2019-2021 ASSESSMENT OF POTENTIAL (AOP) Draft: Under construction - - PowerPoint PPT Presentation

2019-2021 ASSESSMENT OF POTENTIAL (AOP)

►March 21, 2018

Draft: Under construction

www.ma-eeac.org 2019-2021 Assessment of Potential

INTRODUCTION

►First step in planning process ►Assessment of Potential (AoP) estimates potential

savings, which is one important input goal setting

►Presentation will discuss − AoP methodology − Summary of PA potential studies − Key take aways − Electric potential considerations, adjustments and costs − Gas potential considerations, adjustments, and costs

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KEY TAKE AWAYS

►There is still potential in MA to support electric

savings in excess of 3%

►There is still potential in MA to support robust

programs

►Residential electric potential is lower than recent

achievement due to lighting changes

►C&I electric opportunities remain strong ►No significant changes expected in gas potential for

either residential or C&I

►Early expectations are that residential costs may

increase somewhat, but PA Plan will provide best source of data for ongoing planning

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CONSULTANT AOP APPROACH AND METHODOLOGY

►In previous planning cycles, Consultants relied on

historical achievement as primary basis for AoP

►For 2019-2021, past not necessarily a strong predictor

• f the future

− Changing lighting standards and market transformation − Changing baselines − New more varied and integrated opportunities ►In years past, no potential studies for all PAs ►Current AoP uses PA potential studies informed by

trends as starting point

►Made adjustments based on additional analysis of key

considerations and recent program experience

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PA POTENTIAL STUDIES OVERVIEW

►Each PA hired contractors to complete potential

studies

►Scopes of work for each study varied by PA ►Not all PA potential studies were completed by the

same contractor

►PA contractors used different assumptions ►Most PA studies only included annual savings ►Estimate of active demand potential forthcoming

(April)

►Contractors will rerun results with new avoided costs ►Consultant analysis required data extrapolation to

compare results between studies

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PA POTENTIAL STUDIES EXCLUDED SEVERAL SOURCES OF SAVINGS

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NGrid Ever‐ source CLC Unitil Electric Unitil Gas CMA Berkshire Liberty Lead Author Navigant Dunsky Opinion Dynamics /Dunsky GDS GDS Dunsky GDS GDS Received 2/7 1/15 1/15 3/13 1/31 2/22 2/5 2/5 Includes: Fuel Switching SEM x x CHP x Behavior x x x x x x

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TYPES OF POTENTIAL USED IN PA POTENTIAL STUDIES

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Level of savings given current programs, new technologies, and some different incentive levels

Business as Usual Enhanced (BAU+)

Maximum level of cost-effective potential recognizing market barriers

Maximum (MAX) Achievable

Portion of technically feasible potential that is cost-effective assuming no market barriers

Economic

Level of savings given current programs and incentives

Business as Usual (BAU) Achievable

►Precise potential definitions varied by study

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ELECTRIC

Res Electric

C&I Electric Res Gas C&I Gas

Res Lighting

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2017 PROGRAMS ACHIEVED HIGHEST ANNUAL SAVINGS

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‐ 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 MWh

Portfolio Annual Electric Savings

2.93%

• f Sales

3.36%

• f Sales

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PORTFOLIO LIFETIME ELECTRIC SAVINGS OVER TIME

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‐ 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 MWh

Portfolio Lifetime Electric Savings

Evaluated‐Portfolio Planned‐Portfolio Q4 2017‐Portfolio

High level of CHP High level of CHP

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PA POTENTIAL STUDY RESULTS

►The table below presents 2019-2021 Maximum

achievable annual electric savings as a % of sales

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Contractor Residential Low Income C&I Total Portfolio Eversource Dunsky 4.12% 1.93% 3.50% 3.63% CLC* ODC/Dunsky 3.68% 4.47% 3.50% 3.31% National Grid Navigant 2.95% 2.32% 3.03% 2.95% Unitil GDS 2.79% 2.25% 1.70% 2.04% PA Weighted Average 3.49% 2.24% 3.28% 3.29% 2017 Q4 Reported 5.38% 2.07% 2.38% 3.36%

