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Okay. Um, uh, my clock says 1 pm. Uh, welcome. We'll, uh, we'll let the room, uh, well, people are continuing to, uh, come on board. Like to welcome you all to the IDA webinar. My name is Rob Thornton. I'm the president and CEO of the International District Energy Association. Uh, pleased you can join us. Uh today's webinar is the first in a series of webinars on accelerating downtown decarbonization with district energy. Today's part one uh episode is on electrification strategies for
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downtown district steam networks. So we've we planned about a 90minute uh segment for you. We've organized an excellent panel of experts in our field uh from major cities including Boston, Cambridge, New York City, Manhattan, and San Francisco. Um before we begin, let me just do a little bit of housekeeping so that people understand the game plan for today's webinar. Tanya, next slide. So um uh first of all we'll have three presentations in the order of Boston, Cambridge, followed by uh Manhattan, New
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York City, and then finally San Francisco. Um we're going to ask you to hold actually put your questions as you as you have them in the Q&A box, not the chat box. At the bottom of your screen to the far right, you'll see Q&A. So please submit your questions there. We're going to hold all questions until all three presentations have concluded. At that point, I'll moderate the questions and uh invite our panelists uh to respond. Um the webinar will be recorded. Once it's concluded, probably
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in about 24 hours, all of you who are here today or registered will receive a link uh that will provide you both the slides as well as uh the streaming uh content of the video. Again, we'd ask that you uh put all your questions in the Q&A box, not the chat. Um uh I think our Tanya, the next slide is is kind of reinforcing. Okay. So, uh let me introduce briefly uh our panelists. Uh from Boston, uh Kevin Hagerty is the C I'm going to introduce all of you at one time and then we'll go to the individual
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presentations. So, uh pleased that Kevin Hagerty from Vicinity uh is joining us. Kevin is the CEO of Vicinity Energy based here in Boston. Uh, prior to becoming CEO u about two years ago, Kevin served as vicinity's chief operating officer and chief technical officer, bringing about over 25 years of experience in the energy industry. He's a graduate of the US Merchant Marine Academy. Uh, he has a degree in systems engineering, mechanical, and nuclear, and also holds an MBA from Boston University. Welcome, Kevin.
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>> Uh, also from Vicinity, Boston, Matt Matthew Ali. Matt Ali serves as the first ever chief sustainability officer at Vicinity. He leads the company's decarbonization strategy, joining the firm in January 2022. Prior to that, uh Matt really uh uh brought over a decade of service on the Boston City Council uh where he served as the president prom. Um Matt has a degree in political science and English from the George Washington University GW. Welcome Matt. Thank you. Uh, our next presenter is
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Joanna Jagger. Joanna is serves as the general manager of steam operations at Consolidated Edison in New York City. Uh, for those of you, Coned is the largest district steam system, I think, on the planet. Um Joanna brings over 18 years of experience in operations and project management. A very deep background in many segments of the Khan Edison uh parent company. Um she holds an MBA from Forom University and a bachelor of science bachelor of science in bioengineering from Bingmpington University. Welcome Joanna. So glad you
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could join us even though I'm not a Yankees fan but that we'll set that aside for now. Um uh finally really pleased to uh welcome Mike Erkus. Mike is the uh general manager of Cordia Energy Center in San Francisco out there on the west coast. Mike has been uh involved with district steam in San Francisco for over 30 years. Um he began in 1995. Uh has really uh been in this role as a distribution manager for 25 years. uh plant manager and now is the general manager of Cordia Energy San Francisco.
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So Mike uh has a deep understanding and insight to the opportunities and challenges uh for operating a district energy system in downtown San Francisco. Welcome Mike. So at that we're going to turn it we have a Bearcat fan already. So, we're going to turn it over to uh Kevin and Matt to tell us what's happening in Boston Cambridge. Kevin, Matt, take it away. >> Well, thank you, Rob, and uh first just want to say a big thank you to IDEIDA for putting this on and thank you to everybody for attending. Uh any excuse
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that we have to talk about our electrification plans, uh we are all in on it. So, uh, we'll go through, uh, what we're doing in Boston, Cambridge, which is our system that's leading, and then we'll get into some of our other district energy systems and exactly what's going on there. All right. Uh, next slide, please. All right. So, first a little bit about, uh, Vicinity. As, uh, Robert said, I'm Kevin Hagen, the CEO of Vicinity Energy. Uh, Vicinity Energy is the largest owner and operator
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of district energy platforms across the US. Uh, so you can see the map here. We own 19 different district energy systems spread across 12 cities. Uh we control about two 250 million square feet of buildings served amongst it's a thousand plus customers. Uh we control about 400 megawatts of CHP. Most of that is in Boston and Philadelphia. Uh and the slide says 580,000 tons of carbon avoided annually. Uh this is a number that gets updated every year and is continuing to go up as we expand our
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electrification uh footprint. Right. Next slide. All right. And uh and and I I would be remiss if uh if I if I didn't say Matt has had a large part in our electrification plans here. So Matt, if there's something that I'm missing as I'm going through these slides here, please try to >> you got it. Matt is an absolute gamecher for us on the regulatory front and getting a lot of these electrification uh plans in place. Uh so first a little bit about our journey. Uh this is kind of overall how
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we view district energy uh in regards to our migration towards electrification. So, you know, district energy is is a massive force multiplier uh for cities that want to migrate away from an energy source, right? So, if a city's currently using a district energy system is currently using natural gas or they're using oil, uh getting that city to go over towards a decarbonized fuel like renewable electricity or electricity in general is just a heck of a lot easier to do uh with a district energy system
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than it is to do on a building by-building basis. So any city that has a district energy system is just massively leveraged against other cities that don't uh to be able to decarbonize and decarbonize quickly. Uh we don't want to get sued by staples, but we often say that electrifying the district energy system and decarbonizing the district energy system, that's the easy button for a city. Uh and I hope what you guys will come away with after we go through our deck here is we've got a
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very viable way forward on how we are currently putting out electrification technologies uh at our central energy facilities uh to ultimately decarbonize all our district energy systems by 2050. Okay. All right. So on the electrification front, we are deploying three technologies. Uh and where you are in the cities or where you are across the United States, it depends on what technologies we deploy and what district energy system. It's a different mix of these technologies or or a slightly different flavor on it.
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And and also not surprisingly, the East Coast cities are a little bit further ahead in this decarbonized sustainability front uh versus uh what we're seeing play out in the Midwest. It depends on what your city you're looking at, though. Our electrification plans revolve around three technologies. So the first is electric boilers. Uh electric boilers is our peaking technology. Uh and this is a technology that we can get put in place quickly. Uh it's not nearly as capital intensive as
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some of the other technologies that are up here. Uh and it's something that allows us to address our peak load uh in the middle of the winter time when you know for say it's cold on a winter time and uh or cold on a weekend and uh you know we roll into a Monday or Tuesday uh where it still is cold and we have a very very high peak event that we need a lot of generation to turn on heat. The electric boilers are very are really good fit for that. Um that being said they're not as efficient as our base
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load technology that we're going to be deploying which is heat pump complexes. So these are large water source heat pump complexes that if you look at many district energy systems across the states uh they oftent times are in close association with a river. Uh you know you look at our Boston area we've got the Charles River. You look at Philadelphia we've got the Skoo River. You go down to Baltimore we've got the Baltimore Harbor. Uh down in Morgantown, West Virginia, we've got the Mongi. So
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many many cities have a river associated with it. And we leverage those rivers uh to be able to pull heat out of it with a large heat pump complex uh concentrate that heat up into steam or hot water and then send it out to the district energy system. So our highly efficient base load technology that we're going to be deploying for electrification is large scale uh oftent times water sourced uh heat pumps. Uh and these operate at coops that are in the range of two to three uh sometimes pushing beyond that
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um depending on what kind of conditions you can get for the heat source on the heat pump. The last technology we're deploying uh is thermal storage. Uh so thermal storage uh is something that we're using to peak uh we're using to pay some of the intermittent generation with solar and offshore wind that we're seeing happen on our grids. Uh and so this is uh something that'll be deployed later in 2030. So going across here for Boston, uh we've got a 42 megawatt electric boiler that we have uh deployed
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in uh November of 2024 that's online and generating e steam. Uh that's electrified steam. Uh we've got a 35 megawatt heat pump complex uh that's going to enter service in 2028 and thermal storage again a little bit after 2030. So next slide. So a little bit about our electric boiler. Uh so our electric boiler is already online in Boston. Uh I think this is the first and largest electric boiler for district energy uh in in the United States. Uh we started this project back in 2022. We've got some
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pictures up here which show the progression. Uh to kick it off, we brought in Mayor Woo uh to help start the demolition. Uh if you have any demolition projects, as you can see, she does a fantastic job. Uh was able to get the boiler removed and the steam turb removed uh and make some make some room for a new electric boiler. Uh so that started in November of 2022. Uh and we were able to get it online almost exactly two years later, November 19th of 2024. Uh I'm I'm glad to say that our ES team
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is uh it's selling very very well. It's very competitive against building alternatives. And you can see the trend there. In 2024, we produce 1300 impl. Uh in 2025, we're already at 18,000 imp. I expect we'll probably be beyond 20 by the end of the year. Uh and in 2026, that's going to go up 10fold. We're anticipating somewhere between 150 to 200,000 mbs in e steam generation. So, it's it's a bit of a J curve for the demand of how this is taking off. I think another interesting point on our
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e- boiler uh is that the the power that we're bringing in to source uh or to provide uh the electricity for making steam. One of the interesting things that's happening up here in the northeast uh is we've been paid uh approximately for 15% of the steam we're generating. We're getting paid for the pleasure of making E steam. Uh the grid is having trouble determining how much solar is going to be on in any given day because there's so much solar up in New England ISO. Uh it drives a power price
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negative. uh we'll turn our e- boiler on because it's quick and can respond and we'll get paid for the pleasure of converting solar electricity into e steam and distributing out to our customers. So that's that's a nice benefit that we anticipated getting a small amount uh but in the first year of operations but about 15% of our total generation. So a real nice tailwind that we're getting to our east team generation. Another thing Kevin I love about this slide in addition to
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everything you just said was you know when we and I'm sure this will come up in the Q&A as we talk about sort of regulatory oversight and challenges that can present themselves there is when you actually take something from a conception or conceptual idea to actually have a situation where you know a mayor of a major city is taking a sledgehammer to old fossil fuel run infrastructure really underscores um that we're doing this and we're able to do this and that's been enormously
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helpful when people can actually touch and and feel and see these things. We we organized a a trip to Esburg uh Denmark last uh last uh spring uh with several stakeholders and to see you know what's happening over there using these heat pumps, these industrial scale heat pumps to run district energy systems um is nothing short of absolutely inspiring and it really helps with our credibility as we try to be good partners not only to our customers but to the cities we serve as well. >> Exactly.
