ACEEE blog series explores energy-efficiency investments in US

Stacks of American dollar billsEnergy efficiency is a big and growing business with $231 billion invested globally in 2016, according to an estimate by the International Energy Agency You are leaving WAPA.gov. (IEA). The American Council for an Energy-Efficient Economy (ACEEE) used the release of the IEA Worldwide Investment report in July as a springboard to examine how much the United States invests in energy efficiency, what is driving that investment and how it could be increased.

We spend how much?
The first blog post, How Many Billions do US Businesses and Individuals Invest in Energy Efficiency Each Year?You are leaving WAPA.gov. gave $41 billion as the estimated figure for efficiency spending in our country. This was the first year that the IEA report gave a separate estimate for the U.S., but spending was not broken out by sector. Based on the worldwide estimate, about 58 percent of that spending is for buildings, 26 percent for transportation and 16 percent for industry.

Drawing on other spending reports to get a clearer picture, ACEEE concludes that our energy-efficiency investments may actually range from $60 billion to $115 billion annually. This wide-ranging estimate results from different studies employing different measurement methods and parameters. However, additional research by ACEEE and by the U.S. Green Building Council You are leaving WAPA.gov. suggest this range is reasonable.

Policy appears to be the primary driver in energy-efficiency investments, with building codes and appliance and vehicle standards responsible for about $20 billion worth. “Spillover” occurs when policies and programs, such as utility incentives and customer programs, indirectly influence consumer decisions.

Reasons why
Other factors driving the decision to invest in energy efficiency include income and education levels among residential consumers and type of industry for business customers.

Who Invests in Energy Efficiency and Why?, the second blog post, cites a survey by the U.S. Energy Information Administration (EIA) showing that large firms are more likely to engage in energy management activities than small companies. Businesses participating in the Shelton Group’s 2016 B2B Pulse study You are leaving WAPA.gov. rated how important sustainability and conservation were to their company’s operating and capital expenditure decisions. Commercial real estate development and property management were the industry groups that gave energy issues the most consideration.

The EIA’s 2015 Residential Energy Consumption Survey found that consumers with higher incomes are more likely to make energy-efficiency investments large enough to be eligible for federal energy-efficiency tax credits. Smaller investments, such as new lightbulbs, do not appear to be affected by consumer income. Another study found an education effect along with the income effect, but income and education are usually closely related. Households that have moved within the last three years spend more on efficiency improvements, as do younger families.

The reasons commercial customers offer for making efficiency upgrades, while not unexpected, show a subtle shift in priorities. From the Shelton Group study, business customers cited “energy savings or other cost reductions” as the leading motivation for investing in efficiency. Although concern about climate change ranked toward the bottom of the list, the percentage of respondents that mentioned it has nearly doubled in the last year.

Saving on electric bills also topped the reasons residential customers gave for undertaking energy-efficiency improvements at 61 percent. Making the home more comfortable followed with 35 percent and making the home healthier was mentioned by 27 percent of respondents. Taken together, comfort and safety are an equal consideration to financial concerns. The study recommends focusing homeowners on both the financial and non-financial benefits of energy efficiency to explain the value of their investment.

Let’s do more
The final post addresses the question on every utility program manager’s mind—How Can we Increase Energy Efficiency Investments?—and offers 10 suggestions to make it happen. According to ACEEE, only about one-quarter of households and businesses implement efficiency upgrades, in spite of the benefits.

The suggestions focus on expanding what is already working, while remaining open to new approaches. More measurement and benchmarking could help program providers identify successful programs and help customers see the value of energy-efficiency improvements. The article also recommends seeking partnerships with real estate, financial and construction industries to reach consumers through different channels.

Energy-efficiency investments were 8-9 percent higher in 2016 than in 2015. The ACEEE blog series offers some starting points to help utilities keep the momentum going. Energy Services looks forward to hearing about your ideas for getting more results from your existing programs and for creative new service offerings.

