conservation resources in the (draft) 5 th northwest power plan

Northwest Power and ConservationCouncil

Conservation ResourcesConservation Resourcesin the in the

(Draft) 5(Draft) 5thth Northwest Power Plan Northwest Power Plan

Tom EckmanTom Eckman

Manager, Conservation ResourcesManager, Conservation Resources

Northwest Power and Conservation CouncilNorthwest Power and Conservation Council


What You’re About To HearWhat You’re About To Hear

What We’ve DoneWhat We’ve Done

How much is left to doHow much is left to do

What does it costWhat does it cost

Where is itWhere is it

What’s it worth What’s it worth

What it means to you - Utility “Targets”What it means to you - Utility “Targets”


20 Years of Progress – Bonneville 20 Years of Progress – Bonneville and Utility Accomplishmentsand Utility Accomplishments

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1000

1200

1400

1600

1800

1980 1985 1990 1995 2000

Cu

mu

lati

ve A

cq

uis

itio

ns (

aM

W)

Since 1980 the Region’s Since 1980 the Region’s Utilities and Bonneville Utilities and Bonneville Acquired Over 1750 aMW of Acquired Over 1750 aMW of SavingsSavings


20 Years of Progress – State Energy 20 Years of Progress – State Energy Code AccomplishmentsCode Accomplishments

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50

100

150

200

250

300

350

400

450

500

1980 1985 1990 1995 2000

Avera

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att

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Since 1980 State and Local Since 1980 State and Local Energy Codes Have Produced Energy Codes Have Produced Over 440 aMW of Savings.Over 440 aMW of Savings.


20 Years of Progress – Federal 20 Years of Progress – Federal Energy Efficiency Standards Energy Efficiency Standards

AccomplishmentsAccomplishments

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50

100

150

200

250

300

350

400

450

1980 1985 1990 1995 2000

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Since 1980 Federal Appliance Since 1980 Federal Appliance and Manufactured Housing and Manufactured Housing Energy Efficiency Standards Energy Efficiency Standards Have Produced Over 420 aMW Have Produced Over 420 aMW of Savings.of Savings.


PNW Savings from Codes and PNW Savings from Codes and Efficiency Standards 1980-2002Efficiency Standards 1980-2002

0

50

100

150

200

250

300

350

Dishwashers Refrigerator Freezer Room AC DHW HUD Code ResidentialCode

CommercialCode

Avera

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eg

aw

att

s


20 Years of Progress – 20 Years of Progress – Total PNW Conservation SavingsTotal PNW Conservation Savings

0

500

1,000

1,500

2,000

2,500

3,000

Avera

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egaw

att

s

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

BPA and Utility Programs State Codes & Federal Standards

Since 1980 Utility & BPA Programs, Since 1980 Utility & BPA Programs, Energy Codes & Federal Efficiency Energy Codes & Federal Efficiency Standards Have Produced Over Standards Have Produced Over 2600 aMW of Savings.2600 aMW of Savings.


So What’s 2600 aMW?So What’s 2600 aMW?

It’s enough electricity to serve the It’s enough electricity to serve the entireentire state of Idahostate of Idaho

In the year 2002 alone, it saved the region’s In the year 2002 alone, it saved the region’s consumers consumers $1.6 Billion$1.6 Billion in retail power in retail power purchasespurchases


Conservation Now Supplies Over 10% of Conservation Now Supplies Over 10% of the Region’s Electricity Service Needsthe Region’s Electricity Service Needs

20002000 20012001

PNW Electricity Sales PNW Electricity Sales 20,60020,600 18,450 18,450

PNW ConservationPNW Conservation

2,3152,315

2,600 2,600

Total PNW Electricity ServicesTotal PNW Electricity Services 22,915 22,915 21,050 21,050

Share of Electricity Services Met Share of Electricity Services Met by Conservationby Conservation 10%10% 12%12%


Conservation Was The Northwest’s Conservation Was The Northwest’s ThirdThird Largest Source of Electricity Largest Source of Electricity

