Infosheet: Energy Conservation, Efficiency and Supply

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Spring 2015

Provincial Policy Statement, 2014

The Provincial Policy Statement, 2014 (PPS 2014) provides policy direction on matters of provincial interest related to land use planning. It is issued under section 3 of the Planning Act and pertains to decisions in respect of the exercise of any authority that affects a planning matter made on or after April 30, 2014.

Encouraging energy efficiency, conservation, renewable and alternative energy systems, and a clean supply mix is an important part of the government’s commitment to building strong, healthy and sustainable communities and to ensure that the energy needs of all Ontarians are met. Increasing energy efficiency, conservation, and renewable energy are essential steps to reduce greenhouse gas emissions and fight climate change, while managing energy costs. Energy conservation, efficiency and renewable/alternative energy system policies in the PPS 2014 include:

  • Promoting renewable energy systems and alternative energy systems, where feasible, in accordance with provincial and federal requirements (
  • Supporting long term economic prosperity by promoting energy conservation and providing opportunities for development of renewable energy systems and alternative energy systems, including district energy (1.7.1i).
  • Supporting long term economic prosperity by minimizing negative impacts from a changing climate and considering the ecological benefits provided by nature (1.7.1i).
  • Supporting energy conservation and efficiency, improved air quality, reduced greenhouse gas emissions, and climate change adaptation through land use and development patterns that promote design and orientation which:
    1. maximizes energy efficiency and conservation and considers the mitigating effects of vegetation;
    2. maximizes opportunities for the use of renewable energy systems and alternative energy systems (1.8.1f).

Importance of Conservation and Clean Supply to the Province

As the province plans for Ontario’s electricity needs for the next 20 years, conservation will be the first resource to be considered before building new generation and transmission facilities, and will be the preferred choice wherever cost-effective.

The Ministry of Energy is working with its agencies to ensure that they put conservation first in their planning, approval and procurement processes. It is also working with the Ontario Energy Board to incorporate the policy of Conservation First into distributor infrastructure planning processes for both electricity and natural gas utilities.

The policy of Conservation First will ensure value for ratepayers and provide for cost-effective conservation programs that will lessen the need for new supply. Energy conservation and renewable energy systems are important parts of Ontario’s supply mix. Conservation and renewable energy have significant environmental benefits while helping to address climate change and meet energy demand in the province. Conservation also promotes economic growth by helping families and businesses save money.

District energy is one innovative way municipalities can promote energy conservation and efficiency in urban areas while reducing greenhouse gas emissions and managing energy costs. District energy is a method of heating and cooling buildings using hot water and/or chilled water, produced at a central plant located within a community to replace in-house heating and cooling systems.

One important element of Ontario’s Long-Term Energy Plan is distributed generation, which is efficient localized generation from smaller, cleaner sources of electricity. A diverse and distributed provincial energy system ensures that energy is produced locally where it is needed. This shift has also encouraged broader participation in the energy generation market, including municipalities, First Nation and Métis communities, homeowners, farmers and small businesses. Current opportunities for the development of new, renewable energy projects have included bioenergy (e.g., on-farm biogas), hydroelectricity, solar and wind energy.

Did you know?

Ontario’s Long-Term Energy Plan:

  • Adopted a policy of putting conservation first before building new generation and transmission facilities.
  • Set a long-term conservation target of 30 terawatt hours in 2032.
  • Set a goal of meeting 10% of peak demand using demand response by 2025.

Energy Efficiency Supports Efficient Growth

Planning the physical pattern and distribution of land use in our communities has a fundamental influence on energy consumption and efficiency. Land use practices that unnecessarily separate employment, retail and residential uses from one another have contributed to inefficient development. Conversely, mixed land use pattern and increased density promote energy efficiency and help to reduce negative impacts to air quality and climate change.

Energy efficiency and conservation can be achieved when planning communities and through the design of individual developments. For example, site and/or building design can support conservation through building orientation and construction materials. Landscaping techniques that use trees and plants to act as wind and sun barriers can also improve energy efficiency and conservation. Maximizing opportunities for energy efficiency can also promote long-term economic development by fueling productivity and job creation.

The PPS 2014 reinforces the link between energy infrastructure planning and land use planning. It also promotes the efficient and coordinated use of land, resources, infrastructure and public service facilities in Ontario communities.

Taking Action

  • Establish a local improvement charge program for energy efficiency investments, allowing the costs of projects to be recovered from property owners on their property tax bill. (Municipal governments can offer local improvement charges to recover energy efficiency, renewable energy and water conservation projects with repayment through property taxes.)
  • Participate in conservation programs for municipalities and broader public sector organizations offered by your local electricity and natural gas utilities to receive assistance for conservation projects, such as financial incentives, technical assistance and education.
  • Consider granting increases in height and density of development, in exchange for the provision of energy conservation and efficiency measures such as green roofs.

Conservation and Efficiency Support for Climate Change Mitigation

Conservation and energy efficiency reduces greenhouse gas emissions and can promote development that mitigates the impacts of climate change. These efforts can reduce energy use, greenhouse gas emissions and other air pollutants because there is less need to generate energy using fossil fuels. Improved air quality as a result of lower emissions can lead to better overall population health. For example, conservation efforts assisted the province in eliminating the need for coal-fired power plants in Ontario. Conservation of energy (e.g. electricity, natural gas) also reduces emissions related to its extraction and transportation.

