A Small Saskatchewan
Energy Case Study
Pedersen Apiaries Ltd.
Box 579 Cut Knife, Saskatchewan S0M 0N0
October 16, 2009
Presented by Karen Pedersen
Pedersen Apiaries Limited
Pedersen Apiaries Ltd. is a family owned beekeeping operation near Cut Knife, Saskatchewan.
Pedersen Apiaries employs between 4 employees during our slowest season in December and
January and 10-15 people during our peek season in July and August harvesting honey. During
July, August and part of September an extracting line is running at least 3 days/week with several
operating machines. During the winter, a manufacturing line is running 6 days/week with several
operating machines. In two yard sites, Pedersen Apiaries owns 4 residences which are rented out
and one main production building (Honeyhouse/Shop). To run the business, Pedersen Apiaries
uses a lot of energy both in electrical consumption and heating buildings.
Karen Pedersen is President of Pedersen Apiaries Ltd. She has been an employee of the operation
for over 25 years. During the winter of 1992, she was employed in Denmark. After obtaining
her B.A. in Political Studies at the University of Saskatchewan in 1999 she worked the winter in
New Zealand. Karen is now employed year round at Pedersen Apiaries Ltd.
Pedersen Apiaries does not believe that fossil fuels will continue to be cheap in the future.
Therefore, to maintain a competitive advantage, Pedersen Apiaries intends to take advantage of
cheap fossil fuels now to build renewable energy infrastructure.
Pedersen Apiaries energy plans include conservation, installing a solar thermal heating system
with electrical backup, installing wind turbines and replacing the house trailer with a passive
• Insulation and conservation are the cheapest form of heating. Properly designed
buildings that make the most of passive solar heat with flexible small backup systems are
the most logical form of heating.
• The cheapest kilowatt hours (kWh) are the ones that we do not use.
• It is impossible to evaluate energy consumption in heating without also evaluating energy
consumption in electricity and vice versa. To do a proper energy audit requires accurate
• There is a shortage of knowledge, technical expertise and providers of renewable energy
Pedersen Apiaries has been evaluating our efficiencies on several fronts over the past few years.
We became more labour efficient and more fuel efficient. In those situations we used the money
that we saved to reinvest in the business which increased our productive capacity. Efficiency and
conservation are one in the same and they provide a competitive advantage.
Pedersen Apiaries had known for quite some time that we were going to need to replace energy
infrastructure in our operation and had been slowly investigating so that we would be prepared
when we felt it was necessary. During our harvest in 2008, it became clear that we had run out of
time. We were going to need to limp it along until the fall of 2009, but that would be it. We
needed to find a solution now.
Since the question that The Standing Committee on Crown and Central Agencies asked is, “How
should the Government best meet the growing energy needs of the province, in a manner that is
safe, reliable, and environmentally-sustainable, while meeting any current and expected Federal
Environmental Standards and Regulations, and maintaining a focus on affordability for
Saskatchewan residents today and into the future?” we felt that our research and its result would
be both timely and useful to the government. In our research we found that heating and electrical
consumption are closely linked and that it was necessary to consider both, if we were to make the
best decision. We are not trying to provide a general policy document, but rather a small case
study of a current business in Saskatchewan.
This presentation will mostly be limited to the main yard site which includes the
Honeyhouse/Shop and two residences.
Description Main Yard Site
• Built in 3 separate sections.
(1983, 1990, 1998) facing
• The building is a total of
9060 square feet.
• There is in-floor heating in
6268 square feet and another 680 square feet that is insulated and heated with
leaked heat from other areas of the building. (In 1983, in-floor heating was a new
concept so only half of the building had pipes installed in the floor. It is
something we have regretted ever since.) 2112 square feet is deliberately not
insulated or heated.
• The whole building is 2 X 6 or equivalent construction with R20 insulation. The
1998 section is Structurally Insulated Panels (SIP's). They are 2 X 6 and R20
equivalent, but with a better air seal. (During the 1998 construction, Plasti-Fab
salesmen and a couple of Albertan contractors came to see the construction of the
building. It was the first Plasti-Fab SIP building in Saskatchewan. Plasti-Fab sent
a contractor from the United States to oversee its construction.)