Supply in 2000Supply in 2000

Coal13.2%

Conservation10.2%

Gas7.7%

Nuclear3.8%

Other1.3% Petroleum

0.4%

Hydro63.4%


Conservation Is Now The Conservation Is Now The SecondSecond Largest Single Federal Power Firm Largest Single Federal Power Firm

Energy ResourceEnergy Resource

Hydro75%

Nuclear11%

Conservation14%

The Amount of Energy Savings in Public Utility Service Territories from Conservation Programs, Codes and Standards Is Equivalent to Three TimesThree Times the Annual Firm Energy Output of Bonneville Dam


Conservation Met Approximately 1/4 Conservation Met Approximately 1/4 of the Regional Load Growth of the Regional Load Growth

Between 1980 - 2002Between 1980 - 2002

23%

77%

Conservation Generation


Conservation Significantly Reduced Conservation Significantly Reduced

Projected PNW Electricity SalesProjected PNW Electricity Sales

14,000

16,000

18,000

20,000

22,000

24,000

1980 1985 1990 1995 2000

Ave

rage M

egaw

att

s

Medium High ForecastMedium LowMedium High Minus ConservationActual


Annual Conservation Savings Compared Annual Conservation Savings Compared to Difference Between 1983 Medium-High to Difference Between 1983 Medium-High

Forecast and Actual SalesForecast and Actual Sales

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1990 1995 2000

1983 Medium High minus Actual Conservation Savings


Regional Conservation Acquisitions Have Regional Conservation Acquisitions Have Also Helped Balance Loads & Resources Also Helped Balance Loads & Resources ((Creating Creating Mr. Toad’s Wild Ride for the Energy Efficiency Mr. Toad’s Wild Ride for the Energy Efficiency

Service Industry)Service Industry)

0

20

40

60

80

100

120

140

160

1978 1982 1986 1990 1994 1998 2002Co

nserv

ati

on

Acq

uis

itio

ns (

aM

W)

Response to West Coast

Energy Crisis

Response to NW

Recession

Response to “Restructuring

Discussions”


What’s Left to Do What’s Left to Do How Big is the Region’s Conservation How Big is the Region’s Conservation

Resource?Resource? Cost effective & achievable potentialCost effective & achievable potential

= 2800 aMW by 2025= 2800 aMW by 2025 Remaining Potential Equivalent to Regional Remaining Potential Equivalent to Regional

Accomplishments 1980 - 2001Accomplishments 1980 - 2001 Could meet half of the region’s annual load Could meet half of the region’s annual load

growth under “medium” forecastgrowth under “medium” forecast


Cost-Effective and Achievable Conservation Cost-Effective and Achievable Conservation Could Meet Over 10% of PNW Loads in 2025Could Meet Over 10% of PNW Loads in 2025

(Medium Forecast)(Medium Forecast)

0

500

1000

1500

2000

2500

3000

Cost-Effective Potential(aMW in 2025)

Agricultural Sector - 80 aMW

Non-DSI Industrial Sector - 350 aMW

Commercial Sector Non-Building Measures - 420 aMW

HVAC, Envelope & Refrigeration - 375 aMW

New Commercial Building Lighting - 220 aMW

Existing Commercial Buildings Lighting - 130 aMW

Residential Space Conditioning - 240 aMW

Residential Lighting - 530 aMW

Residential Water Heating - 325 aMW

Residential Appliances - 140 aMW

Cost and Achievable Potential by Sector and End UseCost and Achievable Potential by Sector and End Use

1.7 1.7

2.2

1.3

4.3

2.5

3.6

5.2

2.1

2.6 2.8

1.6

2.2

3.2

2.2 2.3

4.6

2.83.1

3.4

1.72.1

0

100

200

300

400

500

600A

chie

veab

le P

ote

nti

al (

MW

a)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Ave

rag

e C

ost

(C

ents

/kW

h)


Where Did All This Potential Where Did All This Potential Come From?Come From?

