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Northwest Power and ConservationCouncil
Slide 1
The Role of Efficiency The Role of Efficiency In Meeting PNW Energy NeedsIn Meeting PNW Energy Needs
Tom EckmanTom EckmanManager, Conservation ResourcesManager, Conservation Resources
Northwest Power and Conservation CouncilNorthwest Power and Conservation Council
Energy Efficiency As A ResourceEnergy Efficiency As A ResourceSeptember 29, 2009September 29, 2009
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Northwest Power and ConservationCouncil
Slide 2
Today’s TopicsToday’s Topics
Energy Efficiency’s Role in the PNW Power Energy Efficiency’s Role in the PNW Power SystemSystem– Historical ImpactsHistorical Impacts
– Projected Impacts of Future Energy Efficiency and Projected Impacts of Future Energy Efficiency and Renewable Resource Development Renewable Resource Development
Can and Should More Be Done?Can and Should More Be Done?– – The Draft 6The Draft 6thth Northwest Power & Conservation Northwest Power & Conservation
Plan’s Assessment of the Remaining Energy Plan’s Assessment of the Remaining Energy Efficiency Potential and Regional Conservation Efficiency Potential and Regional Conservation TargetsTargets
The Evolution of Energy PolicyThe Evolution of Energy Policy
April 18, 1977 – Conservation means a cold dark house
President Carter announces we are engaged in the moral equivalent of war (MEOW)
December 5, 1980 - Conservation declared a resource equivalentto generation
President Carter signs Northwest Powerand Conservation Act
October 11, 2002
President Carter Awarded Nobel Peace Prize
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Northwest Power and ConservationCouncil
Slide 4
Yea See, Yea See, We’re On A We’re On A Mission from Mission from God.God.
For Those of You From Illinois, One For Those of You From Illinois, One Other Event Happened in 1980Other Event Happened in 1980
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Northwest Power and ConservationCouncil
Slide 5
Northwest Power and Conservation Northwest Power and Conservation Planning Act of 1980 (PL96-501)Planning Act of 1980 (PL96-501)
Authorized States of ID, OR, MT and WA to form an Authorized States of ID, OR, MT and WA to form an “interstate compact” (aka, “The Council”)“interstate compact” (aka, “The Council”)
Directed the Council to develop 20-year load forecast and Directed the Council to develop 20-year load forecast and resource plan (“The Plan”) and update it every 5 – yearsresource plan (“The Plan”) and update it every 5 – years
– ““The Plan” shall call for the development of the The Plan” shall call for the development of the least costleast cost mix of resourcesmix of resources
– ““The Plan” shall considerThe Plan” shall consider conservation (energy efficiency) conservation (energy efficiency) its highest priority resourceits highest priority resource equivalent to generation with a equivalent to generation with a 10% cost advantage over power generating resources10% cost advantage over power generating resources
Mandated Mandated public involvementpublic involvement in Council’s planning process. in Council’s planning process.
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Northwest Power and ConservationCouncil
Slide 6
Power Act Priorities Served As Precedent Power Act Priorities Served As Precedent for California’s “Loading Order”for California’s “Loading Order”
Priority shall be given: Priority shall be given: – First, to conservation; First, to conservation; – Second, to renewable Second, to renewable
resources; resources; – Third, to generating Third, to generating
resources utilizing waste resources utilizing waste heat or generating heat or generating resources of high fuel resources of high fuel conversion efficiency; conversion efficiency; andand
– Fourth, to all other Fourth, to all other resources.resources.
The Action Plan envisions a The Action Plan envisions a “loading order” of energy “loading order” of energy resourcesresources– First, conservation and First, conservation and
energy efficiency;energy efficiency;– Second, renewable Second, renewable
energy resources and energy resources and distributed generation; distributed generation; andand
– Third, clean, fossil fuel, Third, clean, fossil fuel, central-station central-station generation. generation.
Northwest Power Act Northwest Power Act Enacted - December 1980Enacted - December 1980
California Energy Action PlanCalifornia Energy Action PlanAdopted - April/May 2003Adopted - April/May 2003
23 Years Later23 Years Later
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Northwest Power and ConservationCouncil
Slide 7
How Has It Worked?How Has It Worked?