Source: American Council for an Energy-Efficient Economy

White paper compiles data on utility programs for low-income customers

Low-income households spend on average three times more of their income on energy bills You are leaving WAPA.gov. than other households, and easing the pain of higher bills during peak-load times of year is a continuous challenge for utilities.

This group of customers can be hard to reach, leading to a hit-or-miss track record for low-income energy-efficiency programs. But the benefits of successful programs stretch beyond energy and bill savings to include fewer shut-offs, healthier homes, less outdoor pollution and more local jobs. It is well worth the effort to design an effective program, and a new report from the American Council for an Energy Efficient Economy (ACEEE) can take some of the mystery out of doing it.

The baseline assessment of more than 70 utilities’ electric and natural gas programs chronicles total investments in these programs, energy savings impacts, customer participation and use of best practices. The study looked at the largest electric and natural gas utility serving each of the 51 largest metropolitan statistical areas.

ACEEE researchers found that low-income programs varied in terms of how deeply they address whole-home energy-efficiency needs and how accessible they were to customers. While many utilities design and administer impressive, effective low-income programs, many of those programs could be improved with best practice elements or increased resources.

The report also looks at best practices in implementation, including whether programs target specific households based on energy burden or other vulnerabilities and streamline enrollment for easier access. Partnering with the federal Weatherization Assistance Program (WAP) to leverage funds and reach more customers is another factor that impacts the effectiveness of a low-income program.

The study includes maps, data tables and new state-level information on low-income program requirements, cost-effectiveness rules and coordination with the WAP program. Utilities can use the data to see how their programs compare to those of similar utilities and to identify opportunities for adding best practice elements.

Read the entire ACEEE blog post for more information, and share your free copy of the report with state and local policymakers as well as other stakeholders. Also, if your utility has a program to help low-income customers, Energy Services Bulletin would like to know about your experiences.

Source: American Council for an Energy Efficient Economy, 7/11/17

New LBNL study helps utilities compare natural gas, renewables

Low wholesale power prices and an uncertain future for federal power regulations have made it trickier—and riskier—than ever for utilities and independent power producers to plan for and invest in generation.

Using Probability of Exceedance to Compare the Resource Risk of Renewable and Gas-Fired Generation seeks to simplify decision-making with clear, cold numbers. The new Lawrence Berkeley National Laboratory (LBNL) study offers a new way to compare the resources, showing that renewables are an economic and reliable choice.

Resource risk can be very difficult to mitigate for long-term investments in power plants, and it manifests differently for renewable and natural gas-fired generation. For renewables, the risk is “the quantity of wind and insolation will be less than expected.” For natural gas, the risk is “natural gas will cost more than expected.”

Statisticians label the mid-range case “P50,” but calculate a probability for all possibilities from P1 to P99. Probability of exceedance is commonly used by utility planners “to characterize the uncertainty around annual energy production for wind and solar projects,” the paper reports. It “can also be applied to natural gas price projections.”

The study’s “statistical concept” quantifies the risk at each P-level of expected renewables output levels and natural gas prices and factors them into a levelized cost of energy comparison. “In general, higher-than-expected gas prices appear to be riskier to ratepayers than lower-than-expected wind or solar output,” noted LBNL researcher and study co-author Mark Bolinger.

Utilities contracted for or owned 55 percent of 2016’s installed wind capacity You are leaving WAPA.gov. and are expected to contract for two-thirds of the 13.2 gigawatts of solar You are leaving WAPA.gov. expected to be added this year. Yet, utility planners may be underestimating the hedge value of these renewable resources. A survey of more than 600 sector professionals You are leaving WAPA.gov. by Utility Dive showed only 7 percent see natural gas price volatility as the main reason to invest in renewables.

Views on the LBNL paper differ across the energy industry with Charlie Reidl, executive director of the Center for Liquefied Natural Gas You are leaving WAPA.gov. insisting that global demand would not put significant price pressures on proven U.S. reserves. Other authorities, however, argue U.S. reserves are being depleted too rapidly You are leaving WAPA.gov. to keep up with growing demand.

