Making Ontario a Leader in…

Making Ontario a Leader in the Low Carbon Economy
Response by Climate Challenge Network to the consultation by the Ministry of Energy, Northern Development and Mines on the 2021-2024 Conservation and Demand Management framework
August 22, 2020

Ian Jarvis P.Eng, Executive Director, Climate Challenge Network
President, Enerlife Consulting Inc.

Summary of recommendations:
Climate Challenge Network recommends the following for future frameworks and program design for electricity and natural gas. These are based on experience with applying Performance-Based Conservation (PBC) methodology to achieve significant energy and emissions reductions in Ontario’s built environment.
1. Focus resources on high energy savings potential buildings.
2. Engage in multi-year relationships rather than individual projects.
3. Support ongoing, portfolio-wide energy management, not just individual projects.
4. Require collaboration between utility companies.
5. Provide training and technical support.
6. Use financial incentives to raise corporate awareness and maintain focus on results.

Ontario has earned an enviable position in North America and globally to benefit economically and environmentally from the transition to low carbon over the next 30 years. Elements of Ontario leadership include:
• Public reporting of energy use data informing policy and enabling owners to make strategic improvements in energy efficiency
• Pay-for-Performance DSM programming for both electricity and natural gas driving innovation and accountability (IESO’s Energy Performance Program, Toronto Hydro's OPSaver Program, Enbridge’s RunitRight Program)
• One of the lowest carbon electricity systems in the world which mitigates the rising cost of carbon and creates competitive advantage for businesses
• Experience with world-class, large-scale sectoral energy efficiency programs which support rapid scaling up of energy efficiency and emissions reductions (Sustainable Schools, Greening Health Care, Mayors’ Megawatt Challenge)
• Leading edge industry-led research into practical transitions to low carbon building operations creating competitive advantage for Ontario businesses (Mayors’ Megawatt Challenge’s net zero ice rink feasibility study, Greening Health Care Low Carbon Heating Plant webinar).

Over the past decade, Ontario has produced a remarkable number of success stories and a growing number of buildings of all types which are among the most efficient in North America (Cadillac Fairview’s Simcoe Place, Humber River Hospital, SCDSB’s Bear Creek Secondary School case study). The expanding body of real performance data indicates that the potential for cost effective energy efficiency improvements in the commercial, institutional, and multi-residential building sectors is far greater than is currently believed. Rapid scaling up of efficiency improvements will support Ontario’s Environmental Plan and the economic recovery by lowering operating costs for private- and public-sector owners, creating green jobs in technical and professional services, construction and equipment supply chains, and substantially reduce greenhouse gas emissions. Investment in Ontario’s energy efficiency and carbon reduction projects can attract capital investment, typically earning double digit rates of return.

Ontario’s sectoral energy efficiency programs show that the majority of energy and emissions reductions are found in better operations and maintenance of existing infrastructure rather than major capital investment in plant and equipment retrofits. Organizational capacity-building yields immediate savings while setting the stage for more successful future capital projects. Infrastructure renewal planning and asset management are fundamental for public sector facilities to achieve low or zero carbon over time. Extending the useful life of existing plant and equipment and choosing more efficient and lower carbon alternatives over like for like replacement substantially reduces lifecycle costs and avoids early obsolescence.

Next-generation energy efficiency and demand management programming should be centred on the principles of Performance Based Conservation (PBC). Developed in Ontario, the PBC methodology uses real energy performance data from buildings (rather than assumptions and calculations) to identify the best energy efficiency opportunities, implement them properly and verify that the intended savings are actually achieved in practice. The growing body of performance data from large numbers of buildings over multiple years is driving applied research in Ontario which is rapidly advancing understanding of the most effective technical and management practices for achieving and sustaining high levels of efficiency.

The core PBC principles are:

• Benchmark large datasets of comparable buildings to identify the most efficient of each type
• Establish rational energy targets for each building type to determine achievable saving potential for individual buildings, portfolios and sectors
• Apply energy component analysis to match the most appropriate measures to each building
• Monitor actual savings over time to verify outcomes, initiate remedial action when required and drive continuous learning and improvement.

The PBC methodology was documented and tested through a pilot project conducted from 2015-18 across three LDCs – Hydro One Brampton (now part of Alectra), Milton Hydro and Halton Hills Hydro. The project addressed electricity, natural gas and water savings in commercial and institutional buildings and was co-funded by the IESO, Enbridge and Union Gas. Eight large public-sector customers participated in the project, registering a total of 205 buildings, covering 17,262,949 sq.ft., out of the total of 569 eligible buildings within the LDC distribution territories. Conclusions from that project can inform future frameworks and program designs for electricity and natural gas as follows:

1. Focus resources on high savings potential buildings. In this case one third of the participating buildings accounted for 80% of the utility cost savings and 70% of the emissions reduction potential.
2. Engage in multi-year relationships rather than individual projects. It takes several years and sustained attention for any organization to uncover the best energy efficiency measures, make capital and operational plans and align management practices to achieve deep energy and emissions reductions.
3. Support ongoing, portfolio-wide energy management, not just individual projects. Left unattended, energy use in buildings tends to creep up over time due to unnoticed operational changes and equipment malfunctions. Detecting and correcting such increases is an essential contributor to sustaining high levels of energy efficiency over time.
4. Require collaboration between utility companies. Owners are interested in saving money, improving and renewing infrastructure, and, increasingly, reducing greenhouse gas emissions. The most effective measures produce electricity, natural gas and often water savings and need integrated solutions. It is more efficient for owners and the utility companies to work together.
5. Provide training and technical support. Every organization has different needs, and few have the internal capability to efficiently drive energy efficiency, especially across large portfolios of buildings. Including training for internal staff and additional technical resources in conservation programs, coupled with accountability for savings results, can accelerate progress.
6. Use financial incentives to raise corporate awareness and maintain focus on achieving results. Graduated incentives, which are back-end loaded to reward achievement of high-performance targets, focus attention on the overall strategy and the details for success.