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A Healthy, Happy,Prosperous OntarioWhy we need more energy conservation2019 Energy Conservation Progress Report

Dr. Dianne SaxeEnvironmental Commissioner of Ontario

WEBINARMarch 29, 2019

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Who is the ECO?• Impartial, independent officer of Ontario legislature• Guardian of the Environmental Bill of Rights• Watchdog on:

• Greenhouse gas emissions in Ontario• Energy conservation• Environmental protection

• It’s my job to report the facts without fear or favour.

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Environmental Bill of Rights (EBR)• Passed Dec 1993• Proclaimed Feb 15, 1994• Cut back April 1, 2019

• gives Ontario residents a right to know about – and a say in – decisions that affect the environment

• educational materials including logos, posters and bookmarks (EN/FR) on our website + EBR guide “Your Environment, Your Rights” in 15 languages

https://eco.on.ca/your-rights/

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What’s in the report?

Why Ontario needs energy conservationMaking utility conservation more effectiveOlder homes: the renovation opportunityUrban sprawl: the road to gridlock

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2

3

4

Energy conservation policy in 2017 and 2018Progress on conservation targetsElectricity conservation program resultsNatural gas conservation program results

A.

B.

C.

D.

Chapters Appendices

#ONpoli#EnergyConservation

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1

1. Why Ontario needs energyconservation

Without smart publicpolicy, a lot of barriers

get in the way.

If energy conservation is goodfor Ontario’s economy andenvironment, why aren’t we

doing more of it?

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1We’re foolish not to conserve

1. It is good for the economy

2. It is good for climate

3. It is good for health well-being

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1Money, climate, well-being:

Reduced Reliance on Fossil

Fuels

Public Budget Savings

Economic Growth

Lower Energy Bills

CompetitiveBusinesses

Energy Resilience

ClimateMitigation

Human Health

Majorbenefitsof reducingfossil fuels

Source: ECO

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1Ontario’s energy intensity is improving (J/GDP)

80%

90%

100%

110%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Energy useEnergy use per capitaEnergy per dollar GDP

Source: Statistics Canada.

-19% per $GDP

-10% per capita

2007 ≈ 2016

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1Reasons for shift

• Some improvement from shift in Ontario’s economy

(manufacturing to services)

• Also improved efficiencies

Source: NRCan

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1Energy intensity high compared to other developed nations

Ontario could reduce: - electricity use 31% - natural gas use 26.5% over the next 20 years (at the same/less cost)

Source: Conference Board of Canada

Ener

gy In

tens

ity

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1¾ of Ontario’s energy is fossil fueledOther fossil

fuels (heating & industrial)

8%

Natural gas (heating & industrial)

28%

Transportation (gasoline &

diesel)33%

Transportation (other petrol)

4%

Transportation (biofuels)

2%

Electricity (carbon-free)

21%

Electricity (fossil-fueled)

2%

Wood (heating)2%

Fossil fuels

• Electricity & natural gas have conservation programs, building codes, appliance standards

• Action needed on transportation fuels

• Action needed on other fossil fuels.

Sources: Statistics Canada; NRCan ; IESO; MECP.

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1Huge cost of imported fossil fuels

0

5

10

15

20

25

30

2011 2012 2013 2014 2015

$ Bi

llion

s

Crude Oil Natural Gas Refined Petroleum Products Total

Sources: Statistics Canada, Canadian Association of Petroleum Producers, National Energy Board

2015: Ontario spent~ $16.8 billion

importing fossil fuels

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1Energy efficiency good for the economy• Net creator of jobs• Fuels GDP growth• Helps lower home energy bills• Helps businesses & public sector reduce

overhead • Stimulates Ontario’s growing efficiency and

cleantech sectors

Photo Credits (L-R): Beau’s Brewery, Grand River Hospital, Samuel, Son & Co.

Source:: IESO.

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1Critical to climate goals

• Energy efficiency could achieve 40% of needed GHG reductions, globally (IEA)

• Ontario recently replaced GHG reduction targets with a non-binding target, more than 60% weaker.

Energy efficiency is the only source of energy without any negative environmental impacts.

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1Air pollution and health

Traffic-related air pollution:

people near major roads at risk

Source: Public Health Ontario

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1Overcoming barriers

Source: ECO

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1Chapters 2, 3 and 4• improve utility gas & electricity

conservation programs

• help homeowners renovate their homes for energy efficiency

• direct municipal growth to existing urban areas with jobs and transit

Recommendation• Significantly reduce Ontario’s

bill for importing fossil fuels through energy conservation and fuel switching.

