Energy Efficiency Trends - Ameren Illinois Energy ...€¦ · Midwest Energy Efficiency Alliance...

Energy Efficiency Trends

Nora A. Naughton, Director of Policy, MEEA

Sweet Savings | 2016 Business Symposium

Midwest Energy Efficiency Alliance

(MEEA)

2

MEEA is a nonprofit membership

organization with 150+ members,

including:

• Electric and Gas Utilities

• State and local governments

• Manufacturers and retailers

• Academic and research institutions

• Energy service companies and contractors

Since 2000, MEEA has been the leading

source for raising awareness and advancing

sound energy efficiency policies and

programs in the Midwest

MEEA balances the diverse interests of its

members and network across the public and

private sectors, creating a common ground to affect positive change for energy efficiency in the Midwest.


MEEA’s Role as a Resource

Advancing

Energy

Efficiency

Policy Facilitating

Energy

Efficiency

Programs

Regional

Representation

in National

Dialogues

Promoting Best

Practices

Coordinating Utility

Programs Efforts

Evaluating &

Promoting

Emerging

Technology

Delivering

Training and

Workshops


The Flavors of Energy Efficiency

» Voluntary efforts at home • Insulation

• LED lighting

• Energy star appliances

• Air sealing

» Voluntary Commercial and Industrial efforts • All of the above plus

• Trend towards EE in Building Operations and Management

• Trend towards EE in Commercial/Industrial Processes as a System (not just efficiency of a motor or an appliance but of entire commercial or industrial process)

» Federally mandated energy usage levels • appliances/equipment (Energy Star)

• LEED Green Building Certification Program by the U.S. Green Building Council

» State or local mandated energy requirements • Building codes

• Building data collection

» Regulated Utility program • Mandated and voluntary programs for utility customers


Midwest State Rankings on

ACEEE Scorecard (2015)

10

10

12 14

22

44

51

48

42

45

27 38

29


ACEEE Scorecard Analysis

Six of the primary policy areas in which states have historically pursued

energy efficiency.

» Utility and public benefits programs and policies

» Transportation policies

» Building energy codes

» Policies encouraging combined heat and power (CHP) systems

» State government–led initiatives around energy efficiency

» Appliance and equipment standards

Energy Efficiency Resource Standards

Integrated Resource Planning


Utility Program Energy Efficiency

» Drivers of efficiency investment:

• Accountability to regulators

• Popular with customers (increase customer satisfaction/control

over bills)

• Reduce energy purchases (and construction of generation or

transmission/distribution) by reducing peak demand or overall

usage

• In some cases, regulatory mandate by state law or regulator order

» Unique challenges:

• Rate structure often based on usage (trend is to separate rate from

usage)

• Mixed incentives (trend is to provide utility with shared incentives)

8


Energy Efficiency Resource Standard

(EERS) » What is an Energy Efficiency Resource Standard?

• A state (or regulator) requirement on public utilities to reduce energy

sales through energy efficiency measures.

• Federal EERS have been proposed but have not passed into law

• Usually stated in terms of percentage of energy reduction in a year

• The strongest EERS requirements exist in Massachusetts, Rhode Island,

and Vermont, which require almost 2.5% savings annually*

• Can apply to either electric or gas public utilities

• Often does not apply to unregulated utilities (such as co-ops or munis)

• As of August 2014, twenty-four states have policies in place that

establish specific energy savings targets or EERS*

» Recent trends

• Movement to EE planning rather than mandated standards or targets

(e.g., Ohio and Indiana had EERS policies in place in the past, which

have been frozen or rolled back in recent years).

• Increased incentives for utilities. *Source: American Council for an Energy Efficiency Economy (ACEEE): State EERS Policy Brief

9


$1.40

$0.38

$1.78

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

$2.0

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

$B

illio

ns

Estimated Annual Utility Investment in Energy

Efficiency-Midwest

10

EERS Legislation • IL Electric • MN Electric,

Gas

EERS Legislation • MI Electric,

Gas • OH Electric Exec Order • IA Gas,

Electric

EERS Legislation • IL Gas Admin Order • IN Electric Voluntary Standard Legislation • MO Electric

Admin Order • WI Elec,

Gas

Legislative Committee • WI EERS

adjusted

Legislation • IN EERS

overturned

• OH EERS frozen


Energy Efficiency as

Bipartisan Issue

» Split Split

11

R

R* D*

D D

D

D D/R: Governor Affiliation

State Legislature

H/S: Repub.

H/S: Dem.

State House/Senate and Governor party

affiliation

at the time of the first enactment of EEPS

Policy

*Indiana recently eliminated its EEPS policy, but is considering new legislation. Ohio has recently weakened its EEPS with a two-year “freeze” on the standard.


