CANADIAN ENERGY POLICY
ISSUES
Peter Love
Adjunct Professor, Sustainable Energy Initiative
York University
Canadian Society for Ecological Economics
November 1, 2013
PRESENTATION OUTLINE
•Energy In Canada
•Climate Change
•National Energy Strategy/Carbon Price
•Energy Conservation
•Transferring Technical/Financial Risk
•Questions & Answers
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ENERGY FLOWS IN
CANADA
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CLIMATE CHANGE
IPCC – Warming is an “unequivocal” fact
- “observed changes are unprecedented over decades”
- “It is extremely likely (>95%) that human influence has been the dominant
cause of the observed warming since the mid 20th century”
IEA -rising fossil-fuel energy use will lead to irreversible and potentially catastrophic
climate change
Ban Ki-moon - slowing or even reversing the existing trends of global warming is the
defining challenge of our ages.
World Economic Forum’s - climate change has the highest combined perceived impact
and likelihood
World Bank – The 4o C scenarios are devastating
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CLIMATE CHANGE IN
CANADA
82% of Canada’s man-made GHG from
production and use of energy
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CLOSURE OF COAL
PLANTS BY 2014
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CARBON COST
ABATEMENT CURVE
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NATIONAL ENERGY
STRATEGY
Last initiative was National Energy Program in 1982
Environmental and business groups (including Cdn Council
of Chief Executives) have called for a new National Energy
Strategy
Major elements would include oil sands, fracking, national
electric grid, renewables, smart grid, carbon pricing, and
conservation
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CARBON PRICING
•Supported by environmentalists, NRTEE and even CCCE
•BC leading North America with carbon tax
•Energy taxes big part of Denmark’s success
•Could be either carbon tax (price known but quantity not) or
cap and trade (quantity known but price unknown)
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CONSERVATION
Five Types
◦ Behavioural Conservation (no change in technology)
◦ Energy Efficiency (technical improvements)
◦ Demand Response (time of use)
◦ Fuel substitution (increases use of other fuel)
◦ On-site generation (excludes FIT contracts in
Ontario)
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BENEFITS OF
CONSERVATION
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EMPLOYMENT BENEFITS
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ENERGY EFFICIENCY RETROFITS
ARE GOOD INVESTMENTS
Energy Efficiency Investment Risks and Returns
Average Annual Return
40%
30%
Major Energy
Efficiency
retrofits
Small company
stocks
20%
10%
Canada
savings bonds
Corporate
bonds
Common
stocks
0%
0%
40%
10%
20%
30%
Risk Index (year-to-year volatility)
Source: adapted from Ehrardt-Martinez, Karen and John ‘Skip’ Laitner: « The Size of the U.S. Energy Efficiency Market: Generating a More
Complete Picture ». Washington, D.C., American Council for an Energy Efficient Economy, May 2008, page 29.
OTHER BENEFITS OF
GOING GREEN
93% reported greater ability to attract talent
81% saw greater employee retention
87% experienced improved workforce productivity
75% reported improvement in employee health
100% experienced increase in goodwill/brand
equity
Source: McGraw Hill “Business Benefits of Green Buildings”.
SIGNIFICANCE OF
BARRIERS
ONE SOLUTION:ENERGY
PERFORMANCE CONTRACT
- Involves: a building owner and energy service
company (ESCO)
- Savings financing: comprehensive measures with
guarantees that the energy savings will be sufficient
to finance the cost of the project
- Performance guarantee: Transfers technical and
financial risk to ESCO
- Used since mid 80’s; Canadian government created
Federal Building Initiative in 1992
ILLUSTRATION OF EPC
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EPC NOT MORE EXPENSIVE
THAN TRADITIONAL PROCESS
EPC Procurement
Traditional “Piecemeal” Procurement
Performance Guarantee Fee
Additional Procurement Processes
Financing Charges
Additional Human Resources
Opportunity costs for differed projects
Less Energy Savings resulting from:
• Lost time
• Fragmented Approach
• No Monitoring and Verification
• No Savings Guarantee
YORK UNIVERSITY
$39.5 million project, 85
buildings, 2 campuses
Campus-wide energy
audit and utility analysis
in 2005-06
$5 million projected
annual savings
CULTURE OF
CONSERVATION
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FINAL THOUGHTS
Women represent 70% “Green Champions” in OPA
segmentation of electricity consumers
You must be the change you wish to see in the world
Mahatma Gandhi
Never doubt that a small group of thoughtful, committed
citizens can change the world; indeed, it is the only thing that
ever has.
Margaret Mead
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DISCUSSION
Peter Love
Adjunct Professor
Sustainable Energy Initiative
York University
plove@yorku.ca
www.yorku.ca/se
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