Sun Blankets New York City, Ahead Of Cold Front Returning Despite Start Of Spring

Utility Access to Data and Innovative Building Programs Will Bolster Demand Side Management and Efficiency Programs

Key Takeaways:

  • The New York State Energy Research and Development Authority (NYSERDA) has joined the Department of Energy’s (DOE) Better Buildings Combined Heat and Power Resiliency Accelerator to foster combined heat and power (CHP) technologies for improved efficiency
  • The DOE’s 2016 Better Buildings update also highlights the completion of its Energy Data Accelerator to expanding energy data accessibility
  • Traditional utility programs with transaction-specific incentives, such as equipment rebates, are broadening their focus to whole-building performance, including benchmarking for retro-commissioning
  • Regulators envision an important role for utilities in improving energy efficiency through access to incentives, technical assistance, and data

Entities Mentioned:

  • Department of Energy
  • Energy Information Administration
  • New York State Energy Research and Development Authority

Insight for Industry – NYSERDA-DOE Partnership Fosters Cogeneration to Enhance Resiliency and Support Energy Efficiency in Buildings

On May 13, 2016, the New York State Energy Research and Development Authority (NYSERDA) announced its partnership with the Department of Energy’s (DOE) Better Buildings Combined Heat and Power Resiliency Accelerator to foster combined heat and power (CHP) technologies for improved efficiency and enhanced resiliency. CHP systems produce both electricity and heat on-site or close to the point of use and, therefore, can continue to power a building under a utility grid interruption. CHP has been given a crucial role in achieving energy efficiency goals and enhancing system resiliency under New York’s Reforming the Energy Vision (REV) strategy.

Launched in 2011, the DOE’s Better Buildings initiative is a multi-pronged strategy aimed to improve the energy use of commercial, industrial, residential, and public buildings by 20 percent over 10 years. Within the program, ten different Better Buildings Accelerators demonstrate innovative policies and approaches and, in so doing, boost investments in energy efficiency. Progress is already being made under the Energy Data Accelerator, which has been the first among the accelerators to complete its mission. The Energy Data Accelerator is a two-year partnership with cities and utilities to improve energy efficiency by expanding energy data accessibility. The accomplishment will enable 18 utilities to provide access to energy data for entire buildings to their owners by 2017, significantly advancing the kind of energy benchmarking needed for efficiency improvements. The DOE noted that states and local governments involved in the Better Buildings initiative have made a number of strides through policies, regulations, and programs, including building performance policies and energy efficiency standards.

In several states, such as Kentucky, Maryland and New York, regulators have given local utilities a significant role in facilitating market access to programs and initiatives through incentives, technical assistance, data access, and services that support enhanced energy performance. Federal, state, and local agencies are collaborating with utilities to enhance customer data access, and encourage awareness of energy use data as a key measure for energy efficiency through tools like the Environmental Protection Agency (EPA)’s ENERGY STAR Portfolio Manager and Green Button initiative’s national standards for access and interoperability. These efforts have encouraged utilities to implement data solutions that enhance access to electronic energy data records.

At both the federal and state levels, energy efficiency resource standards (EERS) form the center of the policy for sustained investment in energy efficiency. As EERS typically consist of long-term goals, utilities are planning for energy efficiency improvements accordingly, increasing the certainty required for large-scale investments. Multi-strategy initiatives such as the Better Buildings and Energy Data Accelerators, working in partnership with state and local governments, will have a direct impact on utility Demand Side Management Portfolios, and the outcomes of state policies, such as those set in New York, could set a precedent in other regions.

NYSERDA Partnership with New Accelerator under DOE’s Better Building Initiative Supports Resiliency Goals under REV

Combined Heat and Power is crucial to achieving energy efficiency goals and enhance system resiliency under New York’s Reforming the Energy Vision (REV) strategy. According to NYSERDA, CHP alone can shave 15-30 percent off a building’s existing energy consumption. Currently, 570 buildings in New York use CHP systems that provide 5.7 GW of power, and represent approximately 13 percent of the 4,400 buildings nationwide that use the technology.

In joining DOE’s Combined Heat and Power for Resiliency Accelerator, NYSERDA said it would coordinate with Long Island Power Authority, PSEG-Long Island, and National Grid’s Keyspan Energy Delivery division to examine the role of CHP in providing uninterrupted energy to Long Island facilities in the aftermath of Superstorm Sandy, Hurricane Irene, and Tropical Storm Lee. The results of this study would identify best practices that can be applied across the state.

