2014 Virginia Energy Plan Energy Efficiency

2014

Virginia Energy PlanENERGY EFFICIENCY

VEP Background

In 2006, legislation directed DMME Division of Energy to develop the Virginia Energy Plan and provided funding that was used to hire a consultant.

In 2014, staff coordinated development of the VEP with direction and input from the Virginia Energy Council, recommendations and other input from public and private sources, and data from public sources.

2014 VIRGINIA ENERGY PLAN

Sources:

Web portal http://commerce.virginia.gov/2014-va-energy-plan/

Six public listening sessions

Other submissions

• Virginia Energy Efficiency Council

• Virginia Advanced Energy Industry Coalition

• Meade Westvaco

• Virginia Chamber of Commerce

• Natural Resources Defense Council

• Environment Northeast

http://commerce.virginia.gov/2014-va-energy-plan/

Governor’s Virginia Energy Council

• The Honorable Maurice Jones, Secretary of Commerce and Trade

• The Honorable Molly Ward,

Secretary of Natural Resources

• Cynthia Adams, E.D., Local Energy Alliance Program

• Kristen Hughes Evans, Founder, Sustainable Chesapeake

• Alleyn Harned, E.D., Virginia Clean Cities

• Chelsea Harnish, Policy & Campaigns Manager, Virginia Conservation Network

• Francis Hodsoll, Founder, Virginia Advanced Energy Industries Coalition

• Steven Jumper, Director, Corporate Public Policy, WGL Holdings, Inc.

• Bernard Lamoureux, Data Center Operations Manager, Microsoft

• David Lawson,V.P., Coal, Norfolk Southern Corporation

• Robert Matthias, Chair, Virginia Offshore Wind Development Authority

• Ann Blair Miller,Director, Project Management, Roanoke Regional Partnership

• Laurie Moran, President, Danville Pittsylvania Chamber of Commerce

• Dr. Ganapati Myneni,Senior Scientist, Jefferson Labs

• Dr. Kenneth Newbold, Director of Research and Innovation, JMU

• Archie Pugh,Managing Director, Transmission, Appalachian Power Company


• Irene Kowalczyk, Director, Global Energy Sourcing & Policy, MeadWestvaco

• Vishwa Link, Partner, McGuire Woods

• Archie Pugh,Managing Director, Transmission, Appalachian Power Company

• Donald Ratliff,VP States – Government Affairs, Alpha Natural Resources

• Jack Reasor, President & CEO, Old Dominion Electric Cooperative (ODEC)

• Sandy Reisky, CEO, Apex Clean Energy

• Stephen Walz, Director, Environmental Programs, Metropolitan Washington Council of Governments

• Mike Ward,E.D. Virginia Petroleum Council

• Dan Weekley,Vice President, Corporate Affairs, Dominion Resources

B. Hayes Framme, Advisor for Infrastructure and Development, Secretary of Commerce and Trade


Takeaways from Energy Efficiency Section:

• Residential and commercial energy use increasing both because of absolute number of buildings and because of total floor space/sf

• Industrial energy has declined due to the recession but is expected to increase

• MUSH energy use is increasing due to new construction and aging buildings

1. Accelerate the Development of Renewable Energy Sources in the Commonwealth to Ensure a Diverse Fuel Mix and Promote Long-Term Economic Health

A. Work to ensure the diversity of the Commonwealth’s generation fuel mix.Virginia must not become over-reliant on a select number of fuel sources. Diversity in fuel mix will provide a hedge against volatility and spread the risk

among varied sources of generation. This diversity must include an increase in the development of zero-emitting renewable sources, as well as on the largely untapped potential of energy efficiency. This path will lead to economic prosperity through increased jobs and environmental health through lower harmful emissions.

VEP Recommendations: Strategic Growth

2. Make Virginia a Leader in Energy Efficiency to Reduce Consumption and Spur Economic Growth

A. Establish the Virginia Board on Energy Efficiency.

The 2007 Virginia Energy Plan established a voluntary goal of reducing energy consumption at the retail level by 10% by 2022, based on a 2006 baseline. The State Corporation Commission analyzed this goal and determined that it was feasible. While there is anecdotal evidence that work toward achieving this goal is underway, there is a lack of a comprehensive understanding, along with easily identifiable data, as to where the Commonwealth currently stands in meeting the 10% goal.

According to SCC website, reaching this goal would postpone the need to build four to five power generation stations. It will also save Virginians a net $200 million to $700 million.”



