In May, 2010, the ECO released Rethinking Energy Conservation in Ontario: Annual Energy Conservation Progress Report - 2009 (Volume 1). This was the first Annual Report on the progress of activities in Ontario to reduce or make more efficient use of electricity, natural gas, propane, oil and transportation fuels. Click here for more information on this report, including videos and communications materials.
1 Executive Summary 2 The Context of the Report 3 Introduction 4 A Conservation Strategy for Ontario	5 Policy Framework Issues 5.1 Electricity Conservation and Demand Management 5.2 Natural Gas Demand-Side Management 5.3 Oil and Propane Conservation 5.4 Transportation Fuels Conservation 5.5 Multi-Fuel Conservation: The GEGEA 5.6 Energy Targets and Benchmarking 5.7 The Policy Framework Agenda	6 Barriers to Conservation 7 Conservation Initiatives Appendix A: Ontario’s Energy Use and Forecast Demand Appendix B: Energy Units Recommendations

This report has identified several policy barriers to energy conservation in Ontario. These include:

• the lack of a comprehensive multi-fuel energy conservation strategy for Ontario, co-ordinated across government ministries;
• insufficient oversight, accountability and public participation for minister’s directives on electricity policy; and instability in the electricity conservation framework (as a result of the rules continually changing) that is preventing participants, such as electricity and gas distributors, from taking action.

These are overarching barriers, but their effects trickle down and affect the design of conservation programs and the behaviour of individuals. The effect of barriers can also flow in the other direction. Behavioural or operational barriers unknown to policy makers may prevent an energy conservation initiative from succeeding, no matter how sound the law or policy.

Contents 1 Other Barriers 1.1 Barriers Identified by Utilities 1.2 Barriers Identified by Buildings Operators 1.3 Barriers Identified by Practitioners 1.4 Barriers Identified for Oil and Propane Conservation 1.5 Barriers Identified for Transportation Fuels Conservation

Other Barriers

The ECO is interested in learning about barriers at all levels. Summarized below are some of the barriers that have been brought to the attention of the ECO. The views presented in this section do not necessarily reflect the opinion of the ECO.

Barriers Identified by Utilities

Local distribution companies (LDCs) informed the ECO of the following barriers.

• There is a lack of regulatory clarity and continuous long-term commitment to energy conservation in government policy.
• There is a need for long-term conservation funding that is independent of short-term program and target-related timelines.
• The government’s top-down approach for setting electricity targets acts as a barrier, because some of the opportunities for conservation at the local distributor level are lost.
• There is a lack of information related to energy conservation in the school curriculum. There are missed opportunities to connect with students and teach a large number of individuals the facts related to energy use and conservation techniques.
• There are policy and information barriers related to smart meters and TOU prices. The true or real pricing is not reflected in the TOU rates; and consumers need clear information related to their smart meter so they can get the best value for their energy usage.

Barriers Identified by Buildings Operators

Building owners, operators and the supporting service industries provided the ECO with the following views on barriers.

• A broad consensus believes that a reporting mechanism for measuring energy use is needed. The preferred approach is to establish benchmarks and initially to not focus on the “delta” or difference between inferior to superior performers or the delta of annual improvement in energy consumption that is occurring.
• The lack of implementation of GEA regulations and directives on energy conservation is a barrier to motivating activity, particularly in the MUSH sector.
• The OPA’s grant funding policy stipulating that it retains ownership of environmental attributes associated with conservation and green buildings is a barrier for building officials using OPA programs.
• Capability in the buildings sector is a barrier. Ontario is not creating the capacity to design, construct and operate green buildings. OPA programs favour resource acquisition over capacity building. Policy makers do not recognize that creating such capability will not only attract manufacturing plants, but involves jobs in building designing, commissioning and retro-commissioning.
• There are administrative barriers to obtaining approvals and securing incentives. A “green concierge” is needed to address this barrier; such a service provider (similar to government’s Renewable Energy Facilitator) could steer building owners through the approvals processes.
• Financial barriers exist to motivating conservation in the broader public sector; the money saved as a result of energy efficiency improvements does not stay in the sector. Public sector managers who lower their operating costs through conservation do not maintain the same operating budget but see their budget lowered. Budget policies that restrict incremental capital spending and do not consider the longer term operating cost savings of efficient buildings are a barrier. The funding formula used by Infrastructure Ontario (an agency of MEI) is an example of this approach: it seeks low capital costs for construction, but ignores the long-term operating costs faced by ministries who operate the building.
• There is insufficient information on energy efficiency available to the building leasing community.

