The Buzz About Canadian Electricity

August 17, 2023

As electricity costs rise, energy efficiency for electric motor is becoming increasingly relevant. With June 2023’s DOE announcement, how can Canadian businesses prepare and what exactly do we need to do?

In this article, we'll cover:

Why Are Electricity Costs Rising?

Some say it’s the clean energy transition, and that’s certainly part of the picture. But the International Energy Agency(1) theorizes the increase is in part due to the rapid global economic recovery, post COVID-19; combined with weaker than expected increase in supply. Demand increases, supply can’t keep up, and as a result prices increase.

With investments in fossil fuels declining in recent years, governments are playing catch up to scale up clean energy sources, impacting the supply of energy for Canadians. One of the key findings of Canada’s Energy Future 2023 report(2), states:

We don’t have an infinite supply of energy and because of this, governments are expanding energy standards to make more efficient use of the energy we do have.

What does that have to do with motors in Canada? Motor driven systems use 39% of all electrical energy consumed in Canada, valued at an estimated $14 billion annually(3). It’s clear that a 1-3% improvement in motor efficiency will have major financial implications for Canadian businesses and consumers – saving potentially hundreds of millions in energy costs annually.

Efficiency Standards Explained

As of 2023, 85% of the World GDP regulates minimum motor efficiency (4), including the United States, Canada, China, India, the European Union, and many more regions. These energy efficiency regulations will have direct and indirect impacts on Canadian businesses in the coming decades.

For context, there are two efficiency standards used throughout the world.

  • NEMA MG 1 which defines efficiency standards for North America
  • International Electrotechnical Commission (IEC) defines efficiency standards for the rest of the world

Here’s how they compare, listed from lowest to highest efficiency:

NEMAIEC Equivielent
Standard EfficiencyIE1
High EfficiencyIE2
Premium EfficiencyIE3
Super Premium EfficiencyIE4
No Standards\IE5

The History of Motor Efficiency in North America

Changes are coming for Canadian motor efficiency standards, but that’s nothing new. Here’s a history of the efficiency regulation changes that have impacted Canadians in the last four decades. It’s been over 10 years since any significant changes took effect for Canadian efficiency standards.

Canada’s Energy Efficiency Regulations

To eliminate inefficient motors from the market, Canada released the Energy Efficiency Regulations. These performance standards provide Canadian businesses with guidelines on motor efficiency, informed by NEMA MG-1. These regulations apply to three-phase induction motors between 1 horsepower and 500 horsepower (and several other criteria). Generally speaking, these performance standards apply to most motors that will be used in manufacturing and industrial applications. Business owners are required to comply with these energy standards. To confirm your motor complies, Natual Resources Canada offers a motor look up tool, here.

The specific efficiency rating for your motor can be found in NEMA MG 1 Table 12-12. For example, for a 2 horsepower, 2 pole motor to be premium efficient, it must have a nominal efficiency of 85.5%. Whereas, a 75 horsepower, 2 pole motor requires a nominal efficiency of 93.6% to be considered premium efficient. Typically, the higher the horsepower of the motor, the higher efficiency required. In other words, the more power the motor consumes, the more efficient the government wants the motor to be with that power.

Department of Energy June 2023 Updates

The DOE Published Energy Conservation Standards Direct Final Rule on June 1, 2023. This establishes energy conservation standards for motors 1-750 horsepower as outlined in the below charts. The biggest changes are 1) the increased efficiency requirements of 100-250 HP motors and 2) the new efficiency requirements for 500 HP - 750 HP motors. Although the DOE is a United States entity, this change is sure to impact Canadians within the next decade.

Motor Size (Non-Air Over)Current Efficiency RatingJune 2027 Required Efficiency Rating
Less than 100 HPPremium / IE3Premium / IE3 (no change)
100 - 250 HPPremium / IE3Super Premium / IE4
Over 250 – 500 HPPremium / IE3Premium / IE3 (no change)
501 – 750 HPNonePremium / IE3


What is Nominal Efficiency in Motors

Energy losses in the form of heat mean that no motor is 100% efficient - but some motors come pretty close. You’ll find the efficiency of your motor by dividing the power output by the power input.

Most motors will indicate nominal efficiency on the nameplate. In order to test a motors’ efficiency, a standard test called IEEE method B is used. The motor is tested under full load and the power is measured using a dynamometer.

But the nominal efficiency stated on your motor is not the exact efficiency of that particular motor. Batches of identical motors are tested, and the average efficiency is then called the nominal efficiency. This means that individual motor efficiency may vary. The allowable variance for a particular motor is 20% from the nominal efficiency. That's a huge range! This means that a motor with a nominal efficiency rating of 91.0% could be only 71% efficient – consuming more power than intended. Motor manufacturers may make a minimum guarantee, so keep an eye out for this as it could save you thousands of dollars in energy costs.

Impacts for Canadian Businesses

So, what does this all mean for Canadian businesses in 2023? The Department of Energy is a United States entity; however, Canada will more than likely follow suit and make the same requirements of Canadian businesses. Leading up to June 2027, motor manufacturers will be updating their 100-250 HP motors from NEMA premium efficient (IE3) to NEMA super premium efficient (IE4). New motors between 500-750 horsepower will have a minimum nominal efficiency equivalent to NEMA Premium Efficient (IE3).

It’s difficult to find super-premium efficient (IE4) motors today as most manufacturers are not producing these yet. But they are available through custom order. We expect super-premium efficient motors will be increasingly available in the next few years.

Regardless of the government requirements, it’s advantageous for Canadian businesses to start switching to premium efficient (IE3) motors, as plenty of high efficiency (IE2) motors are still in rotation. The IE3 models are typically more expensive than the lesser IE2 motors. However, you’ll likely make that money back in the first year of operating a more efficient motor.

Motor Lifecycle Costs

Based on this example, a 100-horsepower motor that is 3% more efficient could save a business $70,000 over 20 years in energy savings – this works out to $3,000 energy cost savings per year per motor. The energy savings alone will make up for the difference in purchase price within the first year of motor operation (5).

Use our efficiency calculator below to calculate your annual cost savings by switching to a super premium efficient motor.


(1) IEA (2021), What is behind soaring energy prices and what happens next?, IEA, Paris

(2) Canada Energy Regulator (2023), Canada’s Energy Future 2023

(3) Government of Canada (2016), CanMOST – Canadian Motor Selection Tool

(4) EASA (2023), EASA Conference Presentation

(5) Baldor, Super-E Motors,

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