Vermont Electric Energy
Efficiency Potential Study –
Draft Findings
April 10, 2006
Overview of Presentation
• Key findings from draft report of April 9, 2006
– Load forecast for Vermont (1.5% a year before DSM, 1.0% a
year after DSM)
– mWh savings potential – base case
– Sources of electric energy savings potential
– Cost effectiveness results
– Annual implementation costs
– Rate impacts
• Key assumptions
• Findings by Sector
GDS Associates, Inc.
2
Vermont kWh Sales Forecast - Before and After
DSM (2006 to 2015)
8,000,000,000
7,000,000,000
6,000,000,000
5,000,000,000
4,000,000,000
3,000,000,000
2,000,000,000
1,000,000,000
0
Before DSM
GDS Associates, Inc.
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
After DSM
3
mWh Savings Potential
Table 1-1: Maximum Achievable Cost Effective Electric Energy Efficiency Potential By 2015 in
Vermont
Maximum Achievable Cost
Effective kWh Savings by 2015
from Electric Energy Efficiency
Measures/Programs for
Vermont (Cost Effective
According to Societal Test)
2015 kWh Sales
Forecast for This
Sector
Percent of Sector
2015 kWh Sales
Forecast
Residential Sector
604,322,635
2,961,041,686
20.4%
Commercial Sector
487,783,850
2,354,697,081
20.7%
Industrial Sector
340,830,973
2,061,496,359
16.5%
1,432,937,458
7,377,235,126
19.4%
Sector
Total
GDS Associates, Inc.
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Key Sources of Savings Potential for
Max. Ach Cost Effective Base Case
• Residential – lighting, electric water heater fuel
conversion, space heat fuel conversion,
standby power
• Commercial – lighting, refrigeration, cooling
• Industrial – industrial lamps and fixtures,
motors
GDS Associates, Inc.
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Cost Effectiveness FindingsSocietal Test
Table 1-3: SOCIETAL TEST AND NET PRESENT VALUE SAVINGS FOR THE MAXIMUM ACHIEVABLE COST EFFECTIVE
ELECTRICITY SAVINGS POTENTIAL SCENARIO FOR VERMONT
Column #
1
2
3
4
5
6
Present Value of
Vermont
Implementation
Costs (Staffing,
Present Value of Marketing, Data
Societal
Present Value of Total Measure
Tracking &
Present Value Of
Net Present
Test
Total Resource
Incremental
Reporting, etc., Total Costs (Col 2 Value savings Benefit/Cost
Benefits ($2006) Costs ($2006)
$2006)
+ Col 3)
($2006)
Ratio
Residential Sector
$457,702,089
$59,152,514
$150,423,957
$209,576,470
$248,125,618
2.18
Commercial Sector
$694,059,369
$272,836,871
$46,764,172
$319,601,043
$374,458,326
2.17
Industrial Sector
$275,160,584
$16,722,419
$23,724,728
$40,447,147
$234,713,437
6.80
Total
$1,426,922,042
$348,711,804
$220,912,856
$569,624,661
$857,297,381
2.51
GDS Associates, Inc.
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Annual Implementation Costs –
Base Case
• Base case assumes EVT pays incentives
equivalent to 50% of incremental measure
costs
• Annual incentives costs are $17.4 million
• Total annual implementation costs are $39.5
million
GDS Associates, Inc.
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Rate Impacts – Base Case
• Annual implementation costs are $39.5 million
• Annual kWh sales decline by 19.4% by 2015
• Lost revenues are calculated based upon VDPS
forecast of retail rates in Vermont
• Savings to Vermonters based on AESC Study
Group avoided generation costs and avoided
T&D costs provided by VDPS staff
GDS Associates, Inc.
8
Table 1-5: Comparison of Potential Electrcity Savings from Recent Studies in Other States
Percent of Total Electricity (GWh) Sales
Sector
Conn.
(1)
2012
California
(2,3)
2011
Residential
Commercial
Industrial
Total
21%
25%
20%
24%
21%
17%
13%
19%
Residential
Commercial
Industrial
Total
17%
17%
17%
17%
15%
13%
12%
14%
Residential
Commercial
Industrial
Total
13%
14%
13%
13%
10%
10%
11%
10%
GDS Associates, Inc.
