EE in Wholesale Markets - Microsoft...Step 2 – Lower Energy; BAU Supply; Lower Price BAU Supply Curve BAU Demand Curve **annual load weighted effect from regression fitted to hourly

Energy Efficiency in Wholesale Markets

Capturing the Multiple Benefits of Energy Efficiency Roundtable on Energy Provider and Consumer Benefits

16 October 2013 Doug Hurley

www.synapse-energy.com | ©2013 Synapse Energy Economics, Inc. All rights reserved.


Synapse Energy Economics, Inc.

• Consumer Advocates and Public Interest Groups in more than 25 states

• More than 20 PUCs and Attorneys General • Over 40 Environmental Groups and Foundations

Energy System modeling, analysis, expert testimony, and stakeholder representation

for…

• Wholesale Market Representation for Consumer Advocates, Energy Efficiency, Renewable Generation, and Environmental Advocates

Agenda

• Impact on transmission planning • Lower wholesale energy and capacity

market prices • Reduced price volatility and

Can we target wholesale impact?


New England Investment in EE


Year Annual EE Budget ($m)

Approx. FCM Revenue

($m)

% extra from FCM

2009 $ 353.4 $ 26.4 7% 2010 $ 535.2 $ 28.5 5% 2011 $ 886.3 $ 24.6 3% 2012 $ 1,029.4 $ 24.1 2%

Notes: 1. Annual Budget from ACEEE 2011 Scorecard, Table 4. 2. FCM = ISO New England Forward Capacity Market 3. Estimated FCM revenues from public data. Does not account for over/under delivery, pro-ration, or multi-year prices.

New England Energy Efficiency Forecast


Year Forecast of Summer Peak Savings Growth

2016 231 MW 2017 218 MW 2018 204 MW 2019 192 MW 2020 180 MW 2021 169 MW 2022 159 MW Total 1,353 MW Annual Average Growth 193 MW

Source: ISO New England Energy Efficiency Forecast Working Group. 2013 Energy Efficiency Forecast.

Effect of EE on Transmission Planning


130000

135000

140000

145000

150000

155000

2012 2014 2016 2018 2020 2022

RSP12 RSP12-FCM RSP12-FCM-EEF

28000

29000

30000

31000

32000

33000

34000

35000

2012 2014 2016 2018 2020 2022

RSP12 RSP12-FCM RSP12-FCM-EEF

New England: Annual Energy (GWh) New England: Summer 90/10 Peak (MW)

Source: ISO New England Energy Efficiency Forecast Working Group. 2013 Energy Efficiency Forecast.

Any savings from deferred or cancelled transmission projects accrue to ALL ratepayers!

Avoided Energy Supply Costs from EE


Source: Avoided Energy Supply Costs in New England: 2013 Report. July 2013.

0

2

4

6

8

10

12

14

16

18

cent

s/kW

h sa

ved

Components of Avoided Cost

Non-embedded CO2

Energy Price Impact

Capacity Price Impact

Avoided Energy Costs

Avoided Capacity Costs

Impact of EE on Wholesale Energy Market Price


Step 1 – Business as Usual (BAU) Energy; BAU Supply, BAU Price

0

50

100

150

200

250

300

- 20,000 40,000 60,000 80,000 100,000

Who

lesa

le P

rice

($/M

Wh)

System Load (MW)

1: BAU supply curve intersects average annual BAU demand curve at annual average energy price of $34.16/MWh**

BAU Supply Curve BAU Demand Curve

**annual load weighted effect from regression fitted to hourly loads and prices

Source: Ohio's Energy Efficiency Resource Standard: Impacts on the Ohio Wholesale Electricity Market and Benefits to the State. ACEEE and Synapse. April 2013.

Impact of EE on Wholesale Energy Market Price


Step 2 – Lower Energy; BAU Supply; Lower Price

BAU Supply Curve BAU Demand Curve

**annual load weighted effect from regression fitted to hourly loads and prices

0

50

100

150

200

250

300

- 20,000 40,000 60,000 80,000 100,000

Who

lesa

le P

rice

($/M

Wh)

System Load (MW)

2. Annual energy reduction of 18,781 MWh (10%) shifts annual average demand curve left

3. BAU supply curve intersects lower annual average demand curve at $33.15/MWh**

Source: Ohio's Energy Efficiency Resource Standard: Impacts on the Ohio Wholesale Electricity Market and Benefits to the State. ACEEE and Synapse. April 2013.

Notes on Price Impact

• Price impact savings accrue to ALL ratepayers, not just those who participate by installing measures at their own home or business.

• Impact can be very sensitive to market rules. This is especially true for capacity price impact.

• Important to analyze timing of EE install and other expected market need, entry, and retirement.

• Estimating the persistence of these reductions requires analyses of how wholesale markets will respond to lower prices over time

• Estimating the resulting impact on retail rates requires analyses of how wholesale capacity and energy costs flow into retail rates


Effect on Hourly Price


Hourly Price and Load in New England. 18 July 2013.

Reducing Price Volatility


EE Loadshapes


Northeast Energy Efficiency Partnerships EM&V Forum / KEMA C&I HVAC Savings Tool

1 MW of Connected Load Reduction in Eastern Mass


Contact Info

www.synapse-energy.com

Doug Hurley -------------

Paul Peterson Sarah Jackson

http://www.synapse-energy.com/

Documents

EE in Wholesale Markets - Microsoft...Step 2 – Lower Energy; BAU Supply; Lower Price BAU Supply Curve BAU Demand Curve **annual load weighted effect from regression fitted to hourly