• Set targets for reducing Ontario’s use of each fossil fuel, track and report progress.

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2

2. Making utility conservation more effective

Can utility conservationin Ontario be

more effective?Yes, by focusing on programs

that maximize greenhouse gasemissions reductions and

by streamlining conservationdelivery.

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2Introduction

• Natural gas and electricity are Ontario’s second and third largest energy sources

• Natural gas-> second largest source of pollution

• Successful utility conservation for 10+years

• Recent cuts for electricity

Other fossil fuels (heating & industrial)

8%

Natural gas (heating & industrial)

28%

Transportation (gasoline &

diesel)33%

Transportation (other petrol)

4%

Transportation (biofuels)

2%

Electricity (carbon-free)

21%

Electricity (fossil-fueled)

2%

Wood (heating)2%

Fossil fuels

Sources: Statistics Canada; NRCan ; IESO; MECP.

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2

Electricity conservation savings

0

1

2

3

4

5

6

7

8

9

10

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Pers

iste

nt n

et e

nerg

y sa

ving

s (T

Wh)

Year

0

0.5

1

1.5

2

2.5

3

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Pers

iste

nt n

et p

eak

dem

and

savi

ngs

(GW

)

Year

Successful utility conservation

Overall consumption 7% Peak demand ~10%

Source: Independent Electricity System Operator.

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2Natural gas conservation savings

Source: Enbridge Gas Distribution Inc. and Union Gas

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Net

per

sist

ent a

nnua

l nat

ural

gas

sav

ing

(mill

ions

m3)

Year

Union Gas Enbridge

Natural gas use would have been 7% higher without conservation

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2

How can Ontario achieve 3.2 Mt CO2e emissions?

Now what?

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2Government Environment Plan

Source: Ministry of the Environment, Conservation and Parks

18% of 18 MtCO2e ≈ 3.2 MtCO2e to come from expansion of natural gas conservation

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2Key question

Can utility conservation achieve 3.2 Mt CO2e of GHG emission

reductions?

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2The government’s rationale?

• OEB study: natural gas conservation CAN reduce GHGs 3.2 Mt if cost is no object

• More benefits to customers

• Avoid spending on gas infrastructure

0

5

10

15

20

25

30

2014 2016 2018 2020 2022 2024 2026 2028 2030 2032

Gre

enho

use

gas

redu

ctio

ns (M

T CO

2e/y

ear

Year

Technical PotentialEconomic PotentialUnconstrained Achievable PotentialSemi-constrained Achievable PotentialConstrained Achievable Potential

Source: Ontario Energy Board

3.2Mt

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2Good news

Together, gas and electricity conservation CAN achieve 3.2 Mt

CO2e of cost-effective GHG emission reductions by 2030

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2Electricity conservation is still important

0

2

4

6

8

10

12

14

16

GHG

em

isis

ons

from

ele

ctric

ity s

ecto

r, M

t of C

O 2e

Year

2.5 Mt of CO2e

2017 LTEP (with cap and trade)

2 Mt of CO2e

No electricity conservation beyond 2018

Electricity conservation activitycontinues (at 2015-2018 levels)

• Framework and funding cuts:• Projected 28% drop in savings from now

until end of 2020• No commitment yet post-2020

• Cancelling electricity conservation will increase fossil-fuelled electricity:

• increase GHG emissions by 2 MT

• Ontario should target electricity conservation to times of high demand, driving GHG emissions savings and system value

Source: Independent Electricity System Operator

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2We need electricity conservation when demand is high

0

5,000

10,000

15,000

20,000

25,000

Midnight 6:00 AM Noon 6:00 PM Midnight

Onta

rio E

lect

ricity

Dem

and

(MW

)

Hour of Day

Spring Summer

On a hot summer week day between 4 am and 6 pm, electricity demand in Ontario can increase by 60%.

Between spring and summer, electricity

demand in Ontario can more than double.

Source: Independent Electricity System Operator and ECO.

Ontario’s electricity demand varies greatly by time of day and by season.

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2Electricity conservation to keep lights on

• IESO forecasting supply gap starting 2023• If electricity conservation programs cancelled, gap will widen further• Risk of maintaining reliability• More reliance on fossil fuel imports or building new expensive generation

Source: Independent Electricity System Operator

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2Conservation to keep cost down

Sources: Independent Electricity System Operator.