New technology and/or lower cost of existing New technology and/or lower cost of existing technologiestechnologies– High performance T8 lighting, control optimization, High performance T8 lighting, control optimization,

compact fluorescent lightingcompact fluorescent lighting New applicationsNew applications

– Sewage treatment, LED traffic signalsSewage treatment, LED traffic signals New end uses evaluatedNew end uses evaluated

– Network PC controlNetwork PC control– AC/DC power converters AC/DC power converters – Commercial refrigerators, freezers, ice-makersCommercial refrigerators, freezers, ice-makers


Combined With Higher Forecast Combined With Higher Forecast of Future Market Prices!!!of Future Market Prices!!!

0

20

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120

140

160

180

Jan-00 Jan-05 Jan-10 Jan-15

Mark

er

Pri

ce (

20

00

$M

Wh

)

Draft Fifth Plan

Fourth Plan


Adjustments Since Last PlanAdjustments Since Last Plan

Reflect new codes & standardsReflect new codes & standards Reflect conservation achievedReflect conservation achieved Incorporate new base line dataIncorporate new base line data

– Commercial Building Stock AssessmentCommercial Building Stock Assessment– Penetration of existing programs (E-Star)Penetration of existing programs (E-Star)– Census data, utility data, economic dataCensus data, utility data, economic data

Higher Avoided CostsHigher Avoided Costs New TechnologyNew Technology


Total Residential Sector Cost-Total Residential Sector Cost-Effective & Realistically Achievable Effective & Realistically Achievable

Potential = 1275 aMWPotential = 1275 aMW

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600

800

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1,400

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Residential SpaceConditioning - 240 aMW

Residential Lighting - 530aMW

Residential Water Heating- 325 aMW

Residential Appliances -140 aMW


Residential Sector Achievable Resource Residential Sector Achievable Resource Potential by Major End UsePotential by Major End Use

Residential Water Heating - 325 aMW

26%

Residential Appliances - 140

aMW11%

Residential Space Conditioning - 240

aMW19%

Residential Lighting - 530 aMW

44%


Residential Sector Realistically Achievable Residential Sector Realistically Achievable Potential for AppliancesPotential for Appliances

Clothes Washers - 140 aMW

91%

Dishwashers - 10 aMW6%

Refrigerators - 5 aMW3%


Residential Sector Realistically Achievable Residential Sector Realistically Achievable Potential for Water HeatingPotential for Water Heating

Efficient Tanks29%

95 aMW

Waste Water Heat Recovery

4%15 aMW

Heat Pump Water Heaters

67%225 aMW


Residential Sector Realistically Achievable Residential Sector Realistically Achievable Potential for Space ConditioningPotential for Space Conditioning

Duct Sealing, Commissioning and Controls - 10 aMW

3%

Energy Star - Manufactured Homes -

20 aMW7%

Duct Sealing - 10 aMW3%

Duct Sealing and System

Commissioning - 5 aMW2%

Energy Star Heat Pump Upgrades - 60

aMW21%

Energy Star - Multifamily Homes - 5

aMW2%

Energy Star - Single Family Homes - 20

aMW7%

Weatherization - Manufactured Home -

20 aMW7%

Weatherization - Multifamily - 30 aMW

10%

Weatherization - Single Family - 40

aMW14%

Energy Star Heat Pump Conversions -

70 aMW24%


Total Commercial Sector Realistically Total Commercial Sector Realistically Achievable Potential = 1105 aMW Achievable Potential = 1105 aMW

(Medium Forecast – 2025(Medium Forecast – 2025))

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I nfrastructure

Equipment

Envelope

Lighting

HVAC


Total Commercial Sector Realistically Total Commercial Sector Realistically Achievable Potential by Major End UseAchievable Potential by Major End Use

Equipment32%

Envelope2%

Lighting35%

Infrastructure7% HVAC

24%


Commercial Sector Realistically Achievable Commercial Sector Realistically Achievable Potential for “Non-Buildings”Potential for “Non-Buildings”

(Medium Forecast - 2025) = 420 aMW(Medium Forecast - 2025) = 420 aMW

Efficient Power Supplies

38%155 aMW

Packaged Refrigeration Equipment

16%70 aMW

Network PC Power Management

15%60 aMW

Municipal Sewage Treatment

14%60 aMW

Municipal Water Supply5%

20 aMW

LED Exit Signs10%

45 aMW

LED Traffic Lights2%

10 aMW


Commercial Sector Realistically Achievable Commercial Sector Realistically Achievable Potential for Buildings = 685 aMW Potential for Buildings = 685 aMW

