efficiency energy for the future energy future of the west: (1) demand response and dynamic pricing;...

Efficiency

Energy for the Future

Energy Future of the West:

(1) Demand Response and Dynamic Pricing;

(2) Energy Use and Sustainable Growth

Utility Energy Forum

Granlibakken Conference Center

May 6, 2005 Arthur H. Rosenfeld, Commissioner

California Energy Commission

916 654 [email protected]

www.energy.ca.gov

www.utilityforum.com

2Efficiency


Time-of-Use (TOU), Critical Peak Pricing(CPP), and Real-Time Pricing (RTP)

Time-of-Use (TOU) rates consist of 2 or 3 price/time blocks published in advance: peak, off-peak, and in some cases, shoulder

Critical Peak Pricing (CPP) rates include a higher price for 50-100 hours per year when prices are high or system conditions are critical

– In exchange for facing these higher-priced hours, prices in other hours are proportionally reduced

– Customer pays the critical peak price when invoked by the utility

• day ahead CPP forecast offers additional time for response Real-Time Pricing (RTP) is an hourly price related to the marginal

cost of a kWh

– Reflects hot weather, scarcity, or equipment failure

• day ahead RTP forecast offers additional time for response

Efficiency


Joint CPUC-CEC Demand Response ProceedingR.02-06-001

Working Group 1. Peevey, Rosenfeld, now joined by Grueneich. Joint CPUC-CEC staff

WG-2. Large Buildings, >200 kW interval meters installed

TOU tariff mandatory, CPP voluntary now, default in ’06.

Facilitators: Hungerford (CEC) + PUC staff

WG-3. AMI. Sponsored SPP (Statewide Pilot Pgm)

Facilitators: Messenger (CEC) + PUC Staff.

CEC has Load Management Power, and plans to require interval meters and communicating thermostats in new buildings under Title-24/Title-20, starting in 2008. We’re looking for new-building pilot programs NOW.

4Efficiency


An Example of a CPP Tariff for Large Customers

$0.00

$0.20

$0.40

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$0.80

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hour of day

$/K

Wh

Prices on CPP Days

Prices on non-CPP days

TOU Prices

5Efficiency


CEC/CPUC Vision: Dynamic Prices & Choice

Always TOU or Better if digital meters available and if economic “CPP” is an extension of TOU Residential and Small Commercial

– Default = CPP

– Hedge = TOU

Intermediate Size Customers (perhaps 200 kw to 1 MW)– Default = CPP

– Hedge = TOU

– Option = RTP (voluntary)

Large (perhaps > 1 MW)– Default = RTP

– Hedges to CPP or perhaps TOU Goal of an additional 1% of Load Response per year

6Efficiency


Note: Tariffs have additional tiered surcharges based on monthly consumption

Residential Tariffs Tested in California Statewide Pilot

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00

Hour Ending

$ (U

.S.)

/ K

WH

FLAT RATE

TOU RATE

CPP-F RATE (NON CRITICAL DAY)

CPP-F RATE (CRITICAL DAY)

7Efficiency


Small Customers Statewide Pricing Pilot “SPP”

Results for the two-summer pilot

– Average savings for CPP_F customers of 12% to 13% during the critical peak periods

• CPP_F = 5 hour event; customers without smart thermostats

– Average savings for CPP_V customers of 27% during the critical peak periods

• CPP_V = event period varies 2 to 5 hours; customers have smart thermostats and receive signal from utility that sets-up thermostat

Savings show little degradation from summer 2003 to summer 2004 Savings remain nearly the same even over three-day heat events

8Efficiency


Observations Regarding the Statewide Pricing Pilot

Results indicate demand elasticity does exist in the residential electricity market

Such price responsive demand will enhance the competitiveness of electricity markets

However, other types of electrical system emergencies may require instantaneous load response

California had a separate proceeding dealing with interruptible load programs

We plan to merge price-sensitive demand response and interruptible programs

– For example, one approach could involve a curtailment signal that a customer would not have the option to over ride.

– The next graph illustrates how this might work

9Efficiency


Critical Peak Pricing (CPP)with additional curtailment option

0

5

10

15

20

25

30

35

40

Pri

ce (

cen

ts/k

Wh

)

Standard TOUCritical Peak PriceStandard Rate

Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Extraordinary Curtailment Signal

Price Signal

?

