A Review of Energy Efficiency Potential Studies in the Midwest

Transcription

1 A Review of Energy Efficiency Potential Studies in the Midwest A research project by the Energy Center of Wisconsin and the American Council for an Energy-Efficient Economy for the Midwestern Governors Association Preliminary Findings and Discussion 16 December 08 Marty Kushler and Dan York, ACEEE Susan Stratton, ECW

2 Purpose Summarize the results of recent Midwest EE potential studies including the scopes and questions posed by the funders/sponsors. Examine the opportunity for additional efficiency achievement under a situation where carbon values are considered. Provide a roadmap to the Midwest states to conduct more comprehensive studies that examine potential to achieve higher levels of efficiency considering current fuel costs, carbon costs, and inclusion of both technology implementation and behavior change.

3 Summary of Midwest Energy Efficiency Potential Studies for Electricity Title State/Region Date Published Assessment of Energy Efficiency Potential: Ontario 7-Oct-05 The Potential for Energy Efficiency in the State of Iowa IA Jun-01 Assessment of Energy and Capacity Savings Potential in Iowa IA Feb-08 Energy Efficiency and Customer-Sited Renewable Energy: Achievable Potential in Wisconsin WI 2005 Xcel Energy Residential DSM Market Assessment Report MN Jul-03 Illinois Residential Market Analysis IL 12-May-03 Midwest Residential Market Assessment and DSM Potential Study Midwest Mar Missouri Statewide Residential Lighting and Appliance Efficiency Saturation Study MO 15-Nov-06 Duke Indiana DSM Market Assessment and DSM Action Plan: Final Report IN 2007 Summary Document for Minnesota Market Assessment Studies MN 2004 Energy Efficiency and Economic Development in the Midwest Midwest Apr-95 Assessment of Achievable Potential for Energy Efficiency and Demand Response in the US ( ) US Aug-08

4 Summary of Midwest Energy Efficiency Potential Studies for Electricity State (year completed) Economic Potential (% savings/year) Residential All Sectors Achievable Potential (% savings/year) Residential All Sectors Illinois (2003) 0.5% Indiana (2007) 0.8% Iowa (2008) 1.7% Kansas (2008) 1.8% 1.7% 0.9% 1.1% Midwest (2006) 0.5% Minnesota (2003) 0.7% Wisconsin (2005) 0.8% Ontario (2005) 1.1% 0.7% Median 1.2% 1.7% 0.7% 0.8%

5 Summary of Midwest Energy Efficiency Potential Studies for Natural Gas State (year completed) Economic Potential (% savings/year) All sectors Achievable Potential (% savings/year) All sectors Illinois (2003) 0.6% Indiana (2007) 0.6% Iowa (2006) 2.7% Kansas (2008) 2.2% 1.5% Midwest (2006) 1.3% Wisconsin (2005) 0.4% Median 2.5% 0.6%

6 Summary of Non-Midwestern Studies of Energy Efficiency Potential for Electricity (part 1 of 2) Total Efficiency Potential over Study Time Period (%) Study Period Average Annual Efficiency Potential (%) Region of Study Technical Economic Achievable (years) Technical Economic Achievable U.S. (2000) NA NA 24% 20 NA NA 1.20% Mass. (RLW 2001) NA 24% NA 5 NA 4.80% NA Calif. (Xenergy/EF 2002) 18% 13% 10% % 1.30% 1.00% Southwest (SWEEP 2002) NA NA 33% 17 NA NA 1.90% NY (NSERDA/OE 2003) 36% 27% NA % 1.40% NA Oregon (2003) 31% NA NA % NA NA Puget (2003) 35% 19% 11% % 1.00% 0.60% Vermont (2003) NA NA 31% 10 NA NA 3.10% Quebec (Optimal 2004) NA NA 32% 8 NA NA 4.00%

7 Summary of Non-Midwestern Studies of Energy Efficiency Potential for Electricity (part 2 of 2) Total Efficiency Potential over Study Time Period (%) Study Period Average Annual Efficiency Potential (%) Region of Study Technical Economic Achievable (years) Technical Economic Achievable New Jersey (Kema 2004) 23% 17% 11% % 1.10% 0.70% Conn. (GDS 2004) 24% 13% NA % 1.30% NA New England (Optimal 2005) NA NA 23% 10 NA NA 2.30% Northwest (NW Council 2005) 25% 17% 13% % 0.90% 0.60% Georgia (ICF 2005) 29% 20% 9% % 2.00% 0.90% California (Itron 2006) 21% 17% 8% % 1.30% 0.60% North Carolina (GDS 2006) 33% 20% 14% % 2.00% 1.40% Florida (ACEEE 2007) NA 25% 20% 15 NA 1.70% 1.30% Texas (ACEEE 2007) NA 30% 18% 15 NA 2.00% 1.20% Utah (SWEEP 2007) NA NA 26% 15 NA NA 1.70% Vermont (GDS 2007) 35% 22% 19% % 2.20% 1.90% Average NA NA NA NA 2.30% 1.80% 1.50%

8 How does Potential Compare to Actual Savings? Verified data on savings is available from 3 Midwest states Minnesota Iowa Wisconsin Comparisons to verified savings in Non- Midwestern states will provide a range of results

