Cop23 - IRENA PANEL - Policies for the integrated promotion of energy efficiency and renewables

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INTERNATIONAL EXAMPLES AND CHALLENGES FOR TRANSFER

POLICIES FOR THE INTEGRATED PROMOTION OF ENERGY EFFICIENCY AND RENEWABLES

7 November 2017

IRENA Pavilion

• Dr. K

Dr. Karoline Steinbacher

Senior Consultant

Ecofys

/ ©ECOFYS, A NAVIGANT COMPANY. ALL RIGHTS RESERVED2 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED22 / ©ECOFYS, A NAVIGANT COMPANY. ALL RIGHTS RESERVED

AT A GLANCE: ECOFYS, A NAVIGANT COMPANY

Global consulting company founded in 1984 with the mission to enable sustainable energy for everyone – since 2016, Ecofys has been part of Navigant’s global Energy practice

We have over 600 experts skilled in energy, climate, environment, economy, communication, law, and psychology – in 2007, 11 of our experts supporting the Intergovernmental Panel on Climate Change were awarded the Nobel Prize together with Al Gore

More than 30 years of experience in developing and evaluating policies, sustainability strategies, and scenarios for companies and sectors provides us with deep knowledge of markets and consumer behaviour

Our strength lies in our strategic understanding of complex energy and climate transition issues: Ecofys connects the dots within the triangle between governments, energy players, and energy-intensive end-users

Ecofys has five offices in four countries: Utrecht, the Netherlands; Cologne & Berlin, Germany; Brussels, Belgium; London, United Kingdom – as part of Navigant, our experts are based in more than 20 offices in the US and Canada, Hong Kong, and the Middle East

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TABLE OF CONTENTS

1. Need for an integrated approach to RE & EE promotion

2. Challenges for integrated RE-EE policies

3. International experiences

4. Conclusion


A NEED FOR INTEGRATING RE & EE PROMOTION

• Integrated thinking on EE & RE needed to advance decarbonization

• In the EU, Energy Union communication/Clean Energy Package ask for

Efficiency First principle & demand-side participation in market

• Current mosaic of measures on demand and supply side

• Implementing integrated policy approach to EE & RE promotion

challenging

• Ecofys advising a broad range of clients in Europe and beyond on EE and

RE policies – and how to integrate them


QUESTIONS AND CHALLENGES OF INTEGRATED RE-EE POLICIES

• How to value demand- and supply-side measures?

• What should be auctioned if both are promoted in an integrated manner?

• How can the system cost perspective be integrated?

• How can tradeoffs of RE vs. EE policies be mitigated (reduced demand ->

declining need for capacity; improved building efficiency -> more difficult

business case for district heating etc.)?

• How can private investment decisions (for EE and RE) and overarching

policy goals be aligned?


INTERNATIONAL EXPERIENCES (I)

• Longstanding experience in the US with integrating demand- and supply-side resources in Integrated Resource Plans (IRPs)

Example Approach

California / Preferred resources pilot PRP by Southern California Edison

• „Loading Order“ as a regulatory principle included in Energy Action Plan – useefficiency as first resource

• Guidelines for integrated resource planning by utilities currently being adopted• Practical experience generated, e.g. in Preferred Resources Pilot (PRP) by

Southern California Edison• To offset demand growth, PRP looks at efficiency measures, decentralized

renewables and demand response in an integrated way• Procurement of demand- and supply side measures in separate calls

Oregon(Northwest Power & Conservation Council), PacifiCorp

• „Least cost planning“ approach obliges utilities to compare all available demand-side measures with supply side

• E.g., PacifiCorp evaluates demand- and supply side measures in an integratedway, adding demand-side measures to a supply curve


INTERNATIONAL EXPERIENCES (II)

• While integrated planning is common, few examples of integrated procurement/promotion of RE & EE

Example Approach

Con Edison, New York, USA

• Implementation of an integrated, technology-neutral auction to contract resourcesin order to avoid grid exentesion

• All efficiency measures with an impact of electricity consumption, generationtechnologies and storage allowed to participate

Denmark • Danish energy agency makes „Levelized Cost of Energy“(LCOE)-calculatoravailable

• Allows for direct comparison of supply- and demand-side measures and can beapplied to different country contects

• On a national level, Energy Efficiency Obligation leaves freedom of choice ofmeasures to companies who can use the LCOE-calculator

• Further refinement of the tool is underway


CONCLUSIONS

Transferring experience with IRP to liberalized energy markets is not straightforward

Integrated policies to promote RE and EE need to be developed to tap decarbonization potential

Discussion on CO2 price relevant to promote demand- and supply-side measures across sectors

Defining clear long-term goals of integrated strategies appears necessary to design programs and reduce risk of target conflicts


DR. KAROLINE STEINBACHERSenior Consultant

[email protected]

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Cop23 - IRENA PANEL - Policies for the integrated promotion of energy efficiency and renewables

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