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Northwest Power and ConservationCouncil
Slide 8
Utility Reaction to Council’s First Utility Reaction to Council’s First Plan Was “Mixed”Plan Was “Mixed”
Three Decades of Utility Conservation Three Decades of Utility Conservation AcquisitionsAcquisitions
(aka “Mr. Toad’s Wild Ride”* for the PNW’s Energy Efficiency Industry)(aka “Mr. Toad’s Wild Ride”* for the PNW’s Energy Efficiency Industry)
0
500
1000
1500
2000
2500
1978 1982 1986 1990 1994 1998 2002 2006
Conse
rvati
on A
cquis
itio
ns
(GW
H/Y
ear)
See: http://en.wikipedia.org/wiki/Mr._Toad's_Wild_Ride
NeverthelessNevertheless Since the Late 70’s Since the Late 70’s
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
GH
W/Y
ear
1978 1982 1986 1990 1994 1998 2002 2006
BPA and Utility Programs Alliance Programs State Codes Federal Standards
Since 1978 Utility & BPA Since 1978 Utility & BPA Programs, Energy Codes & Programs, Energy Codes & Federal Efficiency Standards Have Federal Efficiency Standards Have Produced Produced Nearly 35,000Nearly 35,000 GWH/yr GWH/yr of Savings.of Savings.
We’ve Accomplished “Mass Quantities”We’ve Accomplished “Mass Quantities”
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Northwest Power and ConservationCouncil
Slide 11
So What’s 35,000 GWH/Year?So What’s 35,000 GWH/Year?
It’s enough electricity to serve more It’s enough electricity to serve more than the than the entireentire state of Idahostate of Idaho and and all all of Western Montanaof Western Montana
It saved the region’s consumers nearly It saved the region’s consumers nearly than than $1.8 billion$1.8 billion in 2008 in 2008
It lowered 2008 PNW carbon emissions It lowered 2008 PNW carbon emissions by an estimated by an estimated 15 million15 million tons. tons.
slide 12
Northwest Power and ConservationCouncil
Slide 12
Since 1980 Energy Efficiency Resources Since 1980 Energy Efficiency Resources
More Than More Than HalfHalf of Regional Load Growth of Regional Load Growth
0%
25%
50%
75%
100%
125%
1980 1985 1990 1995 2000 2005
Cum
ula
tive S
hare
of
Gro
wth
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Northwest Power and ConservationCouncil
Slide 13
Utility Acquired Energy Efficiency Has Been AUtility Acquired Energy Efficiency Has Been A
BARGAIN!BARGAIN!
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
May
-96
Nov-9
6
May
-97
Nov-9
7
May
-98
Nov-9
8
May
-99
Nov-9
9
May
-00
Nov-0
0
May
-01
Nov-0
1
May
-02
Nov-0
2
May
-03
Nov-0
3
May
-04
Nov-0
4
May
-05
Nov-0
5
May
-06
Nov-0
6
May
-07
Nov-0
7
Whole
sale
Ele
ctri
city
Pri
ce (
2006$/M
WH
)
Levelized Cost of Utility Efficiency AcquisitionsMonthly Average Wholesale Market Price @ Mid-C Trading Hub
Energy Efficiency Is The Region’s Energy Efficiency Is The Region’s Third Largest ResourceThird Largest Resource
Energy Efficiency12%
Hydro55%
Coal18%
Biomass1%
Wind1%
Nuclear4%
Natural Gas9%
Petroleum & Pet Coke0%
We’ve Saved The Equivalent of Two Grand Coulee Dams
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Northwest Power and ConservationCouncil
Slide 15
So So What’s What’s Next?Next?
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Northwest Power and ConservationCouncil
Slide 16
How Much Efficiency Should We Develop?
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Northwest Power and ConservationCouncil
Slide 17
The Region Has Exceeded the 5The Region Has Exceeded the 5thth Plan’s Targets Every YearPlan’s Targets Every Year
0
500
1,000
1,500
2,000
2,500
2005 2006 2007 2008 -Preliminary
2009 -Projected
Annual S
avi
ngs
(GW
H/Y
ear)
5th Plan Goals
Actual Savings
slide 18
Northwest Power and ConservationCouncil
Slide 18
Energy Efficiency is Still the Cheapest OptionEnergy Efficiency is Still the Cheapest Option
Assumptions :
Efficiency Cost = Average Cost of All Conservation in Draft 6th Power Plan Under $100 MWh
Transmission cost & losses to point of LSE wholesale delivery
2020 service - no federal investment or production tax credits
Baseload operation (CC - 85%CF, Nuclear 87.5% CF, SCPC 85%)
Medium NG and coal price forecast (6th Plan draft)
6th Plan draft mean value CO2 cost (escalating, $8 in 2012 to $47 in 2029).