• Uses two electric hot water heaters.
• Bungalow style facing southeast built in 1966.
• A total of 1768 square feet which includes a partially finished basement.
• The house is heated with radiant heat from an outside furnace through forced air
furnace fan and heat lines under the top level floor. A propane furnace is used as
backup in cold weather.
• It is 2 X 4 construction with R12 insulation.
• Has one year round resident.
• Uses one propane hot water heater.
• Built in the 1970’s or 80’s.
• 576 square feet.
• Heated with radiant heat from an outside furnace through a forced air furnace fan.
• Occupied usually from about April 1 to October 31.
• Uses one electric hot water heater.
In December 1994, Pedersen Apiaries installed an outdoor wood burning furnace in the main
yard site. Since we owned a mostly poplar woodlot that was dying and we also generated
significant waste wood product while manufacturing equipment in the winter, it seemed logical to
heat the main yard with wood. With this outdoor furnace, the one residence still required a
propane backup furnace in extremely cold weather. After 7 years, we replaced the original
furnace because it was leaking. In the fall of 2004 we converted the furnace from burning wood
to burning coal because we had harvested the available woodlot and now needed to give it time to
While coal seemed like a good idea at the time given our existing infrastructure, it had problems.
Besides coal being a dirty fuel, it has also been expensive in terms of labour. We can only source
the coal from one mine and because that coal has been wet, it freezes and bridges above the auger
so that the coal does not feed into the furnace. In cold weather this requires a person to knock
down the coal every few hours. It means a person must be monitoring the coal day and night.
We have been unable to solve the problem despite trying different methods from agitation to
insulation. The cost of the coal continues to rise and the heating units in the coal have declined
so that we have to buy more to accomplish the same amount of heating. We are also spending
significant money on anti-freeze because both furnaces only lasted 7 years before starting to leak.
Another challenge we have is heating loads in the summer months. This is split between our coal
consumption and our electrical consumption. The Honey House requires heat during July,
August and September to maintain our Warm Room and heat the hot water coil in our honey
sump. Even though we have 2 hot water heaters for domestic hot water, we do not have enough
hot water for cleaning. Finally, during those summer months, we have 2 wax melters running
consistently. They are basically glorified electric hot water heaters.
So, the furnace started leaking in 2008 and could only be limped through the winter and 2009
summer season. Our questions was, “What is the most affordable and logical solution to replace
We wanted to consider every possible option that we could for our location considering our
strengths and weaknesses. We did not consider wood since we no longer had a ready source. My
father’s cousin heats his house in Denmark from waste heat from an industry in a nearby town,
but that was obviously not an option where Pedersen Apiaries is located. We read about a used
oil incinerator, but since we did not have a ready source of used oil it did not make sense in our
particular situation. We stayed a winter night in a straw bale house with a masonry stove and
were very impressed, but since our buildings were already built there was no way to incorporate a
masonry stove into them. We also had an in-depth conversation with a person who used a home
built outdoor furnace to burn flax straw. This too seemed like a good option for certain situations
in Saskatchewan. However, flax is not a common crop in our area, so we did not have a ready
source of flax straw. We also did not seriously consider straight electrical heat because we knew
it was not a particularly affordable option.
The following options are ones that we priced out. (Appendix 1) It is important to note that they
are priced out as a total cost over 25 years without making any allowance for inflation. They also
make no allowance for the cost of anti-freeze. The assumption is that we would use a similar
amount of anti-freeze no matter which option we chose. Finally, they make no allowance for the
cost of maintenance and service.
1. Continuing to Burn Coal & Propane - $164,818.13
• The cost to replace the outdoor furnace is $14,000 + freight from Winkler, MB. This
would be our third furnace. At the rate they deteriorate, we would need to replace it 3
times in 25 years. We would spend over $42,000 on furnaces not counting freight.
• In the last 4 years we have burned an average of 56,370 kilograms (kgs) of coal each year.
