Resource Options Workshop Technical Sessions. Demand-Side Management March 8, 2005

Transcription

1 Resource Options Workshop Technical Sessions Demand-Side Management March 8, 2005

2 Welcome to the Demand-Side Management Session Today s Objective To gain a common understanding of DSM and its role in integrated electricity planning, and to gather participants' ideas for technologies, tools, programs and rate options that could reduce energy use and demands on our system. Rick Knowlan

3 Agenda 1:00 1:15 Welcome & IEP Overview Rick Knowlan 1:15 1:45 DSM Overview Richard Marchant 1. What is DSM? 1:45 2:15 Achievements to Date & the Current Plan Steve Hobson 2:15 2:30 Break 2. What has been achieved to date? 3. What is the current plan? 2:30 3:50 Beyond the Current Plan Derek Henriques, Gifford Jung, Murray Bond 2:30 2:45 4. Peak Capacity Reduction 2:45 3:15 5. Rates 3:15 3:50 6. Energy Efficiency Future 3:50 4:00 Break 4:00 4:30 Breakout Session Discussions Rick Knowlan 7. Participant ideas and suggestions 4:30 5:00 Breakout Session Results Rick Knowlan 8. Presentation of results 5:00 Wrap-up Richard Marchant Slide 3

4 IEP Overview 2005 Integrated Electricity Plan (IEP) Long-term plan - how customers demand for electricity will be met Obligation to provide low-cost reliable electricity for generations while factoring in social and environmental considerations Slide 4

5 IEP Overview 2005 IEP Objectives Solicit additional stakeholder input Meet regulatory requirements Preferred portfolio of new resources Slide 5

6 IEP Overview Long Term Electricity Planning Long Term Electricity Planning Resource Expenditure and Acquistion Plan Stakeholder Engagement on Resource Options Stakeholder Engagement on Portfolio Selection / Analysis Resource Calls File Resource Options Report IEP / Action Plan Revenue Requirements Application Denote a process that is filed with the BCUC for approval. Slide 6

7 IEP Overview Stakeholder Engagement 2005 IEP Stakeholder Engagement Survey/ Website Regional First Nations Provincial Resource Options Workshops Broad Public Input Regional Information and Facilitated Sessions Input as requested Resource Options Report Selected Committee to undertake facilitated decisions analysis process Open session to provide broad review of inputs to the IEP process Survey/ Website Regional First Nations Provincial 2005 IEP / Action Plan Slide 7

8 Welcome to the Demand-Side Management Session Murray Bond John Duffy Jennifer Gin Derek Henriques Steve Hobson Gifford Jung Richard Marchant Lyle McClelland

9 Demand-Side Management What are we going to cover today? What is demand-side management? What has been achieved to date? What is the current demand-side management plan? What options are there beyond the current plan? Slide 9

10 DSM Overview Richard Marchant

11 DSM Overview What is DSM? What is the definition of demand-side management (DSM)? Why should a utility pursue DSM? What are the barriers to DSM? What types of DSM is BC Hydro pursuing? What is the definition of energy efficiency, load displacement and peak reduction? How does BC Hydro evaluate the cost-effectiveness of DSM? Slide 11

12 DSM Overview What is DSM? How does BC Hydro evaluate the equity impact of DSM? What risks are associated with DSM? How does BC Hydro confirm DSM electricity savings? What do customers value? What does the BC Government Energy Plan say about DSM? Which of BC Hydro s long-term goals are related to DSM? Slide 12

13 DSM Overview What is the definition of DSM? The BCUC Resource Planning Guidelines (RPG) define DSM as a deliberate effort to decrease, shift or increase electricity demand. BC Hydro s current DSM activities focus on decreasing the electricity that the utility plans for, or provides to, its domestic customers using supply side resources. DSM is a cost-effective form of resource acquisition that, in combination with supply side resources, allows a utility to meet rising electricity demand in a cost-effective and environmentally responsible manner. Slide 13

14 DSM Overview What is the definition of DSM? Demand side resources differ from supply side resources in that the former have a revenue impact on the utility. i.e. the reduced demand equates to reduced sales of electricity as the reduction is on the other side of the meter. Slide 14

15 DSM Overview Why should a utility pursue DSM? Saves money Avoids environmental impacts Creates jobs Makes economy more competitive Slide 15