Midwest Efficiency Targets and

Funding Levels

12

2010 $1.01 billion 2015 $1.78 billion

Illinois 2% elec by 2015 1.5% gas by 2019

Iowa Set on a utility basis

1.4% elec current plans 1.0% gas current plans

Michigan 1% elec by 2012 0.75% gas by 2012 Legislative rollback

proposed

Ohio 1% elec by 2014 Two-year “freeze” after 2014. Future legislation &

funding unclear.

Indiana Overturned 2014 Future legislation &

funding unclear Minnesota

1.5% elec by 2010 1.0% gas by 2010 (gas goal reduced by

commission)

Missouri IRP process; Voluntary electric

Kentucky Voluntary electric

and gas

North Dakota South Dakota

Nebraska Kansas

Voluntary energy efficiency

only

Wisconsin No specific savings

targets

0.6% elec current est. 0.5% gas current est. 1.2% annual operating

revenue spending

target ND

SD

NE

KS

MI

MN

WI

IA

IL

MO

IN

KY

OH


Electric Energy Efficiency

Budget

$0

.5

$0

.5

$3

.2

$1

6 $5

6

$6

6

$6

6 $1

07

$1

59

$1

60

$1

98

$2

72

$2

93

$-

$50

$100

$150

$200

$250

$300

$350

ND KS

SD NE

KY

WI

MO IN

MN IA MI

OH IL

Mill

ion

s

2016

ELECTRIC

13 January 2016

Source: MEEA EE tracking


Natural Gas Energy Efficiency

Budget

$-

$0

.2

$1

.1

$1

.2

$1

.5

$8

$1

2 $

28

$5

1

$5

7

$6

3 $

84

$1

09

$-

$20

$40

$60

$80

$100

$120

NE

ND KY KS

SD MO IN WI

OH

MN IA MI IL

Mill

ion

s

2016

GAS

14 January 2016

Source: MEEA EE tracking


Energy Savings Through Utility Energy

Efficiency in the Midwest

0.7

7.3

3.4

159.5

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

20

08

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

Na

tura

l G

as -

Mill

ion T

he

rms S

aved

Ele

ctr

ic -

Mill

ion M

Wh

Sa

ved

Year

January 2016

Electricity

Natural Gas


Electricity Savings in Midwest States

0.9

2.3

20

12

7

22

3 43

3

51

9

55

7

62

3 83

6

1,0

09

1,1

17

1,7

93

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

KS

ND SD NE

KY

MO IA WI

IN

MN IL MI

OH

GW

h

2016

ELECTRIC

16 January 2016


Natural Gas Savings in Midwest States

0

0

0

0 0.1

2.8

3.1

3.8

11

18

38

39

43

-

5

10

15

20

25

30

35

40

45

OH

NE KS

ND SD KY IN

MO IA WI

MN IL MI

The

rms

(mill

ion

s)

2016

GAS

17 January 2016

Gas Savings Data Not Available


18

0.0

2%

0.0

6%

0.0

9%

0.2

4%

0.3

0%

0.4

0%

0.5

9%

0.9

0%

1.0

0%

1.0

5%

1.1

0%

1.2

8%

1.3

1%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

KS ND SD KY NE MO IN WI IL IA OH MI MN

Energy Efficiency in Midwest States Saved electricity as percent of total retail electricity sales, 2014

Sources: MEEA, 2015; EIA, 2015

EERS

Neither IRP nor EERS

IRP Only


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Minnesota

• Minnesota has adopted both an IRP

model as well as a Conservation

Improvement Plan standard plus

other goals

• MN incorporates existing 1.5%

energy efficiency standard goal as

an input within each utility’s IRP

• Electric savings more than doubled

between 2007 and 2012

Challenges for EE


Pressures and Pushbacks » Legislative Rollbacks

• Indiana – eliminated EEPS in 2014

• Ohio – paused EEPS in 2014

» Current Legislative Debate

• Michigan – proposal to eliminate electric EEPS, but maintain gas

EEPS and establish IRP

• Ohio – various proposals to either eliminate or reduce EEPS

» State Budget Challenges

• Illinois – lack of state budget zeroed out funds for public sector and

low income programs

• Wisconsin – reduced percentage of investment required in EE

programs

» Regulatory proposals

• Proposals to increase fixed rates (reducing customer interest and

potential savings)

» Clean Power Plan

• 11 of 13 states have stopped all work


22

Indiana

2009:

Administrative

order creates

Energizing Indiana

2012:

Energizing

Indiana

Program

Implemented

2015:

DSM plan and

IRP rule

making

process

begins

2014:

Legislature

repeals EERS.

