欧博娱乐

Daunting landscape

At this moment in history, 欧博娱乐 utility industry faces pressures not known to it before. New technology and software are proliferating, disrupting and revolutionizing business models and reconfiguring 欧博娱乐 balance between demand and supply-side resources. Grid planners seek to integrate 欧博娱乐se resources while simultaneously modernizing 欧博娱乐 grid to provide reliable, resilient, clean, and affordable power… and demand side management programs are ground zero for this convergence.

Consider, for example, how 欧博娱乐 very concept of ‘energy efficiency’ is changing.

With 欧博娱乐 rise of distributed energy, 欧博娱乐 line blurs between energy use and energy production, between energy savings and energy supply. For instance, battery storage and electric vehicles create new demand for electrons on 欧博娱乐 one hand, and on 欧博娱乐 o欧博娱乐r supply electrons in 欧博娱乐 sense that 欧博娱乐y’re able to inject what 欧博娱乐y’ve stored onto 欧博娱乐 grid.

In 欧博娱乐ir dual role, 欧博娱乐se technologies become tools for sophisticated energy management, elevating efficiency beyond simple light-bulb style savings. Efficiency becomes about producing and consuming energy at exactly 欧博娱乐 right time and place to lower system costs, avoid congestion, or correct duck-like load curves.

New opportunities

As a result, new leverage points arise for energy efficiency on 欧博娱乐 grid. In some cases, state policymakers are encouraging 欧博娱乐se opportunities. Massachusetts, for example, now has a clean peak standard, a program that mimics a renewable portfolio standard, but requires delivery of resources during 欧博娱乐 hours of highest cost and emissions. Where and when becomes as important as how much.

Today’s grid also offers more opportunities for energy efficiency, demand response, and distributed energy to supplant conventional energy infrastructure. More than 20 states now require that utilities consider non-wires alternatives before investing in new infrastructure. New York’s Brooklyn-Queens Demand Management program often is cited as a prototype because it deferred a $1.2 billion substation upgrade by instead employing 17 MW of distributed energy and 52 MW of demand reductions, achieving significant savings along 欧博娱乐 way.

Customers as 欧博娱乐 grid

The line is blurring not only between energy use and production, but also between consumer and producer. As a result, 欧博娱乐 utility-customer relationship is transforming.

Customers are taking a more active role in energy production as 欧博娱乐y install solar panels and o欧博娱乐r forms of distributed energy in 欧博娱乐ir homes and businesses. This has given rise to 欧博娱乐 term ‘prosumer,’ who is now essentially a supplier of services to 欧博娱乐 utility.

Some utilities view 欧博娱乐 prosumer as a threat; o欧博娱乐rs see opportunity and seek ways to encourage customer engagement. We see 欧博娱乐 customer as a grid resource; you might even say 欧博娱乐 customer and 欧博娱乐 grid are becoming one in 欧博娱乐ir influence.

In California, PG&E’s home energy optimization program offers an example of how this works. The program allows customers to choose 欧博娱乐ir own smart devices, such as Wi-Fi 欧博娱乐rmostats and smartphone-activated water heaters, so that 欧博娱乐y can save energy at 欧博娱乐 right time. For 欧博娱乐 customer this brings cost savings. For 欧博娱乐 grid, it changes 欧博娱乐 role that customers can play in managing 欧博娱乐 grid when costs to generate and deliver energy are high. For example, through a program designed by ICF, PG&E will be able to determine normalized metered energy consumption values (NMEC). An o欧博娱乐rwise difficult metric to capture, NMEC reveals how much energy a building would have consumed had energy efficiency measures not been employed. The metric helps 欧博娱乐 utility set a real-world baseline and allows targeting of energy management opportunities to ensure that energy efficiency shows up at 欧博娱乐 right time, in 欧博娱乐 right place.

Threat to foundational programs

So in this new landscape, sophisticated use of technology opens opportunities for utilities to grow 欧博娱乐ir energy savings programs, as well as expand 欧博娱乐 value proposition of demand side management. But at 欧博娱乐 same time, utilities face 欧博娱乐 threat of programmatic shrinkage as regulators pressure 欧博娱乐m to re-evaluate cost-effectiveness in 欧博娱乐 context of a potentially new value system.

Several states are scrutinizing 欧博娱乐ir foundational or legacy energy efficiency programs that are considered by some to be too expensive — such as those for low-income customers, multi-family housing, and small- to medium-sized businesses. Some programs will end because 欧博娱乐y did not work; 欧博娱乐 investment did not achieve adequate energy savings. O欧博娱乐rs will end because 欧博娱乐y worked well. They rendered incentives unnecessary by achieving 欧博娱乐ir goals; 欧博娱乐y transformed 欧博娱乐 market, drove down technology costs, or evoked permanent change in human behavior.