The disagreement underscores the importance of a method like LBNL’s that quantifies the risk and uncertainty. Renewable industry representatives have called the LBNL paper an important contribution that could be useful for utility integrated resource planning.

Read more about the study and industry reactions in Utility Dive You are leaving WAPA.gov. and download the report and webinar presentations from the LBNL website.

Source: Utility Dive, 6/29/17

SEPA report offers guidance on planning for distributed energy resources

As tempting as it may be for utilities to ignore the growth of distributed energy resources (DER), they must plan for integration of this form of generation. To help power providers develop a strategy to accommodate increasing DER penetration, Smart Electric Power Alliance You are leaving WAPA.gov. (SEPA) has published a two-volume report, Beyond the Meter: Planning the Distributed Energy Future.

Volume I: Emerging electric utility distribution planning practices for distributed energy resourcesThe utility industry is changing and many of the changes are being driven by consumers seeking new energy choices, technology advances leading to lower costs and better performance and new policies. Both utilities and their customers will have to work together to ensure grid reliability as distributed energy resource (DER) penetration increases. Engineering consultants Black and Veatch You are leaving WAPA.gov. collaborated with SEPA to provide a new strategy to become a proactive distribution planning utility.

Volume I: Emerging electric utility distribution planning practices for distributed energy resources outlines why traditional distribution system planning framework does not meet the needs of today’s grid. Five investor-owned and public power utilities shared their drive, progress and challenges when planning and proactively integrating distributed energy resources within their distribution system. The report covers:

  • Practical framework for distribution planning utilities
  • Insight from sector leaders on challenges and successes
  • Tools to better understand customer needs

Volume II: A case study of integrated DER planning by Sacramento Municipal Utility District Volume II: A case study of integrated DER planning by Sacramento Municipal Utility District details how SMUD used the findings of Volume I to forecast DER growth and plan for distribution challenges. Through the lens of SMUD, the report looks at the broader scenarios the electric utility industry can expect to encounter. The report covers:

  • Results of the new utility planning strategies
  • Risks and opportunities of new DER systems
  • More on the new distribution system planning framework

Beyond the Meter is free to download for both SEPA members and non-members.

Source: Smart Electric Power Alliance, May 2017

Report: Utilities can treat electric vehicles as demand response tools

Electric vehicles (EVs) are quickly becoming one of the largest flexible loads on the grid in certain parts of the United States. Bloomberg New Energy Finance projects EV electricity consumption to increase to approximately 33 terawatt-hours (TWh) annually by 2025, and 551 TWh by 2040.

Utilities and Electric Vehicles: The Case for Managed Charging

(Artwork by Smart Electric Power Association)

While most industry analysts see EVs as a boon for utilities, load management risks are an issue. Managed charging—remotely controlling vehicle charging by turning it up, down or even off to correspond to grid conditions—could present utilities with an effective, new demand response opportunity.

Utilities and Electric Vehicles: The Case for Managed Charging, You are leaving WAPA.gov. by the Smart Electric Power Association (SEPA), offers a wide-lens overview of the managed charging ecosystem. This research report studies game-changing utility pilot programs for developing and testing managed charging approaches. Download the free report to learn about:

  • Examples of utility programs
  • Vehicle-grid integration and connected-car platform providers
  • Compatible electric vehicle supply equipment
  • Examples of automotive industry activities

Utilities have a central role to play as a nexus for stakeholders in the EV market, with their deep understanding of the grid and customers’ needs and interest. Power providers must act now to advocate for consumer-friendly features and programs, and to help shape relevant policies, regulations and standards. Utilities and Electric Vehicles: The Case for Managed Charging is an excellent resource for preparing for the future of EVs.

