Rethinking Energy Conservation in Ontario – Results: Executive Summary
| In November, 2010, the ECO released volume 2 of its 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. | |||||
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This is the second volume of the Annual Energy Conservation Report – 2009. It reviews a representative selection of conservation initiatives, and measures progress on achieving several targets identified by the Environmental Commissioner of Ontario (ECO) as guiding energy conservation in Ontario.
Because the focus of this volume is data and results, the key theme of the report is the importance of conservation program evaluation, including measurement and verification of claimed energy savings. Our report notes the robust evaluation frameworks developed by natural gas utilities and the Ontario Power Authority (OPA) for gas and electricity programs, respectively. The ECO notes the need for the government to evaluate the conservation programs that it delivers. Evaluation of results can be used to assess energy savings, improve program design, and demonstrate the value of conservation to both the public and decision-makers.
We provide an update on progress in meeting government-established targets for energy conservation and conservation targets for natural gas utilities.
Our report notes progress made in achieving the provincial electricity reduction target of 2,700 megawatts (MW) in peak demand by 2010. The OPA cautions that the 2010 target is unlikely to be met mainly because the economic downturn has affected industries’ ability to practice conservation. The ECO is concerned that the savings for one of the OPA’s demand response programs are overstated, and that savings for some older conservation initiatives will not persist into 2010. Correcting for these issues would lower the amount of electricity savings that the OPA claims to have achieved, making it even more unlikely that the 2010 target will be reached.
In terms of other targets, progress varies. Ontario met its target for installing smart meters and transitioning to time-of-use electricity prices, which is a commendable accomplishment. Work on meeting the government’s target of a 20 per cent electricity reduction in its own operations continues, and information on the progress made is expected later this year. There is little identified progress on energy efficiency targets that Ontario committed to with the Council of the Federation, or on meeting the commitment to implement a low carbon fuel standard. The 2007 target for ethanol blended into gasoline was achieved. Meanwhile, efforts toward increasing market penetration of electric vehicles are at an early stage.
Our report also notes that both gas utilities met and exceeded their conservation targets. We urge that conservation spending by gas utilities be expanded, given the very high net benefits per dollar spent and the low level of current spending on conservation by gas utilities in Ontario compared to other jurisdictions.
We selected several initiatives for review from among over 100 programs delivered by agencies, utilities, non-governmental organizations and government.
We analyzed the OPA’s industrial demand response programs since they account for the lion’s share of demand savings in the province, and because of their considerable potential in avoiding the need for future generation, transmission and distribution. New electricity supply projects are proving increasingly difficult to site and build. Reducing the need for new projects, along with providing environmental benefits, is the key contribution that demand response offers. We find that the OPA has been successful in establishing demand response as a viable alternative to peaking gas plants. However, the high cost of contractual demand response programs suggests that these programs should only be pursued where necessary.
Our report reviews two residential sector programs (conservation and small-scale renewable energy), as this is how most Ontarians directly participate in the government’s policy to build a green economy. The microFIT program for renewable generation has attracted great interest. Although it accounts for a small amount of total installed system capacity, participation in the program is growing. The Home Energy Savings Program has also attracted strong homeowner interest; the program could be improved if claimed savings were verified. We urge that this be done and that a program continue to be offered in Ontario.
Finally, we observed the beginning of interesting programs and initiatives, including: progress being made towards benchmarking energy performance in schools; implementing efficiency measures and alternate fuels in road freight transport; and, greening Ontario government operations. These activities, although recently commenced and at an early stage, hold great promise.
To address our findings, this report makes the following recommendations:
- The ECO recommends that the Ministry of Energy establish a formal evaluation framework for its energy conservation programs and publicly report on program performance annually on a going forward basis.
- The ECO recommends that the Ontario Power Authority assess the persistence of pre-2008 peak demand savings and report its conservation results in comparison to the government-established cumulative target of 2,700 MW in peak demand reduction by 2010.
- The ECO recommends that the Ontario Power Authority only expand contractual demand response programs when this will eliminate a demonstrated near-term need for new peaking generation.