Big Rivers
Vermont
Mass. Southwest
(KY)
Georgia New York
(4,5)
(4,5)
(6)
(7)
(8)
(9)
2012
2007
2020
2015
2015
2012
Technical Potential
26%
26%
33%
37%
37%
33%
41%
33%
11%
17%
22%
33%
29%
37%
Maximum Achievable Potential
18%
30%
21%
26%
32%
22%
38%
9%
32%
15%
16%
31%
20%
30%
Maximum Achievable Cost Effective Potential
16%
31%
9%
21%
10%
10%
9%
21%
7%
24%
9%
12%
Puget
Oregon Sound (WA) NJ/NH/ PA Wisconsin
(10)
(11)
(12)
2013
2023
2011
2015
28%
32%
35%
31%
17%
7%
0%
12%
7%
6%
0%
6%
35%
35%
41%
9.2%
9
Key Assumptions
•
•
•
•
•
•
New benefit/cost screening model
Line losses
Reserve margin
Electric avoided costs and fossil fuel prices
Externality adders
Maximum achievable penetration rate for
efficiency measures
GDS Associates, Inc.
10
New Benefit-Cost Screening Model
• Built by GDS Associates over the past five years
• Operates in an Excel environment
• Has been approved by regulators in other
States
• Can handle over 110 energy efficiency
measures
• User-friendly and easy to use
GDS Associates, Inc.
11
Key Assumptions – Line Losses
Marginal Energy Losses by Costing Period (% of Sales)
Winter Peak
21.2%
Winter Off Peak
12.4%
Summer Peak
19.5%
Summer Off Peak
14.5%
Average Variable Losses at Peak Hour (% of Sales)
Peak Hour
15.2%
GDS Associates, Inc.
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Key Assumptions for Electric Avoided
Costs
• Electric generation avoided costs for Vermont –
from December 2005 AESC Study Group report
• Fossil fuel prices - from December 2005 AESC
Study Group report
• T&D avoided capacity costs – from VDPS ($163
per kW in 2005 dollars)
• Reserve margin of 13.8% provided by VDPS
staff
GDS Associates, Inc.
13
Key Assumptions for Externality
Adders for Vermont Societal Test
• Non – energy benefits adder of $.0081 per kWh
saved (in 2005 dollars) applied to electricity
savings
• Non – energy benefits adder for fossil fuel
savings obtained from VDPS staff
• Costs of electric energy efficiency measures
reduced by 10%
GDS Associates, Inc.
14
Key Assumptions for Maximum
Penetration of Efficiency Measures
• Maximum penetration rate of 80% for base
case where incentives of 50% of incremental
cost are paid (base case)
• Maximum penetration rate of 85% for base
case where incentives of 100% of incremental
cost are paid (high incentives case)
GDS Associates, Inc.
15
Residential Sector
Findings
April 10, 2006
Vermont Residential Sector
• Much has already been accomplished in VT
• EVT has already saved a significant amount of
electric energy and demand
• This is equivalent to a significant percentage of
2005 annual kWh sales in Vermont
GDS Associates, Inc.
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Residential Savings Summary
• Significant cost effective electricity savings
potential still exists
• Important to understand how electricity is
used in the residential sector
• Residential sector is forecast to have the
fastest kWh sales growth for 2006 to 2015
(1.6%)
• Majority of savings potential is in lighting and
electric water heater fuel conversion
GDS Associates, Inc.
18
Table 5-1: Summary of Residential Electric Energy Efficiency Savings Potential in Vermont
Estimated Cumulative Savings in 2015 as a Percent of
Annual Savings by 2015 Total 2015 Residential Sector
(kWh)
Electricity Sales
Technical Potential
1,204,671,711
40.7%
Maximum Achievable Potential
670,858,182
22.7%
Maximum Achievable Cost
Effective Potential
604,322,635
20.4%
GDS Associates, Inc.
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Figure 5-2 Summary of Potential Savings
1,400,000,000
45.0%
1,204,671,711
40.0%
40.7%
35.0%
1,200,000,000
Kilowatt Hours
30.0%
800,000,000
670,858,182
25.0%
604,322,635
600,000,000
20.0%
22.7%
20.4%
15.0%
% of Total Res Sales
1,000,000,000
400,000,000
10.0%
200,000,000
5.0%
0
0.0%
Technical
GDS Associates, Inc.