All investor

owned utilities

file DSM plans

with IN Utility

Regulatory

Commission


Energy Savings Reduced in Indiana after the Repeal of their Energy Efficiency Resource

Standard

23

*Indiana & Michigan Power has not yet filed a plan for 2016

Rural Cooperatives


Rural Cooperatives and Energy

Efficiency

» Drivers of efficiency investment:

• Accountability to members (customers)

• Reduce energy purchases by reducing peak demand

• In some cases, regulatory mandate

» Unique challenges

• Disperse customer base, low density

• Low electric usage

• Market disinterest

• Funding

» MEEA Resource: Toolkit for Rural Energy Efficiency

• Best practices guide for cooperatives throughout the Midwest

25


Rural Cooperatives and Energy

Efficiency

» Case Study: Michigan Electric Cooperative Association Energy

Optimization (EO) Collaborative Group

» Challenge: large service territories and relatively low electric usage of

members

» EO collaborative formed to address compliance obligations

collectively. includes eight co-op members and four municipalities

» Files collective Energy Optimization plans (as opposed to individual

plans)

» Manages single RFP, selection and contracting processes for

implementation and evaluation contractors

» Achieves economies of scale by pooling talent, sharing costs

26

Industrial

EE


Industrial EE is Important in

the Midwest

28

of electricity in the Midwest states is consumed by the Industrial sector (EIA 2014)

38%

of Industrial EE potential is found in Midwest (McKinsey 2009)

40%

Midwest states are in Top 10 consumers of total energy in the industrial sector, and 4 more are in the Top 25 (EIA 2014)

5


0

20

40

60

80

100

120

140

160

180

200

Ind

ust

rial

En

erg

y Ef

fici

en

cy S

avin

gs [

GW

h]

Portion of EE Savings

by Customer Class

• Residential • Commercial • Industrial

Size proportional to

Total EE Savings in

2012

Focus on Energy

Wisconsin

First Energy Ohio

Xcel Energy Minnesota

Interstate Power & Light

Iowa

AEP Ohio

Consumers Energy

Michigan

Duke Energy Indiana

Duke Energy Ohio

MidAmerican Energy

Iowa

NIPSCO Indiana

42%

43%

34%

Top Industrial EE Program

Administrators in the Midwest


These 10 program administrators

account for :

30

of industrial electricity savings * 82.4%

of total electricity savings ** 50.5%

*out of 79 Midwestern program administrators that reported non-zero Industrial Incremental EE savings on 2012 EIA-861 **out of 192 Midwestern program administrators that reported non-zero Total Incremental EE savings on 2012 EIA-861


Midwest Achieved EE Benefits

per $1 in EE costs

31


Midwest Trends in Industrial Opt-

Outs and Self-Direct Programs

32


Negative Impacts of Opt-Out

Reduces overall amount of energy saved

Loss of knowledge and data – utilities report EE spend & savings; opted-out companies don’t report anything

Portfolio costs all borne by residential & small business customers

Reduces potential of efficiency as a path for Clean Power Plan compliance

Less cost-effective programs are a higher percent of overall portfolio

Reduced cost-effectiveness of portfolio

33

Building Codes and Benchmarking


Building Energy Usage

» Buildings account for 40% of all energy use in the U.S.

» Buildings consume more energy than the industrial or transportation sectors, surpassing industrial in 1998 as the number one consumer of energy.

» In commercial buildings:

• Lighting accounts for one-quarter (1/4) of total energy use.

• Heating and cooling in commercial buildings are next in importance, each with about one-seventh (1/7) of total energy use.

» In residential buildings:

• Space heating comprises the largest energy use at 26%—almost twice any other end use.

• Space cooling, water heating and lighting all use roughly the same percentage of energy in a home (12%–13%)

Source: U.S. Department of Energy, Office of Energy Efficiency & Renewable Energy, 2009 Buildings Energy Data Book


Timeline of Commercial Code

Adoption

2004 2005 2006 2007 2008 2009

2010 2011 2012 2014 2013 2015

Code Level / Equivalence

No Mandatory Statewide Code

Pre-2000 Code

2000 IECC 90.1-1999

2003 IECC 90.1-2001

2006 IECC 90.1-2004

2009 IECC 90.1-2007

2012 IECC 90.1-2010

2015 IECC 90.1-2013

Code upgrade in process


Commercial Building Energy Code

Adoption in the Midwest



2009 IECC/90.1-2007

2012 IECC/90.1-2010

State Adoption

Municipal Adoption 2009 IECC Adopted by Major Municipality

2012 IECC Adopted by Major Municipality In Process to 2015 IECC for Major Municipality

Enhanced 2009 IECC Adopted by Major Municipality

As of March 2016

In Process to 2015 IECC/90.1-2013

2015 IECC/90.1-2013


ASHRAE 90.1 Commercial Code

Efficiency Improvements (1975-2015)

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Timeline of Residential Code

