2014 Energy Conservation Progress Report

Planning to Conserve

The Environmental Commissioner of Ontario released his 2014* Annual Energy Conservation Progress Report to the Legislature on January 13th, 2015.

Energy conservation can be thought of as an energy resource, because it can displace electricity generation from other sources like nuclear, hydro, and natural gas.

Looking at it this way, Ontario’s 2032 energy conservation target is quite large and will account for 16% of production.

Executive Summary

This 2014 Energy Conservation Progress Report is my review of the effectiveness of Ontario’s energy conservation policies and programs implemented by government ministries, agencies and boards. I think it is the only tool that provides a comprehensive summary and critique of the state of energy conservation of all fuels (oil, natural gas, electricity, propane, transportation fuels) in the province. And as such is a valuable resource to monitor the pace, scope and trend of our efforts to conserve energy.

Figure 4 Forecast electricity production

This year’s report focuses on the integration of conservation in energy planning, and covers the following policy developments:

  • The government’s policy to prioritize conservation as the option of first resort, outlined in its Conservation First vision paper released in mid-2013.
  • An Achievable Conservation Potential study produced by the Ontario Power Authority in March 2014 to assist the government in setting electricity conservation targets.
  • The updated 2013 Long-Term Energy Plan released in December 2013 containing the long-term electricity conservation targets and supply-demand outlook.
  • The new conservation and demand management framework for electric distribution utilities released in March 2014 containing conservation targets for the 2015-2020 timeframe.
  • The new regional electricity planning process designed to encourage the participation of local communities in the planning and siting of electricity infrastructure projects.
  • A 2014 Ontario Energy Board decision to approve a new natural gas pipeline for the Greater Toronto Area, and the role that conservation might have played in reducing the need.
  • Time-of-use rates and a conservation initiative targeted at large industrial customers as ways to encourage involvement of the public and business in conservation actions.

My report also analyses energy conservation program results for 2013 – the most recent data available.  For electricity, we are not doing too wellm and many electricity utilities will miss their 2014 targets when the final results are tabulated this year.  Conservation of natural gas continues to perform steadily, producing cost-effective savings to meet targets but a new gas conservation framework launching in 2015 may offer even higher savings.

The table below summarizes my recommendations.

Topic Recommendation
2013 Long-Term Energy Plan
  • The ECO recommends that each update of the Long-Term Energy Plan explain the rationale for all target changes, including the consequences of altering, missing, exceeding or abandoning previous targets.
  • The ECO recommends that the Independent Electricity System Operator expand its scope of evaluation to measure and report energy savings from codes and standards.
Conservation of Natural Gas
  • The ECO recommends that the Ontario Energy Board require natural gas utilities to file advance notice of any identified distribution system need that could have significant cost impact, and ensure conservation is considered as the first resource to meet some or all of this need.
  • The ECO recommends that the Ontario Energy Board allow utilities to increase their conservation budget if targeted conservation spending would avoid greater future infrastructure costs.
Time-of-Use Rates & Industrial Conservation Initiative
  • The ECO recommends that the Ontario Energy Board significantly widen the peak to off-peak price differential.
  • The ECO recommends that the Ministry of Energy lead an integrated review of the electricity pricing structure for fairness and conservation.

* Note: The ECO’s annual energy conservation progress reports were published as two separate volumes from 2009 to 2012. Starting with this report, the ECO will publish the annual energy conservation progress report as a single volume. This 2014 report covers major policy developments in both 2013 and 2014. Please see page 12 of this report for more information.

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