Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage...
Transcript of Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage...
![Page 1: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/1.jpg)
Conservation Voltage Reduction Econometric
Impact Analysis
PresentedtoAESPSpringConference
PresentedbySanemSergici,TheBrattleGroup
(incollaborationwithPepcoMDteamledbySteveSunderhauf andBasilAllison)
May 11, 2016
![Page 2: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/2.jpg)
AgendaBackgroundDataOverviewMethodology SelectingControlGroups ConservationAnalysis PeakAnalysis
Results ConservationAnalysis PeakAnalysis
![Page 3: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/3.jpg)
Background: What is Conservation Voltage Reduction?
ConservationVoltageReduction(CVR)isareductioninfeedervoltagewhichresultsinareductioninenergyconsumption
Keyengineeringprincipal:VoltagecanbekeptonlowerendofAmericanNationalStandardInstitutestandardvoltagebandof114‐126volts
PepcoMaryland’simplementationofAdvancedMeteringInfrastructurehasenabledPepcotomonitorandvaryvoltagelevelswhileremainingwithinspecifiedstandards
![Page 4: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/4.jpg)
Background and Objectives PepcoMDinitiatedtheCVRpilotprogramonAugust1,2013.Itencompasses7substations Approximately45,000residentialcustomers Approximately4,000non‐residentialcustomers
Thevoltagelevelswerereducedby1.5%atthosesubstationsparticipatinginthepilot
Theobjectiveofourstudywasto: QuantifytheconservationimpactoftheCVRprogramforresidentialandnon‐residentialcustomers
QuantifythepeakdemandimpactoftheCVRprogramforresidentialandnon‐residentialcustomers
![Page 5: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/5.jpg)
BackgroundOverview of Previous Research‐ I
Moststudieshavebeenengineeringstudiesasopposedtoeconometricanalysis,andhavenotestimatedapeakdemandvsenergyconservationimpact,oraresidentialvsnon‐residentialimpact
SeveralstudieshavedemonstratedthattheimplementationofCVRleadstodecreasedconsumption,butthereisnoconsensusfora“CVRfactor”(energyreduction/voltagereduction) StudiesindicatearelativelywiderangeofCVRfactors,generallyrangingfrom.5to1
![Page 6: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/6.jpg)
BackgroundOverview of Previous Research‐ II
Residentialandnon‐residentialloadmayresponddifferentlytheCVRasnon‐residentialloadgenerallyhasalargershareofmotorload,whichmaymitigatetheeffectofCVR
CVRasanideahasbeenaroundfordecades,buthasrecentlygainedmoreattentionasitisbecomingmorecost‐effectiveandalsoeasiertocontrol/monitorduetothedeploymentofAMI
![Page 7: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/7.jpg)
BackgroundReview of Select Previous Studies‐ I
WestPennPowerCompany(2014) Studyreducedvoltageby1.5%doinga“onforaday,offforaday”approach
SimilartoPepcoMDstudyinthatitusesdifference‐in‐differencesmethodology
RangeofCVRfactorsbutaverageis0.86 IndianapolisPower&LightCompany(2013)
Studyturned“on”CVRforafewshortperiodsin2012and2013,andcompareddropinusageduringthoseperiodstopredictanimpact
StudyestimatedaCVRfactorof0.7‐0.8
![Page 8: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/8.jpg)
BackgroundReview of Select Previous Studies‐ II
DominionVirginiaPower(2012) Studycomparedbaselinepre‐CVRperiodtoconsumptionduringperiodafterCVRwasimplemented
Impactcalculateusingaday‐pairingmethodinsteadofdifference‐in‐differences
Day‐pairingmethodmatchesdayfromthepre‐treatmentperiodtodaysinthepost‐treatmentperiodtocalculateCVRimpact
StudyfoundaCVRfactorof0.92
![Page 9: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/9.jpg)
BackgroundReview of Select Previous Studies‐ III
PacificNorthwestNationalLaboratory(2010) EstimatedimpactofCVRon24modeledfeedersbyrunningaone‐yearsimulationofsystemandre‐runningwithreducedvoltagelevels
Resultswerevaried,butalmostallfeedersexperiencedsomereductioninbothpeakdemandandenergyconsumption
NorthwestEnergyEfficiencyAlliance(2007) StudymeasuredCVRimpactbycomparing24hoursonand24hoursoff,insteadofusingasetcontrolgroup
StudyfoundCVRfactorsforpeakdemandrangingfrom0.55‐1.12andforenergyrangingfrom0.3‐0.86
![Page 10: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/10.jpg)
AgendaBackgroundDataOverviewMethodology ConservationAnalysis PeakAnalysis
Results ConservationAnalysis PeakAnalysis
![Page 11: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/11.jpg)
Data OverviewThefollowingdatasetswereutilizedforthisanalysis
