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Investing in Electricity Conservation in a Time of Plenty

Summer has begun, and as the days and nights get hotter, our electricity use inevitably rises. But even as the air conditioners kick on, Ontario residents can be pretty confident that there is little risk of brownouts or other emergency measures this year.

Major investments in both electricity conservation and new electricity supply have brought us to a more comfortable balance between electricity supply and demand. In fact, at certain times of day and year, Ontario generates more electricity from nuclear and renewable energy than Ontario homes, offices, and factories consume. To cope with this surplus, we’ve seen an increase in electricity exports, and even intentional reductions in production from nuclear and wind (about 1% of our overall electricity use in 2015). Conservation during hours of surplus does not make sense.

Why then, should we continue to spend money on new electricity conservation initiatives?

One reason is that no conservation initiative will deliver savings only in these few hours of surplus. Most conservation projects will save energy around the clock, or will save more energy at times of high demand (for example, more efficient air conditioning), when natural gas is being used to generate some of our electricity. In the hours when conservation reduces the use of gas-fired generation (illustrated in dark green in the Figure below), it also reduces our energy costs and greenhouse gas emissions.

Figure 6.1

Our time of plenty will not last forever. Nuclear electricity production will drop significantly due to refurbishments at Darlington (beginning later this year) and Bruce nuclear stations, and the permanent shutdown of Pickering. During these refurbishments, natural gas plants will pick up the slack and operate more frequently. Many conservation measures installed today will yield benefits for a decade or more. As a result, in more and more hours going forward, these conservation measures will reduce the use of gas-fired generation.

The Independent Electricity System Operator (IESO) compares the financial costs and benefits of its electricity conservation programs, and the benefits greatly exceed the costs (as they do for natural gas conservation programs which are assessed by the Ontario Energy Board). And that’s even before factoring in benefits of greenhouse gas emissions reductions.

Figure 6.2

Ontario investments in electricity and natural gas conservation have been, and continue to be, sensible and prudent.

That’s not to say everything is perfect. We need to put as much, or more, effort into reducing our use of transportation fuels and natural gas as we do for electricity. We also need better information from the IESO about exactly when electricity conservation reduces natural gas use, and a policy framework that leads utilities to focus their conservation efforts on these hours so we can minimize greenhouse gas emissions that result from electricity generation.

Learn more about how Ontario evaluates the costs and benefits of energy conservation in chapter six of the 2015/2016 Energy Conservation Progress Report, Conservation: Let’s Get Serious.

View the full report.

Download Chapter 6, “Measuring the Value of Energy Conservation”.

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