Written by Chad Grasza
On September 30, 2020, the Ministry of Energy, Northern Development and Mines released a Ministerial Directive to direct the IESO to implement a 2021-2024 Conservation and Demand Management Framework launching the week of January 4, 2021. The new framework will be centrally-delivered by the IESO under the Save on Energy brand and will include incentive programs targeted to those who need them most, including opportunities for commercial, industrial, institutional, on-reserve First Nations, and income-eligible electricity consumers.
The new CDM framework was posted July 23, 2020 with a 30 day comment period.
The original posting from the ERO is as follows:
The current electricity conservation and demand management () Framework, known as the Interim Framework, is ending on December 31, 2020. We are developing a proposal for a new framework that would, if approved, launch immediately after the end of the term of the current Interim Framework, on January 1, 2021.
The Ministry of Energy, Northern Development and Mines is committed to ensuring that Ontario has a safe, reliable and affordable electricity system and is committed to continuing to find efficiencies in the electricity sector.
The province offers a suite of conservation and demand management () programs under the Save on Energy name, which provide incentives and tools to help customers manage their electricity usage and costs. programs defer or offset the need for new power plants and transmission lines, improving energy efficiency and reducing the strain on the electricity system. They are also an important contributor to the economy in Ontario, employing a network of suppliers, channel partners and contractors involved in program delivery.
Programs are governed by frameworks, which establish the rules and guidelines governing program delivery. On March 21, 2019, the Independent Electricity System Operator () was directed to discontinue the previous 2015-2020 framework and replace it with a streamlined suite of programs centrally delivered by the under the 2019-2020 Interim Framework. This action was forecasted to save electricity rate payers up to $442 million between 2019 and 2022.
The outbreak of the Novel Coronavirus (-19) in Ontario has negatively impacted businesses and has delayed the completion of projects. We recognize that customers and the vendor community are looking for stability and predictability in programming for the post-2020 period.
System Needs and Value of Electricity Conservation:
The outbreak has led to an overall decrease in electricity demand across the province; however, as the province gradually reopens, demand is expected to increase and capacity needs are expected to arise starting in 2023, increasing gradually through 2040.
The released its last Annual Planning Outlook () in January 2020. The forecasted capacity needs of approximately 2,000 megawatts () starting in 2023 and growing slowly through 2040.
The and the Ontario Energy Board also released a 2019 conservation Achievable Potential Study () that concluded that there is significant cost-effective potential for electricity conservation in the province, which can help address these forecasted capacity needs as well as address local needs.
Electricity conservation can continue to play an important role in Ontario’s electricity system by lowering peak demand in the province. It is the most cost-effective resource to help meet the province’s energy needs. Based on forecasts, electricity conservation delivered under the 2019-2020 Interim Framework has an average cost of two cents per kilowatt-hour. Electricity conservation can help defer or avoid investment in new, more expensive electricity infrastructure, as well as reduce operating costs of existing generation.
The is separately planning to pilot an ‘Energy Efficiency Auction’ mechanism outside of the proposed 2021-2024 Framework. The results of this pilot are intended to be used to help inform future opportunities for to cost-effectively meet system needs through competitive mechanisms.
We are proposing a Framework that would, if approved, launch on January 1, 2021. The current proposal, if approved, would have the following characteristics:
Term: Four-year term from January 1, 2021 to December 31, 2024, with a mid-term review at the end of 2022.
Delivery: The Framework would continue to be centrally delivered by the with opportunities for anyone, including customers, and program delivery companies to propose cost-effective programs or projects that meet local or regional electricity system needs.
Objectives and customers served: Address limited system needs in near team in the most cost-effective manner while maintaining program delivery capacity in the province; and increase investments in the second two years of the Framework (2023-24) to meet system needs that emerge through the 2020s.To be achieved by:
- Targeting provincial bulk system needs (primarily peak demand reductions) and local/regional system needs.
- Recognizing the wide availability of cost-effective residential energy efficient products, this Framework would focus on providing education and tools for residential customers to empower them to improve their energy efficiency.
Program Types: Proposed programs under the new Framework would fall under the following general program types, with some offering benefits in more than one category. In order to provide a seamless transition from the Interim Framework and to target system needs as they arise, programs may be phased in over time.
- Programs that incentivize whole building electricity savings and peak demand reduction and help business to increase their internal energy management capacity.
- Programs that target local/regional needs, procured through a competitive process.
- Customer-driven solutions for larger/complex projects.
- Customer friendly and direct install programs that enable easy access and savings for standardized measures, including programs for small businesses.
- Programs for on-reserve First Nations communities, including for remote communities soon to be connected to the provincial electricity grid.
- A program for income-eligible households that would provide energy saving measures and installation of measures at no cost to the participant.
Commenting is now closed.
The comment period was from July 23, 2020
to August 22, 2020