Energy Efficiency Resource Standards Steven Nadel American Council - - PowerPoint PPT Presentation

Energy Efficiency Resource Standards

Steven Nadel American Council for an Energy-Efficient Economy March 2009

Share of Maryland Electricity Sales That Can Be Met by Efficiency Policies

• 10,000

20,000 30,000 40,000 50,000 60,000 70,000 80,000 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 Electricity Demand (GWh)

CHP Building Codes RD&D Initiative Appliance Standards

State and Utility Programs

15% reduction in forecasted consumption by 2015

29% reduction in forecasted consumption by 2025

Efficiency Programs Generate Jobs

(Maryland 29% savings by 2025 scenario)

2,000 4,000 6,000 8,000 10,000 12,000 14,000

2008 2010 2012 2014 2016 2018 2020 2022 2024

Net Job Impacts

Source: ACEEE Feb. 2008 Maryland report

Efficiency Resources Cost Effective

0.01 0.02 0.03 0.04 0.05 C a l i f

• r

n i a C

• n

n e c t i c u t M a s s a c h u s e t t s N e w J e r s e y N e w Y

• r

k V e r m

• n

t M e d i a n Levelized Cost of Saved Energy ($/kWh) Source: ACEEE, “Five Years In,” 2005

Evaluated results of All-Sector State-Level Energy Efficiency Programs

Cost of New Electricity Resources

Source: Lazard 2008 for NARUC (midpoint of range)

• 2

4 6 8 10 12 14 Energy Efficiency (a) Wind Biomass

• Nat. Gas

Combined Cycle Pulverized Coal Thin Film PV Nuclear Solar Thermal Coal IGCC Levelized Cost (cents/kWh) w/o Carbon W/ $20/Ton Carbon

National Wholesale Electricity Price With an EERS (Climate Framework Scenario)

$50 $55 $60 $65 $70 $75 $80 $85 2020 2025 Wholesale Electricity Prices (2006$/MWh)

Climate Framework House RES in Climate Framework 10% EE + 5% NG in Climate Framework 15-15 in Climate Framework

Note: Cost of efficiency programs will raise prices at retail level modestly.

Source: ACEEE Dec. 2007 EERS-RES study

Midwest Wholesale Electricity Prices in Business as Usual & Efficiency Scenarios

$50 $52 $54 $56 $58 $60 $62 $64 $66 $68

2020 2025

Wholesale Electricity Prices (2006$/MWh)

BAU House RES 10-5 EERS 15-15 EERS

Source: ACEEE Dec. 2007 EERS-RES study

Energy Efficiency Resource Standards

Analogous to a Renewable Portfolio Standard Electric and/or gas savings targets for utilities

• Includes end-use efficiency and sometimes

combined heat & power (CHP) and codes/standards

• Targets generally start low and increase over time

Savings must be documented in accordance with evaluation rules established by regulators Can authorize bilateral contracts to exchange savings credits and provide a role for 3rd parties

Why an EERS?

Achieve substantial energy and emissions savings Performance based – emphasizes savings, not spending Can be easier to legislate savings targets than spending amounts Can start programs quickly, without many years of study (but targets should be based on cost-effective opportunities)

States with Energy Efficiency Resource Standards (EERS)

These plus BAU EE will save ~5% nationally by 2020

Pending EERS State EERS

Texas

• First state to establish an EERS
• Initially 10% of load growth but increased

by legislature to 20% of load growth

• Utilities have not had difficultly meeting

and exceeding targets

• In 2009, bill likely to come up to increase

to 30% or even 50% of load growth or the equivalent as % of sales

Vermont

• Targets set in contract with Efficiency Vermont
• Have exceeded each year

Vermont

What Markets Do We Work I n?

Target Sub-Markets:

• Colleges and Universities
• Municipal Waste and Water
• K-12 Schools
• Industrial Process
• State Buildings
• Farms
• Hospitals
• Ski Areas

Equipment Replacement Efficient Products Existing Homes Existing Businesses Business New Construction New Homes Low-Income

Markey HR 889 -- A Federal EERS

• 15% electric, 10% gas savings by 2020
• Includes CHP, recycled energy, codes and

standards

• DOE to establish M&V protocols
• Allow bilateral contracts within state; within

power pool with PUC permission

• 5 cents/kWh, 50 cents/therm buyout option
• Funds can be used in state to operate EE

programs

• States implement if “willing and able”
• States can set higher targets if they want

Savings Grow Over Time

Electric Natural Gas Annual Cumulative Annual Cumulative 2011 0.33% 0.3% 0.25% 0.3% 2012 0.67% 1.0% 0.50% 0.8% 2013 1.00% 2.0% 0.75% 1.5% 2014 1.25% 3.3% 1.00% 2.5% 2015 1.25% 4.5% 1.00% 3.5% 2016 1.50% 6.0% 1.25% 4.8% 2017 1.50% 7.5% 1.25% 6.0% 2018 2.50% 10.0% 1.25% 7.3% 2019 2.50% 12.5% 1.25% 8.5% 2020 2.50% 15.0% 1.50% 10.0%

Note: Savings count from date of passage

Other Federal Activities

• Schumer (S. 548)
• Virtually the same as Markey
• Builds on Schumer-Landrieu 2007

amendment

• Senator Bingaman draft bill
• 20% RES with efficiency up to 5% EE
• President Obama’s campaign platform

calls for 15% electric savings by 2020, including codes and standards

How Does a Federal EERS Affect States that Already Have a State EERS? States can implement federal and state EERS simultaneously – same/similar utility filings, meet higher targets States can set higher targets to gain additional savings States with targets greater than the federal targets also benefit from savings in nearby states

• Emission reductions
• Impacts on energy prices

Impacts of a Federal EERS

(15% electric, 10% gas by 2020; savings over and above existing state EERS’s; includes codes & standards)

• Peak demand savings of 117,000 MW

(390 power plants, 300 MW each)

• CO2 emissions down 262 MMT in 2020

(equivalent to taking 48 million vehicles

• ff the road for a year)
• 222,000 net jobs created
• Net savings of $169 billion (B/C ~3:1)

For More Information

ACEEE EERS webpage: www.aceee.org/energy/national/eers.htm (Markey bill, fact sheet, PPT, state-specific analyses) Steven Nadel, snadel@aceee.org 202-507-4000