9 Annual spending and savings by energy efficiency programs in leading states Total EE Program Expenditures Spending as % of Total Utility Revenues EE spending per capita EE program annual savings EE savings as % of total sales $000s % $/capita MWh % CA $357,000 $645, % 1.9% $ ,912,000 2,275, % 0.9% CT $70,999 $98, % 2.1% $ , , % 1.3% IA $52,241 NA 1.7% NA $17.57 NA 314,248 NA 0.7% NA MA $125,000 $120, % 1.4% $19.43 $ , , % 0.9% MN $48,109 $68, % 1.5% $ ,443 NA 0.6% NA NJ $83,177 $95, % 1.0% $ , , % 0.3% NV $24,000 $28, % 0.8% $ , , % 0.6% NY $224,897 $239, % 1.1% $ ,293 NA 0.6% NA OR $63,318 $69, % 2.2% $ , , % 0.9% RI $17,178 $17, % 1.6% $ ,048 64, % 0.8% TX $57,800 $79, % 0.2% $ , , % 0.1% VT $15,806 $23, % 3.5% $ , , % 1.8% WA $113,288 $126, % 2.4% $ , , % 0.7% WI $73,285 $90, % 1.6% $ ,232 NA 0.5% NA

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13 Summary of Annual Energy Efficiency Savings for Natural Gas State EE savings as a % of total sales to end-use customers Iowa 0.9% Vermont 0.7% Minnesota 0.6% Wisconsin 0.5% California 0.3% Oregon 0.2% New Jersey 0.2% New York 0.1%

14 Findings Studies of EE potential in the Midwest are very limited, both in number and methodological approach. There are many gaps in existing studies states, sectors, fuels not included---also don t all include achievable potential estimates. The few available studies of the EE potential for Midwestern states have tended to estimate achievable potential of 1% per year or less. Studies of other states and regions show relatively higher results averaging 1.5%.

15 Findings Several states have achieved ~1%/yr savings in electricity: Vermont highest at 1.8% Connecticut 2nd at 1.3% Leading Midwestern states (2006) (Higher goals in process) Iowa: 0.7%/yr Minnesota: 0.6%/yr Wisconsin: 0.5% Natural gas savings is smaller than electricity and range from 0.1% to 0.9% nation-wide

16 Findings Past actual results have all been limited by funding allowed not any practical limit to what is achievable Past results all have placed a premium on achieving high cost-effectiveness (low cost/saved kwh or high B/C ratio) NOT achieving higher amounts of resources at higher costs that are still less than or equal to avoided supply-side costs. All less than MGA goals of 2%/year both for estimated potentials and for actual results to date

17 Why the differences? Conservative biases of existing studies Avoided costs (used to screen cost-effective technologies) generally used in studies did not incorporate the much higher fuel costs and the dramatically higher power plant construction costs that we now face. Emerging and advanced new technologies generally not included estimates based on off-the-shelf technologies of early 2000s. Carbon costs generally not included. Achievable defined relative to past program and market experience very different customer awareness and market conditions today for energy and end-use energy technologies.

18 Why the differences? Conservative biases of existing studies Achievable also based on past program approaches, designs and results---not necessarily new, innovative and more aggressive designs. Estimates are generally measure by measure difficult to include integrated sets of multiple measures that can be synergistic (sum > parts). Studies generally don t include big, bold leaps in technology such as net zero energy buildings now established as targets for California in 2020 and 2030.

19 Why the differences? Conservative biases of existing studies Some markets and end-uses usually not included, for example if data unavailable or poor quality e.g., lack of research on the cost or feasibility of a measure generally means it will be excluded, even if very promising. Conservatism built into each key assumption all the way through analyses afraid of coming up with results that seem too far fetched results generally supported more modest increases in program activities, goals and funding. Uncertainty almost always treated as taking most conservative assumption about range of possible values.

20 Why the differences? Conservative biases of existing studies Realization rates (customer participation) almost always fall on conservative side of possible range due to questions about social acceptance of energy efficiency. Once known efficiency measures are implemented, studies assume no further improvements will be made over study period. Studies rely on projected costs of energy efficiency not realized (actual) costs, which typically may be lower than projected---and also may decrease over time (for example, history of CFLs shows rapid cost decrease). Studies ignore non-energy benefits e.g., increased thermal comfort, increased productivity and environmental benefits.

21 Conclusions The MGA goal of 2.0% savings per year for electricity is aggressive, but not unsupportable. Indeed, even with substantial conservatisms, nine out of the 20 non-midwest studies had either an achievable or economic potential of 1.90% per year or above. Natural Gas savings may be smaller due to range of measures available. MGA goals were established in a new policy, market and social context much more favorable to EE past EE potential studies and impacts of prior programs provide a guide, but shouldn t limit these goals. MGA goals will stretch state and utility programs: States with strong, well-established programs are well poised to take this step to reach higher goals; States restarting programs after long periods without activity have a longer stretch, but also have large amounts of relatively low-cost and easy-to-achieve resources (for instances, commercial lighting).

22 Recommendations Would be beneficial for Midwest States to commission new studies given the new policy, economic, environmental and social context particularly addressing past conservative biases and gaps to yield a study that explores broader range of possibilities. Wisconsin is conducting a new energy efficiency potential study more in line with present needs, objectives and realities. This study may provide a model for similar studies. MGA should continue to monitor leading states (not just Midwestern) and the results they achieve with similarly higher, more aggressive energy efficiency goals.

23 Recommendations Future studies of energy efficiency potentials in the Midwest should: Include the new, higher, 'avoided costs' when assessing how much EE would be cost-effective using ranges may be helpful. Fully incorporate "carbon costs" in the analysis again, exploring ranges of possible, likely outcomes. Include reasonable assumptions on EE technology improvements and resulting costs over time and better capture advanced, integrated packages of measures. Attempt to reflect the new and different social/political and economic contexts surrounding energy and energy efficiency.