EVALUATION OF PSEG LONG ISLAND ENERGY EFFICIENCY & RENEWABLE ENERGY PROGRAMS. Presentation to LIPA Trustees REV Committee

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1 EVALUATION OF PSEG LONG ISLAND ENERGY EFFICIENCY & RENEWABLE ENERGY PROGRAMS Presentation to LIPA Trustees REV Committee July 25, 2018

2 Opinion Dynamics Opinion Dynamics Evaluation Team has been providing annual independent evaluation of programs for nine years ( ) Primary aim is to design and administer an evaluation that is transparent, well documented, relies on best in class methodologies, and complies with all regulatory requirements In addition to efficiency and renewable program evaluations, we support clients throughout the U.S. and Canada with: Program design Cost effectiveness analysis Baseline studies Assessment of potential Demand response and behavioral program evaluation Distributed energy resources planning 2

3 Three kw and kwh Savings Values Evaluated 3

4 Evaluation Overview Energy efficiency and renewable energy programs combined 2017 Verified Ex Ante Savings 61.3 MW and 286,561 MWh 131% of demand goal and 111% of energy goal 2017 Evaluated Savings 67.6 MW and 262,427 MWh 145% of demand goal and 102% of energy goal 2017 Greenhouse gas reductions 158,000 tons of CO 2 equivalent Equivalent to removing about 31,000 cars from the road Cumulative Evaluated Savings 2009 through MW and 2,335,000 MWh 1,400,000 tons of CO 2 equivalent Equivalent to removing about 274,000 cars from the road 4

5 Evaluation Overview Evaluation found that energy efficiency and renewable energy programs are delivered cost effectively overall $83.2M investment in energy efficiency and renewable energy programs in 2017 $111.2M in total first year economic benefits to the region 773 FTEs on Long Island (first year impact) $734.1M investment in energy efficiency and renewables from

6 Summary of 2017 Program Energy Savings Vs Goals 6

7 Energy Efficiency Portfolio Cost Effectiveness in 2017 In 2017 energy efficiency programs are cost effective compared to supply alternatives from a societal perspective Using standard methodology with PSEG Long Island s avoided costs resulted in benefits > costs 7

8 Energy Efficiency Portfolio Trends in Energy Savings Exceeded ex ante goals at portfolio level Assumptions for lighting market for LEDs were refined in 2017 and are being reflected in 2018 and future program planning and take into consideration recent secondary and primary research: Net-to-gross ratio lowered from 1.2 to 0.55 In-service rates lowered from 100% to 89% Annual hours of use increased from 1,022 to 1,159 Upcoming federal lighting efficiency standards (EISA 2020) will further reduce savings opportunities from residential lighting as the market fully transforms to LEDs Newly implemented Home Energy Management program began in 4 th Quarter Program started later in year than anticipated realizing 25% of the energy savings goal in 2017 Full savings potential should be realized in 2018 as program is now fully up and running 8

9 Renewable Program Cost Effectiveness in 2017 Benefits/Costs <1 from societal perspective Upfront cost of solar PV equipment Rebates are not factored into societal cost test, which are considered to be a transfer between utility and customers Potential value of renewable energy credits ( REC ) are not incorporated as rules are being developed 9

10 Total Installations A total of 39,405 PV systems have been interconnected on Long Island from 2000 to 2017 Approximately 63% of these systems received up-front rebates from LIPA, PSEG Long Island, or NY Sun Initiative All systems receive benefits of net metering Source: PSEG Long Island Interconnection Data and Program Tracking Data PSEG Long Island Historic Solar Analysis 10

11 Renewable Program Trends in 2017 Renewable portfolio exceeded its goals in 2017, but saw decline in new projects and generation capacity compared to previous years NYSERDA NY-Sun initiative rebates for residential solar on Long Island fully subscribed Total residential installations maintained pace from previous year Number of commercial installations similar to 2016, but trending toward larger systems Solar PV market on Long Island remains strong About 32% of systems installed in 2017 did not receive a rebate, but continued to benefit from net metering LIPA and PSEG Long Island s legacy programs, Solar Pioneer and Solar Entrepreneur, combined with falling costs of solar PV, were integral in building and helping the continued sustainability of the robust solar PV market on Long Island 11

12 Energy Efficiency & Renewable Programs Relative Contributions over Past Nine Years (2009 to 2017) *Decrease in 2017 GWH primarily due to lower net-to-gross ratio and in-service rate factors applied to residential lighting net evaluated savings. 12

13 Conclusions Programs are well managed and cost effective overall Verified ex ante savings compare well to ex ante savings Some notable differences between evaluated savings and ex ante savings Lower overall for energy savings Higher overall for demand savings Adjustments made to 2018 planning and savings assumptions should eliminate the majority of the differences PSEG Long Island has leveraged evaluation results to improve program design, operations, and planning PSEG Long Island is proactively addressing changing markets and regulatory circumstances and identifying new savings opportunities Programs continue to yield positive impacts on the Long Island economy and environment 13

14 Questions and Discussion 14

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