northwest power and conservation council the northwest energy efficiency market 2007 naesco...

Northwest Power and ConservationCouncil

The Northwest Energy The Northwest Energy Efficiency MarketEfficiency Market

2007 NAESCO Northwest Regional Meeting2007 NAESCO Northwest Regional MeetingJune 15, 2007June 15, 2007

Tom EckmanTom EckmanNorthwest Power and Northwest Power and Conservation CouncilConservation Council

Better? Worse? About the Same?Better? Worse? About the Same?


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PNW Conservation Targets

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55thth Plan Relies on Conservation and Plan Relies on Conservation and

Renewable Resources to Meet Load GrowthRenewable Resources to Meet Load Growth**

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2004 2007 2010 2013 2016 2019 2022

Cum

ula

tive C

apaci

ty (

aM

W)*

Coal (ICG)CCGTurbineSCGTurbineDemand ResponseWindConservation

**Actual future conditions (gas prices, CO2 control, conservation accomplishments) will Actual future conditions (gas prices, CO2 control, conservation accomplishments) will change resource development schedule and amountschange resource development schedule and amounts


The 5The 5thth Plan PlanCalls for 700 aMW of Savings Calls for 700 aMW of Savings

From 2005 - 2009From 2005 - 2009

0

20

40

60

80

100

120

140

160

2005 2006 2007 2008 2009

Resou

rce (

aM

W)

Residential - Lost Opportunity

Commercial - Lost Opportunity

I rrigated Agriculture - Non LostOpportunity

Industrial - Non Lost Opportunity

Residential - Non Lost Opportunity

Commercial - Non Lost Opportunity


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Major Sources of Savings


Where Are TheWhere Are TheCost-Effective Savings?Cost-Effective Savings?

Industrial 350 aMW

12%

Irrigation 80 aMW

3%

Commercial 1105 aMW

39%

Residential 1340 aMW

46%


What Are the “Big” Measures?What Are the “Big” Measures?

1.7 1.7

1.2

4.3

1.5

3

5.2

3.4

1.8

3.4

2.2

0

100

200

300

400

500

600

700

Res. C

FLs

I ndu

stria

l

New C

om. L

ight

ing

HP W

ater

Hea

ters

AC/DC C

onve

rter

s

New C

om. H

VAC

Res. C

loth

es W

asher

s

Exist

. Com

. HVAC

Exist

. Com

. Lig

htin

g

Exist

. Com

. Equ

ipm

ent

Exist

.Com

. Inf

rast

ruct

ure

Ach

ieveable

Pote

nti

al (M

Wa)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Avera

ge L

eveliz

ed C

ost

(C

en

ts/k

Wh

)


We We ThinkThink All All Returns Returns

Have Been Have Been CountedCounted

62 Utilities62 Utilities88% of Regional 88% of Regional

LoadLoad

Are We Meeting The Plan’s Targets?Are We Meeting The Plan’s Targets?


Utility & SBC Administrator Utility & SBC Administrator Program Savings (Net of NEEA)Program Savings (Net of NEEA)

0

20

40

60

80

100

120

2004Savings

2005Savings

2006ProjectedSavings

Savin

gs

(aM

W)

Low-Income Weatherization

Other

Utility System

Residential

Multi - Sectors

Municipal

Industrial

Federal

Commercial/ Industrial

Commercial

Agriculture/ Irrigation


NEEA SavingsNEEA Savings

0

5

10

15

20

25

30

35

40

2004Savings

2005Savings


Savin

gs

(aM

W)

Other

Residential

Industrial

Commercial



Total SavingsTotal Savings (Not Including Codes, Standards and Market Effects)(Not Including Codes, Standards and Market Effects)

0

20

40

60

80

100

120

140

2004Savings

2005Savings


Savin

gs (

aM

W)

Low-Income Weatherization

Other

Utility System

Residential

Multi - Sectors

Municipal

Industrial

Federal

Commercial/ Industrial

Commercial



We Met the 2005 Target!We Met the 2005 Target! (and we’ll probably meet the 2006 target) (and we’ll probably meet the 2006 target)

0

20

40

60

80

100

120

140

2005 2005 ActualSavings

2006 2006 ActualSavings

(Preliminary)

Savi

ngs

(aM

W)