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All right, next slide. All right. So, the EB boiler in Boston is up and online. Uh, the EB boiler uh is one of uh several that we will be putting in the system there. Um, again, it's our peaking technology. Uh, our base technology though is going to be uh heat pumps. And so, we anticipate putting upwards of three 35 megawatt heat pumps into the Kendall facility. And we have already started construction on the first one. Uh, so we started demo. Uh, this demo began in 2024. We couldn't get Mayor Woo for the demo, so
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naturally it's it's been a little bit slower. Uh but uh we already have the demo underway. Uh and as you can see in 2025, we've already moved plenty of equipment to make room for the that's going to be the heat pump steam compressor that's going to go on that slot uh on the far right there. Uh we've got contracts in place uh with uh with an EPC with an equipment provider. We're using man or now Everlance as our heat pump equipment provider. Uh and uh that heat pump is going to be online in 2028
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uh delivering to some of the customers that have already signed up to start taking some of that highly efficient uh decarbonized east. Next picture or next state slide. All right. So a little bit about the heat pump. Uh I'm not going to talk in too much detail on the cycle here. I'll just simply say that the heat pump is purpose-built to be able to harness the energy that's inherent in the rivers and the cities that we serve. Uh so it's an ammonia cycle heat pump uh that runs at cops between two to three
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uh depending on what the temperatures are going into it. Uh and it is able to deliver full steam pressure. This is a question we get quite often where people think that we're generating at 10 lb or 15 lb. Uh we're delivering because of how the cycle is arranged. We're going to be delivering full steam pressure at 200 PSI uh that the kind of cops that I'm talking about. So, it's a highly efficient system uh that allows us to fully deliver take renewable electricity off the grid uh put that into a very
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efficient system, then deliver fully decarbonized steam over to our customers. Uh and again, it does that by leveraging all the energy we have in the uh the Charles River that runs right underneath our facility. Uh which is a similar circumstance we have in many of our plants where we've got old condensing generation and we have all the infrastructure to be able to pull the river in uh and harness that energy, the river in a heat warm. Next slide. Okay, so what's next? So Boston, like I
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talked about, is our city that's furthest ahead. Um, as we look out as to what types of systems we're going to be putting in place, uh, we've got three heat pumps that are going to be going to Kendall Station, uh, in Boston over in actually over in Cambridge. Uh, and we're already looking because we have so much demand showing up for this heat steam, we're already looking at other places where we may be able to source some additional heat pumps around the city. Uh, we are looking to go much
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larger on heat pumps, but we're also looking towards seawater heat pumps. Um, again, a lot of the cities that we do business in are next to a saltwater source. Uh, Boston is no exception to that and uh uh and we're already looking in a way that we can get a large saltwater heat pump located on Boston Harbor and start harnessing that energy. Uh, they run a little bit more efficiently uh and they don't have as many freeze problems or freeze issues in the winter time that we have to navigate
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around. So, really trying to get a seawater pump uh seawater heat pump in Boston. All right. Electrification in Philadelphia. Uh so this is also well underway. We don't have an EB boiler in Philadelphia yet. Uh and we haven't started construction on a heat pump. Uh that being said, uh we're navigating the permanent regulatory structures. Uh we're well underway getting a small electric boiler put in place in Philadelphia at 9 megawatt and they've both been migrating it up to 50
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megawatts. And we're looking at a much larger heat pump complex in Philadelphia versus Boston. Uh so right now we've got know 45 megawatts preliminary design, but we're looking to go possibly as large as 85 megawatts. Uh and again that heat pump will harness the energy in the scoop river which runs right next to our plant that we used to use uh for cooling in our condensing steam turbines. U we still use actually one of our condensing steam turbines there. So we have full access to that river water uh and we can
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use it to uh to take that energy and make steam and then like I already talked about uh same thing with thermal storage that'll come in later. Um but this allows us to put in a large volume of thermal storage upwards of 600 to 1,000 megatt hours. Uh so we can leverage that price disparity that we're seeing out on the grid with the solar that I talked about earlier uh and the wind uh and and uh take those lowcost electrons in from the grid, store them in our thermal storage, hold it for a
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little bit, and then send it out as heat uh several hours later. It's a it's a way for us to very economically or more economically generate uh steam for renewable electricity or decarbonized electricity. Uh Baltimore uh as as I mentioned earlier, depends on what city you're looking at. Uh Baltimore's got a slightly different favor flavor on electrification. Uh we're well underway on our preliminary design and doing an installation uh for our electric boiler uh in the Baltimore area. Uh so
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Baltimore's electric boilers will be very similar to what we're going to see in Boston and Philadelphia and Grand Rapids and the other cities. Uh where Baltimore is a little bit different uh is that we've got a very large chill water system in Baltimore. Uh and uh we're agnostic as to where the heat comes from for these heat pumps, but once you land these large industrial scale heat pumps, they're just heat vacuums. You can go collect heat from a lot of different areas. We're looking at
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collecting heat from uh you know subway tunnels. We're looking at heat collecting heat from the big dig in Boston. U but one of the great places that we have a lot of uh waste heat uh is our cooling systems. Our cooling systems take heat out of the buildings and they push it over to cooling towers and exhaust that. Uh so our Baltimore heat pump systems are looking at heat recovery chilling uh where we can tap into our chill water system and pick up you know 30 40% of the total heat that we need uh to uh to serve the heating
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system. Next slide. uh Grand Rapids uh we've got an electric boiler uh that is already underway. You can actually see the electric boiler there. Uh we did our first uh we we no longer do ribbon cutings. I shouldn't say that. In Grand Rapids, we no longer do ribbon cutings. We do wrench turnings. Uh so we did a wrench turning um with uh with the uh folks of the of Grand Rapids. And Matt, help me with the name. >> Yeah. No, you've got you've got next to Kevin there is Congresswoman Hillary
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Skolton. Uh we have folks from the city, we have folks from the state, and folks from the county. uh which I think underscores how as we get into these cities that are developing a lot of these decarbonization legislation and ordinances uh just making sure that we're able to have a credible seat at the table and talk about how we tr truly do want to be a partner in this work. I mean that's that's a great picture. It was a great event and a great celebration. The congresswoman's been
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enormously supportive of what we're doing. We've even been able to uh win over some state funding to help support these efforts in both uh Maryland and uh and uh Michigan. Yeah, Congressman was exceptionally supporting was uh and it was great to see her at the uh the site uh do the wrench turning and kick off our effort to get our uh our Grand Rapids uh 9 megawatt evil up and running. Uh and this should be online in 2026. Okay, next slide. >> That's it for our slides. Uh Kevin, I
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think Yeah, thank you. >> All right. All right. Well, we're we're happy to take any questions. Uh like I talked about, our electrification efforts are well underway. Uh and um yeah, this is uh I'm convinced this is the next phase in district energy here in the United States and we're happy to be a part of it and happy to be leading the way. >> Thanks very much. Um Kevin and Matt, appreciate your starting us off leadoff batters here from the Boston Red Sox, I mean vicinity. Sorry about that one. Uh
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we're gonna we're now gonna um move uh west to Manhattan and Joanna Jerger from Con Edison District Steam. Uh so just to the audience, we're going to uh please submit all your questions into the Q&A and at the conclusion of the three presentations, we'll come back and and bump through the questions. So now over to Joanna. U Jo Joanna, what's uh what's new in the Big Apple? >> Oh, I'm I'm happy to provide an update, Rob. Thanks so much. Can you just confirm you can see my screen?