16 DSM Overview What are the barriers to DSM? Availability of more efficient products and processes Awareness that more efficient products or processes exist Accessibility to the products or processes where the end user needs it Affordability relative to the competing but less efficient options Acceptability of the performance by the end user Slide 16

17 DSM Overview What tools exist to overcome barriers? Tools Legislation, Regulation and Standards Education, Information and Awareness Incentives Retail Promotion and Partnering Rates Technology Examples government policy, energy efficiency legislation, appliance standards, building codes publications, advertising, outreach teams, information line, recognition programs (e.g. Power Smart Excellence Awards) partner programs, funding for energy studies, energy managers or recommisioning, financing, incentives product incentive programs, product endorsement program, new home certification and new construction programs, trade allies, inclining block or stepped rates, time of use rates, peak shaving or shifting rates demonstration projects Slide 17

18 DSM Overview What types of DSM is BCH pursuing? Energy Efficiency Load Displacement Peak Reduction Slide 18

19 DSM Overview Definition of Energy Efficiency Energy efficiency includes both being more efficient with electricity used (i.e. producing the same, equivalent or greater result using less electricity) and using less electricity (i.e. conservation). BC Hydro s efforts focus on electricity acquisition, enabling initiatives and market transformation. These can take the form of project or product incentive programs, rate offerings, support for introduction of legislation, regulations or standards, education programs and awareness campaigns. Slide 19

20 DSM Overview Definition of Load Displacement Load displacement projects are those that result in the installation of new self-generation facilities at customer sites, with the electricity generated being used on-site by the customer, with a resultant decrease in the consumption of electricity purchased from BC Hydro. These projects are generally large, and displace a substantial portion of the customer s existing load, even to the extent of total self-sufficiency and the availability of surplus generation. Under the Stepped Rate structure, this surplus generation will be available for effective utilization at the customer s other sites through the load aggregation mechanism. Slide 20

21 DSM Overview Definition of Peak Reduction Peak reduction involves programs or initiatives aimed at a sustained, long-term reduction in the peak capacity requirement. Whereas electricity reduction is system based, peak reduction programs are generally targeted at specific regions or locations. This does not include short-term demand management efforts such as curtailment programs, which are used for operational contingencies. Energy efficiency and load displacement programs are implemented primarily to reduce electricity sales throughout the year. They do however have associated peak reduction benefits due to their associated reduction of the annual peak load. Slide 21

22 DSM Overview How does BCH evaluate the cost-effectiveness of DSM? Utility Cost test Measures the net cost or benefit of a DSM program from the utility's perspective. Costs are those incurred by the utility. Benefits include the utility's avoided costs. Total Resource Cost test Measures the net cost or benefit of a DSM program from the perspective of the utility and its customers. Costs include utility and net participant costs. Benefits include the utility's avoided costs and the participant s nonelectricity benefits. Indicates the economic efficiency of a DSM program as a resource option. Slide 22

23 DSM Overview How does BCH evaluate the equity impact of DSM? Rate Impact Measure (RIM) Measures the impact of a demand-side management program on the utility's rates. Costs include utility costs and lost revenues. Benefits include the utility's avoided costs. Indicates the impacts of a DSM program on non-participants. Slide 23

24 DSM Overview Comparison of Cost Effectiveness Tests UTILITY TRC RIM Participant Non-Electricity Benefits BENEFITS Avoided Generation & Capital Costs Avoided Generation & Capital Costs Avoided Generation & Capital Costs COSTS Net Participant Costs Utility Program Costs Utility Program Costs Utility Program Costs Incentives Incentives Incentives Revenue Loss Slide 24

25 DSM Overview What risks are associated with DSM? Project Completion Risk risk that projects which have received a BC Hydro commitment fail to be completed by the customer Performance Risk risk that the DSM project does not deliver savings as expected over the life of the measures Awareness Risk risk that customers are not aware of energy savings opportunities Participation Risk risk that future program uptake rates are low due to customers not finding offers attractive and motivating Slide 25

26 DSM Overview How does BCH confirm DSM electricity savings? Conducts baseline studies to determine state of market before program begins. Surveys samples of program participants and non-participants while the DSM program is operating and after it s finished, to determine the electricity savings that are attributable to the program. Collects data on sales of energy efficient products targeted by the DSM program. Slide 26