The DOE’s Combined Heat and Power for Resiliency Accelerator aims to encourage states, communities and utilities to consider CHP for their critical infrastructure needs. The initiative aims to assess CHP and identify technology gaps among resiliency planners to stimulate the adoption of CHP as a reliable, high efficiency, low-emitting electricity and thermal energy source for critical infrastructure.

Also known as cogeneration, CHP is the concurrent production of electricity and thermal energy from a single energy source located at or near the point of consumption. CHP technologies can use a variety of fuels to generate electricity, allowing the recovery of heat that would otherwise be lost in the generation process to provide heating and/or cooling. Cost-effective and with few geographic limitations, CHP generators can operate at 65-75 percent efficiency, a significant improvement over the national average of approximately 50 percent when the services are provided separately (Figure 1).

 

CHP-Process

Figure 1 – Efficiency of CHP vs Traditional Power Generation System(Source: DOE)

The Combined Heat and Power Resiliency Accelerator is one of three new focus areas that DOE announced in the 2016 Better Buildings update to develop solutions in resiliency preparations, wastewater infrastructure, and clean energy options in low and moderate income communities. The other two are the Better Buildings Clean Energy in Low Income Communities Accelerator, which aims to lower energy bills in low income communities by expanding installation of energy efficiency and distributed renewables; and the Better Buildings Wastewater Infrastructure Accelerator, which aims to improve the energy efficiency of participating water resource recovery facilities by at least 30 percent and integrate at least one resource recovery measure.

Better Buildings Initiative Highlights Progress, Accomplishes Mission to Expand Energy Data Accessibility

Since 2013, the Better Buildings initiative has launched 10 accelerators – targeted, short-term, partner-focused activities – designed to address persistent barriers to enhance energy efficiency (Table 1).

 

Better-Buildings-Accelerators

Table 1 – Better Buildings Accelerators (Source: DOE)

Accelerators bring together stakeholders who commit to make substantive progress in overcoming such barriers within specific time-frames. According to DOE, 135 partners had shared energy performance results for more than 34,000 properties as of 2015 (Figure 2).

 

Better-Buildings-Participation

Figure 2 – Geographic Distribution of Participating Properties in 2015 (Source: DOE)

The 2016 Better Buildings update shows that partners have cumulatively saved 160 trillion Btus and an estimated $1.3 billion since the program’s launch in 2011 (Figure 3). Currently more than 310 organizations, representing more than 4.2 billion square feet of building space and $5.5 billion in energy efficiency investments are involved in the Better Buildings Challenge.

 

Better-Buildings-Cumulative-Energy-Savings

Figure 3 – Cumulative Energy Savings by Year (TBtu) (Source: DOE)

The Challenge, a cornerstone of the Better Buildings Initiative, is a public-private partnership, wherein participants commit to improving the energy intensity of their building portfolios by at least 20 percent over ten years and share their strategies and results with the market.

Among key accomplishments, the Energy Data Accelerator – a two-year partnership with cities and utilities to improve energy efficiency by expanding energy data accessibility – has been the first to complete its mission. The accomplishment will enable 18 utilities serving more than 2.6 million commercial customers nationwide to enhance energy benchmarking by providing whole-building energy data access to building owners by 2017, which could then translate into efficiency improvements.

State Regulators See Utilities as Crucial for Fostering Energy Efficiency

As demonstrated by the Better Buildings Initiative, successful implementation of energy efficiency programs depends on a close collaboration between state legislations, regulators, and utilities. For that reason, state utility commissions have a prominent role in establishing policies that foster utility-sector energy efficiency programs, particularly in buildings. Legislators and regulators typically require utilities to offer programs and establish mechanisms for utilities to recover their costs through rate case proceedings (Table 2). This trend has led states to establish specific energy savings targets (typically as a percentage of total energy sales) for regulated utilities. For example, Maryland’s EmPOWER initiative — EmPOWER Maryland Energy Efficiency Act of 2008 (HB 374)– has reduced building energy consumption by 15 percent by 2015 through energy efficiency programs including lighting and appliance rebates, HVAC, Home Performance with Energy Star, Energy Star New Homes, CHP, for homes, businesses, and industrial facilities offered by the state’s five largest electric utilities. Similar EERS are in place in a large and rapidly growing number of states.

Among the more recent utility energy efficiency proceedings, on February 12, 2016, KY PSC issued an order (Case No. 2015-00277) approving amendments to Duke Energy’s demand side management programs including expanding the scope of the company’s Residential Smart Saver Energy Efficient Residences Program, Residential Energy Assessments Program, and the Smart Saver Prescriptive to respond to market conditions and enhance Duke Kentucky’s offerings.

