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Electric Energy Efficiency Potential for Vermont (2012-2031) Key Findings February 18, 2011 Workshop. Presentation Overview. Overview of VT Savings Potential Residential Commercial/Industrial Economic Results. Potential Study Overview Define “Potential Study” Types of Potential

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  1. Electric Energy Efficiency Potential for Vermont (2012-2031)Key FindingsFebruary 18, 2011 Workshop

  2. Presentation Overview • Overview of VT Savings Potential • Residential • Commercial/Industrial • Economic Results • Potential Study Overview • Define “Potential Study” • Types of Potential • Cost-Effectiveness • EVT and BED Territories • Forecast without DSM • Sales • Demand • Measure Characteristics • Developing Measure Lists • Measure Assumptions • Replace on burnout vs. Early retirement • Calculating Potential

  3. Vermont Department of Public Service POTENTIAL STUDY OVERVIEW

  4. What is a Potential Study? Simply put, a potential study is a quantitative analysis of the amount of energy savings that either exists, is cost-effective, or could be realized through the implementation of energy efficiency programs and policies. -National Action Plan for Energy Efficiency

  5. Types of DSM Potential • Technical Potential • Complete saturation of all technically feasible measures evaluated in the study • Economic Potential • Complete saturation of all cost-effective technical potential • Used most recent Board approved avoided costs • Achievable Potential • Base case of all economic potential that is achievable given market barriers

  6. Maximum Achievable Potential Definition: Maximum Achievable Potential describes the economic potential that could be achieved over a given time period under the most aggressive program scenario. To reach maximum achievable potential, study assumes: - high levels of penetration over the 20-year period - incentive levels set at 100% of the measure cost - includes replace on burnout and early retirement opportunities

  7. Determining Cost-Effectiveness • Vermont Societal Test • Similar to the Total Resource Cost Test • Benefits: Avoided Energy and Supply Costs, Avoided Fossil Fuel Consumption, Avoided O&M Benefits • Costs: Utility Costs, Participant Costs • Includes a 10% reduction to costs • $0.007 per kWh saved (in $2000) adopted as an environmental adder • Replaces 5% adder for environmental externalities $ Benefit $ Cost Test result of 3.5 means that for every dollar invested, the benefit returned is $3.50. > 1

  8. Other Key Assumptions The GDS screening model was used to screen all measures and to calculate benefit/cost ratios This analysis considered the following: Length of study(20 years) Line losses (~10%) General rate of inflation (2.6%) Real Discount rate (5.6%) Planning reserve margin (14%) Energy efficiency measure load shapes and coincidence factors (EVT TRM)

  9. Vermont Department of Public Service EVT & BED TERRITORIES

  10. BED/EVT Analysis Analysis presents results for electric energy efficiency savings potential in the service areas of Vermont’s two energy efficiency utilities (EEU). Burlington Electric Department (BED) – EEU for City of Burlington Vermont Energy Investment Corporation – EEU for the remainder of the State, under the name Efficiency Vermont (EVT) Differences: Vermont Gas serves the BED Territory. EVT Territory has limited access to natural gas More electric water heating in EVT Territory Greater percent of multi-family housing in BED Territory compared to EVT Territory Slower average annual growth rate in load forecast (sales) Presentation results are combined as statewide unless explicitly stated.

  11. Vermont Department of Public Service LOAD FORECASTS

  12. 2012-2031 Statewide Sales (MWh) Forecast **2012-2031 Load Forecast used in this analysis is from the Itron Unadjusted Load Forecast, and are at the end-meter. *** Also utilized BED Load Forecast for BED Territory ; subtracted BED forecast from statewide forecast to attain EVT forecast

  13. 2012-2031 Statewide Peak Demand (MW) Forecast **2012-2031 Load Forecast used in this analysis is from the Itron Unadjusted Load Forecast, and are at the end-meter.

  14. Vermont Department of Public Service MEASURE CHARACTERISTICS

  15. Residential Energy Efficiency Measures Considered

  16. Commercial/Industrial EE Measures Considered

  17. Sources for Estimating Energy Efficiency Savings Deemed Savings Manuals On-Site Surveys (NMR/KEMA) EIA Energy Consumption Survey (CBECS & RECS) Energy Modeling Software Other energy efficiency potential studies Energy efficiency conference proceedings Program Evaluation Reports

  18. Replace on Burnout vs. Early Retirement Replace on burnout measure cost is incremental cost ; savings are calculated as difference between high efficiency and standard efficiency new equipment Early replacement cost is initially the full cost of the new equipment, then a cost credit occurs when the measure would be replaced anyway at the end of its useful life. Savings are initially based on difference between high efficiency equipment energy used and the energy use of the existing equipment being removed Early replacement can produce greater net benefits but also require greater initial incentives and budgets Both programmatic approaches can be cost effective to the Vermont Societal Test

