How Energy Efficiency Programs Can Support State Energy and Environment Planning:Energy Efficiency Potential and Pathways
Presentation for NCSL
June 1, 2016
Johanna Zetterberg, U.S. DOE and SEE Action
www.seeaction.energy.gov
State and Local Energy Efficiency Action Network
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• Facilitated by DOE and EPA
• Network of 200+ professionals, led by
state and local leaders, bringing
energy efficiency to scale
• Support on energy efficiency policy
and program decision making for
state and local governments and their
stakeholders
• Rich library of guidance documents online
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Outline
• Why energy efficiency
• Pathways concept
• Energy efficiency potential
• Considering energy efficiency pathways in state plans
• DOE and SEE Action resources for states
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Why Energy Efficiency
Energy Efficiency
Least cost solution
Improves air quality
Increases economic
development
Increases electric system
reliability
Yields policy bang-for-buck
Reduces all types of power-plant related emissions
Energy cost savings, jobs, competitiveness
Help meet state, local, federal & private sector goals
Energy resource at ½ cost of new supply
Lowers overall energy consumption on transmission & distribution systems
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Energy Efficiency Pathways
Ratepayer-Funded Programs
Industrial Efficiency Combined Heat & Power
Energy Savings Performance Contracting
Building Energy Codes City-Led Efficiency
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Many Substantial, Well Documented Energy Savings Opportunities
TypicalLead
Savings PathwaysEstimate of National
Electricity Savings Potential in 2030*
Estimate of National Carbon Savings Potential
in 2030**
Pri
vate
Se
cto
rS/
L G
ov’
t
Uti
lity
Ratepayer-Funded Efficiency Programs 645-895 million MWh 368-510 million short tons
Industrial Efficiency 115-175 million MWh 66-100 million short tons
Combined Heat and Power 75-115 million MWh 43-66 million short tons
Energy Savings Performance Contracting 45-90 million MWh 26-51 million short tons
Building Energy Codes 50-60 million MWh 29-34 million short tons
City-Led Energy Efficiency Efforts 25-50 million MWh 14-29 million short tons
S/L Gov’t = state or local government
*DOE calculations of ballpark achievable potential based on sector-specific assumptions for activities occurring 2013-2030; see appendix.
**Carbon emissions estimates based on national average total output emission rate published in 2012 eGRID; see appendix.
NOTE: Savings Pathways may have overlapping savings, so estimates are NOT additive.
Savings come from EE activities across:• industrial, commercial, public, residential bldgs• ratepayer-funded (e.g., utility) programs
• private sector initiatives• state / local government-run programs
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Examples of State Legislature Role (not an exhaustive list)
• Adopt updated building energy codes and trigger an automatic review and update process when new codes are available
• Support energy and cost saving retrofits of public buildings and facilities
• Set energy efficiency targets for utility program administrators
• Enable the use of energy savings performance contracts
• Include combined heat and power (CHP) as a qualified resource in EE or renewable resource standards
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State Level Potential Estimates Available and Coming Soon
Savings Pathways For More Information
Combined Heat and Power (technical potential)http://www.energy.gov/eere/amo/download
s/new-release-us-doe-analysis-combined-heat-and-power-chp-technical-potential
Residential Efficiency Coming soon
Industrial Efficiency Coming soon
Commercial Efficiency Coming soon
Building Energy Codes Coming soon
Appliance Standards Coming soon
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Energy Efficiency Potential Studies & Achieved Electricity Savings
• DOE identified 79 energy efficiency potential studies published between 2007 and 2015 completed for states, utilities, and NGOs.1 They provide estimates across 44 states.
• The majority (60%) found an average savings rate of 1 to 2.5% from prior year electricity sales in economic or achievable potential.
• The 10 states leading on energy efficiency are already achieving 1.25 to 3.5% in annual electricity savings.2 Many of these states have been running energy efficiency programs for decades and are continuing to increase savings.