Alternative and Renewable Energy for My Community

The PPS 2014 encourages planning authorities to provide opportunities for the development of renewable and alternative energy systems. This can help to match generation with local demand and offset local power demand.

Municipalities have a central role in ensuring Ontario has a clean energy supply by promoting local energy solutions. As such, the provincial government encourages municipalities to align energy, the built environment and land use planning; identify community-wide energy efficiency and green energy options; and support economic development opportunities. While it is important to note that renewable energy systems that generate electricity are generally exempt from the Planning Act, planning authorities can still plan for and promote renewable and alternative energy developments in a manner best suited for their communities. In addition, the new Large Renewable Procurement program respects municipal planning processes by restricting ground-mounted solar photovoltaic projects in Prime Agricultural Areas that are designated in a municipality’s current approved Official Plan.

Through municipal energy plans, local planning authorities can align energy infrastructure planning with land use planning within their communities.

The Ministry of Energy recognizes the value of community/municipal energy plans in reducing energy use and provides support to municipalities in developing community energy plans through the Municipal Energy Plan Program. The program supports municipalities’ efforts to better understand the community energy needs, identify opportunities for energy efficiency and clean energy, and develop plans to meet their goals, which can then be considered in regional and local planning processes. An important component of the enhanced regional electricity planning process is the consideration of local interests.

Taking Action

  • Apply to the Municipal Energy Plan (MEP) Program. A MEP is a comprehensive long-term plan to improve energy efficiency, reduce energy consumption and greenhouse gas emissions developed within the context of built environment, land use planning, growth planning, and generation and transmission infrastructure. The program supports municipalities’ efforts to better understand their local energy needs, identify opportunities for energy efficiency and clean energy, and develop plans to meet their goals.

The Energy Reporting and Conservation and Demand Management Plans regulation (O. Reg. 397/11) requires that municipalities and other public sector organizations, such as universities, school boards and hospitals, report their annual energy consumption and develop and implement five-year conservation and demand management plans that outline goals and objectives for reducing energy use. Municipalities can use their conservation plans to reduce the energy they use at their facilities and free up resources for their core activities. The regulation also requires BPS organizations to annually report to the Ministry on their energy use and greenhouse gas emissions and publish the reports on their websites.

The Ontario government is encouraging the development of renewable energy through an array of incentives, such as entering into fixed-term supply contracts through procurement programs administered by the Independent Electricity System Operator, technology and project development funds, and policies that support the use of Crown land and resources.

The microFIT program has been successful in distributing generation across the grid, which can help offset local power demand. The Ministry of Energy announced in its 2013 Long-Term Energy Plan that it will examine the potential for the microFIT program to evolve from a generation purchasing program to a net metering program. Net metering—which allows customers to send surplus electricity generated from renewable energy to their local distribution system for a credit towards their electricity bill— could help match generation with local demand and reduce local load and related infrastructure needs.

Benefits of Alternative and Renewable Energy Sources

  • A cleaner and more sustainable source of energy that reduces the amount of greenhouse gas emissions and increases resiliency to climate change impacts – while managing energy costs.
  • An increase in training and employment opportunities, alternative sources of income and investment in Ontario.
  • An opportunity for local community projects that are rooted in the community.
  • An energy source unaffected by global price fluctuations.
  • Opportunity to take advantage of global demand for renewable and alternative energy technologies and services.
  • An improved quality of life for all citizens of Ontario.

Taking Action

  • Conservation and Demand Management Plans can be used to demonstrate a municipality’s commitment to energy conservation.
  • Consider renewable and alternative energy options when developing Municipal Energy Plans.
  • Incorporate official plan policies that support co-generation, district energy plans and shared energy services.
  • Explore opportunities for energy conservation and generation.
  • Establish a community improvement plan for alternative energy systems and renewable energy systems, if eligible.

PPS 2014 Definitions

Alternative energy system: means a system that uses sources of energy or energy conversion processes to produce power, heat and/or cooling that significantly reduces the amount of harmful emissions to the environment (air, earth and water) when compared to conventional energy systems.

Renewable energy source: means an energy source that is renewed by natural processes and includes wind, water, biomass, biogas, biofuel, solar energy, geothermal energy and tidal forces.

Renewable energy system: means a system that generates electricity, heat and/or cooling from a renewable energy source.

For more information, contact:

Ministry of Municipal Affairs and Housing

Provincial Planning Policy Branch
(416) 585-6014

Municipal Services Offices:

Central (Toronto)
(416) 585-6226 or 1-800-668-0230

West (London)
(519) 873-4020 or 1-800-265-4736

East (Kingston)
(613) 545-2100 or 1-800-267-9438

North (Sudbury)
(705) 564-0120 or 1-800-461-1193

North (Thunder Bay)
(807) 475-1651 or 1-800-465-5027

This Infosheet intends to assist participants in the land use planning process to understand the Provincial Policy Statement, 2014. As this Infosheet deals in summarized fashion with complex matters and reflects legislation, policies and practices that are subject to change, it should not be relied upon as a substitute for specialized legal or professional advice in connection with any particular matter. This Infosheet should not be construed as legal advice and the user is solely responsible for any use or the application of this Infosheet. Although this Infosheet has been carefully prepared, the Ministry does not accept any legal responsibility for the contents of this Infosheet or for any consequences, including direct or indirect liability, arising from its use.

Produced by the Ministry of Energy, Strategic Policy and Analytics Branch

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