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A Tight Schedule for Energy Savings
June 9, 2011
Economy Undermined Minister’s 2006 Conservation Directive
By Barbara Carss
Conservationists will have to pick up the pace and/or cut consumption more deeply to meet the series of energy saving targets that the Ontario government has set for the next 20 years. The Long-Term Energy Plan, released in November 2010, boasts of a 1,700-Megawatt (MW) reduction in peak demand across the province since conservation efforts were launched in 2005. However, a further 2,850 MW in savings will have to be found to get to the interim target of 4,550 MW that the Ontario government hopes to hit by the end of 2015.
“The challenge is awesome,” acknowledges Andrew Pride, Vice President, Conservation, with the Ontario Power Authority (OPA).
Meanwhile, a notable Toronto-based target has been downscaled significantly or perhaps simply pegged more realistically. Toronto Hydro now estimates that its commercial customers should be able to deliver 64 MW of savings in four years with the support of a repackaged conservation and demand management (CDM) incentive program, which was launched in the spring of 2011.
The precursor program administered by the Building Owners and Managers Association (BOMA) of Greater Toronto had strived for 150 MW of savings in the four-year period from 2007 to the end of 2010 – an undertaking arising from former Minister of Energy Donna Cansfield’s directive for 300 additional MW of conservation within Toronto during the same time period.
“That target was really derived from looking at the Minister’s directive and saying: we’ll take half of that,” recalls Mike McGee, Managing Director of the consulting firm, Energy Profiles Limited, and a member of BOMA Toronto’s Board of Directors. “BOMA’s goal, I’d say, was more to just take the lead and get going.”
Indeed, the BOMA CDM program for existing commercial, retail and hospitality properties was up and running several months before the City of Toronto’s Better Buildings Partnership (BBP) launched programs for new construction and existing institutional and multi-residential buildings as part of its targeted 90-MW share of the savings goal. Application deadlines for both the BOMA Toronto and BBP-administered programs expired in December 2010.
BOMA Toronto reports savings in the range of 45 MW and a steady increase in participation, while the savings tallies from the BBP programs are still being finalized. Approved applicants have been contracted to deliver in excess of 90 MW of peak demand reduction, but experience shows that completed projects rarely deliver the full savings envisioned at the outset. Nor will all projects be completed in time to meet the OPA’s deadline so there is still uncertainty about whether those projects will be counted in the final savings outcome.
“There is a fair bit of due diligence that needs to be done before we can put numbers out there,” says Richard Morris, Manager of the City of Toronto’s Energy Efficiency Office. “We don’t have final numbers from the post-evaluation and, typically, most buildings come in lower than contracted.”
MOMENTUM BUILDS SLOWLY BUT STEADILY
Despite falling short of its overall target, savings in the final year of the BOMA CDM program came much closer to the originally envisioned annual results, and participants also tackled a wider range of projects beyond the lighting retrofits that predominated earlier. More lucrative incentives that doubled the available dollars for many projects, more aggressive marketing and the industry’s increasing awareness are all considered factors in the growing momentum.
“A lot of it was education and assisting our members with what the process was all about,” Rob Edwards, BOMA Toronto’s Director of Conservation and Business Development, told attendees at the association’s annual Energy & Environment Forum earlier this spring.
“It takes a long time for the commercial sector to develop the plans, get capital in place, get it approved and execute, and probably the original target underestimated that,” reflects Keith Major, Senior Vice President of Property Management for Bentall Kennedy (Canada) LP. “The commercial industry just doesn’t move very quickly.”
By unhappy coincidence, a major economic downturn then sidetracked many project developers after the long process of securing corporate approval.
“Our sales force started to find that projects were being cancelled left, right and centre because the proponents didn’t have the capital,” Morris recounts. “For BOMA to get 45 megawatts, I’d say that was pretty good. That’s to be applauded.”
At the same time, the declining economy’s impact on overall energy demand helped quell some of the pressure on Toronto’s power system. Concern about transmission constraints in particular, and supply shortfalls in general, had earlier led to fears of potential blackouts in the city and had inspired the CDM programs.
“That’s why the Minister decided we would have the directive for 300 MW,” Morris notes. “That number was not something somebody just made up.”
PROVINCE-WIDE INCENTIVES
Prospective CDM program applicants will now have to adapt to a new process. The slate of newly announced province-wide conservation and demand management (CDM) incentives replicates many programs that were previously offered, but the replacement programs introduce different delivery agents and ensure a uniformity of options in all regions. Local distribution companies (LDCs) will administer the programs, which the OPA has devised and continues to fund.
“There is one way to apply that is consistent throughout the province and the incentives are consistent throughout the province,” Edwards said. “In our new role, BOMA Toronto will be a channel partner with Toronto Hydro and we have been asked to target the types of properties that BOMA members own and operate, specifically office, shopping centres and light industrial.”
A web site dedicated to the new province-wide effort provides program details at http://saveONenergy.ca. This includes incentives for: new construction; audits, retrofits and recommissioning in existing buildings; curtailment in peak demand periods; education/awareness programs; and in-house energy management expertise for properties with demand in excess of 5 MW.
For commercial properties, there are some expanded and new categories of incentives beyond those previously offered through the BOMA CDM or other electricity retrofit incentive programs (ERIP) offered through LDCs outside Toronto. This includes funding for ASHRAE Level II and III audits and newly available funding for commercial tenants to conduct energy audits within their premises.
As with previous retrofit programs, the incentives are prorated to type and outcome of measures undertaken. The prescriptive track provides a per-unit incentive for a defined list of measures, while the engineered and custom tracks involve a more holistic evaluation of the project’s impact on energy consumption and peak demand. More lucrative payouts for engineered and custom retrofit projects correspond to the greater capital investment that’s likely to be required and to the improved savings that can be achieved.
“Prescriptive incentives are the simplest thing and it’s okay to do them on a small-scale basis, but in larger buildings they can be counterproductive,” McGee asserts. “If you’re getting a dollar amount for every light fixture you replace, it just makes you want to keep the same amount of fixtures, but maybe there is a better solution so you won’t need so many fixtures."
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