1 U.S. Department of Energy, 2016, Energy efficiency potential studies catalog2 American Council for an Energy-Efficiency Economy (ACEEE), 2015, State Energy Efficiency Scorecard
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EE Savings Pathways Can be Incorporated into Climate Planning
TypicalLead
Savings Pathways
Helps reach carbon reduction goals
Pri
vate
Sec
tor
Stat
e /
Loca
l Go
v’t
Uti
lity/
Pro
gram
Ad
min
istr
ato
r Reduces smokestack emissions
Produces verifiable
energy savings
Industrial Efficiency
Combined Heat and Power
Building Energy Codes
Energy Savings Performance Contracting
City-Led Energy Efficiency Efforts
Ratepayer-Funded Efficiency Programs
Low Income Energy Efficiency Programs
Gov’t = government
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Illustrative Example of a State-Level Portfolio of Pathways with Increasing Total Savings Over Time
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
1 2 3 4 5 6 7 8 9 10 11 12
Ene
rgy
Savi
ngs
as
Pe
rce
nt
of
Co
nsu
mp
tio
n
Years
City Led Programs
Performance Contracting
Industry Programs
Ratepayer Programs - Deep Savings
Ratepayer Programs - Quick Start
Building Energy Codes
Note: some strategies overlap
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Considering Pathways
How does it work? What are
the benefits?
Who is doing it?
What are they
achieving?
Is policy action
required?
What does it take to
implement?
What are the best
practices?Is it cost
effective?
Show me some
examples
How are savings
documented?
What support is available?
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Pathways: 30,000 Foot View
• About EE– Addresses multiple pollutants (including
C02) for state-specific reasons
– Is an established energy resource
– Saves money and is cost-effective
• Approaches to documenting energy savings and emission reductions
• Practical Considerations– Intergovernmental coordination
– Workforce development
• Pathways – for each pathway:– Definition/description
– Policies foundation for success
– Brief case studies
– Methods for estimating and determining energy savings
– Expected range of energy savings and emissions reductions
• EE for low income communities
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Pathways: 5,000 Foot View
Q: I want to understand what it would
look like to include a specific pathway in my state’s climate or energy plan
A: See
Pathway overview presentations
Q: I want to learn about DOE’s technical
assistance for a specific pathway, and more on implementation best practices
A: See
Accessing DOE’s Many Energy Efficiency Resources and Technical Assistance
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Other Information Available
• Energy Modeling 101 Presentation: covers the basics of power sector capacity expansion modeling, and briefly touches on other types of modeling and analytical tools available to provide data on the electric power system, including energy efficiency.
– Data and Analysis Tools
– Capacity Expansion Models
– Grid Operation (Unit Commitment and Dispatch) Models
– Network Reliability Models
• SEE Action EM&V Resource Portal: a resource compendium for energy efficiency program administrators and project managers. The resources focus on tools and approaches that can be applied nationwide, address EM&V consistency, and are recognized by the industry.
– EM&V Guidance for Multiple Sectors
– Sector Specific EM&V Resources
– Regional Resources on EM&V Consistency
– Resources on Air Quality Impact Evaluation
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Three Websites to Bookmark
1. U.S. DOE energy efficiency savings opportunities and benefits
www.energy.gov/eere/slsc/energy-efficiency-savings-opportunities-and-benefits
2. State and Local Energy Efficiency Action Network (SEE Action)
www.seeaction.energy.gov
3. U.S. DOE technical assistance portal
www.energy.gov/ta
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U.S. DOE Energy Efficiency Savings Opportunities and Benefits
http://energy.gov/eere/slsc/energy-efficiency-savings-opportunities-and-benefits
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Fastest Way to Access Technical Assistance
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ENERGY.GOV/TA
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Thank You
All resources in this presentation can be accessed from energy.gov/eere/slsc/EEopportunities
Contact
Johanna Zetterberg
(202) 288-7414
Danielle Sass Byrnett
(202) 287-1320
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Background Slides – State Roles in
Pathway Policies and Implementation
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State and Local Role in Ratepayer-Funded EE
Policy Actions
• State legislatures and public utility commissions can:
– Set EE targets for program administrators to meet (e.g., EE resource standard)
– Require that a utility plan to meet forecasted demand include EE (e.g., integrated resource plan [IRP])
