OTTAWA—Canadian manufacturers are using less to produce more, according to a recent study by Natural Resources Canada (NRCAN).
From 1995 to 2009, overall manufacturing output increased by 4.5 per cent to $6.3 billion.
At the same time, industry’s energy consumption decreased by 18 per cent—an amount equal to the power used by every Canadian office in 2008, the study notes.
Producers of paper, primary metal, petroleum and coal products and chemicals were the biggest energy users, accounting for 76 per cent of all consumption.
The deepest cuts in energy use came from paper manufacturers. Consumption dropped 41 per cent, likely the result of plant and mill closures. Indeed, it was the only sector to experience a decrease in GDP (19 per cent).
In Ontario at least, industry’s energy use took a dive along with the economy, says Alexandra Campbell, spokesperson for Ontario’s Independent Electricity System Operator (IESO), which operates the province’s electricity system.
“During the recession, industrial demand went down from 10 to 30 per cent. Since 2009, the industrial load has gone back up about 10 per cent,” she says.
While reduced production does impact energy consumption, there have been other factors at play across Canada.
“Power demand doesn’t exactly mirror what’s happening in the economy,” Campbell says, pointing out that usage from residential, commercial and some smaller industries stayed relatively the same during the downturn.
Another reason for large industry’s lower usage could be intentional.
“Conservation and demand response has had a pretty significant push over the past few years in Ontario,” Cambell says.
She also points to the introduction of more renewables and smaller scale generators offsetting demand on the grid.
Ontario’s Energy Minister Brad Duguid has also suggested the province wouldn’t have been able to handle the recent heat wave if it weren’t for adjustments to the province’s energy contracts.
Legislation such as Ontario’s Green Energy Act has had an influence on industrial power, but the NRCAN study found that in some sectors, environmental regulations actually had the opposite effect.
Petroleum and coal product manufacturing was the only industry to increase energy use—up by 25 per cent. It was also the only sector to use more energy per unit of activity.
The study notes this could be in part due to the introduction of federal regulations aimed at reducing air pollutants.
Adhering to those laws required further refinement of crude oil by the petroleum refineries, which in turn required more energy.
But in other sectors, embracing new processes has had a positive impact on power usage.
“Manufacturers’ improved environmental performance is, in part, the result of reduced energy use and improved energy efficiency by adopting best practices and investing in new and less energy-intesive machinery and equipment,” says Jeff Browlee, vice-president of public affairs at CME.
Brownlee says CME’s analysis has found a close correlation between capital investment by manufacturers, energy intensity and GHG emissions intensity.