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>> Yes. >> Okay, fantastic. So, uh we're not quite as far along as vicinity, but I am happy to report that we are making um some headway with the decarbonization efforts that you know we we've done in the past and and moving forward. So, uh I will first start uh again, my name is Joan Jagger, general manager at KO Edison. Um I'll give a little bit of an overview on our steam system as it exists today and then talk about the drivers for decarbonization uh policy specifically and the efforts
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that we're making um since last year and moving forward. So starting with the steam system right now you can see the the footprint we have is is shaded in that that blue area. It's predominantly and and essentially resides entirely in Manhattan. So, our distribution infrastructure extends from the bottom tip of Manhattan up to 96th Street on the west side and 89th Street on the east side. Um, the blue shaded area again is our distribution infrastructure territory and our customers. We have
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about 105 miles of distribution infrastructure, 91 of which are mains and about 14 miles of steam services. The red little pin drops on the screen are indicative of our steam generating facilities. So the top four going from top to bottom uh 59th Street, 74th Street, 60th Street, and East River Station are all Con Edison owned and operated steam generating facilities. The bottom one in Brooklyn is a contract that we have with Brooklyn Navyyard to prod to um purchase steam from that facility that is routed underneath in a
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tunnel underneath the East River that predominantly serves our uh customers in lower Manhattan. So with the asset base that we have in place, we have a steam capacity of 10.8 8 million mounds per hour and that extends from uh that's through the use of our various convention conventional boilers which consist of high-pressure boilers, package boilers um and most notably over at East River Station we have cogen units that produce both steam and electricity. Uh the electrical capacity at East River Station is about
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700 megawatts and predominantly serves the electrical load in lower Manhattan. Uh I'll get into customers in the next slide but high level we have 1500 customers and we are the largest steam system in North America. All right so our customer base as I mentioned 1500 customers uh one customer could be as big as the Empire State Building, One World Trade Center, Grand Central Terminal as you can see on the right there's some notable customers that you're probably familiar with or have
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heard of. Uh so one customer can be really really large um or you know on the smaller side a three-story walk up building residential right so 1500 customers uh is a good amount if we break it down into the types of customers they are we have about a third are office space uses the other third is residential buildings and kind of rounding out the last third would be a compilation of other commercial uses hotels museums hospitals uh education and uh religious facilities. And then when we talk about what their
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their end uses are predominantly in our service territory, we're we're providing for their heat and hot water distribution, domestic hot water and air conditioning. Uh those are the big drivers of our steam. Uh but of course we do have uh museums that are using it for humidification, hospitals using it for sterilization, and other customers for for different uses. So decarbonization efforts, I don't want to say that we this is the beginning of our journey because we've been decarbonizing um for decades through uh
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oil conversions and and fuel oil transitions. Um but we're we're kind of embarking on a new type of decarbonization as we're looking to install uh electric uh steam producing assets. And I'll get to that in in a few minutes. But the big drivers behind why we're decarbonizing is really within two particular laws that I'd like to highlight. The New York State Climate Leadership and Community Protection Act, which I'll call CLCPA from uh from here on out, was enacted in
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2019. It's a state law for all of New York State. and um it it established pretty aggressive emissions targets for for the state and the ones I'll highlight here are by 2040 we need to have a zero emissions electricity production uh which is fairly aggressive and then further a 40% reduction in emissions from baseline 1990 levels by 2030. Uh I'll I'll in a subsequent slide I'll show you you know what that means for us and where we're where we're stacking up to these targets. Uh and
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then further by 2050 an overall 85% reduction from those b those same base 1990 levels. Uh so this these particular metrics are baked into our our clean energy commitment and we are committed to helping the state achieve the state achieve these goals. So this directly impacts and and affects KHN. Um whereas this New York City local law 97 indirectly affects Khed. Uh so this particular local law was established um and enacted in 2019. It is an emissions law targeted at buildings in New York City to help curb
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emissions. So the applicability are is for buildings 25,000 square feet and above. And so what it's doing is it's establishing emissions caps for these buildings. So based on the occupancy classification, so whether it's a hospital, commercial, residential, etc., and utilizing the gross floor area of those buildings, it's setting a cap as to what those emissions can be. And if that cap is exceeded, a penalty uh is is uh essentially put on and at the at the cost of $268 per ton of overage for that cap. And so
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where we as K Edison come in is that as these buildings who are utilizing a variety of different energy sources, a building could use could use steam, could use uh oil, could use electricity, and depending on how much they're using and what uh emissions intensity is for that energy source will dictate how they land comparative to that cap. And so that's the that's the impact we in steam feel and and are working to minimize. So as you'll see here, I moved on to the next slide. These are the emissions coefficients set
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by the department of buildings for local law 97. To date, they've established two sets of coefficients. The first is in 20 uh the time period of 2024 through 2029. And the second emissions coefficient is from 2030 to 2034. So as it stands right now today in 2025, steam has the lowest emissions coefficient compared to the other energy sources. And so we're in a pretty good space right now from an emissions perspective and local law 97. But you can see in the next time period electricity takes a steep decline down
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um where it becomes much more competitive with the steam emissions coefficient. And so when we focus on the efforts moving forward, it's how are we going to affect that steam emissions coefficient to make sure that we remain a reliable energy source for the customers in Manhattan that need um and can use and benefit from the steam system. So, there's a lot on this slide. Uh, this the primary point here is for you to see where these targets are from CLCPA and local law 97 and kind of where
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we're stacking up to date and and the work we have to do in the future. So, starting with CLCPA, taking a look at the 1990 baseline, you can see where we were from an emissions perspective, about 2700 metric tons of CO2. And we're talking at a time where we had higher steam loads, which means higher emissions. We didn't really have much in the way of energy efficiency and we were predominantly predominantly using fuel oil as our source of combustion. Um, fast forward to today, all of that has
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changed. We predominantly use natural natural gas uh between 97 and 99% of the time and now rely on number two fuel oil as a backup source that we're really only using when the gas system is constrained. So compared to the the goal of the 2030 goal of a 40% reduction, we're well ahead of that. And when we look at the 2050 goal, we need to get to 85%. And and I would say we're we're well on our way to doing that. and the the future decarbonization projects that I'll talk to in a little while are
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really going to help to drive us closer to that 85%. When it comes to CLCP, I I mean I'm sorry, when it comes to local law 97, again, these are like implied targets. These are these are what we can do to to remain competitive um for that steam coefficient. So this uses the 2005 baseline and and our our target would be to reduce 40% of that of that baseline year. And again we're today we're ahead of that ahead of that target. And then similarly looking fast forward to 2050 we do have some
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more work to do. Ultimately, the local law 97 target is to be net zero emissions, but we believe we'll have to get there through carbon credits um in addition to a variety of other uh implementations. So these the you probably I mean we just saw a lot of this from from Vicinity and I have to say we've we've been in conversations with them over the last two years or so but it's really quite validating to hear the efforts that Vicinity is making and has made and how that lines up really closely with the
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output of a study that we had done last year and where we want to focus our decarbonization efforts. So uh in 2024 we completed a decarbonization study that highlighted sort of these no regret uh implementations that we should focus the first three being being those technology solutions. So we again we heard it from vicinity we have uh an electric boiler a thermal energy storage unit and an industrial heat pump and that's essentially what we've petitioned the public service commission to approve
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so that we can go ahead and implement it. I will note that Con Edison is a is a regulated utility and in order for us to move forward with projects that could have a rate impact, we have to position the public service commission. And that's exactly what we did in in April of earlier earlier this year. We we sent a petition with these five uh projects looking for approval. And that's the state that we're we're currently in right now is we don't have approval to move forward. We're going through a um
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question and answer period to provide information uh so that an ultimate decision can be made. So just going into a little bit more detail, the electric boiler would be cited at 74 Street capable of producing 150 mbs per hour, which is the equivalent of one of the package boilers that we have within our existing fleet. Thermal energy storage high level is a really great technology to be able to decouple the uh the source the electrical source from the steam uh steam supply and need or dispatch for
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the system. Um this would also be cited at 74th Street um and is is essentially a a thermal battery, right? So so you're just charging and storing heat for the time where you need it on the steam system, ideally minimizing the impact on the electric grid. And then lastly, the industrial heat pump would be cited over at East River where we do have existing access to the East River as a source of heat. So we have our cogen units that are using river water uh for for their condenser and it would essentially be
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tapping into that. Um last uh second to last is a software tool which we've gone through two rounds of R&D piloting to to demonstrate that this this software tool can optimize fleet dispatch to either optimize for cost or emissions reduction. So, we're really excited about this technology to to further drive down emissions and and and increase fuel savings for our customer. And then the last item here is a tariff change and it essentially allows us to buy at a premium more expensive RNG in
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the effort to reduce the the um overall emissions from uh the burning of our our existing fleet. And then I'll just leave with this because a lot of it has been focused on the the production side. We just completed last month a feasibility study focused on hot water loop and being able to utilize waste heat from an existing steam customer. Unfortunately, the results of this were um not really financially feasible and and had um overall the the payback period was much too long uh well over a hundred years.