(Medium Forecast - 2025)(Medium Forecast - 2025)

Lighting50%

335 aMW

Refrigeration5%

35 aMWEnvelope3%

20 aMW

Equipment2%

15 aMWHVAC40%

265 aMW


Industrial Sector Industrial Sector Conservation PotentialConservation Potential

Estimate of 5% of 2025 forecast loadsEstimate of 5% of 2025 forecast loads 350 aMW at 1.7 cents per kWh350 aMW at 1.7 cents per kWh Process controls, drive systems, lighting, Process controls, drive systems, lighting,

refrigerationrefrigeration Significant uncertainty around estimate due Significant uncertainty around estimate due

to ongoing changes in region’s industrial to ongoing changes in region’s industrial mixmix


Irrigated Agriculture Sector Realistically Irrigated Agriculture Sector Realistically Achievable Potential = 80 aMWAchievable Potential = 80 aMW

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Replace Pumps, Nozzles &Gaskets

Replace Nozzles & Gaskets

Convert Center Pivots fromMedium to Low Pressure

Convert Center Pivots from Highto Low Pressure


How Much Should We Do?How Much Should We Do?Derivation of Regional Conservation TargetsDerivation of Regional Conservation Targets

Used Portfolio Model to identify “least Used Portfolio Model to identify “least risk” and “least cost” level of conservation risk” and “least cost” level of conservation developmentdevelopment– Separate annual targets for “lost opportunity” Separate annual targets for “lost opportunity”

and “non-lost opportunity” resourcesand “non-lost opportunity” resources– Model “worked up conservation supply curve” Model “worked up conservation supply curve” – Increased quantities came at increased costs, Increased quantities came at increased costs,

but reduce system risks but reduce system risks


Regional Conservation Regional Conservation Supply CurveSupply Curve

0

20

40

60

80

100

120

0 500 1000 1500 2000 2500 3000

Conservation Potential (MWa)

Real Levelized

Co

st

($/

MW

h)


Conservation Development Conservation Development Levels AnalyzedLevels Analyzed

0

20

40

60

80

100

120

140

160

180

Annual C

onse

rvati

on D

eve

lopm

ent

(MW

a)

Lost Opportunity Non-Lost Opportunity


Average Cost of Conservation by Average Cost of Conservation by

Level of DevelopmentLevel of Development

20

25

30

35

40

45

2,050 2,330 2,580 2,770 2,850 2,900 2,950 2,990 3,030 3,070 3,110

Conservation Developed Over Planning Period (MWa)

Rea

l Le

veliz

ed C

ost

of

Conse

rvat

ion

Dev

eloped

($/M

Wh)


System Cost vs. Risk for Alternative System Cost vs. Risk for Alternative Levels of Conservation DevelopmentLevels of Conservation Development

$27.70

$27.80

$27.90

$28.00

$28.10

$28.20

$28.30

$28.40

$28.50

$17.80 $18.00 $18.20 $18.40 $18.60 $18.80 $19.00 $19.20

Net Present Value System Cost (bllion$)

Net

Pre

sent

Valu

e S

yste

m R

isk

(bill

ion

$)

150 MWa/yr

110 MWa/yr

145 MWa/yr

130 MWa/yr

155 MWa/yr

160 MWa/yr


Changes in System Cost and Risk for Changes in System Cost and Risk for Alternative Annual Conservation Alternative Annual Conservation

TargetsTargets

-$1,500

-$1,000

-$500

$0

$500

$1,000

$1,500

110 130 145 150 155 160

Annual Conservation Development (MWa)

Net

Pre

sen

t V

alu

e S

yst

em

C

ost

/Ris

k (

million

)

Increased Cost

Reduced Risk


WECC Carbon Dioxide Emissions WECC Carbon Dioxide Emissions Reductions for Alternative Reductions for Alternative

Conservation TargetsConservation Targets

0

10

20

30

40

50

60

70

80

90

110 130 145 150 155 160Annual Conservation Development (MWa)

