Reflections is a monthly blog series by Canadian Water Network’s (CWN) CEO Nicola Crawhall. This series is designed for decision-makers navigating complex water-related challenges. It helps leaders stay ahead of change and make informed decisions that shape the future of water in Canada.

For decades, the mission of water and wastewater utilities has been defined by high-quality treatment and infrastructure management. But as the clean energy transition accelerates, the role of the wastewater leader is evolving to include being a critical energy provider. At CWN, we see wastewater not just as a flow to be treated, but as a high-value, untapped thermal asset.

This shift in perspective is already a reality in Markham, Ontario. Earlier this month, I saw the clean energy transition coming to life through a wastewater energy transfer (WET) system connected to a distributed energy network. Similar projects are underway in Vancouver, Mississauga, and other urban areas with large sewage trunk lines that are not too deep and sit near large developments or district heating/cooling systems.

Beyond observing these trends, CWN is actively showcasing them as a blueprint for the sector. As part of our net zero water project, Markham District Energy and the Regional Municipality of York hosted us for a tour on March 11^th of their state-of-the-art wastewater energy transfer project that is nearing completion. We arrived at just the right time to see the guts of the operation being constructed before they are covered up.

Pictured from left to right: Richard Lazlo (President of Lazlo Energy); Scott Laberge (Acting Director, Technology, Innovation, Engineering Support Services at the City of Ottawa); David Szeptycki (Director of Sustainability, Communications, and Innovation at York Region); Nicola Crawhall (CEO of Canadian Water Network); Joe Green (Manager, Infrastructure Analytics at Region of Durham); Brandon Truong (Energy Specialist at the OCWA); Todd Boyd (Manager, Climate Change, and Energy Conservation at York Region); Emma Shen (Global Principal for Wastewater Energy Optimization and Sector Decarbonization at Jacobs); Maika Pellegrino (Senior Project Manager, Water and Wastewater at Jacobs); Jeremy Waud (VP of Engineering at Markham District Energy); Michael Conte (Engineering Manager at FVB Energy); Mohammad Khan (Water and Efficiency Energy Manager at OCWA).

This tour is just one piece of a much larger strategic puzzle. CWN launched a Wastewater Energy Transfer (WET) project in January. In partnership with the Building Decarbonization Alliance and with funding from the Royal Bank of Canada (RBC), CWN is building a cross-sector network to help municipalities exchange the information and technical expertise needed to move WET projects forward. As a part of this work, we’re developing a better understanding of the factors that make WET projects successful and the barriers municipalities face in adopting WET.

The marvel of the project being undertaken by Markham District Energy and the Regional Municipality of York is that it will capture 18.5 MWt (megawatts thermal) of perpetually available heat and exchange it into an existing distribution system to heat and cool approximately 140,000 square meters of household and commercial space. As Markham District Energy’s chief operating officer, Peter Ronson, puts it: “When we were siting our distribution system, we came across this annoying shallow municipal sewage trunk sewer. Then, we realized, hey, wait a minute, that’s a source of heat.”

This realization highlights the technology’s greatest strength: its spatial efficiency. Unlike other forms of renewable energy, WET systems require a very small physical footprint. The Markham facility covers only 1,263 square meters, whereas achieving a similar thermal capacity through geothermal technology would require roughly 20,000 square metres. This spatial efficiency makes WET systems ideal for densely populated urban centers.

While the technical efficiency is impressive, the real impact comes from integrating these systems into our urban design. Imagine if we co-locate new housing developments with sewage trunk lines from the start. We can create a system where heating and cooling capacity actually increases as the population grows. While wastewater heat won’t meet all of our heating and cooling needs, it can reduce our dependence on carbon-based energy when combined with other energy sources.

Scaling this vision requires more than just smart technology — it requires a shift in how we think about infrastructure. In the book How Infrastructure Works, Canadian author Deb Chachra makes the point that individual agency is not enough to decarbonize our economies. Our current system, which supports gasoline distribution and natural gas lines, embeds carbon-based emissions into our daily lives. We need to redesign the system itself to make clean energy the default.

This systems-level logic is exactly why transferring the energy from sewage into buildings is such an attractive proposition. The energy source is plentiful, readily available, provided at a steady temperature (around 21° Celsius), and importantly, immune to supply chain interruptions caused by global conflict. Also, companies like Sharc, a Canadian heat exchange manufacturer, offer technology to transfer energy from sewage into buildings. Despite this, Canada currently discards 52 terawatt-hour (TWh) of thermal energy as heated wastewater per year.

While Canada is just beginning to tap into this potential, Scandinavia is well ahead in this regard. In Oslo, Norway, the Skøyen district facility, which has a thermal heating capacity of 18.7 MW, supplies 7.8 percent of the district heating energy needs. In Stockholm, Sweden, Hammarbyverket — the world’s largest heat pump plant extracting heat from wastewater — contributes 225 MW of thermal energy into the district energy system.

Building on these international models, Canada is finding its own momentum. We have the False Creek Neighbourhood Energy Utility, which generates 9.8 MW to heat 47 buildings in the Vancouver area. The facility in Markham is almost ready to go. And the Mississauga Lakeview system, which broke ground in 2024, will service homes and businesses in the 177-acre development. These last two systems will be among the largest wastewater heat exchange district systems in North America.

However, this momentum could be stalled . With the removal of the federal carbon tax, the business case for WET systems has become more difficult to make compared to the status quo that uses relatively cheaper natural gas. To fix this, the federal government should include WET to the list of clean energy projects that are eligible for a federal Clean Economy Investment Tax Credit. Extending the 30 percent credit, already available to geothermal projects, would fundamentally change the business case and result in more WET projects moving forward.

Ultimately, the path forward isn’t about good intentions. Only by investing in the redesign and reengineering of our infrastructure systems will we make progress in Canada’s energy transition. Look to the pioneers in Markham, Vancouver, and Mississauga to see the way forward.

Get involved

If you are interested in learning how to embark on wastewater energy transfer in your municipality and/or in advancing the national discourse on wastewater energy transfer, join CWN’s WET Community of Practice this coming Fall. Please contact Project Manager Dana Mears at [email protected].

To support the drive to make WET projects ITC-eligible, please contact Richard Laslow at [email protected].