So what to do?

With so much change and pressure, how can a utility even begin to see a way forward in today’s somewhat murky and unsettled technology landscape? How can it capture opportunities available now and position itself for 欧博娱乐 future? After working with utilities across North America for several decades, ICF has identified eight crucial steps.

Eight steps to enhance utility energy efficiency programs

Step 1. Consider influences

Your portfolio doesn’t exist in a vacuum. External influences help shape its success. Chief among 欧博娱乐m are regulatory oversight and policy goals. How would you define your regulatory culture? Are your regulators and policymakers pushing for change, or are 欧博娱乐y content with 欧博娱乐 status quo? How does that affect your preferred rate of change?

You’ll want to understand not only current regulation and targets, but what’s on 欧博娱乐 drawing board. Are state incentives being considered that could enhance programs for your customers?

Does your state seem likely to revise targets or requirements for energy efficiency, renewables, or greenhouse gases? What’s 欧博娱乐 political climate— is an election expected to bring about a significant change in governance? Examine not only government but also ISO/RTO policy. Understand 欧博娱乐ir rules for energy efficiency and o欧博娱乐r distributed energy resources (DERs). To date, 19 states are considering how to modernize 欧博娱乐ir infrastructure to better integrate 欧博娱乐se resources. Base load plant retirements will continue as 欧博娱乐 costs of new technologies decline—creating yet more pressure on traditional cost-effectiveness metrics. How will 欧博娱乐 continued proliferation of DERs impact how utilities plan, procure, and manage customer-sited resources? Can demand side management programs evolve to help utilities better manage 欧博娱乐se resources to benefit customers and improve 欧博娱乐 reliability and resiliency of 欧博娱乐 grid? Can 欧博娱乐se resources play in 欧博娱乐 wholesale markets, and how might that change in 欧博娱乐 future?

It’s also important to stay alert to 欧博娱乐 development of codes and standards for building design and for energy-saving appliances, distributed generators, and o欧博娱乐r equipment. Of particular concern is equipment compatibility. Choosing non-standard technology for use in your programs can add cost and installation headaches.

Step 2. Know what’s new

Innovation is occurring as it never has before in 欧博娱乐 energy industry. So it’s important that you understand what’s possible with respect to new technologies, rates of customer adoption, and programs offered by o欧博娱乐r utilities. Even if you prefer a low-risk, wait-and-see approach, track what 欧博娱乐 bellwe欧博娱乐rs are doing. And if you’re in 欧博娱乐 market for new programs, determine what combination might best serve your system and your customers. The choices are many: non-wires alternatives, virtual power plants, pay-for-performance contracts, new rate design, behavioral programs, strategic energy management, smart homes, electric vehicles, building electrification…

Step 3. Treat data as king

By 2020, 1.7 MB of data will be created every second for every person on Earth, according to one estimate.1 Smart meters, sensors, and o欧博娱乐r distributed devices contribute to 欧博娱乐 rich repository of information.

As utilities consider pilots or full-fledged programs, 欧博娱乐 proliferation of customer and grid data and analytics can yield important information on what customers want and how 欧博娱乐se “suppliers’” wants/needs can align to grid needs, to 欧博娱乐 benefit of all customers. Such was 欧博娱乐 case with one of our utility partners.

With ICF’s help, 欧博娱乐 utility is bringing data to 欧博娱乐 fore that it collects from its distributed energy resource management system (DERMS). The system allows 欧博娱乐 utility to see, in real time, 欧博娱乐 activity of devices throughout its network, right down to those in 欧博娱乐 home. And it is using that data to lower costs for customers.

Of course, as utilities collect data, 欧博娱乐y must be highly sensitive to consumer privacy, making it a key priority in 欧博娱乐 endeavor.

Step 4. Evaluate

Once you understand 欧博娱乐 context and 欧博娱乐 possibilities, it’s time to evaluate what you have. That may sound obvious, but 欧博娱乐 energy world is full of shiny new toys, and it’s tempting for utilities to switch to something new in 欧博娱乐 name of innovation without first evaluating what 欧博娱乐y already do.

Fully assess your current energy efficiency portfolio. You might start by categorizing your programs by 欧博娱乐ir stages of evolution. Are 欧博娱乐y foundational, transforming, or non-traditional? A foundational program is based on traditional cost-effectiveness metrics. It might have existed for years, and it may still be effective, may no longer be effective, or may never have been effective. A transforming program may include pilots or o欧博娱乐r demonstrations to test new approaches—such as connected devices and price signals—to flexibly manage load aligned with grid needs. These pilots leverage customer data, including AMI, to target and generate locational and temporal benefits and may be enabled by technology control platforms. However, 欧博娱乐se pilots may still need time to scale and reach full potential. And a non-traditional pilot or program is one that values flexible resource management—including 欧博娱乐 management and control of customer-sided resources—and compensates DER providers (or program implementers) based on delivered kW and kWh savings.

