Minnesota Energy Efficiency Potential Study:...
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Welcome Conservation Applied Research & Development (CARD) Webinar December 17, 2018 Minnesota Energy Efficiency Potential Study: 2020–2029
Transcript of Minnesota Energy Efficiency Potential Study:...
Welcome
Conservation Applied Research & Development (CARD) Webinar
December 17, 2018Minnesota Energy Efficiency Potential Study: 2020–2029
Presenter
Presentation Notes
Good morning, and welcome to this Conservation Applied Research and Development (CARD) Webinar.
Minnesota Energy Efficiency Potential Study: 2020–2029
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Carl NelsonDirector of Program Development
Center for Energy and [email protected]
Adam ZoetEnergy Planner Principal
MN Department of Commerce [email protected]
Mary Sue LobensteinR&D Program Administrator
MN Department of [email protected]
Matt SocksSenior Consultant
Optimal Energy [email protected]
Presenter
Presentation Notes
I am Mary Sue Lobenstein, the R&D Program Administrator at the Minnesota Department of Commerce, Division of Energy Resources. Our topic today is a review of the results from the recently completed Minnesota Energy Efficiency and Carbon Savings Potential Study. Our presenters are Adam Zoet from the Department of Commerce, Matt Socks from Optimal Energy, and Carl Nelson from the Center for Energy and Environment (CEE). Adam is an Energy Planner Principal at the Department where he helps lead energy efficiency planning efforts. This includes fostering coordinated analysis between the Conservation Improvement Program unit and the Energy Regulation and Planning unit; it also includes overseeing the development and execution of studies such as the statewide potential study that is the subject of this webinar. Matt is a Senior Consultant at Optimal Energy where he serves a leading role in efficiency program design, engineering, economic analysis, and support for clients across North America. He has served as a primary contributor to numerous energy efficiency potential analyses, including for this one. Carl is the Director of Program Development at CEE. Carl has over 15 years’ experience in energy policy work and in the assessment and implementation of a broad array of energy efficiency and renewable energy projects. At CEE he coordinates the development of new program initiatives, and was CEE’s project manager on this potential study.
Webinar Basics
• Attendees in listen-only mode• Type your questions into chat box• Questions addressed at end• Webinar recorded & archived• Handout
Image: Nick Youngson http://www.picserver.org/w/webinar.html
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Download Handout
Enter Questions in Chat Box
Presenter
Presentation Notes
Before we start, I’d like to go over a few webinar basics All attendees will be in listen-only mode As questions occur to you during the presentation, type them into the chat box on the GoToWebinar panel and send them to us. We will do our best to answer all questions within the time allocated, but if for some reason we don’t get to all questions we will answer them later and email all participants a copy of the Q&A from the webinar. This webinar is being recorded and will be available on both the Department’s and CEE’s website at a later date. Finally, the slide deck for this webinar is available on your GoToWebinar panel, where you can download it at any time during the presentation.
Minnesota Applied Research & Development Fund
State Capitol Image: Courtesy Minnesota Department of Administration
• Established in Next Generation Energy Act of 2007
• Help Minnesota utilities achieve 1.5% energy savings goal by:• Identifying new technologies or strategies to maximize energy savings;• Improving effectiveness of energy conservation programs;• Documenting CO2 reductions from energy conservation programs.
Minnesota Statutes §216B.241, Subd. 1e
• Utility may reach its energy savings goal• Directly through its Conservation Improvement Program (CIP)• Indirectly through energy codes, appliance standards, behavior, and
other market transformation programs
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9 Funding CyclesOver 420 proposals107 projects fundedAlmost $24.5 million
Presenter
Presentation Notes
This webinar is one in an ongoing series designed to summarize the results from research projects funded by Minnesota’s Applied Research and Development Fund, which was established in the Next Generation Energy Act of 2007. The purpose of the fund is to help Minnesota utilities achieve their 1.5% energy savings goal. $2.6 million of this fund is set aside annually for the CARD program, which awards research grants in a competitive Request for Proposal process. CARD projects are in all building sectors.