*CLC potential study did not include Max achievable scenario. Estimated using % change from BAU+ to Max achievable scenario for Eversource study

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PA POTENTIAL STUDY ESTIMATES COMPARED TO PAST PLANNING PERIODS

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‐ 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000

Portfolio Annual Electric Savings (MWh)

Evaluated Planned Q4 2017 Eversource % of Sales Unitl % of Sales N.Grid % of Sales CLC % of Sales Potential Average % of Sales PA April 2015 Plan

3.29% (PA Average) 3.63% (Eversource) 3.31% (CLC) 2.95% (National Grid) 2.04% (Unitil) Slide to be animated in presentation

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KEY CONSIDERATIONS-POSITIVE OR NEGATIVE IMPACTS

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Residential

• Lighting
• Fuel Switching
• Program redesign
• Behavior

C&I

• Lighting
• CHP
• SEM
• Upstream changes
• Evaluation
• Baseline Changes

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RESIDENTIAL

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Residential

• Lighting
• Fuel Switching
• Program redesign
• Behavior

Res Electric

C&I Electric Res Gas C&I Gas

Res Lighting

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RESIDENTIAL CONSIDERATIONS: LIGHTING

► 2017 Res annual electric savings were 73% lighting ► PA potential studies show varying levels of declining lighting savings

and NTG higher than agreed-to values going forward

► Eversource report estimates a 65% reduction compared to 2016 and a

45% reduction from 2019 to 2021

► Noticeably steeper decline estimate for Eversource than National Grid

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Yellow Bar = Lighting

Residential Lighting (Annual GWh)

Eversource National Grid

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RESIDENTIAL CONSIDERATIONS: LIGHTING

► Consultants estimate

steeper lighting savings drop than PA studies

► PA studies did not use

most recent evaluation findings

► NTG values are lower

(~50% vs 35% and declining) than in PA potential studies

► PA study lighting NTG

values vary

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‐ 100,000 200,000 300,000 400,000 500,000 600,000 700,000 2016 2017 2019 2020 2021

Projected Annual Lighting Savings (MWh)

Evaluated Q4 2017 Projected

82% drop from 2017

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RESIDENTIAL OPPORTUNITIES: FUEL SWITCHING

►PA Potential studies did not address fuel switching ►Unregulated fuel (oil and propane) to electric fuel

conversions could yield increased electric usage, but modest MMBtu savings

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2021 Ductless Heat Pump Fuel Switch Unregulated fuel participation rate 2.0% Number of Ductless units @ 1.5/household 18,643 MMBtu Fossil Fuel savings (MMBtu) 292,456 Increased Electric usage (MWh) 26,108 Net Annual MMBtu reduction 202,857 % of 2017 Electric MMBtu Savings 1.2%

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RESIDENTIAL OPPORTUNITIES: PROGRAM REDESIGN

►Feb. 28 EEAC resolution supports provision of a

new, integrated residential program design

►The PAs’ potential study scenarios don’t involve a

significant redesign of the residential program

− MAX achievable potential scenarios included generic reductions to market barriers, which translated to higher modeled participation − However, specific program changes were not modeled

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CONTINUOUS ENGAGEMENT MODEL

Significant evolution of residential retrofit program design and IT functionality needed to achieve broader and deeper cost-efficient savings

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Key Elements Needed

Common

• nline

portal Channel Partners New Measures & Methods Technology ‐enabled processes

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INDIVIDUAL PA POTENTIAL COMPARED TO HIGHEST PA ESTIMATE OF POTENTIAL

