CEESP Integration Issues

1
CEESPIntegration Issues

• Val Jensen

2
Requirements of the Decision

• Plan should present a strategy to integrate
  measures programs policies and actors at all
  levels of EE program design and delivery
• Address full range of comprehensive demand-side
  options
• Present a systems approach that encompasses all
  measures programs activities including RD
  CS hardware controls and behavior
• Include a process to collaboratively engage
  expertise
• Utilities should review experience from PGE
  Market Integrated DSM initiative and SCE and
  Sempra Sustainable Communities initiative.

3
Requirements of the Decision

• Decision takes integration a step further with
  its focus on end-to-end strategies
• The Strategic Plan will connect the dots across
  a range of strategies that can apply over the
  product lifecycle of a technology or energy
  management practice. Examples of strategies that
  should be carefully integrated with findings and
  results from one leading to action on the next
  include
• PIER RD activities and findings
• Emerging technologies support
• Utility programs focused on promotion technical
  assistance and incentives
• Market transformation as products services and
  practices become mainstream business as usual
  without the need for financial incentives
• Building codes and equipment minimum standards.
• In other words Decision wants both integrated
  delivery of EE DG and DR and institutionalizatio
  n of an integrated approach to transformation of
  markets (transformational integration).

4
Approach

• Rather than running a separate integration track
  decided to focus on integration issues and
  strategies emerging from the sectors
• We reviewed the material produced by the sector
  teams to identify common and cross-cutting
  elements.
• We expect that within each sector there will be
  brief discussion of integration as it pertains to
  specific sector strategies and that in some
  cases sectors might identify specific
  integration strategies.
• Objective here is to summarize the cross-cutting
  themes and suggest possible cross-cutting
  strategies.
• Because it appears that several sectors have
  identified similar issues and broad strategies
  related to integration a decision will need to
  be made as to whether each sector outlines
  strategies or whether the cross-cutting section
  of the plan includes strategies.
• Focus on issues related to integrated delivery at
  this point as this is necessary to support sector
  strategies
• Need to recognize the importance of the more
  complex integrated view of MT the Decision calls
  for but acknowledge that this transformational
  integration requires a discussion that is just
  beginning.
• We began by trying to outline several questions
  designed to address what we initial saw as the
  primary types of integration.

5
Guidance to Sectors

• For each sectoral strategy we asked conveners to
  provide two pieces of information
• Does the strategy require an integrated approach
  to EE DR and RE
• If the strategy entails elements of EE DR and
  RE how can they be effectively integrated
  technically and in terms of presentation to the
  market
• Also provided three sets of questions to
  conveners intended to tease out information
  about
• Technology Integration physically integrating
  and deploying EE DR and RE technologies Does a
  strategy require an integrated solution What
  does this solution look like What pieces are
  missing Who will supply these pieces Is there a
  role for CS
• Marketing Education and Outreach Integration
  How an integrated bundle of technologies is
  presented to the market What is the value
  proposition for an integrated package How is
  that proposition best conveyed What types of
  MEO are required to build a market
• Institutional Integration How an integrated
  solution is delivered What are the barriers
  within utilities to an integrated offering Are
  there policy barriers to an integrated offering
  Does delivery of an integrated technology bundle
  require new delivery installation/service
  infrastructure

6
Stakeholder Views

• As of 12/30 substantial information related to
  integration only available from the Residential
  and Commercial workshops
• Much less from Ag and Ind
• However all working groups identified at least
  some issues related to technology integration.
• Integrated solutions are critical to Res and Com
  strategies
• Key issues are common
• Institutional silos are a barrier to integrated
  delivery (partly a function of policy)
• Integration built on foundation of AMI
• No consensus as to what the actual architecture
  of integration looks like or who will actually
  deliver integrated solutions to customers

7
Stakeholder Views - Ag
Ag (document labeled Agricultural Sector Draft
3-For Discussion Purposes Only 12-20-07)

• Flagged the large potential for on-site
  generation using ag wastes particularly high in
  the dairy sector.
• Although not specifically referenced in
  connection with irrigation there might be
  opportunities to use distributed/renewable energy
  for irrigation pumping
• Proposed strategies including request for best
  practices case studies related to integration.