– Designate an EE program administrator if not utility
• Public utility commissions can independently:
– Require utilities to offer energy efficiency programs
– Incentivize utilities to deliver energy efficiency (i.e., program and administrative cost recovery, recovery of lost revenues, and incentive payments)
Implementation Actions
• Energy savings are generated when customers install EE measures or change behavior to save energy, as encouraged by ratepayer-funded EE programs
States employ a variety of accountability and oversight structures to ensure savings
• IOUs: investor-owned utilities are regulated by state public utility commissions (PUC)
• Independent administrators: can be overseen by PUC, state energy office, or other agency
• Non-profit and public power: rural electric co-ops and municipal utilities are overseen by co-op boards and municipal governments, respectively, or by PUCs in some states
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ISO 50001 and SEP can be supported by state and local action
Policy Actions• Public utility commissions can facilitate ISO/SEP expansion by:
– Promoting inclusion of ISO/SEP in ratepayer-funded efficiency programs
– Approving the energy savings from ISO/SEP audited results, both as part of mandated efficiency programs and those conducted voluntarily
– Developing a statewide registry of ISO/SEP facilities and energy savings
• State and local policymakers can facilitate ISO/SEP expansion by:
– Leading by example and pursuing ISO/SEP in state and local facilities
– Advancing ISO/SEP as part of economic development and large energy user engagement/retention strategy
Implementation Actions State and local implementation can be supported through:
– Providing technical assistance, tools, and incentives to encourage users to adopt SEP– Providing support for training and certification of Certified Practitioners in Energy
Management Systems (CP EnMS), SEP Lead Auditors, and SEP Performance Verifiers
State and Local Role in Industrial Efficiency – Strategic Energy Management: ISO 50001 and SEP
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Policy Actions• State public utility commissions can facilitate CHP installations by:
– Including CHP as a qualified resource in EE or renewable resource standards– Including CHP in utility or state ratepayer-funded efficiency programs– Standardizing interconnection requirements– Establishing reasonable standby rates – Pursuing models of utility ownership of CHP– Incorporating the non-energy benefits of CHP into cost-effectiveness calculations, including
resiliency and grid stability
• Local policymakers can streamline CHP installations by including CHP in local permitting codes and inspector training.
Implementation Actions State and local CHP implementation is supported by offering:
– Training, outreach, and enforcement of building efficiency policies and codes– Outreach and technical assistance regarding the energy efficiency and non-energy benefits of CHP
State and Local Role in Combined Heat and Power
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State and Local Role in Energy Savings Performance Contracting
ESPC pathway requires state and local action• Legislation enabling ESPC is adopted at the state level; nearly all states have
legislation allowing ESPC. • Decision or approval to use ESPC is made at the individual state or local agency,
department, council, or facility level.
Policy Actions• The most effective state-level ESPC policy includes establishing a state-level
program to provide technical assistance to entities pursuing ESPC projects.• State and local debt and financing policy impacts the way ESPC projects are
structured. A state legislature, governor, administrative agency, or local government can support ESPC by: o Establishing or leveraging a statewide savings goal
o Establishing or leveraging an energy savings goal or EE standard specific to state or local building stock (often set by the governor or local elected official)
o Establishing training or certification programs/requirements for building operators
o Establishing or accessing an internal financing mechanism that can provide a regular, low-cost funding stream for ESPC projects
o Establishing a state chapter of the Energy Services Coalition; chapter meetings bring together public and private ESPC stakeholders.
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State and Local Role in Building Energy Codes
Building energy codes require state and local action
• There is no U.S. national energy code or standard. Building energy codes are adopted and implemented at the state and local levels.
• A designated state agency (e.g., energy office), local government agency (local code administrator), or both are responsible for code development, adoption, and enforcement.
Policy Actions:
• Adoption of new building energy codes can occur directly by legislative action or through regulatory agencies authorized by the legislature.
