Green is Golden: How to Profit from Ontario's New Era of Conservation

Robin V. Sears, Principal, Navigator, and Director, The Empire Club of Canada; Salman Syed, Senior Student, George Harvey Collegiate Institute; Reverend Dr. Ted Reeve, Program Co-ordinator for Leadership and Theological Education in the Faith Formation and Education Unit, The United Church of Canada; Phoebe Lusk, English Student, University of Guelph; Adle Hurley, Member, Ontario Power Authority Board; Ken Elsey, President and CEO, Canadian Energy Efficiency Alliance (CEEA); Verity Craig, Principal, Hays Executive, and Director, The Empire Club of Canada; Barry Beale, Director, Conservation and Distributed Energy, Ontario Ministry of Energy; Joyce McLean, Director, Strategic Issues, Toronto Hydro Corporation; and David Weiner, Senior Partner, NATIONAL Public Relations.

Introduction by John Niles

Past Presidents, Directors, honoured guests, and members of the Empire Club of Canada:

Ancient philosophers as far back as Thales of Miletus had inklings of the profound significance of the conservation of the all-important underlying substance of which everything is made.

Thales of Miletus, the Pre-Socratic philosopher, was far ahead of his time given that he was born in 624 BC and we only started to think in the same way in the last number of years.

Many regard him as the first philosopher in the Greek tradition as well as the father of science and perhaps the first Chief Energy Conservation Officer due to his desire to discover and conserve the elusive matter called energy.

However, 2,631 years later Peter Love holds that title. Peter Love has enjoyed a long and distinguished career in the area of energy efficiency. He most recently served as the Executive Director of the Canadian Energy Efficiency Alliance, a multi-stakeholder organization that has promoted energy efficiency and its related benefits to the economy and the environment.

He also co-founded the Summerhill Group, a firm that specializes in creating energy and environmental programs that encourage sustainability.

Mr. Love was also instrumental in the creation of the EnerQuality Corporation, and served as its president. In this capacity, he was responsible for delivering a series of energy efficiency programs for new homes across Ontario.

Mr. Peter Love is no stranger to the concept of a "cultural shift" in the province. Early in his career, as a project co-ordinator for Pollution Probe, he worked with the team that developed the concept--reduce, reuse, recycle--and co-founded and led a coalition to advocate responsible waste management policies and programs.

As recently as March 2005, he was an invited speaker at the "Global Blueprint for Energy Efficiency in Buildings," a Washington D.C. think-tank session with 50 experts from the E.U., Canada, U.S. and Mexico. An active volunteer and community activist, Love has served on the National Advisory Committee on Energy Efficiency, and as the Director of the Canadian Coalition on Acid Rain.

Peter Love received both his MBA (1983) and his BA (1971) from the University of Toronto.

Peter Love

Thank you John and good afternoon ladies and gentlemen. Let me start by thanking the Empire Club for this invitation. It coincides with the release of my annual report to the government and the people of Ontario. It's titled "Ontario, a new era in electricity conservation."

This era began, officially, with the 2004 legislation that created the Ontario Power Authority (OPA), the Conservation Bureau, and the role of Ontario's Chief Energy Conservation Officer. We're two years down that road and a lot of work has been done in a very short time. From my perspective, the net impact of all the new regulatory, planning, and conservation infrastructure is this: Ontario is beginning to conserve.

The Minister of Energy has set a high target--6,300 megawatts of conservation out of a renewed 24,000 megawatts of power infrastructure.

Clearly, as you'll read in my report, we have a long way to go. However, Ontario's new era in electricity conservation has begun and with further effort from the people both in this room and across the province will grow into a culture of conservation as real and important in Canada as another passion in my life--hockey.

There is some similarity between the two--hockey and electricity. Anyone who has kids in the game and pays a hydro bill knows it. The costs of both keep going up.

But there's a difference. In electricity, you can actually reduce the cost by using it wisely. Despite a salary cap, I'm yet to be convinced that the Maple Leafs are using their money as wisely as the many Ontarians who have begun to re-think their relationship with electricity.

I am no stranger to the field of conservation. Most of my career has been devoted to the environment and energy efficiency. And so when I was asked to become Ontario's first Chief Energy Conservation Officer, it was--in the memorable words of The Godfather--an offer I couldn't refuse.

I did not come to this job blindly. I was quite familiar with the challenges that lay ahead, the largest of which is that most of us, for all of our lives, have taken electricity for granted.

With the flip of one switch, it lights our home, cooks our food and washes our clothes. Flip another switch and it powers our industry and businesses. Flip still another and our hospitals care for the sick and bring our children into the world.

Here and now, I want to ease your mind on one thing. I don't have a light switch for Ontario. Much to my surprise, my desk didn't come with one. My job, you see, is to convince a lot of people to find their own light switch, and use it.