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► Possible decline in participation and savings during initial rollout ► Assumes higher participation and measure uptake and conversions 5 10 15 20 25 30 35 2017 2018 2019 2020 2021 2022 2023 2024 Energy Savings (Million MMBtu)

Residential Lifetime Savings Impact (Electric + Gas) CONCEPTURAL PROJECTION

No Program Redesign Program Redesign

− Changes supported by modernized IT portal − Higher HVAC equipment uptake compared to weatherization Possible Potential Additions

• 53.8 GWh
• 8.9 Million therms
• 251k MMBtu (oil/propane)

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RESIDENTIAL POTENTIAL SUMMARY

►Will be extremely challenging to make up lost lighting

savings in the electric sector in 2019-2021

►Several things needed to keep savings impacts as low

as possible

− Aggressive approaches to boost existing measure production − Identifying new measures and approaches − Promoting fuel switching − Continuing innovations in new construction, and active demand management ►New continuous engagement program model offers

• pportunity for broader and deeper savings for all

fuels

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RESIDENTIAL ELECTRIC POTENTIAL

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Residential Adjustments Savings as %

• f Res Sales

Annual MWh (2019‐2021) Annual Other Fuel MMBTU (2019‐2021) Weighted Average PA Potential Study 3.49% 1,551,605 Lighting ‐ 0.79% ‐ 349,161 +TBD Fuel Switching ‐ 0.26% ‐ 115,607 + 1,150,613 Behavior + 0.16% + 72,394 Program Redesign + TBD + TBD + TBD Net Changes to Potential ‐ 0.89% ‐ 392,374 + 1,150,613 Net Potential After Adjustments 2.61% 1,159,231 2017 Q4 Reported Achievement 5.38% 835,748 Annualized Potential After Adjustments 2.61% 386,410

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C&I

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Res Electric 2.61%

C&I Electric Res Gas C&I Gas

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C&I CONSIDERATIONS: LIGHTING

►C&I lighting market transitioning from screw-in to

linear and other LED technologies

►This is good from an opportunity and EM&V

perspective –favorable evaluations for linear lighting

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C&I CONSIDERATIONS: LIGHTING

►There is still strong potential in C&I linear lighting

(linear lighting not effected by EISA)

►42% of all C&I economic potential is in networked

(controlled) linear lighting

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‐ 100,000 200,000 300,000 400,000 500,000 600,000 700,000 Annual MWh

MA Annual Lighting Savings and Max Achievable Potential

Screw Based Advanced Lighting Design Controls Linear LED Other/Custom Historic Gross Savings Estimated Potential Savings

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C&I OPPORTUNITIES: CHP

►CHP was not included in the PA potential studies − Except CLC where potential was found to be zero ►CHP typically increases C&I Savings by 13.5% or 80k

MWh annual savings per year (16.4) MW)

►DOER has identified a strong pipeline at ~35 MW/yr

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22 MW MIT CHP likely in 2019‐2021

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C&I OPPORTUNITIES: STRATEGIC ENERGY MANAGEMENT

►CMA was the only PA to attribute a value to SEM: For

buildings > 25k SF. They found:

− Commercial potential assumed to be 6% of gas use − Industrial potential assumed to be 2% of all gas use ►The EEAC has recommended SEM in past resolutions ►PAs released a SEM RFP, which could bring in new

savings as soon as 2019

►Estimate that SEM could increase C&I electric annual

savings 2.1% per year and 0.46% for C&I gas savings

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C&I OPPORTUNITIES: UPSTREAM

►The potential studies did not consider program

modifications such as moving measures upstream

►Upstream approach can increase volume and

savings – Example: gas water heaters

►Upstream lighting is the least expensive electric C&I

initiative on a $ / lifetime kWh basis

►PAs continue to add new measures upstream: − Electric: LED fixtures with controls, LED high/low bay, T5 TLEDs, VRF HP, circulator pumps, food service equip. − Gas: Food service, other measures in pipeline