Source: Utility Dive, 5/11/17

ACEEE report offers strategies to improve small business efficiency programs

Webinar: Serving All Customers with Utility Energy Efficiency Programs
Dec. 6
1 p.m. MT

Small businesses represent 90 percent of US businesses, consume about 20 percent of the energy and are of vital importance to our national economy, even more so in small towns and rural areas. Yet, utilities spend less than 4 percent of their energy-efficiency budget on these customers. ACEEEresearch

A new report from the American Council for an Energy Efficient Economy (ACEEE) looks at ways utilities can tap that potential for energy and demand savings in the small business sector. Big Opportunities for Small Business: Successful Practices of Utility Small Commercial Energy Efficiency Programs You are leaving WAPA.gov. identifies successful practices and emerging approaches for reaching those notoriously hard-to-access customers. The report then covers the major structural and organizational barriers that continue to stand in the way of fulfilling the energy needs of small businesses.

Diversity creates challenges
Those barriers include lack of staff, time and money, and the fact that many small businesses rent or lease, rather than own, their buildings. Customers across all sectors are often unaware of utility program offerings and the benefits of energy efficiency in general, and small business owners are no different in this respect.

But even addressing these challenges may not be enough to persuade small business customers to make upgrades that capture deep savings. Utility program managers, as well, may lack the resources to design, promote and provide programs that garner broad participation. The diversity of the small business sector, in terms of industry, energy uses, savings opportunities, financial needs, languages spoken, building types and cultures have important implications for program design.

Don’t stop at lighting
Facing such a broad range of needs, many utilities take a “one-size-fits-all” approach, focusing on the low hanging fruit of lighting upgrades. ACEEE research showed that even among several well-established programs, 90 percent of electric savings come from lighting—and not without good reason.

Almost every type of small, non-residential utility customer sees a quick payback and cost-effective savings from installing such measures as linear fluorescent and LED lamps, fixtures and controls. Adding direct—or even free—installation of qualified measures and high rebates make participation easier, and business owners start saving money right away.

Yet, utilities miss many opportunities by not looking at a wider variety of energy end-uses. In small grocery stores, for example, refrigeration can represent as much as 57 percent of the total electricity consumption. Also, most small business programs are electric only, and don’t provide any natural gas- and water-saving measures for space and water heating or cooking. Electric-only utilities might consider partnering with water and natural gas providers to create integrated efficiency programs.

Customize, partner
Report authors studied leading small business efficiency programs to find emerging trends that are delivering results today and point to a future for program designs and features. A more customized and customer-centric model is the key, according to the report. Recommendations include:

  • Segment your market and design customized offerings for each sub-segment
  • Provide personalized and relevant messages through targeted marketing and communications
  • Offer zero- or low-interest financing to encourage comprehensive retrofits and deeper savings
  • Offer a wide set of eligible measures, for multiple end-uses, based on target market research and data analytics
  • Where possible, assign dedicated project managers to give customers direct technical assistance, education and support
  • Establish partnerships with the local Chamber of Commerce, small business advocacy organizations and community groups to gain access to more commercial customers and engage them as trusted local partners

Download the report to learn more, or register for Serving All Customers with Utility Energy Efficiency Programs You are leaving WAPA.gov. on Dec. 6. This upcoming webinar looks at providing energy efficiency for hard-to-reach customer groups, including small businesses. ACEEE is partnering with Efficiency Cities Network You are leaving WAPA.gov. to present a series of webinars on cities and the transformation of the utility industry. Past topics include:

Source: American Council for an Energy Efficient Economy, 11/21/16

Report: Electric cooperatives are big business

A WAPA customer appeared on a list of the 300 largest cooperatives and mutual organizations in the world, released by the International Cooperative Alliance You are leaving WAPA.gov. (ICA) during the International Summit of Cooperatives in Quebec, Canada, Oct. 11-13.wcm20162001

According to the 2016 World Cooperative Monitor, You are leaving WAPA.gov. Basin Electric Power Cooperative You are leaving WAPA.gov. ranked 215th with $2.25 billion in revenue—which the report calls “turnover”—up 14 places from last year. Two more WAPA customers, Tri-State Generation and Transmission Association You are leaving WAPA.gov. and Great River Energy, You are leaving WAPA.gov. appeared among the Top 20 in the industry and utility category, with $1.4 billion and $1.2 billion in turnover respectively. Within the overall study, U.S. electric co-ops dominated the industry and utilities category with 11 organizations in the Top 20.