At the most recent rate we paid of $0.039/kg, the operational cost of coal would be
$2,198.43 each year for a total of $54,960.75 in 25 years. While we did not calculate in
inflation, the price of coal has been rising. (Appendix 2)
• The most recent trucking rate we paid was $0.032/kg. At the current rate, trucking would
cost $1,803.84/year for a total of $45,096.00 in 25 years. The cost of trucking has also
been rising. (Appendix 3)
• We burn approximately 1300 litres of propane every year to heat hot water and as backup
heat in the house. At the most recent rate we paid of $0.70/litre we would spend $910.46
per year on propane. The price of propane has been rising. (Appendix 4)
• We have not quantified the labour for monitoring the furnace during the night to knock
the coal down.
• We assume that we would continue to provide the maintenance and service.
2. Natural Gas - $98,000 – $142,000
• The nearest natural gas to our location is about 1.6 kilometres away at a nearby oil well
site. Sask Energy estimated that it would cost between $18,000 and $20,000 to trench
natural gas to our yard site.
• Sask Energy also said that the furnace would cost at least as much as the outdoor coal
furnace and probably more. I was not able to obtain a more exact price. I only calculated
one in 25 years.
• I used natural gas records from 2007 and 2008 for a house of 1728 square feet to figure
out an approximate operational cost of natural gas.
o There are inherent problems with comparing the consumption of this house to the
3 buildings on Pedersen Apiaries:
The Honeyhouse/Shop is better insulated than the designated house.
However, the Honeyhouse/Shop has several big doors and a dust control
system that allow significant air leakage and I did not add in the square
footage of the section of the building that is heated by leaked heat.
The two houses are probably equivalent in R value.
The house trailer is significantly worse insulated than the designated
The designated house does not have heating loads in the summer months.
Therefore, I allowed a span of 60% of the house consumption to the full
consumption as a range to consider.
• The designated house used an average of 1.28 m3 per square foot at an average cost of
$0.395/ m3. Therefore, Pedersen Apiaries could use between 6600 and 11000 m3 per year
for a total between $2,600 and $4,300 per year. This would total from $65,000 to
$109,000 in 25 years with no inflation.
• We assume that we would have to hire outside of Pedersen Apiaries to maintain and
service a natural gas furnace.
3. Geothermal Ground Source Heat Pump (Geothermal) - $193,000 - $250,000
• We obtained 3 different quotes on installing this sort of system. All of the quotes had a
lot of essential parts of the process not included in the quote including trenching, storage
tanks, electrical work, and duct work. I allowed an additional $5,000 to $10,000 for this
work though I am not sure that figure is high enough.
• The two possible quotes ranged from $79,570 to $82,164. They did not include the house
trailer. By this point we had realized that the trailer was just a black hole for energy and
there was no point in putting more money into it.
• We assumed that we would have to hire outside of Pedersen Apiaries to service and
maintain the heat pump.
• The one contractor that actually seemed the most knowledgeable and trustworthy
provided us with an estimate showing how much we would save on heating and cooling
the house as well as domestic hot water using geothermal. The sheet raised questions:
o Why was Sask Power charging me almost double the electrical rate that the sheet
o The sheet said the house would use 13,921 kWh/year to heat, cool and provide hot
water. What was our current electrical consumption in the yard? How did it
compare? If the house would use 13,921 kWh/year for 1768 square feet, did that
mean that the Honeyhouse/Shop would use almost 50,000 kWh/year for 6268
These questions sent me on a tangent that led to discovering our electrical consumption. I
am embarrassed to admit that before that I had not really paid any attention to it. Power
was usually there when I turned on a switch and I could not do anything about the price so
I ignored it.
