The Economics of Energy Efficiency – Why It Makes Sense For Canada Carol Buckley Director General Office of Energy Efficiency April 12, 2013 Presentation.

The Economics of Energy Efficiency – Why It Makes Sense For Canada

Carol BuckleyDirector General

Office of Energy Efficiency

April 12, 2013

Presentation to the Canadian Energy Efficiency Alliance

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Purpose of the presentation

Outline a global context

Examine energy efficiency in Canada today

Macro economic benefit of current and future investments

Role of government in realizing the benefits

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Energy Efficiency Update Page 1

Reduction in North American Oil Imports by Source

Source: IEA World Energy Outlook, 2012

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2011 2015

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2020 2025 2030 2035-2

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Demand-side efficiencyBiofuels use in transportNatural gas use in transport

Reductions due to:

Increased oil supply

2011 net oil import levelProjected net imports

Global energy demand is growing rapidly, with shifting demand and supply patterns

Energy efficiency - the “fifth fuel”

Demand side

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Globally, there is still significant untapped energy efficiency potential ….

Source: World Energy Outlook 2012, International Energy Agency

The IEA recommends that efficiency improvements more than double the 1980-2010 rate in order to capture these benefits

Energy Efficiency Potential 2011-2035

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Over the last two decades, energy productivity in Canada has improved

Total secondary energy use intensity per capita and

unit of GDP index, 1990-2010 (1990=1)

0.7

0.8

0.9

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1.1

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Ind

ex

Energy use intensity per capita

Energy use intensity per GDP

25%improvement

Source: Energy Efficiency Trends in Canada, 1990 - 2010

Energy Intensity 1990 - 2010

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… in large part from energy efficiency

1547.8 2981.1 563.1 -65.2 -250.2

-1680.7

-2000.0

-1000.0

0.0

1000.0

2000.0

3000.0

Total change inenergy use

Activity effect Capacityutilization

Service leveland Other

Weather effect Structure effect Energyefficiency

Factors Influencing the Change in Energy Use, 1990-2010

Pet

ajou

les

+ + + +=

Source: Energy Efficiency Trends in Canada, 1990 - 2010

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Each sector has energy efficiency gains (1990-2010)

Residential 36% $9.0 billion savings

Transportation 24% Passenger $8.2 billion; freight $3.4 billion savings

Industrial 20% $6.1 billion savings

Commercial / Institution 30% $5.6 billion savings

Source: Energy Efficiency Trends in Canada, 1990 - 2010

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From a regional perspective, energy efficiency investments yield significant returns .…

Cumulative Regional Impacts of Energy Efficiency Spending in Quebec, New Brunswick, Nova Scotia, and

Prince Edward Island, 2012-2040

5,76814,460

28,600

45,238

83,955

113,250

0

20,000

40,000

60,000

80,000

100,000

120,000

BAU+ Mid High

$201

1 M

illio

ns

Total Efficiency Program Costs Net Increase in GDP

6:1 ratio

Modeled Investment Levels:

BAU+: moderately intensify current efforts

Mid: put provinces among EE leaders

High: put provinces as EE leaders (i.e. No.1)

Source: Energy Efficiency: Engine of Growth in Eastern Canada, prepared by Environment Northeast (May 2012)

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…. including net increases in employment

Thousands (Jobs)

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Th

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Program and participant spending ends

625,000 net increase in cumulative job years

Job Impacts - Mid Scenario

Source: Energy Efficiency: Engine of Growth in Eastern Canada, prepared by Environment Northeast (May 2012)

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…. and net increases in government revenue

New Revenues, Average Annual ($2011 Millions)

Federa l $51

Federa l $250

Federa l $56

Quebec $91

Quebec $116

Quebec $36

Nova Scotia $11

Nova Scotia $12

Nova Scotia $4

New Brunswick $4

New Brunswick $4

New Brunswick $1

Prince Edward Is land $1

Prince Edward Is land $1

Prince Edward Is land $0

$0

$50

$100

$150

$200

$250

$300

$350

$400

Sales Tax Personal Income Tax Corporate Income Tax

Total $158

Total $383

Total $97

Mid ScenarioSource: Energy Efficiency: Engine of Growth in Eastern Canada, prepared by Environment Northeast (May 2012)

Total Gov’t revenue/yr

$638M

Annual Increase in Government Revenue

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More work is underway

Canada-wide Macro-Economic Impact Study

Energy Efficiency Jobs

Multiple Benefits Work (International Energy agency)

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Canada continues to build on the potential of energy efficiency

The Government of Canada is making significant progress toward key IEA recommendations

Making thestock more

efficient

Making energy performance more visible

Making operations

more efficient

Making energyefficiency

more affordable

e.g. Labelling e.g. Labelling programs that programs that

support regional support regional programsprograms

e.g. EnerGuide e.g. EnerGuide Rating System for Rating System for

houseshouses

e.g. Regulations e.g. Regulations covering 74% of covering 74% of

residential energy residential energy useuse

e.g. SMARTWAY e.g. SMARTWAY Transportation Transportation

PartnershipPartnership

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Office of Energy Efficiency

Natural Resources Canada

580 Booth Street

Ottawa, Ontario K1A 0E4

http://www.oee.nrcan.gc.ca

Contact Information

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