10Efficiency


Demand Response and Interval Electricity Meters

Currently large customers have interval meters, mandatory time-of-use pricing, and limited participation in interruptible programs

Starting Summer 2006, these customers expected to be put on default Critical Peak Pricing (CPP) tariffs in IOU areas

Also in 2006, PG&E and SDG&E expect to begin installation of interval meters for electricity customers and will relay gas use and will offer CPP to customers will meters

Installation to take several years during which time SCE plans to follow suit

CEC will define communicating thermostats which can be programmed to respond to CPP and for grid protection

The state has an ambitious goal of 5% demand response (2000 MW) from “price-sensitive” load by 2007

11Efficiency


Dependable DR in IOUs, 2004

Category PG&E SCE SDG&E TotalInterruptible/Curtailable 342 595 2 939 Demand Bidding 40 56 1 97 Critical Peak Pricing 12 6 5 23 Power Authority Demand Response 200 31 5 236 Direct Load Control - 256 2 258 Backup Generators - - 17 17 20/20; Voluntary Programs

Total 593 944 32 1,569

12Efficiency


Time dependent valuation (TDV) prices vary over the year Although TDV prices in some hours exceed 50 ¢/kWh, annual average TDV

price equals ~15 ¢/kWh

TDV: Climate Zone 13 (Fresno), Annual

0

10

20

30

40

50

60

0 876 1752 2628 3504 4380 5256 6132 7008 7884 8760

Hour

TDV (cents/kWh)

13Efficiency


Cost of Conserved Energy (CEE) can also be used to evaluate designs

yearper

AC

kWh

CRRCCE

Δ⋅Δ

=$

CEE = Cost of Conserved EnergyΔ$AC = Consumer price increase due to hot/dry

AC designCRR = Capital recovery rate; set at 10% per

yearΔkWhper year = Annual energy savings due to hot/dry

AC designTDV (CZ 13, Aug 6) comparison to Design CCEs

0.0

10.0

20.0

30.0

40.0

50.0

60.0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hour

TDV and CCE(cents/kWh)

TDV

CCE Design 3

CCE Design 2

CCE Design 1

14Efficiency


Fresno: Payback Periods

2.6

5.8

7.0

2.0

3.5

4.6

0

1

2

3

4

5

6

7

8

AC Design 1 AC Design 2 AC Design 3

Pay

bac

k P

erio

d (

year

s)

Residential

TDV

TDV impacts cost-effectiveness

Efficiency


Energy Future of the West:

(1) Demand Response and Dynamic Pricing;

(2) Energy Use and Sustainable Growth

Utility Energy Forum

Granlibakken May 6, 2005

Arthur H. Rosenfeld, Commissioner

California Energy Commission

916 654 [email protected]

www.Energy.CA.gov

www.utilityforum.com

16Efficiency


California Peak Demand 1965 - 2004

0

20

40

60

80

100

120

140

1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003year

GW

at 5% growth rate

Actual (2.2% year)

120

55

65

0

17Efficiency


Total Electricity Use, per capita, 1960 - 2001

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

196019621964196619681970197219741976197819801982198419861988199019921994199619982000

KWh

12,000

8,000

7,000

California

U.S.

kWh

Californians have a net savings of $1,000/family

18Efficiency


Costs and Pollution Saved by Avoiding a 50% expansion of California Electric System.

Avoids 18 Million tons/year of Carbon Equivalent to getting 12 million cars off the road,

– along with their NOx, CO, and particulate emissions. California has ~25 million motor vehicles,

– avoided 50% more equivalent pollution. The Pavley bill, starting in model year ’09, should start to reduce

another 30%.

California annual electric bill in 2004 ~ $30 Billion Avoided ~$16 Billion of bills, but net saving is only

~$12Billion/year, i.e. $1000/family.

19Efficiency


Per Capita Electricity Consumption

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1960 1965 1970 1975 1980 1985 1990 1995 2000

year

kWh/person

United StatesCaliforniaNew York

Source: http://www.eia.doe.gov/emeu/states/sep_use/total/csv/use_csv

20Efficiency


Per Capita Electricity Consumption

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

196019621964196619681970197219741976197819801982198419861988199019921994199619982000year

kWh/person

Red States 2004 ElectionUnited StatesBlue States 2004 ElectionCalifornia

21Efficiency


$0

$50

$100

$150

$200

$250

$300

$350

$400

Public Interest EnergyResearch (PIER). ~50% to

Efficiency

Emerging TechnologyCoordinating Council

Energy Efficiency andDemand Response

Million $ per Year

Electricity

Natural Gas

EE funding

"Procurement" = Integrated Resource Planning

Proposed Ramp Up to $25 MM

Emerging Technologies Whitepaper January 24, 2005 Arthur Rosenfeld, Commissioner, California Energy Commission Nancy Jenkins, PIER Buildings Program Manager, California Energy Commission Robert Shelton, Managing Director, Navigant Consulting

Figure 4: Public Goods and Procurement Funding for Effic iency

22Efficiency

Energy for the Future Public Interest Energy Strategies –CEC #100-03-12F

GWh Impacts from Programs Begun Prior to 2001

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1975 1980 1985 1990 1995 2000

