www.eco.on.ca
Managing a Complex Energy System – ResultsAnnual Energy Conservation Progress Report – 2010 (Volume Two)
BackgrounderUndertheEnvironmentalBillofRights,1993,theEnvironmentalCommissionerofOntario(ECO)reportsannuallytotheLegislativeAssemblyofOntarioontheprovince’sprogressinenergyconservation.ManagingaComplexEnergySystem–ResultsisthesecondvolumeoftheAnnualEnergyConservationProgressReport–2010.VolumeOne,releasedinJune2011,focusedonthepolicyframeworkforenergyconservation,providinganextensivereviewofelectricitydevelopmentsaswellasaconciseanalysisofaregulatorydecisionaffectingfundingofnaturalgasconservation.Thissecondvolumemeasuresprogressagainstestablishedenergytargets,andreviewsnaturalgasindustrialconservationprograms,theOntarioPowerAuthority’sConservationFund,andelectricityretrofitprogramsforcommercialandinstitutionalbuildings.
Inthepublicdebateoverenergy,conservationisoftenignored.Overthepastyear,therehasbeenagreatdealofattentionfocusedonprices,renewableenergy,andnaturalgaspowerplants.Concernsabouttheaestheticandhealthimpactsofrenewableandgas-firedgenerationdominatedtheenergydebate.
TheECOcautionsthattherealvalueofconservationhasbeenlostinthisdiscussion.Ontarianswereleftwithalopsideddiscussionofpublicpolicythatneglectedtheeconomicandenvironmentalimpactofgrowthinenergydemandthatisnotmoderatedbyconservation.Seldommentionedwasthefactthatconservationeffortsareexpectedtooffsetmuchoftheprojectedgrowthinconsumptionbetweennowand2016.TheCommissionerbelievesthegovernmentshouldmakeconservationatopprioritybecauseofitsprovenabilitytosavecustomersmoneyandavoidnewandoftenunpopularenergysupplyprojects.Asthepasttwoyearshaveshown,willinghostcommunitiesofanytypeofpowerplantarefewandfarbetween.
The Value of Conservation
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governmentelectricityconsumptionbysome15percentcomparedtotheconsumptioninfiscalyear2002/03.(Page21)
TheECOrecommendsthattheMinisterofInfrastructureusetheGreenEnergyAct,2009directivepowertoremovebarriersfacedbycustodialministriestoachievethegovernment’selectricityconservationtarget.Forallintentsandpurposes,thegovernmenthasnowmetitsgoaltoinstallsmartmetersforalleligibleelectricitycustomers,althoughitachievedthegoalslightlylaterthananticipated,with99%ofeligiblecustomershavingmetersinstalledbyJuly2011(thetargetwastheendof2010).
ByJune30,2011,3.6millionofthesecustomerswerealsosupposedtobeshiftedovertotime-of-use(TOU)pricestotakeadvantageofthesmartmeters.Heretheprogresshasbeenslower:about2.8millioncustomershadmovedtoTOUpricingbytheJune30thtargetdate,aboutthree-quartersofthetargetamount.MostofthedelaysinTOUimplementationhavebeencausedbyunforeseentechnicalissuesthatlocaldistributioncompanies(LDCs)haveworkedtoovercome.
Whilepleasedabouttheprogressmade,theECOisdisappointedwiththedelayinTOUdatacollectionandanalysiswhichisneededtocomparepatternsofelectricityconsumptionbeforeandafterTOUbilling.ThegovernmenthasnomechanisminplacetomeasurehowpeoplehavechangedtheirconsumptionwiththeintroductionofTOUpricing.Theprices,setsemi-annuallybytheOntarioEnergyBoard(OEB),arenotbasedonactualdataofhowpricelevelsaffectcustomers’consumption.TheCommissionerbelievesthatthisdataisessentialiftheOEBistosetTOUpricesatlevelsthatmaximizetheamountofconservationfromelectricityconsumers.(Page24)
Targets and Progress
Reduce 2,700 MW of Peak Electricity Demand by 2010
Conserve Electricity inGovernment Operations
Implement Smart Meters and Time‐of‐Use Pricing
TheAnnualEnergyConservationProgressReport–2010(VolumeTwo)reviewedthreeofthegovernment’skeyconservationtargetsaswellasnewtargetssetbythegovernmentin2010toseehowmuchprogresswasbeingmade.Thegovernmentmadesubstantialprogress,butnotenoughtomeetthetargetofa2,700megawatt(MW)reductionofpeakelectricitydemandby2010thatwassetbytheMinisterofEnergy.AccordingtotheOntarioPowerAuthority(OPA),peakdemandwasreducedby1,751.9MW,duetoconservationinitiativesthatbeganin2005.
