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Time-sensitive value of efficiency

This presentation discusses the time-sensitive value of energy efficiency programs in meeting peak demand, highlighting the economic benefits and motivations for using this approach. It showcases recent studies calculating the time-varying value of efficiency measures in different regions, demonstrating the potential for utilities to achieve significant cost savings and system benefits. The presentation also explores various applications of the time-sensitive value of efficiency, including benefit-cost analysis, energy efficiency program design, non-wires alternatives, integrated resource planning, and capacity markets.

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Time-sensitive value of efficiency

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  1. Time-sensitive value of efficiency Natalie Mims Frick, Berkeley Lab National Association of State Utility Consumer Advocates Mid-Year Meeting June 21, 2019 This presentation was supported by the U.S. Department of Energy’s Building Technologies Office under Lawrence Berkeley National Laboratory Contract No. DE-AC02-05CH11231

  2. Peak Demand Impacts From Electricity Efficiency Programs

  3. Efficiency programs appear to be a relatively low-cost way for utilities to meet peak demand

  4. What is the time-sensitive value of energy efficiency? Sources: Navigant MA Baseline Load Shape Study, LBNL analysis using ISO-NE 2018 LMP data Time-sensitive value of energy efficiency (TSV-EE) considers when energy efficiency occurs and the economic value of the energy or demand savings to the electricity system at that time.

  5. Some motivations for using the time-sensitive value of efficiency Source: CAISO Source: ISO-NE Source: CAISO Source: ISO-NE

  6. Recent time-sensitive value of efficiency publications by LBNL April 2018 technical brief supported by DOE’s Office of Electricity – Transmission Permitting and Technical Assistance June 2017 technical report supported by DOE’s Office of Energy Efficiency and Renewable Energy - Building Technologies Office

  7. The 2017 and 2018 studies used the same approach to calculate TSV-EE (1) Measures • Exit sign (flat load shape) • Commercial lighting • Residential lighting • Residential water heater • Residential air conditioning State/Region • Pacific Northwest • California • Massachusetts • Georgia • Michigan • Use publicly available avoided costs and end-use load shapes from state or regional sources. • Document time-varying energy and demand impacts of 5 measures in 5 locations:

  8. The 2017 and 2018 studies used the same approach to calculate TSV-EE (2) • One of the following methodologies was used for each region: • Apply hourly avoided costs to each measure load shape to calculate the time-varying value of measure, or • Use seasonal system peaks, coincidence factors and diversity factors to determine peak/off-peak savings and apply seasonal avoided costs to savings. • If hourly avoided costs and end-use load shapes were available, LBNL used that data. Often, that data was not available and the second methodology was used.

  9. Annual system load shapes * *CE/DTE is Consumers Energy and DTE Energy, utilities in Michigan

  10. Pacific Northwest time-sensitive value by load shape

  11. Results: Total utility system value of savings compared to only their energy value Notes: The flat load shape is an exit sign. Energy value includes: energy, risk, carbon dioxide emissions, avoided RPS and DRIPE, as applicable if reported. Total time-varying value includes all energy values and capacity, transmission, distribution and spinning reserves. Ratios are calculated by dividing total time-varying values by energy-only values.

  12. Forthcoming Berkeley Lab TSV-EE report • Time-Sensitive Value of Efficiency: Use Cases in Electricity Sector Planning and Programs • Study identifies 5 use cases that consider the time-sensitive value of efficiency

  13. Benefit-cost analysis: CPUC Avoided Cost Model California Avoided Cost Calculator Output for Climate Zone 4 (hot and dry) 2019 and 2024 The stacked bar charts are comprised of components of publicly available avoided costs in California. This chart was made by E3 for the California Public Utilities Commission. • TSV-EE Application: The avoided cost model is used to forecast long-term marginal costs to evaluate the cost-effectiveness of distributed energy resources such as energy efficiency, distributed generation, storage and demand response. The model uses annual hourly energy savings and electricity price forecasts.