Barriers Identified by Practitioners

Conservation practitioners (energy services companies, architects, engineers, public interest groups, technical and management consultants) informed the ECO of the following barriers.

• There is no government policy requiring performance measurement and reporting of energy use in buildings and facilities.
• The lack of benchmarking and the inability to create standards for energy use in buildings impedes organizations taking action.
• The lack of transparent and publicly available factual information impedes educating the public. A pocket manual or reference guide containing an agreed set of facts endorsed by all stakeholders is needed. It should set out economic and productivity indicators such as: the cost of conservation versus supply; the amount of public funding spent on conservation versus supply; the claimed financial “waste” that occurs in supply versus conservation; and the employment created by conservation versus supply.
• There is no clear set of standardized rules, protocols and procedures set out by government and government agencies for access to data. Simple, hassle-free, open access to utility data does not exist.
• Barriers are contained within the CDM/DSM regulatory framework. The regulatory procedures and protocols encourage contesting submissions. Incentives are equipment-based, rather than reflecting a holistic or systems-based approach that seeks deep energy savings.
• There is no single authoritative organization to advocate for conservation and no central service agency that conservation advocates can approach to resolve issues (as there is with the Renewable Energy Facilitation Office for advocates of renewable energy).
• The mandate of the OPA inherently makes it a conflicted agency. OPA must integrate demand and supply-side solutions, but its planning documents favour supply-side solutions.
• There is a lack of public education of the benefits of conservation. A general unawareness among the public and the belief that conservation is not needed because renewable energy can solve energy supply problems impedes conservation. Conservation is less tangible with no easily identifiable “widgets” that can be used to educate and motivate the public.
• Public sector spending policies de-motivate conservation because a life-cycle cost approach is not used for public sector investments. There is also a split incentive at work, because public sector managers do not retain financial savings in their budget to apply to resolving problems or offering programs in their sector.

Barriers Identified for Oil and Propane Conservation

Propane companies identified the following barrier.

• The government’s energy efficiency standards for appliances and equipment are too narrow in scope, focusing mainly on space heating equipment to the exclusion of other equipment. The government should consider regulation of other products, which can affect heating a building.

Barriers Identified for Transportation Fuels Conservation

In the transport sector, various cultural, technological, financial, regulatory and infrastructure barriers affect both passenger and freight transportation.

• Cultural and attitudinal barriers exist in the transport sector, especially related to passenger transport and personal mobility. Several factors have resulted in favouring the use of personal vehicles: the current car-based culture, increased urban sprawl, low urban densification targets of existing urban planning policies, the low cost of fuel, and the lack of a price on carbon. The moderate transit ridership levels mean that governments must either provide it at a financial loss or at reduced levels of service making transit an unattractive option.
• The development and demonstration phases of technology innovation tend to have restricted access to financing. In an emerging markets, such as the market for sustainable transportation technologies, it is financially difficult to bring products to the market without solid demand.
• In freight transport, a barrier to wider adoption of proven technology can occur because of a lack of investment capital. Without financial incentives, fuel efficient technologies can be too costly for fleet managers.
• In truck transport, the regulatory inconsistency on codes and standards between jurisdictions can also act as a barrier. The varying degrees of stringency can make compliance complex and adopting new technologies a risk.
• As alternative fuel vehicles become more readily available, a potential barrier to demand may be the lack of adequate infrastructure to power such vehicles. For example, without adequate infrastructure for charging, the demand for electric vehicles will remain low despite the financial incentives offered.

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Citing This Article:
Environmental Commissioner of Ontario. 2010. Annual Energy Conservation Progress Report, 2009 (Volume One): Rethinking Energy Conservation in Ontario. Toronto, ON : Environmental Commissioner of Ontario. pp. 47-50