Power

Energy conservation measures could save Albertans billions

Albertans could be saving hundreds of millions of dollars a year if governments and businesses would take energy efficiency and conservation more seriously, according to the head of an organization that promotes energy efficiency.

John Rilett, chair of the Calgary-based Alberta Energy Efficiency Alliance, says if the Alberta government provided the same level of funding for energy-efficiency programs as some other governments in Canada the savings for homeowners and businesses would be eye-popping.

“We could save Albertans billions of dollars between now and 2015 just by not consuming as much energy,” says Rilett, who is also vice-president of Calgary-based Climate Change Central, a non-profit organization involved in consumer rebate programs, demonstration projects and educational outreach related to climate change.

Rilett says the concept is easy to understand.

“It focuses on the ‘negawatt,’ meaning the watts of energy you don’t consume,” he says. “Efficiency is always less expensive than building new power plants and other infrastructure.”

Alberta lags behind much of Canada and North America in conservation and efficiency of energy consumption, also called demand-side management.

In 42 of the 60 state and provincial jurisdictions in North America, the power and gas utilities operate under what is called performance-based pricing, where government agencies similar to the Alberta Utilities Commission, which regulates utilities in the province, offer incentives to utilities to get their customers to use less energy.

While that might seem counterintuitive — after all, companies rarely want their customers to use less of their products — it makes a great deal of sense in such capital-intensive businesses, says Rilett.

“For instance, BC Hydro goes to its regulator and says, ‘If you give us an incentive, we think we can charge consumers six cents per kilowatt-hour [kWh] instead of 13 cents per kWh.’”

As the deregulated electricity system in the province is structured, there’s no incentive for the power generators to build fewer power plants, comments Rilett.

“In Alberta, if you’re a power generator and you spend $100 on new facilities, you might get a guaranteed nine per cent return. If you spend $109, you still get the same percentage return. But in states and provinces with a cost-of-service structure, if the utility produces power for 90 cents [because of conservation initiatives] it gets to keep the 10-cent difference and still gets a rate of return.”

In Canada, Nova Scotia, Quebec, Ontario, British Columbia, Manitoba and Saskatchewan all have systems in place to encourage utilities to get their customers to conserve.

There is no province-wide program in Alberta, although the City of Medicine Hat, which owns its own gas and power utilities, operates a conservation program called HAT Smart, which is aimed at getting the city’s 60,000 residents to consume less gas, electricity and water. The utilities impose an energy conservation charge on residential customers who consume more than 950 kWh of power a month or over 22 gigajoules of natural gas monthly.

Medicine Hat also has in place its Smart Growth initiative, which encourages the development of more compact neighbourhoods, the construction of green buildings and the use of public transit.

CONSERVATION PROGRAMS

The most aggressive conservation programs in North America are operated by the State of California and were launched in the 1970s.

“California uses half of the electricity, on a per capita basis, that other states in the U.S. use,” says Rilett. “If it didn’t have those programs in place, it would have had to build four to six new nuclear power plants and 10 to 12 coal-fired plants.”

BC Hydro’s Power Smart program, launched in 1989, has saved enough electricity to power 380,000 homes and avoid the construction of at least two power plants. But the Crown-owned utility receives government incentives.

In Ontario, meanwhile, the Ontario Energy Board and Ontario Power Authority were directed in April 2010 to work with about 100 local distribution companies in the province to achieve 1,330 megawatts (MW) of conservation by 2015, enough to power 410,000 homes and to avoid the construction of several new power facilities. Ultimately, the government says, conservation will reduce peak electricity demand by 6,300 MW by 2025, about 30 per cent of the province’s existing power production.

There is no comprehensive plan for conservation and efficiency in Alberta, and — worse yet — little funding to accomplish it and no incentives for companies to promote it, says Rilett.

“In Alberta, we spend $6 per capita on energy conservation programs,” he notes. “Both B.C. and Ontario spend more than $40 per capita on such programs. The B.C. government allocates $180 million a year for such programs and Ontario sets aside $300 million a year. In Alberta, meanwhile, we set aside $14 million a year.”

