New York is in the midst of a major overhaul of the regulatory framework that governs the energy sector. The effort is called REV, or Reforming the Energy Vision, and is intended to open up new opportunities for clean energy and use market forces to reduce greenhouse gas emissions. Energy efficiency continues to be a central part of this effort. Reducing energy consumption and curbing peak demand remain the most cost effective ways to achieve New York’s aggressive greenhouse gas targets and provide utilities with a resource tied to revenue earning opportunities, while also saving customers money and improving customer satisfaction. With energy efficiency, everybody wins – ratepayers, utilities, regulators, and stakeholders. However, getting efficiency right can be the most challenging part.
Making Energy Efficiency Count
Saving energy should be the centerpiece of REV. Efficiency has been tremendously successful – it delivers a cost reduction to the consumer, avoids utility infrastructure stress, frees up funds for economic development and job creation, increases investment, and lowers emissions. Despite the clear value efficiency provides, it is easy for it to get lost in the shuffle. REV is new and exciting, while conservation is more than three decades old. Furthermore, the age-old challenge remains. Saving energy does not directly produce a kW or MWh. Instead it avoids a kW or a MWh, resulting in a counterfactual value – the estimate of the demand or energy that would have been required. Good measurement has been critical for efficiency to succeed, but getting measurement feedback faster and with more granularity is the key to delivering the next level of savings. Advanced M&V has proven capable of addressing these concerns. Advanced M&V calculates impacts from energy efficiency or other DERs based on meter data (AMI, monthly or bi-monthly) and provides near real-time, accurate estimates of energy savings from efficiency projects and programs.
Advanced M&V is a game-changer for energy efficiency in NY and across the country. It converts efficiency from an unreliable and loosely counted reduction in capacity to a real-time resource that can be harnessed to deliver immediate energy savings on the grid. Speedy and granular measurement data allows program administrators to see where savings are occurring across the distribution network and calculate savings at the substation or circuit level. Advanced M&V provides the foundation to evolve energy efficiency into the next era.
REV and Advanced M&V
2017 is a critical year as REV moves into execution. Newly created Distributed System Implementation Plans (DSIPs) will manage how DER’s are incorporated into the grid. Energy efficiency funding is shifting away from the system benefit charge over to ratebase, effectively transitioning to a core utility operation. And non-wires alternative projects are becoming a more important option to address load pockets. In order for these changes to succeed, Advanced M&V will be necessary to ensure that energy efficiency is measured accurately and continuously, and the impacts are trusted by those responsible for managing the distribution grid.
The next step…
Given the importance of measuring energy efficiency, it would be a missed opportunity to wait to adopt advanced M&V. New York can incorporate this technology into the upcoming cycle of energy efficiency programs. Importantly, by starting now utilities can master modern measurement to support the next generation of energy efficiency and craft earnings adjustment mechanisms around innovative market-based models for the future. With a clear understanding of how to measure actual energy savings, New York can develop and deliver new approaches that will animate markets and pave the way for the future of energy efficiency in the state. The moment is now. If New York does this right, everybody wins and the energy efficiency industry will move towards a promising future.
Tom King served as CEO of National Grid U.S. from 2007-2015 and as CEO of Pacific Gas and Electric, both companies are national leaders in energy efficiency results. Tom served the Board and Co-Chaired the Alliance to Save Energy. He has served on the Board of the Edison Electric Institute and American Gas Association. He currently serves on the board of EnergySavvy.
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