The Smart Grid Enabling Energy Efficiency and Demand Response Clark W The Smart Grid Enabling Energy Efficiency and Demand Response Clark W. Gellings Chapter 3: Electric End-Use Energy Efficiency Brevard Community College ETP1400 Distributed Electrical Power Generation and Storage Bruce Hesher 433-5779

Defining Electric End-use Energy Efficiency Why would a utility company try to encourage their customers to buy less of their product? Are they environmentally conscious? Are they trying to avoid the cost of building new power plants and increased fuel costs? Does government policy play a role? Whatever their motivation, Demand Side Management (DSM) is practiced by utilities. Energy surveys, energy audits, and rebate programs are all used as tools to control demand.

Energy Efficiency The “load shape”, amount or pattern, of the energy demand is important. Peak demand defines the maximum capacity of the system. FPL’s “On-call” program is designed to limit peak demand. It is very expensive to increase capacity. Some utilities charge peak rates at certain times of day to encourage users to move their consumption to off peak hours. Day vs night, hot vs cold, etc. all have an affect. Energy efficiency has the fastest financial payback and is the simplest to implement. Demand Side Management/Planning includes such activities as: energy storage, interruptible loads, customer load control, dispersed generation, and energy efficiency.

Is Energy Efficiency Cost-Effective? Yes. An energy consumer should always target efficiency before renewable energy sources. Any funds not spent on electricity go directly to the bottom line (home or business). Think negawatts. Utility sponsored energy conservation activities vary according to the situation of each utility company. Utilities must consider, capacity alternatives, environmental impacts, and etc. See: http://www.fpl.com/residential/energy_saving/programs/index.shtml

Financial Impacts of Energy Efficiency Dealing with energy efficient technologies involves promoting the adoptions of efficiency end-use technologies, the adoption of electric technologies which replace gas or oil end use and/or invoking change in the customer’s behavior. Additionally, efficiency measure that reduce the consumption of oil or gas can have financial benefit in the form of CO2 credits. See “Cap and Trade/Tax”. Regardless of your view on carbon taxation, Spending less on electricity is a good idea. A little effort and a little money can save a lot of money!

How Desirable is Energy Efficiency? The desirability of energy efficiency depends on many factors. See Hertzog p152 (Load Shape and Load Shifting). For example: if a utility has a large photovoltaic plant they may want to encourage users to charge the batteries in their PHEV’s during the day. If they charge the batteries during the night, the utility will need to purchase fuel to meet the demand. If the utility is in a situation where they can add capacity easily, they may expand their efforts to do so instead of encouraging efficiency.

A Renewed Mandate The 1970’s and 80’s showed great stride in the rate of improvement of end-use electric efficiency. The oil embargos of the 70’s started people thinking about consumption, cost, renewables, delivery, and etc. Globally the rate of energy usage increase slowed. Since the 1990’s the rate of improvement has slowed. The lack of willingness to develop domestic oil resources and the lack of a clear U.S. energy policy have contributed to uncertainties in the petroleum market. The uncertainty of oil markets and the increase in the consumption of emerging oil consumers like China and India have driven up prices and renewed interest in renewables, efficiency and conservation.

Drivers of Energy Efficiency p58 The primary reasons to increase worldwide energy efficiency can be grouped into four main factors: 1. Worldwide energy consumption is growing. 2. Fossil fuel resources are finite. 3. A dependence on non-domestic energy supplies compromises national security. 4. There is a increasing perception that the environment is suffering as a result of resource extraction, conversion, and utilization.

Renewed Interest Population growth, increased energy per capita in developing countries, limited resources, increased costs associated with finding extracting and converting less accessible energy resources, national security, and the environment all indicate the need for energy efficiency. In the U.S. since 1973 energy efficiency has provided more “capacity” than efforts to develop new resources. There is also a move toward personal self-sufficiency that drives many people to depend less on utilities for services. Money is a motivator toward meeting your own needs!

Reducing Greenhouse Gas Emissions The debate continues with some providing evidence they allege proves the anthropogenic (human caused) forcing of climate change due to greenhouse gas emissions and others voicing out that there is insufficient reason to believe that climate change is not part of a natural cycle. No matter where you stand on the issue of greenhouse gases, it is a motivating force in energy efficiency.

What Can Be Accomplished? p65 Energy efficient end-use technologies and practices are some of the most cost-effective near-term options for meeting future energy requirements. Many can be deployed faster and at lower cost than supply-side options such as clean central power stations. The cost benefits are also realized directly by the consumer. Some approaches rely on currently available, readily deployable technology; while others rely on future technological breakthroughs. Technological breakthrough cannot but mandated; but it sure can cost a lot! If you Google “U.S. Energy Efficiency Achievable Potential Energy Savings” you will see that there are a lot of entities estimating energy savings.

IEA Estimates In their World Energy Outlook (WEO), the International Energy Agency (IEA) discusses two potential scenarios for the worlds energy future: The reference scenario accounts for all government energy and climate policies currently in effect in predicting energy use patterns through 2030. It does not account for future policies or technological advances. The alternative policy scenario accounts for all policies being considered. It therefore predicts what is possible if currently considered policies are enacted. The alternative scenario does show lower energy use and cleaner environment. The alternative policy scenario would result in 12% lower energy use by 2030 than the Reference Scenario.

United Nations Foundation Estimates In a 2007 report the United Nations Foundation they make a more ambitious goal of doubling the rate of energy efficiency improves to 2.5% for thee G8 nations. It was 2% from 1973 to 1990 but dropped to 0.9% between 1991 and 2004. The UN plan also calls for G8 countries to reach out to Brazil, China, India, Mexico, and South Africa to help them achieve energy efficiency goals. The G8 account for 46% of world energy consummation and the G8+5 account for 70%. The G8 goals would reduce energy consumption by 22% relative the Reference Scenario by 2030.

U.S. Electricity Use by Sector

The cost of Savings The charts on p74 and p75 show the cost of energy savings. Note that like most things there is low lying fruit and things that cost more to achieve.

Energy Efficiency Potential in the U.S. The total energy savings due to efficiency is estimated to be 230TWh ($27 Billion at 12¢) or 5.5% with a peak reduction of 7.5%. Twenty percent of these saving would be from residential where high efficiency air conditioners, improved building shell measures, energy efficient lighting, and appliances. Residential construction standards will also play a part. Half of the potential savings are in the commercial sector. More efficient HVAC systems, improved lighting, and improved. The remaining 30% would come from the industrial sector where more efficient motors and manufacturing methods are important.

Cost of Energy Savings Some energy saving measures cost more than others both for total energy and/or peak demand. Peak Total

U.S. Energy Efficiency Savings Estimates by Sector

Conclusion Improving energy efficiency will require deliberate, concentrated and effective policies and programs. All of the studies summarized in this chapter require that specific sets of policies and programs be implemented in order to maximize the potential for energy efficiency improvement. These studies show that energy efficiency should be part of the overall approach to deploying a smart grid.