The Economics of Energy Efficiency –
Why It Makes Sense For Canada
Presentation to the Canadian Energy Efficiency Alliance
Carol Buckley
Director General
Office of Energy Efficiency
April 12, 2013
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Purpose of the presentation
 Outline a global context
 Examine energy efficiency in Canada today
 Macro economic benefit of current and future
investments
 Role of government in realizing the benefits
3
mb/d
Global energy demand is growing rapidly,
with shifting demand and supply patterns
Reduction in North American Oil Imports by Source
8
7
Demand side
6
5
4
3
2
1
0
-1
-2
2011
2015
Source: IEA World Energy Outlook, 2012
2020
Reductions due to:
Demand-side efficiency
Biofuels use in transport
Natural gas use in transport
2025
2030
2035
2011 net oil import level
Projected net imports
Increased oil supply
Energy efficiency - the “fifth fuel”
Energy Efficiency Update Page 1
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Globally, there is still significant untapped
energy efficiency potential ….
Energy Efficiency Potential 2011-2035
Source: World Energy Outlook 2012, International Energy Agency
The IEA recommends that efficiency improvements
more than double the 1980-2010 rate in order to capture these benefits
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Over the last two decades, energy
productivity in Canada has improved
Total secondary energy use intensity per capita and
unit of GDP index, 1990-2010 (1990=1)
Energy Intensity 1990 - 2010
1.1
Index
1
0.9
25%
improvement
0.8
0.7
1990
1992
1994
1996
1998
2000
2002
2004
2006
Energy use intensity per capita
Energy use intensity per GDP
Source: Energy Efficiency Trends in Canada, 1990 - 2010
2008
2010
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… in large part from energy efficiency
Factors Influencing the Change in Energy Use, 1990-2010
3000.0
Petajoules
2000.0
1000.0
-1680.7
=
+
+
+
+
0.0
-1000.0
1547.8
2981.1
563.1
-65.2
-250.2
-2000.0
Total change in Activity effect
energy use
Source: Energy Efficiency Trends in Canada, 1990 - 2010
Capacity
Weather effect Structure effect
utilization
Service level
and Other
Energy
efficiency
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Each sector has energy efficiency gains (1990-2010)
Residential
 36%
 $9.0 billion savings
Commercial / Institution
 30%
 $5.6 billion savings
Transportation
 24%
 Passenger $8.2 billion; freight $3.4 billion savings
Industrial
 20%
 $6.1 billion savings
Source: Energy Efficiency Trends in Canada, 1990 - 2010
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From a regional perspective, energy efficiency
investments yield significant returns .…
$2011 Millions
Cumulative Regional Impacts of Energy Efficiency
Spending in Quebec, New Brunswick, Nova Scotia, and
113,250
Prince Edward Island, 2012-2040
120,000
100,000
83,955
80,000
60,000
45,238
6:1
ratio
28,600
40,000
20,000
5,768
14,460
0
BAU+
Mid
Total Efficiency Program Costs
High
Net Increase in GDP
Source: Energy Efficiency: Engine of Growth in Eastern Canada, prepared by Environment Northeast (May 2012)
Modeled
Investment
Levels:
BAU+:
moderately
intensify
current efforts
Mid: put
provinces
among EE
leaders
High: put
provinces as
EE leaders
(i.e. No.1)
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…. including net increases in employment
Job Impacts - Mid Scenario
Program and participant spending ends
Thousands (Jobs)
45
625,000 net
increase in
cumulative
job years
Thousands
40
35
30
25
20
15
10
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Source: Energy Efficiency: Engine of Growth in Eastern Canada, prepared by Environment Northeast (May 2012)
2039
2038
2037
2036
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
0
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…. and net increases in government revenue
Annual
Increase
in Government
New
Revenues,
Average
Annual ($2011Revenue
Millions)
Total $383
$400
$638M
$350
Nova Scotia $12
Total Gov’t revenue/yr
Prince Edwa rd Is la nd $1
New Bruns wick $4
Quebec $116
$300
$250
Total $158
$200
Total $97
Prince Edwa rd Is la nd $1
New Bruns wick $4
$150
Prince Edwa rd Is la nd $0
Nova Scotia $11
Federa l $250
$100
New Bruns wick $1
Nova Scotia $4
Quebec $91
Quebec $36
$50
Federa l $56
Federa l $51
$0
Sales Tax
Mid Scenario
Personal Income Tax
Corporate Income Tax
Source: Energy Efficiency: Engine of Growth in Eastern Canada, prepared by Environment Northeast (May 2012)
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More work is underway

Canada-wide Macro-Economic Impact
Study

Energy Efficiency Jobs

Multiple Benefits Work (International
Energy agency)
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Canada continues to build on the potential
of energy efficiency
Making the
stock more
efficient
Making energy
performance
more visible
Making
operations
more efficient
Making energy
efficiency
more affordable
e.g. EnerGuide
Rating System for
houses
e.g. Labelling
programs that
support regional
programs
e.g. SMARTWAY
Transportation
Partnership
e.g. Regulations
covering 74% of
residential energy
use
The Government of Canada is making significant progress
toward key IEA recommendations
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Contact Information
Office of Energy Efficiency
Natural Resources Canada
580 Booth Street
Ottawa, Ontario K1A 0E4
http://www.oee.nrcan.gc.ca
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