As Canada advances toward net zero and intensified climate adaptation goals, there is growing recognition that achieving deep emissions reductions will require optimizing existing infrastructure alongside deploying new clean energy systems. Wastewater Energy Transfer (WET) systems are an emerging component of Canada’s clean energy and low carbon infrastructure landscape. By capturing thermal energy contained in raw or treated wastewater, WET systems can deliver high‑efficiency, low carbon heating and cooling to residential and commercial buildings through thermal energy networks. Wastewater temperatures remain relatively stable throughout the year, offering a reliable, renewable energy source that can supplement or displace more carbon‑intensive heating and cooling technologies. As communities seek cost‑effective pathways to reduce greenhouse gas emissions and decarbonize buildings, WET systems represent a practical and scalable solution.

The widespread adoption of WET systems has been constrained by high upfront capital costs and overall project complexity. Access to appropriate funding, effective risk‑sharing mechanisms, and a clear economic business case remain decisive factors in determining whether projects move from concept to implementation. Current funding and financing mechanisms are not always well matched to the characteristics of WET systems. Clean energy funding frequently assumes private sector leadership, short payback periods. Some current funding and financing mechanisms are not inclusive towards the technology. This fragmentation can leave WET projects falling between policy and funding silos, despite their strong alignment with multiple government objectives. Improved alignment across funding sources, clearer eligibility criteria, and innovative risk‑sharing models could significantly enhance project feasibility, with blended finance approaches, long‑term service agreements, and utility‑enabled delivery models offering promising pathways to bridge the gap between public value and private investment.

Recognizing both the potential and the persistent barriers facing WET systems, Canadian Water Network (CWN) is undertaking this work to support more informed and confident decision‑making by wastewater utility leaders and decision-makers. By clarifying the economic value proposition of WET, identifying key cost and risk drivers, and exploring pathways to scale projects through coordinated funding and governance approaches, CWN aims to help utilities, governments, and partners move from interest to implementation. This work builds on CWN’s role as a neutral convener across the water, energy, and infrastructure sectors. By bringing together diverse perspectives and synthesizing practical insights, CWN seeks to accelerate learning, reduce duplication of effort, and support the responsible expansion of WET as a contributing element of Canada’s low carbon infrastructure future.

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