8
Stakeholder Views-Commercial
All information pulled from Vision and Key
Strategic Actions for the Commercial Sector
version 5 December 17 2007)

• Need to agree on a common metric that combines
  EE on-site renewables and time-of-use energy
  management (p.3)
• Strategy Mandate AMI for all commercial
  customers necessary foundation for integrated
  operation of EE DG and DR (p.6)
• Implementation of diagnostic EMS controls that
  allow integrated building control
• Strategy By 2015 utilities offer integrated
  program delivery including one-stop shop (note
  inconsistency page 10 suggests the date is
  2015 while page 11 suggests this is a 2010
  target)
• Responds to differing needs of different
  buildings
• Comprehensive
• Rewards measured performance improvements
• CPUC to direct an analysis in 2011 of costs and
  benefits of integrated program delivery (Note
  that this is inconsistent with similar
  recommendation on page 11 for this to happen in
  2009)
• CPUC in 2009 will review necessary regulatory
  changes
• Issue Allow utilities to count savings from DR
  and DG
• Issue Drive towards integration needs to
  emphasize targeting of deep and comprehensive
  efficiency efforts
• Service/technology providers need to develop a
  business model that sells an integrated product
  could include manufacturers aggregators and
  contractors.

9
Stakeholder Views-Commercial

• What does integrated delivery look like (11/19
  meeting minutes)
• One-stop shop based on common web portal with
  easy access to all info
• Use of bounty hunters
• Need to find universal and transparent funding
  source for the one-stop shop idea
• Need a rational pricing structure to support
  integrated delivery needs a TOU component
• Must ensure that all externalities are fully
  accounted for to enable proper valuation of
  integrated package
• Suggestion of a performance-based pricing system
  that provides larger elec price discounts for
  more integrated solutions
• Notes from Working Group 6 (Integration)
• Need an aggregator or broker to accurately
  represent EEDR and DG to customers
• Benchmarking needs to be able to incorporate
  integration
• All customers need to have AMI

10
Stakeholder Views - Residential
Except where noted all info from Draft
Residential Section December 26 2007 Note
that Integration Strategy not completed as of
12/30)

• Existing Whole-House
• End-to-end vision (3.1.2)
• Infrastructure to support quality HVAC installs
  and hardware standards that allow communication
  with AMI and DR
• Fully integrated DSM services (EE DG DR and
  AMI) in one cohesive package that captures
  synergies and reduces cost of service (12/28
  version links this to broader green objectives
  such as water IAQ etc)
• Use intelligrid AMI and smart devices to achieve
  load following homes (3.1.3.3)
• Challenges to technology integration (3.1.5.2)
• Institutional barriers within utilities will need
  to be broken down
• Need holistic approach with consistent funding
  source and set of goals
• Need an analysis tool that integrates EE/DR/DG
  into a layered action plan for decision making
  (12/28 edits)
• DSM Integration Requirements (3.1.10)
• All residential strategies require full
  integration of demand-side management services
• Need to provide one-stop shop to minimize hassle
  for consumers and contractors
• RDD to focus on integrated strategies and tech
  solutions
• Need visual display tools and smart devices
• Action Items (3.1.12.1)
• One-stop shop
• Coordinate with AMI roll-out
• Break down silos within utilities to develop
  common energy and demand savings goals and
  funding pools
• Develop visual display and remote access tools to
  enable real time energy management

11
Stakeholder Views - Residential

• Plug Loads (3.2.5.2)
• Primary opportunity and challenge is with
  AMI/Home Area Networks and integration with DR
  and Solar Initiatives
• New Construction (generally tracks Existing Homes
  w/regard to integrated DSM)
• Goals
• Short-term 25 of new homes have DG by 2011
• Mid-term 50 of new homes have DG by
  Integrated DSM solutions with no regulatory or
  institutional barriers Avoided costs methods
  that captures everything Cities have streamlined
  permit process when builders use tiered standards
• Long-term 85 of new homes have DG by 2020
• Integration Strategy (3.8 filled in with
  revised version on 12/28)
• Pulls together many of the elements noted above
  into a separate strategy
• Includes recommendation for integration at local
  level through time-of-sale ordinances
• Envisions integration with water solid waste
  IAQ

12
Stakeholder Views - Residential

• From Integration work group notes
• Several dimensions of integration discussed
• Integration of EE DR AMI Solar Water and GHG
  reductions
• Integration in the various stages of the process
  (program design management marketing sales
  construction evaluation and reporting
• Coordination of program types (MEO incentive
  finance tech assistance etc)
• From Dec 11 workshop notes
• Given the way IOUs are set up to account for
  separate pools of funds it is difficult to
  integrate EE DR and DG into one-stop shop also
  issues in setting up 3rd party programs to
  deliver integrated solutions
• PGE has begun/has planned a pilot for the coming
  year

