Transcript Raising the Bar: New Building Standards Affordable Comfort New

GETTING TO 3% ANNUAL ENERGY SAVINGS
NECPUC Annual Symposium
Stowe, VT
June 17, 2014
Chris Neme, Energy Futures Group
Energy Futures Group Consulting
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Areas of Expertise
 Program Design
 Policy Development
 Building Codes
 Evaluation
 Cost-Effectiveness
Range of Clients
 Government Agencies
 Advocates/NGOs
 Regulators
 Utilities
Clients in more than 20 states, 4 Canadian provinces and Europe.
Presentation Themes
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Get the goals right
Focus on the longer-term
Facilitate integration of efficiency with other objectives
Electrification
 Distributed generation
 Others
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Fully value all benefits of efficiency
The Climate Change Context
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Four strategies required to address climate change:
 De-carbonization of grid
 Electrification
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Investing in grid flexibility to address intermittent renewables
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building heating/other end uses
cars
More transmission inter-connections
More demand response
More flexibility (to turn off/on) of remaining fossil fuel generation
Massive investment in energy efficiency
Conclusion of both European and California studies
California’s Least Cost 2050 GHG Path
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Source: Energy and Environmental Economics (E3), “Meeting California’s Long-Term Greenhouse Gas Reduction Goals, 2009
Question/Goal Needs Re-Framing
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Need longer term focus: e.g. getting to “30% over 10 years”
Articulating goals as 1st year savings is problematic
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Perverse incentive to invest in cheap, shorter-lived measures
Cheapest per 1st year kWh often not cheapest per lifetime kWh:
Savings/
Year
Measure Life
Cost
Cost/unit of
1st year
savings
Cost/unit of
lifetime
savings
Measure 1
20 therms
1
$10
$0.50
$0.50
Measure 2
100 therms
20
$200
$2.00
$0.10
Metrics based on 1 year of performance is problematic
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All about chasing savings this year/quarter/month
Little incentive to invest in longer-term market development strategy
Little incentive to invest in emerging technologies
Lifetime vs. 1st Year Savings Trade-offs
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DTE Selected C&I Prescriptive Measures $/MWh - 2013 Forecast
(Rankings out of 117 Measures)
100
90
80
Rank ($/MWh)
70
60
50
40
30
20
Annual Cost
Lifetime Cost
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Source: Optimal Energy and Energy Futures Group, “Final Report: Alternative Michigan Energy Savings Goals to Promote Longer Term Savings and Address
Small Utility Challenges”, prepared for the Michigan Public Service Commission, September 13, 2013
Make Goals kWh “Equivalents”
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Need “all fuels” perspective to optimize efficiency
Why not weatherize fossil fuel-heated homes?
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They will ultimately need to become electrically heated
Better to weatherize before or at same time as electrified
Why not support efficient fuel-switching?
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We need to electrify anyway
Super efficient, cold climate heat pumps are game-changer
Source efficiency already better than best gas furnace
 More advancements coming
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Electric cars are inherently more efficient
Encourage/Reward Market Transformation
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A range of options:
 Provide credit for advancing codes and standards
 Provide credit for other evidence of MT
 Substantial efficiency budget set-asides for MT
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With their own rigorous performance metrics
More radical changes to savings goals…
Base Goals on Actual kWh Consumption
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E.g. Electric sales should be <XXXX GWh in 5 years
Lots of Advantages:
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Measures the real “bottom line”
Inherently rewards market transformation efforts
Eliminates fights over gross savings measurement
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Still do EM&V, but only to inform strategy
Eliminates fights over free ridership and spillover
But Challenges Too:
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Need to provide credits to support electrification
Need adjustments for weather, economy, maybe other things
Requires commitment to long time horizons…
…but utilities like annual rewards
Fully Value All Efficiency Benefits
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In cost-effectiveness screening:
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Avoided energy, capacity, T&D
Price suppression effects
Marginal line losses
Risk mitigation
Non-energy benefits
When considering T&D:
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Routinely assess alternatives
Equal cost-allocation treatment
New England is nation –
leading on these things,
but still room for
improvement
Some of the best
efforts in country in the
Northeast, but still
some big problems
(e.g. PTF treatment of
transmission, but not
alternatives)
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Q&A
Chris Neme
Energy Futures Group
[email protected]
Phone: 802-482-5001
Cell: 802-363-6551