.70 $5.86 $8.21 $15.46 $11.87 $103.91 Nov 2002 17.87 5.50 $98.30 $6.61 $9.27 $16.44 $12.99 $141.68 Dec 2002 26.81 4.07 $109.20 $7.83 $10.97 $27.16 $12.99 $165.15 Jan 2003 27.31 7.02 $191.77 $12.20 $17.09 $27.47 $12.99 $261.27 Feb 2003 17.91 7.34 $131.51 $8.55 $11.97 $18.02 $12.99 $145.95 Mar 2003 18.96 8.58 $162.75 $10.25 $14.35 $19.07 $12.99 $219.41 Apr 2003 15.79 8.35 $131.89 $8.45 $11.85 $15.88 $12.99 $181.06 May 2003 9.45 5.36 $50.62 $3.84 $5.39 $9.50 $12.99 $82.34 Jun 2003 5.24 7.13 $37.38 $2.93 $4.10 $5.27 $12.99 $62.67 Jul 2003 1.04 6.73 $7.00 $1.10 $1.55 $1.05 $12.99 $23.39

Aug 2003 2.07 5.14 $10.63 $1.35 $1.90 $2.08 $12.99 $28.97 Sep 2003 8.32 6.28 $52.23 $3.87 $5.42 $8.37 $12.99 $82.88 Oct 2003 10.50 5.05 $52.98 $4.03 $5.64 $10.56 $12.99 $86.20 Nov 2003 16.89 5.32 $89.85 $6.30 $8.83 $16.98 $12.99 $134.95 Dec 2003 21.09 5.46 $115.08 $7.85 $11.00 $21.21 $12.99 $163.28

Overall Monthly Average 14.01 5.55 $76.83 $5.40 $7.57 $13.78 $12.31 $113.25

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Appendix 2. Cost recovery period using geothermal a heat pump system in a typical Alberta Home.

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Appendix 3. Geothermal heat pump companies in Canada ALBERTA Company Name City Bertram Drilling Carbon Prairie Geothermal Strathmore Westburne HVAC Calgary Earth Source Geothermal Ltd. Calgary Histech Energy Solutions Calgary REACT Energy Calgary Alberta Geothermal Calgary Earth Geothermal Red Deer Proem Geothermal Cochrane Canadian Geothermal Drilling Wetaskiwin Park Contracting Inc. Wetaskiwin BRITISH COLUMBIA Company Name City Kootenay Geothermal Systems Winlaw Swiss Solar Tech Summerland North Central Plumbing Smithers Mountain Air Industries Whistler Geologic Thermal Solutions Brackendale JC WaterWorks Vanderhoof Mid Point Mechanical Sechelt Owen Pump Service Cranbrook McCormick Plumbing Nelson Aquila Networks Canada Ltd Trail Canadian Geothermal Systems Vernon Global Geothermal Corp. Kelowna Leask & Sons Mechanical Kelowna Markey Mechanical Williams Lake Geothermal Heating Specialties Kamloops Polar Refrigeration Sales Prince George Mother Nature's Heating & Cooling Prince George DSF Mechanical Maple Ridge Clark Drilling Services Vancouver Lincoln Energy Surrey Westland A/C Delta Northspan Exploration Kelowna DV Heating & A/C Aldergrove Solace Energy Burnaby Innovative HVAC Vancouver ANG Engineering Vancouver Prospect Developments Vancouver Pacific Geoexchange Richmond Mount Seymour Plumbing & Heating North Vancouver Groundsolar Geotechnics, Inc. Victoria EMCO Victoria Accutemp Refrigeration &A/C Victoria Lockhart Industries Duncan Pace Mechanical Nanaimo

