EMW Russell 2014

MeasuringNon-EnergyBenefitsofIndustrialEnergyEfficiency:

THECURRENTFRONTIER

CHRISTOPHERRUSSELLVisi%ngFellow,ACEEE::[email protected]

incoopera%onwithNaviusResearchofCanada

AmericanCouncilforanEnergy-EfficientEconomywww.aceee.org

•  ACEEE:anonprofit501(c)(3).Catalysttoadvance

energyefficiencypolicies,programs,technologies,investments&behaviors.

•  50staffinDC,MD,DE,MI,WA&WI•  Focusonend-useefficiencyinindustry,buildings,

u%li%es&transporta%on•  Otherresearchineconomicanalysis;behavior;na%onal,

state&localpolicy.•  Funding:

◦  Founda%onGrants(52%)◦  ContractWork&Gov.Grants(20%)◦  ConferencesandPublica%ons(20%)◦  Contribu%onsandOther(8%)

OutlineforToday•  Aspira%on:defineandrecognizethefullrangeofnon-energybenefits(NEBs)resul%ngfromenergyefficiencyimprovements

•  Intermediatefindings

•  Issuesandopportuni%esfordevelopingandusingsuchinforma%on

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WHYNEBs?PLANTLEVEL

•  Realdollars,fullbenefitsofenergyimprovementsremainhidden

•  NEBsvaluesaccruebeyondu%litybills–  Strongeraccoun%ngofcashflowsandinvestmentreturns–  Broaderorganiza%onalandbusinessimpacts–  Broaderrangeofinterestedstakeholders–  Increasedcredibility,defenseofenergymanagementfunc%ons

WHYNEBs?REGIONALENERGYMARKETS

•  Realdollarsèenhancedjus%fica%onforcapitalinvestment

•  Greaterbusinessreturnsègreatercompe%%venessandviabilityofu%lityratepayers

•  Clearaccoun%ngofNEBsvalues:–  Strongertransparencyofavoidedcostsforu%li%es–  Closeralignmentofu%litytariffswithactualvalueandbenefitofenergyuse

–  Improvedstructuringofdemand-siderebatesandincen%ves

IdealOutcome:ValueForecastsForecastthetypeandvalueofNEBsforanysingleprojectbasedonpastobserva%ons:

$NEBs=f(typeofenergymeasure,industryapplicaFon,etc.)

RaFo:NEBsperMMBtu

“Best”data?Alreadycollectedinlargevolume,formahedforinstantqueryingandinterpreta%on.

AllowsNEBses%matewithinboundsofsta%s%calcertainty.

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“NextBest”OutcomesIftheidealisnotavailable…

•  Es%matetheeffortneededtoahaintheideal:–  Sources?–  Defini%onalconsistency?–  Datastandardiza%on?–  Timeandeffort?

•  CensusofwhatcurrentlyISavailable.

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CRITICALASSUMPTIONS•  INTEGRITYOFOBSERVATION.Changeinenergyconsump%oncanbewholly

ahributabletospecificprojects.Changeinenergyconsump%onandNEBsforanyoneprojectcanbeisolatedfromothersimultaneousprojectsinthesamefacility.

•  INTEGRITYOFMEASUREMENT.Accurateconsump%onbaselinemeasures.Measurementofsavingsarestandardizedacrossallobserva%ons.

•  NORMALIZATIONOFVARIANCE.Before/Anerconsump%onsarenormalizedforproduc%on,weather,etc.Whencomparingtwoormorefacili%es,adjustmentscanbemadefordifferencesinu%liza%onfactor(annualhoursofopera%on)andoverallsystemdesign.

•  INTEGRITYOFDATACOLLECTION.Allfacili%eshavetheabilityandmo%va%ontomeasureandconsistentlydocumentproject-specificenergyusebeforeandanerEACHimprovement.(NOTE:U%lityprogramsrou%nelyrelyoncustomerself-measurementandrepor%ng.)Therearenoproprietaryissuesforbiddingthefacilitytoshareitsenergydata.

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2.3 ELECTRICALPOWER2.31 DEMANDMANAGEMENT2.311 ThermalEnergyStorage2.313 Scheduling2.319 Miscellaneous2.32 POWERFACTOR2.33 GENERATIONOFPOWER2.331 DC2.332 AC2.34 COGENERATION2.35 TRANSMISSION2.351 Transformers2.352 ConductorSize2.4 MOTORSYSTEMS2.41 MOTORS2.411 Opera%on2.413 Hardware2.414 MotorSystemDrives2.415 MotorMaintenanceandRepair2.42 AIRCOMPRESSORS2.422 Hardware2.423 Opera%ons2.43 OTHEREQUIPMENT2.431 Opera%ons2.432 Hardware2.7 BUILDINGSANDGROUNDS2.71 LIGHTING2.711 Level2.712 Opera%on2.713 Controls2.714 Hardware2.72 SPACECONDITIONING2.721 Maintenance2.722 Opera%on2.723 Hardware-Hea%ng&Cooling2.724 Hardware-AirCircula%on2.725 Evapora%on2.726 Controls2.727 Humiditycontrol2.729 Miscellaneous2.73 VENTILATION2.74 BUILDINGENVELOPE2.742 SolarLoading2.744 Infiltra%on2.749 Miscellaneous

