ENERGY EFFICIENCY BRIEF
CANADIAN ELECTRICITY ASSOCIATION CUSTOMER COUNCIL
September 2009
TABLE OF CONTENTS
INTRODUCTION ..............................................................................................................1 HOW DO WE MAXIMIZE ENERGY EFFICIENCY? ......................................................... 1 ELECTRIC UTILITIES ARE COMMITTED TO ENERGY EFFICIENCY ........................... 2 ENGAGE ELECTRIC UTILITIES IN ENERGY EFFICIENCY POLICY DISCUSSIONS.... 3 ENERGY EFFICIENCY DELIVERS TANGIBLE ECONOMIC BENEFITS ........................ 4 ADVANTAGES FOR UTILITIES AND CANADIANS ......................................................... 5 CONCLUSION .................................................................................................................6 INTRODUCTION
A safe, secure, reliable, sustainable and competitively priced supply of electricity is essential to Canada’s
prosperity. Providing Canadians with the means to use electricity wisely and efficiently is pivotal to
maximizing the potential of the Canadian electricity system, minimizing environmental impacts and
meeting current economic challenges.
HOW DO WE MAXIMIZE ENERGY EFFICIENCY?
Canadian electric utilities have decades of
experience in delivering effective energy
efficiency programs to their customers and
believe that it is imperative that energy efficiency
play a more prominent role in energy policy. In
order to leverage the potential for energy
efficiency to: help meet environmental
commitments; help Canadians manage their
energy bills in a challenging economic
environment; and, to help industry meet the
challenges of the need for new supply and
delivery infrastructure; effective coordination of
policy, programs and regulatory efforts along
with long term policy and program commitments,
and appropriate incentives are needed.
Specifically;
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Prioritize Energy Efficiency programs
and measures within government
energy, fiscal and environmental
policies, strategies and portfolios.
Consult with electric utilities when
considering Energy Efficiency initiatives,
programs and policies to achieve
enhanced program payback and uptake.
Engage electric utilities as program
delivery channels to benefit from their
regional knowledge, customer and
supplier relationships and infrastructure.
Adopt multi-year funding cycles for
energy efficiency programs and codes
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and standards initiatives. Benefits of
such initiatives are cumulative and
provide multiple year returns but
continuity and certainty are needed to
effect behaviour change and to engage
effective partners and delivery channels.
Universality of access for all Canadians
to energy efficiency programs is
required and governments have a key
role to play in ensuring access for all
Canadians.
Create a policy balance between
demand and supply to give energy
efficiency a greater role in ensuring a
sustainable, secure energy future.
Institute regulatory policies which
remove financial barriers and encourage
electric utilities to expand their energy
efficiency offerings and exceed their
savings targets.
Maximize the effectiveness of energy
efficiency activities and increase
program uptake by simplifying customer
access.
Develop a common method for
calculating GHG emissions reductions
to maximize the impact of energy
efficiency on GHG emissions.
ELECTRIC UTILITIES ARE COMMITTED TO ENERGY EFFICIENCY
Electric utilities have long been involved in providing energy efficiency programs and information to their
customers. Annual energy efficiency expenditures by government and utilities exceed $400 million per
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year . More needs to be done. A recent CEA survey of electricity sector CEOs identified energy
efficiency as one of the most pressing issues for the industry. Many regions of Canada are being
challenged to develop new supply and delivery infrastructure quickly. Significant new and replacement
infrastructure requirements exist throughout the country and demand for electricity continues to grow. A
recent view of future scenarios predicts that by 2050, due to plug in hybrid vehicles and fuel switching
away from fossil fuels to electricity generated by renewables, 1,700 TWh of electricity supply could be
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needed . In 2007 total electricity generation in Canada was 602.4 TWh.
While energy efficiency cannot substitute for infrastructure or stand-in for much needed new supply, it is
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fundamental to the solution. There is a large, untapped reservoir of energy efficiency potential in Canada
which could make a significant contribution to meeting future energy demand.