Max Achievable
Cost Effective
20
Vermont Residential Space Heating Fuel Shares - 2005
Fuel Oil Heating
54%
Kerosene
7%
Natural Gas
11%
Other
0%
Prop., Bottled, Tank Gas
15%
Wood
11%
Electric Heating
2%
Wood pellets
0%
Fuel Oil Heating
GDS Associates, Inc.
Kerosene
Natural Gas
Prop., Bottled, Tank Gas
Electric Heating
Wood pellets
Wood
Other
21
Vermont Residential Water Heating Fuel Shares - 2005
Oil
29%
Natural Gas
14%
Bottled Gas
18%
Other (Kerosene, Wood,
Solar, Other)
2%
Electricity
37%
Electricity
GDS Associates, Inc.
Natural Gas
Oil
Bottled Gas
Other (Kerosene, Wood, Solar, Other)
22
Figure 5-8 Residential Sector Maximum Achievable Cost Effective Savings by
Measure Type - Percent of Total Savings
WH Fuel Switching,
35.61%
Efficient Furnace Fan
Motor, 2.29%
Space Heat Fuel
Switching, 7.40%
Lighting, 26.40%
Elec. Dryer Fuel
Switching, 4.26%
Pool, 1.76%
New Construction, 4.32%
Cooling (Programmable
Thermostat, Room AC,
Central AC), 0.95%
GDS Associates, Inc.
Minor Appliances
(Dehumidifier & Standby
Power), 7.64%
Major Appliances
(Clothes Washer,
Refrigerators, Freezers,
Dishwashers), 9.36%
23
Commercial Sector
Findings
April 10, 2006
Commercial Sector Summary
• Significant cost effective electricity savings
potential still exists
• Important to understand how electricity is
used in the commercial sector
• Commercial sector is forecast to have the
slowest growth for 2006 to 2015 (0.5% a year)
• Majority of savings potential is in lighting and
refrigeration end uses
GDS Associates, Inc.
25
VT Commercial Sector Segmentation
Industry Type
Percent of kWh
Sales
SIC Categories
1
Light Mfr / Wholesale
23%
20-39, 42, 50-51
2
Retail
15%
52-53, 55-57, 59, 72, 75-79
3
Food Sales
14%
54, 58
4
Other
11%
01-09, 11-17, 40, 41, 44-49, 84-86, 99
5
Schools
10%
82
6
Lodging
9%
65, 70
7
Health Care
7%
80, 83
8
Office
6%
60-64, 66-67, 73, 81, 87-97
9
Dairy
4%
24
Ski Areas
2%
799
10
Total
GDS Associates, Inc.
100%
26
VT Commercial Sector Segmentation
Health Care
7%
Office
6%
Dairy
4%
Light Mfr /
Wholesale
22%
Ski Areas
2%
Lodging
9%
Schools
10%
GDS Associates, Inc.
Retail
15%
Other
11%
Food Sales
14%
27
Commercial Measures Summary
Measure Category
Space Heating
Water Heating
Space Cooling
Ventilation
Motors & Drives
Lighting
Refrigeration
Miscellaneous
Total
Number of Measures
11
5
7
2
3
24
14
6
72
Note: All measures were analyzed separately for each of the ten building types.
GDS Associates, Inc.
28
Commercial Energy Efficiency
Potential Savings Summary
1,000,000,000
45.0%
948,893,965
40.0%
40.3%
800,000,000
30.0%
560,995,147
600,000,000
25.0%
kWh
487,783,850
23.8%
20.7%
400,000,000
20.0%
15.0%
% of Total Comm Sales
35.0%
10.0%
200,000,000
5.0%
0
0.0%
Technical
GDS Associates, Inc.
Max Achievable
Cost Effective
29
Commercial Energy Efficiency
Potential Savings Summary
Summary of Commercial Sector Electric Savings Potential in Vermont
Technical Potential
Existing Buildings
New Construction
Max. Achievable
Potential
Existing Buildings
New Construction
Max. Achievable Cost
Effective Potential
Existing Buildings
New Construction
GDS Associates, Inc.