The document you now have before you is my annual status report about how well I'm doing, how well the province is doing, our plans for next year, and what barriers to conservation need to be removed.

And the good news is this: Ontario is starting to find its own light switch. It's about time, too, because the province desperately needs people to use less electricity.

Today, 80 per cent of the province's electricity generation capacity of 30,000 megawatts needs to be replaced over the next two decades. That is because generation facilities have a shelf life, and power plants now capable of producing 24,000 megawatts in Ontario will have hit their "expiry dates" by 2025.

If you think of power generation as a gas tank, we filled up decades ago and today we're down to a quarter above empty. We'd be foolish to take a long drive into the future without re-fuelling, and until we do, we better use what we have as efficiently as possible.

Clearly, in the words of Bob Dylan who also sang at the Air Canada Centre last night, "the times, they are a changing." This change, however, is not without precedent.

Remember California? In the years 2000 and 2001, ratepayers there faced extremely high prices and rolling black-outs. That's the tank running out of gas, so much so that in January 2001 the Governor of California was forced to declare a state of emergency.

To avoid a similar fate here, the Ontario government set up the Electricity Conservation and Supply Task Force in 2003. Its report called for "a diverse supply and demand mix, including renewable sources, distributed generation and conservation."

Here is a quote from that report. "Ontario needs to create a conservation culture that delivers cumulative and sustainable improvements in energy use and demand response.

Ontario's long-term plan for electricity should include a comprehensive conservation strategy, with clear targets, reflecting a full analysis of the costs and benefits of conservation." The Ontario Power Authority was subsequently created and given the job of drafting a long-term electricity plan that would address our 24,000-megawatt gap. One-quarter of the gap--or 6,300 megawatts--is to be addressed through electricity conservation.

Clearly, no single sector can bear the responsibility of meeting the 6,300-megawatt challenge. It is a challenge that engages all sectors of society: households, large and small businesses, farms, large industry, municipalities, universities, schools and hospitals.

Nor does a culture of conservation happen overnight. It will require a disciplined and sustained effort over several years to engage stakeholders.

So, how do we do that? My report outlines the strategy in detail. It's called market transformation. That is, engaging the market to embrace conservation not merely because it's a good thing to do but a profitable thing to do both today and over the long road to 6,300 megawatts.

Now everyone already knows that conservation is good for the environment. That's a given, but I'm telling my friends in the environmental movement, it's not enough.

As electricity consumers, which all of us are, more and more people are beginning to discover that conservation saves money at home and in the workplace. And while that's wonderful, I'm telling government, it's still not enough.

Few people are aware of the impact of conservation on the economy as a whole. As our annual report points out, investment in electricity conservation in Ontario is between $300 million and $350 million per year. That has created 10,000 person years of direct employment, each and every year forward in Ontario.

The renewal of electricity infrastructure with the objective of improving efficiency--doing the same or more, with less--will be the driving force of conservation, along with environmental benefits and saving money. That's what will be enough.

When it comes to being of benefit to the economy, electricity conservation has a multiplier effect. It truly is a gift that keeps on giving.

Today I'm going to tell you about the Conservation Bureau's plan to meet the 6,300-megawatt challenge.

But first, let me share with you a recent finding by Canada's independent advocate for energy efficiency--the Canadian Energy Efficiency Alliance. The alliance, represented here today by its President Ken Elsey, has awarded Ontario a B+ grade in its sixth national report card on energy efficiency. That's up from a C- grade in 2004. This is the largest year-over-year ratings increase for any province in Canada since the alliance began its report card in 1999.

This is a tremendous accomplishment, of which I am personally very proud. Congratulations are definitely in order. First, allow me to commend the Ontario government for setting targets and the policy framework to make it all happen. Congratulations to the many organizations that design and deliver conservation programs in Ontario. Many of them are here today. But most of all, I want to thank the people of this province for bringing home this early win and for embracing energy conservation.

Some of the specific conservation measures that produced that B+ grade are identified in the inside cover of my report. Take a look for yourself. Given our early embrace of conservation, they're quite impressive.

If there's one indicator of Ontario's new era of electricity conservation, it's this: Electricity consumption was down 2.5 per cent on a per-capita basis from January to August 2006, compared with the same period the previous year.

And that includes August 1, one of the hottest days on record in Ontario, when dozens of Ontario companies voluntarily cut back their use of power to help the province get through the only power alerts of the year.

We also saw some new amendments to the Ontario Building Code go into effect and these will generate hundreds upon hundreds of megawatt savings for years to come.

These are impressive results, but they did not come with a zero price tag. There are some financial costs incurred in developing and running conservation programs. They represent a small fraction of the electricity savings and spin-off economic benefits that I've spoken about, but they still need to be factored into any cost-benefit analysis of conservation.

That's why cost-effectiveness is a core objective and component of every program designed and run by the OPA. We also build in evaluation, measurement and verification, so that we'll know precisely what each program cost to deliver and what the net savings were, in dollar terms, for the people of Ontario. We are fully accountable for the results.

