Energy efficiency represents the biggest potential to cut consumer costs and reduce power demand – one report has found America is just 43.8% efficient. While individual projects show small results, when they accumulate across a regional grid, efficiency savings add up quickly, as New England’s grid operator recently discovered.
State and private programs designed to reduce consumer energy demand have recently cut the need for $260 million in planned transmission system upgrades across the six states within the ISO-New England (ISO-NE) region. The announcement was made during ISO-NE’s energy-efficiency forecast, the first multi-state outlook in the U.S.
Big Investments = Big Energy Savings
ISO-NE is one of the nation’s largest grid operators, managing electricity supply and demand for 14 million people in 6.5 million households and businesses across 8,000 miles of high-voltage transmission lines and 350 generators. The system has more than 32,000 MW of capacity, including more than 2,000 MW of demand response resources.
Roughly $1.2 billion was spent across the ISO-NE region from 2008-2011, resulting in a total reduction of 3,502 gigawatt-hours (GWh) in electricity use. The average state reduced electricity consumption 876 GWh annually, with total summer peak demand savings of 514 megawatts (MW).
The overall effects of these savings are hard to ignore. Regional peak demand is only forecast to grow .9 percent from 2012–2021 (roughly 2/3 the previous estimate), with a flat annual growth in energy consumption over the same period, and winter peak demand actually projected to decline nearly .5 percent.
Lower Demand Leads To Lower Infrastructure Costs
In the long term, this consumption decline will have a major impact. From 2015–2012, ISO-NE estimates annual savings of 1,343 GWh from energy efficiency — roughly the same amount of electricity used by 2 million average homes in the region. New England will spend an estimated $5.7 billion on energy efficiency program over the same time period, according to the report.
As a result, ISO-NE was able to lower long-term planning needs for the system’s grid beyond 2020. “Revised analysis shows that the region can actually defer 10 transmission upgrades that earlier studies showed were needed to ensure system reliability,” said Stephen Rourke, vice president for system planning. “By deferring these upgrades, the region will save an estimated $260 million.”
Energy efficiency programs across the region were comprised of relatively simple steps, like encouraging consumers to swap out incandescent light bulbs for efficient lighting like CFLs or LEDs, upgrade HVAC systems and building insulation, purchase Energy Star appliances, or integrate more efficient industrial processes and motors.
Diverse Funding Streams Foot the Bill
Funding for the 125 different individual programs has come from four main sources: state-designated funding, revenue from the system’s Forward Capacity Market (long-term capacity sales), a designated “systems benefits charge” on ratepayer bills, and revenue from the Regional Greenhouse Gas Initiative (RGGI).
Energy efficiency programs have been the largest recipients of RGGI investments by far, garnering 66 percent of all carbon auction revenue to date, according to the RGGI 2011 Investment Report.
Given all this, it’s no surprise New England leads the U.S. in the energy efficiency economy, with Massachusetts, Vermont, Connecticut, and Rhode Island all listed in the annual ranking of the top ten most energy efficient states.
Silvio is Principal at Marcacci Communications, a full-service clean energy public relations company based in Washington, D.C.