Today’s Agenda
Background on Potential Study (Adam)
Methodology (Matt)
Results (Carl)
Program Recommendations (Carl)
Policy Conclusions (Carl)
Q & A (All)
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Presenter
Presentation Notes
Today’s webinar addresses multiple sectors. For the webinar, Adam will first provide background on the study, Matt will give an overview of the methodology used in the study, and Carl will discuss the study’s findings, program recommendations, and policy considerations. Finally, all three speakers plus Scott Pigg from Seventhwave, who also contributed to the study, will be available for the Q&A. Adam?
Background
Long history of “CIP” (Conservation Improvement Programs)
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1989: All Public utilities were required to operate conservation improvement programs. Oversight transferred from PUC, low-income requirements added.
1983: Utilities with revenues greater than $50 million were required to operate at least 1 conservation program. Required “significant” investment.
1991: A specific level of spending was required (1.5% electric, 0.5% gas) & munis and coops were included.
2007:Next Generation Energy Act Passes.
2010:1.5% Savings Goal for Utilities takes Effect
2017: Munis and Coops meeting a specific threshold exempted from CIP.
1980:PUC directed to initiate a pilot to demonstrate the “feasibility” of investments in EE.
Presenter
Presentation Notes
I’ll start with a brief background on Minnesota Conservation Improvement Program, also called “CIP.” Minnesota has been doing utility energy efficiency programs since 1980s. I won’t go into the details of CIP’s history on this slide other than to say that energy efficiency efforts were ramped up in 2010, when Minnesota moved from a spending goal to a savings goal, which is 1.5% of average retail sales for electric utilities and a minimum of 1% for natural gas utilities. To meet the energy savings goal, Minnesota utilities operate a wide array of residential, commercial, and industrial CIP programs targeted to both retrofits as well as new construction projects. These EE programs help Minnesota households and businesses use electricity and natural gas more efficiently – conserving energy, reducing carbon dioxide emissions, and lessening the need for new utility infrastructure.
Utility Mix in MN - Electric
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Presentation Notes
The colorful map on this slide shows all of Minnesota’s electric utility territories - divided into coops, municipals, and investor owned utilities. The diagram on the right breaks down electric loads by utility type and market sector. Minnesota has over 170 electric utilities, with investor-owned utilities having two-thirds of the state’s load, while cooperative utilities comprise the majority of territory. Electric cooperative utilities also tend to have a higher proportion of residential customers than electric municipal utilities and electric investor-owned utilities.
Utility Mix in MN – Natural Gas
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The map on this slide shows Minnesota gas utility territories divided into municipal and investor owned utilities, and the diagram on the right shows gas sales by utility type and market segment. The investor-owned utilities serve 94% of the state’s natural gas sales. About two-thirds of residential customers in Minnesota are served by natural gas utilities, the majority of which are municipal utilities. Significantly, 17 percent of residential customers in Minnesota use electricity as their primary heating source, with most of the remainder heating their homes with delivered fuels, primarily propane.
MN EE Achievements - Electric
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Minnesota has been the leading Midwestern state for energy efficiency achievements for the last decade, and those achievements have been steadily growing, as you see here for electricity. Minnesota electric utilities, have met or exceeded the 1.5 percent annual energy savings goal each year since 2011. In 2017, the electric investor-owned utilities had their best year in terms of overall energy savings (around 780 gigawatt hours or 2.3 percent savings). This was driven primarily by Xcel Energy, which achieved significantly higher energy savings in 2017 compared to years past.
MN EE Achievements – Natural Gas
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Natural gas energy efficiency achievements follow a similar upward trajectory. Minnesota gas utilities, overall, have met the 1 percent minimum, but only exceeded the 1.5 percent goal in 2017. In both 2016 and 2017, Minnesota’s gas efficiency achievements were the highest in the nation. In 2017, CenterPoint Energy had one of its most successful years ever in terms of energy savings (2.6 million dekatherms or 1.9 percent savings). The Company’s 2017 achievements are due in part to an extraordinarily large custom project completed in 2017.