27 DSM Overview How does BCH confirm DSM electricity savings? (cont d) In addition, for programs that include larger individual projects (e.g. > 0.3 GWh/yr): Conducts a technical and financial review of each project prior to awarding DSM incentive. Visits selected facilities before and after project to inspect operation and equipment. Carries out engineering calculations, physical measurements, utility bill analysis and computer modelling to quantify electricity savings. Undertakes formal evaluations to assess the energy saved and the cost-effectiveness of all DSM programs. Slide 27

28 DSM Overview What do customers value? Power Smart is recognized by over 95% of BC Hydro s customers Overall satisfaction with Power Smart is ~ 80% Needs include: providing information about products and programs showing how you can reduce your bill providing programs that meet the needs of your business Slide 28

29 DSM Overview What does the BC Government Energy Plan say about DSM? Under new rates, large electricity consumers will be able to choose a supplier other than the local distributor New rate structures will provide better price signals to large electricity consumers for conservation and energy efficiency The Province will update and expand its Energy Efficiency Act, and will work with the building industry, governments and others to improve energy efficiency in new and existing buildings The Utilities Commission Act will be amended to remove a disincentive for energy distributors to invest in conservation and energy efficiency Slide 29

30 DSM Overview Why is DSM relevant to BC Hydro s long term goals? BC Hydro Purpose Reliable power, at low cost, for generations. Electricity Conservation & Efficiency Develop and foster a conservation culture in BC that leads to customers choosing to make a dramatic and permanent reduction in electricity intensity. Environmental Impact No net incremental environmental impact. Slide 30

31 DSM Overview Why is DSM relevant to BC Hydro s long term goals?(cont d) Financial Targets Maintain existing position of having costs among the lowest in North America. Reliability (Supply) Electricity self-sufficiency (energy and capacity) in B.C. for meeting all domestic needs. Customer Satisfaction To lead other companies in offering extraordinary value and service Slide 31

32 Achievements to Date & the Current Plan Steve Hobson

33 Achievements to Date What has been achieved to date? Since 1989 Saved British Columbia residents and businesses over $1.4 billion on their electricity bills Grown to offset about 600 megawatts of electric generation annually (making it the 6th largest generator in the BC Hydro system) Collected and recycled over 200,000 inefficient second operating fridges Made British Columbia a world leader in energy efficiency Slide 33

34 Achievements to Date What has been achieved to date? In the Past Year Alone Worked directly with over 8,500 businesses (ranging from pulp and paper mills to educational and healthcare institutions to property management firms to small retailers) to identify and implement energy efficiency projects Distributed over 1.6 million compact fluorescent light bulbs to over 530,000 customers - in partnership with 7 international manufacturers, and 15 retailers at over 180 locations Reached over 250,000 BC students (K-12) in 900 schools Slide 34

35 Achievements to Date What has been achieved to date? (cont d) In the Past Year Alone (cont d) Facilitated the introduction of LED holiday lights in British Columbia - with total sales of over 1,000,000 strings Signed over 200 large BC businesses to Power Smart Partner agreements Recognized six customers as Power Smart Certified Partners - for their leadership in energy efficiency and sustainability Slide 35

36 Current Plan What are we going to cover? What is the current DSM plan? Why did BC Hydro choose to pursue a plan of this scale? How does BC Hydro s DSM plan compare to other utilities? What has been achieved to date? What residential DSM programs are included in the plan? Why did BC Hydro choose these programs? How do the Compact Fluorescent Lighting and Refrigerator Buy- Back programs work? Slide 36

37 Current Plan What are we going to cover? (cont d) What business DSM programs are included in the plan? Why did BC Hydro choose these programs? How does the Power Smart Partners and Product Incentive programs work? What is BC Hydro doing to support these programs and build an energy efficiency ethic? Why did BC Hydro choose these initiatives? How do the Education and Power Smart Alliance initiatives work? Slide 37

38 Current Plan What is the current DSM plan? Save 3,600 GWh per year by 2012 through a suite of DSM programs targeting residential and business customers represents roughly one third of forecast growth in electricity demand Projected cost of $1.3 billion over 10 years, split 50:50 between BC Hydro and participating customers Approaching end of year 3 of 10 Slide 38

39 Current Plan Why did BCH choose to pursue a plan of this scale? Wanted a plan that would: be more cost-effective than new supply; and capture a considerable portion of the estimated electricity conservation potential in BC; yet not constitute an over-reliance on DSM to meet load growth BC Hydro s current plan includes: Residential - approximately 700 GWh per year in lighting, appliances, and weatherization Commercial and institutional - approximately 600 GWh per year in lighting, building retrofits and new buildings Industrial - approximately 2300 GWh per year in pump improvements, mechanical pulping improvements and load displacement Slide 39