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C&I CONSIDERATIONS: EVALUATION AND BASELINE CHANGES

►Consultant analysis shows:

− C&I evaluations will decrease future electric savings 1.1%

• Comprehensive Design (CDA), Multiple Upstream, Custom

Process, Small Biz Lighting − C&I evaluations will decrease future gas savings 10.9%

• CDA, Upstream HVAC, Steam traps (Custom and Rx)

− Baseline and Industry Standard Practice changes will impact savings as follows:

• 3% reduction in electric annual savings
• 11% reduction in gas annual savings

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C&I ELECTRIC POTENTIAL

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Commercial and Industrial Adjustments Savings as % of C&I Sales Annual MWh (2019‐2021) Weighted Average PA Potential Study 3.28% 2,710,425 SEM + 0.05% + 43,689 CHP + 0.29% + 240,000 Evaluation Adjustments ‐ 0.03% ‐ 23,236 Baseline Adjustments ‐ 0.08% ‐ 62,446 Linear Lighting + TBD + TBD Net Changes to Potential + 0.24% + 198,008 Net Potential After Adjustments 3.52% 2,908,433 2017 Q4 Reported Achievement 2.38% 693,842 Adjusted Annualized Potential 3.52% 969,477

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TOTAL ELECTRIC POTENTIAL

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Portfolio Adjustments Savings as %

• f Total Sales

Annual MWh (2019‐2021) Annual Other Fuel MMBTU (2019‐2021) Weighted Average PA Potential Study 3.29% 4,379,456 Residential Net Adjustments ‐ 0.29% ‐ 392,374 + 1,150,613 C&I Net Adjustments + 0.15% + 198,008 Net Changes to Potential ‐0.15% ‐ 194,366 Net Potential After Adjustments 3.14% 4,185,090 2017 Q4 Reported Achievement 3.14% 1,395,030 Adjusted Annualized Potential 3.36% 1,574,249

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PORTFOLIO ELECTRIC COSTS

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PORTFOLIO ELECTRIC COST TO ACHIEVE OVER TIME

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$0.215 $0.265 $0.315 $0.365 $0.415 $0.465 $0.515 2010 2011 2012 2013 2014 2015 2016 2017 2018 $/kWh

Portfolio Annual Electric Cost to Achieve

Evaluated Planned Q4 2017 Linear (Evaluated) Linear (Planned)

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PA POTENTIAL STUDY COSTS TO ACHIEVE

►Table below presents 2019-2021 Max achievable

annual electric costs to achieve ($/kWh)

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Residential Low Income C&I Total Portfolio National Grid $0.90 $1.18 $0.75 $0.82 Eversource N/A N/A N/A $0.73 Unitil $0.95 $0.95 $0.50 $0.72 CLC N/A N/A N/A N/A PA Weighted Average $0.90 $1.17 $0.75 $0.73 2017 Q4 Reported $0.27 $1.43 $0.34 $0.34

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PA MAX ACHIEVABLE POTENTIAL COSTS TO ACHIEVE ARE MUCH HIGHER THAN HISTORICAL COSTS TO ACHIEVE

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$0.015 $0.115 $0.215 $0.315 $0.415 $0.515 $0.615 $0.715 $0.815 $/kWh Portfolio Annual Electric Cost to Achieve Evaluated‐Portfolio Planned‐Portfolio Q4 2017‐Portfolio Potential High Potential Low Potential Average PA April 2015 Plan

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ENERGY EFFICIENCY COST CURVES - ILLUSTRATIVE

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Source: IESO presentation, “Module 3: Conservation and Demand Response Outlook.” August 2016

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GAS

Res Electric 2.61% C&I Electric 3.52%

Res Gas C&I Gas

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PORTFOLIO ANNUAL GAS SAVINGS OVER TIME

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‐ 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 Therms

Portfolio Annual Gas Savings

Evaluated‐Portfolio Planned‐Portfolio Q4 2017‐Portfolio

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PORTFOLIO LIFETIME GAS SAVINGS OVER TIME