From a global perspective, however, energy cooperatives represent only a small portion of the organizations built on the cooperative business model. Insurance and agricultural/food groups comprise 64 percent of all co-ops with revenues of $100 million or more, topping all categories. The 2016 edition of the monitor is based on information submitted by 2,370 cooperatives from 63 countries.

Even so, electric cooperatives are a big business in the US, owning and maintaining 42 percent of the nation’s electrical distribution lines, generating 5 percent of its electricity and employing 72,000 people. Such figures support the ICA’s vision of cooperative organizations creating jobs, empowering citizens and building communities. That is a pretty good description of WAPA customers, if we do say so ourselves.

The World Cooperative Monitor collects and analyzes data on the world’s largest co-operative and mutual organizations and other enterprises controlled by co-operatives. The International Cooperative Alliance produced the report in conjunction with the European Research Institute on Cooperative and Social Enterprises.

Source: America’s Electric Cooperatives, 10/17/16

ACEEE report: Energy efficiency a critical resource for meeting demand, environmental goals

The combined savings from appliance and equipment efficiency standards, utility-sector energy-efficiency programs and building codes since 1990 represent the third-largest electricity resource in the nation, according to a new report from the American Council for an Energy Efficient Economy You are leaving WAPA.gov. (ACEEE). Moreover, increased use of these policies could potentially make it the US’s largest electricity resource by 2030. logo

Growing economy, flat energy use
The Greatest Energy Story You Haven’t Heard: How Investing in Energy Efficiency Changed the US Power Sector and Gave Us a Tool to Tackle Climate Change, released in August, seeks to correct the oversight of the title. By quantifying the energy savings and other benefits from a set of energy-efficiency programs and policies, the paper details the quiet success story that started 40 years ago.

Following the 1973 oil crisis, a diverse group of scientists, analysts and policymakers began to develop strategies to reduce energy waste and use less energy to deliver the same or better services. As a result, our gross domestic product increased by 149 percent from 1980 to 2014 while energy use in the United States increased by just 26 percent. Without energy-efficiency, we would need the equivalent of 313 additional power plants to meet the country’s energy demands.

Utilities making the business case for customer programs will find data to show that energy efficiency creates US jobs, reduces energy burdens for struggling customers and strengthens community resilience. Commercial customers will be interested to learn that it also improves their bottom line and returns at least double its investment. Homeowners save an average of $840 annually through energy efficiency and have the potential to save more.

Fighting climate change
Just as important as the economic benefits is ACEEE’s finding that energy efficiency policies can play a major role in compliance with the Environmental Protection Agency’s Clean Power Plan. Most states could meet at least 25 percent of their emissions reduction requirements through efficiency policies and the resulting investments, and many could achieve 100 percent.

Utilities understand that the cleanest kilowatt-hour is the one never used. Those 313 power plants that were never built would have emitted 490 tons of carbon dioxide by 2015. The report states that well-designed policies could save another 1,000 terawatts and avoid all the accompanying emissions.

The successful policies cited in the report include:

  • Appliance and equipment efficiency standards that enforce minimum performance requirements while still leaving consumers a wide array of more efficient products to choose among.
  • Building energy codes, which set minimum requirements for energy-efficient design and construction for new and renovated buildings.
  • Utility energy-efficiency targets and energy savings goals to meet through programs that help customers save energy.
  • Utility regulatory reforms that incentivize utilities to provide energy-efficiency services to customers instead of selling more electricity and investing in more electricity generation resources.

Barriers remain
The report acknowledges that in spite of the many benefits energy efficiency offers to society, there are still barriers to widespread adoption.

Consumer awareness of energy performance is still limited and data on their energy use is often not available to them. Split incentives, such as rental properties, are another common problem. Building owners have little reason to make property improvements if they are not paying the utility bills.