• The most effective state adoption processes include legislation triggering an automatic review and update process when new codes are available.
Implementation Actions:
• Actual energy savings are achieved through code compliance, not code development or adoption.
• State and local building officials enforce the code by verifying that what is built actually complies with the energy code.
• Adopting jurisdictions must educate and support local code officials to enforce the energy code.
• State and local governments can speed adoption by helping to prepare the building design and construction communities to comply with new energy codes.
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State and Local Role in City-Led Efficiency
City-led efficiency requires state and local action
Policy ActionsState legislatures or public utility commissions can facilitate city savings through:• Enabling policies that facilitate clean energy financing, such as PACE (e.g., Texas,
Colorado)• Utility requirements to facilitate better access to energy data (e.g., California,
Washington)• Targeted city programming to encourage and provide technical and financial
assistance for community-wide efficiency (e.g., Massachusetts)
Implementation ActionsCity offices (e.g. General Services, Sustainability, Finance, Mayor’s Office), municipal utilities, or community-based organizations generate energy savings from: • Training, outreach, enforcement of building efficiency policies• Outreach and technical assistance for voluntary efficiency programs• Installing energy upgrades to municipal buildings, water/ wastewater treatment
facilities, streetlights
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Appendix:
Calculations of Electricity and Carbon Savings
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Estimates of National Electricity and Carbon Savings Potential in 2030NOTE: Pathways may include overlapping savings, so estimates are NOT additive.
Savings Pathway
Ballpark Achievable Potential Calculations Based on the Following Low to High Scenarios Data Sources Low estimate High estimate
Ratepayer-Funded Efficiency Programs
Total estimated savings in 2030 from reduced electricity load growth rates due to ratepayer-funded energy efficiency programs achieving annual incremental savings of 1.1 - 1.5% from 2012 baseline.
LBNL, 2013, The Future of Utility Customer-Funded
Energy Efficiency Programs in the U.S.
645 million MWh368 million short
tons CO2
895 million MWh510 million short
tons CO2
Industrial Efficiency
Total estimated savings in 2030 from 50 - 75% of industrial plants achieving double business as usual annual energy intensity improvements relative to AEO 2015 forecasted baseline.
EIA 2015 AEOTables 25-35 115 million MWh
66 million short tons CO2
175 million MWh100 million short
tons CO2
Combined Heat and Power
Total estimated savings in 2030 from completing 30 -45% of economical (less than 10 year payback) CHP projects smaller than 100 MW.
American Gas Association, 2013, The Opportunity for CHP in the United States
75 million MWh43 million short
tons CO2
115 million MWh66 million short
tons CO2
Energy Savings Performance Contracting
Total estimated savings in 2030 based on 0 - 8% annual growth rates in volume of ESCO projects from 2012 baseline.
LBNL, 2015, Estimating customer electricity and fuel
savings from projects installed by the US ESCO industry and
LBNL, 2014, A method to estimate the size and
remaining market potential of the U.S. ESCO industry
45 million MWh26 million short
tons CO2
90 million MWh51 million short
tons CO2
Building Energy Codes
Total estimated savings in 2030 from 100% adoption and 70-95% compliance rates for ASHRAE 90.1-2010 / ASHRAE 90.1-2013 commercial building codes (compared to ASHRAE 90.1-2007 baseline) and IECC 2012 / IECC 2015 residential building codes (compared to IECC 2009 baseline)
DOE determinations and supporting analysis and PNNL
Codes Impact Analysis
50 million MWh29 million short
tons CO2
60 million MWh34 million short
tons CO2
City-Led Energy Efficiency Efforts
Total estimated savings in 2030 from 5 - 10% savings in city-wide (residential, commercial, and industrial) electricity consumption for the largest 50 U.S. cities.
ACEEE, 2015, City Energy Efficiency Scorecard Table C6 25 million MWh
14 million short tons CO2
50 million MWh29 million short
tons CO2
Carbon emissions estimates based on national average total output emission rate (1,136.53 lb/MWh or .57 short tons/MWh) published in 2012 eGRID
