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Title: Time-varying value of electric energy efficiency

Abstract

Electric energy efficiency resources save energy and may reduce peak demand. Historically, quantification of energy efficiency benefits has largely focused on the economic value of energy savings during the first year and lifetime of the installed measures. Due in part to the lack of publicly available research on end-use load shapes (i.e., the hourly or seasonal timing of electricity savings) and energy savings shapes, consideration of the impact of energy efficiency on peak demand reduction (i.e., capacity savings) has been more limited. End-use load research and the hourly valuation of efficiency savings are used for a variety of electricity planning functions, including load forecasting, demand-side management and evaluation, capacity and demand response planning, long-term resource planning, renewable energy integration, assessing potential grid modernization investments, establishing rates and pricing, and customer service. This study reviews existing literature on the time-varying value of energy efficiency savings, provides examples in four geographically diverse locations of how consideration of the time-varying value of efficiency savings impacts the calculation of power system benefits, and identifies future research needs to enhance the consideration of the time-varying value of energy efficiency in cost-effectiveness screening analysis. Findings from this study include: -The time-varying value of individual energy efficiencymore » measures varies across the locations studied because of the physical and operational characteristics of the individual utility system (e.g., summer or winter peaking, load factor, reserve margin) as well as the time periods during which savings from measures occur. -Across the four locations studied, some of the largest capacity benefits from energy efficiency are derived from the deferral of transmission and distribution system infrastructure upgrades. However, the deferred cost of such upgrades also exhibited the greatest range in value of all the components of avoided costs across the locations studied. -Of the five energy efficiency measures studied, those targeting residential air conditioning in summer-peaking electric systems have the most significant added value when the total time-varying value is considered. -The increased use of rooftop solar systems, storage, and demand response, and the addition of electric vehicles and other major new electricity-consuming end uses are anticipated to significantly alter the load shape of many utility systems in the future. Data used to estimate the impact of energy efficiency measures on electric system peak demands will need to be updated periodically to accurately reflect the value of savings as system load shapes change. -Publicly available components of electric system costs avoided through energy efficiency are not uniform across states and utilities. Inclusion or exclusion of these components and differences in their value affect estimates of the time-varying value of energy efficiency. -Publicly available data on end-use load and energy savings shapes are limited, are concentrated regionally, and should be expanded.« less

Authors:
; ;
Publication Date:
Research Org.:
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
Sponsoring Org.:
USDOE Office of Energy Efficiency and Renewable Energy (EERE), Building Technologies Office (EE-5B)
OSTI Identifier:
1398500
Report Number(s):
LBNL-2001033
ark:/13030/qt6zw8n2vm
DOE Contract Number:
AC02-05CH11231
Resource Type:
Technical Report
Country of Publication:
United States
Language:
English
Subject:
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION

Citation Formats

Mims, Natalie A., Eckman, Tom, and Goldman, Charles. Time-varying value of electric energy efficiency. United States: N. p., 2017. Web. doi:10.2172/1398500.
Mims, Natalie A., Eckman, Tom, & Goldman, Charles. Time-varying value of electric energy efficiency. United States. doi:10.2172/1398500.
Mims, Natalie A., Eckman, Tom, and Goldman, Charles. Fri . "Time-varying value of electric energy efficiency". United States. doi:10.2172/1398500. https://www.osti.gov/servlets/purl/1398500.
@article{osti_1398500,
title = {Time-varying value of electric energy efficiency},
author = {Mims, Natalie A. and Eckman, Tom and Goldman, Charles},
abstractNote = {Electric energy efficiency resources save energy and may reduce peak demand. Historically, quantification of energy efficiency benefits has largely focused on the economic value of energy savings during the first year and lifetime of the installed measures. Due in part to the lack of publicly available research on end-use load shapes (i.e., the hourly or seasonal timing of electricity savings) and energy savings shapes, consideration of the impact of energy efficiency on peak demand reduction (i.e., capacity savings) has been more limited. End-use load research and the hourly valuation of efficiency savings are used for a variety of electricity planning functions, including load forecasting, demand-side management and evaluation, capacity and demand response planning, long-term resource planning, renewable energy integration, assessing potential grid modernization investments, establishing rates and pricing, and customer service. This study reviews existing literature on the time-varying value of energy efficiency savings, provides examples in four geographically diverse locations of how consideration of the time-varying value of efficiency savings impacts the calculation of power system benefits, and identifies future research needs to enhance the consideration of the time-varying value of energy efficiency in cost-effectiveness screening analysis. Findings from this study include: -The time-varying value of individual energy efficiency measures varies across the locations studied because of the physical and operational characteristics of the individual utility system (e.g., summer or winter peaking, load factor, reserve margin) as well as the time periods during which savings from measures occur. -Across the four locations studied, some of the largest capacity benefits from energy efficiency are derived from the deferral of transmission and distribution system infrastructure upgrades. However, the deferred cost of such upgrades also exhibited the greatest range in value of all the components of avoided costs across the locations studied. -Of the five energy efficiency measures studied, those targeting residential air conditioning in summer-peaking electric systems have the most significant added value when the total time-varying value is considered. -The increased use of rooftop solar systems, storage, and demand response, and the addition of electric vehicles and other major new electricity-consuming end uses are anticipated to significantly alter the load shape of many utility systems in the future. Data used to estimate the impact of energy efficiency measures on electric system peak demands will need to be updated periodically to accurately reflect the value of savings as system load shapes change. -Publicly available components of electric system costs avoided through energy efficiency are not uniform across states and utilities. Inclusion or exclusion of these components and differences in their value affect estimates of the time-varying value of energy efficiency. -Publicly available data on end-use load and energy savings shapes are limited, are concentrated regionally, and should be expanded.},
doi = {10.2172/1398500},
journal = {},
number = ,
volume = ,
place = {United States},
year = {Fri Jun 30 00:00:00 EDT 2017},
month = {Fri Jun 30 00:00:00 EDT 2017}
}

Technical Report:

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  • Quantifying the time-varying value of energy efficiency is necessary to properly account for all of its benefits and costs and to identify and implement efficiency resources that contribute to a low-cost, reliable electric system. Historically, most quantification of the benefits of efficiency has focused largely on the economic value of annual energy reduction. Due to the lack of statistically representative metered end-use load shape data in Michigan (i.e., the hourly or seasonal timing of electricity savings), the ability to confidently characterize the time-varying value of energy efficiency savings in the state, especially for weather-sensitive measures such as central air conditioning,more » is limited. Still, electric utilities in Michigan can take advantage of opportunities to incorporate the time-varying value of efficiency into their planning. For example, end-use load research and hourly valuation of efficiency savings can be used for a variety of electricity planning functions, including load forecasting, demand-side management and evaluation, capacity planning, long-term resource planning, renewable energy integration, assessing potential grid modernization investments, establishing rates and pricing, and customer service (KEMA 2012). In addition, accurately calculating the time-varying value of efficiency may help energy efficiency program administrators prioritize existing offerings, set incentive or rebate levels that reflect the full value of efficiency, and design new programs.« less
  • This appendix presents a time-phased energy efficiency investment plan for Russia whose goal is to develop a plan for investing in energy efficiency between now and the year 2010 Such a plan identifies possible investments within the specified time frame and the consequences of these investments.
  • The report is an analysis of the possibilities for using rate structure innovations to help improve the economic efficiency and equity of the performance of the electric utility industry. It focuses on two such innovations: the use of marginal cost concepts in the ratemaking process; and the introduction of time-varying rates.