Despitenotreachingthe2010target,Ontario’sconservationeffortsdeliveredsignificantbenefitsbyreducingtheneedfornewgenerationandsavingelectricityratepayersmoney.Thereductioninpeakdemandbysome1,750MWisapproximatelyequivalenttohavingtoinstallthegeneratingcapacityofthreenaturalgaspeakingpowerplants.Byinvestingabout$1.7billioninconservationprogramsfrom2006to2010,Ontariosavedelectricityratepayers$3.8billioninavoidedelectricitysupplycosts.(Page17)Tosupportitscommitmenttoacultureofconservation,theOntariogovernmentpledgedtoreduceelectricityuseinitsownfacilitiesby10percentby2007,andanother10percentby2012.Thegovernmentaimedtoachievethesesavingsprimarilythroughupgradestoitsbuildings,employeeeducationandotheractions.Thegovernmentagency,InfrastructureOntario,metthisgoalinfacilitiesthatitmanaged,whiletheministriesthatmanagetheirownfacilities,suchastheMinistryofCommunityServicesandCorrectionalServicesortheMinistryofNaturalResources,laggedbehindbecauseinsufficientresourceswerededicatedtoimprovingefficiency.Thismeantthegovernmentwasabletoreduceitselectricityconsumptionbyonly8percentby2007,andexpectstoreachonly75percentofits2012target.Whileshortofitsgoal,thiswillstillreduce
EnergyefficiencyisoftengivenalowprioritybyOntario’sindustrialfirms.Therearesomeverycost-effectiveopportunitiestosaveenergy,buttheyareseldomacteduponwithouttheassistanceofutilities.Toovercomethesebarriers,Ontario’snaturalgasutilities(EnbridgeandUnionGas)haveofferedindustrialconservationprogramsthatprovidetechnicalassistanceandfinancialincentives.Theseprogramshaveconsistentlydeliveredlargesavingsandhavebeenmorecost-effectivethangasconservationprogramsinanyothersector.
However,theOEBrecentlytoldthegasutilitiesthatitisnolongermandatoryforthemtooffertheseprogramstolargeindustrialcustomers.BothofOntario’sgasdistributorshavereducedtheirproposedspendingfortheselargecustomersasaresult.TheOEBactionraisestheconcernthatdistributorswillcontinuetolimitspendingoutoffearthatrequeststofinancemoreextensiveprogramswillberejectedbytheBoard.Thelikelyresultwillbeadecreaseinthefundsdirectedatindustrialgasconservation.
TheEnvironmentalCommissionerbelievesthatiftheOEBhadexplicitlyconsideredsocietalcostsofenergyconsumption,suchasgreenhousegasemissions,itwouldhavemaintainedmandatoryconservationprogramsforlargeindustrialcustomers.ThispatternofnotconsideringtheenvironmentalconsequencesofenergyconsumptionisalsoreflectedinotherrecentOEBdecisionsforelectricityconservation.TheECOsuggestsachangeinlegislationtomaketheOEBmoreeffectiveinpromotingenergyconservation,ashadbeenintendedbytheGreenEnergyandGreenEconomyAct,2009.(Page38)
TheECOrecommendsthattheMinistryofEnergyamendtheOntarioEnergyBoardAct,1998sothattheOntarioEnergyBoard’sobjectivesincludehavingregardtotheenvironmentalcostsassociatedwithenergyconsumption.
