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Comments for Workshop on EEU Budget for 2009-2011
August 6, 2008
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Outline of Presentation
1. The Board’s Questions to Efficiency Vermont
2. Efficiency Vermont’s Approach to the Board’s Questions
3. Approach to Ramp-up Response
4. Efficiency Vermont’s Ramp-up Response
5. Rate of Ramp-up
6. Potential Expansion Strategies
7. Potential Changes in Costs and Savings
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The Board’s Questions to EVT
• Can EVT ramp up the delivery of energy efficiency services as quickly as CLF and VPIRG have proposed?
• If so, what types of services would be increased or offered for the first time?
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Efficiency Vermont’s Approach to the Board’s Questions
• We will seek to meet the Board’s objectives for the EEU with whatever budget level we are provided.
• Our response is preliminary; we have not yet adequately considered all aspects of the proposed ramp-up, including the time necessary for:
• Planning
• Development
• Capacity expansion (both internal and external)
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Our Approach to Ramp-up Response
We conducted rough estimate of potential costs and savings for 2011 at the major market level, including consideration of:
• Trends in technology and market opportunity
• Recent history and expected % changes in EVT cost / MWh
• Potential to take target area strategies statewide
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Summary of Efficiency Vermont’s Response
While challenging, we believe it would be possible to increase spending on cost-effective energy efficiency by 2011 to a budget level commensurate with that proposed by CLF and VPIRG.
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Ramp-Up
$40
$60
$85
$31
2008 2009 2010 2011
To ramp up responsibly to the 2011 budget level proposed by CLF and VPIRG, we suggest a ramp-up path that would likely rise more slowly at the beginning:
?
?
$30.75 M
?$85 M
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Other Ramp-up Issues
• Consider ramp-up and ramp-down demands and effects on market partners and customers• To minimize market disruption, large ramp-ups should be sustained for several years; and if ramped down, at a gradual pace.
• What planning assumptions would be made beyond 2011? • Would ramped-up levels be maintained?
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Potential Expansion Strategies
Markets Key Ramp-Up StrategiesBusiness Market Opportunities Lighting Increase incentives & more upstream focus
HVAC and other Business Market opportunity
Increase incentives & more upstream focus
Business Retrofit More comprehensive in all retrofit markets
Largest Customers (> 500 MWh, account- managed)
Expand target area strategies statewide (Account Management)
Large Commercial (40-500 MWh)Expand target area strategies statewide (Direct Install)
Small CommercialExpand Direct Install to Small Commercial; new vendor-driven options
New target / niche marketstelecommunications, hospitality, data centers, others tbd
New vendor-driven target InitiativesPay for performance for compressed air, refrigeration, farms, and other technologies and sub-markets tbd
Business New Construction Stratgeies tbd for higher market share
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Potential Expansion Strategies
Markets Key Growth Strategies
Retail Efficient Products
CFLsFocus on maintaining success and on specialty products with lower adoption rates
Appliances and other retail productsStrategies for higher market share; refrigerator turn-ins, higher tier incentives
Advanced lighting (LEDs) Phase in and aggressive promotion
Consumer electronicsENERGY STAR® PCs, Smart Strips, upstream promotion
Residential Existing Homes
Home Performance with ENERGY STAR Expand participation in HPwES
Direct Install lighting / appliances (new) Direct install in targeted communities
New technologies for electric DHW Retrofit or Direct Install
Feedback / Behavioral Tools that provide customer feedback (e.g., Blue Line; Positive Energy; others tbd)
Solar DHW Incentives and promotion (subject to screening)
Residential New Construction Strategies for higher market share, deeper savings
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Supplemental and Back-up Strategies
• Open solicitation for third-party / vendor proposals
• Pay for customer energy reduction (similar to California 20/20) – possible tie-in to smart meters
• Downsize strategies – (e.g., right-sizing equipment, smaller appliances, smaller homes)
• Next generation, deep direct installation for residential and / or small business
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Potential Changes in Costs and Savings
2008 2011
EVT Cost ($M) 28$ 77$
Annual MWh 116,000 159,000
Summer Peak MW 16 24
Winter Peak MW 17 22
TRB ( $M ) 100$ 156$
$0.025
$0.051
$0.107
$-
$0.020
$0.040
$0.060
$0.080
$0.100
$0.120
2008 2011 AVOIDEDCOST
With savings from CFLs dropping, an expected greater reliance on measures and strategies with higher costs, and more aggressive strategies, the levelized cost of efficiency will likely increase. It would still remain well below avoided supply costs.
EVT Levelized Cost / kWh
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Potential Change in Levelized Cost and TRB / kWh by Major Market
2007 2011 2007 2011
Business New Construction 0.029$ 0.045$ 0.117$ 0.162$
Business Market Opportunities 0.050$ 0.064$ 0.097$ 0.154$
Business Retrofit 0.023$ 0.045$ 0.086$ 0.127$
Retail Efficient Products 0.012$ 0.047$ 0.088$ 0.131$
Residential New Construction 0.079$ 0.118$ 0.277$ 0.295$
Residential Retrofit 0.056$ 0.098$ 0.065$ 0.110$
Total 0.025$ 0.051$ 0.095$ 0.140$
EVT Cost / kWh EVT TRB / kWh
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Potential Change in Spending by Major Market
Business New Construction
14%
Business Market Opportunities
7%
Business Retrofit30%
Residential New Construction
16%
Residential Retrofit17%
Retail Products16%
Business New
Construction
13%
Business Market
Opportunities
12%
Business Retrofit
54%
Residential New
Construction
10%
Residential Retrofit
5%
Retail Products
6%
20112007
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Planning for CFL Market Transformation
In 2007, retail CFLs accounted for:
• 46% of first-year MWh
• 42% of Summer Peak MW
• 26% of lifetime MWh
• 25% of TRB
• 14% of costs
Efficient Products Percentage of Total EVT
MWhs, Lifetime MWHs, expenditures, and TRB
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
2000 2001 2002 2003 2004 2005 2006 2007
% of Annual MWH % of Lifetime MWH % of EVT Cost % of TRB
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Planning for CFL Market Transformation• EVT is collaborating in the DPS investigation of
attribution and savings in the context of the rapidly changing CFL market to inform 2009-2011 planning
• EVT’s interim planning for 2009-2011 assumes for Retail Efficient Products:
• 25% reduction in savings per CFL in 2009• 50% reduction in savings per CFL in 2010• 75% reduction in savings per CFL in 2011