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So, we're going to kind of take the lessons that we've learned through this particular study and see how we might be able to pivot and um and rethink about how we can we can maximize the use of the um the heat from or the the uh sorry, the heat from the steam customers condensate and and maximize its use. So, more to come on this and we're excited about it, but I I did want to highlight the fact that we we are continuing to think about how we can um increase efficiencies on the distribution side.
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So, that's all my slides. I will hand it hand it over. >> Thanks a lot, Joanna. Really uh very interesting. I mean, the uh the city that never sleeps, right? The the the challenge. Um so, a couple of threads are emerging. One is access to renewable power. um transmission level, heat pump, uh steam uh uh steam supply. Very interesting. Uh so uh now we're going to we're going to finish with a presentation uh from San Francisco um city by the bay and Mike Urkus is going to give us an insight to you know
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uh what's happening with the district's theme system in downtown San Francisco. uh and then we'll come back and uh walk through the questions and try to get uh uh get the panel discussion going. Mike, over to you. Take it away. Thank you. Thanks again, Joanna. >> Thank you, uh Rob and thank you everyone for for joining today. Um we really appreciate the opportunity to share um at this presentation. I just want to confirm everybody can see my screen. >> Yes, Mike. Thank you.
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>> Yeah. So, um we're gonna we're going to just kind of go through um basically where we're at here in San Francisco. Little bit behind probably Boston. Um definitely well on our way. Um probably I would say in between where Boston and New York are currently. Um so currently why decarbonized downtown? Well, obviously we're all heading in that direction, but currently the the the San Francisco climate goals and challenges. Um the department of environment here in San Francisco has presented a climate
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action plan which aims to eliminate natural gas and use renewable electricity by 2040. Um this obviously creates infrastructure and cost challenges for the existing buildings as well as the utilities. I mean we're all going to be faced with this type of thing whether the infrastructure can handle the you know the additional electric load or whether the buildings can can retrofit to to accept um turning all electric. So, those are some of the challenges that we're we're trying to solve. I I love Kevin's um term, the
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easy button. That's what we're trying to offer here um as far as being able to decarbonize or accelerate decarbonization here in San Francisco. So, the district energy solution, Cordia's district energy approach provides a centralized scalable solution to decarbonize thermal energy for many buildings otherwise faced with major renovations. Again, you know, if you're an old historic building and you've got, you know, steam infrastructure or, you know, existing um, you know, uh, gas
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boilers that that goes to potentially hot water internal systems, it might be very difficult to renovate the building as well as, you know, avoiding downtime um, if you're able to switch over to district energy. Again, benefits of centralization. Centralizing energy systems accelerates carbon reduction, improves reliability, and reduces the disruption to the buildings. again by by allowing them to maintain uh existing infrastructure. Like I said, very easy conversion um for a lot of these buildings when if you were to just
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convert to uh district energy. So, we all know kind of what what district energy is. Um we we have plants as well. I'm going to just focus more on San Francisco obviously, but we we also have facilities in Pittsburgh and Harrisburg, um in Omaha, Phoenix, and Minneapolis. and all of them are faced kind of with exactly what we're looking at. Um here, Cordia's goal um as a as a corporation is to be net zero at all of our facilities by 2050. Fortunately, here in San Francisco, we have a little bit of a jump start on on
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that goal because we have direct access to electricity produced um via a hydro dam. So ultimately, we we've got a little bit better of an opportunity to, you know, procure that that carbon-f free power. Um, district energy systems offer scalable, flexible solutions that enhance sustainability and support urban de decarbonization efforts. Again, um, we all kind of know what we're trying to accomplish here as a as a community, as a district energy community. So, this is what we're looking at right
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here. So, these are our operations existing u historical steam service. So, we have provided steam heat and we are a steam only uh facility here currently. We're looking at other potential options outside of our existing system, but currently we are a steam only facility. So we've heated downtown San Francisco since 1910 through two major steam plants. We have about 70 a little over 75,000 ft of underground steam distribution system and we run a system at about 125 PSI. We currently have
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about 180 buildings on our system. some of the the notable customer base that we have and and you there's a lot of iconic and historic buildings as well as I mentioned um Bank of America headquarters, the Moscone Center, um Convention Center, San Francisco City Hall, which is obviously a um one of the reasons why we've been able to be such a a great partner with our local um with our local government is city hall is actually on our system. Hilton Union Square and and Standard Oil Building,
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just just to mention a few. um we have you know 40 years of regulatory experience um we are a regulated utility here so that presents its own challenges um but you know again in in with the ability to work directly with PUC um a lot of our efforts have been you know actually I don't want to say accelerated but for sure we've we've developed a great partnership with with our local government our local utilities so accords energy delivery and we have a current maximum capacity of about
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420,000 pounds an hour we're going to obviously look to increase that. Our anticipation is as we offer this this again easy button solution to to downtown San Francisco, we anticipate running out of capacity fairly fairly quickly and we're already in the works of you know other projects that we're looking at um we'll call phase two of the project we're going to talk about today to increase the capacity that we currently have. Um, again, our our team manages distribution system, the plant
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operations, and customer service to enable or to ensure reliable and responsible energy solutions. So, we're kind of a one-stop shop. We don't really contract anything out. Everything we do here is uh internal operation. Sorry, I was going to go back. So, obviously, that's just a little map of our area. Um, so one of the other things I did want to bring up because here in, you know, especially on the West Coast, so we're very very hyperfocused on decarbonization, but here on the West
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Coast, we're also very concerned about water conservation. Another obvious uh very important and um, you know, commodity or natural resource that we I think we really need to focus on. So it's it's in in kind of unison with with our decarbonization efforts. We've also been looking at several water recovery or water conservation efforts. And the big one that we've done in in recently was we recover we are recovering groundwater from our a local um subway system that was basically just pumping
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the water out into the bay. So, we put in this entire system and we're recovering pretty consistently since about 2019 about 30 million gallons of water a year. So, we're reducing our water use by about 30%. Um, recovered water is purified to our boiler grade using uh filtration and and a RO system that we put in. And this project was developed again with with a partnership with the SFPU. This was again back probably prior to the hyperfocus on decarbonization where they were really focused on water conservation. So we
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were able to partner with the PUC. They actually gave us some grant money to um to to offset some of the cost of the installation and we're able to execute the project. And this, you know, so like I said, since 2019, it's it's been running like a top. And this kind of shows the ability for Cordia to, you know, self- finance and self-perform these type of upgrades. We also have an existing uh well that we are currently working with the PUC to to try and permit. And if we are able to to
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go ahead and permit that well, we will offset almost 100% of our u domestic water use. So here is our electrification strategy. So Cordia plans to replace our natural gas boilers with electric steam generation boilers to support cleaner energy use. Now again I'll say we have kind of two phases very similar to Boston where the first in phase the cleanest easiest quickest way is to install electric boilers. The second phase is going to involve heat pumps and the the issue is we do not have a a
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river anywhere near our facility, but within fairly um close vicinity, we do have San Francisco Bay. And so we are currently in a in a very early stages of looking at procuring an additional site to where we can install heat pumps and and use bay water very similar to what Boston is going to be doing to produce that high uh high pressure steam that we can plug right into our existing system. The issue with trying to convert our system to any type of hot water system is, you know, just like any other major city,
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there's just no room and the cost would just be astronomical to try and, you know, replace a one steam pipe with with two giant hot water pipes. So uh the project timeline again construction we're anticipating to start somewhere in 2028 and commissioning is planned for 2031 which will meet all the renewable mandates set forth by the city and the department of environment and the centralized electrification approach supports obviously urban decarbonization and reduces cost compared to individual
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building solutions. So kind of the timeline, we've already implemented Burns and Mack uh an engineering group that that has already done the initial preliminary study. We're at about 30% design for for what we're um planning to install. The utility, our local utilities performing system impact study again because their current system, you know, potentially may not be able to handle the type of um electric load that we're we're going to be requiring to to run these boilers. Um and and we're
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working in partnership with the PUC who who's actually going to be building their own substation and we're going to pull the the power basically directly off of their substation. Following that completion of that study, we're going to initiate our environmental review and we're anticipating this to take, you know, 6 to 12 months. And then in parallel, um we'll be doing additional engineering to to finalize the the construction at our plant. then we'll go before our board and at that point like
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I said following full approval of construction will be initiated and we expect to complete it by 2031. We're actually um in line to complete the project much sooner than that but there was delays on on the uh PUC end as far as developing their their substation where we're going to be getting the power from. So again, this is kind of the let's just say the cascading effects HCHE's dam the substation the new substation PC's building our electric boilers and then carbon-f free to our to our existing
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customers and hopefully a lot more on top of that. So again, we'll be upgrading our facilities with the electric boilers. The project will be financed um on Cord's balance sheet showcasing our strong financial backing and execution capability. So, we're actually owned by um KKR, which you know, their diversified core and infrastructure fund provides Cordia with long-term capital for critical infrastructure projects. So, again, you know, this this is is going to be all self- financed. And then sustainable
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energy mission, Cordia, Cordia's upgrades aligns with its mission for sustainable energy transformation and urban environments. And again, I will say Cordia as a corporation has its goal to be carbon-f free by 2050. So, I kind of wanted to show this slide because unlike some of the other places, we do not have a lot of space. So, our biggest challenge is space. So, we've historically always tried to fit 100 lbs of oranges into a 50 lb bag. So, basically, this is our existing space. Uh this is our plant and hopefully you
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can see my cursor, but if not, it's off to the left. So, our plant, you can see the stack in the middle. And then we have a parking lot there where the where the trucks are parked. There's zero space available anywhere else on our site. And this is the existing site. So essentially the the proposed construction will be an elevated platform so we can keep our parking space and the the new transformer will go on top of that elevated structure and that that transformer will actually be operated and maintained by the SFPU. And
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then we will take the power from that ex that new transformer to um to inside the plant where the new electric boilers are going to be. We're gonna have to do a lot of Jenga shuffling inside of our plant to to actually get these to get these electric boilers in there. So again, not a lot of space. One of the you know it kind of restricts our options so to speak. So you know again we are currently looking at other options in other sites to you know incorporate heat pumps um as a as a main heat source.