Cost of Efficiency in MN
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State ACEEE Ranking
Electric spending ($/kWh)
Gas spending ($/therm)
Massachusetts 1 $0.34 $7.39 California 2 $0.35 $6.02 Rhode Island 3 $0.37 $5.89 Vermont 4 $0.39 $3.68 Oregon 5 $0.29 $3.56 Connecticut 6 $0.43 $6.17 Washington 7 $0.21 $3.83 New York 7 $0.27 $5.12 Minnesota 9 $0.19 $1.76 Maryland 10 $0.33 $9.88
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Minnesota has lower energy costs than the high-achieving states on the coasts, which partly explains why Minnesota has the lowest cost of acquiring energy efficiency compared any other state in American Council for an Energy Efficient Economy ranking of the top 10 states.
Goals of Study
•Estimate statewide electric and natural gas energy efficiency for 2020-2029
•Produce actionable resources
•Engage stakeholders
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Presenter
Presentation Notes
While Minnesota has historically done quite well with energy efficiency achievements, the state has heard concerns from stakeholders about being able to meet goals in the future. To help address these concerns and plan for the future of CIP, the Department of Commerce commissioned a study to look at the next decade of energy efficiency. To that end, the project team, consisting of Center for Energy and Environment, Optimal Energy, and Seventhwave, were commissioned to: 1) Estimate statewide electric and natural gas energy efficiency and carbon-saving potential for 2020-2029; 2)Produce data-driven and stakeholder-informed resources defining market segments, end uses, measures, and programs that could be targeted in the decade ahead to realize the state’s cost-effective energy efficiency potential; and 3) Engage stakeholders in order to help advance robust energy policies and energy efficiency programs in the state, and to inform future efficiency portfolio goals.
Study Team
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The study was lead by Center for Energy and Environment, with the modeling done by Optimal, and significant support from Seventhwave.
Methodology
Types of Energy Efficiency Potential
Technical
Economic
Maximum Achievable
Program
Types of Energy Efficiency Potential (cont.)
Technical
Economic
Maximum Achievable
Program
• Maximum Achievable: Subset that is achievable considering market barriers, given the aggressive incentives and idealized programs
• Rebates set at 100%• Technology adoption at theoretical
maximum
• Program Potential: Subset of achievable, given constrained incentives (50%) and program budgets
Societal Cost Test Used for Screening
Presenter
Presentation Notes
Minnesota regulators use the societal test as their main cost-effectiveness screen, and that’s what we used for this study as well. Significantly, the Societal test includes the value of avoided emissions, including CO2, and this represented about a quarter of the total net benefits in our modeling.
High Level Methodology Overview
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We modeled over 300 unique measures and 20 customer segments, resulting in thousands of measure permutations that were examined by the project team.
Results
Results – Electric Utilities
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Here are the high-level results for electric utilities through the end of 2029. Compared to the baseline energy use, there is economic potential to reduce electricity usage by about a third. The program potential scenario can capture about half of this total economic potential, resulting in a 14% decrease in total electric usage compared to the baseline. The maximum achievable scenario can capture nearly 2/3 of the economic potential, resulting in a 21% total decrease in electric usage compared to the baseline.
Results – Electric Incremental by Year
Presenter
Presentation Notes
This chart shows the incremental electricity savings by year. The program potential scenario shows average savings, over the 10-year period, of about 1.8 percent per year, while the maximum achievable scenario shows savings of about 2.6 percent per year. You will note that savings drops in 2022, and then slowly grows again in the later years. This reflects the federal lighting standards that will be going into place at the end of 2021, which effects screw-in general service lamps. For our modeling, we assume no savings from general service lamps after this date, which virtually eliminates lighting savings from the residential sector. The drop in lighting savings is gradually replaced by other end-uses.
