Heat pump technology for customers’ seasonal heating and cooling requirements has become a center of increased discussion and debate by industry and government.

Despite a number of key advantages natural gas pumps have over their electric alternatives — with both still at their early stages of development prior to any serious market penetration — the benefits of gas-powered pumps have been lost in these discussions.

NGIF Capital, through its NGIF Industry Grants division, has taken on a major role in deepening understanding of those benefits and advantages. NGIF Industry Grants recently funded two important projects to de-risk their technology and advance them closer to commercialization over the last 12 months.

The first was an industry grant of $525,500 to support a Canadian multi-unit demonstration project of a natural gas heat pump developed by ThermoLift, a U.S.-based company.

Its patented Thermal Compression Heat Pump uses natural gas as an energy source and combines heating, cooling and domestic hot water delivery to function as a furnace, water heater and air conditioner in one single unit.

Through the two-year project with NGIF Industry Grants, Thermolift is testing several units in various provinces to show the application and determine a viable pathway to market in Canada.

The second is an industry grant of $600,000 to support a project demonstration of Stone Mountain Technologies Inc’s (SMTI) high-efficiency residential space and water heating system.

Called the “furnace-combi”, the system is designed to replace forced air furnaces and gas water heaters with a new high-efficiency natural gas heat pump serving both loads.

SMTI is currently field testing five of these systems in Alberta homes over the winter.

This is the second project undertaken by SMTI with an NGIF Industry Grant. The first was for a high-efficiency gas heat pump for space and water heating, and an electric chiller for air conditioning. Their product will be particularly useful, both in terms of costs and environmental benefits for the construction industry.

“In both cases, these companies have been able to leverage NGIF’s industry access and grant financing to accelerate their technology development,” said John Adams, President and CEO of NGIF Capital Corporation and Managing Partner of NGIF Cleantech Ventures. “NGIF Industry Grants and its focus on de-risking start-ups and their clean technologies through field trials and pilots, is part of NGIF’s integrated model of industry validation, customer creation, and natural gas market commercialization.”

Natural gas-driven products integral to future energy mix

“There are multiple reasons why natural gas-driven products such as heat pumps are integral to Canada’s future energy mix,” writes Jackie Forrest, the Executive Director of the ARC Energy Research Institute in a recently published Globe and Mail op-ed column.

Noting that the use of natural gas as an alternative option for achieving net-zero emissions targets is often overlooked, Forrest says there are multiple strategies ongoing to transition natural gas into a cleaner fuel.

“First, gas can be blended to reduce its carbon intensity…Renewable natural gas can be blended with conventional gas to reduce emissions. Clean hydrogen can also be blended with natural gas.” (For example, companies in Britain are planning to blend 20 per cent of hydrogen into gas by 2023).

“There is also the practical matter that replacing natural gas with electricity will prove difficult in Canada,” says Forrest. “This is certainly true for heating, including for industrial processes.”

“According to McKinsey & Company, only about half of industrial energy load can be replaced with electricity today. And for everyday citizens, an electrical power system would need to be greatly overbuilt to serve peak consumption on the coldest winter days.”

Forrest’s comments are reinforced in a recent report conducted by Guidehouse consultants for FortisBC on how British Columbia could achieve the transition to a lower carbon energy system in the coming years — with the importance of natural gas emphasized.

“B.C.’s approach to climate policy should consider how factors like peak demand will be met well beyond 2030 and what the long-term implications will be for costs,” say Guidehouse consultants.

Gas system provides reliability and resiliency

“The gas system provides valuable reliability and resiliency to the province’s energy system. As decarbonization progresses, this resiliency increases in importance.”

“As the gas system grows into serving new markets where decarbonization is more difficult, the system will be relied on as a fundamental tool.”

When it comes to natural-gas powered heat pumps, many reviewers tout the inherent advantages over the electric alternative — including the two companies funded by NGIF Industry Grants.

“With ThermoLift’s natural gas heat pump, energy is used to pump renewable heat from the outside, significantly improving system efficiency, and reducing greenhouse gas emissions,” says Paul Schwartz, director and co-founder of Thermolift.

Paul Schwartz with a ThermoLift natural gas heat pump.

“The heat pump utilizes an innovative cycle that reduces energy consumption and costs by approximately 30 to 50 per cent,” he says. “Unlike electric heat pumps that can have significantly weakened performance in temperatures below zero degrees Celsius, testing has shown the natural gas heat pump can operate even when outdoor temperatures are extremely cold, commonly the case in Canada.”

Electrification not always the optimal tool

The question at hand, says Michael Garrabrant, president and CEO of SMTI, is whether consumers want to decarbonize or electrify our economy.

“Electrification is one possible tool, but not the only tool and in some cases is far from the optimal one,” Garrabrant says.

“Our units, for example, are true cold-climate heat pumps. They can operate down to -40 degrees and can provide warmer temperatures than electricity, meaning the end-user does not have to sacrifice comfort.”

“Given the utility cost reductions, our pumps will have a payback for the end-user within two to five years and a much lower cost of total ownership — over 15 years — compared to electric pumps and standard gas furnaces and water heaters.”

“This means the cost of carbon reduction will actually be reduced,” he adds. “Our natural gas pumps also provide energy and carbon emission reductions without adding additional load to the energy grid.”

“Our natural gas pumps also provide energy and carbon emission reductions without adding additional load to the energy grid.”
– Michael Garrabrant, President and CEO, SMTI

When load is added to an electrical grid, the additional power is generated at the margin (for example from gas, coal and oil-powered plants), and not from the baseload sources like hydro, wind, solar and nuclear energy.

“When load is added to an electrical grid, the additional power is generated at the margin (for example from gas, coal and oil-powered plants), and not from the baseload sources like hydro, wind, solar and nuclear energy.”

“So marginal grid emissions must be used to evaluate the impact of fuel switching from gas to electric, and in almost all areas of the world this results in an increase in carbon emissions.”

From an NGIF perspective, these types of investments are exactly why the foundation was created in the first place.

“This is the type of technology we envisioned advancing when we created NGIF several years ago,” says Timothy Egan, president and CEO, Canadian Gas Association and chair, NGIF Capital Corporation.

“These innovations will allow the natural gas industry to continue to support its customers with cost-effective energy solutions that reduce emissions and enhance reliability.”

Dennis Lanthier is an award-winning writer and corporate communications specialist with almost two decades of experience in oil and gas. He earned an International Association of Business Communicator’s Gold Quill in 2011 for the creation of a magazine distributed to TransCanada Pipeline’s employees and retirees. Dennis is now a freelance writer working with several oil and gas associations in the energy sector.