November 19, 2017

CONFERENCE BOARD OF CANADA
Doing More With Less: Increased Energy Efficiency Could Lower Energy Demand in Canada

August 25, 2017

According to the International Energy Agency, approximately two-thirds of economically feasible global energy efficiency measures have not been implemented. If Canada were to pursue energy efficiency improvements more aggressively, it could reduce its energy consumption by up to 15 per cent by 2035, according to a new Conference Board of Canada report released on August 24th.

Key areas for energy savings potential include lighting, space heating, and household electronics for residences, while in the commercial sector, lighting, computer and HVAC equipment hold the most promise. In Canada, electricity and natural gas utilities are largely responsible for the implementation of energy efficiency measures and the largest efficiency improvements will result from their actions, such as incentive programs to install energy efficient equipment or appliances, conducting energy audits, and performing energy efficient retrofits. Efficiency measures could also include a broader suite of policy instruments, such as land-use measures, equipment and building performance standards, and renewable subsidies. 

Highlights

  • Canada ranks among the most energy-intensive of OECD countries, as well as among the highest GHG emitters per dollar of GDP produced.
  • Increasing energy efficiency could reduce energy demand in Canada by as much as 15 per cent by 2035, resulting in demand that is below 2017 levels.
  • While energy efficiency improvements can help lower Canadian demand for energy, it is not a complete solution to help Canada meet its GHG emissions reduction goals.

"While energy efficiency is associated with several benefits, energy efficient measures have not been fully adopted to the extent that it would be economically efficient to do so, in part due to market and consumers behavioural failures," said Len Coad, Research Director, Energy, Environment and Transportation Policy. "As Canada transitions towards a lower carbon future, energy efficiency could contribute to our efforts to address climate change by reducing both the country's energy intensity and growth in energy demand."

The report, Doing More with Less: Energy Efficiency Potential in Canada, provides an overview of remaining energy potential that exists in Canada and applies their average energy intensity improvements to the National Energy Board's (NEB) long-term energy forecast to determine the impact that such improvements would have on Canada's future energy consumption.

The NEB expects that Canada's energy demand will continue to grow at an average annual rate of 0.7 per cent, reaching 13,868 petajoules (PJ) by 2040. Applying a range of energy efficiency improvements could result in as much as a 15 per cent reduction in energy consumption forecasted by the NEB, approximately 5 per cent below the 2017 level for residential, commercial and industrial energy use.

From a climate change perspective, however, the contribution of energy efficiency policies will be smaller. Electricity in Canada currently comes from sources that are approximately 80 per cent renewable or very low emissions and could be near 100 per cent by 2035. The most important contribution energy efficiency gains can make is to reduce the need for hydrocarbons to provide heat.

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