Northwest Power and Conservation Council The Role of Energy Efficiency The Role of Energy Efficiency in Could (and Should) Play in in Could (and Should) Play in Montana’s Future Montana’s Future Insights from the 5 Insights from the 5 th th Northwest Northwest Power and Conservation Plan Power and Conservation Plan Tom Eckman Tom Eckman Manager, Conservation Resources Manager, Conservation Resources Northwest Power and Conservation Council Northwest Power and Conservation Council Presented October 18, 2005 Presented October 18, 2005 Montana Energy Futures Conference Montana Energy Futures Conference
67
Embed
Northwest Power and Conservation Council The Role of Energy Efficiency in Could (and Should) Play in Montana’s Future Insights from the 5 th Northwest.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Northwest Power and ConservationCouncil
The Role of Energy Efficiency The Role of Energy Efficiency in Could (and Should) Play in Montana’s in Could (and Should) Play in Montana’s FutureFuture
Insights from the 5Insights from the 5thth Northwest Northwest Power Power and Conservation Planand Conservation Plan
– What These Might Mean for MontanaWhat These Might Mean for Montana
What’s Behind the GoalsWhat’s Behind the Goals
The Challenges AheadThe Challenges Ahead
slide 3
Northwest Power and ConservationCouncil
PNW Energy Efficiency PNW Energy Efficiency AchievementsAchievements1978 - 20041978 - 2004
0
500
1,000
1,500
2,000
2,500
3,000
Avera
ge M
egaw
att
s
1978 1982 1986 1990 1994 1998 2002
BPA and Utility Programs Alliance ProgramsState Codes Federal Standards
Since 1978 Utility & BPA Since 1978 Utility & BPA Programs, Energy Codes & Programs, Energy Codes & Federal Efficiency Standards Have Federal Efficiency Standards Have Produced Nearly 3000 aMW of Produced Nearly 3000 aMW of Savings.Savings.
slide 4
Northwest Power and ConservationCouncil
So What’s 3000 aMW?So What’s 3000 aMW?
It was enough electricity to serve the It was enough electricity to serve the entireentire state of Montana, state of Montana, plusplus 60% of Idaho in 2004 60% of Idaho in 2004
- OR –- OR –
It was enough electricity to serve the It was enough electricity to serve the entireentire state of Idaho state of Idaho plusplus Western Montana in 2004 Western Montana in 2004
It Saved the Region’s Consumers Nearly It Saved the Region’s Consumers Nearly $1.25 billion$1.25 billion in 2004 in 2004
slide 5
Northwest Power and ConservationCouncil
Energy Efficiency Resources Energy Efficiency Resources Significantly Reduced Projected PNW Significantly Reduced Projected PNW
Electricity SalesElectricity Sales
14,000
16,000
18,000
20,000
22,000
24,000
1980 1985 1990 1995 2000
Avera
ge M
eg
aw
att
s
Medium High ForecastMedium LowMedium High Minus ConservationActual
slide 6
Northwest Power and ConservationCouncil
Energy Efficiency Met Nearly 40% of Energy Efficiency Met Nearly 40% of PNW Regional Firm Sales Growth PNW Regional Firm Sales Growth
Between 1980 - 2003Between 1980 - 2003
61%
39%
Generation Conservation
slide 7
Northwest Power and ConservationCouncil
Regional Utility Conservation Acquisitions Have Regional Utility Conservation Acquisitions Have Helped Balance Loads & ResourcesHelped Balance Loads & Resources
0
20
40
60
80
100
120
140
160
1978 1982 1986 1990 1994 1998 2002
Conse
rvati
on A
cquis
itio
ns
(aM
W)
Response to West Coast
Energy CrisisResponse to NW
Recession
Response to “Restructuring
Discussions”
Creating Mr. Toad’s Wild Ride for the PNW’s Energy Efficiency IndustryCreating Mr. Toad’s Wild Ride for the PNW’s Energy Efficiency Industry
slide 8
Northwest Power and ConservationCouncil
Utility Acquired Energy Efficiency Has Been Utility Acquired Energy Efficiency Has Been A BARGAIN!A BARGAIN!