5th Plan Target

Alliance Programs(Utility, SBC andBonneville Funded)

Bonneville FundedConservation

Utility FundedConservation

BPA and Utilities Are Investing About BPA and Utilities Are Investing About $170 Million/yr in Energy Efficiency*$170 Million/yr in Energy Efficiency*

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2004 2005 2006Projected

Exp

en

dit

ure

s (C

urr

en

t $

)

Northwest Energy EfficiencyAlliance

Utility Low-IncomeWeatherization

Bonneville Low IncomeWeatherization

Bonneville Conservation(C&RD)

Bonneville Conservation(ConAug)

Utility Conservation

*Equivalent to 1.75% of Regional Retail Revenues


We’re Meeting The 5We’re Meeting The 5thth Plan Targets At Plan Targets At Lower Than Anticipated Cost (to utilities)Lower Than Anticipated Cost (to utilities)

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Firs

t Year

Cost

/aM

W(m

illio

n 2

000$)

20

05

C

os

t R

an

ge


The Road Ahead – The Road Ahead – Is This The Renaissance?Is This The Renaissance?

The Road Ahead – A Brighter The Road Ahead – A Brighter Future @ Lower WattageFuture @ Lower Wattage

Over 14 million CFLs sold in 2006Over 14 million CFLs sold in 2006– PNW has 16% of all US installsPNW has 16% of all US installs

w/4% of the populationw/4% of the population

BPA has several new regional BPA has several new regional initiatives underway initiatives underway

State & Federal standards for 17 appliancesState & Federal standards for 17 appliances– Help hit targets beginning 2008Help hit targets beginning 2008

Commercial & Commercial & Industrial program Industrial program participation is upparticipation is up

The Road Ahead – Utilities The Road Ahead – Utilities Appear to Be “Ramping Up”Appear to Be “Ramping Up”

Increasing its 2008 conservation goal by 40%Increasing its 2008 conservation goal by 40%

Developing a “green utility” strategyDeveloping a “green utility” strategy

Increasing its 2008 efficiency goal by 20%Increasing its 2008 efficiency goal by 20%

Expanding efficiency target “company wide”Expanding efficiency target “company wide”

Doubling its annual efficiency budget in 2008Doubling its annual efficiency budget in 2008

Funding extended through 2025Funding extended through 2025

IOUs permitted to increase ETO energy efficiency funding IOUs permitted to increase ETO energy efficiency funding over and above the 3% public purpose minimumover and above the 3% public purpose minimum

Requires Washington utilities with more that 25,000 Requires Washington utilities with more that 25,000 customers to customers to set 10-year conservation acquisition targets to achieve all cost-effective savings

Other Factors


Utility Acquired Energy Efficiency Remains AUtility Acquired Energy Efficiency Remains A %*&?! BARGAIN!%*&?! BARGAIN!

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

May

-96

Nov-9

6

May

-97

Nov-9

7

May

-98

Nov-9

8

May

-99

Nov-9

9

May

-00

Nov-0

0

May

-01

Nov-0

1

May

-02

Nov-0

2

May

-03

Nov-0

3

May

-04

Nov-0

4

May

-05

Nov-0

5

May

-06

Whole

sale

Ele

ctri

city

Pri

ce (

2000$/M

WH

)

Levelized Cost of Utility Efficiency AcquisitionsWholesale Market Price


Natural Gas Prices Are Still HighNatural Gas Prices Are Still High

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

J an-

01

Jul-0

1

Jan-

02

Jul-0

2

Jan-

03

Jul-0

3

Jan-

04

Jul-0

4

Jan-

05

Jul-0

5

Jan-

06

Jul-0

6

Sum

as

Gas

Pri

ce (

2000$/M

Btu

)


And Are Forecast to Remain SoAnd Are Forecast to Remain So

$0

$1

$2

$3

$4

$5

$6

$7

$8

2000 2005 2010 2015 2020 2025

Natu

ral

Gas

Pri

ce @

Wellh

ead (

20

06

$)

Actual 5th Plan Medium Proposed Revised Medium


New Generating Resource Costs New Generating Resource Costs Are Higher Are Higher

0

20

40

60

80

100

120

140

Wind2004

Wind2006

Gas2004

Gas2006

Coal2004

Coal2006

Hyrdo2004

Hydro2006

PPAs2004

PPAs2006

Resource Type and Year Bid

Nom

inal Levelized

Cost

($

/M

WH

)


Will Higher “Carbon Cost” Matter?Will Higher “Carbon Cost” Matter?

