Corix Pioneers District Energy Solutions to Optimize Space and Costs in Residential Developments

📅 1 day ago

Corix is revolutionizing energy systems in residential developments by centralizing mechanical systems, allowing for more usable space and cost savings, particularly in light of rising construction costs and interest rates.

In the realm of residential construction, every tower sacrifices a portion of its space to accommodate essential equipment. From the inception of a project, mechanical systems typically reserve a basement room and a prime rooftop penthouse. This allocation of square footage occurs before the first residential unit is even designed, resulting in costs that developers incur but cannot recoup through sales or rentals. As construction expenses soar and interest rates fluctuate, absorbing these costs has become increasingly challenging. Diego Mandelbaum, Chief Development Officer at Corix, which specializes in district energy systems across North America, highlights the pressing need for developers to navigate these financial hurdles effectively. "For developers building today, trying to make their projects pencil, taking capital off of traditional real estate development is a major factor," he stated. The strategy of district energy systems, which relocate thermal equipment from individual buildings to a centralized plant, is emerging as a solution. This model involves a central facility, strategically positioned on, near, or beneath a development site, generating heat and chilled water for cooling. The energy is then distributed through a network of pipes to each connected building, eliminating the need for separate boilers within each structure. This centralized approach not only streamlines energy production but also allows for a gradual transition to cleaner energy sources, such as waste heat from local power plants or wood waste destined for landfills. Corix's district energy network in Cleveland, established in 1894, exemplifies the long-standing efficacy of this system. Today, this model is assisting contemporary developers in reclaiming both space and financial resources. The capital benefits extend beyond merely recovering square footage. Often, they align with compliance to stringent sustainability standards that, while well-intentioned, can be financially burdensome. At Oakridge Park in Vancouver, the initiative to develop a district energy system was spurred by the city's low-carbon building policy. Instead of implementing costly mechanical systems in each tower, Corix's solution involved centralizing the mechanical equipment, which enabled the project to meet green zoning requirements while significantly reducing capital expenditures and spatial demands. Upon completion, Oakridge Park is expected to encompass approximately 5 million square feet. Furthermore, this approach can enhance financing options for projects. The Canada Mortgage and Housing Corporation (CMHC) is the sole provider of mortgage loan insurance for multi-unit residential buildings in Canada. A significant portion of new rental housing relies on CMHC financing, which imposes efficiency and sustainability criteria that can be expensive to fulfill if addressed on a building-by-building basis. Mandelbaum emphasizes, "We’re able to help developers meet these standards," indicating that Corix can facilitate access to CMHC-insured loans essential for project financing. The earlier Corix is involved in a project, the more potential savings can be identified, allowing the team to influence the master plan's layout before the allocation of mechanical spaces and penthouses becomes fixed. Regardless of the timing of their engagement, developers are not burdened by the costs associated with the central plant and piping; Corix finances these aspects and recoups its investment over time through energy rates charged to customers. Maintaining competitive rates is paramount, and rapid overbuilding could jeopardize this balance. This reality underscores the importance of strategic timing. Mandelbaum notes, "District energy doesn’t really work by just looking at an engineering study and asking, 'Can we make it work?' It’s about figuring out how to phase in your generation and your capital in sync with the development." Corix employs a phased construction approach, utilizing modular construction and prefabrication to increase capacity as additional buildings are completed. At UniverCity, adjacent to Simon Fraser University, initial installations began with modular natural gas boilers, which were later supplemented by a larger biomass plant once sufficient community load was established. This system now provides heating for both the university and its surrounding area, covering nearly 5 million square feet. In Utah City, a substantial master-planned development in the United States, Corix's involvement began after the first building was erected. Faced with the necessity of approximately 70 megawatts of power for thermal systems, the local utility's timeline for grid supply extended to a decade, prompting concerns from the developer. However, with active construction, the team had precise costs for mechanical equipment ready for comparison against Corix’s proposals, which proved favorable. "We built a modular plant in Washington state, transported it on a truck bed, and energized it within two years of the initial agreement," Mandelbaum recounted. Currently, around 20 million square feet of real estate is anticipated to benefit from this energy system. As more buildings connect, Utah City is set to replicate the efficiency of SFU’s system by capturing waste heat from a nearby 1.3-gigawatt gas-fired power plant, which currently releases heat into the atmosphere. Mandelbaum explains, "What we're doing is closing the loop on what’s otherwise a wasted resource." Although projects of this magnitude can span decades, Corix is equipped to manage the extended timelines, largely due to its ownership by the British Columbia Investment Management Corporation, which oversees public pensions in the province. Mandelbaum asserts, "We’re able to take a very long-term view. We have patient capital." This long-term perspective encompasses every stakeholder involved in a project, including developers, regulators, municipalities, and ultimately, customers. For Mandelbaum, the key consideration is how the end-users will experience the development. The benefits for residents manifest in reclaimed space at ground level or on sunlit rooftops. "Just imagine," Mandelbaum said, "if every single rooftop was able to be used for amenity space, or for recreation, or for a garden."

Related Posts