13
Stakeholder Views-Industrial

• Less direct consideration of technology
  integration reflected in industrial summary
• Integration viewed in terms of integrated
  approach to resource management and program
  delivery
• Industry is managing energy use GHG emissions
  reduction water use waste disposal and air
  quality as a part of a comprehensive approach to
  effective resource utilization
• Industry has coordinated access to energy
  efficiency and regulatory assistance via a
  statewide integrated program that supports the
  states energy and environmental goals
• Develop and launch seamless centralized
  statewide access for California industry to
  technical assistance to support more effective
  utilization of energy resources. Conduct pilot
  demonstration projects with 2-3 industrial
  sectors to test new program concepts

Source 2009-2020 California Statewide Energy
Efficiency Strategic Plan Recommendations for
Industry (ppt)
14
Stakeholders views of what integration means
varied widely

• Policy e.g. integrating EE climate smart
  growth policies water conservation green
  building Integrating technology development with
  CS Integrating incentives and pricing policies
• Technology EE DR RE AMI smart
  appliances/devices information displays
• Locational Integrating policies and programs
  across jurisdictions integrating solutions
  across fleets of buildings owned by one entity
• Institutional Goes beyond utility institutional
  issues to the question of whether local
  governments might be a more appropriate
  integrator and whether there is a need for new
  market entities offering integrated solutions
• MEO The need to integrate/synchronize multiple
  messages and brands some of which themselves
  promote integrated solutions and some of which
  are focused on EE or RE or DR

Primary sources DSM Integration Sector Input
from Conveners Accenture 12/14/07 Vision
and Key Strategic Actions for the Commercial
Sector version 5 December 17 2007
Residential Meeting Minutes Meeting Date
December 11 2007 2009-2020 California
Statewide Energy Efficiency Strategic Plan
Residential Sector December 26 2007 Draft.
15
The Need to Constrain Integration

• No disagreement that integration is
  important/essential
• Attempting to completely manifest the Decisions
  integration vision in this plan is beyond reach
  given time constraints the diversity of views
  and the host of other issues to be addressed
• What is do-able
• Propose a working definition of integration that
  incorporates both the integration of technologies
  as part of comprehensive solutions and
  transformational integration that links
  policies and programs over a technologys
  lifecycle
• Draw the path to transformational integration
  through a strategy to first test integrated
  delivery and then to create a forum for ongoing
  exploration of the broader issues of integrating
  across technologies and along the product
  lifecycle.

16
Input Tagged to the Outline

• Followings offer suggestions tagged to
  specific sections of the outline

17
Guiding Principles (Taken from the IOU-CPUC draft
TOC)

• Market Transformation including need to manage
  new and emerging technologies integration of
  policy programs and other initiatives
• The transformation envisioned by the Decision is
  one requiring a shift of focus from transforming
  markets for technologies to transforming policy
  programs and behavior to focus on integrated
  energy management.
• However the metric against which the
  transformation is to be measured in not yet
  defined. Options might include
• Minimize consumer net (from the grid) energy
  consumption (Implied by the BBES) Commercial
  group seems to suggest similar metric for
  existing commercial bldgs Residential existing
  goal appears focused on gross reduction.
• Minimize (or reduce to specific levels)
  climate/environmental footprint
• Include embodied energy/carbon
• Minimize net economic cost of electricity
  natural gas energy service considering
  environmental externalities
• Therefore the right integration will be a
  function of the policy target
• This is an issue that the Plan needs to address
  at the top of the integration agenda.
  Specifically flagged in Vision and Key Strategic
  Actions for the Commercial Sector version 5 on
  page 3 bullet (1).

18
Guiding Principles (Taken from the IOU-CPUC draft
TOC)

• Integration Innovation Collaboration
• As MT is a dynamic process so must be the
  process of integrating technologies policies and
  institutions to support MT
• Unlikely to reach ambitious goals set in the plan
  without effective technology integration and
  technology advancement
• One key element of integration is building a more
  effective institutionalized link between
  technology innovation and policy programmatic
  strategies
• Innovation/technology development should be
  guided in part by the gaps in the technology
  needed to support the MT.
• Example of the link between development of smart
  thermostats and Title 24 needs.
• Given the constituency for integration effective
  strategies can only emerge from continued
  collaboration across all dimensions.

