Steam and thermal energy trade sector review recommendations

Table of contents


1.0 Executive summary

Over the past year, Measurement Canada's sector review team has consulted with stakeholders in the Steam and Thermal Energy sector to determine how measurement accuracy will be achieved and the degree of involvement for Measurement Canada.

The steam and thermal energy sector is considered a non-traditional sector as Measurement Canada has had little involvement in this sector in the past.

Stakeholders in the steam subsector have indicated they do not want Measurement Canada involvement at the industrial and the commercial and institutional levels of trade, however stakeholders in the thermal energy subsector (hot water and chilled water) have indicated they want Measurement Canada intervention at the industrial level, the commercial/institutional level and residential level of trade to provide the services needed to maintain accuracy and confidence.

A consensus of stakeholders and the Steam and Thermal Energy Trade Sector Review team recommend that:

Approvals

  1. Measurement Canada should require type approvals for all devices in the steam and thermal energy sector with the exemption of devices in the steam subsector at the industrial and the commercial/institutional levels of trade.
  2. Devices used in the steam subsector at the industrial and the commercial/ institutional level of trade should be exempt from approval.
  3. Measurement Canada should harmonize approval requirements for thermal energy devices with international standards such as the International Organization of Legal Metrology (OIML) recommendations.
  4. Approval testing should be conducted by organizations that meet a formal Measurement Canada alternative service delivery program, with the final approvals issued by Measurement Canada.
  5. Measurement Canada should implement a formal recognition program for other countries' type approval processes of trade devices in the thermal energy subsector, with final device approval issued by Measurement Canada.

Measurement Canada should implement a formal recognition program for other countries' type approval processes of trade devices in the thermal energy subsector, with final device approval issued by Measurement Canada.

Initial inspections

  1. Measurement Canada should require mandatory initial inspections of trade devices in the steam and thermal energy sector with the exemption of trade devices at the industrial and the commercial/institutional levels of trade in the steam subsector.
  2. Devices used in the steam subsector at the industrial and the commercial/institutional level of trade should be exempt from initial inspection.
  3. Sampling methods for initial inspections should be accepted as long as the sampling methodology is approved by Measurement Canada. Initial inspections should include current industry practices of factory inspections and if applicable, installation requirements.
  4. Organizations other than Measurement Canada should be allowed to perform initial inspections, provided they are authorized under the Measurement Canada accreditation or registration program requirements.
  5. A certificate is to be provided to device owners and a status indicator is to be affixed to devices, upon passing initial inspection, showing the date of inspection.
  6. A joint working group made up of sector stakeholders and Measurement Canada staff should be assembled to select an appropriate standard, such as CSA C-900 or EN1434, for initial inspection requirements.
  7. Initial inspection requirements should be aligned, where possible, to OIML requirements, within the next ten years.

Periodic (subsequent) inspections

  1. Measurement Canada should require a mandatory periodic inspection every 8 years for devices used in the steam and thermal energy sector, with the exception of devices in the steam subsector at the industrial and the institutional and commercial level of trade.
  2. Devices used in the steam subsector at the industrial and the commercial/and institutional level of trade should be exempt from periodic inspection.
  3. A joint working group made up of sector stakeholders and Measurement Canada staff should be assembled to qualify mandatory periodic inspection requirements and where possible, align those requirements to OIML requirements, within the next ten years.
  4. Sampling methods as well as other periodic inspection methods should be considered, including the possibility of in service inspections, provided these methods are approved by Measurement Canada.
  5. Periodic inspections should be performed by authorized service providers that meet the established requirements of either the Measurement Canada accreditation or registration program.
  6. A voluntary program for periodic inspections should be implemented in the sector until legislative changes can be made.
  7. Should periodic inspections become mandatory, an inspection expiry date is to be shown on the certificate and the status indicator.

Physical test standards

  1. All physical test standards used by Measurement Canada inspectors and authorized service providers for inspections should be certified according to the schedule in the Weights and Measures Regulations.
  2. Physical test standards should be certified either by Measurement Canada or by a recognized laboratory that meets Measurement Canada's alternative service delivery requirements.