Redu

ctiion

in

WE

CC

Carb

on

Dio

xid

e

Em

issi

on

s (M

illion

Ton

s)


Annual Conservation Development Annual Conservation Development for Least Risk and Least Cost Plansfor Least Risk and Least Cost Plans

PreliminaryPreliminary

0

20

40

60

80

100

120

140

160

180

2005 2010 2015 2020 2025Year

An

nu

al C

on

serv

ati

on

D

evelo

ped

(M

Wa)

Least Cost

Least Risk


PreliminaryPreliminary Annual Target in Annual Target in the Range of 130-150 MWathe Range of 130-150 MWa

Compared to “business-as-usual” case of 50 Compared to “business-as-usual” case of 50 MWa/year, stabilizing conservation deployment at MWa/year, stabilizing conservation deployment at 150 MWa/year would: 150 MWa/year would: – Reduce NPV system cost by ~5%Reduce NPV system cost by ~5%– Reduce regional “risk” by nearly ~10%Reduce regional “risk” by nearly ~10%– Reduce WECC carbon dioxide emissions by Reduce WECC carbon dioxide emissions by

nearly 80 million tons over the next 20-yearsnearly 80 million tons over the next 20-years


Residential SectorResidential SectorPreliminaryPreliminary Annual Acquisitions Targets Annual Acquisitions Targets

2005 to 2010 = 75 aMW2005 to 2010 = 75 aMW

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Lost-Opportunity

Non-Lost Opportunity

Annual Total Resource Cost = $75 Million

Annual Total Resource Cost = $155 Million


Commercial Sector Commercial Sector PreliminaryPreliminary Annual Acquisitions Targets Annual Acquisitions Targets

2005 – 2010 = 55 aMW2005 – 2010 = 55 aMW

0

10

20

30

40

50

60

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Lost OpportunityRetrofit

Annual Total Resource Cost = $70 million



Industrial Sector Industrial Sector PreliminaryPreliminary Annual Acquisitions Targets Annual Acquisitions Targets

2005 – 2010 = 15 aMW2005 – 2010 = 15 aMW

0

5

10

15

20

Avera

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Non-LostOpportunity



Irrigated Agriculture Sector Irrigated Agriculture Sector PreliminaryPreliminary Annual Acquisitions Targets Annual Acquisitions Targets

2005 – 2010 = 5 aMW2005 – 2010 = 5 aMW

0

1

2

3

4

5

6

Avera

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Non-LostOpportunity



Regional Conservation Resource Regional Conservation Resource PreliminaryPreliminary Annual Acquisition Targets Annual Acquisition Targets

2005 – 2010 = 150 aMW2005 – 2010 = 150 aMW

0

10

20

30

40

50

60

70

80

Lost Opportunity Non Lost Opportunity

Reso

urc

e P

ote

nti

al

(aM

W)

I rrigated Agriculture

Industrial

Residential

Commercial


Total Resource Acquisition Total Resource Acquisition Cost = $380 millionCost = $380 million

$0

$50

$100

$150

$200

$250

LostOpportunity

Non-LostOpportunity

Acq

uis

itio

n C

ost

s(M

illion

s 2

00

0$

)

I rrigated Agriculture

Industrial

Residential

Commercial


To Meet Council’s Draft Plan Targets To Meet Council’s Draft Plan Targets Regional Conservation Investments Will Regional Conservation Investments Will

Have to Increase Significantly or Be More Have to Increase Significantly or Be More EfficientEfficient

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 20022005 -2025

AnnualTarget

Mill

ions

(2000$

)

Regional Utility Conservation Acquisition Expenditures


Is 150 MWa/yr “Doable”?Is 150 MWa/yr “Doable”? It’s half the region’s load growth!It’s half the region’s load growth!

