Energy Efficiency Trends in Canada, 1990 to 2005

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Chapter 2. Energy use

Overview – Energy use and GHG emissions

The industrial sector accounts for the largest share of energy use in Canada, but is second to transportation in terms of share of GHG emissions.

Energy is used in all five sectors of the economy: residential, commercial, industrial, transportation and agriculture. In 2005, these sectors used a total of 8475 PJ of energy. The industrial sector accounted for the largest share of energy followed by transportation, residential, commercial/institutional and agriculture. Total GHG emissions associated with the energy use of the five sectors was 495 Mt in 2005.

One petajoule is approximately equal to the energy used by 8900 households in one year (excluding transportation).

Figures 2.1 and 2.2 show the distribution of secondary energy use and GHG emissions, by sectors. Emissions from the transportation and agriculture sectors exceeded their share of energy consumption because these sectors tended to use forms of energy that were more GHG intensive.

Figure 2.1 Secondary energy use by sector, 2005 (percent)

Figure 2.2 GHGs by sector, 2005 (percent)

Natural gas and electricity are the main types of end-use energy purchased in Canada.

In 2005, natural gas and electricity accounted for almost half the energy used in Canada. This was followed by motor gasoline and oil (diesel fuel oil, light fuel oil, kerosene and heavy fuel oil), which represented approximately 34 percent of fuel usage. Natural gas and electricity are used in all sectors of the economy while motor gasoline is mainly used in the transportation and agricultural sectors.

Figure 2.3 Secondary energy use by fuel, 2005 (percent)

Trends – Energy use and GHG emissions

Energy use grew less rapidly than the economy, but more rapidly than the population.

Between 1990 and 2005, energy use in Canada increased by 22 percent, from 6952 PJ to 8475 PJ. At the same time, the Canadian population grew 17 percent (approximately 1 percent per year), and GDP increased 51 percent (more than 3 percent per year). More generally, energy use per unit of GDP declined, while energy use on a per capita basis increased.

Figure 2.4 Total secondary energy use, Canadian population and GDP, 1990-2005

Energy use has been growing fastest in the transportation and commercial/institutional sectors.

The industrial sector uses the most energy in our economy, consuming 3209 PJ of energy in 2005. But growth in energy use in the transportation and commercial/institutional sectors has outpaced all sectors. Over the 1990-2005 period, these two sectors each registered a 33 percent increase in energy use.

Growth in energy use was reflected in growth of GHG emissions. Consequently, the commercial/institutional sector experienced the highest growth in emissions at 37 percent and the transportation sector the second highest at 32 percent.

Growth in emissions in the transportation sector allowed it to surpass the industrial sector in producing the most GHG emissions in our economy. This is the result even with electricity-related emissions included in the industrial sector. Several reasons may explain this, among them the trend to move more freight by road (trucks), increasing fossil fuel use.

Figure 2.5 Total secondary energy use and growth by sector, 1990 and 2005

Figure 2.6 Total GHG emissions and growth by sector, 1990 and 2005

Energy intensity and efficiency

Canada improved its energy efficiency between 1990 and 2005. The following section discusses two indicators of energy efficiency: energy intensity and an energy efficiency measure using factorization.

Energy intensity

Canada's energy intensity improved 19 percent between 1990 and 2005. However, per capita, energy use increased 5 percent.

Energy intensity, when defined as the amount of energy required per unit of activity (GDP), improved 19 percent between 1990 and 2005. This reduction in energy intensity reflects an overall improvement in energy efficiency, which is how effectively energy is being used in producing one unit of GDP. More simply, if the economy in 2005 had produced the same level of GDP that it did in 1990, it would have used less energy.

Figure 2.7 Total secondary energy use intensity per capita and unit of GDP, 1990-2005

Conversely, the amount of energy required per capita, which is the energy intensity for each individual, increased 5 percent between 1990 and 2005. This upward trend reflects the increasing use of electronic appliances, increasing ownership of personal vehicles and increasing number of goods transported. In other words, Canada is producing goods more efficiently, but is using more energy-consuming goods per capita compared to 1990.