B. Aggressively implement energy efficiency in state government.

• Create, within the administration, a Chief Energy Efficiency Officer to oversee the aggressive implementation of energy efficiency measures in state agencies, including Energy Performance Contracting (EPC)

• Streamline and standardize the EPC process by developing a master packet that agencies can use to guide them through the process and ensure no unnecessary barriers slow down the project

• Accomplish the goal of reducing electricity consumption in state facilities by 15% through EPC by 2017

• Reinstitute a commissioning/re-commissioning pilot program in state facilities



C. Develop a marketing, outreach and preliminary assistance program to engage local municipalities in Energy Performance Contracting (EPC)

There are four broad tasks valuable to offer local governments and consistent with the scope of this contract:

• Education about the pros and cons of energy performance contracting

• Assistance in prequalifying governments initially interested in the concept Assistance in getting prequalified governments out to bid and in selecting qualified Energy Service Companies (ESCOs)

• Preliminary owner’s agent assistance, through the investment audit stage

The Commonwealth should develop an initiative to promote increased adoption of EPC in local governments. The Governor could highlight this initiative through an energy efficiency tour to regions of the state that are centers of best practices, as well as localities that would benefit most from EPC.


2. Make Virginia a Leader in Energy Efficiency to Reduce Consumption and Spur

Economic Growth

D. Create a central state facility energy data registry and dashboard to track energy consumption at all state agencies.

Energy Management Systems (EMS) and their associated cost savings and sustainability opportunities are increasingly vital to enterprise cost control and competitive strategies. The emergence of relatively inexpensive computing, data storage, and cloud deployment options have already transformed many industries, and are now poised to do the same for enterprise energy management. Applying technological advances to create smart buildings offers the opportunity to utilize data-driven energy management solutions on a cost-effective basis, which will provide predictable and unprecedented energy, operational, and capital expenditure savings.


2. Make Virginia a Leader in Energy Efficiency to Reduce Consumption and Spur

Economic Growth

E. Engage social entrepreneurs in exploring and implementing innovative models, such as pay for performance, in order to test new and innovative ways to cut energy bills and to finance energy efficiency upgrades in existing multi-family residential properties.

Social entrepreneurship is uniquely positioned to aid government in addressing energy efficiency in two primary ways:

• Better leveraging public and private resources • Testing and developing impact-making solutions

In partnership with government, social entrepreneurs can augment their ability to generate and implement transformative, cost-effective solutions to the most challenging societal challenges facing the Commonwealth, our nation and the world.


1. Expand, Improve, and Increase the Reliability of Virginia’s Energy Infrastructure

C. Create flexible financing mechanisms to help to put in place key additional energy assets and support priority energy programs.

Objectives of the funding mechanism would include: provide low-cost financing for energy program delivery and projects to expand or improve energy infrastructure, including renewable energy systems, energy conservation and efficiency and alternative fuels; increase local economic activity and create jobs; and leverage private funding and markets.

• Use of Virginia’s Qualified Energy Conservation Bond (QECB) allocation and other funding sources could provide low-cost financing options for: energy performance Contracting (EPC) to improve building energy efficiency; deployment of energy efficiency measures and programs, and renewable energy systems; and for alternative transportation refueling infrastructure.

VEP Recommendations: Infrastructure

1. Expand and Foster an Educational Environment to Prepare the Next Generation of Virginia’s Energy Workforce

A. Expand and accelerate participation in the Troops to Energy program, training veterans to work in the energy industry.

B. Collaborate with community colleges and four year institutions to train the next generation of STEM workers in the energy sector.

C. Establish annual goals and identify opportunities to increase statewide attainment rates of credentials that align with employer needs.

D. Align energy workforce supply to current and anticipated employer demands by constructing career pathways and training solutions for future workers.

VEP Recommendations: Workforce

Appendix A: 111(d)

President’s Directive to EPA: develop carbon pollution standards, regulations or guidelines, as appropriate, for:

1. New power plants- Proposed January 8, 2014

2. Modified and reconstructed power plants- Proposal: June 2014- Final: June 2015

3. Existing power plants- Proposed Guidelines: June 2014- Final Guidelines: June 2015- State Plans due: June 2016

EPA assumes that states will be able to achieve an annual incremental savings rate of 1.5% of electricity demand by or before 2030, ramping up at 0.2% each year beginning in 2017.

Appendix A: 111(d) VA Timeline

Implementation led by DEQ

• July - Sept 2014 –EPA provides 120-day public review and comment period (extended by 45 days)

• June 2015 – Final rule promulgated by EPA

• June 2016 – States submit compliance plans to EPA, or request a one or two year extension to fully develop a stand-alone compliance plan or multi-state compliance plan

• June 2017 – States submit final stand-alone compliance plans to EPA

• June 2018 – States working with other states on multi-state compliance plans must submit final multi-state plans to EPA

• 2020 to 2029 – State plans, subject to EPA approval, become effective with the interim intensity goal in place averaged over the entire ten year period

• 2030 – States must comply with the final intensity goal averaged over three years

Appendix A: 111(d) Compliance

Building Block Strategy EPA Used to Calculate the State Goal

Maximum Flexibility:Examples of State

Compliance Measures

1. Make fossil fuel-fired power plants more efficient

Efficiency Improvements Efficiency improvementsCo-firing or switching to natural gasCoal retirementsRetrofit CCS