Beyond the consumer’s control are regulatory, legal and pricing issues. Business models that tie profits to selling more energy and making capital investment discourage investments in energy efficiency. The environmental, health and security costs to society of energy production and transmission are not factored into energy prices. Although energy efficiency helps reduce these costs, the savings are rarely recognized.

Measuring the effects of energy efficiency still poses a challenge, as utility program managers are well aware. However, recent advances in data availability and analytics are making this task easier.

You can download The Greatest Energy Story You Haven’t Heard for free and share it with your board of directors, resource planners and program managers. Take a moment to congratulate your colleagues on a successful strategy and then start planning how to keep on succeeding.

Source: American Council for an Energy Efficient Economy, 9/14/16

New report focuses on measuring flexibility in utility resource plans

Flexibility Inventory for Western Resource Planners, a new report from Berkeley Laboratory, shows how utilities can develop a high-level, year-to-year flexibility inventory that tracks flexibility supply and demand based on integrated resource plans (IRPs).Flexibility Inventory for Western Resource Planners, a new report from Berkeley Laboratory

Historically, utilities do not evaluate flexibility supply and demand in their planning studies. However, power systems will need to be more flexible to successfully integrate increasing amounts of variable generating resources, such as wind and solar, and to deliver the full benefits of a diversified portfolio.

Flexibility supply is the capability of generation and demand to change in response to system conditions. Flexibility demand is largely determined by the amount that the net demand changes over different timeframes and the degree to which those changes can be predicted. Berkeley researchers apply the flexibility inventory to western IRPs from the Resource Planning Portal database.

The report finds that the largest amount of flexibility supply and demand occur over long time intervals (more than 6 hours), with supply based on the ability to ramp resources fully and turn units on or off. Flexibility supply is most limited relative to flexibility demand over shorter intervals (e.g., 15 minutes) when there is less time to ramp resources.

The choice of modeling-parameters in the flexibility inventory can have a big effect on the measure of flexibility, especially during challenging shorter intervals. Researchers identified ramp rates for coal and combined-cycle gas turbine units, startup times for combustion turbines and risk tolerance of the decision maker as being among the most important parameters. The study found that resources that can ramp quickly—such as energy storage, direct load control and quick-start generators—have the greatest potential to increase flexibility supply.

You can download the report, a summary slide deck and a recording of a webinar presentation summarizing the report from Berkeley Lab publications.

Source: Lawrence Berkeley Laboratory, 10/27/15

Energy Department offers $6 million for Native American clean energy

Western, DOE Office of Indian Energy, present free webinar for applicants
Sept. 16
1-2 p.m. MDT

The Energy Department (DOE) announced on September 2 a $6 million grant opportunity to establish clean energy and energy efficiency projects on tribal lands. The Department’s Office of Indian Energy is soliciting applications from Indian tribes (including Alaska Native regional corporations, village corporations, tribal consortia and tribal organizations) and tribal energy resource development organizations to install facility-scale clean energy and energy efficiency projects and community-scale clean energy projects on Indian lands.

Accompanying the funding announcement, DOE issued a report showing that threats to tribal energy infrastructure are expected to increase as climate change exacerbates extreme weather conditions. Tribal Energy Systems Vulnerabilities to Climate Change examines in detail, region by region, how climate change is likely to affect the energy supply system serving tribal lands—including many system components that are not directly owned or controlled by tribes. The report concludes that tribes that own and operate their energy infrastructure have greater self-determination in building resilient energy infrastructures.

The Office of Indian Energy, in coordination with Western, is hosting an informational webinar on the funding opportunity on Sept. 16, 2015,  from 1–2 p.m. Mountain Daylight Time. Attendees will hear who is eligible to apply, what the application needs to include, cost share and other requirements, how to ask questions and how applications will be selected for funding. There is no charge for the webinar, but advanced registration is required.

Applications must be submitted by Dec. 10, 2015, 5 p.m. ET.

Source: Green Power News via EERE Network News, 9/9/15