CALGARY, ALBERTA--(Marketwire - Sept. 5, 2012) - Alberta energy efficiency nonprofit C3, formerly Climate Change Central, today published a research paper identifying energy efficiency funding and administration options used in North America that could be assessed, customized, and applied with beneficial effect in Alberta's unique energy system.
C3 prepared the report for consideration by the provincial government and other stakeholders based on the idea that improving the efficiency of our energy system is an important economic, environmental, and social opportunity -- even within a resource-rich jurisdiction such as Alberta.
The report, Energy Efficiency Funding and Administration Options for Alberta, does not take a position on benefits or drawbacks of any one approach or combination of approaches, but says Alberta would benefit from using a modified combination of mechanisms. The province has cost-effective -- yet untapped -- energy efficiency opportunities in its residential, commercial, and institutional buildings; its transportation sector; and its industrial sector.
In addition to reducing environmental impacts, cost-effective improvements in energy efficiency would:
- increase the productivity and competitiveness of the province's economy;
- contribute to the postponement or avoidance of costly infrastructure (and related regional siting conflicts);
- reduce Albertans' exposure to spikes in energy prices;
- seed new businesses, support jobs, stimulate technological innovation; and
- boost the financial position of households, businesses, and industry.
In spite of these benefits, there are several frequently cited barriers and market distortions that mean energy efficiency improvements are often ignored. These barriers and market distortions affect the supply of, and demand for, energy-saving and conservation technologies and practices.
The Government of Alberta has an array of policy options, including financial and non-financial incentives and regulations, to encourage businesses and individuals to become more energy efficient. In simple terms, the government will look to achieve an effective balance between helping the energy service industry increase the supply of energy-saving measures, and increasing the demand for these measures among all energy consumers.
Adequate long-term funding in support of these policy options helps maintain momentum so energy efficiency measures and practices can reach a 'tipping point' in their respective markets. After this, they become the market standard and energy savings become persistent in the absence of further government intervention.
Multiple funding mechanisms used in other jurisdictions across North America could be considered for application in Alberta. The capital sources and the administrator are of particular importance and are the focus of the C3 paper.
In other jurisdictions, capital for energy efficiency initiatives is sourced mainly from the following:
- Taxpayers, through general tax revenues or earmarked tax receipts;
- Ratepayers, through a separate, dedicated surcharge or system benefits charge; a general rate application; or some other rate-based mechanism;
- Industry, through local, provincial, or regional market-based or regulatory mechanisms;
- Investors, though bonds or private lending or equity; or
- Some combination of the above, including public-private partnerships.
An administrator designs, plans, implements, manages, and evaluates energy efficiency initiatives. The role of administrator can be filled by a number of actors, including the traditional administrators of large-scale energy efficiency programs - utilities, independent third parties, government departments or agencies, and various hybrids of these. Administrators also can include private financial institutions, such as national or regional banks or credit unions, and for-profit third parties.
To view figure 1, please visit the following link: http://media3.marketwire.com/docs/n905c3.pdf.
As a starting point for wider consultation on the options presented, the paper presents a set of commonly accepted criteria against which the options could be appraised by the Government of Alberta and stakeholders.
The funding and administration options paper follows the release by C3 earlier in the year of an energy conservation potential review for buildings in Alberta. This analysis quantified substantial economic opportunities to reduce energy use, consumer energy costs, and greenhouse gas emissions in the province's residential, commercial, and institutional sectors.
C3 has been the main administrator of Alberta energy efficiency programs funded by tax dollars. In addition, to date, the Climate Change Emissions Management Fund has directed money to industrial-based energy efficiency projects. A smaller number of demand-side management initiatives have been administered by regulated natural gas and electricity distributors and paid for through utility rates.
About C3, formerly Climate Change Central
C3 is an Alberta-based nonprofit that encourages energy efficiency and the small-scale use of alternative energy sources by Albertans. We engage decision-makers -- individuals, businesses and other organizations -- to encourage cost-effective choices about energy use. C3 partners with government, municipalities, and corporations to design and administer tailored programs to help people use less energy, save money, and reduce GHG emissions.