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
May
-96
Nov-9
6
May
-97
Nov-9
7
May
-98
Nov-9
8
May
-99
Nov-9
9
May
-00
Nov-0
0
May
-01
Nov-0
1
May
-02
Nov-0
2
May
-03
Nov-0
3
May
-04
Nov-0
4
May
-05
Wh
ole
sale
Ele
ctri
city
Pri
ce (
20
00
$/M
WH
)
Levelized Cost of EfficiencyAcquisitionsWholesale Market Price
slide 9
Northwest Power and ConservationCouncil
So Much for the Past, So Much for the Past, What’s AheadWhat’s Ahead
55thth Plan Relies on Conservation and Renewable Plan Relies on Conservation and Renewable
Resources to of Meet Load GrowthResources to of Meet Load Growth**
**Actual future conditions (gas prices, CO2 control, conservation accomplishments) will Actual future conditions (gas prices, CO2 control, conservation accomplishments) will change resource development schedulechange resource development schedule
slide 11
Northwest Power and ConservationCouncil
Cost-Effective and Achievable Cost-Effective and Achievable Conservation Should Meet Over 45% of Conservation Should Meet Over 45% of
PNW Load Growth from 2005-2025*PNW Load Growth from 2005-2025*
0
5 0 0
1 0 0 0
1 5 0 0
2 0 0 0
2 5 0 0
3 0 0 0
C o s t - E ff e c t iv e P o t e n t ia l( a M W in 2 0 2 5 )
A g r i c u l t u r a l S e c t o r - 8 0 a M W
N o n - D S I I n d u s t r i a l S e c t o r - 3 5 0 a M W
C o m m e r c i a l S e c t o r N o n - B u i l d i n g M e a s u r e s - 4 2 0 a M W
H V A C , E n v e l o p e & R e f r i g e r a t i o n - 3 7 5 a M W
N e w C o m m e r c i a l B u i l d i n g L i g h t i n g - 2 2 0 a M W
E x i s t i n g C o m m e r c i a l B u i l d i n g s L i g h t i n g - 1 3 0 a M W
R e s i d e n t i a l S p a c e C o n d i t i o n i n g - 2 4 0 a M W
R e s i d e n t i a l L i g h t i n g - 5 3 0 a M W
R e s i d e n t i a l W a t e r H e a t i n g - 3 2 5 a M W
R e s i d e n t i a l A p p l i a n c e s - 1 4 0 a M W
Plans Along the Efficient Frontier Permit Plans Along the Efficient Frontier Permit Trade-Offs of Costs Against RiskTrade-Offs of Costs Against Risk
$35,500
$36,000
$36,500
$37,000
$37,500
$23,600 $23,800 $24,000 $24,200 $24,400 $24,600
NPV System Cost (Millions)
NPV
Syst
em
Ris
k (
Mill
ions)
Least Risk
Least Cost
slide 17
Northwest Power and ConservationCouncil
Three Conservation Options TestedThree Conservation Options Tested
Option 1Option 1: : AcceleratedAccelerated – Similar to the “best – Similar to the “best performance” over the last 20 yearsperformance” over the last 20 years– Non-lost opportunity limited to 120 aMW/yearNon-lost opportunity limited to 120 aMW/year– Ramp-up lost-opportunity to 85% by 2017Ramp-up lost-opportunity to 85% by 2017
Option 2Option 2: : SustainedSustained - Similar to typical rates over - Similar to typical rates over last 20 yearslast 20 years– Non-lost opportunity limited to 80 aMW/yearNon-lost opportunity limited to 80 aMW/year– Ramp-up lost-opportunity to 85% by 2017Ramp-up lost-opportunity to 85% by 2017
Option 3Option 3: : Status QuoStatus Quo - Similar to lowest rates over - Similar to lowest rates over last 20 yearslast 20 years– Non-lost opportunity limited to 40 aMW/yearNon-lost opportunity limited to 40 aMW/year– Ramp-up lost-opportunity to 85% penetration by 2025Ramp-up lost-opportunity to 85% penetration by 2025
slide 18
Northwest Power and ConservationCouncil
Average Annual Conservation Average Annual Conservation Development for Alternative Levels of Development for Alternative Levels of
Accelerating Conservation Accelerating Conservation Development Reduces Cost & Development Reduces Cost &
RiskRisk
$20
$22
$24
$26
$28
$30
$32
$34
$36
$38
$40
Option 1 - Accelerated Option 2 - Sustained Option 3 - Status Quo
NPV
(bill
ion
20
04
$)
NPV System Cost NPV System Risk
slide 20
Northwest Power and ConservationCouncil
WECC Carbon Dioxide Emissions WECC Carbon Dioxide Emissions Reductions for Alternative Reductions for Alternative
Conservation TargetsConservation Targets
0
10
20
30
40
50
60
70
80
Mill
ion T
ons
over
20 y
ears
Option 1 - Accelerated Option 2 - Sustained Option 3 - Status Quo