  19. Example: Developing Tech. Potential Estimates Tech. Potential Example: • 100,000 homes • 75% have dishwashers • 25% of all dishwashers are energy efficient (Remaining potential is 75%) • 70 kWh annual savings 100,000 * 75% = 75,000 homes 75,000 * 75% (100%-25%)= 56,250 homes 56,250 * 70kWh = 3,937,500 kWh Note: Estimated 50/50 split between replace on burnout and early retirement. In this example, 28,125 homes would be targeted as early retirement and 28,125 homes targeted as replace-on-burnout

  20. Commercial/Industrial Sector Methodology (Technical Potential) • “Top-Down” approach disaggregates baseline statewide sales forecast by building type and end use based on: • Itron end use forecasts (heating, cooling, and other for commercial) • KEMA market characterization • CBECS • MECS • Measures applied to specific building/end use combinations and characterized by: • Savings (absolute and percent of end use consumption) • Effective Useful Life • Applicability • Measure data sources include the Vermont TRM, EVT data, KEMA market characterization studies, ACEEE, and other secondary sources • Applicability factors account for competition between measures

  21. Max. Achievable Potential Methodology • Assumed 100% incentives • Retained 50/50 split between replace-on-burnout and early retirement • Assumes approximately 90% of the eligible market is reached by 2031 • Assumes efficiency measures that reach the end of their useful life prior to 2031 are reintroduced into the analysis to allow savings (and costs) to persist throughout the entire 20-year study • Includes a reduction to measure costs over time for emerging technologies and LED bulbs. • Other measure costs remain constant in nominal dollars

  22. Vermont Department of Public Service OVERVIEW OF VERMONT SAVINGS POTENTIAL

  23. 2031 Efficiency Potential Savings (All Sectors Combined)

  24. Residential Energy Efficiency Potential Summary

  25. Residential Technical Potential Supply Curve 28% of Technical Potential can be achieved for less than $0.08/kWh

  26. Residential Technical and Economic Potential Estimates

  27. Residential Max. Achievable Potential (Compared to Load Forecast) 202 – Assumes CFL Becomes New Lighting Baseline

  28. Residential Max. Achievable Potential (by End Use) 2019 2031

  29. Residential Maximum Achievable Potential - EVT Energy Savings (as a % of 2031 Sales) by End-Use

  30. Residential Maximum Achievable Potential - BED Energy Savings (as a % of 2031 Sales) by End-Use

  31. C&I Energy Efficiency Potential Summary

  32. C&I Technical Potential Supply Curve 8% of Technical Potential can be achieved for less than $0.08/kWh

  33. C&I Technical and Economic Potential Estimates

  34. C&I Max. Achievable Potential (Compared to Load Forecast) Δ 639,051 MWh in 2031 Adjusted Load Forecast

  35. C&I Max. Achievable Potential (by End Use) 2031

  36. Economic Results Summary (VT Societal Test) • All Sectors Combined • Energy – 1,533,411 MWh • Summer Demand – 230.7 MW • Winter Demand – 240.0 MW Achievable Potential based on aggressive market penetration targeting all cost-effective measures and ~90% of the remaining market. • Combined Costs ($NPV) • Measure– $702.3 Million • Admin. – $330.8 Million

  37. Vermont Benefits and Costs NPV Measure Costs are $702.3 million (out of the total $1,033 million VT Societal Costs) NPV Incentives are $839.7million NPV Incentives are greater than NPV measure costs because incentives were calculated as 100% of the measure cost whereas the VT societal test has applied a 10% reduction to measure costs for all calculations NPV Benefits represent lifetime benefits of all measures including electric avoided costs, avoided fuel consumption, water savings, other O&M benefits, as well as the VT Societal Test externality benefits.

  38. Estimated Residential Annual Budgets (Max. Achievable)

  39. Estimated C&I Annual Budgets (Max. Achievable) Incentives range from 47%-63% of the total estimated budgets annually

  40. Contact Information:

  41. Questions?

  42. Comparison between GDS Team and VEIC Studies… Initial effort to compare any significant differences between the two independent studies Overall, similar methodologies were used to determine the potential for electric energy efficiency savings As discussed, there were some differences in assumptions throughout the study Comparison effort will continue to further understand the distinctions between the two studies

  43. Comparison between GDS Team and VEIC Studies… VEIC Study GDS/Cadmus Study • Includes maximum achievable potential at the statewide level • Forecasts include IBM’s energy and potential savings • Net to gross ratio dependent upon measure level characterizations and not always equal to 1 • Retrofit pace calculated to ramp up quickly and capture a higher percentage of achievable potential over the first decade Includes 3 statewide forecasts (Technical, Economic, Max. Achievable) at the BED, EVT, and statewide levels Forecasts do not include IBM’s energy or potential Net to gross ratio =1 Retrofit pace calculated to capture all retrofit potential at a set rate over the 20 year analysis period

  44. Residential Comparison (by End-Use) GDS/Cadmus Study VEIC Study

  45. Commercial/Industrial Comparison (by End-Use) GDS/Cadmus Study VEIC Study

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