40 Current Plan How does BCH s DSM plan compare to other utilities? Utility F2006 Investment ($ million) % of Revenue F2006 Electricity Savings (GWh) % of Sales BC Hydro % % Manitoba Hydro % % Hydro Quebec % % Slide 40

41 Current Plan What has been achieved to date? Demand Side Management Gigawatt Hours F03 F04 F05 F06 F07 Fiscal Year Plan Target Actual (F03, F04), Forecast (F05) or Committed (F06, F07) Slide 41

42 Current Plan What residential DSM programs are included in the current plan? New Home Program Renovation Rebate Program Variable Speed Motors Program Fuel Substitution Program Refrigerator Buy-Back Program Seasonal Light Emitting Diode Program Compact Fluorescent Lighting Program Slide 42

43 Current Plan Why did BCH choose these programs? They target the largest and most cost-effective sources of residential electricity conservation potential. Lighting: Compact Fluorescent Lighting & Seasonal Light Emitting Diode programs Weatherization: New Home & Renovation Rebate programs Appliances: Refrigerator Buy-Back & Variable Speed Motors programs They target region-specific trends in fuel choice. Fuel Substitution program targets space heating on Vancouver Island Slide 43

44 Current Plan How does the Compact Fluorescent Lighting program work? CFLs use roughly 75% less electricity than incandescent bulbs and last up to 8 times longer. Program s objective is to transform the CFL market to a higher level of sustained sales and market penetration. First stage offered 2 free CFLs to each residential customer, coupled with discount coupons for additional CFLs distributed 1.6 million CFLs to 530,000 residential customers Second stage will maintain heightened level of awareness through discount coupons and promotional advertising Slide 44

45 Current Plan How does the Refrigerator Buy-Back program work? 24% of BC households operate two refrigerators Today s refrigerators are considerably more efficient than older models 33% change from 1990 to 2000 Many used refrigerators are resold to other consumers Program s objective is to permanently remove older models from the market BC Hydro takes the second refrigerator away for free, disposes of it in an environmentally responsible manner and rebates the owner $30 have removed over 60,000 refrigerators since 2001 Slide 45

46 Current Plan What business DSM programs are included in the plan? Power Smart Partners Program Product Incentive Program Lighting Redesign Program Small Business Compact Fluorescent Lighting Program High Performance Buildings Program Load Displacement Program Slide 46

47 Current Plan Why did BCH choose these programs? They target the largest and most cost-effective sources of business electricity conservation potential: Lighting: Product Incentive, Lighting Redesign and Small Business Compact Fluorescent Lighting programs Building retrofits: Power Smart Partners program New buildings: High Performance Buildings program Industrial process improvements: Power Smart Partners program Load displacement Slide 47

48 Current Plan Why did BCH choose these programs? (cont d) They match program offerings with customer needs Large business customers need a flexible program that suits their unique circumstances: Power Smart Partners, Load Displacement and High Performance Buildings. Smaller customers need a simple, easy to use program: Product Incentive Program and Small Business Compact Fluorescent Lighting Slide 48

49 Current Plan How does the Power Smart Partners program work? Targets BC Hydro s largest customers, namely those spending over $50,000 per year on electricity Addresses financial and non-financial barriers preventing these customers from capturing cost-effective energy efficiency opportunities typically, electricity is a small proportion of their total costs and management is unaware of cost-effective energy efficiency opportunities Slide 49

50 Current Plan How does the Power Smart Partners program work? (cont d) Program provides financial assistance to identify energy saving opportunities and to implement projects, as well as information and recognition of customers achievements Customers identify an energy saving opportunity and apply for financial financial assistance from BC Hydro. Program supports retrofit projects that meet minimum BC Hydro technical and financial criteria. This flexibility is important to these customers, each of whom has unique project needs. Slide 50

51 Current Plan How does the Product Incentive program work? Targets all business customers, but especially those with projects that are too small to participate in the Power Smart Partners program Addresses financial and awareness barriers Offers a financial incentive for one-to-one replacements of standard efficiency equipment with high efficiency equipment and for add-one energy saving technologies like controls Customers submit an online application prior to product purchase. Slide 51

