Energy Consumption Planning for 2014: Proactively prepare for the inevitable rise in Ontario energy costs.
Since the release of Ontario’s 2013 Long Term Energy Plan (LTEP) this past December, energy consumers across the province have been concerned with the worrisome speculation surrounding energy costs, particularly the predicted rise over the next few years.
According to the report, energy costs are expected to rise at a higher rate than they ever have before, reaching an approximate 10% increase in 2014 and 2015, followed by a 15% increase in 2016.
The LTEP focuses on balancing 5 principles: cost-effectiveness, reliability, clean energy, community engagement as well as a focus on energy conservation and demand management. While investing in these areas will increase costs in the short term (over the next 3 year), the plan aims to collectively lower energy consumption across Ontario in the long term.
Take the province’s $2.1B investment in clean energy as an example. While this may seem like an astronomical number up-front, the investment will allow the government to phase in more renewable electricity sources, by 2025 it is expected that half of the province’s generation capacity will come from green sources such as wind or solar energy.
While the initial rise in energy rates is inevitable, the provincial government is planning to incorporate number of tools into the plan to help residential and commercial energy consumers mitigate the effects of the cost increase.
All Ontario energy consumers can use the following 4 best practices:
- Adopt a “Conservation First” mandate for your household or business. Much like Ontario has set a hurdle rate to screen program proposals; you can set one to consider the opportunity cost of a conservation activity against the cost of using the usual amount of electricity supply. The province has already had significant success in using similar tactics. At the end of 2013, Ontarians had conserved approximately 8.6 TWh of electricity (over $750 million in savings) – that’s enough electricity to power a Mississauga-sized city!
- Utilize the upcoming “Green Button” initiative set up by the Ontario government to gain access to your smart meter data; that is, your consumption data presented in a standardized format that can easily be shared across various applications, products, and services that regularly consume energy. While this program is geared predominately to residential consumers, Ontario businesses can use tools that leverage big data in a similar way. Your business can use historical billing data collected directly from your utility company to track and analyze usage. This will enable you to conserve energy during peak usage, as well as assist in retrofit planning to increase the energy efficiency of your equipment. At its base, the Green Button serves to remind consumers that understanding and monitoring your consumption are crucial steps in the energy management process.
- Participate in “Demand Response” (DR) programs to pinpoint peak demand periods to reduce the amount of electricity your home or company draws from the electricity grid during peak demand periods. These programs are especially important for large electricity consumers to take part in; as they shift consumption from peak to low periods, it not only decreases their electricity spend, but also improves province-wide energy reliability and decreases systems costs.
- Get inspired by the Ontario Power Authority’s (OPA) social benchmarking pilot program, as this will enable consumers to compare their energy consumption costs and patterns with like consumers. While this pilot program is once again catered to residential consumers, benchmarking is still an important practice to adopt as a business consumer in Ontario. Benchmarking energy consumption across all locations within your company’s portfolio, and the different utilities that service each location can help identify best practices from your top performing locations and apply them at the lower performers, raising the average performance of the entire portfolio.
Whether you are an industrial, commercial or residential energy consumer, setting a consumption or cost reduction goal will help in achieving energy cost savings. Many of the tools the government is proposing are still at their infancy stage, however good conservation and energy management systems do not require these programs to be in place.
In upcoming issues of this blog we will provide guidance to businesses in Ontario, on what they can do today to gain a better understanding of their energy needs and programs they can implement to support their energy conservation measures that will help reduce their energy spend.
If you have any questions or comments please share them in the comments section below.