$0
$50
$100
$150
$200
$250
$300
Energ
y Effic
iency
Geothe
rmal
Combin
ed C
ycle
Col. B
asin
Wind
AB Wind
Advan
ced N
uclea
r
Super
critic
al Coa
l (No C
SS)
IGCC (N
o CSS)
Recipr
ocat
ing E
ngine
Woo
d Res
idue
(No C
HP)
MT
Wind
WY W
ind
CSP Par
aboli
c Tro
ugh
Utility
Photo
volta
ic
Leve
lized
Life
cycl
e C
ost
(200
6$/M
Wh)
Emission (CO2) costTransmission & Losses
System IntegrationPlant costs
There’s Still “Mass Quantities” To There’s Still “Mass Quantities” To DoDo
6th Plan Technically Achievable Conservation Potential by Sector6th Plan Technically Achievable Conservation Potential by Sector
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
< 0 <20 <40 <60 <80 <100 <120 <140 <160 <180 <200
Real Levelized Cost (2006$/MWh)
Tec
hnic
allly
Ach
ieva
ble
Pote
nti
al
(GW
H/Y
ear)
Utility DistributionAgricultureIndustrialCommercialConsumer ElectronicsResidential
slide 20
Northwest Power and ConservationCouncil
Slide 20
Two Methods for Setting Two Methods for Setting Efficiency GoalsEfficiency Goals
Integrated Resource Planning (IRP)Integrated Resource Planning (IRP)– Systematic evaluation of the least Systematic evaluation of the least
cost/least risk portfolio of resource choices cost/least risk portfolio of resource choices where energy efficiency is treated where energy efficiency is treated equivalent to generating resourcesequivalent to generating resources
Energy Efficiency Resource Portfolio Energy Efficiency Resource Portfolio StandardsStandards– Mandated minimum share of energy Mandated minimum share of energy
efficiency resourcesefficiency resources
Council Uses “Grump” IRP ModelCouncil Uses “Grump” IRP Model
The Future’s Like A Box of Chocolates. The Future’s Like A Box of Chocolates.
You Never Know What You’re Gonna GetYou Never Know What You’re Gonna Get..
Council IRP Analysis=> Council IRP Analysis=> Test Lot’s of ChocolatesTest Lot’s of Chocolates
0%
2%
4%
6%
8%
10%
12%
14%
16%
0.8%
1.0%
1.3%
1.5%
1.8%
2.0%
2.3%
2.5%
2.8%
3.0%
3.3%
3.5%
3.8%
4.0%
Annual Load Growth
Pro
babili
ty (
%)
$0
$5
$10
$15
$20
$25
2010 2015 2020 2025
Natural Gas Prices
2006$/M
MB
tu
Efficient Frontier
$155
$156
$156
$157
$157
$158
$158
$104 $104 $105 $105 $105 $105 $105 $106
NPV System Cost (2006$billions)
NPV
Syst
em
Ris
k
(2006$bill
ions)
Wholesale Market Electricity Price
$0
$50
$100
$150
$200
$250
$300
2010 2015 2020 2025
2006$/M
WH
0
5000
10000
15000
20000
25000
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
Hydrosystem Ouput
Capaci
ty (
MW
)
Resource Supply Curve
0
2
4
6
8
10
12
245 514 1598 2202 2560 3444 4934 6735 8945
Cumulative Supply (MW)
Real Le
veliz
ed C
ost
(C
ents
/kW
h -
2000$)
Portfolio Portfolio Analysis Analysis ModelModel
Carbon Price
$0
$20
$40
$60
$80
$100
$120
2010 2015 2020 2025
2006$/T
on
Portfolio ABCD
0
10
20
30
40
50
60
70
$50 $75 $100 $125 $150 $175 $200 $225
NPV System Cost (billion2006$)
Fre
quency
slide 23
Northwest Power and ConservationCouncil
Slide 23
All Plans Along the “Efficient Frontier” All Plans Along the “Efficient Frontier” Acquire Virtually the Same Amount of Acquire Virtually the Same Amount of
Energy EfficiencyEnergy Efficiency
0
10,000
20,000
30,000
40,000
50,000
60,000
0 20 40 60 80 100 120
Efficient Frontier Portfolios
Effi
cien
cy R
eso
urc
e A
ddit
ion
s (G
WH
)
Least Cost Portfolios
Least Risk Portfolios
slide 24
Northwest Power and ConservationCouncil
Slide 24
Portfolio Analysis on Portfolio Analysis on OneOne Slide Slide
$0
$50
$100
$150
$200
$250
$300
$350
$400
0 2000 4000 6000 8000 10000 12000 14000 16000
MWa
20
06
$/M
Wh
Coal ConservationGasRenewablesNuclear
Generic coal, gas and nuclear units are shown at typical project sizes - more units could be built at comparable cost.
$0
$50
$100
$150
$200
$250
$300
$350
$400
0 2000 4000 6000 8000 10000 12000 14000 16000
MWa
20
06
$/M
Wh
Coal ConservationGasRenewablesNuclear
Generic coal, gas and nuclear units are shown at typical project sizes - more units could be built at comparable cost.