Electrical Consumption as it related to Geothermal
With the exception of this past year that Pedersen Apiaries is fairly consistent in
its power usage in the main yard at around 30,000 kWh/year. (Appendix 5) We
pay approximately 10 cents/kWh when monthly fees are included. I learned that
heaters, hot water tanks, clothes dryers and ovens are big electrical loads, much
more so than motors and other machines. We realized the house would use very
little power since its hot water tank is propane and there is almost never anyone in
the house to use the appliances so the Honeyhouse/Shop used most of the power in
While speaking to a Sask Power employee, it was recommended that I examine
geothermal closer. I was told that they have to deal with people who do not
understand why their power bill increased so much. In fact, they looked up one
residence that they knew had converted to geothermal and it was using 40,000
kWh/year, 10,000 kWh more than Pedersen Apiaries main yard site.
The increase in electrical consumption led us to rule out a Geothermal. Paying a large
installation cost is justified when it lowers or removes the operational costs, but if the
operational costs are going to remain high, the large installation cost cannot be justified.
4. Solar - $115,000-$138,000
First of all it is important to point
out that solar as a form of energy is
similar to using the phrase fossil
fuels. There are many different
types of solar technology in
different stages of development.
This paper will only be referring to
passive solar heating and active solar thermal heating. It is also important to note that one of the
residences (3000 square feet) that Pedersen Apiaries
owns in the second yard was built over several years
during the 1970’s. It is heated by passive solar heating
and a small biomass stove backup. When that
residence was built, little was known about how exactly
to build a passive solar heated house. So while there
are many things, like reducing the sizes of the
windows, that would now be done differently it was the
best that could be done at the time. Therefore, Pedersen Apiaries has practical experience with
the reliability and affordability of solar heating in Saskatchewan.
Despite this experience, Pedersen Apiaries knew very little about active forms of solar heating.
Since the buildings were already built, we could not redesign them into passive solar heating.
However, we did know that the concrete floor in the Honeyhouse/Shop is a huge heat sink.
During the winter it took us 5 days to notice that the heat had been shut off for a section of the
building that we were in every day. After realizing that none of the previous 3 options were
particularly satisfactory, we sought out information on solar heating. This was difficult, since
there are few solar providers in Saskatchewan and they are so busy with urban work, that they did
not need rural work. Therefore, we sought to discover the information and analyze the situation
We toured 2 solar thermal heated residences. They had different types of panels. In fact, the one
house had home built panels that could even be built in a school shop class. When the weather
was -20ºC, that house would only lose 0.3 ºC every hour with the backup heat turned off. We also
visited a solar provider in Alberta. The fog was so heavy on the day we visited that we could not
see the windmill behind the house when we drove up to the house. Additionally, his solar
vacuum tubes were frost covered. Despite that, the temperature of the solar heated water
continued to rise as we were there. At the end, he showed us a tube outside, under a mix of sun
and cloud, which became so hot within a minute that we could no longer touch it. The
Honeyhouse/Shop faces due south and has a lot of empty wall space for solar panels. All of this
information convinced us that solar heating was the logical answer for the summer heating loads,
but how it would work in the winter remained an open question.
The investigation into solar thermal heating led Pedersen Apiaries to further evaluate our
electrical consumption. It was clear that the two hot water heaters, two wax melters and the
clothes dryer were all significant contributors to our electrical consumption. It was also
noticeable that all of them were drawing their most significant loads during the province’s peak
power times and that we had no way of changing their timing. By this time, it was also apparent
that the cheapest form of energy was the negawatt, so we installed an outdoor and indoor clothes
line to replace the clothes dryer. The wax melters were ran with a much more discerning eye
towards reducing the energy that they each used. Instead of always running them together, where
possible, they were used consecutively with the hot water being transferred from one to the other.
It became a selling point for a solar thermal heating system that it would not only reduce the
operational costs of our heating system, it would also reduce our electrical consumption as a
whole and at peak times.
Back up System
Pedersen Apiaries is situated on a ridge of hills higher than the surrounding countryside.
Consequently three separate towers have been installed nearby. It seems logical to take
advantage of Sask Power’s net metering program and install windmills to take our
electrical consumption to zero. We did not do this because we were distracted with the
heating system. It will become stage 3 in our plan to achieve energy efficiency.
