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2019 California Energy Efficiency Action Plan: Moving to Demand Flexibility and Scaling EE

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December 18, 2019
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2019 California Energy Efficiency Action Plan: Moving to Demand Flexibility and Scaling EE

California’s Energy Efficiency Action Plan

As California turns its focus to a 100 percent clean energy future, the California Energy Commission (CEC) released its comprehensive action plan for achieving the state’s energy efficiency and building decarbonization goals. The 2019 California Energy Efficiency Action Plan charts progress toward doubling energy efficiency by 2030, explains where current targets are falling short and makes important recommendations for how the state can achieve its goals.

We commend the CEC on its clear vision for evolving energy efficiency from kWh-based reductions to demand flexibility that can deliver the time and locational impacts needed to balance renewable energy and accelerate towards our 2045 zero carbon goals.

Among many recommendations, the CEC's action plan echoes themes that are central to Recurve’s vision for energy transformation, including open yet secure access to energy data, open source solutions for measuring results, and enabling markets for demand flexibility through pay for performance.

The plan also offers hope for synchronizing the state's myriad efficiency policies and objectives through data and transparent measurement and forecasting. Exchange of information forms the backbone for coordination across agencies, between regulators and the regulated, and within the market. Commissioner McAllister went big on data before it was “cool” and has stayed the course to bring this reality forward. Data is the raw ore of the energy transition, especially at the grid edge.  Making intelligent use of this data is critical to ensure that actions are coordinated, properly valued and aligned with the ultimate goal of decarbonization.

CEC Commissioner Andrew McAllister sums it up nicely in his introductory letter to this report:

“With apologies to Shakespeare: The grid is the thing! As we transform our energy systems to minimize greenhouse gas emissions, efficiency will be a bedrock resource, creating headroom in the electricity grid for new loads from transportation and buildings. Further, it is no longer sufficient to utilize energy efficiency only as a static resource. Energy systems – new homes, replacement heating and cooling equipment, industrial processes and the like – must be both highly efficient and flexible to the maximum extent possible. Flexibility means interactivity with the grid: the ability to manage energy usage, proactively and situationally, to minimize both its cost drivers and its carbon content.”

We of course completely agree as well with the report’s energy efficiency principle on quantifiable savings, which states that “to successfully set a path to achieve the state’s energy and climate goals, the 2019 EE Action Plan must have accurate data from which to calculate electricity, natural gas, and GHG savings. To the extent such data are available, they are leveraged in determining California’s progress toward its goals.” 

Everyone should read the entire report (here). 

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We took the liberty of pulling out some of the sections we think are most interesting from the report which you can read below:

Energy Efficiency as a Resource  (PAGE 22)

New tools combining metering, analytics and controls are enabling robust assignment of temporal and locational value to efficiency as a grid system resource. For example, normalized metered energy consumption (NMEC) methods can calculate actual time-specific energy savings from real consumption data with statistical rigor. Pervasive – and increasingly automated – use of NMEC methods will allow efficiency programs and the broader energy services marketplace to target locales, customer classes and measures most effectively, and cost-effectively – that is, when and where energy savings are most valuable. Further, matched with real-time data on the carbon content of grid supply, these methods can optimize demand, moving it up or down, to achieve active emissions reduction. Such approaches hold great promise for cost optimization – from customer to system – as well as for informing program portfolio development, emissions-related goal setting, long-term procurement, and transmission and distribution system planning. If properly supported by the energy agencies, these tools will enable demand-side resources to contribute centrally to California’s energy and climate transition. 

Program Designs and Energy Efficiency as a Resource (PAGE 95)

California has unique tools at its disposal to implement new program designs and to procure resources that emit fewer GHG emissions. Through the IRP process, the state is increasing clean energy procurement. Energy efficiency and demand flexibility tools should be available for procurement, but are not currently pursued in this process. 

  1. Develop ways to incorporate aggregations of energy efficiency and demand flexibility into long-term planning (Lead: CPUC, IOUs; Partners: CEC, California ISO, program implementers). 
  2. Develop similar methods for POUs to integrate aggregations of energy efficiency and demand flexibility into each IRP (Lead: POUs and CEC; Partners: California ISO, program implementers). 

California should not only look to expand the role of efficiency and demand flexibility in resource procurement, but also in program designs. Hourly data from smart meters and lessons learned from successes in other states and Europe reveal promising new programs for California. 

  1. Expand and foster the use of meter-based savings programs in both incentive based programs and resource procurement (Lead: CPUC and utilities; Partners: CEC, California ISO, program implementers, energy service companies). 
  2. Encourage pay-for-performance approaches outside the ratepayer portfolio (Lead: Legislature; Partners: CPUC, CEC, California ISO, utilities, program implementers). 
  3. Leverage aggregated, normalized energy consumption data and open source methods to enable new markets and unlock more private market capital

Open-Source Energy Solutions (PAGE 62)

California has been a leader in the development and use of open-source energy measurement and verification tools, for example the energy standards use an open source software to model energy use. Stakeholders initiated a process in 2012 to develop transparent, empirically tested methods for tracking demand change at the utility meter. The process, known as CalTRACK Methods, is now part of the Energy Market Methods Consortium (details in box on the following page) and brings together state representatives, government agencies, and private sector stakeholders. 

The CEC supplied initial funding to develop the open-source OpenEEmeter software. The software engine implements the CalTRACK methods to quantify monthly, daily, and hourly changes in energy consumption from utility meters. 

Discussion of SB 350 Energy Efficiency Doubling Progress (PAGE 69)

The updated SB 350 reference case scenario shows the state will fall short of the 2030 goal. Compared to the 2017 results, the expected electricity savings are about 20 percent lower, natural gas savings are 50 percent lower, and combined (Btu) savings are 17 percent lower in 2030. New electricity savings barely stay ahead of the decay of older savings. California needs to assess its electricity efficiency programs to unlock the economic potential documented in the CPUC potential and goals study. If only about 10 percent of the estimated economic potential electric savings are achieved each year, as Figure 18 shows, the state will not be able to achieve its goal. Natural gas savings are closer to reaching a 2030 goal. This finding highlights the success of codes and standards and utility incentive programs to reduce natural gas demand. Similar to electricity efficiency programs, new program designs and technologies should be introduced to close the natural gas savings gap. Taken together, all energy savings fall short of a 2030 goal unless new action is taken to increase standards compliance, turn over more outdated equipment, increase program participation, and infuse additional funds into the energy efficiency market. 

Conversion of Efficiency Savings to Avoided Greenhouse Gas Emissions  (PAGE 69)

While energy efficiency is the primary goal of this 2019 EE Action Plan, it is also becoming equally important to reduce GHG emissions through energy efficiency and demand flexibility. As described in greater detail in Goal 3, GHG emissions from energy use vary by the time of day and season. 

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The sections above are just a very small part of this 166 page action plan, selected based on Recurve’s perspective. We highly recommend reviewing the report in total (here).

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