slide 21
Northwest Power and ConservationCouncil
Why Energy Efficiency Reduces NPV Why Energy Efficiency Reduces NPV System Cost and RiskSystem Cost and Risk
It’s A Cheap (avg. 2.4 cents/kWh TOTAL It’s A Cheap (avg. 2.4 cents/kWh TOTAL RESOURCE COST) Hedge Against Market RESOURCE COST) Hedge Against Market Price SpikesPrice Spikes
It has value even when market prices are It has value even when market prices are low low
It’s Not Subject to Fuel Price RiskIt’s Not Subject to Fuel Price Risk It’s Not Subject to Carbon Control RiskIt’s Not Subject to Carbon Control Risk It’s Significant Enough In Size to Delay It’s Significant Enough In Size to Delay
“build decisions” on generation“build decisions” on generation
slide 22
Northwest Power and ConservationCouncil
The Plan’s Targets Are A The Plan’s Targets Are A Floor, Not a CeilingFloor, Not a Ceiling
When we took the “ramp rate” constraints off the portfolio model it developed
1500 aMW1500 aMW
of Conservation in 2005
slide 23
Northwest Power and ConservationCouncil
Where Are The Savings?Where Are The Savings?
slide 24
Northwest Power and ConservationCouncil
Sources of Savings by SectorSources of Savings by Sector
Estimate of 5% of 2025 forecast loadsEstimate of 5% of 2025 forecast loads 350 aMW at 1.7 cents per kWh350 aMW at 1.7 cents per kWh Process controls, drive systems, lighting, Process controls, drive systems, lighting,
refrigeration, compressed air, etcrefrigeration, compressed air, etc Potential is a function of the ongoing Potential is a function of the ongoing
changes in region’s industrial mixchanges in region’s industrial mix
Plan Plan Conservation Action ItemsConservation Action Items
Ramp up “Lost Opportunity” conservationRamp up “Lost Opportunity” conservation» Goal => 85% penetration in 12 years Goal => 85% penetration in 12 years » 10 to 30 MWa/year 2005 through 200910 to 30 MWa/year 2005 through 2009
Accelerate the acquisition of “Non-Lost Accelerate the acquisition of “Non-Lost Opportunity” resourcesOpportunity” resources
» Return to acquisition levels of early 1990’sReturn to acquisition levels of early 1990’s» Target 120 MWa/year next five yearsTarget 120 MWa/year next five years
Employ a mix of mechanismsEmploy a mix of mechanisms» Local acquisition programs (utility, SBC Administrator & Local acquisition programs (utility, SBC Administrator &
BPA programs)BPA programs)» Regional acquisition programs and coordinationRegional acquisition programs and coordination» Market transformation venturesMarket transformation ventures
slide 31
Northwest Power and ConservationCouncil
The Total Resource Acquisition Cost* of The Total Resource Acquisition Cost* of 55thth Plan’s Conservation Targets Plan’s Conservation Targets
*Incremental capital costs to install measure plus program administration costs estimated at 20% of capital.
slide 32
Northwest Power and ConservationCouncil
Meeting the Plan’s Efficiency Targets Will Meeting the Plan’s Efficiency Targets Will Likely Require Increased Regional InvestmentsLikely Require Increased Regional Investments
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Avera
ge 1
991-
04
Avera
ge 2
001-
2004
2005
2009U
tilit
y I
nvest
men
ts (
mill
ion
20
00
$)
slide 33
Northwest Power and ConservationCouncil
Although, The Share of Utility Although, The Share of Utility Revenues Required is ModestRevenues Required is Modest
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Aver
age
1991
-04
Aver
age
2001
-200
420
0520
09Share
of
Reta
il R
evenues
(%)
Regional Average Revenues/kWh will need to increase by $0.000006/kWh
slide 34
Northwest Power and ConservationCouncil
Utility* Efficiency Acquisition Plans for 2005 Are Utility* Efficiency Acquisition Plans for 2005 Are Close to 5Close to 5thth Plan Targets Plan Targets
0
20
40
60
80
100
120
2005 5th Plan Target 2005 Utility Acquistion Plan
Conserv
ati
on L
evels
(M
Wa)
*Targets for 15 Largest PNW Utilities. These utilities represent approximately 80% of regional load.