Investment in energy efficiency yields cumulative and lasting energy and cost savings. However, in order
to realize these savings, programs and initiatives must be underpinned by long term and sustained
funding and policy commitment. Multi-year funding cycles would create certainty for program delivery
infrastructure and resource planning and provide a stable basis from which to effect behaviour change
and market transformation
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Demand Side Management Potential in Canada: Energy Efficiency Study by Marbek Resource Consultants Ltd and
M.K. Jaccard and Associates Inc, May 2006, page 10
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A Technology Roadmap to Low Greenhouse Gas Emissions in the Canadian Economy: Prepared for: National
Round Table on the Environment and the Economy, J & C Nyboer and Associates Inc., August 2008
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Demand Side Management Potential in Canada: Energy Efficiency Study by Marbek Resource Consultants Ltd and
M.K. Jaccard and Associates Inc, May 2006 concluded that depending on the policy instruments in place across
residential, commercial and industrial sectors, a 3 to 10 percent reduction in total energy demand by 2025 is possible.
This equals a 16 to 56 percent reduction in energy demand growth by 2025
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ENGAGE ELECTRIC UTILITIES IN ENERGY EFFICIENCY POLICY
DISCUSSIONS
Canadian electric utilities have been involved in
energy efficiency programs and initiatives and the
acceleration of market transformation through
codes and standards for over two decades.
It is a challenging proposition to construct
programs and measures given the energy
diversity among the provinces in terms of
supply, regulation and structure and Canada’s
geography, climate and industrial structure.
Experience suggests that without the
involvement of the companies that have the
most direct relationship with energy customers,
the ability to target programs, to monitor
outcomes and to adjust program delivery will be
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less than ideal.
Electric utilities have
electricity consumption data and understand
local conditions of energy demand and end
uses, socio-economic diversity and regional
lifestyles. They have local brand recognition
and established and long-standing relationships
with households, commercial enterprises,
industry and suppliers. They are well positioned
to deliver education and programs to their
customers and have the expertise, program
delivery capability and infrastructure to do so.
Who should deliver energy efficiency
programs?!
The public increasingly recognizes the benefits
and importance of better managing their energy
consumption. CEA research has shown that when
it comes to meeting the future electricity needs of
their province Canadians are most in favour of
energy efficiency and conservation programs.
Energy Efficiency delivers multiple benefits to
Canadians: reduced energy expenditures;
increased economic competitiveness; improved
energy security; employment opportunities; and,
the reduction of greenhouse gas and air emissions
across Canada.
In fact, CEA research has shown that the vast
majority of consumers expect their electric utility
to provide energy efficiency programs and
information, and in tough economic times will
continue to look to their electric utility to help
them manage their electricity consumption and
consequently their electricity bill.
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Institutional and Regulatory Barriers to Utility
Demand-Side Management in Canada, Energy
Efficiency Working Group Energy Sector
Sustainability Table, November 2008
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However, some citizens face unique barriers
such as lack of investment capital and lack of
control over their housing arrangements which
prevent them from participating in energy
efficiency programs. Government has a key role
in ensuring that all Canadians have the
opportunity to benefit from taking measures to
reduce their energy consumption by facilitating
universal access to energy efficiency programs
and initiatives
Preference for next MW!
ENERGY EFFICIENCY DELIVERS TANGIBLE ECONOMIC BENEFITS
CEA research indicates that the most common
motivation for Canadians to take action in the
home to use electricity more efficiently is to save
money.
showed that Energy efficiency measures have
enabled California households to redirect their
expenditures toward other goods and services,
creating about 1.5 million full time equivalent
(FTE) jobs with a total payroll of $45 billion,
driven by household energy savings of $56 billion
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from 1972-2006.
Motivation for energy efficiency?!
The positive impact of energy efficiency on the
economy has also been identified by McKinsey
and Co. They point out that an investment in
improving efficiency in energy use in areas such
as lighting, heating and cooling, water heating,
appliances and buildings can produce positive
economic returns, substantially reduce GHG and
other emissions and free up needed investment
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funds for supply infrastructure.
