An Energy Efficiency Strategy for Ontario's Homes, Buildings and Industries

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In the 20th century, Ontario’s economy was built on a foundation of low-cost and abundant energy supplies. From 1906 to 1959 we enjoyed continuously falling electricity rates as Ontario Hydro developed virtually all of our low-cost hydro-electric resources. And starting in 1958 with the completion of the TransCanada pipeline system from Alberta to Ontario, we began to rely on low cost natural gas to heat our homes and fuel our industries. Times have changed, however.

We no longer have access to additional low-cost Made-in-Ontario electricity supplies (pending further developments in renewable technologies). And we must dramatically reduce our natural gas consumption as part of a comprehensive strategy to reduce our greenhouse gas emissions to 80% below 1990 levels, by 2050. Therefore Ontario needs a new energy strategy to heat our homes and buildings and power our province in the 21st century.

As a result of over a hundred years of low-cost energy, Ontario’s energy consumption per person is amongst the highest in the world. For example, our energy consumption per person is 50% higher than New York State’s and double that of the United Kingdom. This means we are sitting on top of a huge untapped energy efficiency gold mine that can and should be fully exploited to meet our energy needs.

• According to a Canadian Manufacturers & Exporters report, Ontario’s industries could cost-effectively reduce their energy consumption by 29% by 2030 by implementing all the economically feasible best practices that are readily available.

• A study for Enbridge Gas Distribution found that the natural gas consumption of its residential, commercial and industrial customers could be cost-effectively (e.g., a net gain in savings over the life of the investment) reduced by 18%, 29% and 34% respectively by 2017. A similar report for Union Gas concluded that its customers could cost effectively reduce their natural gas consumption by 30% by 2017.

• Since 2004, the Hospital for Sick Children in Toronto (Sick Kids) has reduced its energy consumption by 19.3% despite the addition of more energy intensive medical equipment and the expansion of services. Sick Kids is now one of Ontario’s most energy efficient hospitals but it believes that its work has just begun. It is now planning to double its energy savings over the next few years.

By investing in energy efficiency we can reduce our energy bills, raise our GDP, create jobs, reduce the federal and provincial deficits and lower our greenhouse gas emissions.

• The cost of saving electricity is 76-94% lower than the cost of new nuclear energy. Nevertheless, Ontario is proposing to spend six times more on new electricity supply ($75.4 billion) than on energy efficiency ($12 billion). By shifting more spending to low-cost energy efficiency from high-cost new supply we can keep the lights on and reduce our electricity bills.

• A recent study by Dr. Ernie Stokes of The Centre for Spatial Economics (CSE) for the Ontario Clean Air Alliance calculated the economic benefits of energy efficiency investments that would reduce our natural gas consumption by 15% by 2026. According to Dr. Stokes’ analysis, these investments would provide the following benefits in 2026: raise our GDP by $5.1 billion (0.6%); create 28,500 new jobs; raise corporate profits by $451 million; and reduce the combined federal and provincial deficits by $591 million – all while reducing Ontario’s total greenhouse gas emissions by 5.5%.

To fully exploit our energy efficiency gold mine we must develop and implement an energy efficiency strategy that will motivate and help millions of Ontario consumers and businesses to achieve all their cost-effective opportunities to save energy (all opportunities that will provide energy consumers with a net financial gain over the lifecycle of the initiative). Our five-step energy efficiency strategy is as follows.

First, we need big, bold energy efficiency objectives that can be used to drive the practical changes needed to achieve all cost-effective conservation. These objectives are:

1. Move our homes and buildings towards super efficiency;

2. Make Ontario’s industries the most energy efficient in the world; and

3. Squeeze all available energy from the natural gas we use.

Second, we need a plan to move Ontario towards our three big, bold objectives at no extra cost to the province’s energy consumers. That is, the life-cycle electricity and/ or natural gas savings of the plan’s energy conservation and efficiency measures must exceed their costs.

Third, we need to find smart individuals, municipalities and private sector corporations that will agree to play a leadership role in promoting and implementing these goals because they understand the benefits to the province and their own bottom lines.

Fourth, we need our municipal electric utilities (e.g., Toronto Hydro), Hydro One, Enbridge Gas Distribution and Union Gas to expand their energy conservation and efficiency programs to help their customers achieve all of their cost-effective energy savings opportunities, which will help move our homes and buildings towards super efficiency and make our industries the most energy efficient in the world.

Fifth, the Government of Ontario must ensure that its policies and regulations align with these objectives:

a) Energy efficiency labelling must be mandatory for the sale of all Ontario homes;

b) Our minimum legally-binding energy efficiency standards for new homes, buildings, appliances and equipment must be continuously improved to reduce the energy bills of Ontario’s homeowners and reflect advances in technology;

c) The Ontario Energy Board and the Ontario Power Authority must eliminate their red tape that is limiting the ability of our electric and gas utilities to help their customers achieve all of their cost-effective energy saving opportunities;

d) The Ontario Energy Board must ensure that its rate design policies for our electric and gas utilities promote the wise and efficient use of energy, not wasteful consumption; and

e) Ontario’s electric and gas utilities must be allowed to invest in district energy projects.

By pursuing our five step strategy to fully exploit all of our energy efficiency opportunities that are lower cost than new energy supply, we can help ensure that Ontario’s future will be clean, green and prosperous.