Much of that funding, from both the federal and provincial governments, as well as from industry, is managed by Climate Change Central, which has a variety of conservation-related programs in place.

The programs are funded by a $36-million, three-year commitment set up in 2009 by the Alberta government, as well as funding from the federal government’s ecoENERGY Retrofit program, set up in 2007 when Ottawa allocated $220 million for home retrofits and $60 million for businesses. In total, about 140,000 homeowners across the country received grants of up to $5,000, supplemented by provincial grants, to carry out energy efficiency improvements to their houses.

Although the federal Tories have announced they will stop receiving new applications in 2011, they allocated another $300 million for home improvements in the 2009 federal budget, expected to lead to efficiency improvements to 200,000 housing units across Canada.

Rilett says Climate Change Central has been able to get 100,000 households in Alberta involved in a number of energy-efficiency improvements, ranging from funding for new Energy Star high-efficiency furnaces, washers and dryers, and other appliances, to audits that have led to the installation of insulation and energy-efficient windows in homes across Alberta.

CREATING A CONSERVER CULTURE

One of the problems the organization has dealt with is the province’s inadequately built housing stock, Rilett says.

“Alberta has some of the worst-performing homes in the country, from an energy-efficiency standpoint,” he says. “That means Albertans consume more gas and electricity than other parts of the country.”

Part of the reason for that is the province has not updated its building code standards in any significant way since the 1960s, and many building-envelope improvements have been made since then, he says.

As the ecoENERGY program expires in 2011 amid a torrent of criticism from the environmental community and others, he says it behoves the Alberta government to step in to fill the void.

“The Alberta government needs to take a long-term view,” Rilett says. “They need to establish a longer-term focus on program funding.”

In addition, he says the Alberta Utilities Commission, which the government has also charged with developing a place for the rollout of so-called smart meters and smart-grid technology, as well as a regulatory review, should be tasked with developing a long-term strategy to help Albertans conserve more.

Ironically, Rilett points out that, despite the province’s woeful performance in the area of energy conservation, Alberta is a leader in another conservation area.

It leads the country in recycling, through the Alberta Recycling Management Authority, first established in 1992 to manage the province’s tire recycling program. It now manages an electronics recycling and paint recycling program as well.

In addition, the 15-year-old Alberta Beverage Container Recycling Corporation oversees one of Canada’s longest-running beverage container recycling programs.

“It’s a model that can be adopted for energy efficiency and conservation,” he says.

To convert Alberta to a “conserver culture,” he says the emphasis has to be on deploying technologies such as smart meters, which will help homeowners track their power use, on education about the benefits of conservation, and on a “behaviour fix” aimed at getting people to turn off lights when rooms are empty and to only plug their vehicles into power outlets for an hour or so when it’s cold, instead of all night.

Jesse Row, director of the sustainable communities group for environmental organization the Pembina Institute, says increasing building code standards would go a long way towards helping conserve both power and gas.

“The Alberta government said in its climate change plan it was going to toughen building code standards, but they got cold feet after the builders complained,” he says.

The standards haven’t been upgraded since the early 1980s and those changes were minor ones, he says.

Pembina and others have estimated that bringing residential building code standards up to an 80 rating based on the federal government’s EnerGuide standard — an EnerGuide rating shows a standard measure of a home’s energy performance — would save Alberta homeowners at least $70 a month on their power and gas bills, while the higher building code standards would cost them an average of $35 a month over the life of their mortgages.

Since there are more than one million houses in Alberta, if all were brought up to EnerGuide 80 standards, it would lead to billions of dollars in energy savings, Row notes.

“Improving building code standards is the low-hanging fruit of energy conservation,” says Row.

 

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TWO KEY POINTS TO PONDER

1. An increased emphasis by Albertans on energy conservation could help save money and reduce the need for additional power generation facilities.

2. More stringent building code requirements would help homeowners save money over the life of their mortgages.

PLAYERS ON THE STAGE

1. Climate Change Central (www.climatechangecentral.com)

2. Alberta Energy Efficiency Alliance (www.aeea.ca)

GOING BROADER, DEEPER

1. EnerGuide (www.nrcan.gc.ca)

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