Billingdata Hourlyconsumption Weatherdata(dewpointanddrybulb temperatures) Advancedmeteringinfrastructure(AMI)activationdate ParticipationinDemandSideManagementprograms RecipientsofOpower HomeEnergyReports Netenergymetering(NEM)status
![Page 12: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/12.jpg)
Data Overview Forthepeakanalysis,theprimarydatasetwashourlydatafromAMIforJune‐August2013and2014,hours‐ending15‐19
Fortheconservationanalysis,theprimarydatasetwasmonthlybillingdatafromSeptember2012throughAugust2014 MonthlydatausedbecausehourlydatawasonlyavailableforsummerbeforeCVRimplementationasAMIactivationstartedinearly2012butwasnotcompleteduntilmid‐2013
![Page 13: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/13.jpg)
AgendaBackgroundDataOverviewMethodology SelectingControlGroups ConservationAnalysis PeakAnalysis
Results ConservationAnalysis PeakAnalysis
![Page 14: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/14.jpg)
MethodologySelecting Control Groups
PepcoMD’sCVRprogramwasnotdesignedasarandomizedcontroltrial
PepcoMarylandengineeringandloadexpertsmatchedeachsubstationwhichreceivedCVRtreatmentwithacontrolsubstationwhichdidnotreceiveCVRtreatment
Tomatchtreatmentandcontrolsubstations,theexpertsconsideredcustomerandloadcharacteristicsandensuredthattreatmentandcontrolpairingsaregenerallyadjacent
Allpairingsareinasinglejurisdiction,manyfactorswhichaffectconsumption(e.g.,economicfactorsandweather)aresimilarbetweenpairings
![Page 15: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/15.jpg)
MethodologySubstation Pairings
TreatmentSubstations ControlSubstations
KensingtonSub.193 LindenSub.156
LongwoodSub.192 WoodAcresSub.154
MontgomeryVillageSub.56 GaithersburgSub.31
BranchvilleSub.69 GreenbeltToaping CastleSub.173
RiverdaleSub.4 BladensburgSub.175
CampSpringsSub.72 St.BarnabasRd.Sub.59
Wildercroft Sub.178 LanhamSub.149
![Page 16: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/16.jpg)
MethodologyValidating Control Group Wecarried‐outafter‐the‐factcomparisonofPepcoMaryland’scontrol‐treatmentpairingstovalidatethecontrolgroup
BelowarecomparisonsofcontrolandtreatmentconsumptionusinghourlyAMIdataforthepeakanalysis
![Page 17: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/17.jpg)
MethodologyValidating Control Group We find that the residential customer load profiles are verysimilar to each other in terms of their shape and level for thetreatment and control groups This implies that the residential control group customersrepresent the but‐for usage of the residential treatmentcustomers fairly well
For the non‐residential customer load profiles, we find thatthey are very similar to each other in terms of their shapebut they differ in terms of the level of usage between thetreatment and control groups Treatment customers are slightly larger than the control groupcustomers, on average. This difference will be accounted for bythe fixed effects estimation routine
![Page 18: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/18.jpg)
Methodology: Difference‐in‐Differences through Panel Data AnalysisWe carried out a Difference‐in Differences (DID) analysis through apanel data regression analysis to estimate the CVR impact Regression model compares the usage of the treatment and control
group customers before and after the CVR treatment, while accountingfor other factors that could potentially confound the estimated impactsuch as weather conditions, DSM program participation, AMI activation,and calendar dummies
The Fixed Effects (FE) estimation routine was used to ensure that theestimated coefficients from the resulting model are unbiased. FEestimation assumes that the unobservable factor in the error term isrelated to one or more of the model’s independent variables. Therefore,it removes the unobserved effect from the error term prior to modelestimation using a data transformation process
![Page 19: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/19.jpg)
MethodologyCVR Impacts estimated in this Study
Impact Dataset AnalysisVariable
Pre‐treatmentPeriod(*)
Post‐treatmentPeriod
Peak Hourly AMIDataset HourlyUsage
June–August2013
June–August 2014
Conservation
MonthlyBillingData
Average DailyUsage
Sept.2012–August2013
Sept.2013–May2014
(*) The CVR program has begun on August 1st, however the CVR activation for the last treatment substation was on August 12, which is the effective start date of the CVR program for our analysis. For that reason, August 2013 is partially a pre-treatment month