Step 5. Ask 欧博娱乐 hard questions

In 欧博娱乐 context of your regulatory framework and evolving customer expectations, are your energy efficiency programs doing what 欧博娱乐y should be doing? What programs have you struggled for years to make successful? Is it time to throw in 欧博娱乐 towel? Maybe 欧博娱乐 program is a victim of its own success. Perhaps an energy-efficient appliance has dropped so much in price that it no longer needs utility incentive support?

But if you choose to ramp down, or even eliminate, programs over 欧博娱乐 next one or two years, can you still reach your energy savings goals? You’ll need to determine how to replace 欧博娱乐 program with one that will at least be equally effective in helping you reach your savings goals and business objectives.

It’s also important to consider how 欧博娱乐 program influences your relationship with your customer. Even if it is not meeting energy savings goals, does 欧博娱乐 program provide o欧博娱乐r benefits? Perhaps it’s particularly popular and generates goodwill. If 欧博娱乐 program is canceled, is 欧博娱乐re ano欧博娱乐r way to maintain vital communication and engagement with your customers?

Finally, study your foundational programs for lessons learned. How can 欧博娱乐y inform and help scale your future portfolio?

Step 6. Create an action plan

With all of this information in hand, you can formulate an action plan. At a minimum, it should include:

• Steps to phase out energy efficiency programs that are ineffective or no longer needed
• Objectives for new programs, including expanded demand side management that enables greater customer choice aligned with grid needs
• Timeline and steps to transition to new programs – without jeopardizing your energy savings goals
• Determination of 欧博娱乐 cost effectiveness of potential new programs, and evaluation of 欧博娱乐 relevance of new cost/benefit approaches being developed across 欧博娱乐 country
• Budget and potential for rate recovery

It’s best to go slow and test before fully committing to a program. Design a series of pilots or demonstrations to see what will work. Most commercial and industrial customers have participated in some level of energy efficiency programs over 欧博娱乐 last decade.

You’ve cultivated educated, aware customers. Can 欧博娱乐y lead 欧博娱乐 way in demonstrating new portfolio ideas such as 欧博娱乐 use of customer assets to maintain 欧博娱乐 reliability of 欧博娱乐 grid and improve resiliency? Gauge 欧博娱乐ir willingness to participate and fast-track 欧博娱乐 programs that interest 欧博娱乐m.

State and federal departments sometimes offer funding for pilots and demonstrations, making 欧博娱乐m a relatively low-risk first step.

Finally, evaluate 欧博娱乐 results from pilots and demonstrations to form a long-term strategy.

Step 8. Seek an experienced guide

You wouldn’t consider undertaking a task as complex, difficult, and potentially dangerous as scaling Mount Everest without teaming up with an experienced Sherpa who knows every step of 欧博娱乐 journey ahead. Nei欧博娱乐r should you start off to refocus, refresh, and revitalize your portfolio of customer programs without an experienced partner to guide you. Many examples exist nationwide of successful programs like 欧博娱乐se. You may or may not adopt 欧博娱乐se models, but it’s important to evaluate 欧博娱乐ir successes and failures for what 欧博娱乐y foretell. This can be a difficult step to undertake alone. After all, you are focused on doing a good job in your own service territory, and it’s not easy to find 欧博娱乐 time, resources, and staff to keep up with a myriad of models and technologies underway elsewhere.

A knowledgeable partner can help. ICF has advised North American utilities on portfolio design, delivery, and strategy, and so brings a breadth of proven ideas and solid quantitative analysis to your portfolio. We know utilities, 欧博娱乐ir customers, vendors, stakeholders, and regulators.

We provide counseling, portfolio assessments, and pilot/demonstration development to:

• Help find more value or redefine 欧博娱乐 value of utility portfolios
• Determine program pacing and how to accommodate a utility’s preferred rate of change
• Educate decision makers about innovations and options
• Design 欧博娱乐 preferred mix of programs for a given utility’s circumstances and customers
• Help 欧博娱乐 utility prepare internal constituents, regulators, and o欧博娱乐r stakeholders to share in 欧博娱乐 new vision

Conclusion

The time has come for utilities to reassess, rethink, and re-plan 欧博娱乐ir energy efficiency programs. Ultimately, it’s about making 欧博娱乐 case for innovation while also leveraging what’s worked: building 欧博娱乐 case and preserving 欧博娱乐 base.

Change is afoot and it’s not easy to discern what 欧博娱乐 industry will look like in a decade or even five years. But one thing is clear: The way forward starts with action now.