Helping American cities switch to electric heating won’t be a walk in the park

FOR years, Tami Nelson struggled with what she called the “temperamental old man” in the basement. He was inefficient. He was smelly. And he took way too much of her money.

It wasn’t a neighbour she was referring to. That was her nickname for the ancient oil-fed burner that provided heat and hot water for her 8-unit apartment building in the Bedford-Stuyvesant neighbourhood of Brooklyn.

Her tenants called to complain of cold showers. In winters, her monthly heating oil bill went to US$1,000 or higher. Her basement walls were coated with soot and stench.

No more. This past spring, she evicted the old machinery and replaced it with electric heat pumps. In so doing, she brought her century-old property along an increasingly urgent global transformation: weaning homes and offices off oil and gas.

In the United States, the Biden administration is trying to speed up this very shift, with billions of dollars in tax rebates to electrify buildings and make them more energy-efficient. The global energy crisis, spurred by the Russian invasion of Ukraine, has also hastened that shift. In 2021, sales of heat pumps grew significantly in the United States and several other major markets, going by research published in Nature.

It is important because emissions from buildings – primarily for heat and hot water – account for more than a quarter of the nation’s emissions. In New York City, it is roughly 70 per cent. Under a 2019 city law, most large buildings have to drastically reduce their numbers starting in 2024. If they exceed their emissions limits, they will be fined.

Enter a new business opportunity.

Nelson converted her building with the help of Donnel Baird, an entrepreneur who grew up nearby and founded a company called Bloc Power. His contractors installed the equipment. Nelson rents it on a long-term lease.

All summer, the heat pumps have cooled the apartments, since they function as air conditioners as well as heaters. This winter will be her first without the smelly, troublesome oil burner in the basement. She hopes her bills will be lower too.

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Baird, for his part, hopes other landlords will follow suit, and quickly.

The city has a tough law, he said, but carrying it out is another matter. “New York City, I would argue, is the most aggressive city in the country on energy efficiency and green buildings,” Baird said. “We are so far behind, and we are under-performing.”

It is a tall order in New York City. Buildings are old and drafty. Many apartment building owners, including cooperatives, cannot readily afford to go all-electric. There aren’t enough workers trained to retrofit them.

And often, even in new buildings – to say nothing of old buildings that were built decades before heat pumps existed – there isn’t enough space to accommodate all the equipment. Expect to see new electric kits on high-rise rooftops – like in Williamsburg, Brooklyn, where an array of heat pumps will be housed in a glass dome above the old Domino sugar-refinery building, right behind an old smokestack.

A few cities, such as Ithaca, New York, and Berkeley, California, have passed laws requiring all buildings, new and old, to get rid of all oil- and gas-run equipment in the coming years, whether for heating or cooking. Dozens of cities across the United States have also passed laws that prohibit new gas hookups. With that has come a counter-offensive, funded by gas companies and local utilities, to prohibit or discourage local laws to ban gas.

The Inflation Reduction Act, the climate law signed last month by President Joe Biden, offers up to US$8,000 in tax rebates for property owners to purchase electric heat pumps and make energy-efficiency improvements. (Think insulation and better windows.) Many buildings will need to upgrade their electric panels in order to fully electrify. There are rebates for that, too. The bill also allocates US$200 million to train workers who can install new electric appliances and insulate homes.

But as buildings electrify, along with cars and buses, other challenges loom. One is cleaning up the electrical grid so that it burns less fossil fuel. Utilities will also need to produce much more electricity as demand grows.

At the moment, New York City’s 24 power plants run mostly on methane gas and fuel oil, spewing greenhouse gas emissions into the atmosphere and polluting the air nearby. New York City aspires to have what it calls a fully “clean-energy” electricity grid by 2040.

Baird said if any city can do it, it is New York. It has the money and the political consensus to take climate action quickly. “New York is a test case of the possibility of turning buildings into Teslas and using a municipal mandate to do it,” he said. “Those are the two real strategic questions.”

Across the Atlantic Ocean, Russian President Vladimir Putin’s invasion of Ukraine has changed the strategic calculations for electric buildings.

The European Union relies on gas to heat homes, much of it from Russia. The European Commission is now scrambling to wean itself off gas, in part by doubling the installation of electric heat pumps by 2025, while also pushing for energy efficiency.

