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How NEEA Estimates Energy Savings from Market Transformation

This article explains how NEEA estimates and reports energy savings from their market transformation work, including the role of evaluation and the different baseline approaches used. It also highlights the importance of tracking market progress over time.

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How NEEA Estimates Energy Savings from Market Transformation

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  1. June 2018 How NEEA EstimatesEnergy Savings fromMarket Transformation

  2. Energy Savings in NEEA’s work • The energy savings that NEEA reports reflect results from the alliance’s investment in Market Transformation • Energy savings is one metric for Market Transformation work • NEEA estimates and reports energy savings for the purposes of: • Assessing the long term potential of the regional investment • Setting and tracking to NEEA business plan (5-10 year) and annual operations plan (1 year) targets • Supporting annual funder regulatory reporting obligations • NEEA tracks market progress over time and estimates the resulting energy savings across this time horizon (both during and after market intervention).

  3. Market Transformation Defined “The strategic process of intervening in a market to create lasting change in market behavior by removing identified barriers and/or exploiting opportunities to accelerate the adoption of all cost-effective energy efficiency as a matter of standard practice.”

  4. Market Transformation Energy Savings: Key Concepts • Market Transformation results in energy savings • Market transformation is a long-term enterprise • Market adoption is subject to market forces that are influence-able but not necessarily control-able • Predicting market adoption rates is highly uncertain • The bulk of the savings occur after active market intervention is completed • The only thing that can actually be measured is total market adoption – everything else is a construct

  5. Energy Savings Calculation Components - Data Sources: • Regional Technical Forum • Independent lab tests and evaluation reports • Market relationships with manufacturers, distributors and/or retailers • Regional Technical Forum • Independent lab tests and evaluation reports

  6. Market Transformation Energy Savings: Role of Evaluation • Market progress is evaluated annually for each program via an independent, third party review • A key activity of this evaluation work is a review of the key assumptions used in estimating savings • Sources of key assumptions used in savings reporting: • Power Council • Regional Technical Forum • Estimates by independent studies that are then reviewed by a third party • NEEA engages in an annual review with Cost Effectiveness and Evaluation Advisory Committee and the Power Council

  7. Market Transformation Energy Savings: Previous and Current Investments • Market Transformation savings occur and are tracked over a time horizon that extends beyond the intervention investment period • NEEA will track and report energy savings for all investments, prior or current, for which the market is still demonstrating increased adoption and resulting incremental energy savings in the region • The savings accounting for current and prior investment initiatives is the same • The estimated savings in a given year include savings from both past and current initiatives; they are first year savings from new installations

  8. Market Transformation Energy Savings Counting and Reporting: Foundational Tenets • Savings are an estimate • Estimated energy savings are incremental, first year savings, at the end-customer meter • NEEA engages with multiple parties to fulfill the review and/or audit function of key assumptions • NEEA does not attempt to attribute cause and effect • Baseline matters • NEEA makes every effort to avoid double counting

  9. Two Baseline Approaches used in Estimating and Reporting Savings POWER PLAN Power Plan Baseline MARKET TRANSFORMATION Market Baseline Freezes the baseline by actualizing the market performance every 5-6 years Used for power planning purposes Forecasts a continuous view of the market without intervention Used to track full effects of change over time

  10. The Savings Categories are Different MARKET TRANSFORMATION POWER PLAN Power Plan Baseline Total Power Plan Regional Savings Remaining Savings Market Baseline Total Regional Savings Co-Created Savings Net Market Effects

  11. MarketBaseline Differing baseline views Total Regional Savings Power Plan Baseline Market Share Laggards Early Adopters Late Majority Early Majority Time

  12. Market Transformation Approach TOTAL MARKET ADOPTION Net Market Effects Co-Created Savings Local Programs Market Baseline TOTAL REGIONAL SAVINGS MARKET SHARE CURRENTMARKET SHARE 20+ years 5 years 10 years 15 years

  13. Power Plan Approach TOTAL MARKET ADOPTION RemainingSavings Total EESavings Local Programs MARKET SHARE POWER PLAN BASELINE 20+ years 6 years 12 years 18 years

  14. Questions?

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