Potential for Energy Efficiency in the Power Sector and Role of ...

Potential for Energy Efficiency in the Power Sector
and Role of Institute for Electric Efficiency
Lisa Wood
Executive Director
January, 2009

Institute for Electric Efficiency
• Mission
– To advance energy efficiency practices and demand response
among electric utilities
• Role of IEE
– Provide resources/share information and best
practices/clearinghouse/discussion groups
– Identify key issues & barriers/enablers
– Collaborate with power industry and advisory committee to
advance EE
• Funding
– IEE member electric utilities. Launched in 2008.
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IEE Governance
• Management committee of 17 CEOs of investor-owned
utilities
– Chair, Jim Rogers, President & CEO, Duke Energy
• Advisory committee of leading energy efficiency advocacy
organizations and policy makers
– ASE, ACEEE, CEE, DRAM, EPRI, NRDC, NARUC, NASUCA,
RMI, Sierra Club
– DOE, EPA, FERC
• Strategy committee of VPs overseeing energy efficiency
in electric utilities
3

Power industry challenges
• Rising demand
• Rising construction costs
• Rising fuel costs
• Shrinking generation reserve margins
• Climate change
• Difficult lending environments
4

Non-Coincident Peak Demand (GW)
Electricity usage (TWh) and summer peak
demand (GW) forecast (EIA)
TWh
5,000
4,500
4,000
Reference Electricity Forecast
Industrial
Commercial
Residential
Reference Summer Peak Demand Forecast
1,400
Industrial
Commercial
1,200
Residential
3,500
3,000
1,000
800
2,500
2,000
600
1,500
400
1,000
500
200
-
2008 2010 2020 2030
-
2008 2010 2020 2030
5

Energy efficiency is fundamental to the
power business – 1 st fuel!
• EE and DR are cost-effective ways to:
– Reduce carbon emissions,
– Significantly moderate expected growth in electricity
• EE programs can offset about 1/3 of expected growth in
electricity usage, and
• EE and DR programs can offset about 50% of expected
growth in summer peak demand between 2008 and 2030.
• EE and DR help customers manage electricity usage
Source: EE and DR potential estimates based on, Assessment of Achievable Potential for Energy
Efficiency and Demand Response in the U.S., EPRI Report No. 1016987. January 2009.

$Billions
Utility spending on energy efficiency is
increasing significantly in the U.S. (EIA)
$3.0
Total Utility Spending on EE & LM (2000 - 2007)
Source: EIA Form 861
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
2000 2001 2002 2003 2004 2005 2006 2007
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Usage forecast - baseline vs. realistically achievable
potential. EE programs can achieve 398 TWh of
savings by 2030 (EPRI report)
Annual Electricity Use (TWh)
5,000
4,500
Baseline Forecast
Realistic Achievable Potential
Maximum Achievable Potential
398 TWh
savings
in 2030
Actual
4,000
3,500
3,000
2,500
1990 1995 2000 2005 2010 2015 2020 2025 2030
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TWh
EE savings potential of 398 TWh in 2030 (realistically
achievable - EPRI) vs. actual 67 TWh in 2007 (EIA)
Total TWh Savings Due to Energy Efficiency
400
350
398 TWh
300
250
200
150
207 TWh
100
50
0
67 TWh
2007 2020 2030
Actual Realistically Achievable Potential (EPRI, 2009)
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Percent of Total Load
Energy efficiency programs can save 398 TWh or 8%
of U.S. electricity usage in 2030
12%
11.2%
10%
8%
6%
10.1%
8.2%
8.2% achievable
reduction from
baseline
4%
4.8%
2%
2.1%
0%
Maximum
Achievable Potential
0.5%
Realistic Achievable
Potential
2010
2020
2030
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Residential
Commercial
Industrial
Top “3” end uses for EE savings potential (EPRI
report)
Electronics
Cooling
2030
2020
2010
Appliances
Lighting
Other
Cooling
Machine Drive
Lighting
HVAC
0 20 40 60 80 100
Annual Electricity Savings (TWh)
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Peak demand forecast – baseline vs. realistically
achievable potential. EE and DR programs can
achieve 157 GW of savings by 2030 (EPRI report)
Non-Coincident Summer Peak Demand (GW)
1,200
1,000
Baseline
Realistic Achievable Potential
Maximum Achievable Potential
Actual
157 GW
savings
in 2030
800
600
400
200
-
1986 1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030
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GW
EE and DR GW savings potential of 157 GW in 2030
(realistically achievable - EPRI) vs. actual 30 GW in 2007 (EIA)
Total Peak Load Reduction due to EE and DR
160
140
120
157 GW
100
80
60
79 GW
40
20
0
30 GW
2007 2020 2030
Actual Realistically Achievable Potential (EPRI, 2009)
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Percent of Summer Peak Demand
EE and DR programs together can save 157 GW or 14% of U.S.
summer peak demand (GW) in 2030 – half EE and half DR
20%
18%
16%
19.5%
14%
12%
10%
15.3%
14.0%
8%
6%
8.2%
4%
2%
0%
4.9%
2.2%
2020
2030
Maximum Achievable
Potential
Realistic Achievable
Potential
2010
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Portfolio of sources for peak demand
savings (EPRI report)
Price-Response
DLC-Water Heating
DLC-Central AC
2030
2020
2010
Commercial Industrial Residential
Price-Response
Interruptible Demand
DLC-Process
Price-Response
Interruptible Demand
DLC-Other
Direct Control-Lighting
DLC-Cooling
- 5,000 10,000 15,000 20,000 25,000
Cumulative Summer Peak Demand Savings (MW)
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IEE focus: Key issues surrounding significant
growth in EE and DR nationwide
1. Making EE scalable and sustainable
– Regulatory framework for EE business (e.g., cost recovery,
incentives, disincentives).
– Range of best practices – one size does not fit all
– Measurement and verification of EE savings
– Interface between EE programs and codes & standards
– Well defined roles for utilities vs. 3 rd party administrators
2. Utilizing all sources for peak demand reduction
– Price response, direct load control, & interruptible programs
– AMI/dynamic pricing rollout to mass market critical component
3. Effective programs for low income customers
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Institute for Electric Efficiency – role,
focus, vision
• Educate
• Communicate
• Collaborate with advisory committee members
• Advance EE practices and demand response in
power sector
• Work with utilities in leading EE
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IEE website –
www.edisonfoundation.net/IEE
IEE
website
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For more information, contact:
Lisa Wood
Executive Director
lwood@edisonfoundation.net
202.508.5550
Institute for Electric Efficiency
701 Pennsylvania Ave., N.W.
Washington, D.C. 20004-2696
http://www.edisonfoundation.net/IEE
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