Energy Efficiency’s Role Does Not Depend Energy Efficiency’s Role Does Not Depend on Climate Policy Assumptionson Climate Policy Assumptions
0
10,000
20,000
30,000
40,000
50,000
60,000
Sa
vin
gs
(G
WH
/Ye
ar
by
20
30
)
$0-$100Carbon
CurrentPolicy
No ClimatePolicy
No RPS Retire Coal $100 Carbon $20 Carbon $0-$50Carbon
slide 26
Northwest Power and ConservationCouncil
Slide 26
Draft 6Draft 6thth Plan Calls for A Doubling of Plan Calls for A Doubling of Annual Energy Efficiency Savings Annual Energy Efficiency Savings
Over Next DecadeOver Next Decade
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2005 2010 2015 2020
Annual S
avi
ngs
(GW
H/Y
ear)
Plan Goals
Historical Savings
slide 27
Northwest Power and ConservationCouncil
Slide 27
Draft 6Draft 6thth Plan Goal 1: Plan Goal 1: Meet 90% of Load Growth with Meet 90% of Load Growth with
ConservationConservation
0
50,000
100,000
150,000
200,000
250,000
2010 2015 2020 2025
GW
H/Y
ear
PNW Load w/o Conservation
PNW Loads w/Conservation
slide 28
Northwest Power and ConservationCouncil
Slide 28
Draft 6Draft 6thth Plan Goal 2: Plan Goal 2: Meet 28% of Load Growth with Meet 28% of Load Growth with
Wind & Other Renewable ResourcesWind & Other Renewable Resources
0
50,000
100,000
150,000
200,000
250,000
2010 2015 2020 2025
GW
H/Y
ear
PNW Load w/o Conservation
PNW Loads w/Conservation
PNW "Loads"w/Wind & Other Renewables
You Can’t Meet More Than 100% You Can’t Meet More Than 100% of Load Growth!of Load Growth!
What?What?
Meeting more than 100% of load growth withMeeting more than 100% of load growth with
energy efficiency and renewable resourcesenergy efficiency and renewable resources
displaces existing carbon based generationdisplaces existing carbon based generation
Why We Must:Why We Must:
slide 31
Northwest Power and ConservationCouncil
Slide 31
Meeting Our Goals Drops Carbon Meeting Our Goals Drops Carbon Emissions 15% Below 1990 Levels by Emissions 15% Below 1990 Levels by
20202020
0
10
20
30
40
50
60
70
2010 2015 2020 2025
CO
2 E
mss
ions
(tons)
Draft 6th Plan Average Emissions
1990 Emissions
slide 32
Northwest Power and ConservationCouncil
Slide 32
Meeting Our Goals Will Require Meeting Our Goals Will Require 2X – 3x Our Current Investments 2X – 3x Our Current Investments
in Energy Efficiency in Energy Efficiency
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
2009 2010 2011 2012 2013 2014
Regio
nal U
tilit
y/S
BC
Inve
stm
ent
(Mill
ion 2
006$)
slide 33
Northwest Power and ConservationCouncil
Slide 33
Meeting Our Goals Will Reduce Meeting Our Goals Will Reduce Reliance on More Expensive Reliance on More Expensive
ResourcesResources
$0
$100
$200
$300
$400
$500
$600
$700
2010 2011 2012 2013 2014
Regio
nal R
eve
nue R
equir
em
ent
(Mill
ion 2
006$)
Cumulative Conservation Cost/Expenses
Cumulative Cost of Equivalent Market Purchases
slide 34
Northwest Power and ConservationCouncil
Slide 34
In Fact, Meeting Our Goals Will Reduce In Fact, Meeting Our Goals Will Reduce Regional Revenue Requirements Below Regional Revenue Requirements Below
Today’s Within Four YearsToday’s Within Four Years
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2010 2011 2012 2013 2014
Year
Cum
mula
tive
Change
slide 35
Northwest Power and ConservationCouncil
Slide 35
Accelerating Energy Efficiency Increases Accelerating Energy Efficiency Increases Rates But Decreases Consumers’ BillsRates But Decreases Consumers’ Bills
65
70
75
80
85
90
2010 2015 2020 2025
$/M
Wh
and
$/M
onth
(20
06$)
Draft Plan RatesLow Conservation Case RatesDraft Plan BillsLow Conservation Case Bills
Accomplishing the 6Accomplishing the 6thth Plan’s Conservation Plan’s Conservation Goals Will “Goals Will “Stretch”Stretch” the Columbia River the Columbia River
In 20 years, we will have In 20 years, we will have added the equivalent of added the equivalent of 50% to the “output” of all 50% to the “output” of all hydroelectric resources in hydroelectric resources in the PNWthe PNW
. . .and reduced the power systems carbon footprint 15% below 1990 levels
slide 37
Northwest Power and ConservationCouncil
Slide 37
Conservation – Cheap, But Worth It?Conservation – Cheap, But Worth It?
Any Any Questions?Questions?
slide 38
Northwest Power and ConservationCouncil
Slide 38
Thanks for Thanks for ListeningListening
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