Energy Efficiency is a cost effective option for
contributing to the achievement of greenhouse gas
reduction targets and produces tangible benefits
for the environment. The National Round Table on
the Environment and the Economy (NRTEE) has
identified increasing energy efficiency as key to
reaching Environment Canada’s goal of 60%-70%
In addition to contributing to the bottom line of
household budgets, cost effective energy
efficiency increases the competitiveness of
business and industry by reducing energy
overhead and input costs. Energy Efficiency
contributes to a robust economy and creates
‘green’ jobs and through savings creates
employment in other sectors. A recent study on
Energy Efficiency and job creation in California
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Energy Efficiency, Innovation, and Job Creation in
California, David Roland-Holst, October 2008
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The Case For Investing in Energy Productivity,
Andre, Brodeur, McKinsey & Co. presentation to
CEA Customer Council, September 11, 2008
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reduction in GHG emissions by 2050 (compared
with current levels) predicting that by doing so
approximately 40 per cent of the target reductions
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could be achieved.
consumptions and laying plans for grid
modernization or smart grid initiatives. Utilities have
and continue to introduce and deliver cost effective
energy efficiency programs and marketing
initiatives that help customers reduce their energy
bills, and which reduce supply costs and concerns.
ADVANTAGES FOR UTILITIES
AND CANADIANS
Canadian electric utilities engage in and promote
energy efficiency because it is good for our
customers, good for the environment and good for
our businesses. Offering energy efficiency
information and programs provides an opportunity
for utilities to engage customers and enhance
relationships with them. It helps customers
manage their energy bills and helps utilities
manage their supply and infrastructure needs.
Energy Efficiency can be a more cost effective
means to meet electricity demand than traditional
or renewable supply options. According to BC’s
Energy Plan, Energy Efficiency is a more
economical resource than some other options to
meet new supply needs. Greater emphasis, by
way of incentives and policy stimulation for energy
efficiency, would promote greater use of a
resource that is both sustainable and cost
effective.
Resource Energy
conservation/efficiency
Large Hydroelectric
Natural Gas
Coal
Biomass
Geothermal
Wind
Small Hydro
Ocean (wave and
tidal)
Solar PV
Energy efficiency programs should not result in a
reduction in earnings for utility shareholders. In
certain jurisdictions utilities are compensated
through regulated rates for the expense associated
with program delivery and infrastructure while
customers benefit from lower bills through
participation in the utility energy efficiency
programs. In other jurisdictions, regulatory policies
which guide the operation of electric utilities can be
a disincentive for energy efficiency. The United
States is taking steps to encourage states to adopt
supportive utility regulation. Under the terms of the
American Recovery and Reinvestment Act in
addition to committing 3.2 billion USD for energy
efficiency programs, 3.1 billion USD in state grants
is contingent on the alignment of utility financial
incentives with helping their customers use energy
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more efficiently.
Estimated Cost
$/megawatt hour 32-76
43-62
48-100
67-82
75-91
44-60
71-74
60-95
100-360
700-1700
Similar recognition by Canada of the important role
of utilities, and the energy, economic,
environmental and other benefits of cost effective
energy efficiency, is critical to maximizing Canada’s
energy efficiency potential.
Taken from the BC Energy Plan
(http://www.energyplan.gov.bc.ca/bcep/default.aspx?has
h=7)
Electric utilities are leading by example by taking
steps to ensure their own efficient use of energy.
Programs to reduce line loss, encourage system
efficiencies and reduce environmental impacts are
underway. Utilities are installing smart meters to
allow customers to actively manage their energy
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Advice on a Long-Term Strategy on Energy and
Climate Change, National Round Table on the
Environment and The Economy, June 2006
http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1e
nr.pdf, page 24
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CONCLUSION
Energy Efficiency provides Canadians with an opportunity to reduce their energy bill and their
environmental footprint. Canadian electric utilities have long been leaders in delivering energy efficiency
and have pioneered the introduction of energy saving products and programs. Utilities recognize that the
effectiveness of energy efficiency can be maximized through an integrated and collaborative approach and
welcome the opportunity to work with governments, regulators and customers to move energy efficiency
forward
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