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Electrical Energy Efficiency Runs a Distant Second in Ontario

Ontario needs negawatts, not nuclear megawatts

By Angela Bischoff

            The Government of Ontario has long had mixed feelings about improving energy efficiency. On the one hand, as a province without abundant low-cost energy sources (think Alberta gas or Quebec water power), it only makes sense to reduce our energy use as much as possible to keep our beer cold and our homes warm.
           But on the other hand, we have a long tradition of megaproject-obsessed energy planners and provincial utilities (first Ontario Hydro, now Ontario Power Generation and Bruce Power). If Ontario residents actually became as efficient in electricity use as our neighbours in New York State—who use one third less energy per person as we do now—there would be little need for giant nuclear projects. To some in the Ontario energy bureaucracy, that’s a problem. They want to protect this fading industry, despite little interest in Candu nuclear technology outside of Ontario.
           That’s why, despite lots of rhetoric about creating “a culture of conservation” and “bending the cost curve,” we often see history repeating itself at Queen’s Park when it comes to improving our energy efficiency. We take baby steps when we could be taking giant strides, and we put up many difficult hurdles for both utilities and citizens to jump over, at least when it comes to the smarter use of electricity.
           It was something of the same story when the government’s new Conservation Framework was released recently. The framework is meant, fundamentally, to change Ontario’s approach to efficiency by “Putting Conservation First.” That is something the Ontario Clean Air Alliance has been calling on the government to do for some time, so we are pleased that they have embraced the principle.
           Unfortunately, however, their framework misses the most important aspect of a conservation-first approach: it limits the energy savings that can be realized by utilitydriven conservation programs at an absurdly low level. That’s known as protecting the market—in this case for multi-billion-dollar nuclear projects—and this is no favour to Ontario businesses or citizens.
           Conservation First should mean that we acquire all the energy savings (sometimes called “negawatts”) that we can harvest at a cost that is lower than the cost of new supply. The Ontario Power Authority estimates that we can buy conservation negawatts for 3.5–4.5 cents per kWh. Ontario Power Generation estimates that power from a rebuilt Darlington station will cost at least 8.3 cents per kWh. Keeping the brakes on efficiency to save room for Darlington is financial madness, but that is what Ontario appears to be doing.
           The framework sets the bar for saving electricity at less than one per cent of total electricity supply over the next six years. There is some wiggle room for utilities to outperform and realize larger savings, but realistically, we are looking at utility-driven energy savings of one to one and a half per cent at most. Our cost-effective conservation potential is much, much larger than that.
           Interestingly, the government has embraced a true conservation-first approach for natural gas. Gas utilities are being told to capture any efficiency savings they can find that cost less than delivering another cubic metre of gas from Alberta. So no hidden caps—just a clear directive to put the pedal to the metal on reducing natural gas use while maintaining comfort and convenience for Ontarians.
           The different approaches taken toward gas and electricity conservation tell us a lot about the government’s motivations. The government clearly recognizes the need to reduce the flow of dollars out of the province to pay for imported gas. With electricity, however, cutting down on demand threatens the financial viability of nuclear plants. So we continue to walk instead of run on electricity conservation, despite being well behind many of our major competitors when it comes to using energy efficiently.

Angela Bischoff is Outreach Director, Ontario Clean Air Alliance, http://www.cleanairalliance.org

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