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By: Don McLean

Individual provinces have differing regulatory regimens, market conditions, incentive programs, energy related greenhouse gas factors and GST/HST cost structures. For companies operating facilities across Canada, provincial differences should be considered when developing a corporate energy strategy.

To begin, a fundamental analysis of your company’s corporate energy spend should be completed. This is a simple table of your annual energy use and cost by commodity, including a subtotal by province. The annual period can be any 12 month period – for example the latest calendar or fiscal year, or the most recent 12 months. To start, calculate unit rates by commodity by province. Add provincial emissions factors to the table and calculate carbon footprint by commodity by province.

For example, in Ontario the emissions factor for 2009 electricity use is 0.000220 tonnes CO2 equivalent per kilowatt hour (tCO2e/kWh). If a company uses 10 million kilowatt hours per year, its electricity related carbon footprint is 2,200 tCO2e.

From the provincial analysis, consider the following:

1. How is my energy use distributed provincially?

Energy-related regulations and incentive programs are set primarily on a provincial basis. Fish where the fish are – if 50% of your electricity spend is in Ontario, and 5% is in Quebec, it makes sense to focus first on developing a strong understanding of Ontario incentive programs.

2. What are my unit costs of electricity and natural gas by province?

Unit costs, for example electricity and HST costs, vary by province. British Columbia, Manitoba, and Quebec have lower electricity rates as a result of their relatively low cost hydro-electric generation. Alberta and Ontario have higher electricity rates. All things being equal, money spent on lighting retrofits for example, is better spent in Alberta than Manitoba. With natural gas, unit rates trend higher as transportation costs increase moving east from Alberta. This should be taken into account when looking at where to spend money on natural gas related initiatives.

3. Provincially, what is the carbon footprint associated with my energy use?

Electricity-use related greenhouse gas emissions vary dramatically by province. For example, the emissions factor associated with electricity use in Quebec is 0.000011 tCO2e/kWh versus 0.000820 for Alberta. The same electricity use in Alberta contributes 75 times the carbon it does in Quebec. Once again, all things being equal, if you are focused on reducing your carbon footprint, reduced electricity use gets you significantly “more bang for your buck” in Alberta than Quebec.

Once you have your provincial analysis complete, it can be used to help prioritize your energy efficiency investments and provide input into your organization’s corporate energy strategy.

Figure 1 is a bubble graph of unit electricity cost versus electricity use by province for a fictitious company – ABC Company. The bubble size represents the relative carbon footprint associated with its electricity use. Imagine Figure 1 has four quadrants with the upper right quadrant representing provinces with high energy use and high energy cost. This area represents prime regions that ABC Company should focus on.

Figure 1 identifies that ABC Company’s three largest electricity using provinces are Ontario, Quebec, and Alberta. Of these three, Ontario has the largest electricity consumption. This signals that ABC Company should make it a priority to understand the energy efficiency incentive programs available in Ontario. Alberta has the highest electricity-related carbon footprint and the highest unit cost. Quebec, while having high consumption, has the lowest carbon footprint and lowest unit cost. If ABC Company’s focus is carbon footprint reduction, the company should make energy efficiency improvement in Alberta a priority. British Columbia, Manitoba, and Quebec are low cost and low carbon footprint. New Brunswick, while relatively low in energy use, has a relatively high unit rate and high carbon footprint.

Figure 1 – Electricity Use and Rate by Province

In the development of an effective corporate energy management program it is important to take into account provincial differences. A summary of energy use and cost by province inclusive of unit costs and provincial emission factors will provide a valuable framework from which to develop a corporate energy strategy. It’s a low cost early step that will help guide important investment decisions before moving to high cost, site specific capital initiatives.

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Don has over 30 years of experience in the energy industry and is responsible for total energy and environmental management solutions at Energy Advantage Inc.