Comments for Workshop on
EEU Budget for 2009-2011
August 6, 2008
1
Outline of Presentation
1. The Board’s Questions to Efficiency Vermont
2. Efficiency Vermont’s Approach to the Board’s
Questions
3. Approach to Ramp-up Response
4. Efficiency Vermont’s Ramp-up Response
5. Rate of Ramp-up
6. Potential Expansion Strategies
7. Potential Changes in Costs and Savings
2
The Board’s Questions to EVT
• Can EVT ramp up the delivery of
energy efficiency services as quickly
as CLF and VPIRG have proposed?
• If so, what types of services would be
increased or offered for the first time?
3
Efficiency Vermont’s Approach
to the Board’s Questions
• We will seek to meet the Board’s objectives for the EEU
with whatever budget level we are provided.
• Our response is preliminary; we have not yet adequately
considered all aspects of the proposed ramp-up,
including the time necessary for:
• Planning
• Development
• Capacity expansion (both internal and external)
4
Our Approach
to Ramp-up Response
We conducted rough estimate of potential costs and
savings for 2011 at the major market level, including
consideration of:
• Trends in technology and market opportunity
• Recent history and expected % changes in
EVT cost / MWh
• Potential to take target area strategies
statewide
5
Summary
of Efficiency Vermont’s Response
While challenging, we believe it would
be possible to increase spending on
cost-effective energy efficiency by
2011 to a budget level commensurate
with that proposed by CLF and
VPIRG.
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Ramp-Up
To ramp up responsibly to the 2011
budget level proposed by CLF and
VPIRG, we suggest a ramp-up path that
would likely rise more slowly at the
beginning:
$85
?M
$85
$60
?
$30.75
$31 M
2008
?
$40
2009
2010
2011
7
Other Ramp-up Issues
• Consider ramp-up and ramp-down
demands and effects on market partners
and customers
• To minimize market disruption, large rampups should be sustained for several years;
and if ramped down, at a gradual pace.
• What planning assumptions would be
made beyond 2011?
• Would ramped-up levels be maintained?
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Potential Expansion Strategies
Markets
Key Ramp-Up Strategies
Business Market Opportunities
Lighting
Increase incentives & more upstream focus
HVAC and other Business Market
opportunity
Increase incentives & more upstream focus
Business Retrofit
More comprehensive in all retrofit markets
Largest Customers (> 500 MWh, accountmanaged)
Expand target area strategies statewide (Account
Management)
Expand target area strategies statewide (Direct
Install)
Expand Direct Install to Small Commercial; new
vendor-driven options
telecommunications, hospitality, data centers,
others tbd
Large Commercial (40-500 MWh)
Small Commercial
New target / niche markets
New vendor-driven target Initiatives
Business New Construction
Pay for performance for compressed air,
refrigeration, farms, and other technologies and
sub-markets tbd
Stratgeies tbd for higher market share
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Potential Expansion Strategies
Markets
Key Growth Strategies
Retail Efficient Products
CFLs
Appliances and other retail products
Focus on maintaining success and on specialty
products with lower adoption rates
Strategies for higher market share; refrigerator turnins, higher tier incentives
Advanced lighting (LEDs)
Phase in and aggressive promotion
Consumer electronics
ENERGY STAR® PCs, Smart Strips, upstream
promotion
Residential Existing Homes
Home Performance with ENERGY STAR
Expand participation in HPwES
Direct Install lighting / appliances (new)
Direct install in targeted communities
New technologies for electric DHW
Retrofit or Direct Install
Feedback / Behavioral
Tools that provide customer feedback (e.g., Blue
Line; Positive Energy; others tbd)
Solar DHW
Incentives and promotion (subject to screening)
Residential New Construction
Strategies for higher market share, deeper savings
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Supplemental and
Back-up Strategies
• Open solicitation for third-party / vendor
proposals
• Pay for customer energy reduction (similar to
California 20/20) – possible tie-in to smart meters
• Downsize strategies – (e.g., right-sizing
equipment, smaller appliances, smaller homes)
• Next generation, deep direct installation for
residential and / or small business
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Potential Changes
in Costs and Savings
With savings from CFLs dropping, an
expected greater reliance on measures
and strategies with higher costs, and
more aggressive strategies, the levelized
cost of efficiency will likely increase. It
would still remain well below avoided
supply costs.
2008
EVT Cost ($M) $
2011
28 $
77
Annual MWh 116,000 159,000
Summer Peak MW
Winter Peak MW
16
17
TRB ( $M ) $ 100 $
EVT Levelized
Cost / kWh
$0.120
$0.100
$0.080
156
$0.051
$0.060
$0.040
24
22
$0.107
$0.025
$0.020
$2008
2011
AVOIDED
COST
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Potential Change
in Levelized Cost and TRB / kWh
by Major Market
EVT Cost / kWh
EVT TRB / kWh
2007
2007
2011
2011
Business New Construction
$ 0.029 $ 0.045 $ 0.117 $ 0.162
Business Market Opportunities
$ 0.050 $ 0.064 $ 0.097 $ 0.154
Business Retrofit
$ 0.023 $ 0.045 $ 0.086 $ 0.127
Retail Efficient Products
$ 0.012 $ 0.047 $ 0.088 $ 0.131
Residential New Construction
$ 0.079 $ 0.118 $ 0.277 $ 0.295
Residential Retrofit
$ 0.056 $ 0.098 $ 0.065 $ 0.110
Total
$ 0.025 $ 0.051 $ 0.095 $ 0.140
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Potential Change in Spending
by Major Market
2007
2011
Resident ial Ret rof it
Residential Retrofit
17%
Business New
Construction
14%
5%
13%
Const ruct ion
Business Market
10%
Opport unit ies
12%
Ret ail Product s
Residential New
Construction
16%
Retail Products
16%
Const ruct ion
Resident ial New
Business M arket
Opportunities
7%
Business New
6%
Business Retrofit
30%
Business Ret rof it
54%
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Planning
for CFL Market Transformation
Efficient Products
Percentage of Total EVT
MWhs, Lifetime MWHs, expenditures, and TRB
In 2007, retail CFLs
accounted for:
• 46% of first-year
MWh
50.0%
• 42% of Summer
Peak MW
40.0%
• 26% of lifetime
MWh
• 25% of TRB
• 14% of costs
45.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2000
2001
2002
% of Annual MWH
2003
2004
% of Lifetime MWH
2005
% of EVT Cost
2006
2007
% of TRB
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Planning
for CFL Market Transformation
• EVT is collaborating in the DPS investigation of
attribution and savings in the context of the rapidly
changing CFL market to inform 2009-2011 planning
• EVT’s interim planning for 2009-2011 assumes for
Retail Efficient Products:
• 25% reduction in savings per CFL in 2009
• 50% reduction in savings per CFL in 2010
• 75% reduction in savings per CFL in 2011
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