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Okay. So, one of the things we are going to do as part of this project though is so we current our current operation as as an efficiency um upgrade that we we did about 15 years ago as we installed a a direct contact economizer. And so what it did or does I should say was it actually uses our flu gas as a preheat source for boiler makeup. So, this is all downstream of our existing economizers on our boilers. And so, it preheats our our makeup water up to, you know, between 160 and 180°. Well, obviously, once we stop burning natural
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gas or or restrict it tremendously, that that heat source goes away. So, we don't want to be inefficient and put, you know, 55 degree water into our boiler. So, we're looking to incorporate a series of heat pumps that much on a much smaller scale to incorporate into this system to preheat our boiler makeup. So, you know, just some quick numbers that we had um our team do what we're looking at. And these would be air source heat pumps as well. And again, very limited on space. We're going to have to do some some
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serious retrofit to our to our roof to get these installed. But at the end of the day, we're looking at increasing our, you know, our efficiency on those electric boilers. um you know 99% going to about what we anticipate to be about 110%. So it increas you know it reduces our electric consumption but also gives us about an extra you know um I think it was 14,000 lbs an hour of steam. So we're all for that. It's a very basic you know line diagram. That's what we're looking at right now. This is our our
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existing DCI which utilizes as I said the the flu gas from our existing stack. We'll replace that with heat pump to our DA to our electric boiler out. So that again, combining heat pumps with electric boilers boosts that efficiency to 10 107% and gives us 12,000 lbs an hour extra. So um and reduces our electric use by 7.4. So again, we're very very sensitive to customer rates. Again, we're a regulated utility, so any rate case that we do has to be approved by the CPU. And we're also again, we
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want to keep our rates as low as possible. So any energy efficient project or in, you know, anything that we can incorporate in this project, we're going to do. So we would keep the rates lower the customer and increase system capacity and affordability and service. So kind of community impact and future vision. Um we we have a diverse customer base as I stated. Cordia serves prominent institutions supporting vital commercial, civic and cultural facilities in San Francisco. Our local employment um 24 local staff
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including technical specialists. We have 17 union workers fostering communitydriven workforce. Many of our employees are veterans and mostly coming from the Navy. Um, again, our community partnership, the company collaborates with local government agencies, the SFPU and transit agencies to enhance community energy services and sustainability. So, again, I I'll say we we've had a really great relationship with our local government and our local utilities. Um, especially the San Francisco Public
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Utility Commission. they have been just handinhand with us walking through this entire project. In fact, some of the initiatives and and ordinances that have been passed uh around decarbonization is particularly the the the SF climate plan as well as a a new BA major building renovation ordinance that has gone out that requires all buildings to be all buildings going under a new retrofit or major renovation is what they call it or any new construction have to be all electric starting next year. So gas is done for anything new or
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anything retrofitted. We were able working with our local government to actually um have our system included into that as a option um to basically comply with the the new regulations. So that's been great. And we are also included in the SF environment climate action plan. So again, it's all through relationships that we've developed over the years with our local government and our local utilities. And again, our our commitment to sustainability. We emphasize reliability, sustainability,
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and excellent customer service. And it's long-term energy partnership. And we do we consider our our clients or our customers our partners 100%. you know, before we even before we even started down the road of looking at this type of project, we went out and talked to, you know, our top 30, our top 40 customers to run the ideas by them, our our plan, our anticipated implementation, um anticipated rate structure. We're actually going to potentially offer a three- tiered rate structure. So let's
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just say prior to the absolute we have to be carbon-f free a building's faced with I you know maybe I just want to do half carbon free steam and so or actually I want to wait until I absolutely have to do anything. So we're we're looking at offering a three- tiered rate structure. Obviously it'd have to be cleared by the PC but we've already spoken with them about it and they are completely open to the idea. Oh shoot they do. And so carbon-f free downtown vision again transition to
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renewable electricity. Um Cordia plans to be net zero by 2031. Cordia San Francisco. So we are already currently using carbon-f free electricity here at our plant but it's a very very small amount. The that obviously the big demand is going to come from our electric boilers but our plan is to be net zero by 2031. Fully adopting that renewable electricity as well as some renewable gas for potential downtimes some peak demand times. Uh we're also in in talks with the San Francisco PUC Wastewater Division to utilize their
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their methane that they're going to be producing off of their new water treatment facility which is just down the road from us. So electrification of steam networks, centralized electric steam and district energy systems will replace traditional fossil fuelbased steam networks. And um again, collaboration with the SAPC and other partners strengthens technical and financial support for decarbonization here in San Francisco. So again, our our Cordia's approach provides a scalable blueprint for other
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cities aiming to achieve carbon-f free energy systems. And I believe that's it for San Francisco. >> Great. Thanks a lot, Mike. Uh really appreciate it. Um so uh if I could invite all the panelists to come back. Mike, thanks so much for sharing uh what's underway in San Francisco. Really a a lot of phenomenal work. So uh we're now going to kind of bump through the questions. I'm going to try to consolidate them a bit, but u so first question is uh so in electrifying steam obviously that requires it may in
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some cases require a big investment from the electric grid. what what uh what needed to happen in order for you to electrify the steam but and I I'm thinking in fact that these three systems are really uh connected to the grid at a wholesale level right I mean you're at like transmission level electricity which is a big head start but you know what kind of infrastructure investments were required to to kind of move you and San Francisco you're not you're waiting on the utility who would
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like to start Kevin can we start in Boston with. >> Yeah, sure. Yeah. So, it it depends on what city you're taking a look at. Uh but there's a there's a couple themes on the interconnect. Uh so, for the larger cities that we serve, uh we typically already have some sort of co-generation or large co-generation. Uh and as everybody knows, co-generation produces a lot of electricity. So, if you look at our Kendall station in Boston, which houses a 225 megawatt cogen, uh we've
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got a 300 megawatt substation that sits on the property and it was installed to to serve the cogen. So we have a tremendous amount of electrical infrastructure on the grid that connects us to the backbone of the grid at the higher voltages. I think in Boston it's 110 KV, Philadelphia, it's 230 KV. Uh and that allows us to get rate structures that mirror or very closely mirror wholesale rates. So having these large cogens uh already plugged into the grid number one allows us to have interconnect infrastructure in place so
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we can import large volumes electricity. rather than sending electrons out, we're going to use the same infrastructure to turn uh and and import electrons. Uh the higher voltages give us access to wholesale rate structures like you alluded to, Rob. Uh and this isn't true in every city, but in a lot of cities, the difference between wholesale and retail is dramatic. You know, up here in the Boston or the New England ISO area, uh wholesale rates may on any given day say between $30 to $60 per megawatt. Uh
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whereas the retail rates will strike anywhere between $250 to $300 a megawatt. Uh so there's a dramatic difference between wholesale and retail rates. uh when you get outside of the cities where we don't have large codegens, uh we're doing something that's very similar to uh what Mike and team are doing is we're we're working with the utilities uh and we're trying to find access points where we can uh get large volumes of infrastructure, get an get a u an interconnect upgraded, get a
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substation upgraded uh and that's a little bit more complicated and it's a little more challenging to get to the higher voltages. Uh but we I don't think we've yet found a city where we aren't able to find a a good access point that's a former power station or a former newspaper printing building or former something uh where it's got either there or in near proximity uh the type of electrical infrastructure we need to put an electric boiler or heat pump. Uh and the last point uh is uh we
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we found that partnering with the electric utility has often been a good thing for us. Uh this isn't something we were sure how it was going to shape up when we got into this. Uh but uh we've seen that for the electric utilities, they're also under the gun to have to decarbonize. Uh as part of electrification, they have to put in a tremendous amount of substations in a dense urban environment. And that is I see Joanna nodding her head and that's enormously complicated. I mean the last
