Energy Manager

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The silver lining in Ontario’s energy dilemma

When it comes to energy, Ontario has a lot of problems: it’s electrical system is outdated, and the province faces the long-term risk of not being able to produce enough energy to sustain a dynamic economy. If nothing were to be done, power outages and energy rationing would become facts of life.


August 12, 2010
By John Gilson


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If you’re an energy management professional (i.e. facility, building and plant manager, employer, employee) there is a potential upside to all of this. For example, the provincial government and various utilities are working to address the issues, finding ways to produce more sustainable energy, and improve energy conservation and demand management. What does this mean? More energy-efficiency incentives!

An old car
According to Borden Ladner Gervais (BLG) lawyer Shane Freitag, Ontario’s electrical system is comparable to an old car.

“Our current electricity system is like a car we bought in 1980, but in 2002 we decided to turn that car into a taxi cab,” said Freitag, a specialist in energy issues. “The car is taking on more passengers and expected to run 24/7. The utilities have taken good care of the car, but you’re still dealing with the same old engine–you’re asking it to do something it wasn’t designed to do. As a result, it’s forced to run slower.”

Fixing Ontario’s current electrical infrastructure is a tremendous task. Possible solutions lie in conservation initiatives (incentives, rebates, etc.) and better demand management (“price fixing” and the use of smart meters). The Independent Electricity System Operator (IESO), which is responsible for the day-to-day operation of the province’s electricity system, sends out public appeals during high-consumption days (hot and cold weather). Public appeals, along with “price fixing” and smart meters are good examples of demand management. Conservation initiatives, which often include rebates for using eneryg-efficient equipment, are offered by utilities and all levels of government.

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But conservation and demand management alone aren’t nearly enough to deal with Ontario’s energy problem. According to the Ontario Power Authority (OPA), if the province is to sustain a growing population and economy it will need to replace up to 80% of its existing generating capacity in the next 20 years.

Freitag says this is easier said than done.

“The government has always encouraged utilities to be prudent. We are better at forecasting, and the Minister of Energy (Brad Duguid) has issued targets,” he said. “But it’s the approvals that take the longest amount of time, where 5-7 years of permitting delays are common. Essentially, people don’t want transmission lines in their backyards.”

Finding new sources of energy
Building new infrastructure isn’t Ontario’s only problem. Due to pollution and climate change concerns, the provincial government wants to phase out the use of coal-fired generation facilities. This won’t be an easy task as these facilities currently account for 21% of Ontario’s electricity. To compound the problem, many of the province’s nuclear facilities will need to be replaced as they are nearing the end of their service lives.

As crushing as this all might sound, all isn’t dire in Ontario. To ensure that the province has a sustainable supply of energy in the future, the provincial government has recently enacted legislation, such the Green Energy Act (GEA), which is designed to encourage Ontario homeowners and businesses to use renewable energy. The GEA includes the popular Feed-in-Tariff (FIT) program and MicroFIT program, which allows energy users to produce their own energy. It’s difficult to say whether the “Green Revolution” will truly change the way we do business, but judging by the large number of success stories on EM it seems to be working so far.

As a result of the GEA, the OPA projects that the province’s generation of renewable energy will double by the year 2025. In addition to renewable energy, the government is also investing heavily in “clean-burning” natural gas. By the year 2025, the OPA expects electricity generated by natural gas will double from 5,000 MW to 10,000 MW.

The silver lining
Higher energy prices, along with greater rationing, are likely to be more common in Ontario if the province doesn’t update its electrical infrastructure and find additional sources of energy. This would definitely be harmful for Ontario businesses. Fortunately, the provincial government is well aware of the issues at hand and seems focused on turning the corner. As a result, various levels of government throughout the province, as well as utilities, are offering a treasure trove of incentives to companies wishing to become more energy efficient. Here are a few of the incentives being offered:

BOMA Toronto CDM Program – The OPA program offers up to 40% rebates for retrofits to large commercial buildings. If this program interests you, apply quickly as it is set to expire on December 31, 2010. A Go Green Plus/BOMA Best Assessment must be completed to be eligible for rebates.

Commercial Condensing Boiler Program – An Enbridge initiative, the Commercial Condensing Boiler Program can save you up to a maximum of $30,000 per project.

Commercial Programmable Thermostats – Union Gas is offering free energy-saving programmable thermostats to all commercial customers in their franchise area.

Demand Response Program – This OPA programs offers rebates to voluntary participants in the ICI sector that reduce their electricity demand.

Dollars to $ense Energy Management Workshops – This federal government initiative offers companies opportunities to cut operating costs by adopting energy-savings tips.

ecoENERGY for Renewable Heat – Another federal initiative, ecoENERGY for Renewable Heat offers financial incentives for the installation of a solar heating system to eligible organizations in the ICI sectors.

Electricity Retrofit Incentive Program (ERIP) – This program offers incentives to businesses to encourage the most efficient retrofits for existing facilities. ERIP focuses on the areas of lighting, motors, heating ventilation and air conditioning (HVAC) and the overall electricity systems.

Feed-in Tariff (FIT) Program – This popular program administered by the OPA is a guaranteed funding structure that combines stable, competitive prices and long-term contracts for energy-generated using renewable resources.

Ontario Solar Thermal Heating Incentive (OSTHI) – This Ministry of Energy and Infrastructure incentive offers grants of up to $80,000 to ICI sector entities that install a qualifying solar water or solar air heating system.

Power Savings Blitz – This program offers a free energy assessment as well as lighting and water heating retrofits (up to $1,000) for small commercial businesses in the office or non-food sub-sectors with electricity usage of less than 50 kW.

Toronto Hydro Business Incentive Program – This incentive encourages and rewards energy-efficient renovations to commercial buildings.

TowerWise – For high-rise and condominium residents, owners, managers and builders, this incentive offered by the Toronto Atmospheric Fund (TAF) offers information and resources to help reduce operating costs by improving the energy efficiency of buildings.