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Appendix 3 (cont.). Geothermal Heat Pump Companies in Canada. MANITOBA Company Name City Keating Mech. Service Landmark Barkman Plumbing & Heating Steinbach Friesen Drilling Steinbach Kiansky Bros Vita Interlake Refrigeration Arborg Lindell Electric Eriksdale Dueck's Refrigeration Manitou Anderson's Plumbing & Heating Pilot Mound Georoc Vermette Newton Enterprises Newton Ransom Construction Boissevain Paradise Plumbing & Heating Ltd Dunrea Hollyoake Plumbing Ochre River Super Plumbing & Heating Roblin Ste. Rose Plumbing & Heating Ste. Rose Top Mechanical, Ste. Rose Flowtech, Oak Lake Ice Kube Systems Ltd., St. Paul Perimeter Drilling Winnipeg Nova Star Refrigeration Winnipeg Cimco Lewis Winnipeg AGRA Earth & Environmental Winnipeg Preferred Heating & Cooling West St Paul Brandon Hills Geothermal Brandon NEW BRUNSWICK Company Name City Maritime Water Treatment Richibucto Elite Heatpump Upper Rexton G.L. Caissie Richibucto A+R Electric Richibucto Armlin Geothermal Drilling Robichaud Steeves Heating Salisbury Pro-Vent Shediac Sussex Plumbing & Heating Sussex Brennan Contracting Bristol Energy-Tech Sales & Services moncton Kerr Controls Moncton Harry Black Heatpump Miramichi City Refrig-Plus Caraquet Maritime Refrigeration & A/C Bathurst Air-Care Fredericton Eg Stairs Plumbing Fredericton Neilson Heating & Ventilation Lincoln Elite Heat Pump Upper Rexton Maritime Geothermal Ltd. Bathurst Charlotte County Refrigeration Pennfield Beaulieu Plumbing & Mechanical Caron Brook Valley Refrigeration & A/C Jacksonville Eric Boissonneault Charlo

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Appendix 3 (cont.). Geothermal Heat Pump Companies in Canada. NEWFOUNDLAND Company Name City Martin Hammond Clarke's Beach Tarfam Refrigeration Lawn Ground Source Heating Systems St. Alban's DRL Coachlines Triton Clearwater Drilling Doyles Kean's Pump Shop St. John's Gel Builders Grand Falls NOVA SCOTIA Company Name City Aucoin's Plumbing Cheticamp Town of Springhill Springhill Westburne (Atlantic) South Hampton Fundy Ventilation & Heat Pumps Aylesford C & H Plumbing & Heating Waterville Mira Road HVAC Sydney Kerr Controls Sydney A.B. Mechanical Sydney Kevin Ballantyne & Son New Glasgow W R Graham Services New Glasgow Hub Well Drilling Truro Glen-Mar Fall River Kerr Controls Dartmouth Aqua-Air Heat Pump Systems Middle Sackville Ron White Well Drilling Amherst Annapolis Valley Air Management Kentville Gow's Air Bridgewater

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Appendix 3 (cont.). Geothermal Heat Pump Companies in Canada. ONTARIO Company Name City Company Name City Gene Gourgon Plumbing & Heating Almonte Cook's Water Systems Owen Sound M. Harkes Contracting Fraserville Just Geothermal Systems Ingersoll Manotick Energy Systems Kars H.A.P. Mechanical London Arthur Tom Electric Williamsburg Anchem Sales London Jack's Heat Pumps Jasper Colonial Plumbing Enterprises Chatham Tony Zomers Contracting Eganville Lambton Heating & Cooling Port Edward Davidson's Plumbing Brighton Abram Sheet Metal Sarnia Martin Electric Bancroft Delta Plumbing & Heating Windsor Whitfield Plumbing & Heating Bancroft Urban Heating & Cooling LaSalla Brendan Frauzel Ottawa Tebby Air Conditioning & Heating Huntsville Canadian GeoExchange Coalition Ottawa Austin Refrigeration Port Carling Rick Menard Heating & Cooling Orleans Bernard Rochefort Astorville Ottawa Air Design Ltd Nepean, Gary Stillar Electric Powassan Longhill Energy Products Nepean, Community Electric Sturgeon Falls Donwel Heating & A/C Greely, A-1 Quality Heating & A/C Garson R. Parisien Service Hawkesbury, Bedika Thermal Technologies Cutler Sunworks Hawksbury, Tompkin's Hardware Emo Dave Good Plumbing Smith Falls, Brubacher Contracting Mine Center Carleton Refrigeration A/ Carleton Place, Romyn Heating Pinewood Therm Aire Kingston Andy Morrel Mechanical Services Keewatin Robert H. Yach Heating & A/C, Arnprior Raymar Heating & A/C Keewatin Miller Refrigeration & A/C Renfrew Exl-Aire Huntsville Valley Refrigeration Pembroke Gravenhurst Plumbing & Electrical Gravenhurst Superior Plumbing Cobourg South Side Parry Sound G & G Comfort Cobourg Kohut Electric Kirkland Lake Rayco Refrigeration Peterborough Nauss Plumbing & Heating Sudbury Link Heating & A/C Beaverton Beaton Enterprises Timmins Bell Technical Cookstown RHF Heating and A/C Elliott Lake Nottawasaga Mechanical Wasaga Beach Hubbard Refrigeration Thunder Bay Bering Heating & A/C Fonthill Alternate Basic Energy Systems Thunder Bay Pro-Vent Mechanical Oshawa Westburne Frontier Refrigeration Thunder Bay Oshawa Refrigeration Service Oshawa McKee Electric Dryden March Mechanical Service Oshawa Filmore Mechanical Fort Francis Groundheat Systems Aurora Bostech Mechanical Moorefield Yanch Heating & A/C Barrie McLellan & Sons Mount Forest Downer Midland Cavi Heating WestLorne Earth Energy Utility Corp Burlington Geo-Teck Heating Zurich JTH Best Engineering Burlington Lambton Enviroquest Alvinston TRAK Canada Burlington Shute Plumbing & Heating Ridgetown HydroHeat Canada Ancaster Eden Energy Equipment Guelph Bruce Edward Thompson Heating Dundas Quatic Industries Inc. Guelph Welmers Heating & A/C Dundas Wellington Comfort Systems Guelph Boonstra Heating & A/C Hamilton Geo-Solar Systems Fergus M.A.R.C.H. Mechanical Ltd. Milton ARISE Technologies Waterloo Loops Unlimited Toronto Geothermal Energy Kitchener Mancini, Saldan & Associates Ltd. Toronto Al Dunn Heating & A/C Waterloo Calibur Mechanical Etobicoke NextEnergy Solutions Elmira Native Builders Ohsweken Versatemp Mechanical Cambridge Irvin Shantz Floradale Air Climate Handlers Brantford Corestar Mechanical Systems New Dundee Perras Mechanical Services Ltd. Brantford Northern Heating & Ventilation Markdale Gerry's Plumbing & Heating Mildmay Don Wallace Plumbing Harriston

