Building Energy Efficiency Program Portfolio Development Presented to: NJ Energy Master Plan

Building Energy Efficiency Building Energy Efficiency Program Portfolio DevelopmentProgram Portfolio Development

Presented to:NJ Energy Master Plan Energy Efficiency Stakeholders

By: Susan Coakley, Executive DirectorNortheast Energy Efficiency Partnerships (NEEP)December 13, 2007

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OverviewOverview OverviewOverview

About NEEPAbout NEEP

A Historical Perspective of Efficiency in the NortheastA Historical Perspective of Efficiency in the Northeast

Emerging Trends and Issues Emerging Trends and Issues

Strategies to Procure All Cost-Effective Efficiency Strategies to Procure All Cost-Effective Efficiency

NJ Program Portfolio Development ProcessNJ Program Portfolio Development Process

Opportunities for Stakeholder InputOpportunities for Stakeholder Input

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Northeast Energy Efficiency Northeast Energy Efficiency PartnershipsPartnerships

Northeast Energy Efficiency Northeast Energy Efficiency PartnershipsPartnerships

““Facilitating partnerships to advance the Facilitating partnerships to advance the efficient use of energy in homes, buildings efficient use of energy in homes, buildings

and industry.”and industry.”

• Regional non-profit organization since 1996.

• Serving New England, New York and Mid-Atlantic states

Our mission:Our mission: To promote the efficient use of energy in To promote the efficient use of energy in homes, buildings and industry in the Northeast U.S. homes, buildings and industry in the Northeast U.S. through regionally coordinated programs and policies that through regionally coordinated programs and policies that increase the use of products, services and practices that increase the use of products, services and practices that achieve a cleaner, more reliable and affordable energy achieve a cleaner, more reliable and affordable energy system.system.

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A Brief Northeast History of A Brief Northeast History of Efficiency Efficiency

A Brief Northeast History of A Brief Northeast History of Efficiency Efficiency The Past:The Past: Energy efficiency based on resource Energy efficiency based on resource

acquisition 1985-1995acquisition 1985-1995 The Present:The Present: Efficiency as a public benefit Efficiency as a public benefit

program 1995 – 2007 in most statesprogram 1995 – 2007 in most states

Since 2006:Since 2006: Renewed interest in efficiency as a Renewed interest in efficiency as a resource – potential to double-triple savings to:resource – potential to double-triple savings to:

• Reduce carbon emissions Reduce carbon emissions • Meet capacity needsMeet capacity needs• Reduce energy costsReduce energy costs

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Annual Ratepayer Efficiency Annual Ratepayer Efficiency FundingFunding

Annual Ratepayer Efficiency Annual Ratepayer Efficiency FundingFunding

Historical High:Historical High:

$900 million plus $900 million plus 19941994New England + New Jersey + New YorkNew England + New Jersey + New York

Post Industry Restructuring: Post Industry Restructuring:

$450 million $450 million 1997 1997

$623 million plus$623 million plus 20072007New England + New Jersey + New YorkNew England + New Jersey + New York

Future:Future:

On track to exceed $1.5 billion/year!On track to exceed $1.5 billion/year!

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Efficiency Impact Efficiency Impact 1995 – Present1995 – Present

Lowered energy growth: Lowered energy growth: kept at 1.5% per yearkept at 1.5% per year

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Emerging Trends and IssuesEmerging Trends and IssuesEmerging Trends and IssuesEmerging Trends and IssuesPolicy:Policy: Efficiency as the most cost-effective, readily available Efficiency as the most cost-effective, readily available

resource to meet multiple policy objectives:resource to meet multiple policy objectives:Power System ReliabilityPower System Reliability• ISO New England Forward Capacity Market ISO New England Forward Capacity Market DSM resources DSM resources• FERC order to PJM to integrate energy efficiency into the RPM FERC order to PJM to integrate energy efficiency into the RPM • Increased Short-term demand response programs – RTOsIncreased Short-term demand response programs – RTOs• Geographically targeted efficiency Geographically targeted efficiency T&D constraints - VT, CT, NY T&D constraints - VT, CT, NY• PSE&G procurement of energy efficient T&D equipmentPSE&G procurement of energy efficient T&D equipmentEnvironmentalEnvironmental • RGGI – 100% consumer allocation of allowance revenuesRGGI – 100% consumer allocation of allowance revenues• State Climate Change Policies – efficiency as top priorityState Climate Change Policies – efficiency as top priority• NJ Master Plan Goal – 20% savings by 2020NJ Master Plan Goal – 20% savings by 2020• NY 15% Challenge – 15% savings by 2015NY 15% Challenge – 15% savings by 2015• New England Governors/Eastern Canadian Premiers - New England Governors/Eastern Canadian Premiers - Energy AffordabilityEnergy Affordability• Procure all cost-effective energy efficiency – CT, RI, ME, MA, VTProcure all cost-effective energy efficiency – CT, RI, ME, MA, VT• More gas efficiency programsMore gas efficiency programs• State appliance efficiency standardsState appliance efficiency standards