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substation they put in the Boston Cambridge area was a billion dollars and it took 10 plus years to put in. We've got a lot of infrastructure around the cities. We're we've got the maps out. we've got the facility charts out and we're working with the electric utilities of hey if we give you some space in one of our steam facilities uh and you bring in a substation that helps solve the substation issue for you and also it gives us access to the kind of power and the kind of voltage that we
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want for our electrification plans. So I think those three put together has uh has given us a leg up to be able to get the right volume of electricity the right price uh for our electrification plans. So I I'd like to um and I know Joanna and Mike you you kind of share the the challenge of uh well the steam system is in fact a tremendous partner for the electricity grid right and um uh so how um what I I don't believe there were like government subsidies but there are local policies right so Joanna you
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mentioned local law 97 in Manhattan Mike, you mentioned the San Francisco climate plan. Matt and and Kevin, I know in Boston there's Berto 2.0. How important is local policy driving, you know, the steam system to accelerate the investment in decarbonization to do it on behalf of your customers? Um, is that really the a driver Joanna in New York? >> So, it's a driver for us. I think there's some convincing that needs to be done at the the pol for for the policy makers. Um we have to do our part to
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convince them that it's more efficient to local uh to to decarbonize in a central location instead of expecting thousands of of different people to electrify independently of each other. Um so we're making the case and I can't say it's not a it's a tough battle, right? So, I I think we're the conversations we're having with uh Department of Buildings in the city is there's there's a lot of oomph behind local electrification. Um so, we still have a stronger case to make and and
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constant conversations and sharing the benefits of a centralized district energy system. >> So, solving the problem, uh Kevin mentioned the easy button, aggregate, integrate, innovate, right? I mean, uh, I think Mike in San Francisco, you know, you're really kind of taking on the challenge. San Francisco is a a very dense sort of small city, two miles by two miles. Um, uh, Mike, how important how important is local policy for Cordia San Francisco to to kind of, you know, make this investment?
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>> Oh, I mean, very important. As I said, you know, we've kind of been walking handinhand with them as they've been working toward their goals, but and they've been completely open to the idea of district energy is a great opportunity to accelerate their goals, you know, in one project in one location. So, you know, one of the one of the things like I as I mentioned is they've actually allowed us to to make some additions in their local policy to include district energy as a as a
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compliance uh you know, as being compliant for the building. So it absolutely 100% has been very very important and very valuable. >> And and Matt Matt you you bring 10 years of of experience from Boston City Council, right? And you heard Joanna say there's some convincing to do. Uh h how do you how do you inform educate you know sort of policy makers to embrace district energy as an accelerant as a as a solution? >> I I think it's going back to fourth grade math class and you have to show
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your work. You have to show that this isn't just a pie in the sky idea. I mean, five years ago, I was a city council in Boston helping to advance the Berto 2.0 legislation. He had done the benchmarking about eight years earlier. This was the building standards. And I got a call from Kevin Hagerty and a name many people on this call probably know, the late great Bill Dross saying, "We think district energy could be a solution to help cities decarbonize." Admittedly, I wasn't familiar with it,
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but I was immediately brought into this vision of using the Charles River, an iconic waterway for whom the song Dirty Water has been named, as a renewable energy source. And as I eventually joined the company and got to see firsthand what Kevin's vision come into practice, it's been nothing short of absolutely inspirational. So, as a former policy maker and elected official, I think there's a real hunger to embrace new ideas, recognizing there is not one answer. We need to be realistic. Um, we also need to work
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together. And to go to your earlier question, Rob, you know, uh, as you talk about partnerships with with the electric company, uh, Eversource would be a natural business rival for us several years ago. Now they actually cite the electrification of district energy systems in their ESMP uh as a way that they can achieve some of their goals as well. So it's about working together. It's about being honest. Um continuing conversation. Many utilities, you know, not to cast dispersions, but many utilities would fight many of these
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mandates and ordinances going forward. Uh we want to have a seat at the table because we can do it and other cities have done it. And and when we point to some leading sustainability cities particularly in Northern Europe, places like Copenhagen, Malmo, Drummond, the list goes on and on that have used their district energy assets to help uh reach aggressive decarbonization goals that gives us immediately immediate credibility. But now the hard part is actually doing it. So it's staying active. It's staying engaged. Um they're
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going to push us probably farther and faster than we want to go and that's a good thing. Um but as long as we can have an an aggressive but achievable timeline, district energy is absolutely part of the solution for these cities. >> But Matt, speaking of timeline, I mean the electric boiler went from sort of concept commission in about two years, right? I mean very, you know, a sprint in a lot of ways, right? So, you know, how how does how can um how can the district energy industry help educate
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policy makers that uh in you know, in lie of electrifying everything, which is a phrase that kind of boils my water. um you know how do we what needs to happen uh to you know help people understand that you know the district energy steam network is in fact a solution right um go Matt >> I like I like the first slide that we use Kevin and I use in virtually every presentation that shows 1900 through the present and show evolution where existing infrastructure that's constantly evolving the constant about
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district energy systems is that we're constantly getting better. Um, and that's something that that that will absolutely continue. So, it's to to show that, it's to demonstrate it and it's to move from concept to actual practice uh is the way that we're going to be successful. And then the other thing is, you know, as the national level is going to uh roll back a lot of these environmental initiatives and laws, it's it's cities uh that are going to sort of double down and triple down in many of
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these things. So it's it's able to be adaptable uh focused and move fast. And and to your point, two years from, you know, a sledgehammer to operational is nothing short of uh of really really remarkable. >> Well, something that I'd like to add on to that, I mean, you talk a lot about regulars and policy makers, and absolutely that's critical for getting these kinds of projects off the ground because it creates a market. But our largest and our first east team customers were actually not under the
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gun of Berto or Buo. So I think that's a really really important point. You know people are looking at whether or not they can get these kind of projects to go forward. There is a large appetite when you look at the Eds and Neds which are very common customers on district energy systems. They have their own institutional goals or drive that they're trying to get to some sort of level of sustainability. uh and those first movers in the EDMS space were actually our first underwriters uh and
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our largest underwriters of our electrification plans. So having the Berto and the Buyos and the local law 97 absolutely critical creates a market uh but you know there's a large portion of the customer base out or I should say there are large select customers out there uh who are willing to underwrite these kind of projects because it's just less expensive for them to use the district energy system than it is to try to do it their own way. So I think it's uh um regulation and policy is critical
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but you can you can get pretty far field uh with with these large customers without the right kind of regulatory backing. And and Kevin, you make a good point. Uh, you know, I think there's a common thread between Boston, New York, and San Francisco. Um, that really these are you have landmark customers, right? These are institutions, museums. Uh, Joanna, you mentioned uh Kevin, city hall, iconic uh buildings. So, um, is there I is is is there a solution where, you know, you kind of knock over the first domino and
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I don't I know they don't just fall, right? It's a it's a continuous effort. Um, but, you know, how important is to how important is it to secure, you know, a primary anchor user of electrified steam? Um, Mike, you know, you're going to be converting renewable electricity into steam. Joanna, you you know, I mean, you're already the lowest carbon resource there. So, uh, so how important is like the uh just having the scale that our systems uh have to offer? How the aggregated scale?
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Mike or Joanna, any thoughts there? Oh, good. Joanna, >> I'll at least start. Um, so I do think it's important. I mean, in listening to our existing customer base, of course, there's always a threat that they could leave, right? And so it's it's also a function of retention. And we've definitely heard from our customers, what are you doing? We need we need, you know, more emissions projects, reduction projects faster, right? So we hear from our customers that they want action.
