Retooling to improve competitive capability

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  • Documenting Success Eric Hirs t

    T here are several reasons why I think demand-side manage- ment programs are likely to grow

    over the next couple of decades.

    One is the increased emphasis on

    integrated resource planning,

    which recognizes conservation

    and load management as re-

    sources equivalent to and substi-

    tutable for power plants. The sec-

    ond is environmental concerns,

    including global warming. The

    third is financial incentives, which

    Harrison Wellford and Earle Tay-

    lor also mentioned. Last is a

    growing recognition that utilities

    can play an important role in over-

    coming the market barriers that

    stand between Amory Lovins

    holding an efficient lightbulb in

    his hand and an electricity user ac-

    tually getting it screwed into a fix-

    ture.

    I developed a very simple

    spreadsheet model at Oak Ridge

    National Laboratory and used it

    to simulate the effects of an ambi-

    tious scenario of demand-side

    management programs over the

    next 20 years. My results are sum-

    marized in Figure 1. The top curve is the forecast from the En-

    ergy Information Administration,

    which EIA developed for the De-

    partment of Energys National En-

    ergy Strategy. The bottom curve

    is my forecast, which shows how

    much electricity consumption

    could be reduced with aggressive

    DSM programs. This amounts to

    about a 20% reduction by 2010, Table 1: Ambitious DSM Programs

    consistent with the estimates Reduction in electricity use

    made by a number of utilities from DSM in year 2CKKl

    which are conducting aggressive Southern California Edison 13% DSM programs (see Table 1). Long Island Lighting 9%

    Some other beneficial effects of Consolidated Edison 6%

    ambitious DSM programs include: Seattle Cii tight 7% Northeast Utilities 7%

    l cutting electric bills to New England Electric 7% customers in all sectors by more Wisconsin Electric 7%

    than $60 billion per year; Pacific Gas & Electric 6%

    l cutting total U.S. emissions of

    carbon dioxide - not just elec- credible and consistent fashion

    tric utility emissions -by the fact that they really do pro-

    about 9%; and vide gigawatt-hours and cut

    l eliminating the need to build megawatt requirements at times

    over 400 new power plants. of system peak load.

    This all sounds wonderful. But A part of documentation is the

    I have a warning: I want to em- need to develop widely used defi-

    phasize the need for a stronger an- nitions for DSM programs. Right

    alytical basis for DSM programs. now, when we talk about partici-

    I second the point that Earle Tay- pation, program costs, and energy

    lor and Roger Sant made about savings, we all have different con-

    the need for comprehensive and cepts and different terms in mind.

    competent evaluations of DSM But just as we have developed

    programs. If we are serious about terms for power plants, such as

    treating demand-side manage- heat rate and capacity factor, we

    ment programs as a resource, have to do the same thing on the

    then we have to document in a demand side. n

    Figure 1: DSM Can Make a Big Diirence in the Next 20 Years

    ELECTRICITY USE (BkWh) 5,000

    EIA/NES

    1970 1980 1990 2000 2010

    December 1991 55

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