Improving Energy Performance in Canada – Report to Parliament Under the Energy Efficiency Act For the Fiscal Year 2007-2008

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Executive Summary

Canadians spent approximately $152 billion in 2005 on energy to heat and cool their homes and offices and to oper-ate their appliances, cars and industrial processes. Several factors contribute to Canadian energy demand: a vast geography, a northern climate with extreme seasonal variations in temperature and an economy founded on an abundance of natural resources.

Types of Energy Use

The two general types of energy use are primary and secondary. Primary use represents Canada’s total consumption, including energy required to transform one energy form to another – such as coal to electricity – and energy required to deliver energy to consumers. Secondary use is energy consumed for residential, commercial/institutional, industrial, transportation and agricultural purposes.

Key highlights in energy use include the following:

• Between 1990 and 2005, the latest year for which figures are available, primary energy use increased by 27 percent.
• In 2005, secondary use accounted for 69 percent of primary energy use and produced 66 percent (495 megatonnes [Mt]) of Canada’s total greenhouse gas (GHG) emissions. This last figure includes emissions produced by utilities in meeting the demand for electricity.
• Without the energy efficiency improvements made to buildings and equipment and the changes in the behaviour of energy users during the past several decades, the increases in energy use would have been much higher.

The industrial sector consumed the most energy, accounting for 38 percent of total secondary energy use in 2005. Transportation was second (29.5 percent), followed by residential (16.5 percent), commercial/institutional (14 percent) and agriculture (2 percent).

Promoting Energy Efficiency

Natural Resources Canada (NRCan) promotes energy efficiency and the use of alternative energy as a means to reduce GHG emissions and save money. NRCan uses a broad range of policy instruments, including leadership, information, voluntary initiatives, financial incentives, research and development, and regulation.

The Energy Efficiency Act, which came into force in 1992, provides for the making and enforcement of regulations concerning minimum energy performance levels for energy-using products, the labelling of energy-using products and the collection of data on energy use. The Energy Efficiency Regulations are described in Chapter 2.

Energy Intensity / Energy Efficiency

As explained in Chapter 1, although energy intensity is sometimes used as a proxy for energy efficiency, there is a difference between the terms. It is important to understand this difference when comparing Canada with other countries.

Energy efficiency refers to how effectively energy is being used for a given purpose. For example, providing a similar (or better) level of service with less energy consumption on a per-unit basis is considered an improvement in energy efficiency.

Energy intensity is the amount of energy use per unit of activity. Examples of activity measures in this publication are households, floor space, passenger-kilometres, tonne-kilometres, physical units of production and constant dollar value of gross domestic product. Energy intensity is a broader measure, capturing not only energy efficiency but also other impacts on energy consumption, such as weather variations, market behaviour and changes in the structure of the economy.

Evidence of Change

As explained in this report, recent growth in energy use is primarily due to increased activity in various sectors. However, this growth would have been much greater without improvements in energy efficiency.

As reported in Chapter 1, energy efficiency improvements made between 1990 and 2005 are estimated to have reduced GHG emissions by almost 64 Mt and decreased energy expenditures by $20.1 billion in 2005.

Between 1990 and 2005, the residential sector recorded a 25 percent improvement in energy efficiency. The figures for the transportation (19 percent), industrial (13 percent) and commercial/institutional (9 percent) sectors demonstrate that improvements in energy efficiency are being made throughout the economy.

Through improvements in energy efficiency, Canadians can reduce their energy bills and achieve important environmental goals. Over the short term, changes to less GHG-intensive fuels (e.g. from coal to natural gas) can help reduce GHG emissions. However, over the long term, reducing GHG emissions further will require more widespread use of alternative energy.

Canada is a world leader in the production of renewable energy, with almost 16 percent of its primary energy supply coming from renewable sources in 2005.

Engaging Canadians

To maximize the effectiveness of its initiatives, NRCan engages a growing number of partners from the private and public sectors. Dozens of co-operative agreements are in place with a broad range of businesses, community groups and other levels of government.

These initiatives engage Canadian society, along with every sector of the economy, in new and more efficient approaches to secondary energy use and in the development and deployment of renewable energy sources.

This report provides an overview of the work being done in each sector and highlights NRCan’s efficiency and alternative energy (EAE) programs and lists their key achievements for the 2007–2008 fiscal year. Program entries for market transformation programs also include quantitative performance indicators in graph or table format. A list of NRCan’s EAE initiatives and expenditures appears in Appendix 1.

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