Energy Efficiency Trends in Canada, 1990 to 2005

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Chapter 4. Commercial/Institutional sector

Overview – Commercial/Institutional energy use and GHG emissions

In Canada, floor space for the entire commercial/institutional sector is equivalent to the area of the Island of Montréal.

In 2005, commercial business owners and institutions spent $23.8 billion on energy to provide services to Canadians. This represents approximately 3 percent of the value of goods produced by this sector. In 2005, this sector was responsible for 14 percent of the total energy use in Canada and produced 13 percent of the associated GHG emissions.

Figure 4.1 Total energy use by sector, 2005 (percent)

Figure 4.2 Total GHG emissions by sector, 2005 (percent)

In the commercial/institutional sector,⁶ energy is used for space heating, cooling, lighting, water heating, operating auxiliary equipment (such as computers) and auxiliary motors. Space heating accounts for the largest share of energy use in the sector with more than half of the total energy used for this purpose.

Included in the commercial/institutional sector are activities related to trade, finance, real estate, public administration, education and commercial services. These activities have been grouped into 10 subsectors (see Figure 4.4 for a complete listing of activities).

Together, offices, retail trade and educational services account for 70 percent of the total Canadian commercial square footage. In 2005, the floor space associated with commercial/institutional activities was estimated at 653.4 million m².

Figure 4.3 Commercial energy use by end-use, 2005 (percent)

Figure 4.4 Commercial/institutional floor space by activity type, 2005 (percent)

Trends – Commercial/Institutional energy use and GHG emissions

Between 1990 and 2005, the commercial/institutional sector was the second fastest growing sector with respect to energy use (transportation was first), but was the fastest growing sector with respect to GHG emissions.

From 1990 to 2005, total commercial/institutional energy use increased 33 percent, from 867 PJ to 1153 PJ, including street lighting. At the same time, GDP for the commercial/institutional sector grew 57 percent and the floor space grew 28 percent.

Figure 4.5 Commercial energy use by fuel type and floor space, 1990-2005

The GHG emissions associated increased 37 percent over the same period. The increase in the use of more GHG-intensive fuels, such as heavy oil and light fuel oil, explains why GHG emissions grew at a faster pace than energy use.

Natural gas and electricity are the main energy sources for the commercial/institutional sector, accounting for 86 percent of total energy use. There was a rapid growth in the use of heavy fuel oil (228 percent), light fuel oil and kerosene (77 percent) since 1999.

The reason for these increases is still unknown and may be due, in part, to the fact that these fuel types are erroneously attributed to the commercial sector. Fuel marketers included in the commercial/institutional sector are buying petroleum products from refineries and then reselling the fuel to other sectors (e.g. industrial, transportation). NRCan is working with Statistics Canada (SC) to determine the possible reasons for these anomalies in order to improve the quality of the commercial/institutional data reported.

The proliferation of auxiliary equipment such as computers, faxes and printers added to energy use in Canada since 1990.

As shown in Figure 4.6, of the seven end-uses, space heating and cooling, water heating and auxiliary equipment have contributed to commercial energy growth. This growth is consistent with an overall increase in commercial/institutional floor space in Canada.

Space heating continues to be the primary end-use in the sector. Energy use for space heating increased 24 percent between 1990 and 2005. Two other end-uses have large increases in energy requirement: auxiliary equipment, resulting from increasing computerization of work spaces, and space cooling, resulting from a higher cooling rate of commercial/institutional buildings.

Figure 4.6 Commercial energy use by end-use, 1990 and 2005

The increase in office activities drove most of the increased demand for energy in Canada's commercial sector.

As shown in Figure 4.7, the office subsector accounted for the largest share of energy use in 2005 (35 percent). Retail trade (17 percent) and education services (14 percent) were the next largest users. Offices also had the largest increase in energy consumption, using 129.5 PJ more energy in 2005 than in 1990, followed by retail trade (46.8 PJ increase).

