TAF is pleased that the 2013 Long Term Energy Plan (LTEP), released last week, recognizes conservation as a valuable energy resource with the potential to reduce or delay the need for costly generation investments.
LTEP 2013 acknowledges Ontario’s gains in energy productivity and recognizes that economic growth does not necessarily generate equivalent growth in electricity demand. Taking a Conservation First approach, the Plan calls for conservation and demand response to be pursued before developing new electricity generation capacity. In fact, the new LTEP advances the prospect that almost all of Ontario’s projected growth in electricity demand between now and 2032 will be offset by conservation programming and improvements to energy efficiency codes and standards. That’s quite an energy conservation achievement!
However, energy conservation efforts should not be confined to the electricity sector. TAF supports an integrated, client-focused approach to conservation including electricity and natural gas conservation efforts. While we are pleased that the government is promoting a coordinated approach, the LTEP lacks specifics on how this will be achieved, or any targets for gas conservation.
The new LTEP sets an electricity savings target of 30TWh by 2032 (up from 28TWh by 2030 in the 2010 LTEP), and sets the additional goal of meeting 10% of the province’s peak electricity demand with demand response measures by 2025. To meet these laudable goals, the Province must fully exploit the tools it has at its disposal. Unfortunately, some key approaches seem to be weakly supported in the Plan. Time-of-Use (TOU) electricity pricing is an effective tool for achieving demand response among residential consumers. But Ontario’s on-peak/off-peak pricing is not dramatic enough to drive the necessary behaviour change. Studies indicate that the TOU pricing schemes that most effectively deliver permanent load shifting have peak:off-peak price ratios of 4:1 or higher.
Similarly, a sizable portion of Ontario’s conservation target could come from strengthened energy efficiency codes and standards for products and appliances. However, these standards are updated on an ad hoc basis – unlike the energy provisions in Ontario’s building code, which are reviewed and updated on a 5-year cycle. In order to prevent the worst performing products from entering Ontario’s marketplace, Ontario’s product and appliance efficiency standards should be rigorously and systematically reviewed on a cyclical basis.
Furthermore, TAF is pleased at the Ministry of Energy’s plans to give local distribution companies more flexibility to address local conditions with their conservation programming. However, TAF would also have liked to see the LTEP acknowledge that conservation and distributed generation are most valuable in demand-dense, transmission-constrained areas like Toronto.
To re-cap – let’s celebrate the Conservation First commitments represented in this new plan! But the devil is in the details. Let’s adjust the TOU pricing signals, take a systematic approach to codes and standards, advance a client-centred, multi-fuel approach to conservation, and also consider the local benefits of conservation when making energy system investments.