NAICS INDUSTRYCLASSIFICATIONS311,312 Food,Beverages,Tobacco313,314 Tex%les&AlliedMillProducts315,316 Apparel,Leather,&AlliedProducts321 WoodProducts322 Paper323 Prin%ng&Related324 Petroleum&Coal325 Chemicals326 Plas%cs&RubberProducts327 NonmetallicMineralProducts331 PrimaryMetals332 FabricatedMetalProducts333 Machinery334 Computer&ElectronicProducts335 ElectricalEquipment,Appliances,andComponents336 Transporta%onEquipment337 Furniture&RelatedProducts339 Miscellaneous

33Electricityimprovementmeasures18Manufacturingindustries

--594dis%nctmeasure+industrymatches30replica%onsofeachmeasure+industry

--17,820observaFonsrequiredtoachievestaFsFcalvalidity.ThisisthenumberBEFOREaccounFngforregionalvariance.

U.S.D

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GYCONSERV

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RECLASSIFICAT

IONSYSTEM

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HOWMUCHDATA?

Howclosetotheidealcanweget?

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OURAPPROACH•  SurveyofNorthAmericanexperience•  ACEEEcoveredU.S.contacts,NaviuscoveredCanada•  Obtained51U.S.items,35Canadian.Sourcesincluded

u%li%esandalliedregulatorygroups,governments,academics,consultants,vendors,andliterature.

•  “Items”includereports,databases,projectsummaries

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RESPONSETYPES•  REAL,PROJECTSPECIFICDATA(mostlyCADDET)

Basedonpost-implementa%onmeasurement

•  EXPERTESTIMATESBASEDONREALPROJECTANALYSES(IACDatabase)Centraltendenciesderivedfromlargenumbersofexanteprojectanalyses

•  INDIRECTHARDDATASta%s%csdescribingfrequencyofNEBsobserva%on,paybackswith/withoutNEBs,etc.

•  MEASUREMENTPROTOCOLSFormulaicmodelsforevalua%ngNEBsbasedonexpertconsensus

•  PRACTICALINTERPRETATIONSProject-levelrulesofthumbforNEBes%ma%on

•  DIOGNOSTIC&METHODOLOGICALTHEORYApproachesfores%ma%ngNEBs(programadministratoraudiences)

•  ANECDOTALOBSERVATIONSReferencetospecificprojects’impacts,minimalquan%fica%on

•  CONCEPTUALJUSTIFICATIONTheore%caldiscussionimpacts,noquan%fica%on

•  DEAD-ENDsNoresponse,ornoinforma%ontoreport

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86RESPONSESThissummaryDOESNOTincludetheIACDatabasefindings(2,378U.S.projectsavingses%mates)

*IncludesmanyglobalexamplesNotenoughforsta%s%callysignificantmeasureofofcentraltendency,confidenceintervals,etc.asoriginallyenvisioned.

*

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0 5 10 15 20 25 30

DEADENDS

CONCEPTUALJUSTIFICATION

ANECDOTALOBSERVATIONS

DIOGNOSTIC&METHODOLOGICALTHEORY

PRACTICALINTERPRETATIONS

MEASUREMENTPROTOCOLS

INDIRECTHARDDATA

REALPROJECT-SPECIFICNEIDATA

CANADA U.S.

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ABOUTEXISTINGNEBsDATA•  Majorityofdocumenta%onusedtosupportevalua%onsof

energyprogramcosteffec%veness(totalresourceplanning,societalimpactcosts,etc.)Dataarenotbuiltupfromindividualprojects(bohomup),butderivedfromaggregateprogramresults(topdown).

•  Virtuallyalltop-downNEI/NEBmetrics/mul%pliersarederivedfromexpertconsensus,NOTfrommeasurementofactualinstalla%ons.

•  Singlelargestdatasourceofferses%mates,notactuals(IACDatabase).16,300assessments,123,000projects

EXAMPLE:CADDET*CASESTUDIES*CentrefortheAnalysisandDissemina%onofDemonstratedEnergyTechnologies

•  Dataclosesttomee%ngthecriteriasoughtbythisstudy•  26individualindustrial,electrotechnologyprojects.Ofthese:

–  77%quan%fykWhsavings–  4%quan%fynaturalgassavings–  42%describegrosssavings(allforms)indollars–  58%describeelectricitysavingsindollars–  Dollarsavingssome%mesprovidedforvariousNEBs(from4%to31%)–  35%providesimplepayback–  ThebalancesimplynotethatvariousNEBsexist,withoutquan%fica%on

Eventhis“best”datafallsFARshortofthequanFtyandqualityneeded

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EXAMPLE:INDIRECTHARDDATA:(Woodruff,etal)

hhp://www.leonardo-energy.org/sites/leonardo-energy/files/documents-and-links/EECORE%20Benefits.pdf

