Energy Efficiency: Realistic, Attainable and Profitable Projects

5 July, 2018 | Blog

DANIEL CÔTÉ, P.Eng.

Mechanical Engineer

Improving your company’s energy efficiency has a lot of advantages. Reducing energy consumption cuts energy costs, heightens financial competitiveness and shrinks your business’s environmental footprint. Studies also show that industrial processes-even high-performing ones-can often be made up to 20% more efficient.(1)

What kind of projects are we talking about?

These types of projects are the ones we see most often in the energy efficiency sector:

  • Performance improvement
  • Process integration
  • Energy management
  • Demonstration of innovative technologies
  • Reduction in greenhouse gas (GHG) emissions
  • Renewable energy generation

Although these projects can provide numerous lasting benefits, it can be hard for companies with tight budgets and cash flows to undertake them. That’s why you should know about the available financial incentives and alternative financing programs to help with every step of these projects.

Who offers these incentives?

The following institutions offer numerous programs:

  • Government of Canada (2)
  • ecoENERGY Efficiency for Industry
  • Tax Savings (Class 43.1, 43.2 for accelerated capital cost allowance)
  • Provincial governments
  • Public utilities (gas, electricity)

What do the incentives cover?

Almost every step of an energy efficiency project can benefit from financial incentives:

  • Pre-feasibility study
  • Research and development (for innovation projects)
  • Equipment purchases
  • Project execution (construction and commissioning)
  • Energy audits and optimization projects

Financing under the various programs can cover up to 75% of eligible costs.

Projects with a positive impact on cash flow

When no budget is available but the potential savings are clear, certain financial and public institutions offer to finance 100% of these innovation and energy efficiency projects, including preliminary studies. These loans offer a moratorium on repayment of the principal and can even be repaid with the savings generated by the project.

The carbon market: How does it affect your operations?

Many provinces in Canada have set objectives to reduce greenhouse gas (GHG) emissions. Given industry’s extensive use of fossil fuels, energy efficiency projects often dramatically reduce GHG emissions.

Québec and, more recently, Ontario have adopted a cap-and-trade system for GHG emissions allowances, commonly referred to as the carbon market.(3) This allows companies to buy and sell the GHG emissions reduction credits for energy efficiency projects.

In 2015, the number of free credits will decline by 1% to 2% a year. Additionally, the cost of emissions credits is expected to increase by 5% a year until 2020. This will make GHG emissions reduction projects more attractive financially and penalize less efficient companies.

Other provinces like Alberta and Saskatchewan tax GHG emissions or impose fines when emissions exceed allowable thresholds.

In short, being environmentally responsible and reducing GHG emissions can be profitable!

Remaining competitive in your market

Under the ISO 50001 Energy Management Systems (EnMS) Standard, industries that implement and maintain an EnMS typically save 10% to 20% on energy costs in the first five years.(4) Natural Resources Canada provides financial assistance for up to 50% of eligible costs, to a maximum of $40,000, for energy management projects like implementing the ISO 50001 standard.

Conclusion

Everyone wins with energy efficiency projects!

  • Benefit from many economic incentive and financing programs
  • Reduce operating costs with long-term savings
  • Remain competitive
  • Reduce the environmental footprint of operations
  • Maintain positive image as a leading corporate citizen

To learn more about energy efficiency and discover how your company can stand out, contact our experts.  BBA can assist your company with energy efficiency projects, as well as with identification and completion of available financial incentive grants and financing programs.

References:

This content is for general information purposes only. All rights reserved ©BBA

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