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Emerging Trends and IssuesEmerging Trends and IssuesEmerging Trends and IssuesEmerging Trends and IssuesProgram/TechnologyProgram/Technology:: Increasing savingsIncreasing savings Program Ramp-up to Increase Resource AcquisitionProgram Ramp-up to Increase Resource Acquisition

• Increasing Discretionary Retrofit as budgets increaseIncreasing Discretionary Retrofit as budgets increase• Infrastructure development to increase capacitiesInfrastructure development to increase capacities

Statewide programs with Regional CoordinationStatewide programs with Regional Coordination• Consistent programs, requirements, joint marketing, co-brandingConsistent programs, requirements, joint marketing, co-branding• Co-promotions with manufacturers, distributors and retailersCo-promotions with manufacturers, distributors and retailers

Community-Based Program Strategies – Community-Based Program Strategies – VT, MA, NYVT, MA, NY Increased focus on Whole Building SolutionsIncreased focus on Whole Building Solutions

• Home Energy PerformanceHome Energy Performance• Northeast Collaborative for High Performance SchoolsNortheast Collaborative for High Performance Schools• LEED, Advanced Buildings, ASHRAE 189LEED, Advanced Buildings, ASHRAE 189• NetZero Energy Homes and BuildingsNetZero Energy Homes and Buildings

New Technologies/Big Opportunities:New Technologies/Big Opportunities:• ENERGY STAR electronics (telephony, TVs, VCRs, external power supplies)ENERGY STAR electronics (telephony, TVs, VCRs, external power supplies)• Ductless mini-split air conditioningDuctless mini-split air conditioning• Solid State Lighting (still emerging)Solid State Lighting (still emerging)

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Procure All Cost-Effective Efficiency Procure All Cost-Effective Efficiency Procure All Cost-Effective Efficiency Procure All Cost-Effective Efficiency The Policy FrameworkThe Policy Framework Statewide planning:Statewide planning:

• Goals – Procure all cost-effective efficiencyGoals – Procure all cost-effective efficiency

• Statewide multi-year goals to address multiple objectivesStatewide multi-year goals to address multiple objectives

• Continually assess efficiency potential and cost-effectivenessContinually assess efficiency potential and cost-effectiveness

• Address all fuels and coordinate with building integrated renewables Address all fuels and coordinate with building integrated renewables Strategies to achieve aggressive efficiency goals:Strategies to achieve aggressive efficiency goals:

• R&D to identify new opportunitiesR&D to identify new opportunities

• Voluntary programs + state procurement to build market adoption Voluntary programs + state procurement to build market adoption

• Market mechanisms to value energy and demand savings Market mechanisms to value energy and demand savings

• Regulation to lock in market gains (codes and standards)Regulation to lock in market gains (codes and standards) Stable fundingStable funding cost recovery, decoupling, incentives, multi-year budgets cost recovery, decoupling, incentives, multi-year budgets Coordinated programs & policiesCoordinated programs & policies – statewide, regionally and nationally – statewide, regionally and nationally Evaluation, tracking and reporting Evaluation, tracking and reporting

• Address multiple policy objectives (energy, environment, economic)Address multiple policy objectives (energy, environment, economic)• Consistent protocols to participate in regional markets Consistent protocols to participate in regional markets

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Procure All Cost-Effective Efficiency Procure All Cost-Effective Efficiency Procure All Cost-Effective Efficiency Procure All Cost-Effective Efficiency

The Program FrameworkThe Program Framework Statewide programs designed toStatewide programs designed to::

• Maximize net benefits Maximize net benefits

• Minimize lost opportunitiesMinimize lost opportunities

• Address all market sectorsAddress all market sectors

• Overcome market barriers by market sector – targeted information, Overcome market barriers by market sector – targeted information, technical assistance and incentivestechnical assistance and incentives