Net quantity (commodity) inspections

  1. Measurement Canada should not perform net quantity (commodity) inspections in this sector.

Complaints

  1. Measurement Canada should provide complaint investigation and inspection services for this sector, but only after the two parties have had the opportunity to resolve the issue first.
  2. Measurement Canada should publicize its role as an investigator of trade measurement complaints in this sector.
  3. Measurement Canada's legislation should allow for the full disclosure of complaint inspection information to the two parties of the transaction.
  4. Measurement Canada should use tickets or fines along with other forms of enforcement if the investigations and the inspections indicate that the requirements of the Weights and Measures Act are not met.

Monitoring

  1. Measurement Canada should monitor this sector by compiling compliance data on devices, by retaining complaint investigation results and by soliciting stakeholder feedback/input and disseminate this information in aggregate form on a yearly basis.

Future sector reviews

  1. Future trade sector reviews should be conducted if there is a significant reduction in compliance rates, there are major changes in the industry that can have an impact on measurement accuracy or stakeholders indicate that there is a lack of confidence in measurement accuracy.

2.0 Introduction

This report contains the recommended level of involvement for Measurement Canada in the Steam and Thermal Energy sector. These recommendations are the result of extensive consultation with sector stakeholders to determine the programs and services needed to ensure the accurate measurement of goods and services at a reasonable cost with minimal risk to the parties involved in the measurement transactions.

This report summarizes the views of the Steam and Thermal Energy sector stakeholders, established through consensus during the consultations, and provides Measurement Canada senior management with the supporting rationale and considerations behind each recommendation. The Steam and Thermal Energy Trade Sector Review team welcomes any comments, questions, or requests for clarifications on the contents of this report.

3.0 Industry overview

The steam and thermal energy sector, although relatively small, is a rapidly growing sector in the Canadian economy. The rapid growth in this sector is mainly due to increasing energy costs and environmental concerns. Heat energy via hot water or steam pipes is often produced, transported and sold by what is commonly referred to as a district heating system. In other cases, surplus steam and heat produced during power generation and industrial processes, often wasted in the past, are being recovered and sold to other users.

Heat sources for district heating systems can be geothermal heat, solar heat, surplus heat from industrial processes, and nuclear power. The principles for a conventional combination of cogeneration and district heating apply the same for nuclear as it does for a thermal power station.

The opposite of district heating is district cooling. Working on broadly similar principles to district heating, district cooling delivers chilled water to buildings like offices and factories needing cooling.

Canada lags other countries in district heating systems, particularly countries in Europe. In Denmark, for example, district heating covers more than 60% of space heating and water heating. In 2007, 80.5% of this heat was produced on combined heat and power plants (co-generation). Heat recovered from waste incineration accounted for 20.4% of the total Danish district heat production. Most major cities in Denmark have large district heating networks including transmission networks operating with up to 125 °C and 25 bar pressure and distribution networks operating with up to 95 °C and between 6 and 10 bar pressure.

In the US, Consolidated Edison of New York (Con Ed) operates Con Edison Steam Operations, the largest commercial district heating system in the world. The system has operated continuously since March 1882 and serves Manhattan Island from the Battery through 96th Street. NRG Energy operates district systems in major cities of San Francisco, Harrisburg, Minneapolis, Pittsburgh and San Diego. Seattle Steam Company operates a district system in Seattle. Detroit Edison operates a district system in Detroit.

District heating is also used on many college campuses, most notably the University of Notre Dame which produces over half its own electricity and all of its heating needs from the same plant. Cornell University's Lake Source Cooling System uses Cayuga Lake as a heat sink to operate the central chilled water system for its campus and to also provide cooling to the Ithaca City School District. The system has operated since the summer of 2000 and was built at a cost of $55-60 million. It has a cooling capacity of 14,500 tons.

As stated above, district heating is a growing industry in Canada, with many new systems being built in the last ten years.

Many Canadian universities, like Dalhousie University in Halifax, operate central campus heating plants. Dartmouth has a district heating system that uses geothermal heat as its source and sells the heat to several downtown buildings. Montreal has a district heating and cooling system in the downtown core.