52 Current Plan How does the Product Incentive program work? (cont d) BC Hydro gives the customer the go-ahead to purchase and begin installation. Customer installs pre-approved products and submits invoices to receive their incentive. Random pre- and post-installation inspections are conducted. Slide 52

53 Current Plan What is BCH doing to support these programs and build the energy efficiency ethic? Public Awareness and Communication Power Smart Alliance e.catalog Information Gateway Home Energy Profile Legislative, regulatory & standards Involvement Slide 53

54 Current Plan Why did BCH choose these initiatives? To increase broad energy efficiency awareness Public Awareness and Communication To give customers the information they need to act e.catalog Home Energy Profile To ensure high quality consulting and contractor services are available to business customers wanting to take action Power Smart Alliance To ensure the legislative and regulatory framework advances with BC Hydro s DSM achievements Legislative, regulatory and standards involvement Slide 54

55 Current Plan How does the Education initiative work? Targets K-12 students in 55 districts and 900 schools Reinforces Power Smart messages to school age children, BC Hydro s customers of tomorrow A team of trained staff travel the province to deliver: in-class presentations, plays and games behaviour change campaigns, and school energy audits The initiative also provides teacher s kits with energy efficiency modules and curricula Slide 55

56 Current Plan How does the Power Smart Alliance initiative work? Objective is to ensure that business customers wanting to take action can access high quality consulting and contractor services Alliance members meet minimum eligibility criteria around staff qualifications and ongoing training, satisfactory references, financial stability and others. BC Hydro refers participating customers to Alliance members when they are seeking consulting or contractor services. Slide 56

57 Beyond the Current Plan Peak Capacity Reduction Rates Energy Efficiency Future

58 Peak Capacity Reduction Derek Henriques

59 Peak Capacity Reduction What are we going to cover? Why is peak capacity important to BC Hydro? What drives the peak capacity on the electric system? What are DSM peak capacity reduction initiatives? What has BC Hydro done to explore DSM peak capacity reduction measures? What is BC Hydro s approach to addressing peak capacity constraints with DSM? Slide 59

60 Peak Capacity Reduction Why is peak capacity important to BC Hydro? Peak Day Electric Load Profile BC Hydro Electric System MW Hours of the Day Slide 60

61 Peak Capacity Reduction What drives the peak capacity on the electric system? Residential loads in the winter on the coldest day Space Heating & Ventilation Water Heating Cooking Lighting Entertainment Equipment Slide 61

62 Peak Capacity Reduction What are DSM peak capacity reduction initiatives? Peak reduction involves programs or initiatives aimed at sustained, long-term reduction in peak capacity requirements. There are three types of DSM peak load management as demonstrated here: Peak Clipping Valley Filling Load Shifting Slide 62

63 Peak Capacity Reduction What are DSM peak capacity reduction initiatives? Here are some examples of measures that reduce peak: Slide 63

64 Peak Capacity Reduction What has BC Hydro done to explore DSM peak capacity reduction measures? CPR 2002 CPR 2002 Industrial Peak Capacity Reduction Potential Rocky Mountain Institute Workshop in July 2003 CPR 2004 Residential and Commercial Potential for peak capacity reduction Slide 64

65 Peak Capacity Reduction What is BC Hydro s approach to addressing peak capacity constraints with DSM? Update and maintain an inventory of DSM capacity reduction measures Establish areas with distribution constraints that have sufficient lead time for DSM to be an option Undertake pilots to demonstrate the acceptance and viability of DSM capacity reduction initiatives Develop and implement DSM options to address peak capacity constraints when cost-effective and appropriate Slide 65

66 Rates Gifford Jung

67 Rates Regulation of BC Hydro ROR, REAP (Section 45 of UCA) The forecasted capital expenditures, energy purchase agreements, demand-side management expenditures, and other planning expenditures required to support the utility s plan to provide service to its ratepayers. Actual costs are recovered from ratepayers through a revenue requirement application. Slide 67

68 Rates Regulation of BC Hydro Revenue Requirement (Section 59(5) of UCA) The forecast accounting costs to provide service (both quality and quantity) to ratepayers plus a fair and reasonable return on equity to the utility. The accounting costs include energy costs, operating, maintenance, and administration expenses, finance costs, depreciation and amortization expenses, and other service costs. Slide 68