• Achieve long-term impacts – Achieve long-term impacts – market transformationmarket transformation

• Leverage resources and engage market participationLeverage resources and engage market participation

• Coordinate with related public policies – Coordinate with related public policies – buildingbuilding codes, standards, codes, standards, tax incentives, state procurement policies tax incentives, state procurement policies

Flexible program implementationFlexible program implementation respond to developments respond to developments Evaluation and data collectionEvaluation and data collection embedded in program embedded in program

implementationimplementation

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Program Design Evolution to Increase Cost Program Design Evolution to Increase Cost Effectiveness Effectiveness

Program Design Evolution to Increase Cost Program Design Evolution to Increase Cost Effectiveness Effectiveness First GenerationFirst Generation

• Information and loans, e.g., Audit programsInformation and loans, e.g., Audit programsCheap but not cost-effectiveCheap but not cost-effective – – low savings!low savings!

Second GenerationSecond Generation • Rebates and performance contractingRebates and performance contracting• Focus on retrofit Focus on retrofit pay full avoided cost pay full avoided cost

Cost-effective savings but not cheap!Cost-effective savings but not cheap! Third GenerationThird Generation

• Strategic market interventions – overcome market Strategic market interventions – overcome market barriers – incentives, tech assistance, target marketingbarriers – incentives, tech assistance, target marketing

• Priority to new construction and equipment replacementPriority to new construction and equipment replacement• Discretionary retrofit Discretionary retrofit • Near-term savings and long-term market transformationNear-term savings and long-term market transformation• Tie to regulations building energy codes and standardTie to regulations building energy codes and standard

Cost-effective, cheap, long lasting!Cost-effective, cheap, long lasting!

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Next Generation Energy Next Generation Energy EfficiencyEfficiency


Ramp-up to Meet Aggressive Efficiency GoalsRamp-up to Meet Aggressive Efficiency Goals

Wider and deeper building energy efficiencyWider and deeper building energy efficiency

• More participantsMore participants

• More savings per building and transactionMore savings per building and transaction

• More and new technologies More and new technologies

• New programs – all market sectorsNew programs – all market sectors

• New strategies and partnersNew strategies and partners

• New market mechanisms – resource acquistion New market mechanisms – resource acquistion

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Elements:Elements: New Construction – target net zero energy buildings Equipment purchase and replacement –

comprehensive high efficiency, right sized, controls to maintain high performance

Retrofit – comprehensive, customized services customer focused

Integrated strategies:• Whole house/whole building – all end uses

• All fuels

• All technologies - demand response, distributed generation, building integrated renewables

• Performance based – results oriented

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Elements:Elements:

Move Upstream

• Engage retailers, manufacturers, distributors as partners

• Engage franchise, multiple property owners and managers

Complementary Public Policies

• Regular updates to building energy codes, appliance strategies

• Building labeling requirements

• Tax incentives – state and federal to leverage big shifts

• Integration with state and local procurement and construction requirements

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Per

cen

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f C

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es W

ash

ers

Th

at A

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Sponsor StatesWith Initiative

National Average2001: Whirlpool

Enters Market

1998: Regional Initiative Begins

2003: National Clothes Washers Campaign Kicks Off

2007: Federal Minimum Efficiency Standard in effect

Sponsor States Without Initiative

1998: 6 Manufacturers, 15 Qualified Products

2002: 18 Manufacturers, 99 Qualified Products

2004: More stringent ENERGY STAR spec takes effect

Market Transformation for High Efficiency Clothes Washers

In New England

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Elements:Elements: Increase customer awareness and participation

• More and better controls

• Instantaneous energy use information

• Increased energy labeling – buildings and products

Community Partnerships

• Engage community leadership to motivate the public

• Community energy planning – all facilities

• Community challenges and special promotions

Build Infrastructure

• Ready access to high efficiency products and services

• Professional development

• Workforce training and certification

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Procure All Cost-Effective Efficiency Procure All Cost-Effective Efficiency Procure All Cost-Effective Efficiency Procure All Cost-Effective Efficiency

The Evaluation FrameworkThe Evaluation Framework Research and Evaluation Plan – set requirements up-front to

address multiple policy and program objectives:

• Track impacts – energy, carbon, capacity, dollars

• Award performance incentives

• Data methods and schedules identified upfront Program baselines established (cooperative, regional studies) Consistent protocols and inputs – state + regional coordination Process evaluation to guide program effectiveness – identify mid-

course corrections Impact evaluation - to verify savings estimates Tracking and reporting - Consistent statewide protocols, integrated

processes

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Procure All Cost-Effective Efficiency Procure All Cost-Effective Efficiency Procure All Cost-Effective Efficiency Procure All Cost-Effective Efficiency Program Administration and OversightProgram Administration and Oversight Many models:

• One statewide efficiency administrator – VT, ME, RI, NJ

• Coordinated/collaborative administration – MA, CT, NH Issues/Needs:

• Arms length regulatory oversight

• Focus on performance, results vs. program detail

• Performance metrics that address near-term and long-term goals

• Access to customer data marketing, tracking

• Addressing multiple fuels – electric, gas, oil – to provide integrated service and solutions

• Coordination with renewable energy programs

• Coordination with other state agency programs

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NJ Energy Master Plan NJ Energy Master Plan Efficiency Program Efficiency Program

Portfolio ProjectPortfolio Project

2020

NJ Master Plan Efficiency Program NJ Master Plan Efficiency Program Portfolio ProjectPortfolio Project


Purpose:

• Achieve the 2020 Master Plan energy savings goal cost-effectively and expeditiously

• Develop a “best in class” program portfolio to overcome market barriers to cost-effective energy efficiency

• Address all customer sectors

• Build on experience of successful programs in New Jersey as well as other states and regions

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Approach: NEEP lead team of national experts to develop a “best

in class” program portfolio to overcome market barriers to cost-effective energy efficiency

Address all customer sectors, all fuels, all demand-side resources

Build on experience of successful programs in New Jersey as well as other states and regions

Stakeholders input to guide development - provide data and perspective

Build stakeholder support for the recommended program portfolio throughout process

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Portfolio Elements:

• Residential Strategies

• Commercial Building Strategies

• Institutional Strategies

• Industrial Facility Strategies

• Municipal Strategies

• Strategies for Plug-in Electronics

• Community Partnerships

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NJ Master Plan Efficiency Program NJ Master Plan Efficiency Program Portfolio ProjectPortfolio ProjectDevelopment Process (preliminary):

Phase I – Program Development Characterize customer sectors to be served Establish program development criteria Develop cost-effectiveness assessment methods and inputs Review current NJ programs, identify gaps Identify successful models NJ and elsewhere to address gaps Establish program development priorities Develop statewide comprehensive portfolio of NJ program strategies with

four-year goals and budgets for all customer sectors Project overall program impacts – savings, participants and cost-

effectiveness Establish research, evaluation, tracking and reporting and implementation

recommendations

Phase II – Infrastructure Development Assess job impacts – recommend workforce development priorities

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Deliverables and Schedule (preliminary):

Interim Reports Interim Report #1 – Market Characterization,

Development Criteria, Cost-Effectiveness – January? Interim Report #2 – Gap Analysis and

Program/Strategy Development Priorities – February? Interim Report #3 - Program Portfolio

Recommendations with Impacts and Research, Evaluation, Tracking, Reporting Recommendations – April?

Final Report Executive Summary of Findings and Recommendations with

appendices – May?

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Stakeholder Input: Use meetings of the NJ Energy Master Plan

Energy Efficiency Committee to solicit input from stakeholders on particular topics

Review notes and materials from previous NJ BPU efficiency forums to inform program development

Conduct targeted outreach to stakeholders to get input and guide development

Circulate draft materials for comment and input

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Project Team: Susan Coakley – Project Manager

Philippe Dunsky – Portfolio Manager

Chris Neme - Residential

Doug Baston – Commercial, Industrial, Municipal

Carter Wall - Institutional

Jonathan Livingston – Plug-in Electronics

Bob Obeiter, Michael Ambrosio – Research, Evaluation

Blair Hamilton – Community Partnerships

Others to be confirmed

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Stakeholder Questions TodayStakeholder Questions TodayStakeholder Questions TodayStakeholder Questions Today

Criteria to Guide Program and Portfolio Development

Information Resources

Project Development Comments and Suggestions

Policy Framework to Implement Program Portfolio: Questions and Issues to Address

Thank YouThank YouThank YouThank You

Northeast Energy Efficiency Partnerships, Inc.

Susan Coakley

Executive Director

781-860-9177, ext. 12; [email protected]

www.neep.org

Documents

Building Energy Efficiency Program Portfolio Development Presented to: NJ Energy Master Plan