Therefore, we have not calculated any operational costs into the solar thermal system
because we plan that electricity, offset by windmills, will be our backup. While this too
must be factored into costs for energy consumption on our farm, we currently spend
around $3,000/year on electricity in the main yard. Calculating for 25 years with no
inflation shows another $75,000 that can be spent on wind installation to reduce
operational electricity costs.
We did not have the skills to design a solar system for ourselves though we did think that we
could do much of the installation, service and maintenance. We could not compare costs without
the skills to figure out how many solar thermal panels or what size of storage tank Pedersen
Apiaries would require. We looked at the costs of the other options and figured that it would
probably make sense to spend up to $200,000 on a system that would have minimal operational
costs in comparison. We finally found an engineer to work with us. He is still working on
designing the exact system, but he did ballpark it for us. Presently, he has estimated between
$115,000 and $138,000 for installation.
5. Conservation - $24,100
The real epiphany occurred when we realized that all of the buildings that Pedersen Apiaries
owns are actually passively solar heated. It just turns out that unlike the one residence with the
small biomass stove for backup, they are very poorly designed and therefore require constant
backup heat in the form of coal, propane and electricity.
• Consequently, we have installed insulation in the attics to take them up to R-50 for
• We have installed new windows and have the other half are on order for a total of
• We have started on the walls of the house to increase the insulation to R32 in a method
that will prevent thermal bridging. Additionally, we have added insulation to certain
walls in the Honeyhouse/Shop. All this extra wall insulation came to a price of
• We will also be finishing the partially finished basement in the house, for an estimated
price of $1,200.
• We also estimated in another $400 for improved weather stripping and foam insulation
around doors and windows.
The house trailer is a black hole draining energy and dollars away from our business. It needs to
be replaced with an energy efficient passive solar residence.
To be successful in business requires accurate forecasting and the ability to read the writing on
the wall. It also requires a competitive advantage. North America’s competitive advantage has
been cheap fossil fuels. While we have been enjoying this competitive advantage, the rest of the
world was forced into practicing forms of energy conservation or efficiency.
Pedersen Apiaries does not believe that fossil fuels will continue to be cheap in the future.
Therefore, to maintain a competitive advantage, not only must we catch up to the rest of the
world in energy efficiency, we must surpass it to compensate for our energy consumption in the
winter. We cannot know for sure, but we believe that the costs of renewable energy sources will
likely follow a U shaped trend. Now the costs are coming down as the technology is further
developed and it is mass produced. However, we expect that the cost of all forms of energy will
rise as the cost of fossil fuels rise. This is because we expect that the renewable energy
infrastructure will not be there yet to replace fossil fuels when the prices of fossil fuels rise.
Pedersen Apiaries intends to take advantage of cheap fossil fuels now to build renewable energy
infrastructure so that it is not caught in the upslope of the prices. This also will position Pedersen
Apiaries well to remove itself from the grid if Sask Power or the Saskatchewan government
chooses an expensive form of power generation like nuclear power.
Pedersen Apiaries plans to move forward, first of all, reducing our heating and electricity loads
through conservation. Secondly, we plan to install a solar thermal heating system with electrical
backup. Thirdly, we plan to install wind turbines. Finally, we plan to replace the house trailer
with a passive solar residence. We do not have the capacity to do all of this immediately, but it
will be done in short order.
Several things became clear as we researched this. The most obvious one was that insulation and
conservation is the cheapest form of heating. Properly designed buildings that make the most of
passive solar heat with flexible small backup systems are the most affordable and
environmentally friendly form of heating. Likewise, the cheapest kilowatt hour was the one that
we did not use. As with heating, reducing our electrical consumption requires understanding
what uses electricity, paying attention to what we use, and using that knowledge to creatively
increase our efficiency.
Secondly, it became apparent that it was impossible to evaluate energy consumption in heating
without also evaluating energy consumption in electricity. Changing how we heated would
change our electrical consumption for either good or bad. We need to do a total energy audit and
increase our efficiency in all of our energy consumption. However, to do a proper audit requires
accurate information. While we know what our consistent electrical consumption is, we have not
been able to determine what caused last year’s 15% increase. Originally, I blamed it on the
second wax melter. I have since realized that it can not be the only culprit. Sask Power only
reads our meter once per year so they cannot provide us any useful information to help in an
audit. We have invested in some power meters and we are now monitoring our Sask Power
meter weekly to determine which loads can be reduced.
