Electricity efficiency programs appear to be a relatively low-cost way for utilities to meet peak demand, compared to other options, according to a report by the Lawrence Berkeley National Laboratory.
In a first of its kind analysis, the Energy Department research center said it developed a framework to analyze peak demand savings across utilities and states and to begin quantifying the cost of saving peak demand.
“With increasing need for a more flexible and resilient electricity system, and changing costs for generation, utilities and other efficiency program administrators must take into account all characteristics of efficiency programs — including peak demand reduction — to ensure a reliable system at the most affordable cost,” the Berkeley lab said.
However, there has generally been little effort in the United States to gather peak demand reduction data or benchmark the cost of achieving peak demand reductions, the Berkeley lab researchers said.
The Berkeley lab expects the report will be used by utilities, state decision makers, regional transmission organizations and stakeholders.
The study — Peak Demand Impacts From Electricity Efficiency Programs — is based on the costs, energy savings and peak demand savings for electricity efficiency programs for 36 investor-owned utilities and other program administrators in Arizona, Arkansas, California, Colorado, Illinois, Massachusetts, Maryland, New York and Texas for four years starting in 2014.
The Berkeley lab researchers started by calculating the “program administrator cost of saving electricity,” or PA CSE, for each energy efficiency program.
Then the researchers calculated the “program administrator cost of saving peak demand” — a new metric — at the state level and for specific programs.
The savings-weighted PA CSE in the study period averaged 2.9 cents per kilowatt-hour across the nine states, according to the report. The savings-weighted PA CSPD averaged $1,483/kilowatt.
The Berkeley lab found that seven programs types — residential heating, air conditioning, and ventilation; residential lighting; whole-home retrofit programs; low-income programs; programs targeted at small commercial customers; prescriptive rebates for medium and large commercial and industrial customers; and custom rebate programs for large C&I customers — account for 58 percent of total peak demand savings.
“Importantly, these types of programs are designed for kWh reductions; they also happen to reduce peak load,” the researchers said.
Residential lighting programs accounted for 15 percent of total peak demand savings, custom C&I programs made up 14 percent of the savings and prescriptive C&I programs drove 11 percent of the savings.
At $730/kW to $740/kW, residential lighting programs have the lowest first-year PA CSPD, followed by prescriptive rebates for medium and large C&I customers at $1,330/kW, according to the report.
The costs are lower when spread out over the life of the effective useful lifetime of the measures, according to the report. For example, the Berkeley lab researchers pegged the levelized CSPD for residential lighting programs at $94/kW, followed by C&I prescriptive rebates at $148/kW and residential HVAC at $249/kW.
The report is available here.