 

Table 2 – Open State Commission Dockets on Energy Efficiency Proceedings for Buildings (Source: EnerKnol)
California R1311005 Rulemaking concerning energy efficiency rolling portfolios, policies, programs, evaluation, and related issues
Iowa EEP-2016-0002 Investigation to determine the reasonableness of Liberty Utilities’ proposed energy efficiency plan which includes appliance rebate and residential low-income weatherization assistance programs
New York 07-M-0548 Proceeding regarding an Energy Efficiency Portfolio Standard
 New York 14-M-0094 Proceeding to consider a Clean Energy Fund which includes provisions for building improvements and building performance criteria.
 New York 14-M-0224 Proceeding to enable Community Choice Aggregation programs
Ohio 16-0743-EL-POR Application of Ohio Edison Company, Cleveland Electric Illuminating Company, and Toledo Edison Company for approval of energy efficiency and peak demand reduction program portfolio plans for 2017- 2019
Idaho IPC-E-16-03 Proceeding to consider Idaho Power Company’s application for a determination of 2015 demand side management expenses as prudently incurred
Kansas 16-KCPE-446-TAR Application of Kansas City Power & Light Company for approval of its demand-side management portfolio under the Kansas Energy Efficiency Investment Act
Missouri EO-2015-055 Proceeding to consider Union Electric Company’s filing to implement regulatory changes in furtherance of energy efficiency under the Missouri Energy Efficiency Investment Act (MEEIA).
District of Columbia FC1130 Proceeding to investigate into modernizing he electric delivery system with increased sustainability
Maryland 9362 Proceeding to consider Allegheny Power’s energy efficiency, conservation and demand response programs pursuant to the empower Maryland energy efficiency act of 2008

 

Energy Efficiency Resource Standards establish savings targets for energy use that utility and non-utility program administrators are required to meet through customer energy efficiency programs, thereby encouraging end-user energy saving improvements. An EERS, similar to a Renewable Portfolio Standard (RPS) or Alternative Energy Portfolio Standard (AEPS), requires utilities to reduce energy use by an increasing amount each year. States may combine an EERS and RPS by allowing energy efficiency to count for RPS obligations. For example, since a large part of electricity is consumed in the residential and commercial sector through lighting, cooling, and heating in buildings, electricity efficiency forms an important part in overall building performance policy. Electricity savings requirements for utilities may include flexibility to achieve the standard through a market-based trading system of energy savings certificates. Currently, 25 states have EERS policies requiring electricity savings (Figure 4).

 

State-EERS-Goals

Figure 4 – Energy Efficiency Resource Standards and Goals as of March 2015 (Source: DSIRE)

 

According to DOE, utility programs that have traditionally focused on transaction-specific incentives, such as equipment rebates, are broadening their focus to consider incentives based on whole-building performance, and incorporate performance benchmarking as part of retro-commissioning programs. DOE’s Better Buildings Challenge has enabled utilities to provide access to whole building data, offer multi-measure programs, and report on results. Furthermore, with the emergence of advanced metering and electronic data exchange methods, energy performance information has gained prominence in customer service and efficiency program offerings. For example, Green Button, a component of DOE’s Energy Data initiative, seeks to make customer energy data available through utility-funded solutions. Similarly, through the EPA’s ENERGY STAR program, utilities are offering whole-building approaches such as energy performance benchmarking using Portfolio Manager, an online tool for tracking energy and water consumption and greenhouse gas emissions in buildings.

State and Local Government Buildings Still Have Large Untapped Efficiency Potential

According to DOE, local government buildings, which represent 64 percent of government floor space, have a savings potential of 260 trillion Btus, while state buildings have the potential to save up to 100 trillion Btus. DOE highlighted that states and local government partners involved in the Better Buildings initiative have made notable accomplishments through policies, regulations, and programs, such as building performance policies and energy efficiency portfolio standards. State and local government buildings consume more than 1,300 trillion Btus annually.

Examples of state programs that foster energy efficiency in state and local government buildings include:

  • In California, a 2012 executive order established targets for energy, water efficiency, and GHG emissions for state buildings. Energy savings targets included reductions in grid-based energy purchases by 20 percent by 2018 relative to 2003 baseline; 50 percent of newly constructed state buildings and major renovations started after 2020 to be zero net energy, and 100 percent by 2025; 50 percent of existing square footage to include measures achieving zero net energy by 2025.   State buildings have already reduced energy use by 14 percent through 2014 since 2003.