Toronto's Enwave provides district heating and cooling to around 100 customers within the downtown core of Toronto, including deep lake cooling technology, which circulates cold water from Lake Ontario through heat exchangers to provide cooling for buildings in the city. Windsor has a district heating and cooling system in the downtown core as well. London, Cornwall and Markham operate district heating systems that serve commercial and residential buildings. In Sudbury, a district energy loop is available for some commercial buildings as well as municipal offices. A method of recovering industrial and residential heat from sewer waste via under ground service pipes is also in the development stage. Ottawa has two district heating systems that supply hot water heating to government-owned buildings in the city.

Calgary's ENMAX is currently building its Calgary Downtown District Energy Centre which will provide heating to up to 10 million square feet of new and existing residential and commercial buildings. Construction of the Calgary Downtown District Energy Centre has begun with its commercial operation started in March 2010. Drake Landing in Alberta is a small heat distribution system, serving 52 homes, but is notable for being the only central solar heating system in North America. In Edmonton, apartment owners have installed heat monitoring devices to allocate hot water heating costs to individual tenants.

Vancouver's Central Heat Distribution Ltd. operates a central heating plant in the downtown core. A large scale district heating system has been constructed in South East False Creek in the downtown Vancouver core that is serving many new developments including the former 2010 Olympic Village. A large portion of the heating demand for this system will come from an innovative sewer heat recovery system, which will greatly reduce greenhouse gas emissions. The city of North Vancouver provides heating services to commercial buildings in the city's downtown.

Lastly, petrochemical plants in cities like Sarnia and Edmonton sell their excess steam to neighbouring industrial plants for their use.

A very small percentage of homes are heated or cooled using steam or thermal energy (less than 0.03% of homes in Canada). Therefore, affected consumers are found in pockets such as specific apartment or condominium buildings.

4.0 Scope

The steam and thermal energy sector is made up of three distinct levels of trade: the industrial level, the commercial/institutional level and the residential level.

The industrial level of trade consists of producers of steam and processors of raw materials that require heat and steam for their production processes. Also included are co-generation facilities that produce electricity and capture the waste heat produced during the generation process.

The commercial/institutional level of trade includes district heating (energy) systems and their customers. Their customers are often hospitals, government and municipal facilities, universities and educational institutions, tenants in shopping malls, building complexes where heating and/or cooling is provided by a central plant.

The residential level of trade consists of district heating (energy) systems including utilities that operate and maintain heating systems as well as property management companies that produce heat for resale to their tenants. The consumers can be private homes, apartments and condominiums. Heat is generally provided as a liquid and is transferred into the dwelling by means of a heat exchanger. In most cases, measurements are taken of the amount of liquid as well as the change in temperature as the liquid passes through the heat exchanger. These measurements are used to calculate the amount of heat consumed.

In some cases, an energy monitoring system is used to allocate the hot water heat used in individual apartments or condominiums. The temperature of the liquid is measured and the length of time the liquid flows through the heat exchanger to calculate the portion of energy used to heat an individual apartment or condominium.

Stakeholders

The stakeholders in the sector include:

5.0 Methodology

Beginning in April 2009, the Steam and Thermal Energy Sector Review team contacted hundreds of industry stakeholders across the country to familiarize them with Measurement Canada's programs and the trade sector review process.

The review team investigated trade measurement practices in the sector, and solicited views and comments from the stakeholders, regarding the Measurement Canada measurement programs they would like to see in the industry, and how these programs could be best provided. The information obtained from these meetings was summarized in a discussion paper, which proposed the future role of Measurement Canada, and the necessary measurement programs within the sector.

Recommendations from the meeting and input from other stakeholders' comments are included in this report, and will be presented to Measurement Canada's Senior Management Committee for review and acceptance, in June 2010.

Decision-making criteria

During the consultation process, the team strived to achieve a consensus among sector stakeholders for all recommendations. The following conditions were used to guide the discussions:

For the purposes of the review and this report, a consensus is a general agreement and does not necessarily imply unanimous agreement.