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2Beyond the silos• Collaboration between electricity and natural gas programs

• More energy and GHG savings, greater innovation, administrative cost savings

• Conservation of other fuels/fuel switching• 10% of province’s residences heated by alternative fuel sources (propane,

oil, wood)• A single administrator model for conservation of all heating fuels?

• “one-stop” shop for customers• Requires stable funding, strong policies and long-term commitment to

conservation• Post-2020 discussions should begin now

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2Recommendations

Deliver planned 3.2 Mt of greenhouse gas reductions from conservation programs by:a. growing natural gas conservation funded by ratepayersb. including conservation of other heating fuels and fuel switchingc. focusing electricity conservation on programs that save electricity

when fossil fuels are being used to generate electricity, andd. accurately measuring and valuing GHG reductions.

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3

3. Older homes: the renovation opportunity

Must older Ontario homesbe drafty energy hogs? Not if we improve their

energy efficiency duringplanned renovations.

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3Residential energy use

• In 2016, the average household spent $2,391 on home energy, totalling $12.4 billion for Ontario

• Residential = 13% of Ontario’s annual GHG emissions

21%

Energy use by sector in Ontario, 2017

Industrial

Transportation

Agriculture

Residential

PublicAdministrationCommercial andOther Institutional

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3Why homes?

• “Homes” refer to low-rise residential buildings

• 70% of Ontario households live in these homes (3.7 million households)

• 83% of residential energy use is in these homes

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3Why older homes?

• Homes built in or before 2005 account for 86% of all Ontario homes

• Designed to use twice as much energy

• Not becoming significantly more efficient

• Though people love to renovate

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3Building envelopes matter

• Necessary to achieve more than 30% reduction in energy use

• Changes to the building envelope are rare opportunities for improvement

Source: Adapted from Canadian Mortgage and Housing Council

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3Building envelope renovation benefits

• Comprehensive benefits for the economy, environment and wellbeing unobtainable by any other single measure

• Improving envelope before upgrading equipment saves money

Improved Building Envelope

Gas and electricity savings

Better thermal comfort

Better acoustic comfort

Protection from future utility rate

fluctuationsNew look for home

Energy equipment

savings

Lower greenhouse

gas emissions

Resilience to power outages

Source: ECO

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3Conservation programs miss the envelope• Electricity conservation programs have been successful at

upgrading lighting

• Natural gas conservation programs allow envelope improvements, but residential participants have mostly done furnace upgrades

• Cap and trade cancellation has ended a source of funding for envelope improvements

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3Homeowners want energy efficiency

0%

10%

20%

30%

40%

50%

60%

70%

Buying appliances that are moreenergy efficient

Upgrading insulation, windows ordoors to make your home more

energy-efficient

Switching to a more energy-efficient home heating and

cooling system

Buying green energy to poweryour home

Very interested Somewhat interested Not very interested Not at all interested

Source: Environics Research

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3But homeowners perceive building envelope upgrades as:

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3If you’re already renovating, make it energy efficient!• Nearly half of all Ontarians plan to renovate in the next 12 months

spending an average of $13,600 per renovation

Source: Energy Step Code Council.

• Energy upgrades during renovations are lower cost and less disruptive

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3Getting energy efficiency into home renovations

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3Renovations create local jobs

• There are currently over 300,000 jobs in residential construction and 175,000 jobs in home renovation in Ontario

• Ontario needs to renovate as many homes as it builds every year

• Lots more skilled jobs!

Source: National Institute of Standards and Technology

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3

Ontario homes don’t need to be energy hogs if renovations

include energy efficiency

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3Recommendations

Ensure that:a. buyers know the energy use of their potential homeb. efficiency improvements are easy and low-risk for homeowners to

financec. the Building Code sets minimum levels of efficiency in renovated

homes, andd. renovation professionals have energy efficiency capacity and

expertise.

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4

4: Urban sprawl: the road to gridlock

How can we save energy,shorten commutes, andimprove quality of life?

By building ourcommunities up and in,

instead of out.

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4We need to talk about cars

• One fifth of Ontario’s emissions• Car travel is growing faster than

population• 4 out of 5 Ontarians commute

by car• Canada’s car emissions world’s

worst

Cars20%

Heavy Industry

19%

Buildings21%

Freight11%

All other sources

29%

2016 GHG emissions in Ontario

Source: Environment and Climate Change Canada

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4Ontarians are driving more than ever

0%

10%

20%

30%

40%

50%

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Chan

ge s

ince

199

0

Year

Ontario population

Passenger-kilometres

Source: Natural Resources Canada

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4Why do we drive so much?