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They want us to do something. Um, but of course that's counterbalanced by affordability, right? Right. We need you to do something, but it's got to be cheap, right? We need to remain competitive. So, I certainly think it's it's definitely important. Um, and of and of course, you know, we're we're contingent on approval from from the public service commission, but it's making sure that we're thinking creatively um not just about production, but about efficiencies, about energy
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efficiencies from from the customer sided uh assets. Um, and so kind of thinking holistically on how we can do things cheap but get to our goals. And I think that when when we do that and start to to make um actual tangible results happen, it'll it'll be that domino effect that you're talking about. >> Yeah, good point, Joanna. Mike. >> Yeah. Know, I mean, she kind of said said it all. And again, it's like Kevin stated as well. A lot of the buildings that we went out and, you know, kind of
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spoke with, they were already looking at potential solutions, you know, outside of having to do it, so to speak, via, you know, some type of legislation. So, when we come and offer the opportunity to, you know, hey, you just stay where you are and you'll be, you know, you'll already reach your goals. A lot of them are very excited by that, you know, potential. So again, I think very important to go out there and and actually bang on doors and talk to people essentially and get everybody pulling
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that rope in the same direction. And >> but Mike, doesn't that really derisk the transition for your customers instead of, you know, let's say, you know, let's say they move to uh electrify their buildings. Aren't they really exposed to the retail power market and the volatility there and the uncertainty of technology, etc. Don't you really give them a haven uh for a lower risk solution? Maybe maybe not forever, but certainly over the next couple of decades. >> Well, absolutely. And if you look at the
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electric rates, you know, and what they've done here, particularly, you know, in the Bay Area and San Francisco, it's astonishing where they've gone. And if you know, and we're very, we can do the similar thing with gas right now. We could provide a very stable market, you know, very stable price because we'll procure it, you know, for an extended period of time. We're going to do the same thing with electricity by purchasing it directly from the San Francisco PC. So, we're able to
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stabilize that and avoid the type of, you know, upturns or downturns in in the electric rates that may come to a building that's doing it on their own. >> So, the first phase, I guess, a common thread among three cities. Uh, first phase is an electric boiler. And well, the question was why electric and not electrode? I'll let uh I'll let uh maybe Kevin take a a crack at that. But the second phase I I think we're also hearing is heat pumps, right? So the first is sort of like the the technology
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that's more immediately at hand uh gives you access to uh you know the grid and renewable electricity and then the the you know the next is uh you know high temperature heat pumps right and so is this is the phasing of your investments also uh of value to your customers? Kevin, uh, thoughts there? >> Uh, yeah, absolutely. So, the different pieces of equipment are are a different fit for different types of customers, right? So, if you look at the electric boiler, the electric boiler is a low
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capital, but you know, relatively, you know, when you look at electrification equipment, less efficient, right? So, it's 20% more efficient than our hydrocarbon boilers. It's a little odd calling it less efficient, but uh the EB boiler is low capital, uh, less efficient. So, it's a really good fit for customers that have a very peaky profile, right? So you look at the commercial office space um you know you don't want to put in a tremendous amount of cost on capacity there because
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they're only going to use it for you know 3 months out of the year 4 months out of the year in the middle of the winter time. Uh conversely you look at uh you know the eds and meds the lab space uh they have a very very fatter consumption profile uh and so the heat pump is very good fit for them. The heat pump is a lot more expensive to put in but you know it uses half or even less electricity. So economics, it's actually cheaper to put the heat pump in and serve those larger, more consistent load
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sources than it is to put an electric boiler in. Uh, and also that's the point that keeps you competitive. It's very difficult to put an electric boiler in and compete against a building that's going to do its own air source heat pumps. Um, whereas the heat pump technology competes fantastically against a uh a building a large energy user that's going to put in their own heat pumps on a building side. So, you've got to make sure that the right kind of contracts, the right kind of
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equipment is trimmed to the types of customers that you're looking to serve. So, I I think from that standpoint, Rob, it's exceptionally important that uh um I always tell my sales team, we want to make sure we're showing up in in in the right part of the city to the right customer with the right product. And that that last part is very important. Make sure you show up for the right product, whether it's e boiler or heat. >> Yeah. and um so uh the the quiver of technologies,
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right? So as a district energy provider, you you really have a garage with like a whole fleet of of capacity, right? You have an electric boiler that you can u take advantage of negative price power. Uh you can sort of ramp quickly. Um then then you have maybe you know a heat pump that as you mentioned Kevin can support your base load through the course of the year and then maybe the I think the third phase I I heard is thermal storage right so something that complements uh all of those uh when when you think
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about the uh sort of the profile h how important is this quiver of technologies and and how does that produce value for your customers? customer because you can make the investment in these technologies that may not work on an individual building basis. Does scale really help district energy in this case? Matt, any thoughts or or Joanna? >> No question. I mean, I think that that our ability to utilize all these different arrows um makes us unique uh and strong and and you know, the expression Kevin often uses is we we
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are belts and suspenders business. uh people will pay us because these are your hospitals, your health centers, these are government build, these are folks that need to make sure that that our uh reliability rate is as high as it is. So by utilizing different tools, proven decarbonized tools, uh it gives us a huge benefit to our customers. >> And you know, you look at the list of Joanna's customers, right? Right. I mean the mu museums, works of priceless works of art, uh hospitals where surgeries are
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happening 24/7. You have missionritical customers, right? So you can't take a day off. You can't, you know, you can't really be the Boston Red Sox and, you know, lose a game or two. It's always the playoffs. Um, let's talk about technologies for a moment. And one of the questions came in. Are you looking are you looking at or have you looked at geothermal? And secondly, uh where does nuclear fit? Is that something downstream? Uh recognizing you're in urban tight urban environments and you
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know some of these technologies uh may not be an easy fit, but um geo exchange with a steam system is is that is that somewhat of a challenge given the high temperatures you have to uh produce and deliver? Mike, any thoughts there? Yeah, that's the issue, you know, the high temps that we have to deliver. If we're looking at some type of ambient loop or some type of hot water loop, then you could look at, you know, geo, but if we're looking at, you know, geo that's going to supplement our our steam
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system, our existing steam system, it's going to be a challenge. We actually looked at it. It takes a tremendous amount of space, a tremendous amount of time, cost, and obviously drilling, you know, in a in a park in the middle of San Francisco for a year and a half probably is isn't going to go over very well. So that's that's one of the challenges for sure at least for for a steam system. And the vertical density of course you know of a city like well I mean there's only I think there's only
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one city on the planet like Manhattan right where uh um and and uh Joanna a question came across uh the steam coefficient for uh or the the carbon the steam emission the coefficient for for uh conad and steam is that because you're using one fuel to make two useful sources he uh heat and power is that is that the reason for your >> Yeah. So one the two units that are essentially base loaded that's that supply the majority of steam that we use in our steam system is actually utilizing exhaust heat from a combustion
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turbine that's allocated all that all that gas is allocated uh to the electric side. So we're essentially taking that free heat to produce steam into our steam system. >> I see. Okay. Uh well I mean that's the advant that's combined heat and power. That's Thomas Edison, right? Yeah, >> let let's talk about the permitting uh process and the sort of the the gestation period. Uh to to any of the panelists, you know, how how important is doing your homework? Um you know,
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having the wherewithal to uh advance these projects from an environmental permitting and scale solution. Uh how how how challenging was that? Anyone? Kevin? Uh so these infrastructure investments are on the order of tens of millions if not hundreds of millions. So >> you don't have any choice. You have to do your homework. It's got to be welldesigned. It's got to be well permitted. It's got to be derisked and you're going to need that to get the type of capital to come to the table or
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regulators to come to the table and back your your investment. So you have to do your homework. Uh and thankfully uh we don't we're not reinventing the wheel here. If you want to see it done, you can hop on a plane, you can head over to Europe, and you can see a lot of, in fact, one of the stories Matt talked about talked about is going to Esper. Uh, so we went over to Esper to look at their, uh, their heat pump technology. Uh, they're using a CO2 cycle heat pump to take ocean water and concentrate that
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up, uh, and send that out on their hot water system. Uh, and when we got over there, uh, we were comparing notes and and somebody said, "Hey, you want to see our electric boilers?" So it was really interesting to see that you know a thousand plus miles away uh you have a a team that is working on the same problem that we have and they're coming up with a very very similar solution set >> right >> uh so yeah you have to do your homework it is encouraging that a lot of the
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district energy across the planet is going this direction you can look at Europe as a reference US district energy systems are a little bit different though so you know you have to make sure you adopt it here but yeah we spent a tremendous amount of time probably a couple years between uh engineering permitting regulatory uh just to get a package together that we felt confident enough uh could get pushed across the finish line uh to install our first heat pump. So yeah, absolutely. You have to do your
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homework. >> You know, uh Kevin, I I saw my first electric boiler. It was like I don't know. It was the size I the size of like a tractor trailer standing on its nose in a in a facility in Copenhagen. and he was saying, "Yeah, we we got paid to make make heat last night cuz the, you know, the wind turbines were still running and no one could use it and so we got negative price power." Um I mean that that's that's windfall territory. Um how when um have any of the organizations and again I appreciate
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Downtown District Steam and the legacy systems that you represent, Joanne, 140 years in Manhattan. uh Boston, you know, nearly a century. San Francisco, same. Uh have you looked at converting the steam system over to hot water or does that uh as they say in Texas, that dog won't hunt? Is it just too much infrastructure investment and and not enough advantage? Do you is is steam really the the game in our dense American cities? >> I I'll take a crack at this. So, we actually have done studies in the past.