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Appendix 3 (cont.). Geothermal Heat Pump Companies in Canada. PRINCE EDWARD ISLAND Company Name City Prompt Plumbing & Heating Souris Lowther Refrigeration Cornwall Watson MacDonald Well Drilling Cornwall Chiasson Ventilation Systems York Richard's Mechanical Souris Kerr Controls Charlottetown Control Air Systems Charlottetown Jamison Electric Charlottetown First Mechanical Systems Charlottetown QUEBEC Company Name City Geotherm Lac St. Charles Geotherm Stoneham Techno Pompe Quebec R.J. McIntyre Sept-Iles Aubin Refrigeration Trois-Rivières Geothermix Distribution Inc. Montreal Le Groupe Master Ltée Montreal Airtechni Inc. Montreal Dek-Air Laval Ouest LeDoux Enterprise Sainte-Geneviève Bon-Air Ste Isidore L' ERE du Comfort Repentigny Therm'Eau Confort Grande-Ile GeoPerformance Geothermal St-Hippolyte SASKATCHEWAN Ken's Plumbing Foam Lake Prairie Built Homes Carlyle Skulmoski Plumbing & Heating Moosomin Dwight's Drilling & Geothermal Watrous TMAC Enterprises Denare Beach Regina Geothermal Regina Alberta Geothermal Regina Frontier Refrigeration Saskatoon

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Appendix 4. Distribution of overall (A) and natural gas (B) energy consumption in Canada.

A) 1998 1999 2000 2001 2002

Primary and secondary energy (Petajoules) Producer consumption 1,073.3 1,229.3 1,257.4 1,264.9 1,369.9 Non-energy use 811.8 828.9 790.3 863.2 894.4 Energy use – final demand 6,956.2 7,132.5 7,376.0 7,175.4 7,404.3 Industrial 2,149.0 2,177.3 2,268.6 2,166.3 2,243.7 Transportation 2,256.6 2,307.3 2,279.8 2,240.4 2,249.8 Agricultural 224.7 229.9 231.9 218.1 205.7 Residential 1,183.5 1,232.3 1,287.8 1,240.0 1,295.1 Public administration 130.3 124.5 131.3 126.8 129.8 Commercial and other institutional 1,012.3 1,061.4 1,176.4 1,184.1 1,280.5 Statistics Canada. 2004.

B) 1998 1999 2000 2001 2002

Natural gas (Petajoules) Producer consumption 538.6 669.2 685.5 672.7 694.5 Non-energy use 201.5 205.5 190.1 159.7 148.8 Energy use – final demand 2,163.8 2,232.0 2,346.7 2,162.0 2,358.1 Industrial 897.3 907.3 950.1 847.2 948.3 Transportation 246.5 247.5 221.3 202.0 214.1 Agricultural 23.7 24.1 27.3 23.3 22.4 Residential 577.8 609.3 644.8 601.0 646.8 Public administration 27.2 24.4 25.7 24.0 23.3 Commercial and other institutional 391.3 419.4 477.4 464.5 503.3 Statistics Canada. 2004.