Results – Electric Potential by End Use
Cumulative annual 2029 savings
Program potential scenario
Presenter
Presentation Notes
This chart shows the breakdown in end-uses at the end of the study period. It shows the relative contribution to cumulative total 2029 savings for the program potential scenario. You can see that for residential, lighting represents a mere 6% of total potential. Space heating shows the largest end-use potential, at 35% of total residential potential. Note that we did not consider fuel-switching in our potential estimates, so the space heating potential is only for those homes that currently heat with electricity, which is about 17 percent of households in Minnesota. The reason that space heating represents such large potential is that for those 17% of homes that do heat with electricity, they use a lot of electricity, roughly double that of non-electricaly heated homes, and there are some rather recent technology advances that have enabled huge savings in these electrically heated homes, which we will talk about more shortly. In the Commercial and Industrial sector, lighting still represents 25% of total potential for the C&I sector, so even though lighting has dominated savings achievements in recent years, there is still a lot of inefficient lighting out there. We also see several new end uses increasing in importance in the C&I sector, especially refrigeration, motors and system efficiency. System efficiency refers to energy efficiency measures that can save multiple end uses at once, and often achieve increased efficiency through operating existing equipment more efficiency – for example building automation systems in large buildings increasingly have advanced sensors and controls, which, when combined with automated logic, can identify, diagnose and correct faults in large complex HVAC systems, saving motors from running, ventilation from being pumped in, and cooling from being used when it is not needed.
Results – Electric Top Five Residential Measures
Presenter
Presentation Notes
This slide shows the top 5 measures that contribute the most to residential electric potential. Two of these measures are cold climate heat pumps for electric space heating, that can cut the electricity used for space heating in half, compared to electric resistance heating. In total, heat pumps represent over 20 percent of residential potential. Other measures on the list include programmable thermostats, particularly the newer “smart” thermostats, as well as Energy STAR clothes washers, and home energy reports, a proven behavioral strategy for the residential sector.
Results – Electric Top Five Commercial Measures
Presenter
Presentation Notes
In the commercial sector, we see a mix of newer and emerging technologies, as well as the tried and true. Two of the five measures are related to lighting, including improved lighting design for new construction and remodeling, and integrated lighting controls. Like improved lighting design, integrated building design is targeted at new construction and remodeling. Variable speed-drives are a proven technology and have been a part of efficiency programs for some time, but there are still a lot of cost-effective opportunities for them in the market. The high-efficiency small walk-in is a refrigerated room found in the food service sector.
Results – Electric Potential by Segment
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Presentation Notes
This slide shows total potential by building segment; again, this is for total cumulative 2029 savings for the program scenario. The residential sector is shown in blue, commercial in green, and industrial was not broken down into separate segments, and so is represented as one segment. Within residential, it is not surprising that single-family is the largest potential, as most homes are single-family. This figure breaks out potential separately for low-income, and you can see that within multifamily, the majority of potential is within the low-income segment – again, this is because the majority of families living in multifamily housing in Minnesota are low-income. Within commercial, healthcare is the segment with the largest potential. Food service and food sales are have large opportunities, driven by the large amounts of refrigeration these segments use.
Results – Gas Utilities
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Presentation Notes
Now we turn to gas program potential. Similar to electric, there is total economic potential to reduce natural gas usage by about one-third by 2029. Our modeling showed about 1/3 of this total potential being captured by the program potential scenario, or an 11% reduction in energy usage;, and just over half being captured by the maximum achievable scenario, or about an 18% reduction in energy usage versus the baseline projection.
Results – Gas Incremental by Year
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This chart shows the incremental savings by year for the program and the maximum achievable scenarios. On average, our modeling shows a 1.2% annual incremental savings from the program scenario, and 2% annual incremental savings from the maximum achievable scenario.
Results – Gas Potential by End Use
Cumulative annual 2029 savings
Program potential scenario
Presenter
Presentation Notes
This shows the end-use breakdown for natural gas. In general, there are less end-uses for gas than there are for electric, with space heating dominating for both residential and commercial and electric. Residential does represent a larger fraction of the total savings compared to electric – residential savings for natural gas is nearly double that for electric.
Results – Gas Top Five Residential Measures
Presenter
Presentation Notes
Condensing furnaces and boilers have long been a mainstay of residential gas programs, and our modeling shows that will continue to be true, representing nearly 40% of total potential. As with the electric mesaures, programmable thermostats are also in the top 5 for gas. There are still a substantial number of older Minnesota homes with inadequate insulation, and thus attic insulation and air sealing make this list as well. Aerosol envelop sealing is the only emerging technology measure to be on the list, and is not widely used in Minnesota right now. It is an automated method of sealing up interior spaces, and can dramatically decrease air infiltration compared to traditional manual air sealing methods. In our study, it’s mainly applicable to new and remodeled homes, but in the future may find application with older homes as well. Although we are kind of breezing through these descriptions here, more information on these, and other measures included in the study is available in the main report, which can be downloaded.
