Energy Targets and Benchmarking
| In May, 2010, the ECO released its first Annual Report on the progress of activities in Ontario to reduce or make more efficient use of electricity, natural gas, propane, oil and transportation fuels. Click here for more information on this report, including videos and communications materials. | |||||
Setting quantitative energy conservation targets makes it easier to measure the progress made in achieving those goals. However, Ontario has a stated overarching goal to “build a culture of conservation, ” which is implicitly a broad-based objective that over time will mean more conservation of all uses of energy.
As discussed in Section 5.1, the government has established targets for the electricity system to reduce peak demand by 6,300 megawatts by 2025. There is no corresponding target for reducing total electricity consumption. In theory, the peak demand target could be met simply through demand response programs that shift electricity consumption to off- peak hours, rather than making use of all five of the categories of conservation described in Section 3.2 to reduce overall consumption of energy. Appendix B provides more information on the difference between energy consumption and demand.
There is some evidence that demand response initiatives are taking precedence. Of the 21 programs offered by the OPA, just three contributed more than 70 per cent of the savings target in 2008. These are the OPA’s two Demand Response programs for large industrial users and the PeakSaver program for residential and small business consumers. It is arguable whether Ontario is building a broad, enduring conserver culture that includes all types of conservation when three programs – programs that are typically activated in summer for only a few hours each year to shave peak demand – represent most of the savings designated to meet Ontario’s electricity target. Peak demand reduction by itself will not provide the full suite of benefits that ensue from overall energy conservation, such as significant greenhouse gas emissions reductions.
The targeted emphasis on peak demand reduction also does not reflect the diversity of current conservation program delivery. The majority of programs offered in Ontario by the OPA target energy conservation rather than demand reduction. But these programs may be vulnerable to cancellation, as they are not significantly contributing to the OPA’s official conservation goal (meeting the 6, 300 MW demand reduction target).
The government is already moving toward electricity consumption targets in several areas. With the GEGEA, LDCs are expected to be assigned conservation targets for reductions in both peak demand and total electricity consumption. The government has set consumption-based electricity conservation targets for its own operations. Ontario has the largest property portfolio in the province and includes some 6,000 buildings that consume over 600 million kilowatt-hours (kWh) annually.
Given these considerations, the ECO believes there is a need to re-think target setting in order to place greater value on all categories of conservation.
| Recommendation :
The ECO recommends that the Ministry of Energy and Infrastructure establish targets to reduce provincial electricity consumption. These consumption targets will supplement the province’s existing targets to reduce peak electricity demand and fulfill the government’s commitment to build a culture of conservation. |
There are currently no government-established targets for fuels other than electricity and low-carbon transportation fuels. For natural gas conservation, government does not establish targets; they are agreed to during a public hearing process overseen by the OEB. As they currently operate, gas DSM targets are used to calculate incentives for gas distributors (who are financially rewarded for meeting or exceeding the amount of natural gas that they commit to conserving).
The GEGEA enables the government to establish a special funds account to deliver multi-fuel programs, such as Ontario’s home retrofit program that primarily addresses natural gas consumption. Accordingly, this raises the issue of whether the government should be more directly involved in establishing gas targets. As the GEGEA mandates the ECO to report on progress to reduce the use of oil, propane and transportation fuels, it begs the question of whether the government intends to set targets for these fuels so that results can be measured.
The ECO believes that the government should decide whether it would help to build a conservation culture by setting targets for fuels other than electricity. If targets are warranted, their formulation should be developed with public input. The ECO believes that energy use information is the key to setting meaningful targets. When developing the Integrated Power System Plan, the Ontario Power Authority commissioned a detailed analysis of the potential for electricity conservation in Ontario (both for peak demand and total electricity consumption). Studies of this type may be necessary for other fuels, as a precursor to setting meaningful targets.
The ECO believes that benchmarking energy consumption, at the building or organizational level, should also be used to identify the potential for conservation. Benchmarking shows the variation in energy consumption between buildings with similar uses. This would help to refine conservation targets as technologies and behaviours change. The approach was used in the commercial real estate sector by the Real Property Association of Canada (REALpac) prior to developing an energy conservation target, as noted in Section 7.1.
Under the Green Energy Act, the government has the ability to require conservation plans from the broader public sector and other prescribed consumers. Such plans would include total energy consumption and could require detailed information at a facility level. The ECO believes the government should use the tools enabled by the GEA and others to begin widespread energy benchmarking, to drive improvement, and to inform the establishment of targets.
| Recommendation :
The ECO recommends that the Ministry of Energy and Infrastructure establish reportable benchmarking by sector. This would assist the government in deciding whether to establish targets to conserve natural gas, oil, propane and transportation fuels, and would make the targets meaningful. |
Citing This Article:
Environmental Commissioner of Ontario. 2010. Annual Energy Conservation Progress Report, 2009 (Volume One): Rethinking Energy Conservation in Ontario. Toronto, ON : Environmental Commissioner of Ontario. pp. 41-42