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‐ 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000 400,000,000 450,000,000 Therms

Portfolio Lifetime Gas Savings

Evaluated‐Portfolio Planned‐Portfolio Q4 2017‐Portfolio

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PA POTENTIAL STUDY RESULTS

►The table below presents 2019-2021 Max achievable

annual gas savings as a % of sales

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PA Contractor Residential Low Income C&I Portfolio Total Columbia Dunsky 3.12% 1.19% 3.21% 2.95% Eversource Dunsky 3.14% 2.29% 1.84% 2.37% Unitil GDS 1.04% 1.38% 2.62% 2.20% Liberty GDS 1.45% 1.33% 0.64% 1.12% National Grid Navigant 1.07% 2.19% 0.88% 1.01% Berkshire GDS 0.67% 1.15% 0.58% 0.65% PA Average 1.81% 1.84% 1.27% 1.54% 2017 Q4 Reported 1.22% 2.03% 0.99% 1.15%

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PA POTENTIAL STUDY GAS SAVINGS ESTIMATES COMPARED TO PAST PLANNING PERIODS

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‐ 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 Therms

Portfolio Annual Gas Savings

Evaluated Planned Q4 2017 Columbia % of Sales Eversource % of Sales Unitil % of Sales Liberty % of Sales

• N. Grid % of Sales

Berkshire % of Sales Potential (Average) PA April 2015 Plan

2.37% (Eversource) 0.65% (Berkshire) 2.95% (Columbia) 2.20% (Unitil) 1.54% (PA Average) 1.12% (Liberty) 1.01% (National Grid)

Slide to be animated for presentation

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CONSULTANT KEY CONSIDERATIONS

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Residential

• Behavior
• Program redesign

C&I

• SEM
• Upstream changes
• Evaluation
• Baseline changes

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RESIDENTIAL GAS POTENTIAL

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Residential Adjustments Savings as %

• f Res Sales

Annual therms (2019‐2021) Weighted Average PA Potential Study 1.81% 62.0 Million Behavior + 0.40% + 13.6 Million Program Redesign + TBD + TBD Net Changes to Potential + 0.30% + 13.6 Million Net Potential After Adjustments 2.20% 75.6 Million 2017 Q4 Reported Achievement 1.22% 13.9 Million Adjusted Annualized Potential 2.20% 25.2 Million

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C&I GAS POTENTIAL

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Commercial and industrial Adjustments Savings as % of C&I Sales Annual therms (2019‐2021) Weighted Average PA Potential Study 1.27% 49.3 Million SEM + 0.05% + 2.0 Million Upstream +/‐ TBD +/‐ TBD Evaluation ‐ 0.09% ‐ 3.5 Million Baseline ‐ 0.09% ‐ 3.6 Million Net Changes to Potential ‐ 0.13% ‐ 5.0 Million Net Potential After Adjustments 1.14% 44.2 Million 2017 Q4 Reported Achievement 0.99% 10.5 Million Annualized Potential After Adjustments 1.14% 14.8 Million

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TOTAL GAS POTENTIAL

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Portfolio Adjustments Savings as % of Total Sales Annual Therms (2019‐2021) Weighted Average PA Potential Study 1.54% 118.7 Million Residential Net Adjustments + 0.18% + 13.6 Million C&I Net Adjustments ‐ 0.07% ‐ 5.0 Million Net Changes to Potential + 0.11% + 8.5 Million Net Potential After Adjustments 1.65% 127.3 Million 2017 Q4 Reported Achievement 1.15% 26.6 Million Adjusted Annualized Potential 1.65% 42.4 Million

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PORTFOLIO ANNUAL GAS COST TO ACHIEVE OVER TIME

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$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00