Figure 4.7 Commercial energy use by activity type, 1990 and 2005

Twelve million people worked in Canada's commercial sector in 2005.

Several indicators can help describe the growth of energy use in the commercial sector, including the number of employees, floor space and GDP. Figure 4.8 shows that floor space increased 33 percent from 1990 and the number of employees in this sector increased 28 percent.

Figure 4.8 Commercial energy indicators, 1990 and 2005

While some gains in energy efficiency were made in terms of overall floor space per employee, this was offset by an increase in energy requirements for auxiliary equipment. Not only was there an overall increase in computerization of the work environment in the commercial/institutional sector during this period but the actual number of devices required increased with employment.

Commercial/Institutional energy intensity and efficiency

Energy intensity

Accommodation and Food Services is the most energy-intensive commercial/institutional activity.

In the commercial/institutional sector, energy intensity refers to the amount of energy used per unit of floor space (GJ/m²).

Figure 4.9 Commercial/institutional energy intensity by activity type, 1990 and 2005

Accommodation and Food Services consumed 2.8 GJ/m² in 2005, followed closely by Health Care and Social Assistance, which consumed 2.4 GJ/m². Combined, energy intensity of these two activities increased 3 percent between 1990 and 2005.

The rise in intensity may be attributable to an increase in energy-intensive activities (restaurants, laundry) and services (extensive hours of operation), as well as the addition of electronic equipment that has high energy requirements (such as medical scanners).

The commercial and institutional sector as a whole experienced a small increase in energy intensity of 4 percent in terms of energy consumed per unit of floor space (GJ/m²). But the sector improved its energy intensity by 15 percent when measured against economic activity (PJ/$97).

Energy efficiency

Energy efficiency improvements in Canada resulted in an energy savings of $1.6 billion in the commercial/institutional sector since 1990.

Energy efficiency improvements in the commercial/institutional sector are very similar to those in the residential sector. They include changes to the thermal envelope of buildings (insulation, windows etc.) and increased efficiency of various energy consuming items in commercial/institutional buildings such as furnaces, auxiliary equipment and lighting. The estimated energy efficiency improvements have resulted in a 75.4 PJ energy savings for this sector between 1990 and 2005.

Figure 4.10 Commercial/institutional energy use, with or without energy efficiency improvements, 1990-2005

Figure 4.11 ilustrates the influence that various factors had on the change in commercial/institutional sector energy use between 1990 and 2005. These effects are the

• activity effect – An increase in floor space increased energy use 28 percent (246.6 PJ) and led to an increase of 14.0 Mt in GHG-related emissions.
  
  
• structure effect – The effect of structure changes in the sector (the mix of activity types) was small – a decrease of 1.2 PJ in energy use and 0.1 Mt in GHG-related emissions.
  
  
• weather effect – The winter of 2005 was similar to the winter of 1990, but the summer was warmer. The net result was a 25.2 PJ increase in energy demand in the commercial/institutional sector for space conditioning. GHG-related emissions rose by 1.4 Mt.
  
  
• service level effect – An increase in space cooling and in the service level of auxiliary equipment, which is the penetration rates of office equipment, (e.g. computers, fax machines and photocopiers), led to a 91.8 PJ increase in energy use and a 5.2 Mt increase in GHG-related emissions.
  
  
• energy efficiency effect – Improvements in the energy efficiency of the commercial/institutional sector saved 75.4 PJ of energy and 4.3 Mt of related emissions.

Figure 4.11 Impact of activity, structure, weather, service levels and energy efficiency on the change in commercial/institutional energy use, 1990-2005

* The service level effect refers to the increased use of auxiliary equipment and office equipment.

** "Other" refers to street lighting, which is included in total energy use but excluded from the factorization results.

⁶ Among the sectors presented in this document, the commercial/institutional sector has the most significant data limitations. Readers should keep this in mind while reviewing this chapter.

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