How SMUD Re-Engineered Itself to Focus On Decarbonization Through Flexibility and Electrification

March 24, 2020

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Summary of the Key Points

Recently, the Sacramento Municipal Utility District (SMUD) became the first electric utility in the nation to begin evaluating all of its demand-side manage management programs in terms of avoided carbon emissions rather than average savings.

In this  Building Decarbonization Coalition webinar, Scott Blunk, Strategic Business Planner at SMUD, explains how the challenge of this transformation is affecting every aspect of SMUD's business. Recurve's Matt Golden and Adam Scheer then outline how Recurve is working with SMUD to quantify demand flexibility at the meter to correctly measure carbon reductions on an hourly marginal basis.

Currently, 65 percent of customers in the United States are served by a utility with a carbon or emission reduction goal, according to the SEPA Carbon Reduction Tracker.

However, SMUD is leading the way in not only committing to zero-carbon but also aligning internal goals directly with avoided carbon as the key metric. Moving to a carbon-based accounting approach is critical for utilities like SMUD to meet their greenhouse gas goals, especially as they electrify all residential energy use.

A key part of this transition is understanding how the carbon intensity of the grid varies by the hour and season. The chart below shows how the marginal emissions intensity of SMUD’s grid varies depending on the season and time of day in 2020 and projected to 2030. While adding renewable energy will reduce carbon over the course of the decade, there are still many times (such as winter mornings and summer evenings) when the grid will still rely on fossil fuels to serve additional load (red areas).

The temporal nature of carbon emissions has important implications for where demand-side programs should be putting their focus. Working with E3, SMUD studied the carbon savings value of various measures to its grid, both now and into the future (values are specific to SMUD’s service area). The analysis shows that as renewable capacity grows, different measures will have different carbon savings value and costs. In the table below, we see that installing an electric heat pump will have more carbon value over time than residential solar PV.

Electrification and other decarbonization efforts affect the nature and timing of grid peaks as well. Understanding where and when these changes occur allows utilities to better optimize their efforts. 

In the clip below, Recurve's Adam Scheer explains how Recurve connected the dots between SMUD's GHG forecast to the actual meter-based impact of electrification.

Recurve’s analysis showed that the installation of heat pumps creates a new winter morning heating load, and because heat pumps double as more efficient air conditioners, installing them reduces summer peak air conditioning load, resulting in a dual annual peak (though in climates with less existing AC, there may be increased summer ramps as well).

The charts below show the impact of heat pump electrification on winter and summer demand for the average single-family home in more detail. The additional usage in the winter is concentrated in the morning hours before falling midday. This makes sense as customers heat their homes in the mornings but require less heating in the warmer, sunnier midday period. In the summer the heat pump serves as an air conditioning efficiency upgrade and strong midday/early evening savings are observed.    

Overall the heat pump eliminates gas consumption for space heating and adds about 1.1 MWh of annual electric load per household. The gas savings provide an immediate GHG reduction of roughly 1.5 tons per year. The GHG impacts on the electric side vary over time as renewables continue to decarbonize the grid, as shown in the figure below.  

Even in the short term, the GHG savings from gas outweigh the increased electric GHG.  

The half a ton per year increase in electric GHG emissions starting in 2020 steadily improves over time as the grid gets greener until, by 2040 (bottom panel), heat pumps are saving grid carbon in addition to the gas savings from electrification. 

Lessons Learned

We now understand that while electrification is a key strategy for decarbonization, it is not a silver bullet. The addition of new winter heating loads during carbon-intensive periods highlights an opportunity for other demand flexibility measures--including traditional building shell efficiency--to help by both allowing for “right-sizing” equipment and shaving demand from both summer and winter peaks. This is how we can use a coordinated mix of demand-side resources to make the entire system more carbon-efficient, faster while also giving customers the best experience possible.

In thinking ahead to programs that can support holistic, beneficial electrification, Recurve’s work with SMUD to understand the meter-based performance and optimization strategies for efficiency begins to paint a clear picture. The figure below summarizes the impacts of SMUD’s Home Performance Program, which also focused on single-family homes, providing customers building shell and HVAC system retrofits. The dotted traces show the seasonal load shape impacts for the average participant, who saved about 1 MWh per year. 

The solid lines show the metered program impact for the top 15 percent of customers, identified by pre-program peak usage patterns. These customers achieved nearly three times the summer peak savings with much greater savings depth (savings as a percent of consumption). There are tens of thousands of customers in SMUD’s territory who meet this load profile and who offer a highly cost-effective electrification + efficiency opportunity that can also yield much greater GHG savings.

In the following clip, Recurve's Matt Golden explains how using this kind of targeted approach to identify the highest potential customers in advance (instead of relying on the average impact of an intervention) is the key to both making programs cost effective and to scaling demand flexibility to cut carbon emissions as quickly as possible.

This is the path to scalable demand-side decarbonization: Find customers most in need who can drive cost-effective benefits for the entire customer base. Deliver coordinated offerings with a focus on GHG. Measure impacts at the meter with full transparency so that grid planners, regulators, implementers, and utilities are all seeing the same report card. Scale what is clearly working.  

In SMUD’s case, the forward-thinking move to GHG creates clarity and alignment that opens the door to cost-effective, scalable, demand-side decarbonization. Recurve’s work is helping them understand how to walk through it.

Download the slides here.

The Secret Plan for Decarbonization: How Demand Flexibility Can Save Our Grid

Read our Electricity Journal article to learn how behind the meter flexibility can work as a true grid and climate resource.

Read the articleRead the article

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