Results – Gas Top Five Commercial Measures
Presenter
Presentation Notes
In the commercial sector, high-efficiency heating equipment – boilers and furnaces – again represent the largest share of savings at a combined 25%. Energy recovery ventilators and demand-controlled ventilation are not was widely known, but also have huge savings potential. And again, for smaller commercial buildings, smart thermostats can save energy very cost-effectively.
Results – Gas Potential by Segment
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Presentation Notes
This is the potential by building segment for the natural gas utilities. Here, single family potential dominates all other sectors, demonstrating the importance of residential customers to achieving natural gas savings. Similar to electric utilities, healthcare is the largest commercial sector for natural gas savings.
Results – Emissions Reduction from Electric Potential
2029 cumulative annual program potential
• Emissions reduction: 5,528,600 tons CO2e
• Equivalent to the emissions of 1,072,000 passenger vehicles or 542,000 single family homes
Presenter
Presentation Notes
We also calculated the greenhouse gas emission reductions, and the cumulative annual emissions reductions in 2029 would be the equivalent of taking over 1 million passenger vehicles off the road, or equal to the emissions from over half a million single-family homes. This is from the program potential scenario.
Results – Emissions Reductions from Natural Gas Potential
2029 cumulative annual program potential
• Emissions reduction: 2,763,400 tons CO2e
• Equivalent to the emissions of 437,000 passenger vehicles or 271,000 single family homes
Presenter
Presentation Notes
For natural gas, the avoided emissions in 2029 would be the equivalent of over 430,000 passenger vehicles, or over 270,000 single-family homes.
Results – Program Budgets and Savings
Electric Natural gas
YearBudget
(millions)Incremental
savingsBudget
(millions)Incremental
savings
2020 $205 1.70% $102 0.70%
2021 $237 2.00% $124 0.90%
2022 $250 1.60% $150 1.10%
2023 $282 1.70% $177 1.20%
2024 $315 1.80% $206 1.40%
2025 $329 1.80% $214 1.40%
2026 $346 1.90% $220 1.40%
2027 $363 1.90% $225 1.40%
2028 $380 1.90% $234 1.40%
2029 $379 1.80% $241 1.50%
Presenter
Presentation Notes
This slide shows the total electric and natural gas budgets that we modeled for the program scenario. This represents more than a doubling of spending levels compared to current levels of spending levels. However, the lifetime cost of savings is still less than procuring from other sources – for electric, the spending it is about 2 cents/kWh, and for gas it is under 30 cents/therm.
Results – Cumulative Net Benefits (2020-2029)
Societal cost testUtility cost test
(WACC discount rate)
Max achievable
ProgramMax
achievableProgram
Total net benefits (millions) $14,500 $10,100 $1,700 $4,000
Benefit-cost ratio 2.1 2.2 1.2 2.2
From an overall societal perspective, the program scenarioresults in $2.20 of benefits for every dollar spent
From the utility’s perspective, the program scenario also results in $2.20 of benefits for every utility dollar spent
Presenter
Presentation Notes
Although we are showing an increase in total spending, this spending is still cost-effective, as is shown by this slide, which reports the total net benefits for the entire study period, for both electric and natural gas, as well as the benefit cost ratios. A benefit-cost ratio of greater than one indicates positive net benefits, and the ratio itself indicates the degree to which it is cost-effective. So, for example, this table shows that the program scenario has a societal cost-benefit of 2.2. The means that for every dollar spent, there are $2.20 of benefits. From the utility perspective, we also calculated a cost-effectiveness ratio of 2.2 for the program scenario, which again indicates that for every dollar the utility spent on CIP, it returned $2.20 in benefits. This was assuming the weighted average cost of capital for the discount rate, which is about a 7% discount rate.