69 Rates Regulation of BC Hydro Rate Design (Section 60 of the UCA) Rates levels are set to recover from each class of ratepayers the revenue requirement to serve those ratepayers. Rate structure is how the revenue requirement is collected from individual customers. Commission considers rates as fair, just and reasonable if they have no undue discrimination, preference or prejudice; and provide reasonable compensation to the utility. Slide 69

70 Rates General Rate Design Rate Design Principles for rate structure: Fairness; Efficiency; and Simplicity. Rate level: Rate levels will recover approved revenue requirement. Slide 70

71 Rates General Rate Design Fairness Rates are set for each rate class to recover the costs to provide service. Revenue requirement is allocated to rate classes based on cost causation principles. Ideally rates are set to recover 100% of the costs. In practice, rates are considered fair if they recover between 90 and 110% of the costs. Slide 71

72 Rates General Rate Design Efficiency Rates are set so that the customer s run-out block of energy appropriately reflects the utility s marginal cost. Good rate design would see the marginal rate the customer sees as approximately equal to the marginal cost the utility sees. The balance of costs to serve customers would be recovered through fixed charges or demand charges. Slide 72

73 Rates General Rate Design Simplicity Rates are simple and easy to understand. To the extent possible, a utility s rates should be simple and easy for customers to understand. If rates are designed simply and efficiently, customers will make economically efficient tradeoffs to decide on their level of consumption. Slide 73

74 Rates General Rate Design Other Considerations/Limitations Bill Impacts The commission has in the past ruled that rate rebalancing or redesigns that end up with individual bill impacts of greater than 10% are not fair, just, and reasonable. Slide 74

75 Rates Residential Tariff Residential Rate Class (2004 data) No. of Customers: 1.5 million Total Sales: Revenue: $960M Electricity Sold: 15,646 GWh Average Revenue: 6.1 /kwh Yearly Average per Customer: Revenue: $640 Electricity Sold: 10,500 kwh Slide 75

76 Rates Residential Tariff Residential Rate: Fixed Charge per month: $3.62 Energy Charge: 6.05 /kwh Rate Design Features: Simple, easy to understand. Energy charge is slightly higher than long-run acquisition cost of energy (5.5 /kwh). Reasonably efficient across all consumption levels with a mild incentive to conserve. Slide 76

77 Rates Residential Case Study Residential Stepped Rate Reset the energy rate at the margin to recover average embedded costs of the wires system and to recover incremental energy costs Slide 77

78 Rates Residential Case Study Current Rate Option Fixed Charge per month $3.62 $3.62 Tier One Price (Est.) 6.05 c/kwh 3.7 c/kwh Tier Two Price 8.0 c/kwh Tier One Volume per month Summer 750 kwh Winter 1,000 kwh % of Customers Seeing Tier 2 Price (Est.) 40% % of Consumption at Tier 2 Price (Est) 55% Slide 78

79 Rates Residential Case Study Residential Histogram Nu mb er of Cu sto me rs (Sa mp le) Option 2 : 40% of Customers Impacted Winter Summer Annual to to to to to to to to to to > Bimonthly Consumption Slide 79

80 Rates Residential Case Study Impact of Rate Design 40% of customers will have some load exposed to the Tier 2 price 55% of energy would be re-priced at Tier 2 Bill Impacts 60% of customers would see about a 40% reduction in their bill 30% of customers would see 10 to 15% reduction in their bill 10% of customers would see bill increases of 5 to 10% with the highest users seeing a >30% increase Slide 80

81 Rates Residential Case Study Price Elasticity Typical long-run price elasticity's for electricity are 0.1 to 0.3 (i.e., 1% change in bills leads to a 0.1% to 0.3% change in electricity consumption) Price Response Over Time 60% of customers would increase their consumption by 8% 30% of customers would increase their consumption by 2% 10% of customers would decrease their consumption by 1 to 3% Net impact would be total residential electricity sales would increase by 5% and residential rates would have to go up 2 to 3%. Slide 81

82 Rates Residential Case Study General Observations Rate design is a blunt instrument with limitations Efficient rates provide the right price signal at the margin to customers Targeted programs are more effective than rates Slide 82

83 Energy Efficiency Future Murray Bond

84 Energy Efficiency Future What are we going to cover? Conservation Potential Review (CPR) 2002 Study Objectives Study Scope Study Approach Study Findings Energy Efficiency 3 Energy Efficiency 4 Energy Efficiency 5 Treatment of DSM in IEP Slide 84