2. Use lower-emitting power sources more

Dispatch changes to existing natural gas combined cycle (CC)

Dispatch changes to existing natural gas CC

3. Build more zero/low- emitting energy sources

Renewable EnergyCertain Nuclear

New NGCCRenewablesNuclear (new and up-rates)New coal with CCS

4. Use electricity more efficiently

Demand-side energy efficiency programs

Demand-side energy efficiency programsTransmission efficiency improvementsEnergy storage

Appendix A: 111(d) Target Emissions

Applying EPA’s “Best System of Emission Reduction” (BSER) strategy, the following assumptions for Virginia are made:

• 6% improvement in generating efficiency can be achieved at coal fired power plants “inside the fence line” of the facility

• Redistribution of about 10% of the state’s coal generation to combined cycle units in Virginia

• Expansion of renewable generation to an interim level of 12% and a final level of 16% by 2030

• Expansion of Virginia’s energy efficiency and demand side management programs so that they offset 9% of total generation by 2030

111(d) Impact Reports

The Virginia Center for Coal and Energy Research, Virginia Tech 111(d) Impact Study:

“For example, a study in Washington State, citing data from American Council for an Energy Efficient Economy (ACEEE), indicated that the investment-to-job ratio in the energy efficiency industry was $184,049 per job in 2004 (WSU, 2009). Inflating that figure to 2012 dollars, it is estimated that additional energy efficiency jobs could range from 116 to 466 under different scenarios in Virginia.”

ACEEE’s 2012 Energy Efficiency and the Economic Opportunity Fact Sheet: for every $1M spent in building efficiency improvements, 20 jobs are supported. For every $1M in avoided consumer energy costs, another 17 jobs are supported.

5 jobs vs. 37 jobs – depending on your source

111(d) Impact Reports

Southern Environmental Law Center’s ICF Report 111(d) Impact Analysis:

“We note that the implementation of the CPP leads to lower wholesalemarket costs, owing primarily to the fact that fewer new builds are required. However, accounting for EE costs shows that there is a net positive compliance costs associated with the implementation of CPP for the state of Virginia.”


A. Establish the Virginia Board on Energy Efficiency.

The 2007 Virginia Energy Plan established a voluntary goal of reducing energy consumption at the retail level by 10% by 2022, based on a 2006 baseline. The State Corporation Commission analyzed this goal and determined that it was feasible*. While there is anecdotal evidence that work toward achieving this goal is underway, there is a lack of a comprehensive understanding, along with easily identifiable data, as to where the Commonwealth currently stands in meeting the 10% goal.

*According to SCC website, reaching this goal would postpone the need to build four to five power generation stations. It will also save Virginians a net $200 million to $700 million.”

Establish an Energy Efficiency Board

Convene a stakeholder session on increasing the breadth and depth of energy efficiency programs to help the state meet its voluntary energy efficiency goal.

VAEEC Census/VEP Recommendations

• Voluntary EE goal is accelerated by 2 years – VEP seeks to achieve this goal by 2020

• EE Board appointed by Governor and convened 90 days from Oct 1 VEP release

• EE Board will:

• oversee the implementation of the strategic plan

• provide guidance to accomplish plan goals

• publish progress reports on implementation on a bi-annual basis

• create a grant response team from its members to work with private and public sector entities to develop grant proposals

Establish an Energy Efficiency Board

• Develop, within 12 months, an M&V method to compile and track energy consumption at the retail, residential, and commercial levels

• Determine where VA currently sits in achieving the 10% voluntary goal

• Identify market, regulatory and policy barriers and opportunities to help both the private sector and regulated utilities work together to meet the 10% goal

• Provide recommendations to address market, regulatory and policy barriers and opportunities

• Review best practices in cost recovery and shared-savings mechanisms that may help accelerate utility adoption of energy efficiency

Energy Efficiency Board Duties

• Develop a plan to coordinate outreach efforts throughout all regions of the state and with all necessary stakeholders to ensure a consistent communications and messaging strategy focused on increasing energy efficiency education and participation

• Identify creative financing tools that can be used at both the generation and demand side levels and make recommendations for their implementation

• Recommend any new programs or policy changes that would support energy efficiency building upgrades for low income Virginians – particularly in Southside and Southwest Virginia

• Review existing Virginia-specific energy efficiency studies to determine if a comprehensive report on Virginia efficiency potential is necessary

Energy Efficiency Board Duties

About the Virginia Energy Efficiency Council:Founded in 2012, the Virginia Energy Efficiency Council seeks to assess and support programs, innovation, best practices

and policies which grow Virginia’s energy efficiency industry and to provide a forum for stakeholder interaction.

Al Christopher, Director Division of Energy, DMME

• Next Steps for VEP• Newly awarded SEP award

Documents

2014 Virginia Energy Plan Energy Efficiency