• Mostly because of where we live

• 3 in 4 Ontarians live in car-dependent suburbs

• Cars often only option to get to work, shops, and school

Source: Danielle Scott / Creative Commons

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4Media headlines focus on urban high-rises…

Source: Flickr / Mona P.

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4But most growth is in suburbs

• Car-dependent suburbs grew 5 times faster than walkable/ transit-friendly areas (1996-2016)

• 86% of population growth in Greater Toronto and Hamilton Area on greenfield land (2001-2011)

Source: Ministry of Municipal Affairs and Housing

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4Urban sprawl has high costsEconomic•Infrastructure and services•Traffic congestion•Lost productivity•Car costs

Social•Health impacts•Time spent in traffic

Environmental•GHG emissions•Loss of farmland and natural heritage•Wildlife decline

Source: Smart Prosperity Institute

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4

Sources: The Best and Worst Cities for Commuting, and C.D. Howe Institute

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4Driving is highly energy-inefficient

• Even those who must drive have options

• See our factsheet

~100%

99%

99%

95%

93%

87%

0 50 100 150 200 250 300

Walk orcycle

Subway

Streetcar

GO train

Bus

Car

Emissions intensity (gCO2e/PKM)

Greenhouse gas savings from taking public transit instead of a car

Emissions Savings Source: An Wang et al (2018)

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4Means a big carbon footprint

Source: Jared VandeWeghe and Christopher Kennedy, 2007

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4What are the solutions?• Grow in, instead of out

• Higher densities• Shorter distances

• Greater mix of uses• Walkable urban design

Source: Ryerson City Building Institute. Note: average prices for the GTHA region as of July 2016

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4Why not in Greater Golden Horseshoe?• Projected growth by 2041:

• 3.8 million more people • 1.5 million jobs

• Split into “Inner Ring” and “Outer Ring”

• Growth Plan sets planning framework for region

Source: Ministry of Municipal Affairs and Housing

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4Growth Plan is supposed to encourage compact growth

Source: ECO, adapted from Neptis Foundation

• Ambitious targets to increase densities and reduce sprawl

• Policies support alternatives to cars (transit, walking, cycling)

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4But the plan contains major flaws• Directs 1,000,000 to Outer

Ring with low densities, few jobs

• Growth forecasts 16% higher than actual growth (2006-16)

• Job forecasts way off

• Bad commutes will get much worse

Sources: Ontario Ministry of Finance and Ontario Ministry of Municipal Affairs and Housing.

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4Plus poor implementation

• Few transit stations are meeting density targets

• Most recent growth is not close to frequent transit

• Many municipalities failing to meet “minimum” targets

• Limited reporting or oversight• No difference to the amount of

sprawl vs pre-Growth Plan

Do not support

any transit43%

Support bus

service45%

Support LRT or BRT

3%

Support subway

9%

Transit-supportive densities at 333 Growth Plan major transit station areas

Source: Ontario Ministry of Municipal Affairs and Housing

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4Proposed amendment would make things worse• Weaker targets for many

municipalities• Simplified boundary

expansion process• Reduced opportunities for

public input• Removal of “climate

change” or “net-zero” wording

https://ero.ontario.ca/notice/013-4504?_ga=2.152808575.738976320.1553271485-563716315.1478705254

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4

CAN’T WAIT FOR THE ROAD TO BE WIDER!

FINALLY!

Road to congestion and gridlock

Credit: Andre-Phillippe Cote

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4Recommendations1. Remove barriers to higher housing densities near transit and jobs

2. Revise Growth Plan allocations to direct more growth to existing urban areas with transit and jobs, and limit Outer Ring growth

3. Require municipalities to up-zone near transit as a condition of funding

4. Reverse amendments that reduce density and intensification targets

5. Regularly report to the public on Growth Plan performance

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Thank you and goodbye

• This is our last day.• ECO abolished on April 1, 2019 as per Schedule 15 of Bill 57

• Thank you to staff and external reviewers for helping us deliver an excellent report under exceptionally difficult conditions

• Not aware of current plans to take down ECO website• Hard copies may still be available

How to reach the Auditor General

Email:comments@auditor.on.careports@auditor.on.ca

Telephone: (416) 327-2381Fax: (416) 327-9862

http://www.auditor.on.ca/

Mail:Office of the Auditor General of Ontario20 Dundas Street West, Suite 1530Toronto, Ontario M5G 2C2

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Mike.Parkes@eco.on.ca

@Ont_ECO

/OntarioEnvironmentalCommissioner

eco.on.caQuestions

#ONpoli#EnergyConservation