Thirdly, there is a shortage of knowledge, technical expertise and providers of renewable energy
in Saskatchewan. We will have to be able to service and maintain the equipment ourselves.
As a business we have been evaluating our efficiencies from several fronts over the past few
years. We became more labour efficient and more fuel efficient. In those situations we used the
money that we saved to reinvest in the business increasing our productive capacity. Investing in
energy efficient infrastructure should benefit both our business and the economy just as our other
efficiencies did. Efficiency and conservation are one in the same and they have only helped our
business keep a competitive advantage.
We hope that this small concrete example can help you in your deliberations and research
towards an affordable and sustainable energy future for Saskatchewan.
Appendix 1: Total 25 year costs without inflation. The table has specific costs and the chart shows installation and operational costs.
Specifics Quantity Rate Price Total Price
Coal 25 56370 $ 0.04 $ 54,960.75
Trucking 25 56370 $ 0.03 $ 45,096.00
Coal & Propane $164,818.13
Propane 25 1300.65 $ 0.70 $ 22,761.38
Furnaces 3 $14,000.00 $ 42,000.00
Natural Gas (60% of compared house rate) 25 6605.0 $ 0.39 $ 65,186.78
Natural Gas Low Furnace 1 $14,000.00 $ 14,000.00 $ 98,186.78
Trenching 1 $19,000.00 $ 19,000.00
Natural Gas (100% of compared house rate) 25 11008.4 $ 0.39 $108,644.63
Furnace 1 $14,000.00 $ 14,000.00 $141,644.63
Trenching 1 $19,000.00 $ 19,000.00
House $ 25,170.00
Honeyhouse/Shop $ 54,400.00
Geothermal Low $193,402.61
Things not included $ 5,000.00
Electricity (60% rate of house for honeyhouse) 25 43533 $ 0.10 $108,832.61
House $ 21,265.00
Honeyhouse/Shop $ 60,899.00
Geothermal High $250,350.02
Things not included $ 10,000.00
Electricity (100% rate of house for honeyhouse) 25 63274 $ 0.10 $158,186.02
Low 2 $57,500.00 $115,000.00
High 2 $69,000.00 $138,000.00
Windows $ 9,809.76
Attic Insulation $ 7,137.20
Conservation Wall Insulation $ 5,547.27 $ 24,094.23
Weather Stripping & Foam $ 400.00
Finish Basement $ 1,200.00
25 Year Total Cost With No Inflation
Coal & Natural Gas Natural Gas Geothermal Geothermal Solar Solar Conservation
Propane Low High Low High Thermal Low Thermal High
Appendix 2: The price of coal that Pedersen Apiaries has paid since 2005. While we did not calculate any price increases into the
Total Cost over 25 years, we expect the cost of coal to continue to rise.
Price of Coal
2004.5 2005 2005.5 2006 2006.5 2007 2007.5 2008 2008.5 2009 2009.5
cents/kg Linear (cents/kg)
Appendix 3: The price that Pedersen Apiaries has paid for trucking coal since 2006. While we did not calculate any price increases
into the Total Cost over 25 years, we expect the cost of trucking to continue to rise.
Price of Trucking Coal
2005.5 2006 2006.5 2007 2007.5 2008 2008.5 2009 2009.5
cents per kg Linear (cents per kg)
Appendix 4: The price that Pedersen Apiaries has paid for propane since 2003. While we did not calculate any price increases into
the Total Cost over 25 years, we expect the cost of propane to continue to rise.
Projected Price of Propane
Price of Propane Poly. (Price of Propane)
Appendix 5: The main yard power consumption was relatively constant. We do not know what caused the 15% increase last year.
The power consumption in the 2nd yard is declining. We also do not know why.
Pedersen Apiaries Power Consumption
2003 2004 2005 2006 2007 2008 2009
Power Consumption Main Yard Power Consumption 2nd Yard