85 Energy Efficiency Future CPR 2002 Study Objectives Provide an assessment of the remaining hard-wired electricity efficiency potential in BC as a basis for designing new energy efficiency initiatives. Estimate the potential contribution of energy efficiency programs to the reduction of BC Hydro s peak capacity requirements. Identify additional technologies that could become available during the study period. Slide 85

86 Energy Efficiency Future CPR 2002 Study Scope Timeframe Sector Coverage Geographical Coverage Technologies Line Losses Slide 86

87 Energy Efficiency Future CPR 2002 Timeframe 15-year study period. Base Year is 2000/01. Milestone periods at 5-year increments. 2005/ / /16 The base year of 2000/01 was selected because it was the most recent 12-month period for which complete data was available. Slide 87

88 Energy Efficiency Future CPR 2002 Sector Coverage The study addresses three sectors. Residential Commercial/Institutional Industrial Slide 88

89 Energy Efficiency Future CPR 2002 Geographical Coverage The report studies the total BC Hydro service area, but excludes areas that are not integrated into BC Hydro s grid system. It also excludes the (former) West Kootenay Power service area. The study provides the results for three regions. Vancouver Island Lower Mainland Interior Slide 89

90 Energy Efficiency Future CPR 2002 Technologies The study focuses on estimating the Economic and Achievable potentials of technologies. Technologies considered must increase electricity efficiency be commercially viable by 2005 Technologies not considered control or shift of electrical demand alternative sources of supply The study also identifies and describes other technologies that are likely to become available within the remainder of the study period (to 2015/16). Slide 90

91 Energy Efficiency Future CPR 2002 Line Losses All electricity savings are measured at the customer s meter, which is consistent with the calibration of base year consumption. Line losses were only used twice in the study. In the calculation of the cost of energy saved, because the cost of energy saved is measured as the avoided cost of new supply at the regional distribution point. In the calculation of the demand impact of customer savings on the BC Hydro system. Slide 91

92 Energy Efficiency Future CPR 2002 Study Approach Major Analytical Steps Slide 92

93 Energy Efficiency Future CPR 2002 Study Findings Forecast Summary Total BC Hydro Service Area Potential Annual Savings (GWh/yr) Slide 93

94 Energy Efficiency Future CPR 2002 Study Findings Forecast Summary Total BC Hydro Service Area Annual Electricity Consumption Slide 94

95 Energy Efficiency Future CPR 2002 Study Findings Forecast Summary Total BC Hydro Service Area Demand Implications (MW) of Economic & Achievable Forecasts Slide 95

96 Energy Efficiency Future CPR 2002 Study Findings Forecast Summary Total BC Hydro Service Area Demand Implications (MW) of Economic & Achievable Forecasts Slide 96

97 Energy Efficiency Future Energy Efficiency 3 Extension of previous programs from 2012 to Conceptual stage. Will add new programs and potentially new technologies to EE2 inventory. In 2017, savings are at the CPR 2002 Likely Achievable level for Slide 97

98 Energy Efficiency Future Energy Efficiency 4 A more aggressive version of EE programs. Starts in 2010, but flexible. Conceptual stage. New programs and technologies. In 2024, savings are at the CPR 2002 Upper Achievable level for Achieving EE4, depends on our ability to influence the actions of allies and governments. Slide 98

99 Energy Efficiency Future Energy Efficiency 5 A very aggressive version of EE programs. Can start in 2008 at the earliest, most likely later. Conceptual stage. New programs and technologies. In 2024, savings are at the CPR 2002 mid-point between Upper Achievable and Economic for Achieving EE5, depends significantly on our ability to influence the actions of allies and governments. Slide 99

100 Energy Efficiency Future DSM Annual Energy Savings Slide 100

101 Energy Efficiency Future Treatment of DSM in the IEP Committed resources, EE2 and Load Displacement, are netted out of the load forecast. For EE options, future savings are held constant when netting out of the load forecast. When treating EE options as a resource and when calculating cost tests, savings are only included until their persistence (as per the 10-Year Plan) ends. Slide 101

102 Energy Efficiency Future Supply Curve Slide 102

103 Breakout Session Discussions Rick Knowlan

104 Breakout Session Discussions Your ideas and comments for the future of energy efficiency To reduce energy use and demands on our system, what would you suggest in terms of... technologies programs tools 2. Are there any rate options that you think may be useful to consider further in a General Rate Design application? Slide 104

105 Wrap-up Richard Marchant

106 Thank You More information at: