Role of Energy Efficiency in Addressing Electric System Reliability and Other Energy Problems

1
Role of Energy Efficiency in Addressing Electric
System Reliability and Other Energy Problems

• Steven Nadel
• Executive Director
• American Council for an Energy-Efficient Economy
• Washington, DC

2
Reliability Problems Face Multiple Regions
3
Past DSM Cutbacks Have Contributed to the Problem
Projected vs. Actual Available Peak Reductions
for 1998
Source ACEEE analysis of EIA reports and Form
861 data.
4
Capacity Margins Continue to Decline
Source NERC Reliability Assessment, 1999-2008.
5
Options for Closing the Demand-Supply Gap

• Supply Side
• New power plants (particularly peakers)
• New transmission lines
• Improved system maintenance

• Demand Side
• Load management
• Traditional (radio control, I-rates)
• Real-time pricing or credits
• Energy-efficiency programs
• Resource acquisition
• Market transformation

6
Potential for Cost-Effective Electricity Savings
in the Mid-Atlantic States
Note Savings analysis based on implementation of
80 of cost-effective opportunities by
2010. Source ACEEE, 1997, Energy Efficiency and
Economic Development in NY, NJ, PA.
7
Allocation of Peak Demand by End-Use
Source Xenergy study for N.J. utilities.
8
Program Example Residential Cooling Systems

• Encourage purchase of high-efficiency
  air-conditioners and heat pumps in new
  construction and when existing systems are
  replaced
• - National savings potential 5,000 MW annually
• - Examples NJ, Long Island
• Early replacement of old inefficient a/c (e.g.
  CA)
• Training and incentives on good installation and
  maintenance practices
• - National savings potential 20,000 MW
• - Examples NJ for new units, CA for repair of
  old

9
Program Example Commissioning of Existing
Commercial Buildings

• Commissioning - 5-15 energy savings, 1-3 year
  simple paybacks
• Also substantial peak savings (national
  potential 22,000 MW)
• Program needs to address
• Service provider training and technical support
• Educating building owners/managers about
  opportunity
• Educating maintenance staff on how to maintain
  savings
• Model programs NYSERDA, Portland General
  Electric

10
Program Example Residential CFLs

• CFLs reduce energy use 70 relative to
  incandescent bulbs
• Prices have been dropping and sizes shrinking
• Savings particularly large in evening hours
• Program approach
• Discount coupons, redeemable in local stores
  (e.g. NW, PEPCo)
• Complement with public education and point of
  purchase materials

11
Summary of Savings Potential from Peak Reduction
Programs

• These savings are approximately 40 of expected
  demand growth over the next decade

12
Options for State Policy Makers

• Adopt and implement public benefit fund to
  support energy efficiency programs
• Adopt up-to-date building codes
• Adopt state tax credits for efficient equipment
  and buildings
• Encourage use of combined heat power (CHP or
  cogeneration) systems

13
Options for State Policy Makers (continued)

• Support/adopt minimum efficiency standards (e.g.
  CA)
• Finance and implement efficiency upgrades to
  state and municipal facilities (e.g TX)
• Promote Energy Star equipment and buildings

14
Status of State Energy Efficiency Public Benefit
Programs
15
State Energy Efficiency Public Benefit Funds
16
Residential Building Code Status
17
Commercial Building Code Status
18
State Tax Incentive Options

• Waive sales tax for Energy Star equipment (e.g.
  MD OR has larger incentives)
• Green buildings tax credit for commercial
  buildings (e.g. NY)
• Credits for efficient new homes
• Titling or other tax waivers/credits for hybrid
  and fuel cell vehicles (e.g. MD)

19
Encouraging CHP

• Adopt favorable CHP and distributed generation
  interconnect and access rules (e.g., Texas PUC)
• Establish interagency team to facilitate siting
  and permitting (e.g., NY and CA)
• Cost-share CHP feasibility studies (e.g. NY)
• Review state facilities for CHP opportunities
  (e.g. NY)

20
Equipment Efficiency Standards

• Federal Standards
• Retain new residential standards -- a/c, water
  heaters and clothes washers
• Develop new standards -- commercial a/c,
  transformers

• State Standards
• Stronger a/c standards
• Standards on products not federally regulated --
  torchierres, exit signs, transformers
  commercial refrigeration

21
Texas Loan Star Program

• Capital retrofit program for building energy
  efficiency
• 95 million revolving loan fund
• Over 10 years,133 million loaned for 118
  projects savings to date 83 million
• Average 22 energy savings
• Continuous commissioning a key component of the
  program

22
The ENERGY STAR Label

• Residential
• Consumer Electronics, Dishwashers, Clothes
  washers, Lighting fixtures, CFLs, HVAC,
  Refrigerators, Windows, Room A/C, Dehumidifiers,
  Set-top boxes

23
The ENERGY STAR Label

• Commercial
• Office equipment, Exit signs, Roofing products,
  Transformers, Traffic signals, Water coolers
• New Products
• Telephony, Ceiling and ventilation fans,
  industrial motors, small commercial HVAC

24
Energy Star Building Labeling Program

• Existing Programs
• Offices
• Schools

• In Beta Test
• Groceries
• Convenience stores
• Other building types planned

25
Employment Impacts of Energy Efficiency Programs
Policies
Source ACEEE, 1997, Energy Efficiency and
Economic Development in NY, NJ, PA.
26
RAND Study on California Programs

• Examined impacts of energy efficiency programs
  and policies from 1977-1995
• Found statewide economic benefits of 875-1300
  per capita
• Added 3 to state economy
• Reduced air pollution emissions from stationary
  sources by 40
• Source The Public Benefit of Californias
  Investments in Energy Efficiency