Program Findings and Recommendations
Presenter
Presentation Notes
Part of our work was to assess current programs in Minnesota, and make recommendations for programmatic strategies that will be necessary to capture the end uses and segments that we just talked about. As part of this work, we reviewed EE programs in Minnesota, as well as around the country, to distill best practices and to make our recommendations. We will summarize this work in this section.
Current MN Utility Program Findings
Minnesota has a strong foundation of effective CIP programs• Minnesota currently has some of the lowest cost and best performing programs in
the country
• Utilities in Minnesota – both IOUs and COUs – have been proactive in designing and implementing comprehensive, effective, and innovative program models
Partnerships have helped increase program effectiveness• Deep relationships with trade allies have helped utilities deliver programs
• Smaller utilities face additional challenges in implementing programs, but the most successful COU programs involve cooperation among utilities
• Some utilities have achieved enhanced performance through joint natural gas-electric programs 38
Presenter
Presentation Notes
Two themes emerge from our review of existing EE programs in MN. First, MN already has a strong foundation of effective CIP programs. As Adam had mentioned in his introduction, MN is starting from a strong foundation, and already has some of the lowest cost and best performing programs in the country, including many examples of effective, innovative programs. Second, partnerships have helped increase program effectiveness. Utilities have formed strong relationships with trade allies, such as HVAC contractors, who then help to sell the programs. We did hear from many smaller utilities that they face additional challenges in implementing programs, but where they worked together to jointly implement programs was where there was the greatest success among the customer-owned utilities. And finally, joint gas-electric programs are becoming more common, and can have efficiencies in program delivery, as well as increasing overall performance.
Electric utilities will need to increase diversity of end-uses addressed by CIP programs
2017 2029
Presenter
Presentation Notes
From our modeling, one of the main findings for electric utilities is that programs will need to expand significantly into non-lighting end-uses. The bar graph on the left shows that currently, lighting represents an estimated 60 – 70% of all savings for both the residential sector, as well as the commercial and industrial sectors. This compares to the two bar charts on the left that we’ve already seen, which show only 6% lighting savings for residential, and 25% lighting savings in C&I. So programs will need to increase the effectiveness with which they are addressing these other end uses.
ASHPs – the new LEDs for Residential Sector?Measures within residential
space heating end use
Presenter
Presentation Notes
Let’s take the example again of cold-climate air-source heat pumps, which are the largest source of savings in the residential sector for electric utilities. And this is largely because cold climate air source heat pumps have such enormous energy-saving potential for those that use electric resistance and electric furnaces to heat their homes. It is the single largest residential measure by far. You can also see here that lighting does not even show up as a measure, but AHSPs go a long way towards replacing the savings lost by screw-in bulbs for residential.
Example of Air-Source Heat Pump (“mini-split”)
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Presentation Notes
This is one type of cold-climate air-source heat pump, called a mini-split. It can be used to heat a single room, or multiple units can heat a whole home. It has an outside condenser/compressor unit and an inside air-handling unit, or header, that pumps out the hot air. They can also be used as air conditioners. ASHPs are pretty common in warmer climates for heating, but the cold-climate version that works effectively down to zero degrees or colder has only come on the market in recent years – so it still a relatively new technology. Recent years of sales data show that contractors are not selling the most efficient versions of this technology, even though the high-efficiency versions are not much more expensive. So, there is an opportunity for CIP programs to make a difference through trade ally outreach and effective incentive programs.
Sources of Natural Gas Potential
Presenter
Presentation Notes
For natural gas utilities, it is less dramatic of a turn from traditional energy efficiency sources. However, the residential sector, with 40% of the potential, is a more important sector than it is for electric utilities in general.
Smart Thermostats Grow in Importance
Measure categories within gas space heating end use
Presenter
Presentation Notes
Smart thermostats will become a larger part of the utility savings mix than currently. We found an existing saturation level of 7% in single-family homes from our primary data collection work. So there is a lot of growth potential there. As smart thermostats are a relatively new technology, and we are still learning about how they can be effective in saving energy, this technology will also be important from a research perspective, to make sure that utility programs are promoting effective smart thermostat technology, and that the savings is being claimed consistent with the latest evaluation research.
