2017
Aug
24
Investment in conservation still the way to go for Ontario

 

 

Our latest energy conservation report, Every Joule Counts, highlights that investment in energy conservation remains the cheapest form of energy in the province. Thanks in part to conservation, Ontario has been able to grow its economy and population over the past decade without increasing its energy use.

In Every Joule Counts we analyzed the conservation performances of Ontario’s gas and electric utilities under the first year of their respective 2015-2020 frameworks. We found that electricity and gas conservation initiatives over the past decade reduced overall energy use in 2015 by 3%. The government’s Climate Change Action Plan is working to further reduce fuel use by encouraging switching to cleaner, non-carbon based fuels.

 

Share of overall fuel demand in Ontario, by fuel type, including demand reduced by utility-run conservation programs (2015)

 

For electricity, conservation remains the cheapest and most environmentally friendly source of generation in Ontario. Ontarians pay 3.5 cents for every kWh saved through conservation. Other sources of new generation cost much more: 6.5-26 cents per kWh for renewable energy (e.g., biofuel, wind and solar); 12-24 cents per kWh for hydro generation; 12-29 cents per kWh for nuclear generation; and 8-31 cents for every kWh of gas generation.

Given that 2015 saw a 5% increase in new electricity savings, the transition from the last framework to the current one seems to have gone smoothly. The electric utilities achieved 16% of their 7 TWh target in 2015, which puts them on track to achieve that target by 2020. As they were able to use remaining funds from the previous framework, utilities used less than 2% of their budget for the new framework in 2015, and are therefore now in a favourable position to achieve their targets.

 

First year energy savings from new conservation program activity for distribution-connected customers

 

Like electricity, natural gas conservation is also cost-effective at roughly $3 in benefits for every dollar spent. Though natural gas conservation has already helped reduce carbon emissions by 300,000 tonnes a year since 2012, investment in gas conservation is much lower than that in electricity conservation. Natural gas conservation is expected to increase in the coming years with the government’s plans to reduce greenhouse gas emissions in the province, and utility funding may be supplemented by money from Ontario’s new green bank. For 2015, the gas conservation results are still in draft, but indications are that Union Gas programs have seen a 17% decline in savings while Enbridge programs increased results by 20%. These figures might change once verified by the Ontario Energy Board.

 

Annual Greenhouse Gas Emissions Reductions (t CO2 e) from Gas Utility Conservation Programs (2012 – 2015)

 

Both the electricity and gas conservation programs have to complete separate mid-term reviews by June 1, 2018. These reviews will assess the performance of the electricity and gas utilities, and should indicate which programs will continue to achieve the most reductions until the end of the framework in 2020. Targets and other elements of each of the frameworks may see changes.

With the ongoing rollout of the Climate Change Action Plan and the upcoming nuclear refurbishments, both electricity and gas conservation will become even more crucial for the province. And given how cheap conservation is compared to other generation forms, investment in conservation is a no-brainer.

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