Media Release

Toronto, December 7, 2011 – The Environmental Commissioner of Ontario says the government’s energy conservation achievements are substantial, but incomplete. In releasing volume two of his 2010 Energy Conservation Progress Report, Managing a Complex Energy System – Results, Gord Miller says “the government achieved two-thirds of an electricity conservation target that it had set. It’s a respectable showing given that Ontario’s targets are among the most ambitious in North America”.

What concerns Miller more is that the value of conservation seems to have been lost in the public debates over energy, especially when debating electricity prices or building new generating plants. “The government should step up conservation efforts because it saves customers money, reduces environmental damage, and helps avoid new and often unpopular power plants,” Miller says. As the past two years have shown, willing host communities of any type of power plant are hard to find.

The Environmental Commissioner says the Annual Energy Conservation Progress Report shows mixed results in the government’s conservation efforts.

• Ontario’s electricity conservation efforts reduced peak demand by 1,750 megawatts (MW) in 2010 due to new programs and initiatives that began in 2005. This is the equivalent to not having to build three new natural gas-fired peaker plants. By investing about $1.7 billion in conservation programs, Ontario saved electricity ratepayers $3.8 billion in avoided electricity supply costs. However, this achievement was only 65% of the 2,700 MW peak demand reduction target that the government had set itself.
• Energy savings from the conservation programs operated by the province’s natural gas utilities performed well against the targets approved by the Ontario Energy Board. These programs were very cost-effective, providing more than $400 million in net benefits and a reduction of 185 million cubic metres in the amount of natural gas used in 2010.
• There are no results available on the conservation impact of time-of use (TOU) pricing.  The government is only now beginning to measure how people have changed their consumption with the introduction of TOU. The prices, set semi-annually by the Ontario Energy Board, are not based on actual data of how price levels affect customers’ consumption. TOU prices should incorporate this real-world information in order to maximize the amount of conservation.

 There is a risk that electric utilities will not meet their 2014 electricity conservation targets. Not only was there a delay in the province-wide programs delivered by the Ontario Power Authority, but the Ontario Energy Board has been unsupportive of customized programs that were supposed to be offered by utilities.

The Environmental Commissioner says “I want to impress upon the new Energy Minister, in light of the actions of the Ontario Energy Board and program delays, that immediate action is required if the electric utilities are to meet the 2014 targets that are a condition of their licence. The alternative,” says Miller, “is to give them more time.”

Download the full report

Download the Commissioner’s opening remarks

For more information on the report, please refer to the backgrounder

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Aussi disponible en français

For more information, contact:

Maria Leung

Communications and Outreach Coordinator

Environmental Commissioner of Ontario

416-325-3371 / 416-819-1673

1-800-701-6454

Maria.leung@eco.on.ca

For bilingual support, please contact Jean-Marc Filion: 705-476-9665

The Environmental Commissioner of Ontario is the province’s independent environmental watchdog, appointed by the Legislative Assembly. The ECO monitors and reports on compliance with the Environmental Bill of Rights, the government’s progress in reducing greenhouse gas emissions and its actions towards achieving greater energy conservation in Ontario.

 

 

The electrical grid is at the heart of our daily activities, yet we rarely think about how electricity is delivered to us. In its simplest form, the grid is made of a series of wires that carry electricity from the source of generation to our homes and businesses, as well as equipment like transformers that regulate the voltage of the power delivered. This is the electricity we use to power almost everything, from computers, televisions and air conditioners, to our traffic lights, hospitals and shopping malls.

In my Annual Energy Conservation Progress Report – 2010 (Volume One): Managing a Complex Energy System, I discussed the importance of a smart grid, which is the next step for our electrical grid.

Tomorrow's Smart Grid, as shown on pg. 45 of Managing a Complex Energy System.

What is a smart grid?

A smart grid involves monitoring and controlling the electrical grid to ensure it remains balanced and reliable. This will allow us to adopt newer and greener technologies, such as electric vehicles, without compromising our electrical grid’s reliability.  This is a simplified diagram of a smart grid, illustrating how the different components of the grid are connected together.

Report highlights

My report highlights some important components of a smart grid, including smart meters, distributed generation and energy storage. For example, smart meters record when and how much electricity is used, allowing consumers to learn more about their electricity consumption habits.

Several Ontario utilities (such as Toronto Hydro) have taken the lead by providing Internet applications that show users their metered electricity consumption data collected from smart meters. At these websites, consumers can monitor their electricity usage to identify sources of electricity waste and shift some of their electricity use to times when the overall demand is lower. This will reduce the strain on our electrical system and help avoid the need for new and costly peaking power plants that are built for use during times of very high electricity demand. I believe that for the smart grid to succeed, one organization must establish the vision and provide overall leadership necessary to guide all participants towards the common goal of modernizing the grid.

Conserving electricity in this province has never been more important. According to Ontario’s Long-Term Energy Plan, provincial electricity consumption will grow by 15 per cent between 2010 and 2030, meaning that we will need more generating stations to provide power. However, if we use what we already have more efficiently, we could decrease the amount of new generation required. Due to the physics of delivering electricity over wires, Ontario loses about 6% of its electricity between the generating stations and consumers. By minimizing these losses, we can get more power from our existing generation stations to the end-users. In fact, my report recommends that the Ontario Energy Board encourage and facilitate smart grid investments that reduce line losses, putting these investments on an equal footing with conservation investments.