2010 2011 2012 2013 2014 2015 2016 2017 2018 $/therm

Portfolio Annual Gas Cost to Achieve

Evaluated‐Portfolio Planned‐Portfolio Q4 2017‐Portfolio

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PA POTENTIAL STUDY GAS COSTS TO ACHIEVE

►The table below presents 2019-2021 Max achievable

annual gas costs to achieve ($/therm)

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PA Residential Low Income C&I Portfolio Total Eversource N/A N/A N/A $24.02 National Grid $14.36 $30.57 $7.49 $12.60 Columbia N/A N/A N/A $12.48 Berkshire N/A N/A N/A N/A Liberty N/A N/A N/A N/A Unitil N/A N/A N/A N/A PA Average N/A N/A N/A $15.51 2017 Q4 Reported $8.32 $20.12 $4.20 $7.70

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PA POTENTIAL STUDY GAS COST TO ACHIEVE ESTIMATES COMPARED TO PAST PLANNING PERIODS

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$0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $/therm

Portfolio Annual Gas Cost to Achieve

Evaluated Planned Q4 2017 Potential (High) Potential (Low) Potential (Average) PA April 2015 Plan

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PORTFOLIO

Res Electric 2.61% C&I Electric 3.52% Res Gas 1.93% C&I Gas 1.14%

THANK YOU

Questions?

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INDIVIDUAL PA POTENTIAL COMPARED TO HIGHEST PA ESTIMATE OF POTENTIAL

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500,000 1,000,000 1,500,000 2,000,000 2,500,000 National Grid Eversource CLC Unitil MWh

Annual Potential Savings by PA

Study % Savings High PA % Savings

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RESIDENTIAL CONSIDERATIONS: LIGHTING

►While PA studies anticipated reductions in lighting

net to gross, 2019-2021 evaluation agreed-to values are much lower

►Further, PA study lighting NTG values vary

| 52 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2016 2017 2018 2019 2020 2021

LED Net to Gross Values

Statewide Plan/Proposed National Grid Eversource CLC

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PROGRAMS INSTALLED MANY MORE LEDS THAN PLANNED

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0% 20% 40% 60% 80% 100% 120% 2016 2017

%LEDs

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RESIDENTIAL CONSIDERATIONS: LIGHTING

►Consultants estimate even steeper lighting savings drop

than Eversource potential study

►By 2021, total annual lighting savings are projected to

decline by ~82% compared to 2017

►Would result in a ~64% reduction in total Residential annual

electric savings in 2021 compared to 2017

►PA studies did not incorporate most recent evaluation

findings into their results

►2019-21 evaluation agreed-to values are much lower (~50%

vs 35% and declining) than assumed in PA potential studies

►Further, PA study lighting NTG values vary

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ADDITIONAL RESIDENTIAL SAVINGS CONSIDERATIONS

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Expected Lifetime Energy and Summer Demand Savings Directionality and Magnitude vs. PAs' Potential Studies Electricity (MWh) Summer Demand (MW) Delivered Fuels HVAC/DHW Evaluation Impacts neutral neutral ? Active demand management +

+

Residential program redesign: Whole House and HVAC

+ + +

Evaluation results (primarily lighting)

‐ ‐

+

Increasing services to renters/moderate income/other underserved customers + +

+

Multi‐family retrofit + + +

EB8

Slide 55 EB8 sput content in res adjustments slide

Eric Belliveau, 3/21/2018

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ADDITIONAL RESIDENTIAL SAVINGS CONSIDERATIONS

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Expected Lifetime Energy and Summer Demand Savings Directionality and Magnitude vs. PAs' Potential Studies Gas Appliance/Consumer Products Evaluation Impacts ‐Low Fuel switching (unregulated fuel to gas) ‐Med HVAC/DHW Evaluation Impacts +Low Active demand management +Low Residential program redesign: Whole House and HVAC +Med Evaluation results (Overall) +High Increasing services to renters/moderate income/other underserved customers +Med Multi‐family retrofit +Med