Home
	Databases
	NEUD Publications
	Data & Analysis Centres
	Glossary

Energy Efficiency Trends in Canada, 1990 to 2004

Chapter 1. Introduction

From 1990 to 2004, Canada's energy efficiency improved by an estimated 14 percent. In 2004 alone, these improvements reduced energy use by 902.7 petajoules, saving Canadians almost $14.5 billion and lowering greenhouse gas emissions by 53.6 megatonnes.

About Energy Use, Energy Efficiency and Greenhouse Gas Emissions

Determining the impact of energy efficiency improvements on energy consumption levels for a vehicle, piece of equipment or appliance is straightforward; it can easily be tested and measured. However, determining how these individual improvements integrate and affect energy consumption and resulting greenhouse gas (GHG) emissions is more complex.

This report addresses the complicated question of what impact energy efficiency is having in Canada. It provides an analysis of the impact of energy efficiency on secondary energy use – the energy that Canadians use to heat and cool their homes and workplaces and to operate their appliances, vehicles and factories – and on the generation of electricity.

The analysis presented in this report uses a factorization method that separates the changes in the amount of energy used by the residential, commercial/institutional, industrial, transportation and electricity generation sectors of the economy into five factors. These factors are

1. Activity: Activity is defined differently in each sector. For instance, in the residential sector, it is defined as households and the floor space of residences; in the industrial sector, it is defined as a mix of industrial gross domestic product, gross output and industrial output such as tonnes of steel; and in the electricity generation sector, it is defined as gigawatt-hours produced.
   
   
2. Structure: Structure refers to change in the makeup of each sector. For example, in the industrial sector, a relative increase in activity in one industry over another is considered a structural change; in the electricity generation sector, a relative increase in production from one fuel process over another is considered a structural change.
   
   
3. Weather: Fluctuations in weather lead to changes in heating and cooling requirements. This effect is taken into account in the residential and commercial/institutional sectors, where heating and cooling account for a significant share of energy use.
   
   
4. Service Level: The increased penetration of auxiliary equipment in commercial/institutional buildings during the 1990s increased energy consumption for this end-use. Since we have only limited data on stocks, sales and unit energy consumption levels related to this equipment, an index has been estimated to capture the impact of these changes over time. This effect is measured only in the commercial/institutional sector.
   
   
5. Energy Efficiency: Energy efficiency refers to how effectively energy is being used, for example, for how long an appliance can be operated with a given amount of energy. For the electricity generation sector, it represents the conversion losses.

In this analysis, one complexity that arises is how to treat the secondary use of electricity that, unlike other fuels used at the end-use level, does not produce any GHG emissions. Thus it is common (but not universal) practice to allocate GHG emissions associated with electricity production to the sector that uses that electricity. This is achieved by multiplying the amount of electricity used by a national average emissions factor that reflects the average mix of fuels used to generate electricity in Canada. The sectors in this report are analyzed with and without this allocation.

Total Canadian GHG emissions are estimated to have been 758.0 megatonnes¹ (Mt) in 2004; of this, 67 percent, or 505.4 Mt, resulted from secondary energy use (including electricity-related GHG emissions). GHG emissions resulting from secondary energy use are influenced by two principal factors: the amount of energy used and the GHG intensity of the energy used (the quantity of GHGs emitted per unit of energy). The sector-by-sector analysis in this report elaborates on these two principal factors and their impact on GHG emissions trends.

Chapter 2 provides an analysis of total secondary end-use energy efficiency, energy use and related GHG emissions trends. Chapters 3 to 7 describe the results of the sector-by-sector analysis of energy efficiency and GHG emissions. The appendix provides a glossary of terms.

Differences From Previous Reports

This report is the eleventh annual review of trends in energy use, energy efficiency and GHG emissions in Canada, using 1990 as the baseline year. It updates last year's Energy Efficiency Trends in Canada, 1990 to 2003 and delivers on Canada's commitment to track trends in energy efficiency, energy use and related GHG emissions. In addition to the change in the factorization methodology (see the text box at beginning of this chapter), Energy Efficiency Trends in Canada, 1990 to 2004 differs from previous reports in four key ways.

The first difference is in the commercial/institutional sector. This year, the OEE redesigned the commercial/institutional modelling framework to improve how energy is allocated among different activity types and to various end-uses in the commercial/institutional sector. As well, in the 2003 database, floor space data were redeveloped to be consistent with the North American Industry Classification System (NAICS). In this process, some floor space data were attributed to the industrial sector and therefore excluded from the 2003 database. This year, these floor space data were re-assessed and allocated to certain commercial/institutional activity types. Please see "Chapter 4. Commercial/Institutional Sector" for more information.

The second difference is in the industrial sector. This year, our data provider, Informetrica Limited, made significant revisions to our historical activity data, in particular to gross output (GO) data. Since more than half of the 49 industries analyzed in this report use GO as an activity driver, these changes have affected the factorization analysis in this sector. Please see "Chapter 5. Industrial Sector" for additional information.

The third difference is in the transportation sector where the OEE revised its estimate of historical truck stocks prior to 1994. In the passenger and freight transportation sub-sectors, the light truck stock was revised downward; whereas in freight transportation, the number of medium and heavy trucks was increased. These changes affected the allocation of energy use between the passenger and freight sub-sectors, as well as the activity data in the 1990 reference year. As a result, the factorization results presented for both sub-sectors, particularly passenger transportation, are different from previous reports. Please see "Chapter 6. Transportation Sector" for additional information.

The fourth difference is in the coverage of the report. Due to inadequate detail in energy and activity data, the agriculture sector will no longer be examined in this report. However, since agriculture is still a part of total secondary energy use, tables containing aggregate energy, GHG and gross domestic product (GDP) data for this sector will continue to be available from the comprehensive database on the OEE Web site: oee.nrcan.gc.ca/tables06.

¹ Environment Canada is responsible for Canada's official GHG inventory.