Ontario’s existing grid was developed long-ago and, although our electricity needs have increased and evolved, our grid has not changed in a similar way. We expect that our grid will continue to provide us with reliable electricity, and modifications are needed to ensure the grid remains reliable and dependable.

For more information on Ontario’s smart grid, you can visit the websites for Ontario’s Smart Grid Forum and the Smart Grid Working Group. These groups are monitoring and facilitating progress in developing the smart grid.

In my Annual Energy Conservation Progress Report – 2010 (Volume One): Managing a Complex Energy System released earlier this week, I took issue with energy price subsidies, whether in the form of the 10% rebate on electricity bills currently delivered through the Ontario Clean Energy Benefit, or the idea of removing the HST from energy costs.

Removing energy subsidies is always going to be tricky politically, as Adam Radwanski skilfully pointed out in the Globe and Mail. But I still think it’s the right thing to do.

First off, let’s remember that the money for these subsidies doesn’t fall from the sky – it comes from your tax dollars. The Ontario Clean Energy Benefit will cost us 1.1 billion dollars this year. Under the Benefit’s current design, the size of your rebate is tied directly to the amount of energy you use. So if you and I have the same income, but I use twice as much energy, the Benefit will essentially transfer money from your pocket to mine; not very fair, and not an incentive to conserve energy.

As with many goods or services, the amount of energy we use will depend on the price. If we keep the price of energy artificially low through subsidies, we’ll use more of it, and undercut our conservation efforts. One study estimated that the 10 per cent reduction in the price of electricity provided by the Clean Energy Benefit will increase total electricity consumption in Ontario by 1.3 per cent. That will eliminate one-third of the electricity savings expected from utility conservation programs between 2011 and 2014.

It gets even worse in the long term. When deciding whether to invest in conservation measures such as insulation or higher efficiency appliances, most people compare the extra upfront cost they will pay with the savings they will see over time from lower energy bills. Keeping the price of energy artificially low distorts this comparison, making investments in energy efficiency less attractive to the consumer.

People often tell me that removing energy subsidies is unfair to low-income people or to families. There are two ways around this: A government can offer rebates or tax credits to protect vulnerable groups. You could expand these rebates and credits to everyone, but that will likely depend on your political beliefs. From an environmentalist’s perspective, I make just one request: don’t tie the size of the credit to the amount of energy you use!

Secondly, if you want to minimize any tax credits, create programs to help low-income households conserve energy by helping them make home improvements. My report commends the government for the province-wide low-income program it’s recently developed, particularly for encouraging a co-ordinated approach between electric and gas utilities.

This approach can be applied more generally to all consumers. Instead of subsidizing the price of energy, we could use government funds to reduce our energy bills by investing in conservation. That would be a much better idea than cancelling energy conservation programs such as the Home Energy Savings Program, which the Ontario government just did.

So it might not be popular, but I’ll stand by my comments – subsidizing the price of energy is not fair, and it hurts the cause of conservation.

(Toronto, ON, June 14, 2011) The Environmental Commissioner of Ontario (ECO), Gord Miller, has published the Ontario government’s first report in EPUB format (.epub): Annual Energy Conservation Progress Report – 2010 (Volume One): Managing a Complex Energy System. This will allow more Ontarians (and people in other jurisdictions) to access the report and learn about the Ontario government’s performance in environmental policies.

• Watch the webcast of the press conference live from Queen’s Park
• Watch videos of the Commissioner outlining key points of the report:
  • Overview
  • Electricity pricing
  • Smart Grid
• Click here for more information about the report
• Download the report on your computer (.pdf)
• Download the entire report on your mobile device (.epub)

The Environmental Commissioner of Ontario reading his annual conservation report in EPUB format on his tablet

“Twenty years ago, if someone wanted to read a government report, they had to go to a library. Today, accessing the report is as simple as downloading and opening it on a tablet,” stated Commissioner Miller.

Reports published electronically not only increase accessibility, but also benefit the environment. “Before the Internet era, we were required to produce 5,000 printed copies of each of our annual reports,’ said Miller. “Now that the Internet has become a part of most people’s lives, we can and do publish our reports electronically. We now use much less paper and save thousands of dollars every time we prepare a report.”

The Toronto Public Library (TPL) has included the EPUB version of Annual Energy Conservation Progress Report – 2010 (Volume One): Managing a Complex Energy System in the collections. To access the report through the TPL, please visit http://www.torontopubliclibrary.ca

To download the EPUB version of Annual Energy Conservation Progress Report – 2010 (Volume One): Managing a Complex Energy System, visit www.eco.on.ca

Reports published in EPUB format by the ECO are available free of charge from the ECO website. All future reports will be available in the following formats: print, PDF, HTML and EPUB (.epub).

For more information visit http://www.eco.on.ca

To schedule interviews, contact:

Maria Leung, Communications & Outreach Coordinator, 416-325-3371 or email maria.leung@eco.on.ca.

Aussi disponible en français.

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The Environmental Commissioner of Ontario is the province’s independent environmental watchdog. Appointed by the Legislative Assembly, the ECO monitors and reports on compliance with the Environmental Bill of Rights, the government’s progress in reducing greenhouse gas emissions and its actions towards achieving greater energy conservation in Ontario