Abby L. Harvey
GHG Monitor
11/7/2014
The 1.5 percent annual incremental savings suggested in building block four of the Environmental Protection Agency’s proposed carbon emission standards for existing coal-fired power plants is not feasibly achievable through third party energy efficiency programs alone, Omar Siddiqui, Senior Technical Executive at the Electric Power Research Institute explained during a webinar hosted this week by EPRI and Resources for the Future. EPRI compared the figures presented in the EPA regulation, dubbed the Clean Power Plan, with EPRI’s own energy efficiency assessment and concluded that relying only on energy efficiency programs that utilities or other third parties would administer the 1.5 percent annual incremental savings target is unattainable. “The 1.5 percent annual incremental savings target … by our modeling estimates, this is greater than what can be attained. It exceeds the economic potential for energy efficiency programs alone,” Siddiqui said.
EPRI examined energy efficiency programs in a range of scenarios. The “economic potential” scenario, which assumes that every customer opts for the most efficient measure within reasonable economic bounds, even if it may not be the least cost up front, when run through the EPA’s annual incremental savings metric resulted in only about .9 percent annual incremental savings, Siddiqui said. Further, the more realistic “achievable potential” scenario, which takes into account economic, supply and perception issues results in only .5-.7 percent incremental savings each year Siddiqui said.
However, this shows only one piece of the demand side energy efficiency equation. “What’s key here [is that] we’re talking about just the impact of energy efficiency programs that utilities or other third parties would administer, but it doesn’t include the impact of other mechanisms apart from energy efficiency. The most readily citable example would be the impact of codes and standards not currently legislated but that if enacted would provide greater levels of energy savings over all. So that is an important factor when one looks at the attainability of that 1.5 percent.”
Cooperation Key to Attaining 1.5 percent
Because reaching the 1.5 percent annual incremental savings target cannot be reached by energy efficiency programs alone cooperation amongst state agencies and governments is going to be very important in developing a feasible plan. This presents a challenge due to the complexity of many of these systems, Dian Grueneich, Senior Research Scholar at the Precourt Energy Efficiency Center at Stanford University said. “With 111(d) we have an additional coordination challenge that essentially the folks on the hook for 111(d) compliance at the state level are whatever that state’s entity is that is in charge of air quality compliance with federal rules … on the other hand, rate payer funded programs are overseen by the state utility commissions, of which every state has one, and then if you have codes and standards or tax incentives or grants, those can be done through a state energy office and then you may also have activities undertaken by local government that result in energy efficiency savings,” Grueneich said.
Luckily, Dian said, there already exists a framework within many states that can be used as a jumping off point to create a system that works within the EPA standards. “The good news is that every single state has the potential to have greater energy efficiency savings. Under our traditional view we look at energy efficiency as a cost effective solution and we’ve got a very good framework already in place. Forty-seven states in fact, currently have the utility demand side energy efficiency programs and a majority of states, 27 states, have energy efficiency standards or goals, so this is really taking a framework that we already have in place and building and expanding on it. EPA, when it was calculating the state’s emissions goals included only the ratepayer funded energy efficiency programs which typically are operated by utilities,” she said. “At the same time the states can use in getting to that 1.5 percent incremental singings per year … all types of energy efficiency in their implementation plans; state building codes, tax incentives, financing, ESCO programs etc. The key is going to be showing those savings and dealing with any interactions.”