6.0 Recommendations

Although initial indications from the steam subsector showed interest in having Measurement Canada intervention, representation at consensus meetings indicated the consensus is to have no intervention at the industrial and the commercial/institutional levels of trade. No stakeholders were identified at the residential level of trade in the steam subsector, however previous trade sector reviews suggest that, should there be steam stakeholders at the residential level, they would probably want Measurement Canada intervention.

The vast majority of stakeholders in the thermal energy subsector indicated that Measurement Canada should become involved at all levels of trade to ensure measurement accuracy and fairness. Stakeholders, particularly vulnerable stakeholders, indicated that Measurement Canada's direct presence in the sector is critical in order to maintain stakeholders' confidence. This was confirmed at the consensus meetings held in Toronto and Edmonton.

6.1 Approvals

Before any device can be used in trade in Canada, a prototype must receive approval from the Measurement Canada Approval Services Laboratory located in Ottawa. The approval ensures that the device is capable of measuring accurately throughout its service lifetime.

The approval process involves the evaluation of one or more devices of a particular type in accordance with the relevant regulations and specifications for the design, composition, construction and performance. Once it has been determined that the device type complies with all specified approval requirements, pattern or type approval is granted and a notice of approval is issued by the Approval Services Laboratory.

Currently, Weights and Measures Regulations exempt packaging devices used exclusively to weigh standard sized packages from the requirement for approval.

In September 2006, Measurement Canada entered into a Mutual Acceptance Arrangement with member countries of the OIML for recognition of test results in the approval of non-automatic weighing devices and related modules. Mutual Acceptance Arrangements allow for participating countries to utilize test reports from other countries in their own approval process.

Measurement Canada currently conducts approval testing and issues type approvals; however, under the United States / Canada Mutual Recognition Agreement, the examination and tests of certain fuel dispensers and scales performed by the United States are recognized by Measurement Canada.

Recommendations

A consensus of stakeholders and the Steam and Thermal Energy Trade Sector Review team recommend that:

Rationale / considerations

Initial inspections only ensure devices measure accurately under the particular conditions and location at the time of testing. The type approval process ensures devices of certain types are capable of measuring accurately throughout their service life and under varying conditions.

There are several benefits to the Mutual Acceptance Arrangement program, for instance, they allow OIML member countries to rely on the facilities and competencies of other member countries for test results, thus reducing barriers to trade and competitiveness. The Mutual Acceptance Arrangement works to reduce duplication in testing and allows for a quicker turnaround on measuring device approvals.

Harmonizing approval requirements and accepting other countries' approvals may reduce the amount of control that Measurement Canada would otherwise have on a type approval evaluation.

Required action

  1. Harmonize approval requirements with international standards such as the OIML.
  2. Institute a formal Measurement Canada alternative service delivery program, with the final approvals issued by Measurement Canada.
  3. Implement a formal recognition program for other countries' type approval processes of trade devices in this sector, with final device approval issued by Measurement Canada.
  4. Expand mutual acceptance agreements with other countries for approval testing.

Priority: high

Times lines: Medium term (1 to 3 years)

6.2 Initial inspections

An initial inspection is the first inspection or certification of each device before it may be placed into trade service. This inspection is currently mandatory, and ensures that the device is approved, is installed correctly, and is measuring accurately within the limits of error (tolerance) set out in the Weights and Measures legislation. Currently, registered companies are not authorized to perform inspections in the Steam and Thermal Energy sector. They would be granted this authority only if Measurement Canada's Senior Management Committee accepts recommendation 6.2.4, shown below.

Recommendations

A consensus of stakeholders and the Steam and Thermal Energy Trade Sector Review team recommend that:

Rationale / considerations

The accreditation program has the added protection of a quality system, but both the accreditation and registration programs have formal training, evaluation and monitoring programs.

Initial inspections ensure that the devices used in trade are the same as the model that was approved, the installation is correct and the devices meet the requirements of the Weights and Measures legislation.

Accredited or registered companies are able to install, calibrate, inspect and certify the devices. The companies must qualify for these programs and their recognized technicians are monitored on an ongoing basis by Measurement Canada. They may therefore be able to reduce the amount of time and costs associated with initial inspections.