One of the greatest sources of untapped energy is the energy we waste. Isolating and tracking energy efficiency in the Canadian economy is carried out in a conscious effort to publicize this energy resource. That way, this analysis can examine all areas of the economy to determine what would have happened if there had been no improvements and identify areas that can continue to improve energy efficiency.

Energy efficiency

Energy efficiency improved 16 percent since 1990. These improvements reduced energy use by approximately 1100 PJ, decreased GHG emissions by 64 Mt and saved Canadians $20.1 billion in 2005.

Energy efficiency refers to how effectively energy is used to provide a certain level of service or output. To isolate the effect of energy efficiency in the economy, as well as in individual sectors, the analysis uses a factorization method. Factorization separates the changes in the amount of energy used into five effects: activity, structure, weather, service level and energy efficiency.

• activity effect – Activity is defined differently in each sector. For example, in the residential sector, it is defined as the number of households and the floor space of residences. In the industrial sector, it is defined as industrial GDP, gross output (GO) and physical industrial output, such as tonnes of steel.
  
  
• structure effect – Structure refers to changes in the makeup of each sector. For example, in the industrial sector, a relative increase in activity in one industry over another is considered a structural change.
  
  
• weather effect – Fluctuations in weather lead to changes in heating and cooling requirements. This is measured in terms of heating and cooling degree-days. This effect is taken into account in the residential and commercial/institutional sectors, where heating and cooling account for a significant share of energy use.
  
  
• service level effect – Service levels refers to the penetration rate of devices and equipment. For example, the term denotes use of auxiliary equipment in commercial/institutional buildings and appliances in homes, or the amount of floor space cooled. Although these devices are becoming more efficient, the addition of more devices would represent an increase in service levels, which has tended to offset these gains in efficiency.
  
  
• energy efficiency effect – Energy efficiency refers to how effectively energy is being used, that is, using less energy to provide the same level of energy service. Energy efficiency gains occur primarily with improvements in technology or processes. An example would be insulating a home to use less energy for heating and cooling or replacing incandescent lights with fluorescent lights.

As Figure 2.8 indicates, without significant ongoing improvements in energy efficiency in end-use sectors, energy use would have increased 38 percent between 1990 and 2005, instead of 22 percent. These energy savings of 1096 PJ are equivalent to removing 16 million cars and passenger light trucks from the road.

Figure 2.8 Secondary energy use, with or without energy efficiency improvements, 1990-2005

Figure 2.9 illustrates the relative impact of each effect on energy use over the 1990-2005 period for the economy as a whole. The following is a summary of and rationale for the results:

• activity effect – The GDP of Canada grew 51 percent between 1990 and 2005. This activity increase is estimated to have increased energy use by 36 percent, or 2516 PJ, with a corresponding 147 Mt increase in GHG-related emissions.
  
  
• structure effect – Over the 1990-2005 period, a shift in production toward industries that are less energy intensive resulted in a decrease of 138.4 PJ and an 8.1 Mt decrease in GHG emissions.
  
  
• weather effect – In 2005, winter temperatures were similar to those of 1990 but the summer was warmer. The result was an overall increase in energy demand for temperature control of 30.8 PJ and a 1.8 Mt increase in GHG-related emissions.
  
  
• service level effect – From 1990 to 2005, changes in service level (e.g. increased use of computers, printers and photocopiers in the commercial/institutional sector) raised energy use by 162.9 PJ, and increased GHG-related emissions by 9.5 Mt.
  
  
• energy efficiency effect – As noted above, improvements in energy efficiency saved 1096 PJ of energy and 64.0 Mt of GHG-related emissions from 1990 to 2005.

We can apply this analysis to each sector, residential, commercial/institutional, industrial and transportation.

Figure 2.9 Impact of activity, structure, service level, weather and energy efficiency effects on change in energy use, 1990-2005

* "Other" refers to street lighting, non-commercial airline aviation, off-road transportation and agriculture, which are included in the Total change in energy use column above but are excluded from the factorization analysis.

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