Improving Energy Performance in Canada – Report to Parliament Under the Energy Efficiency Act For the Fiscal Year 2006-2007

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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 operate 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 comprises Canada's total consumption, including energy required to transform one form to another – such as coal to electricity – and energy required to deliver energy to consumers. Secondary use comprises 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 27.0 percent.
• In 2005, secondary use accounted for 68.5 percent of primary energy use and produced 66.2 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 improvements in energy efficiency 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 consumes the most energy, accounting for 37.9 percent of total secondary energy use in 2005. Transportation is second (29.5 percent), followed by residential (16.5 percent), commercial/institutional (13.6 percent) and agriculture (2.5 percent).

Promoting Energy Efficiency

For the past decade, Natural Resources Canada (NRCan) has promoted 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 actions, 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, as well as the labelling of energy-using products and the collection of data about energy use. The Energy Efficiency Regulations are described in Chapter 2.

Energy Intensity / Energy Efficiency

As explained in Chapter 1, although aggregate energy intensity is sometimes used as a proxy for energy efficiency, there is a difference between the two terms. Understanding this difference is important when comparing Canada with other countries. Energy intensity is a broader measure, capturing not only energy efficiency but also impacts such as weather variations 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 alone.

Between 1990 and 2005, the residential sector recorded a 24.9 percent increase in energy efficiency. The figures for transportation (18.8 percent), industry (12.8 percent) and the commercial/ institutional (8.7 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 (for example, 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 cooperative 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, highlights NRCan's efficiency and alternative energy (EAE) programs, and lists their key achievements for 2006-2007. All programs are described in the corresponding sector chapter. Program entries for market transformation programs also include quantitative performance indicators in graph or table format (see below). A list of NRCan's EAE initiatives and expenditures appears in Appendix 1.

Performance Indicators Highlighted in the Report

Equipment, Standards and Labelling

• Volume of Monthly Import Documents
• Estimated Impact of Energy Efficiency Regulations, 2010 and 2020 (aggregate annual savings)
• ENERGY STAR^® Qualified Appliances as a Percentage of Total Category Sales in Canada, 1999 to 2005
• ENERGY STAR Awareness Levels in Canada, 2005

Housing

• Annual Heating Consumption for Houses Constructed to Different Standards
• Number of Households, Average Floor Space of New Houses and Energy Intensity Indexes, 1990 to 2005
• Average Energy Consumption of New Appliances, 1990 and 2005 Models
• Number of Eligible R-2000* Housing Starts, 1990 to 2006
• Residential Energy Use and Energy Savings per Household, Pre-1945 to 2000-2007

Buildings

• Estimated Average Energy Savings by Type of Building Under the Commercial Building Incentive Program, 2006
• EnerGuide for Existing Buildings – Incentive Retrofit Projects, 1998 to 2006

Industry

• CIPEC Energy Intensity Index, 1990 to 2005
• Estimated CIPEC Energy Savings, 2001 to 2006
• Industrial Dollars to $ense Participants, 1997 to 2006

Transportation

• Company Average Fuel Consumption (CAFC) versus Canadian Voluntary Standards, 1990 to 2006
• Vehicle Fuel Efficiency Labelling
• Drivers Trained, 1998 to 2005

Renewable Energy

• Electricity Generation Capacity from Renewable Sources (Includes Hydro-Electricity)
• Canadian Wind Power Capacity, 1993 to 2006
• REDI for Business Projects Completed, 1998 to 2005

Federal House in Order

• GHG Emissions Reductions From Federal Operations, 1990 to 2010
• Federal Fleet Size and Fuel Consumption, 1997 to 2005
• Purchases of Alternative Fuel Vehicles (Including Hybrids) for the Federal Fleet, 1997 to 2005

* R-2000 is an official mark of Natural Resources Canada.

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