Both Both AmountAmount & & ValueValue of CO2 avoided of CO2 avoided depends on when it is avoideddepends on when it is avoided

Hence, the “carbon control” value of Hence, the “carbon control” value of energy savings should incorporate their energy savings should incorporate their time-based value (as it does for time-based value (as it does for electricity savings)electricity savings)– Shape of Savings (kWh daily & seasonally)Shape of Savings (kWh daily & seasonally)– Physical production (pounds per kWh daily Physical production (pounds per kWh daily

and seasonally)and seasonally)


Northwest Resources “on the margin”Northwest Resources “on the margin”55thth Plan Resource Portfolio Plan Resource Portfolio

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2005 2010 2015 2020 2025

Ho

urs

/yr

Demand

Hydro

Natural Gas

Fuel Oil

Biomass

Coal

Nuclear

Must-run


Marginal Carbon Savings by Marginal Carbon Savings by Load ShapeLoad Shape

0.0

0.3

0.5

0.8

1.0

1.3

1.5

2005 2010 2015 2020 2025

lbC

O2/

kWh

All hoursSegment 1Segment 2Segment 3Segment 4

Segment 1: 0800 – 1800 M-FSegment 1: 0800 – 1800 M-F

Segment 2: 0400 - 0800/1800-2200 M-F; 0400 – 2200 S&SSegment 2: 0400 - 0800/1800-2200 M-F; 0400 – 2200 S&S

Segment 3: 2200 - 0400 M-FSegment 3: 2200 - 0400 M-F

Segment 4: 2200 - 0400 S&SSegment 4: 2200 - 0400 S&S


Impact of Alternative CO2 Control Costs Impact of Alternative CO2 Control Costs on Marginal Value of Conservation on Marginal Value of Conservation

SavingsSavings

$0

$2

$4

$6

$8

$10

$12

$14

$16

$0 $5 $10 $15 $20 $25 $30

Cost of CO2 ($/Ton CO2)

CO

2 v

alu

e (

$/M

Wh

)

0.85 lb/kWh

0.9 lb/kWh

0.95 lb/kWh

1.0 lb/kWh

Flat (8760 hr) zero-CO2 resource


Impact of Higher Assumed Impact of Higher Assumed CO2 “Control” CostCO2 “Control” Cost

Assuming PNW CO2 Emissions Factor ofAssuming PNW CO2 Emissions Factor of~ 1 lb/kWh~ 1 lb/kWh– A $10/ton CO2 change in emissions “control” A $10/ton CO2 change in emissions “control”

cost increases cost increases forecastedforecasted market prices by market prices by approximately $4/MWhapproximately $4/MWh

– A $40/ton CO2 change in emissions “control” A $40/ton CO2 change in emissions “control” cost increases cost increases forecastedforecasted market prices by market prices by approximately $16/MWhapproximately $16/MWh


Carbon Control Might Make 4% to 15% Carbon Control Might Make 4% to 15% More Conservation “Cost-Effective”More Conservation “Cost-Effective”

0

500

1000

1500

2000

2500

3000

3500

$10 $20 $30 $40 $50 $60 $70 $80 $90 $100

Levelized Cost (2000$/MWa)

Ener

gy

Sav

ings

in 2

025 (

MW

a)

Technically Achievable PotentialEconomically Achieveable Potential - 5th Plan*Economically Achieveable Potential - $10/Ton "CO2 Adder"Economically Achieveable Potential - $40/Ton "CO2 Adder"

Additional 100 - 400 MWa Cost-Effective @ $10 - $40 Ton

*Without “Certain” Carbon Control


BETTER!BETTER!

WORSE?WORSE?

ABOUT THE SAME?ABOUT THE SAME?

SummarySummary


QuestionsQuestions


Thank Thank you you verry, verry, verry verry much!much!

Thank Thank you very you very much.much.

northwest power and conservation council the northwest energy efficiency market 2007 naesco...

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value of co2

conservation goal

efficiency goal

conservation accomplishments

amw of savings

eto energy efficiency

emissions control cost

plan targets