Estimated Cumulative
Annual kWh Savings
by 2015
% Savings of 2015
Commercial Sector
kWh Sales
948,893,965
40.3%
925,829,504
23,064,460
560,995,147
40.6%
30.7%
23.8%
547,229,097
13,766,050
487,783,850
476,581,431
11,202,419
24.0%
18.3%
20.7%
20.9%
14.9%
30
Breakdown of Commercial kWh Savings for
Existing Commercial Buildings
Refrigeration
37%
Water Heating
4%
Motors, Pumping
3%
GDS Associates, Inc.
Transformers
0.2%
HVAC, Cooling
14%
Space Heating
3%
Lighting
39%
31
Breakdown of Commercial kWh Savings for
New Commercial Buildings
Water Heating
5%
Refrigeration
52%
GDS Associates, Inc.
Transformers
0.2%
HVAC, Cooling
11%
Space Heating
8%
Motors, Pumping
7%
Lighting
17%
32
Commercial Sector Supply Curve
for Existing Buildings
Existing Commercial Buildings
Maximum Achievable Cost Effective Supply Curve
$0.40
Levelized $/kWh Saved
$0.35
$0.30
$0.25
$0.20
$0.15
$0.10
$0.05
$0.00
0.0%
5.0%
10.0%
15.0%
20.0%
Commercial Buildings Savings Potential as Percent of Commercial Sales
GDS Associates, Inc.
33
Commercial Sector Supply Curve
for New Buildings
Commercial New Construction
Maximum Achievable Cost Effective Supply Curve
$0.40
Levelized $/kWh Saved
$0.35
$0.30
$0.25
$0.20
$0.15
$0.10
$0.05
$0.00
0.0%
5.0%
10.0%
15.0%
20.0%
Commercial Buildings Savings Potential as Percent of Commercial Sales
GDS Associates, Inc.
34
Industrial Sector
Findings
April 10, 2006
Table 7-1: Summary of Industrial Sector Energy Efficiency Potential in Vermont
Savings in 2015 as a Percent
Estimated Cumulative Annual of Total 2015 Industrial Sector
Savings by 2015 (kWh)
kWh Sales
Technical Potential
426,039
20.7%
Maximum Achievable Potential
340,831
16.5%
Maxium Achievable Cost
Effective Potential
GDS Associates, Inc.
340,831
16.5%
36
Figure 7-1 Estimates of the Distribution of 2004 Industrial Sector Electricity
Consumption in Vermont
Agriculture
8%
Other
24%
Food Manufacturing
12%
Wood Products
6%
Transportation
3%
Paper
15%
Computers
19%
Fabricated metal
6%
GDS Associates, Inc.
Mineral Products
7%
37
Figure 7-3: Technical Potential Savings in 2015 by End Use
Melting and Casting
1%
Heating
35%
Motors
52%
Heat Treating
9%
Drying and Curing
0%
Other Motors
2%
GDS Associates, Inc.
Material Processing
0%
Refrigeration
1%
38
Table 7-3 - Industrial Sector Maximum Achievable Cost Effective Savings Potential (kWh) by Type of
Energy Efficiency Measure by 2015
Technical
Potential Savings
by 2015 (annual
Measure #
kWh)
Industrial Energy Efficiency Measure
Percent of Total
1
Efficient industrial lamps and fixtures
113,777,728
33.4%
2
Motor system optimization (including ASD)
66,264,221
19.4%
3
Electric supply system improvements
42,597,920
12.5%
4
Pump system efficiency improvements
27,711,734
8.1%
5
Air compressor system management
18,243,643
5.4%
6
Advanced motor designs
14,877,224
4.4%
7
Other industrial energy efficiency measures
11,894,839
3.5%
8
Transformers (NEMA Tier II)
11,359,445
3.3%
9
Fan system improvements
11,338,238
3.3%
10
Industrial motor management
8,624,478
2.5%
11
Sensor and Controls
8,352,022
2.5%
12
Advanced lubricants
5,157,438
1.5%
13
Advanced Air compressor Controls
632,043
0.2%
Total Industrial Sector Savings Potential
340,830,973
100.0%
GDS Associates, Inc.
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