19
Strategic Context - What shapes the consideration
of strategy

• Suggest the following be raised in this section
• Very aggressive targets not achievable without
  combining EE DG and DR
• Policy and program competition that has arisen
  as individual goals were established and pursued
  for EE DG and DR. Has created some institutional
  barriers to integrated delivery
• Regulatory framework that the plan is being
  developed within is geared toward EE and
  widget-based savings. However an effective
  integrated strategy will likely require
  investment in technologies and practices that do
  not directly satisfy EE goals.
• As a related point the success of the
  integration of EE DG and DR requires new metrics
  such a net energy reduction or net CO2
  reduction.
• There may be a need to for new or revised
  standards and tools for economic analysis of an
  integrated package of options. Is the current
  definition of cost-effectiveness appropriate when
  considering long-term investments Can current
  methods and tools properly account for the
  comparative economics of EE DG and DR
• Should cost-effectiveness be defined by the cost
  of renewable energy (see Vision and Key
  Strategic Actions for the Commercial Sector
  version 5 December 17 page 1)
• There will be a need to harmonize the integration
  policies and programs adopted by the utilities
  and CPUC with CARB AB32 policies particularly
  with respect to DG

20
Cross-Cutting Strategies Demand-Side Integration

• Sectors are likely to identify either a
  stand-alone integration or integration
  requirements as part of broader strategies
• These strategies are likely to have a number of
  common elements need to decide if the
  strategies should be raised within sectors or as
  cross-cutting strategies
• Followings suggest what a cross-cutting
  section might look like with the assumption that
  the integration strategy is presented here
• First thing that this section would need to do is
  Define/classify integration
• Followingis a rough cut at how to think
  about the integration issue two basic
  dimensions
• Technology integration
• Transformational integration integrating the
  policies and programs along the life-cycle of a
  technology

21
The Dimensions of Integration
Integration of technologies
Integration of policies and programs over
technology lifecycle Transformational
Integration
22
The Dimensions of Integration

• The Decision envisions the top-right quadrant
• Can approach that directly or by traveling
  through top-left or bottom-right
• Attempt to outline strategies that will lead to
  the top-right along a path that begins with the
  capability to deliver an integrated package of
  technologies
• Acknowledge that the parallel work going on with
  emerging tech CS etc suggests simultaneous
  approach through the bottom-right.

See Draft Residential Section December 26 2007
section 1.2 3.1.2 3.3.2 and Vision and Key
Strategic Actions for the Commercial Sector
version 5 page 10 Offer Integrated Program
Delivery
23
Organizing Integration
Review of workshop notes and discussion suggests
that integration strategies have two components

• Elements requiring integration
• Policies Multiple and inconsistent policies for
  EE DG DR
• Programs Overlapping and inconsistent program
  offerings EE DR and DG compete to some extent
• Technologies EE DG DR AMI Smart devices etc
• Messages EE DG DR climate cost etc
• Product stages RD through commercialization
• Delivery channels Utility local market 3rd
  party
• Market actors Manufacturers distributors
  retailers utilities installers financiers
  brokers builders etc
• Incentives/disincentives

• Pathways to integration
• Policies Establish the framework for
  integration. Requires alignment of objectives and
  rules across multiple state regional and local
  jurisdictions
• Programs Create the vehicles for taking
  integrated offerings to the market. Requires
  alignment of multiple offerings by multiple
  entities
• Delivery Actual delivery of an integrated
  solution. Requires consistency across utilities
  local govts 3rd parties and market providers.
  Requires clear value proposition. May require new
  market actors/ organizations.

A strategy will address what needs to be
integrated and how/where that integration
will occur.
24
Elements of Proposed Strategy

• Elements of integration Technologies policies
  programs delivery channels funding and
  incentives
• Pathways to integration Requires policy changes
  new program concepts and new delivery methods
• Vision Energy efficiency demand response and
  distributed generation technologies are offered
  as elements of an integrated solution supporting
  sector net energy reduction goals. A robust
  infrastructure has developed to support the
  delivery and maintenance of integrated solutions
• Goals
• By 2011 utilities have tested a variety of
  integration models and identified the barriers
  opportunities and cost-effectiveness of each.
• Each model should be designed to achieve the
  maximum cost-effective reduction in
  building/facility net energy use
• By 2015 (Draw from individual sectors e.g. x of
  new homes/buildings and y of existing
  homes/buildings)
• By 2020..