PERCENTOFRESPONDENTSCLAIMINGNON-ENERGYBENEFITS

NON-ENERGYBENEFIT

Woodruff,etalStudyN=63

Reducedmaintenancematerialcost 92%

Reducedmaintenancelabor 71%

PermanentCAPEXavoidance 33%

Avoidedprocurementcost 63%

Avoidedpurchasesofcarbonoffsets 10%

EnhancedPR,Image 44%

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EXAMPLE:MassachusehsTechnicalReferenceManualhhp://www.ma-eeac.org/Docs/8.3_TRMs/1MATRM_2013-15%20PLAN_FINAL.pdf

O&M($)SAVINGSPERUNITINSTALLEDOVERECONOMICLIFE

MEASURE LOW HIGH

VARIOUSLIGHTING&LIGHTINGSENSORFIXTURES(p.418) $0.41 $33.65

ANNUALNEIVALUEPERkWhSAVEDBYC&ILARGERETROFITPROJECTSCHPSystems Administra%vecosts,O&M $0.015

Prescrip%veLigh%ng Administra%vecosts,materialhandling,materialmovement,otherlaborcosts,O&M,salesrevenue,wastedisposal $0.027

Prescrip%veHVAC Administra%vecosts,othercosts,otherlaborcosts,O&M,rentrevenue $0.097

CustomHVACAdministra%vecosts,materialhandling,materialmovement,othercosts,otherlaborcosts,O&M,productspoilage,rentrevenue,salesrevenue,wastedisposal

$0.024

CustomLigh%ng $0.059

Refrigera%on $0.047

Other $0.056

FactorsbasedonresultsofvariousstudiesconductedbyKEMA,TetraTechandOp%malEnergyforMassachusehsprogramadministrators

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IACDATABASE:Highlights

MEASURE FREQANNUAL

kWhSAVED

NATGASmmBtuSAVED

PERMWh

OTHERFUELmmBtu

SAVEDPERMWh

NON-ENERGYCENTS

SAVEDPERkWh

RATIO:$NON-ELECSAVINGSPER$ELECSAVED

AIRCOMPRESSORS-Hardware 496 105,663,196 0 0 1.43 0.24

AIRCOMPRESSORS-Opera%ons 25 1,450,649 0 0 0.34 0.06

MOTORS-Hardware 188 37,641,217 0.47 0 0.43 0.12

MOTORS–Maintenance,Repair 23 3,889,539 0 0 0.84 0.14

MOTORS–SystemDrives 1,123 331,467,976 0.34 0.17 0.06 0.06

OTHERMOTORSSYSTEMS-Hardware 511 82,807,274 1.54 0.11 12.25 2.21

OTHERMOTORSYSTEMS-Opera%ons 12 1,255,260 0 0 16.07 2.68

Elec@$0.06/kWh,naturalgas@$6.00/mmBtuSavingsvaluesarees%matesprovidedbyexpertsacrossmanyprojectsRa%osarebasedonmul%pleprojectvaluesinsumma%onDataNOTadjustedforregion,annualu%liza%onfactors,overallsystemdesign,opera%ngstrategy,etc.

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AVAILABLENEBsFINDINGSIN2014

•  Overwhelminglyanecdotaldata.Sta%s%calreliabilityremainselusive.

•  IndirectmeasurementofNEBs:rulesofthumborprescribed“percentadders”sanc%onedbyu%lityregulators(7.5%to30%ofsavedenergyvalue)

•  SmallsamplesofdescribefrequencyofobservedNEBsbytype,novalua%on

MOVINGFORWARD:Opportuni%estoGenerateSolidNEBsData•  En%%es*interestedinimprovingNEBsdata•  RecentNorthAmericanenergyprogramrebates&incen%ves

havegeneratedlotsofcustomprojectfeasibilitydata•  Considerasyndicatedeffortacrosspar%cipa%ngu%li%esto

generateNEBdatafromprojectreports:–  Pullfrompastreports,or–  Developacollabora%vedataprotocoltoensureconsistentdata

collec%onacrossu%li%es,generatedatafromfuturecustomprojects

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*BCHydro,OntarioPowerAuthority,ManitobaHydro,AMECEnvironmentalInfrastructure,SaskEnergy,NRCanada,MichaelsEnergy(supportcontractorto22+u%li%es),Na%onalGrid,PGE,WSUClearinghouse

CONCLUSIONS•  SufficientdatadoesnotyetexisttoreliablypredictNEBs

•  “SecondBest”dataincludes:

–  Expertes%matesacrossmanyproposals(IACdatabase,n=2,378since2000)andMassachusehsTechnicalReferenceManual.S<llverylimitednumberoftechnologies,industries

–  Actualdataforaverysmallnumber(n=26)ofprojects(CADDET)–  Surveysdescribingpercentoffacili%esdetec%ngNEBs

•  Reconsider:SeekNEBstoimprovesimplepayback?Orseekbeherinvestmentmetricsforenergysavings?

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Energy PathFINDER .com ChristopherRussell

[email protected]

@ENERGYpathfndr

THANKYOU!

EMW Russell 2014

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