By James Larsen, Director of Business Development with The Advanced Energy Centre at MaRS Discovery District in Toronto, Canada
North American households consume almost 2x the amount of energy as typical European households, and 6x that of Latin America or Asia. Read that again. Canadian and U.S. households consume a whopping 12,000 kWh of energy per year. But why?
In some jurisdictions, consumers have access to cheap energy. In Quebec, for example, residents have grown accustomed to abundant hydro power. This low-cost, legacy generation, transmission and distribution infrastructure was fully depreciated long ago. The capital cost has since been paid off, therefore the cost of electricity is actually just a function of the very small cost to produce it. This is a big driver for the extremely low residential electricity costs of only around 7 cents/kWh in Quebec. At those prices, typical energy bills reach around $72 per month – a rather weak incentive to reduce consumption. And when compared to average European levels of approximately 18 cents/kWh, which are 150% above Quebec rates, one can begin to understand Europeans’ conservative energy use.
It’s no surprise that an abundance of cheap energy has contributed to significantly more liberal consumption habits among North Americans.
For example, Canadians watch an average of 30 hours of TV per week; only slightly less than our southern neighbors, who clock in at 33 hours. Compare that to Sweden and China, which each average around 18 hours per week — that’s almost half of our consumption.
How about laundry? Approximately 85% of U.S. households own tumble dryers, and the majority of people are running 2 or more loads per week. Dryers account for 6% of the country’s residential electricity consumption each year and add a cumulative $9 billion to American families’ utility bills. By comparison, the U.K. gets by on a 57% dryer ownership rate (most European countries have tumble dryer ownership rates below 50%), and U.K. customers who embrace hang drying far outnumber those who don’t — by a ratio of 14:1.
A worse habit still, is our maintenance of indoor temperature. Here, the U.S. statistics are the most bracing. A nation with over 300 million people, accounting for only 4.5% of the world population, consumes more energy for air conditioning than the rest of the world combined. America uses more electricity for cooling than Africa, a population of 1.1 billion, uses for everything!
Another key underlying and structural factor that further exacerbates consumption behavior is the size of our houses. In Canada and the U.S., the average home size is around 1,950 sqft and 2,160 sqft, respectively. Compare that to Italy at 870 sq ft, Japan at 1,000 sq ft, Russia at 615 sq ft or China at 650 sq ft. Larger houses mean larger areas to heat and cool to maintain our optimum indoor temperatures. Larger living spaces also boosts the energy we use for lights, devices, and other appliances.
Interestingly, as illustrated by the comparisons with our international peers, we can certainly improve our attitudes and behaviors with respect to energy. However, changing habits is hard, and it’s often easier to rely on other solutions to avoid lifestyle adjustments.
Therefore, while we have the power to alter all of the above drivers of our aggressively high energy usage, we instead make decisions to supply more energy. Ontario, recently decided to refurbish the Bruce Power Plant at a cost of $13 billion, ensuring the supply of 45,000 GWh of energy per year through 2064 — a massive, long-term capital project. Consider this: if Ontario’s roughly 13 million residents were to decrease their energy usage to European levels (ie. 4,000 kWh/year/household of conserved energy), energy demand could be reduced by 20,000 GWh/year — almost half of the power coming online from Bruce. Given some of the aforementioned structural issues (e.g., our large home sizes), it is unlikely that we could reach that level of conservation, but even attaining half of that goal makes a good argument for us to look to conservation first.
There are impressive examples from leading jurisdictions in North America on avoiding the costs of new supply through conservation. California provides an excellent example, as efficiency measures launched during the 1970s have since saved nearly $90 billion on customers’ energy bills and avoided at least 30 power plants, with 11 more plants expected to be avoided over the coming decade.
The example from California and Ontario’s previous Conservation and Demand Management Framework and its new Conservation First program are good starts, but more can be done. North Americans are way out of sync with the rest of the world and it is time for us to act. The silver lining is that there are technologies in place that can help us reduce our energy consumption. Part of MaRS Discovery District, the Advanced Energy Centre represents leading technologies, like Ecobee’s smart thermostat, that leverages temperature control data to automatically make intelligent and personalized heating and cooling decisions, as well as Nanoleaf’s light bulbs — the world’s most efficient LEDs. There are also several technologies like Ecotagious or Eyedro that help customers understand their energy usage and meet their demand savings and energy efficiency targets.
With an increased awareness and urgency to change our attitudes, habits and behaviour, coupled with new technologies and innovations, we have the ability to further reduce our energy usage, avoiding massive capital projects and their associated costs, while also contributing to the fight against climate change.
About the Author: James Larsen, P.Eng., MBA
James Larsen is the Director of Business Development at The Advanced Energy Centre (part of MaRS Discovery District), a public-private partnership with a mission to foster the adoption of innovative clean energy technologies in Canada, and to leverage those successes and experiences into international markets.
Prior to joining The Advanced Energy Centre, James was a Management Consultant with Bain & Company, developing strategic solutions for market-leading companies. James also spent many years as an engineer working in the renewable energy industry with a variety of technologies, including hydrogen fuel cells, micro-hydro and geothermal generation.
James has dedicated significant personal time towards his passion for sustainability, founding the 2011 Ivey Business School sustainability conference and ecological footprint reduction challenge. James also volunteers as an Advisor with MaRS Cleantech’s Venture Services group, providing business advisory to young cleantech companies, to help them grow into successful sector leaders.
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