Important that net energy reduction does not
result in an increase in onsite energy use due to
DG strive for net reduction in CO2
25
Elements of Proposed Strategy

• Utilities design/administer multiple pilots
  designed to test different models for integrating
  delivery of EE DG and DR. The pilots should
  incorporate
• A bundled offering that includes elements of
  energy efficiency distributed generation and
  demand response on a platform that includes best
  available AMI technology and architecture.
• Utility 3rd party and local government delivery
  (different pilots test different models). Pilots
  based around local delivery should incorporate
  elements related to local codes enforcement and
  time-of-sale ordinances.
• Delivery to the following market segments May
  be separate pilots
• Commercial NC
• Commercial existing
• Residential NC
• Residential existing
• Low income
• Industrial
• Ag
• Integrated messaging

26
Elements of Proposed Strategy

• The pilots should identify and assess
• Internal organizational issues related to
  integrated delivery including cost allocation and
  accounting and project management
• Policy issues that constrain delivery of an
  integrated offering
• Technical issues associated with effectively and
  efficiently integrating technologies within a
  building
• Technology gaps
• Issues related to the market infrastructure for
  delivering a bundled offering (e.g. lack of
  coordination among involved trades lack of
  post-installation support etc)
• The reductions in net energy consumed by the
  buildings participating in the pilots
• The costs associated with the net energy
  reductions
• Consumer attitudes related to the bundled
  offering
• The availability and appropriateness of
  methodologies/analytical tools for determining
  the optimal mix of AMI EE DG and DR

27
Elements of Proposed Strategy

• Requirements
• Knowledge/information/research
• The purpose of the pilots is to build a stronger
  knowledge base to inform the structure of
  post-2011 integrated offerings.
• Pilots should be designed in-part to test
  alternative architectures for integrating/optimizi
  ng technologies in concert with AMI
• Technology
• Basic technologies appear to be in-place
  although will continue to evolve. What appears to
  be missing is a proven architecture for actual
  integration of operation elements of smart
  metering smart devices and control logic to
  optimize net energy consumption.
• Education and training
• Requirements will become more clear as pilot
  results become available and a more clear
  definition of the dominant integration
  configuration becomes more clear
• Policy
• CPUC either allows EE funds to be used to support
  the pilots or loosens restrictions on co-mingling
  of EE DG and DR funds.
• CPUC may need to consider alternative risk/reward
  structure for integrated offerings. If the goal
  of integration is to promote the maximum
  cost-effective reduction in net energy net
  benefits will trend toward zero reducing the
  utilities incentive to promote.
• CPUC allows utilities to propose counting rules
  that enable reductions in net energy from DG and
  EE savings prompted by DR to be counted toward EE
  targets.
• CPUC may need to suspend existing CSI metering
  DG and DR rules to enable the pilots current
  policy silos possibly act as constraints on
  program design and delivery

28
Elements of Proposed Strategy

• Requirements
• Marketing Education and Outreach
• Test value proposition as part of the pilots
• Test alternative marketing channels
• Develop customer education packages for operation
  of integrated systems
• Financing requirements
• Require CPUC permission to use EE funds or blend
  EE DG RE advanced metering funds. Allow
  utilities latitude to test a variety of
  alternative incentive and financing schemes.
• Low-Income special considerations
• At least one pilot would target low income
  customers
• Action Plan
• Lead and other key players for each action
• Utilities lead with pilot identification and
  execution
• CPUC lead for consideration of policy changes and
  creating initial policy flexibility for the pilots

29
Elements of Proposed Strategy

• Action Plan
• Utilities jointly decide which will conduct which
  pilots (existing PGE IDSM and SCE and Sempra
  Sustainable Communities might serve as one or
  more of the models being piloted)
• Could include expansion of InDEE and IDEEA to
  include integrated offerings
• In 2009-2011 plans utilities would identify the
  pilots they propose to run
• Pilot design should be completed with pilot
  launch in 2009
• In approving utility plans CPUC will need to
  address the policy requirements
• Pilots should incorporate on-going real-time EMV
• 2012-2014 plans would include proposals for
  larger scale programs based on available pilot
  results
• Utilities and stakeholders should form
  integration collaborative to review progress of
  the pilots and continue discussions regarding the
  broader issues of transformational integration
  with updates provided as part of whatever process
  is used for the continuation of the strategic
  planning process.