Required actions

  1. Establish a joint working group made up of interested stakeholders and Measurement Canada staff to select an appropriate requirement to be used for initial inspections.
    Priority: High
    Time line: Short term (6 months to 1 year)
  2. Expand the registration program to include the Steam and Thermal Energy sector.
    Priority: High
    Time line: Medium term (1 to 3 years)
  3. Provide a certificate to device owners and a status indicator affixed to devices, upon passing initial inspection, showing the date of inspection. Should periodic inspections become mandatory, an inspection expiry date be shown on the certificate and status indicator. Priority: High
    Time line: Long Term (3 to 5 years)
  4. Align device tolerances, where possible, to OIML requirements.
    Priority: High
    Time line: Long Term (3 to 5 years)

6.3 Periodic (subsequent) inspections

After the initial inspection, weighing and measuring devices are inspected throughout their service lifetime, either by Measurement Canada or an authorized service provider (accredited or registered company), to ensure they continue to measure accurately and are not used in a fraudulent manner.

Currently, there are no mandatory requirements for periodic inspection of weighing and measuring devices in the Weights and Measures Act and Regulations. Measurement Canada scheduled subsequent inspections are based on priorities and available resources, whereas the inspections by authorized service providers are based on requests by the device owner.

Currently, registered companies are not authorized to perform inspections in the Steam and Thermal Energy sector. They would be granted this authority only if Measurement Canada's Senior Management Committee accepts recommendation 6.3.5, shown below. It should be noted that other trade sector reviews have recommended making periodic subsequent inspections mandatory and a bill was tabled in the House of Commons in April 2010 to make this change.

Recommendations

A consensus of stakeholders and the Steam and Thermal Energy Trade Sector Review team recommend that:

Rationale / considerations

The time required for legislative changes for a mandatory inspection program can be lengthy and although a voluntary program could be put in place, device owners may opt out of this program at anytime.

Inspections involve more in depth testing than calibrations or checks. Therefore, they are more likely to detect measurement problems and incorrect device settings, installations or usage.

Device errors over a long period of time could be costly for one of the trading parties and could damage the reputation of companies as well as the sector.

Measurement Canada does not have the resources to conduct the periodic inspections and there will be additional costs to the device owners for inspection of devices through authorized service providers.

Measurement Canada inspectors do not have the authority to calibrate or repair trade devices. Therefore, use of authorized service providers will allow the devices to be adjusted if there are any measurement problems found during the inspection.

Having the device inspections done by authorized service providers will allow Measurement Canada's resources to focus inspections on problem areas and to monitor the performance of the Steam and Thermal Energy sector.

Required actions

  1. Establish a joint working group made up of interested stakeholders and Measurement Canada staff to select an appropriate requirement to be used for periodic inspections.
    Priority: High
    Time line: Short term (6 months to 1 year)
  2. Expand the registration program to include the Steam and Thermal Energy sector.
    Priority: High
    Time line: Medium term (1 to 3 years)
  3. Expand the Voluntary Periodic Certification Program to include the Steam and Thermal Energy sector and to provide incentives for stakeholders participating in the program.
    Priority: High
    Time line: Medium term (1 to 3 years)
  4. Develop a communication plan that will inform stakeholders of the implementation of the Voluntary Periodic Certification Program and explain the benefits of the program.
    Priority: High
    Time line: Medium term (1 to 3 years)
  5. Change the Weights and Measures Act to institute mandatory periodic inspections.
    Priority: High
    Time line: Medium term (1 to 3 years)
  6. Ensure the stakeholders are kept informed, especially when a mandatory periodic inspection is put in place.
    Priority: High
    Time line: Medium term (1 to 3 years)

6.4 Physical test standards

Physical standards used for inspections are certified by Measurement Canada according to the schedule in the Weights and Measures Regulations and referenced to a national physical standard which is held by the National Research Council of Canada (NRC). Physical standards are therefore traceable to international units of measure.

Measurement Canada has established and implemented an alternative service delivery program, where physical standards used for inspections may be certified by Measurement Canada, based on test results from recognized calibration laboratories.