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Uh, I'm not sure the last time we did it, but it it just worked out to be too um from a financial perspective infeasible. Um, but even if you were to do it, you're still up against the challenges of gutting very iconic buildings and the reason why they want to steam on stay steam on the first place, you know what I mean? So, um, it didn't work out in the past. I do think it makes sense to to sort of periodically refresh the analysis just to to prove and and kind of assess in current conditions, but the last time I
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was done, it just was not feasible. >> Yeah. And and I can appreciate too, you already have, you know, you already have the customers, right? They're you call them rate payers. They're already it's really difficult to advertise a conversion when you already have the revenue, right? So if new build or new start part of the city, you know, maybe a different technology approach uh might make sense. Let's talk about technologies for a second. Kevin, you mentioned actually the, you know, moving
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to ocean uh uh oceangriven heat pumps, right? And San Francisco Bay, certainly Manhattan, you've got two rivers, right, on both sides of your city. Um but going to the ocean, the salinity, does that require like a new level of metallurgy, a titanium, you know, how capital intensive is it utilizing bay water uh for a heat pump? Is there a an order of magnitude challenge there, Kevin, on a technical basis? >> No, I mean the the the technology to be able to pull seawater and use it for cooling has been around for Yes.
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So it's a well established industry and at the end of the day the heat pump is nothing but a collection of compressors and heat exchangers. >> Yes. >> Right. So we're leveraging compressor technology which ironically is is used in the oil and gas space. Um so we actually we think that's uh we get a chuckle out of that that the same technology that oil and gas uses to do enhanced oil recovery is the same technology that we're using to decarbonize cities. Uh so we get the
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compressor technology from there. It's very well established. uh you know over a million running operating hours been in place you know since the 1970s uh and the heat exchanger technology uh to use salt water is like I said very very well established you do have to go to different materials >> right >> uh but they're not you know you're not dealing with unoptanium uh type of heat exchangers uh and dealing with the growth that happens inside there's technologies in place for that so as
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Matt mentioned uh we run a belt suspenders and safety pins type of organization we have no interest in being serial number one on any kind of technology technology. Uh so we we go directions that already lean into wellestablished uh technology that's that's proven and not too expensive and that's definitely the case with using seawater for cooling or sea water for heat exchanger. >> Well, that's encouraging. You know, I know Stockholm has been heating and cooling most of the city with uh you
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know, bay water uh for a couple of decades now. Let's talk about water for a moment. Um, I know in San Francisco, Mike, uh, you you mentioned you're actually reclaiming, uh, you know, groundwater that was once, uh, flooding, you know, the BART system. Now you're using that, cleaning it up, using it, displacing 30 million gallons of, you know, kind of fresh water from the city. So, uh, uh, there was a question too about condensate, and I, and I know in in some of the cities maybe you don't
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have full coverage of condensate return. Some of your customers are using it for snow melt, etc., But um you know h how much water are you able to either you know displace or avoid or recover from from condensate is is that actually you know something that's district energy has an advantage in uh Mike and then you know any anyone else. >> Well I'll start so I'll start by saying unfortunately you know our system was built as a as a once system. So, you know, as of 30 years ago, when I when I
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first started here, we had 0% compensate return. Um, so at this point, we've built that up to about almost 30%. >> And we continue to strategically, you know, go after the bigger users obviously so we can recover more condensate from our larger customers and we continue to do that. But as a part of the project, you know, of, you know, hopefully reducing our our net uh water usage to zero, that's where the BART water recovery came into play. And that's where this well is coming into
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play. And if we can if we're able to get this well permitted, actually, we don't even need to condensate. Obviously, there's a heat aspect to it that would be, you know, uh increase our efficiency, but at the end of the day, if we were able to permit this well, we can go to net zero on our water. And you know I mean it doesn't it customers can recover condensate and I think in San Francisco or I I forget what city it is but you know they're recovering uh condensate and using it as
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preheat for you know big no it's uh you know big in hotel laundry right so uh you know the the byproduct of steam has a lot of different uses I know we're getting tight on time we've got only got a couple of minutes left a final a final fin set of questions uh for the river heat pump projects. Um how important is the temperature the sort of the variance in in uh you know seasonality sort of temperature fluctuations? Kevin u you're you're actually you're taking heat out or putting heat in.
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Uh what should people think about utilizing a river heat a river for a heat pump project? Uh so fresh water versus salt water is important. Fresh water freezes earlier. So you have to have antifreeze solutions or you've got to be really particular about the delta temperature that you that you pull from fresh water in the winter time because it's not too difficult to drop level freezing point. So the type of water that you're using is important. Salt water makes things a little bit easier. Albeit you do have
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material considerations that you have to take into account like we talked. Um the temperature of the water moves the efficiency around a lot. So oftent times I'm throwing coops out there that are, you know, between two to three. Uh, and that really depends on what pressure the system's running at. It, depends on what temperature the river is running at. It's pretty easy to assemble a heat pump where you come up with a 1.5 COP. You know, if you're pushing at an exceptionally high pressure, uh, and you
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have a, uh, and you you're you're layering in a lot of freeze protection and whatnot, you know, you can easily design them at once. So, you've got to be particular about the delta temperature to avoid freeze protection. uh you've got to be particular about um about the kind of pressures that you operate. Uh and if you split the cycle between heat pump and steam compression, you can definitely get into the twos to the threes, but it moves around a lot, right? So our heat pump, if you look at
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the heat pump in isolation, I think the heat pump by itself will move between a, you know, a 22 and a 27 depending on the water temperature. So it moves around a lot by water temperature. >> Very good. Well, >> and one PS um a gentle correction to to your question there, Rob, is we're actually not adding heat to the river. It's always removing heat. It's removing several degrees, which is one of the reasons why many uh environmental groups who support the river are very supportive of what we're doing because
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it's much better for the uh for the fish life, for the plant life, etc. >> Yes. In fact, you're making you're making life more comfortable for uh for the fish. Thank Matt said, >> we appreciate that. You know, uh it's hard to believe, but we've actually reached our 90minute threshold. Um and before we conclude, I I I want to thank uh our presenters for uh as Woody Allen said, 90% of success is just showing up. Thank you, uh for showing up. Uh you know, I think uh this was a very
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insightful uh uh webinar looking at, you know, how district energy is accelerating decarbonization in three of America's, I think, you know, most iconic cities, frankly. Uh, and in order of importance to me, Boston, uh, New York, and San Francisco. Actually, I love all three cities. Uh, Joanne, I was only kidding about the Yankees. Well, not really, but um, uh, again, you know, uh, thank you to our friends from Vicinity, Coned, and Cordia. Cordia San Francisco. Uh, Tanya, if we can, uh, go to some the the concluding slides again.
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So, as a housekeeping note, uh there will be another uh webinar. We're uh actually uh curating the time and the dates. So, keep an eye on our website, districtenergy.org. Uh the second uh the second webinar in a series will uh will occur uh shortly and we'll be featuring systems in Chicago, Toronto, Seattle, and Vancouver. Uh and and perhaps one or two others uh because District Energy is really on the move. um in our cities across North America and as Kevin mentioned around the world. Um the uh the uh stream and slides will
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be available to everyone who's registered whether you uh uh stayed on or not. Um and there's more to come from IDA. Our campus energy conference will take place uh in February in Washington DC. Campus Energy 2026. uh the program is uh robust um and you know please make a plan to join us. We'll also be heading to another Capitol city in June. Our annual conference will take place in Ottawa uh in June 23 through 26 next year. U all of all all of the content of IDA is now resides on learndistenergy.org.
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This webinar and others are available. So point your uh point your cursor to it. uh share it with your friends. There is a lot of content that we make available on learnd districtenergy.org and and there'll also be uh continuing webinars uh including I think it's uh tomorrow our uh young professionals group will be uh hosting some industry veterans to share u their experience. Johnson Controls will be talking about next level sustainability and driving optimization. Every year IDA we have a series of
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competitions and awards. Last year our innovation award um that they will be presenting really how they've managed to reduce emissions uh conserve energy and and deliver value um at uh in uh from our innovation award winner. And then finally uh we have a series of webinars coming up on thermal energy networks both area based planning and then the business models that one should consider. So visit our QR code uh please stay tuned at district energy. Uh thank you all uh for joining us and uh I I
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just want to thank our uh our members from uh Kevin uh Hagerty from and Matt Ali from Vicinity Energy. Thank you very much. Joanna Jerger from Khan Edison and in the steam business and Mike Urkus. Mike Orurf from Cordia, San Francisco. Thank you both. Thank you all very much for uh you know, really making uh making yourselves available. Appreciate it.
