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Achieving big savings: takeaways from ACEEE’s recent report

ACEEE recently wrote a great paper titled “Big Savers: Experiences and Recent History of Program Administrators Achieving High Levels of Electric Savings.”  While the report is substantial, I highly recommend reading it if you have the time.  In the report, ACEEE defined some of the key characteristics of high performing programs, including the development of delivery infrastructure to support mass adoption, close links with EM&V feedback, and the willingness to be open to outside ideas.  The paper gives a good overview of how some of the largest programs in the country are achieving high levels of savings and summarizes some of the great work the energy efficiency industry is doing (including DNV GL). 

If you didn’t have the time to read the 99 page report, here are some of my key takeaways:

  1. Regulatory drivers dictate savings levels: States that set high savings and spend targets drive programs to achieve high results.  Penalties or incentives for achieving those targets don’t seem to be a strong indicator of actual results versus the plan.  Our experience is that utility clients generally embrace both the challenge of the savings goal and strive to satisfy their customers through a well-run energy efficiency program.
  2. Program savings and program spending are highly correlated: On average, programs achieve 0.4% savings for every 1% spending as a percentage of energy revenues.  Programs that save 2% of load spend an average of 6.94% of energy revenues. These numbers from ACEEE are net savings values and expenses for the entire portfolio of programs including administration, M&V, marketing, and such.  The program administration averages are skewed by states like California and Massachusetts which tend to have more rigorous baseline assumption, higher M&V scrutiny, and higher administration costs than the clients DNV GL works with implementing energy efficiency programs. (DNV GL does support much of the M&V work for Massachusetts program administrators.)
  3. Lifetime cost of energy saved has remained flat: This is perhaps the most counterintuitive finding, as program administrators have complained for years about changes in codes / baselines and market saturation causing program costs to escalate.  Average lifetime costs vary greatly based on market, technology, measure life along with the costs to deliver programs.  According to ACEEE, lifetime costs of electricity savings has remained flat at 3.5 cents per kWh for the past seven years, although many utility clients we work with have portfolio lifetime costs below this value.  What this tells me is that the tree of “low hanging fruit” continues to grow more fruit.  As technology evolves, energy efficiency has become more cost effective and both the functionality and usability of new equipment has improved, making energy efficiency more appealing to end use customers.  During the past seven years, DNV GL has worked with our clients to facilitate the transition and evolution of programs away from CFLs and fluorescent retrofits and towards LED technology and enhanced lighting and HVAC control systems.

Going forward, many of these high performing programs will see growth in LED technologies over traditional lighting retrofits, an increased emphasis in behavioral programs over capital intensive projects, and an uptick in programs that have more integration with utility-based assets, such as smart meters, demand response, and conservation voltage reduction efforts.  Personally, I believe the future of energy efficiency continues to look promising and I look forward to assisting all program administrators to achieve high levels of savings through continuous improvement and evolution of their energy efficiency programs.


 

Steve Baab:  Steve works at DNV GL as the Head of Department, Cross District Services.  Steve works to bring best practices and innovative program ideas to DNV GL clients.  Before coming to DNV GL, Steve was the ComEd C&I portfolio manager where he led the Smart Ideas program from initial launch in 2008 to a program that offers a wide spectrum of customer solutions in both energy systems and market segments.

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