 

  • In Massachusetts, a Better Buildings Partner, the 2013 Accelerated Energy Program targets a 25 percent reduction in energy, emissions, and energy costs at 58 million square feet of state buildings at 700 distinct sites, comprising 4,800 buildings. By December 31, 2014, the state has initiated efforts to implement energy efficiency measures in the identified portfolio. These projects are expected to reduce energy use by 20 percent or more and reduce energy bills by $42 million annually, while leveraging approximately $24 million in utility incentives. State buildings participating in the Building Asset Rating (BAR) pilot, which seeks to develop a low-cost process for a building asset rating that will complement existing operational ratings. Additionally, monthly utility consumption data for state facilities are collected and reported through the Mass Energy Insight system.

 

  • In Minnesota, which is also a Better Buildings Partner, the Guaranteed Energy Savings Program was initiated in April 2011 in response to Governor Mark Dayton’s executive order requiring state agencies to adopt cost-effective energy efficiency and renewable energy strategies to achieve an aggregate 20 percent reduction in energy use for state-owned buildings. The 2011 Back to Work Minnesota initiative brings together public and private sector leaders to identify innovative financing methods that can spur energy efficiency retrofits of commercial and public buildings across the state.

 

  • In New York, the BuildSmart NY initiative provides a strategic plan to implement Governor Cuomo’s December 2012 Executive Order 88, which mandates 20 percent energy efficiency improvement in state buildings by 2020. In the initiative’s first year, energy consumption across state buildings was reduced by five percent, equivalent to reducing emissions by more than 130,000 tons annually.

 

  • In Vermont, Act 40 of 2011 calls for the state to lead by example in reducing energy use and set a five percent energy savings goal for state government. The Vermont Department of Buildings and General Services (BGS) is creating a strategic plan for energy savings that will be used as a model for other state agencies and departments. The 2012 Climate Change Action Plan for State Government Buildings and Operations directs state government buildings and operations to achieve emissions reductions of 25 percent by 2012 and 50 percent by 2028, and if practicable, 75 percent by 2050, relative to 1990 levels.

Energy Efficiency Developments Rely on Policy Environment to Accommodate Emerging Technologies

Energy efficiency as a resource can reduce emissions and facilitate savings in customer electricity bills, leading to policy and regulatory support because of economic or environmental reasons. State efforts have led to the development of utility demand-side management, ranging from customer behavior programs to building heating, ventilation and air-conditioning (HVAC), lighting system, and appliance upgrades.

A December 2015 report from the Energy Information Administration (EIA) shows that energy consumption by the U.S. federal government dropped to 0.94 quadrillion British thermal units (Btu) in FY 2014, the lowest level since FY 1975 (Figure 5). From FY 2003 to FY 2014, the federal government reduced building energy intensity an average of 1.9 percent per year.

 

Federal-Government-Energy-Consumption

Figure 5 – Federal Government Energy Consumption, 1975-2014 Fiscal Years (Source: EIA)

 

Federal, state, and local agencies are collaborating with utilities to enhance customer data access, and encourage awareness of energy use data as a key measure for energy efficiency through tools like the Environmental Protection Agency (EPA)’s ENERGY STAR Portfolio Manager and Green Button initiative’s national standards for access and interoperability. These efforts have encouraged utilities in several states to implement data solutions that enhance access to electronic energy data records.

At both the federal and state levels, EERS remains critical policy for sustained investment in energy efficiency. The longer terms and goals associated with an EERS heightens the importance of energy efficiency in utility planning efforts, thereby increasing certainty required for large-scale investments. According to a May 2016 report from the American Council for an Energy-Efficient Economy (ACEEE), in 2014, states with an EERS achieved incremental electricity savings of 1.2 percent of retail sales on average, compared to average savings of 0.3 percent in states without an EERS.

State regulations and policies seek to eliminate financial disincentives that prevent utilities from implementing energy savings – in essence, if the utility receives a premium for every unit of energy delivered, that utility’s commercial incentive is to deliver as much energy as possible. For example, many states employ mechanisms – such as revenue decoupling, system benefit charge, and performance incentives – that disconnect the utility’s cost recovery from variable energy sales, thereby overcoming the disincentive for energy efficiency in the utility business model, where fixed cost recovery is traditionally linked to volumetric energy sales. Such financial mechanisms will continue to be instrumental in energy efficiency penetration.

Moving forward, multi-strategy initiatives such as the Better Buildings and Energy Data Accelerators, working in partnership with state and local governments, will have a direct impact on utilities seeking to leverage enhanced data access in Demand Side Management Portfolios. The types of policies seen in New York, California, Massachusetts, and Minnesota, and the outcomes of open dockets in New York (14-M-0094) could set precedent for policymakers and utilities in other regions seeking to replicate similar programs.

Originally published by EnerKnol.

EnerKnol provides U.S. energy policy research and data services to support investment decisions across all sectors of the energy industry. Headquartered in New York City, EnerKnol is proud to be a NYC ACRE company.