EE in System Forecasting

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1 EE in System Forecasting NEEP Forum Annual Meeting, Washington, DC December 12, 2012 Paul Peterson Synapse Energy Economics Inc. All rights reserved.

2 Synapse Energy Economics Consulting firm in Cambridge Massachusetts with a staff of 30 people Issues Electric industry restructuring & utility rate cases Wholesale markets, ISOs, and RTOs System Planning and resource development Environmental impacts of power industry Clients State Consumer Advocates and Utility Commissions Public Interest and Environmental groups EPA and DOE RTO stakeholders Synapse Energy Economics Inc. All rights reserved. NEEP Annual Forum: EE in Planning 2

3 NMR Group Recommendation 2 Increase the consistency, understanding and transparency of: Approaches to forecasting Application of net or gross savings Better coordinate energy efficiency forecasts Program reporting Bulk power system planning EPA air quality assessments Synapse Energy Economics Inc. All rights reserved. NEEP Annual Forum: EE in Planning 3

4 New England Energy Efficiency Forecast Developed in response to requests from state agencies, ESCOs, and NEPOOL Participants Applied to ten-year baseline forecasts used to analyze future system needs. Incorporates resources cleared in the Forward Capacity Market auctions (three years) and estimates the next seven years Synapse Energy Economics Inc. All rights reserved. NEEP Annual Forum: EE in Planning 4

5 EE Forecast developed from State program reports and data Synapse Energy Economics Inc. All rights reserved. NEEP Annual Forum: EE in Planning 5

6 Conservative Forecast ISO adds inflation escalator to program costs, but not to program budgets ISO assumes increasing costs of all EE measures over time ISO uses net savings to avoid over-counting EE impacts in its econometric forecasts However, feedback loops in the EE Forecast methodology will self-correct ISO s assumptions, if they are in error Synapse Energy Economics Inc. All rights reserved. NEEP Annual Forum: EE in Planning 6

7 ISO-NE RSP12 Annual Energy (GWh) Weather Normal History and Forecast Synapse Energy Economics Inc. All rights reserved. NEEP Annual Forum: EE in Planning 7

8 Gross versus Net Savings Key issue is transparency of what goes into gross or net savings value. Different purposes for using gross or net: Net savings appropriate for evaluating costeffectiveness of programs Gross savings appropriate for system planning to evaluate EE impacts on future system peak loads and energy consumption Gross savings also appropriate for EPA models Econometric models tend to understate EE Synapse Energy Economics Inc. All rights reserved. NEEP Annual Forum: EE in Planning 8

9 Energy consumption (declining slope to flat) Synapse Energy Economics Inc. All rights reserved. NEEP Annual Forum: EE in Planning 9

10 2005 NEEP Estimate : Correct for Synapse Energy Economics Inc. All rights reserved. NEEP Annual Forum: EE in Planning 10

11 Synapse Projections of EE Impacts in MISO Total Projected Energy Sales and Energy Net EE in 4 EE Scenarios, GWh GWh 570, , , , , , , , , , Year Total Energy (GWh) GEP Scenario with Fixed Incremental Savings, Energy - EE (GWh) Best Practices, Energy - EE (GWh) GEP Scenario, Energy - EE (GWh) States' average EE potential, Energy - EE (GWh) Synapse Energy Economics Inc. All rights reserved. NEEP Annual Forum: EE in Planning 11

12 Synapse Projections for PJM Peak Load Peak Load Forecast and Peak Load Net EE, MW MW Year PJM Total Peak Demand (MW) PJM Modified Assumptions, Load - EE (MW) PJM Best Practices, Load - EE (MW) PJM Assumptions, Load - EE (MW) PJM Current Programs, Load - EE (MW) Synapse Energy Economics Inc. All rights reserved. NEEP Annual Forum: EE in Planning 12

13 Contact information Paul Peterson Synapse Energy Economics Synapse Energy Economics Inc. All rights reserved. NEEP Annual Forum: EE in Planning 13

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