An independent analysis jointly produced by 4 non-profit research groups recently concluded that electrifying buildings could slash gas use by 25 billion cubic meters, or about a sixth of all the gas that the European Union imports from the Kremlin.

Individual countries are taking their own measures. Germany is mandating heat pumps by 2024, and the Netherlands by 2026. Austria this year banned the sale of new gas boilers altogether. “Every gas heater we get rid of is a step out of our dependence on Russian gas,” its climate minister, Leonore Gewessler, said in June.

Heat pumps work by expelling warm air out of buildings when it is hot outside, and pulling warm air into buildings when it is cold outside. They have a bad reputation to overcome: Older ones were not great at heating homes in really frigid temperatures. Their proponents say that the technology has markedly improved. And the evidence suggests that, too. Some of the coldest parts of the world have some of the highest penetration of electric heat pumps.

Consider Sweden. Winters are very cold there, and fossil fuels account for less than 5 per cent of home heating. That shift took 50 years.

Sweden once heated its buildings with oil. The 70s oil crisis was the first tipping point. Next was a 1991 carbon tax, which made heating oil more expensive with a levy on the carbon dioxide emitted.

Today, Sweden relies on district heating: Pipes carry heat into apartment buildings. The heat comes mostly from burning garbage and biomass (which has environmental problems). Single-family homes, meanwhile, rely mostly on heat pumps.

Sweden faces a new challenge. There might not be so much garbage to burn as the country expands recycling, and its buildings need to become more energy-efficient.

Baird, the heat-pump installer who worked with Nelson in Bed-Stuy, grew up in Brooklyn, then Atlanta, then returned to Brooklyn after college. For years, his company made money by hooking up homes that relied on heating oil, like Nelson’s property, to the city’s gas grid. Gas is less polluting than heating oil.

The birth of his first child brought an epiphany. He realised that by hooking up those buildings to gas, he was helping prolong the city’s reliance on fossil fuels. “I was like, ‘Oh, when my kid’s 35, and he’s my age, this gas pipeline that I just paid for is still going to be there’,” he said.

At the same time, two of his most prominent investors, former Google chief executive Eric Schmidt and his wife, Wendy, nudged him to consider ditching gas altogether.

It made business sense. Not only could he help the city’s 10,000 buildings leapfrog from dirty heating oil and go electric; there were tens of thousands of other buildings that could also pivot from gas boilers to electric heat pumps.

He shifted Bloc Power’s core business. It now focuses mainly on electrification in churches, swanky condos and apartment buildings in several cities nationwide. Bloc Power also trains 1,000 workers from low income neighbourhoods.

For Nelson, the switch to electric has not gone entirely smoothly. It took much longer than she had hoped for the city to issue permits. The equipment is now installed, but the plumbing lines and wires haven’t been removed. The 2 machines in the backyard are enormous. So much for her plans to build a terrace back there.

“Everyone was learning,” she said. “There was a lot we didn’t know.”

Indeed, space is a huge challenge. Most high-rise buildings don’t have enough space to house the equipment. Developers of new buildings, if they want to go all-electric, need to set aside expensive real estate to accommodate the kit. Architects will have to find ways to cut down on energy use. “It really puts pressure on the design team to be massively efficient,” said Hale Everets, who manages new construction for Two Trees, the company turning the old sugar refinery into office space.

At the moment, Baird is vexed by a vast 300-unit housing cooperative in Queens, the Dorie Miller Cooperatives, one of the first where Black New Yorkers could buy their own homes. Like Nelson’s building in Bed-Stuy, this one too has been struggling with ancient, inefficient boilers that guzzle heating oil.

If the cooperative replaces the old oil boilers with new oil boilers, it risks being hit with city fines. If it leases a new electric kit from Bloc Power, its residents’ maintenance fees go through the roof.

Michael De Valera, the treasurer of the cooperative’s board of directors, worried about space. And he wondered if the city would have transmission lines in place to meet all the new electricity demand. It is a test of whether and how the new federal climate law can help a big city housing complex wean itself off fossil fuels.

At the moment, De Valera said, the plan is to switch out the old oil boilers for gas ones, prolonging the building’s reliance on fossil fuels for an additional 40 years or so. “There’s less work that has to be done, there’s less cost, there’s less of an education for shareholders,” he said. “When you look at all of the above, the transition is going to be a bit slower for us.” NYT