Thanks very much.
It's a pleasure to be here with you today.
My name is Tonja Leach and I'm the executive director of QUEST.
For those of you who don't know us, we're a neutral, non-partisan, business-friendly non-profit service organization, and we have a vision that's local. In fact, it's about as local as it can get. While large energy infrastructure projects still steal the headlines, the really exciting story is unfolding on “main streets” across Canada.
The efforts of communities—local governments, their utilities and energy service providers, builders and developers—are yielding stronger local economies, lower energy costs for citizens and corporations, improved resiliency and security, and, almost as a happy accident, cleaner air, land and water. I am of course talking about smart energy communities, a concept that grounds QUEST and is the ideal end state of our work.
Recognizing that we all likely have a different understanding of what makes up a smart energy community, let me give you our description. A smart energy community seamlessly integrates local, renewable and conventional energy sources to efficiently, cleanly and affordably meet its energy needs. It's a coveted, highly livable place to live, work, learn and play.
We envision that eventually all the requirements of daily life, all of the services that energy provides and the things that make neighbourhoods function—transportation; building heating, cooling and hot water; lighting; wireless data networks; resource recovery operations—will be working together in an invisible symphony.
Let's bring this to the context of energy efficiency and the topic of your study.
We know that many of the measures put in place by federal and provincial governments to enhance energy efficiency have to date yielded great results compared with those from the 1990-2015 period, when demand for energy grew by an average of 1.2% per year. End-use energy demand has slowed, and according to the National Energy Board, it's predicted to continue to do so in the business-as-usual scenario, averaging growth of 0.3% per year. Reasons for this include slower economic and population growth than we have seen historically; improving energy efficiency; the impact of the pan-Canadian approach for pricing carbon; and other policies, programs and regulations.
The energy efficiency industry was estimated to have produced $54 billion in 2013, or approximately 3% of Canada's GDP, and it has likely only increased since that time. Additionally, energy efficiency measures save Canadian households and businesses around $38 billion annually. This, in turn, frees up capital that is spent elsewhere, further enhancing growth and jobs in the Canadian economy. Energy efficiency measures also feature strong returns on investment, often higher than 10% and sometimes even at 20% to 30%. It's estimated that this multiplier effect can result in a sevenfold generation in GDP for every dollar spent on energy efficiency and create between 30 and 57 jobs for every million.
What is the role of communities? While the economics of energy efficiency are very positive, the results to date have largely been a result of building, technology or appliance-scale efficiency advancements, and there's still much more opportunity to capitalize on. Communities influence over half of energy use and greenhouse gas emissions in Canada—nearly 250 megatons of carbon dioxide—primarily in residential, commercial and personal transportation sectors.
If we look at them independently, the energy waste from these sectors is 25%, 29%, and 75% respectively, and herein lies the opportunity. An opportunity exists for increased system-wide energy efficiencies, by focusing not only on each of the sectors independently but also on the integration and planning at the community level.
Thousands of Canadian communities are struggling with a complex combination of priorities—think affordability, poor air quality, gridlock and shuttered storefronts. These issues are the unfortunate legacy of outdated planning, design and building practices. Those who laid the groundwork for our cities and towns typically did so in an ad hoc, piecemeal manner, and under the assumption that energy would be forever cheap, abundant and free of consequences.
Today residents of these cities and towns pay more for energy than they need to, to heat and cool homes and businesses, and to get them where they need to go.
On average, community per capita spending on energy ranges from $3,000 to $4,000, equivalent to $1 billion per year in total for an average-size Canadian community.
Add to this complex challenge the fact that, while we have good documentation on energy production, our documentation on energy use is fragmented and incomplete, and the data systems we do have cannot talk to each other. So in addition to struggling with a complex set of priorities and legacy systems contributing to energy waste, communities also don't have the information, tools or resources needed to make educated and effective decisions on how to solve our community-scale energy efficiency challenges.
Take this analysis from the city of London, Ontario, which has a population of 370,000 people. The community spent $1.6 billion on energy in 2014—on gasoline, natural gas, electricity, diesel, etc. Of this amount, only 12% stayed in the local economy and 59% stayed in the province. While developing their community energy plan and undertaking an economic analysis, London calculated that for every dollar of reduction in energy use they would keep $14 million in the local economy, resulting in a compounded energy cost avoidance of $250 million per year by 2018.
The opportunity to keep energy dollars local and circulating within the local economy can be enhanced through the use of conservation and local generation such as district energy or combined heat and power. This can also help utility-demand reduction, smart load integration, renewable content, and cost avoidance.
This profile will of course vary widely between communities, but it's clear that the opportunity to keep energy dollars local and circulating within the local economy can be enhanced through a systems approach to community-scale energy efficiency.
We know there's a significant opportunity to reduce greenhouse gas emissions and boost local economies through the integration of local, renewable and conventional energy sources to efficiently, cleanly, and affordably meet energy needs. We also know that there is a shortage of research to fully quantify the potential.
In 2009, QUEST conducted a study to assess the potential of integrated systems in meeting climate change targets. The results suggested that by doing things like integrating community energy systems, updating land use policy, improving transit, and opening up opportunities for energy through policy changes, we could reduce direct and indirect urban emissions by approximately 40% to 50% in the long run.
Subsequent studies, such as our “Community Energy Planning: Getting to Implementation in Canada!” research, have shown that smart energy communities have a multitude of direct economic benefits such as cost savings and jobs, and indirect benefits such as reduced congestion, improved air quality, improved community health, and increased social interaction as a result of active transportation.
So what is the federal role in all of this?
We would like to see continued support for existing agencies such as those in Yukon, B.C., Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Newfoundland, New Brunswick, and Nova Scotia. The country is well covered by energy efficiency agencies, but there's more that many of them can do. We could also use some federal support to establish and realize the full potential of those programs.
While QUEST has undertaken research to build understanding of the potential for smart energy communities to stimulate the economy and reduce greenhouse gas emissions, and NRCan recently undertook some further research on that, I believe that more research with newer modelling that includes all sectors would be extremely beneficial, not just for understanding the potential but also to enable us to measure our success.
We need to focus on supportive policy that enables smart energy communities but doesn't prescribe the integration of systems. Every community is different and requires a unique suite of solutions to maximize their efficiency. Therefore, policy needs to enable while appreciating the differences in opportunities.
Last, support for accessible energy data via the establishment of a pan-Canadian energy information agency or similar data trust would be very well received by our network across Canada, and I think it would be useful to a multitude of utilities and communities.
Thank you.