– But it’s only about 1/3 more than we achieved from 2000 – 2002But it’s only about 1/3 more than we achieved from 2000 – 2002– We did it before – now we have 20 years experience and We did it before – now we have 20 years experience and

infrastructure (e.g.,Alliance, federal standards, utility staff and infrastructure (e.g.,Alliance, federal standards, utility staff and programs)programs)

There’s not that much out there!There’s not that much out there!– Half is lost-opportunities which haven’t happened yetHalf is lost-opportunities which haven’t happened yet– Nearly two-thirds is new stuffNearly two-thirds is new stuff– Getting it all means PNW must be 10% more efficient in 20 yearsGetting it all means PNW must be 10% more efficient in 20 years

It will raise rates too much!It will raise rates too much!– About 2/3 (or more) of cost of meeting target is already in ratesAbout 2/3 (or more) of cost of meeting target is already in rates– Additional cost ~$50 - $75 million/yr = less than 1% of regional Additional cost ~$50 - $75 million/yr = less than 1% of regional

utility revenue requirementsutility revenue requirements


It’s Not Your Father’s OldsmobileIt’s Not Your Father’s Oldsmobile LargestLargest Measures Are Still UntappedMeasures Are Still Untapped

Residential CFLs (19% of year 2025 potential)Residential CFLs (19% of year 2025 potential) High-Performance Commercial Lighting (13%)High-Performance Commercial Lighting (13%) Residential Heat Pump Water Heaters (7% )Residential Heat Pump Water Heaters (7% ) AC/DC Power Converters (5%)AC/DC Power Converters (5%) Residential Clothes Washers (5%)Residential Clothes Washers (5%) Sewage & Water Treatment (3%)Sewage & Water Treatment (3%) Fix Roof Top Economizers (3%)Fix Roof Top Economizers (3%) Commercial Refrigerators, Freezers, Ice (2%)Commercial Refrigerators, Freezers, Ice (2%) Network PC Control (2%)Network PC Control (2%) Low-Pressure Distribution (2%)Low-Pressure Distribution (2%)


Plan Conservation Action Items -1Plan Conservation Action Items -1

Focus on “Lost Opportunity” ConservationFocus on “Lost Opportunity” Conservation– Half the 150 MWa annual targetHalf the 150 MWa annual target– New initiatives are needed at all levelsNew initiatives are needed at all levels

Establish Mechanism for Regional Establish Mechanism for Regional Coordination and Program AdministrationCoordination and Program Administration– Reduce cost and improve performanceReduce cost and improve performance– Current coordination is ad hocCurrent coordination is ad hoc– Bonneville no longer positioned to serve as Bonneville no longer positioned to serve as

regional “administrator”regional “administrator”



Aggressive Utility Action Is Needed to Aggressive Utility Action Is Needed to Achieve TargetsAchieve Targets– Consumer actions are unlikely to capture all Consumer actions are unlikely to capture all

regionally cost- effective conservation savingsregionally cost- effective conservation savings Utility programs should be efficient, but Utility programs should be efficient, but

meet targetmeet target– Rate impacts of conservation always an issueRate impacts of conservation always an issue– Potential conflict between capturing “lost Potential conflict between capturing “lost

opportunities” and meeting “first cost” goalsopportunities” and meeting “first cost” goals



A Mix of Mechanisms Will Be NeededA Mix of Mechanisms Will Be Needed– Local acquisition programs must be expandedLocal acquisition programs must be expanded

» Target represents 50% increase over 2002 Target represents 50% increase over 2002 accomplishments accomplishments

– DoubleDouble budget for regional market budget for regional market transformation transformation

» New initiatives New initiatives » Expanded initiativesExpanded initiatives» Regional investments in “infrastructure” neededRegional investments in “infrastructure” needed


SummarySummary

It's big – Around 2800 aMWIt's big – Around 2800 aMW It’s cheap ~ 2.4 cents/kWhIt’s cheap ~ 2.4 cents/kWh It's new “stuff” and improved “old stuff”It's new “stuff” and improved “old stuff” It's half lost opportunityIt's half lost opportunity It’s nearly all capitalIt’s nearly all capital It’s going to require more money at a time when It’s going to require more money at a time when

utilities are faced with the bad politics of rate utilities are faced with the bad politics of rate increases – but it’s “doable”increases – but it’s “doable”

BothBoth regional regional costcost and and riskrisk increase if we failincrease if we fail

conservation resources in the (draft) 5 th northwest power plan

Documents