GW

H

Utility Programs: at a cost of ~1% of Electric Bill

Building Standards

Appliance Standards

~ 14% of Annual Use in California

Utility Programs $ 250 Million ~18,000 GWHStandards $ 10 Million ~18,000 GWH

Program Costs and Savings in 2004

23Efficiency

Energy for the Future Source: David Goldstein

United States Refrigerator Use v. Time

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002

Average Energy Use per Unit Sold (kWh/yr)

0

5

10

15

20

25

Refrigerator volume (cubic feet)

Refrigerator Size (cubic ft)

Energy Use per Unit(KWH/Year)

1st Federal Stds ‘92

24Efficiency

Energy for the Future Source: David Goldstein

United States Refrigerator Use v. Time

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002

Average Energy Use or Price

0

5

10

15

20

25

Refrigerator volume (cubic feet)

Energy Use per Unit(KWH/Year)

Refrigerator Size (cubic ft)

Refrigerator Price in 1983 $

$ 1,270

$ 462

25Efficiency


The Value of Energy Saved and Produced(production @ .03 and savings @ .085 $/kWh)

0

5

10

15

20

25

Bill

ion

$ p

er y

ear

Energy Saved from150 M Refrig/Freezersat 2001 efficiency

Nuclear

Conventional Hydro

Existing Renewables

ANWR @10,000 Btu/kWh

100 Million Rooftop

PV System @ 1kW

26Efficiency


20

30

40

50

60

70

80

90

100

110

1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Year

Index (1972 = 100)

Effective Dates of National Standards

=

Effective Dates of State Standards

=

Refrigerators

Central A/C

Gas Furnaces

EER = 13

Impact of Standards on Efficiency of 3 Appliances

Source: S. Nadel, ACEEE,

in ECEEE 2003 Summer Study, www.eceee.org

75%

60%

25%

27Efficiency


Annual Usage of Air Conditioning in New Homes in CaliforniaAverage drop of 3% per year while House size grew 1.5% per year

0

500

1,000

1,500

2,000

2,50019

75

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

kWh

/YE

AR

Source: CEC Demand Analysis Office

Federal Appliance Standards

Initial California Title 24 Building Standards

California Title 20 Appliance Standards

100%

38%

SEER 10

SEER 13

28Efficiency


After Saturation (16 years)Impact of Standards on Residential Central A/C

and Roof Top A/C Units in the United States

20

30

40

50

60

70

80

90

100

110

1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006Year

Index (1972 = 100)

EER = 13

300 GW

200 GW

100 GW of U.S. Nuclear Power Stations

29Efficiency


Source: Stabilization Wedges: Pacala and Socolow, Science Vol 305, page 968

Growth = 1.5%/yr

30Efficiency


Carbon Dioxide Emissions from Fossil Fuel Combustion in California -- 1999

Source: Inventory of GHG Emissions, CEC, Nov. 2002

31Efficiency


United States Energy Consumption 1949 to 2001Source: Table 1.5 Annual Energy Review; data for 2001 is preliminary

0

20

40

60

80

100

120

194919511953195519571959196119631965196719691971197319751977197919811983198519871989199119931995199719992001

Quadrillion Btus

32Efficiency


Energy Consumption Per Person 1949 to 2001Source: Table 1.5 Annual Energy Review; data for 2001 is preliminary

0

50

100

150

200

250

300

350

400

194919511953195519571959196119631965196719691971197319751977197919811983198519871989199119931995199719992001

Million Btus

United States

33Efficiency


Energy Intensity in the United States Energy Consumption Per $ of Gross Domestic Product 1949-2001

0

5

10

15

20

25

194919511953195519571959196119631965196719691971197319751977197919811983198519871989199119931995199719992001

Thousand Btus per Chained 1996 $

Source: Table 1.5 Annual Energy Review; data for 2001 is preliminary

Energy Costs = 6% of GDP in 1999

or $6000/family

34Efficiency


Annual Rate of Change in Energy/GDP for the United States International Energy Agency (IEA) and EIA (Energy Information Agency)

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

IEA data EIA data

- 2.7%Average = - 0.7%- 3.4%

35Efficiency


Annual Rate of Change in Energy/Gross State Product for California(Sources: EIA and California Department of Finance)

-7.0%

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

Average = -1.0% -4.5% -3.9%

36Efficiency


World Primary Energy Consumption1980 to 2001

Source: EIA

0

50

100

150

200

250

300

350

400

450

1980198119821983198419851986198719881989199019911992199319941995199619971998199920002001

Quads (10^15 BTUs

)

20-year annual growth was 1.7%

efficiency energy for the future energy future of the west: (1) demand response and dynamic pricing;...

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