John Vandenberg, MBA and Louis Azzolini, MBA

Energy Shifts in Canada’s North

In Canada’s north, homes and buildings generally rely on diesel fuel for heat, which contributes significantly to the already high cost of living. Two alumni of Athabasca University’s MBA program, Louie Azzolini and John Vandenberg, work in the not-for-profit and public sector respectively to encourage individuals and organizations to choose energy sources such as biomass that are a less expensive and lower carbon option than diesel.

Azzolini heads up the Arctic Energy Alliance, a non-profit that operates at arm’s length to the government of the Northwest Territories to develop and implement programs that reduce the costs and environmental impact of energy services. Vandenberg is the Director of the Petroleum Products Division of the Department of Public Works (PWS). The department has taken a leading role in pursuing energy efficiency and alternative energy over the last decade.

Both Azzolini and Vandenberg point to a 2006 project that paved the way for the growth of the biomass market in the NWT. In addition to displacing more than 3.4 million litres of heating oil, PWS’s installation of a wood pellet boiler at the North Slave Correctional Facility in Yellowknife showed that there were practical alternatives to diesel. A Yellowknife company installed the pellet boiler at no cost to the government, and bills the government for the heat energy supplied.

“The project was the first of its kind in Canada’s north,” says Vandenberg. “It proved that biomass technology was viable, and it catalyzed interest in other retrofit projects and in the market as a whole.”

Azzolini also sees the biomass boiler installation as a watershed moment. “The government of the Northwest Territories spearheaded the development of the industry with this one project,” he says. “And it’s paid off. Yellowknife now has the highest density of pellet biomass heating in North America. Government played a fundamental role in changing market behaviour: once the market saw it was viable, an industry began to develop. Now we have all sorts of companies with expertise in installing and maintaining boilers, we have pellet distribution systems in place and we have widespread interest from consumers.”

Since 2006, the government has installed wood pellet boilers in 15 public buildings and another four are under consideration. “We figure that over the past three years alone, we have saved $1.5 million in energy costs,” says Vandenberg. This includes the amount saved in switching to wood pellets from diesel, as well as a range of energy-efficiency measures in public buildings.

While Vandenberg and the team at PWS focus on public buildings, Azzolini and his group at the Arctic Energy Alliance support individuals and businesses making the shift to alternative energy sources such as wood pellets.

“The price of heating with pellets can be 30 to 50 percent less than heating with oil,” he says. “Although there’s a strong incentive for people to switch, the market was underdeveloped. So we look for tangible projects to bring buyers and sellers together and develop the market.”

This can include training tradespeople to install and maintain wood pellet stoves. “What happens is that by developing private sector capacity to install these stoves, we create demand for them. The market grows. At a very basic level, we lubricate the exchange process.”

In addition to building capacity through training and raising awareness of energy issues, the Arctic Energy Alliance also offers individuals and businesses financial incentives to make the switch away from heating systems based on fossil fuels.

Like the government’s Department of Public Works, the Alliance leads by example. The organization installed a pellet boiler that is reducing heating bills from $30,000 to $14,000 annually. At a system cost of $30,000, they see a two-year payback on investment.

Vandenberg also makes the business case for switching to alternative energy sources and investing in energy-efficiency programs. “The government wants to save money for taxpayers. These projects do that. They also reduce fossil fuel dependence and lower our greenhouse gas emissions – which are important public issues. We’re proud that one-third of the energy used in public buildings in the Northwest Territories is from sources other than fossil fuels. That’s an achievement.”

The two men speak highly of the value of their MBA education, which provides them with the tools to analyze the complex interconnections that make up an energy system and to think more strategically.

“The MBA was life-changing,” says Vandenberg, who completed his degree in 2012. “I knew I would improve my quantitative skills, but I also gained a more holistic understanding of the world of business, which certainly has strong value for the work I do.”

For Azzolini, who graduated in 2002, the MBA has given him the conceptual tools to develop and advance the Arctic Energy Alliance’s programs. “I think an MBA can change the way you look at the world and ultimately make you a better thinker. The traditional view is that an MBA teaches you to maximize profit. I use the same tools to figure out how to maximize impact.”

Photo credit: James MacKenzie/jamesmackenziephoto.com