Program Recommendations
Recommendations for Utility Programs:
• Continue to test promising new approaches.
• Offer comprehensive program designs for larger and harder-to-reach customers.
• Develop upstream incentives and associated program support in selected markets.
• Incorporate operational savings into commercial and industrial programs.
• Employ segment-specific strategies to reach customers.
• Deepen trade ally engagement and training efforts.
• Incorporate AMI-enabled capabilities into programmatic strategies.
• Leverage interest by local governments in energy efficiency.
Coordination among Utilities:
• More systematically share best practices and program successes.
• Coordinate more closely on trade ally outreach and training.
• Work further towards coordinated and/or joint implementation of programs.
Presenter
Presentation Notes
Here you can see the 11 specific recommendations that we have for CIP programs to be able to capture the efficiency potential identified in our modeling. Many utilities in Minnesota are doing most, or even all of these practices to some degree or another. I won’t go into detail about these, but you can refer to the full report for more detail.
Policy Conclusions
Presenter
Presentation Notes
Finally, policy conclusions from our work.
Process for feedback
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Presentation Notes
We formed an advisory group for this project, and they were the source of many of our policy ideas. In addition, we conducted a survey of nearly 40 industry participants. This slide shows the process we used for developing the policy topics, as well as receiving input on the policy conclusions discussed in the report. In addition to discussions at the advisory committee, most of the advisory committee members also contributed written comments on these topics, which will be compiled as an appendix to the study. There were three major policy topic areas that were discussed: Achievement of CIP goals, Regulatory oversight of CIP, and Incorporation of demand-response and efficient fuel-switching into CIP For each of these topics, we compiled relevant findings from our research, stakeholder input, and finally, the study team’s conclusions. In the interests of time, we’ll focus today just on the conclusions.
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Presentation Notes
For each of these topics, we compiled relevant findings from our research, stakeholder input, and finally, the study team’s conclusions, all of which can be seen on this summary table, which is in the executive summary. In the interests of time, we’ll focus today just on the conclusions within each of these topic areas.
Topic Area #1: Achievement of CIP goals
• The 1.5% savings goal can continue to be achieved using the existing flexibility to adjust goals when justified.
• Lifetime savings could be better measured and tracked through the annual reporting process, rather than a statutory change.
• Consider allowing consumer-owned utilities to report savings in a multi-year framework.
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Presenter
Presentation Notes
As we’ve seen by the modeling, it is possible to meet the 1.5% goal for electric utilities, and the 1% minimum for natural gas utilities, although it is likely to require increased, but still cost-effective spending. Stakeholders did feel that consideration of the long-term lifetime savings would be a better metric than the current 1st year savings goals, but ultimately concluded that a statutory change may not be worth the trouble. Small utilities talked about the variability in savings they can have from year to year, especially when they get a lot of savings from a few large customers which may bump up the savings in that year, but may make the next year harder to reach the goal. So the suggestion here is that those savings could be smoothed out if they reported in a multi-year framework.
Topic Area #2: Regulatory oversight of CIP
• Clarity on key regulatory topics could be accomplished through the creation of a CIP guide.
• Consider creating a formal advisory committee for CIP regulatory topics to increase transparency and avenues for stakeholder coordination on CIP implementation.
• Continue to have strong research and development to support future energy savings.
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Presentation Notes
The regulatory oversight of CIP is only likely to get more complex, as the number of end uses addressed by CIP increasingly becomes diversified. A CIP policy guide for utilities could help provide clarity for CIP program managers in navigating a more complex world. Although the DER already regularly engages CIP stakeholders on an informal basis, we did suggest a formal advisory committee be formed for CIP regulatory topics. Finally, CIP is a very technology-forward program, and finding and staying on top of new sources of energy savings is critical to the success of the program. We’ve talked today about ASHPs as one of those new sources of savings, and CARD research into this has been critical inputs to this potential study in characterizing their potential in future years.
Topic Area #3: Incorporating demand-response & efficient fuel-switching into CIP
• Consider whether to incorporate “integrated demand-side management” into the CIP framework — with appropriate safeguards.