slide 35
Northwest Power and ConservationCouncil
Most IOU Efficiency Plans are Close Most IOU Efficiency Plans are Close to 5to 5thth Plan’s Targets Plan’s Targets
0
5
10
15
20
25
Pacifi
Corp
(OR,W
A,ID)
Puge
t Sou
nd E
nerg
y
Portland
Gen
eral
Idah
o Po
wer
Avist
a Util
ities
North
weste
rn E
nerg
y
Con
serv
ati
on
Levels
(M
Wa)
Plan Targets
Utility Plans
slide 36
Northwest Power and ConservationCouncil
However, Several Large Public Utility Efficiency However, Several Large Public Utility Efficiency
Plans Are Well Below 5Plans Are Well Below 5thth Plan Targets Plan Targets
0
1
2
3
4
5
6
7
8
9
10
Seattl
e City
Lig
ht
Snoho
mish
PUD
Taco
ma
Power
Cowlit
z PU
D
Clark
PUD
EWEB
Grant
PUD
Bento
n PU
D
Flat
head
REA
Con
serv
ati
on
Levels
(M
Wa)
Plan Targets
Utility Plans
slide 37
Northwest Power and ConservationCouncil
SummarySummary The 5th Plan’s Goal IsThe 5th Plan’s Goal Is To Make The To Make The
InefficientInefficient Use of Electricity . . . Use of Electricity . . .– ImmoralImmoral– IllegalIllegal– UnprofitableUnprofitable
If We Fail Both If We Fail Both CostsCosts and and Risk Risk Will Be HigherWill Be Higher
slide 38
Northwest Power and ConservationCouncil
Backup SlidesBackup Slides
slide 39
Northwest Power and ConservationCouncil
Montana Electric Sales Montana Electric Sales 1,490 aMW in 2004 1,490 aMW in 2004
Industrial625 aMW
42%
Commercial440 aMW
30%
Residential425 aMW
28%
Source: US DOE/EIA
slide 40
Northwest Power and ConservationCouncil
Montana Electricity Sales Represent Montana Electricity Sales Represent 8% of Regional Sales Across All 8% of Regional Sales Across All
What’s Left To Do At What’s Left To Do At Home?Home?
65 Average MW
slide 42
Northwest Power and ConservationCouncil
Montana Has The Region’s Lowest Montana Has The Region’s Lowest Market Shares of Electric Water and Market Shares of Electric Water and
Space HeatingSpace Heating
0%
10%
20%
30%
40%
50%
60%
70%
80%
Mark
et
Satu
rati
on
ID MT OR WA Region
Electric Water Heater Electric Heating Central Air Conditioning
slide 43
Northwest Power and ConservationCouncil
Montana’s Average Electricity Montana’s Average Electricity Use/Residential Customer Is The Use/Residential Customer Is The
Lowest in the RegionLowest in the Region
0
2000
4000
6000
8000
10000
12000
14000
Avera
ge A
nnual U
se/C
ust
om
er
(kW
h)
WA OR ID MT Region
slide 44
Northwest Power and ConservationCouncil
But Residential Customer Use Has Not But Residential Customer Use Has Not Declined Since 1990, While Use in Other Declined Since 1990, While Use in Other
PNW States HasPNW States Has
0
2000
4000
6000
8000
10000
12000
14000
16000
1990 1992 1994 1996 1998 2000 2002 2004
Avera
ge
Annual U
se/C
ust
om
er
(kW
h)
ID MT OR WA
slide 45
Northwest Power and ConservationCouncil
Montana’s Housing Stock is Montana’s Housing Stock is Predominantly Single Family and Predominantly Single Family and
Regional Residential Sector Realistically Regional Residential Sector Realistically Achievable Potential for AppliancesAchievable Potential for Appliances
Clothes Washers - 135
aMW75%
Dishwashers - 10 aMW
6%
Refrigerators - 35 aMW
19%
slide 49
Northwest Power and ConservationCouncil
Montana Residential Sector Achievable Montana Residential Sector Achievable Conservation Resource Potential for AppliancesConservation Resource Potential for Appliances
Energy Star Dishwashers
1 MW9%
Energy Star Refrigerators
2 aMW18%
Energy Star Clothes Washers8 aMW73%
slide 50
Northwest Power and ConservationCouncil
Regional Residential Sector Realistically Regional Residential Sector Realistically Achievable Potential for Water HeatingAchievable Potential for Water Heating