There is a new economy emerging in Ontario, an economy that was born with the province's new era of electricity conservation. That is, the economy of energy efficiency.

This economy is being driven by the demand of both consumers and businesses to invest in better appliances, equipment and buildings that deliver the same or greater levels of service using less energy. It is an economy that like the computer economy before it, can explode upon our lives in ways unimaginable just a few years ago.

Think for a moment about compact fluorescent light bulbs, LEDs or light-emitting diodes, holiday lights, high efficiency air conditioners, and furnaces. Some of these products have been around for years, yet it is safe to say they are now viewed as mainstream rather than as alternative choices.

The new energy efficiency economy holds out a simple promise to the consumer: You can have your cake and eat it too. And it delivers on that promise. It is proof positive that maintaining your lifestyle and preserving the environment does not have to be a trade-off.

And, the new energy efficiency economy hold out a simple promise to business--investment in energy-efficient technology cannot only save you money. If you are in the business of developing, distributing, marketing or selling energy-efficient products to consumers or other businesses, there are whole new markets to open up to make you even more money.

For the business consumer, energy efficiency means no trade-off between maintaining your profits and preserving the environment. In fact, energy efficiency will go one better. It will improve your bottom line.

That's a message being embraced by the Toronto Building Owners and Managers Association (BOMA). Its conservation program is targetting 150 megawatts by 2010 in large office buildings.

The partnership between BOMA and the OPA has tremendous strategic significance. Commercial buildings are among our top-three targets for conservation in the province. One large, retrofitted office tower can yield one megawatt in conservation, so the payback potential for this initiative is huge.

Two more programs, a 90-megawatt conservation deal with the City of Toronto and a similar one with Toronto Hydro, will bring a total of 330 megawatts in savings for the city by the year 2010. This is especially timely because Toronto's transmission lines are heavily congested. Think of the 330 megawatts, then, as welcome relief for the city's transmission head cold.

Just this past Friday, the Premier and the Minister of Energy, and I, announced that we are expanding three residential programs across the province that had successful trial runs during the summer--Peak Reduction, Beer Fridge Bounty, and Summer Savings.

The rollout of these local pilot projects, two of which were developed right here by Toronto Hydro, demonstrates the emerging success of Ontario's conservation initiatives.

From big programs, like our Every Kilowatt Counts program that delivered energy and money saving incentives to every home in the province, to smaller pilot projects, like Refrigerator Retirement, that tested the viability of giving people incentives to give us their old inefficient appliances, conservation initiatives are starting to find their legs.

Still, some barriers to conservation remain. In my report, you'll find a list of 17 recommendations to eliminate them. At the top of my list is for us to aggressively model the California experience in codes and standards, specifically as they relate to appliances. It's important for us to collaborate with other jurisdictions, such as California and New York, as well as other provinces to address one of the real demons in power consumption--phantom load. Perhaps I can convince Governor Schwarzenegger to call his next movie Death To Phantom Load.

Ladies and gentlemen, I would be remiss in not mentioning one final driver of conservation--all the householders, companies and institutions who helped us earn that B+ from the Canadian Energy Efficiency Alliance. You are the ones who are building a culture of conservation in this province.

If there is anyone out there who hasn't yet climbed on the bandwagon, now is the time. It's a big one, and it's getting bigger every day.

The Conservation Bureau is doing its part. We are home to incredibly dedicated employees who come to work each day with great pride of purpose. But we can only point the way.

As I am fond of saying about conservation, everyone has to find his or her own light switch. Yours might be as simple as discovering the joys of LED lights this holiday season, or saying good-bye to your last 60-watt bulb. To help you do that, the folks at Home Depot have given you a couple of free compact fluorescent lamps (CFLs) to get you started. They are one of the many companies in Ontario who are starting to embrace the new energy efficiency economy.

You might also want to start a new trend in your office next summer by joining Premier McGuinty, myself and many others in mothballing your jackets and ties from June until September, or signing a petition to get the thermostat turned up.

If you haven't done any of this before, you are in for a pleasant surprise. It's called more money in your pocket and a sense of pride and accomplishment.

Ladies and gentlemen, Ontario is going to meet its 6,300-megawatt challenge. We have the momentum, and the proof is in the annual report now in your hands.

Ontario has already reduced its consumption by 2.5 per cent and, by 2007, I hope, will reach my challenge for a 10-per-cent reduction.

We have growing demand for conservation programs. More and more people are discovering that green is golden.

We have a growing commitment and determination to get the job done.

Ontario is finding its light switch. Make sure that you find yours. You'll contribute to the reliability of Ontario's electricity system and reap the cost benefits at the same time.

Thank you very much.

The appreciation of the meeting was expressed by Verity Craig, Principal, Hays Executive, and Director, The Empire Club of Canada.