Adoption

2004 2005 2006 2007 2008 2009

2010 2011 2012 2014 2013 2015



Pre-2000 Code

2000 IECC

2003 IECC

2006 IECC

2009 IECC

2012 IECC

2015 IECC

Code upgrade in process

As of August 2015


Residential Building Energy

Code Adoption in the Midwest No Mandatory Statewide Code


2009 IECC

2012 IECC

2015 IECC

State Adoption

Municipal Adoption 2009 IECC Adopted by Major Municipality

2012 IECC Adopted by Major Municipality In Process to 2015 IECC for Major Municipality

Enhanced 2009 IECC Adopted by Major Municipality

As of March 2016


IECC Residential Code Efficiency

Improvements (1975-2015)

41


Building Code and Benchmarking

Benefits » What are the benefits to consumers (residential and commercial)

from upgraded building energy codes?

• Compounded energy savings over the life of the building (60-80 years).

• Increased comfort and safety.

• Increased manufacturing and jobs from building supplies in Midwest

− Insulation, windows, lighting, thermostats.

» What are the benefits of building energy tracking and benchmarking

requirements?

• Create more accurate energy budgets.

• Identify underperforming buildings and pinpoint specific energy reduction

measures.

• Verify savings completed by Energy Service Companies or within

performance contracts.

• Earn Recognition in ENERGY STAR, Green Globes, LEED, and/or local

challenge programs.


Building Energy Benchmarking

General Definition:

» Track energy consumed by an existing building over time

» Compare results to similar buildings or an applicable standard

Image Courtesy of Portland State University


Midwest State Gov’t Energy Data

Collection / Use

44

RToS

RToS

State Pilot Underway

State Owned/Operated Building Data Collection and Implementation

State Pilot Complete

State Owned Considering

State Owned Enacted

Updated February 2016

RToS Voluntary Residential Time of Sale Disclosure


EE Opportunities and Leading States

» State Energy Plans

• Iowa, Missouri, Minnesota, Illinois (Energy Roadmap)

» Technical Resource Manuals

• Michigan, Illinois, Ohio, Kentucky, Missouri, Iowa

» IRPs

• Indiana, Michigan, Minnesota

» Industrial Efficiency and CHP programs

• Illinois, Ohio, Michigan, Iowa

» Building Energy Codes and Increased Compliance

• Illinois, Michigan, Iowa, Ohio, Kentucky


46


Electricity Prices Compared with Cost

of Energy Efficiency

9.67

10.45

1.4

0

2

4

6

8

10

122

00

1

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

US Levelized Cost of EE

Range

Midwest Average Cost of EE

National Average Electricity Price

Ohio Average Electricity Price

Sources: EIA 2015; Lazard 2013; LBNL 2014


Electricity Prices Compared with Cost

of Energy Efficiency

9.42

10.49

0.00

2.00

4.00

6.00

8.00

10.00

12.002

00

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

US

Levelized

Cost of EE

Range

Midwest

Average

Cost of EE

US Average Electricity Price

Illinois Average Electricity Price

1.4

• Illinois

Sources: EIA 2016; Lazard 2015; LBNL 2014


Policies to Drive Energy Efficiency

49

Energy Savings Targets for Utilities

Energy Efficiency Resource Standard

Incorporating Energy Efficiency into Resource Planning

Demand Side Management (DSM) Planning

Market-Based EE

Energy Savings Performance Contracts: delivery of savings through performance-based contracts;

usually provide guaranteed savings.

Financing

Voluntary Labeling and Benchmarking

Wholesale Electricity Markets:

Behavioral Efficiency Programs Use of information dissemination, social interaction, competition, and/or potential rewards rather

than direct financial incentives as the primary mechanism for changing energy consumption

behavior.

Appliance Efficiency Standards Efficiency Standards: Mandate minimum energy and water efficiency requirements for selected appliances and equipment that are not subject to existing federal standards.

Building Energy Use

Building Energy Codes: Establish minimum efficiency requirements for new and renovated

residential and commercial buildings.

Other Mandatory Building Efficiency Policies: Examples include mandatory energy-use

benchmarking and disclosure requirements


Clean Energy Trust- Midwest

Clean Jobs Report

Energy Efficiency

423, 548 Jobs in Sector

74.44%

Advanced Grid 4067 Jobs in Sector

.71% Renewable Energy

69,873 Jobs in Sector

12.28%

Clean Fuels 7048 Jobs in Sector

1.25%

Advanced Transportation

64,394 Jobs in Sector

11.32%


Percentage of Energy Efficiency Jobs


Questions and Contact

Information

Nora A. Naughton

Director of Policy

Midwest Energy Efficiency Alliance

[email protected] www.mwalliance.org

52

mailto:[email protected]

http://www.mwalliance.org/

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Transcript of Energy Efficiency Trends - Ameren Illinois Energy ...€¦ · Midwest Energy Efficiency Alliance...