In2010,thegovernmentintroducedtwomajornewelectricitytargets:
LDCConservationandDemandManagementTargets–2014
Forthefirsttime,LDCshavebeenassignedmandatoryconservationtargets.Theyarecollectivelyrequiredtoachieve1,330MWofpeakdemandsavingsin2014and6,000gigawatt-hours(GWh)ofconsumptionsavingsfrom2011to2014.Eachutilitywasgivenashareofthistargetanditwasmadeaconditionoftheirlicence.TheECOisconcernedthatLDCswillnotmeettheirtargetsduetoalatestartinlaunchingtheprograms,anddifficultiesingettingprogramapprovalsfromtheOEB.Todate,onlytwoLDCshaveappliedfortheBoard-Approvedprograms,whichwillbeneededifLDCsaretomeettheirtargets,andeachapplicationwaswithdrawnfollowinganunfavourabledecisionororderbytheOEB.TheEnvironmentalCommissionerurgesthegovernmentandtheOEBtopromptlyimplementchangestoensurethatthetargetismet.Failingthat,thegovernmentshouldreconsiderthetargettimelineof2014.TheECOalsorequeststhegovernment,theOPA,andtheOEBclarifywhetherandhowLDCscancredittheconservationsavingsthatwilloccurwithTOUpricingtowardstheirindividualLDCconservationtargets.(Page27)
Province-WideElectricityConservationTargets–2015andBeyond
Province-wideelectricityconsumptionanddemandreductiontargetswerealsoestablishedfortheperiodafter2014.TheOPAwilldiscloseitsstrategyformeetingthesetargetswhenitreleasesanupdatedIntegratedPowerSystemPlan.TheCommissionerisconcernedwiththelackoftransparencyinsettingthesenewprovince-widetargets.ThisissimilartowhatoccurredwhenthetargetsthatLDCsmustmeetby2014wereset.TheECObelievesthatthegovernmentdidnotmakeenoughinformationavailableaboutthemethodandassumptionsthatunderliethesetargets,sothepubliccouldnotjudgewhetherthesetargetsweresufficienttodeliveranoptimalamountofconservation.(Page34)
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Reviews of Conservation Programs
Natural Gas Industrial Conservation Programs
New Targets
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TheEnvironmentalCommissioneralsoreviewedfourconservationprogramsthatoperatedbetween2007and2010toimproveenergyefficiencyinexistingcommercialandinstitutionalbuildings.Theseprogramswerecost-effectiveindeliveringelectricitysavings,butgenerallydidnotachievetheirtargets.
In2011,theOPAreplacedtheseprogramswithanewprovince-wideprogramprovidingfinancialincentivesforbuildingretrofits,aswellasfundingforaudits,buildingcommissioningandbuildingoperatortraining.TheECOsupportstheseprogramenhancementsbutbelievesincreasedincentivesandmoreeducationandoutreacheffortsmaybeneededtomeetsavingstargets.
TheECOnotesabarriertoprogramparticipationthatprogrammanagersflaggedaboutthecommercialretrofitprogramsthatranfrom2007to2010.SomepotentialprogramparticipantsdeclinedtoparticipatebecausetheywerelegallyrequiredtogivetheOPAownershipofallenvironmentalattributes,suchascarboncreditsresultingfromreducedgreenhousegasemissions.(Page44)
TheECOrecommendsthattheOntarioPowerAuthorityreleaseclaimstoownershipofenvironmentalattributesarisingfromconservationprojectsfundedwiththeaidofOntarioPowerAuthorityincentives.
Electricity Retrofit Programs for Commercial and Institutional Buildings
The Conservation Fund
TheECOexaminedgrantsfromtheOPA’sConservationFundthatareawardedtostimulateinnovationinconservation,testuniqueelementsofconservationinitiatives,buildcapacity,andsupportpilotprojects.From2005to2010,theFundprovidedalmost$15millionto97projectsacrossallsectors,andtestedanumberofinitiativesthatarenowincorporatedintoOPA’sregularconservationprogramportfolio.TheOPAplanstomakemoreuseoftargetedRequestsforProposalsonspecificpriorityareasforelectricityconservationinvestments.TheECObelievesthatthereisacontinuingneedforaprogramliketheConservationFundtodriveimprovementsinconservationprogramdesignandencourageinnovation.(Page48)
Aussidisponibleenfrançais
Formoreinformation,contact:MariaLeungCommunicationsandOutreachCoordinatorEnvironmentalCommissionerofOntario416-325-3371/[email protected]
1075 Bay Street, Suite 605
Toronto, ON
M5S 2B1, Canada
T: 416.325.3377 F:416.325.3370
Toll free: 1.800.701.6454
The Environmental Commissioner of Ontario is the provinceʹs independent environmental watchdog, appointed by the Legislative Assembly. The ECO monitors and reports on compliance with the
Environmental Bill of Rights, the governmentʹs progress in reducing greenhouse gas emissions and its actions towards achieving greater energy conservation in Ontario.
The Conservation Fund
DownloadtheEnvironmentalCommissioner’s2010EnergyConservationProgressReportManagingaComplexEnergySystem–Resultsat
wwwecoonca. . .