• In crafting specific policy for integrating demand-response and fuel-switching, safeguards should ensure end-use efficiency is not decreased; utility incentives for investor-owned utilities should be considered separately (demand-response) or not provided (fuel-switching).
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Presentation Notes
Two themes that came up again and again were the desire to include demand-response and efficient fuel-switching into the CIP framework. Demand response, also called load-shifting, involves shifting load from a time of high demand, to one of low demand. This utility resource will become important in a high-renewables penetration, in order to better match the load with when renewables produce power. Efficient fuel-switching, which when it involves switching to electricity is also called “beneficial electrification” has been promoted as a way to decrease carbon emissions, and possibly decrease costs. We found that in certain situations, efficient fuel switching can save customers money on their energy bills, reduce emissions, and increase overall efficiency – but it is very site and fuel-specific. However, it has the potential to significantly increase overall efficiency in the state. Our conclusion from considering stakeholder feedback was that if DR and efficient fuel switching – together called “integrated demand-side management” – were to be included within CIP, it would be important to consider safeguards to ensure that end-use efficiency is not decreased. The Dept. will be kicking off a separate stakeholder process on this topic to more fully consider this important.
DEMO of Utility Reporting Tool
• The utility reporting tool will enable results of the potential study to be examined in more granular detail, including by:
• Individual utility (Both electric and natural gas)• Building segment• End use• Measure
• Note that the modeling inputs for this potential study were varied by model region when supported by available data, but many assumptions were statewide.
• Reporting tool will be posted on the study website in the coming weeks.
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Questions?Minnesota Energy Efficiency Potential Study: 2020–2029
Send us your questions using the GoToWebinar chat box!
Adam [email protected]
Carl [email protected]
Matt [email protected]
Scott [email protected]
Presenter
Presentation Notes
Thanks Adam, Matt, and Carl If you have not already done so, please send us your questions via the chat box in the GoToWebinar panel. Now, I’m going to turn it back over to Adam who has been monitoring the questions as they’ve come in. Adam, do you have any questions on the webinar? Thanks, Adam. If you have follow-up questions about this research, feel free to contact Adam or Carl.
Minnesota Energy Efficiency Potential Study Report
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Link to ReportDepartment’s Energy
Data & Reports Webpage CEE’s Potential Study
Webpage
Webinar Recording available in few weeks
on CEE’s Webpage
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Presentation Notes
The potential study report is available now on either the Department’s Energy Data & Reports webpage or on CEE's Potential Study webpage. The recording of this webinar will be available in a few weeks on CEE’s webpage. Links to either webpage, as well as a direct link to the report itself are on this slide.
CARD Project Resources
R&D Web Page (https://mn.gov/commerce/industries/energy/utilities/cip/applied-research-development/)54
For Other research documents use CARD Fact Sheets, Guidelines & Tools Quick Link
For Webinars use CARD Webinars & Videos Quick Link
For Reports use CARD Search Quick Link
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Presentation Notes
Links to past CARD project reports and webinars can be found on the Department’s Applied Research and Development page. This R&D webpage has additional resources and information related to the CARD program and to CARD research projects which you can check out. The address is at the bottom of this slide.
Thanks for Participating!Upcoming CARD Webinar:• Feb 7: Field Study of Tier 2 Advanced Power Strips
Commerce Division of Energy Resources e-mail list sign-up
If you have questions or feedback on the CARD program contact:Mary Sue Lobenstein
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Thanks for participating today! We appreciate your interest in CARD projects. Before we leave, I want to take this opportunity to mention another upcoming CARD webinar: On Feb 7 – Slipstream (formerly Seventhwave) will discuss measured savings, occupant acceptance, operational issues, and cost-effectiveness from their field study of Tier 2 Advanced Power Strips in office buildings. Announcements about upcoming webinars and other news related to the Minnesota Conservation Improvement Program can be found in the CIP Newsletter. You can use the link on this slide to sign up for the Newsletter. In the meantime, contact me if you want more information on this upcoming webinar or if you have questions, feedback or suggestions for the CARD program or CARD webinars. Thanks, again!