Recommendations

A consensus of stakeholders and the Steam and Thermal Energy Trade Sector Review team recommend that:

Rationale / considerations

Test standards that have a current certificate of calibration traceable to national or international standards provide confidence in inspection results.

Use of other calibration organizations could provide some alternatives for inspectors and authorized service providers, and may reduce the time needed to certify test standards.

Use of other calibration organizations, even under an alternative service delivery program, could reduce some of Measurement Canada's control of test standards.

Required actions

  1. Designate physical standards to be used in the process of inspections for this subsector.
    Priority: High
    Time line: Short term (6 months to 1 year)
  2. Implement an alternative service delivery program, which allows the use of test results from recognized laboratories for the certification of physical standards in the thermal energy subsector.
    Priority: Medium
    Time line: Long term (3 to 5 years)

6.5 Net quantity inspections

Steam and Thermal Energy are not sold in bulk or packaged for wholesale use.

Recommendations

A consensus of stakeholders and the Steam and Thermal Energy Trade Sector Review team recommend that:

6.6 Complaints

Measurement complaints received by Measurement Canada are usually investigated by Measurement Canada inspectors and if necessary, devices or commodities are inspected. The complainant is then informed as to whether the device, product or service meets the requirements of the Weights and Measures Act. If an inspection indicates that the device or the commodity does not meet legislated requirements, then normal enforcement actions such as rejections, seizures, prosecutions etc., can be taken.

Measurement Canada also has the authority to charge the owner of the device under the criminal code of Canada for the measurement infraction(s). However, Measurement Canada does not have the authority to compel the device owner or the complainant to provide compensation, even if the complaint is justified.

Recommendations

A consensus of stakeholders and the Steam and Thermal Energy Trade Sector Review team recommend that:

Rationale / considerations

Current Access to Information legislation prohibits Measurement Canada from providing details of the results of the inspection to the complainant without the permission of the device owner. Legislative changes may be required to give Measurement Canada the authority to provide details of inspection results.

Required actions

  1. Develop a policy clearly outlining what information from complaint inspections/investigations could be provided to a complainant.
  2. Develop communications with stakeholders in the sector in an effort to ensure they are aware that they can lodge a complaint with Measurement Canada, if they are not satisfied with measurement accuracy.

Priority: Medium

Time line: Medium term (1 to 3 years)

6.7 Monitoring the sector

Measurement Canada monitors the marketplace usually through data collected from inspections conducted by Measurement Canada inspectors, by authorized service providers and from Measurement Canada investigations. The majority of this data is in the form of compliance tables for different device types and for different commodities. Measurement Canada uses this data to identify problem areas and to help prioritize its inspection programs. As the use of authorized service providers for scheduled inspections increases, Measurement Canada is focussing more of its resources on monitoring the marketplace for compliance to its legislation.

Recommendations

A consensus of stakeholders and the Steam and Thermal Energy Trade Sector Review team recommend that:

Rationale / considerations

Ongoing monitoring will be needed to determine the effectiveness of the implemented recommendations.

Required actions

  1. Develop and implement a monitoring program for the sector.
  2. Develop a user-friendly format with explanations, for reporting the performance of the sector and determine distribution points (i.e. Measurement Canada website, industry newsletters, etc.).

Priority: Medium

Time line: Medium term (1 to 3 years)

6.8 Future sector review

Since 2000, Measurement Canada has completed reviews in 16 out of 39 identified sectors. The accepted recommendations have already been implemented or are in the process of being implemented. To date, there have been no subsequent reviews.

Recommendations

A consensus of stakeholders and the Steam and Thermal Energy Trade Sector Review team recommend that:

Rationale / considerations

Trade sector reviews give stakeholders an opportunity to provide input in the way in which trade measurement is regulated in their sector.

Trade sector reviews take a lot of time and resources from Measurement Canada and from stakeholders, therefore they should be held only if there is a need or benefit to the sector and to Measurement Canada.

This trade sector is expected to grow rapidly in the years to come.

Required actions

  1. Develop measurable criteria for holding future sector reviews.

Priority: High

Time line: Medium term (1 - 3 years)

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