  14. Energy efficiency program design: Oncor Select Incentives for Oncor 2019 Commercial Standard Offer Program TSV-EE Application: Several utilities in Texas, including Oncor, provide energy efficiency program incentives for both energy and peak demand savings. Peak demand reductions are calculated for each utility using methodologies described in the statewide technical reference manual.

  15. Non-wires alternative: Brooklyn Queens demand management Source: SEPA 2018, ConEd 2018

  16. Integrated resource planning: PacifiCorp • TSV-EE Application: PacifiCorp creates energy efficiency cost curves using annual hourly (8,760) load shapes, which are inputs to the IRP capacity expansion model with all other resources. Allowing efficiency to compete with all other resources creates a reliable portfolio at least cost. 20-year MWh Potential for Class 2 DSM bundles, 2017 IRP PacifiCorp-West Summer Capacity Load and Resource Balance, 2017 IRP Update

  17. Capacity markets: ISO-NE On-Peak Resources Performance Hours 9% 8% 7% Source: FCA #11, FCA #12, FCA #13 TSV – EE Application: Energy efficiency may participate in ISO-NE’s Forward Capacity Market by bidding resources that produce demand reductions during designated hours for both summer and winter seasons.

  18. Time-sensitive value: Criteria pollutant emissions reduction (1) New York Department of Environmental Conservation proposed regulations in February 2019 to limit NOx emissions from simple cycle combustion turbines that have a nameplate capacity of >15 MW. Restrictions on NOx emissions are during ozone season (May 1 – October 31) Consideration of the time-sensitive value of efficiency may facilitate states, cities or utilities to prioritize efficiency measures that reduce emissions during ozone season (e.g., air-conditioning equipment).

  19. Time-Sensitive value: Criteria pollutant emissions reduction (2) Comparison of 2017 ISO-NE emission rates (lb/MWh) This chart was made by ISO-NE and is included in their 2017 ISO New England Electric Generator Air Emissions Report • The top 5 high energy demand days (HEDD) marginal emission rate for emitting locational marginal units (red bars) are significantly higher than the marginal emission rate for emitting locational marginal units (purple bars) on all other days.

  20. Select Time-Sensitive Value of Efficiency: Use Cases in Electricity Sector Planning and Programs Observations (1) Each of the 5 use cases showcase several examples of how the time-sensitive value of efficiency can be used for more effective planning or programs

  21. Select Time-Sensitive Value of Efficiency: Use Cases in Electricity Sector Planning and Programs Observations (2) Time-scale of analysis: The purpose of the analysis, and access to data, will determine the level of time-sensitive value of efficiency (high or low resolution).

  22. Select Time-Sensitive Value of Efficiency: Use Cases in Electricity Sector Planning and Programs Observations (3) https://www.nrel.gov/buildings/end-use-load-profiles.html Data: End-use load profile research underway now will provide a publicly available foundation for time-sensitive value of efficiency analysis.

  23. Related research These are examples and are not meant to be a comprehensive list of related research. • End-Use Load Profiles for the U.S. Building Stock • Building Technologies Office (BTO) funded project that is a multi-lab collaboration to create end-use load profiles representing all major end uses, building types, and climate regions in the U.S. building stock. • Electricity Markets and Policy energy efficiency research • Time and locational sensitive value of efficiency • Time-varying value of electric energy efficiency (2017) • Time-varying value of energy efficiency in Michigan (2018) • No Time to Lose: Recent research on the time-sensitive value of efficiency (webinar) • The Cost of Saving Electricity Through Energy Efficiency Programs Funded by Customers of Publicly Owned Utilities: 2012–2017 (forthcoming) • Peak Demand Impacts from Electricity Efficiency Programs (forthcoming) • Energy Efficiency in Electricity Resource Planning (forthcoming)

  24. Visit our website at: http://emp.lbl.gov/ Click here to join the Berkeley Lab Electricity Markets and Policy Group mailing list and stay up to date on our publications, webinars and other events. Follow the Electricity Markets and Policy Group on Twitter @BerkeleyLabEMP Lisa Schwartz lcschwartz@lbl.gov 510-486-6315 Natalie Mims Frick nfrick@lbl.gov 510-486-7584

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