![Page 20: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/20.jpg)
MethodologyConservation Model SpecificationConservationmodelmeasuresaverageenergysavingsfromCVR
∗ ∗ ∗ ∗
∗ ∗ ∗ ∗
Where:Averagehourlyconsumptionforhouseholdi indayt.FlagindicatingthatthestartofthetreatmentperiodFlagindicatingthatthecustomerhasreceivedtheCVRtreatmentImpactofTemperatureHumidityIndexonusageFlagindicatingthatacustomer’sAMImeterhasbeenactivatedMonthspecificimpactcommontoallhouseholds
∗ MonthspecificimpactoftheTemperatureHumidityIndexIndicatorthatacustomerisparticipatinginDSMprogramCustomerfixedeffectiid errorterm,clusteredbyhousehold
![Page 21: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/21.jpg)
Methodology Peak Impact Model PeakimpactmodelmeasurespeakdemandsavingsfromCVR Asthepeakimpactanalysisisfocusedonquantifyingthesavingsduringsystempeakconditions,weundertakeouranalysisusingdataonthehottestdaysoftheyear Wedefinepeakashoursending15‐19(usingPJM’scapacitymarketpeakdefinitionforsummer)
WedefinehottestdaysasthosewithaveragepeakTHIsgreaterthan77,whichequatestoroughly85°F)
Werunthepeakimpactmodelforweekdays,weekendsandalldaystogaugewhetherthepeakimpactvariesduetodifferentpeakloadcharacteristicsduringthesedays
![Page 22: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/22.jpg)
MethodologyPeak Impact Model Specification
∗ ∗ ∗
∗ ∗ ∗
∗ ∗ Where:
Averagehourlyconsumptionforhouseholdi indaytFlagindicatingthestartofthetreatmentperiodFlagindicatingthatthecustomerhasreceivedtheCVRtreatmentImpactofTemperatureHumidityIndexonusageMonthspecificimpactcommontoallhouseholds
∗ MonthspecificimpactoftheTemperatureHumidityIndexIndicatorthatacustomerisparticipatinginDSMprogramgroupkCustomerfixedeffectiid errorterm,clusteredbyhousehold
![Page 23: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/23.jpg)
AgendaBackgroundDataOverviewMethodology SelectingControlGroups ConservationAnalysis PeakAnalysis
Results ConservationAnalysis PeakAnalysis
![Page 24: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/24.jpg)
ResultsConservation ImpactResidentialCustomersA1.5%reductioninvoltageisestimatedtoresultina1.4%reductioninconsumption Significantatthe1%level ImpliedCVRfactorof.93whichiswithinrangesuggestedbypreviousstudies
![Page 25: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/25.jpg)
ResultsConservation ImpactNon‐ResidentialCustomers1.5%reductioninvoltageisestimatedtoresultina0.9%reductioninconsumption Notstatisticallysignificant,thoughstillanunbiasedestimateofthemeanimpact
ImpliedCVRfactorof0.6whichiswithinrangesuggestedbypreviousstudies
Insignificantresultlikelydrivenbysmallersamplesizeandalsoheterogeneityofcustomers
![Page 26: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/26.jpg)
ResultsPeak ImpactResidentialCustomersA1.5%reductioninvoltageisestimatedtoresultina1.1%reductioninpeakconsumption Significantatthe1%level ImpliedCVRfactorof.73whichiswithinrangesuggestedbypreviousstudies
![Page 27: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/27.jpg)
ResultsPeak ImpactNon‐ResidentialCustomers1.5%reductioninvoltageisestimatedtoresultina2.5%reductioninpeakconsumption Significantatthe1%level ImpliedCVRfactorgreaterthan1isbeyondexpectedrangeforCVRimpact
Highimpactimpliesthatthereareotherunobservableeffectswhichwewerenotabletocaptureinthisanalysis,likelyduetoheterogeneityofnon‐residentialcustomers
![Page 28: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/28.jpg)
ResultsPeak ImpactResidentialpeakresultsarerobustacrossdaysandhours
Hour Ending All DaysWeekends & Holidays Only
Weekdays
(% Impact) (% Impact) (% Impact)
Hour 15 ‐1.13% ‐1.67% ‐0.90%Hour 16 ‐1.02% ‐1.23% ‐0.90%Hour 17 ‐1.02% ‐1.08% ‐1.00%Hour 18 ‐1.21% ‐1.16% ‐1.20%Hour 19 ‐1.17% ‐1.10% ‐1.20%
15‐19 Pooled ‐1.11% ‐1.28% ‐1.08%
![Page 29: Conservation Voltage Reduction Econometric Impact Analysis · 2018-02-02 · Conservation Voltage Reduction Econometric Impact Analysis Presented to AESP Spring Conference Presented](https://reader034.fdocuments.net/reader034/viewer/2022050612/5fb2fc7650201f608433d955/html5/thumbnails/29.jpg)
ResultsConclusion
Residentialimpactisrobust PepcoMaryland’sCVRpilotprogramhasbeensuccessfulinleadingtoadecreaseinresidentialconsumptionduringpeakhoursandalsoyear‐round
Theresultsarestableacrossmultipleeconometricmodels
Non‐Residentialimpactismoredifficulttoquantifyusingeconometricmethodsduetoheterogeneityandsamplesizeissues Inthefuture,largerdatasetswithlargersamplesizemayresultinstatisticallysignificantresults