Efficient Tanks29%
95 aMWWaste Water
Heat Recovery4%
15 aMW
Heat Pump Water Heaters
67%225 aMW
slide 51
Northwest Power and ConservationCouncil
Montana Residential Sector Conservation Montana Residential Sector Conservation Resource Potential for Water HeatingResource Potential for Water Heating
High Efficiency Water Heaters
3 aMW27%
Waste Water Heat Recovery
1 aMW9%
Heat Pump Water Heaters
7 aMW64%
slide 52
Northwest Power and ConservationCouncil
Regional Residential Sector Realistically Regional Residential Sector Realistically Achievable Potential for Space Achievable Potential for Space
ConditioningConditioningNew Construction -
Shell Measures 40 aMW
16%
Duct Sealing & System
Commissioning & Controls 15 aMW
6%
Weatherization60 aMW
24%
Heat Pump Upgrades 55 aMW
22%
Heat Pump Conversions
75 aMW32%
slide 53
Northwest Power and ConservationCouncil
Montana Residential Sector Conservation Montana Residential Sector Conservation Resource Potential for Space ConditioningResource Potential for Space Conditioning
Cost-Effective Commercial Conservation Potential Cost-Effective Commercial Conservation Potential in 2025 For Building Lighting, HVAC & Equipment- in 2025 For Building Lighting, HVAC & Equipment-
Fifth Plan is lower due to changing (less Fifth Plan is lower due to changing (less electrically intensive) industrial mix ) = 5% electrically intensive) industrial mix ) = 5% of 2025 sector loadsof 2025 sector loads
Montana potential @ 5% of 2004 salesMontana potential @ 5% of 2004 sales
= 30 aMW= 30 aMW
slide 60
Northwest Power and ConservationCouncil
While PNW Annual Utility System While PNW Annual Utility System Investments in Energy Efficiency Have Declined Since Investments in Energy Efficiency Have Declined Since
Total PNW Annual Energy Efficiency Total PNW Annual Energy Efficiency Achievements Have Been Growing, Largely Due Achievements Have Been Growing, Largely Due To The Impact of Energy Codes and StandardsTo The Impact of Energy Codes and Standards
PNW Utilities Now Invests Less Than 2% of PNW Utilities Now Invests Less Than 2% of Their Retail Sales Revenues in Energy Their Retail Sales Revenues in Energy
Fortunately . . . The “First Year” Cost ($/aMW) of Fortunately . . . The “First Year” Cost ($/aMW) of Utility Acquired Energy Efficiency Has DeclinedUtility Acquired Energy Efficiency Has Declined
PNW Utilities Have Gotten More Efficient at Acquiring PNW Utilities Have Gotten More Efficient at Acquiring Energy Efficiency - Cost Are Now Below $15 MWHEnergy Efficiency - Cost Are Now Below $15 MWH
Cumulative 1978 - 2004 Efficiency Cumulative 1978 - 2004 Efficiency Achievements by SourceAchievements by Source
Alliance Programs185 aMW
6%
State Codes560 aMW
19%
Federal Standards545 aMW
19%
BPA and Utility Programs1635 aMW
56%
slide 66
Northwest Power and ConservationCouncil
The Share of PNW Retail Electricity Sales The Share of PNW Retail Electricity Sales Revenues Invested In Energy Efficiency Has Revenues Invested In Energy Efficiency Has
Declined Since The Early 1990’sDeclined Since The Early 1990’s
$0.0$1.0$2.0$3.0$4.0$5.0$6.0$7.0$8.0$9.0
$10.0
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Tota
l R
eta
il Ele
ctri
city
Sale
s R
evenue
(bill
ion 2
000$)
Revenues Invested In EfficiencyRevenues Dedicated to Other Costs
slide 67
Northwest Power and ConservationCouncil
Utility Acquired Energy Efficiency Has Been Cost-Utility Acquired Energy Efficiency Has Been Cost-Competitive with Market PurchasesCompetitive with Market Purchases