CEC Posits Efficiency Blunts Demand

California investor-owned utilities are likely to see flat or declining peak power demand in the coming decade if the California Public Utilities Commission’s energy efficiency program succeeds, according to a California Energy Commission analysis released February 17. The analysis--while seemingly good news on its face--was greeted with caution during an Energy Commission workshop. The phase out of coastal plants that use once through cooling to protect marine life, plus the integration of 33 percent renewable energy into the grid points to the need to continue to build new power plants, said grid operator spokesperson Gregg Fishman. He noted, however, “The California Independent System Operator has not yet fully reviewed the Energy Commission report.” “Are we comfortable in our energy planning that load growth is going to be declining for an extended period of time, maybe for the first time in history,” said Chris Kavalec Energy Commission demand analyst. The Energy Commission analysis laid out three levels of success for the CPUC’s energy efficiency program, namely high, medium and low scenarios. It found peak power demand among the state’s investor-owned utilities would reduce the CEC’s forecast of 52,000 MW in 2020 by between 8 and 12 percent. Under both the high and medium scenarios, peak demand at utilities would actually decline from the projected peak in 2012 of slightly under 48,000 MW. Total energy demand at the private utilities under the high and medium scenarios would barely budge upward by 2020 from the slightly less than 200,000 GWh projected by CEC in 2012 after some economic recovery occurs. It would hit 205,000 GWh under the medium scenario and slightly less under the high scenario. The Energy Commission even projects that Pacific Gas & Electric will see its peak load decline from its 2008 level, when the economic recession hit with full force that fall. The analysis notes that while efficiency measures are supposed to be the state’s chief way to meet the need for electricity under the so-called loading order, “relying solely on these resources for long-term resource adequacy is uncharted territory.” (The “loading order” calls for efficiency first, renewable energy second, and non-renewable electricity sources last.) The Energy Commission report warns that “if decision makers postpone decisions to invest in supply-side resources and energy efficiency fails to deliver as forecasted, serious reliability (and cost) consequences would result.” Commissioner Jeff Byron questioned how well the CPUC could actually track and verify energy savings under its 2008 energy efficiency plan. Using a personal example, he explained how he picked up dozens of compact fluorescent light bulbs on sale at a hardware store recently and stored them in a box as replacements for when his installed bulbs burn out. “How do you track that none of them got installed?” asked Byron. CPUC regulatory analyst Carmen Best acknowledged the difficulty and replied that history has shown efficiency measures may not fully achieve their stated goals. She added that energy efficient devices wear out and are not necessarily replaced with devices that are as energy efficient, causing decay in the rate of savings. However, Itron consultant Mike Ting said that much of the savings planned by the CPUC in the decade ahead is to be due to changes in codes and standards that require construction of long-standing zero net energy buildings. He also said that retrofits of heating, ventilation, and air conditioning systems should bring more long-lasting energy savings than recent programs that have focused largely on installing compact fluorescent lights. The Energy Commission analysis builds on the electricity demand forecast outlined in its 2009 Integrated Energy Policy Report, noted agency officials at the meeting. That report showed demand would rise more slowly than the Energy Commission projected in 2007 due to the recession, increased use of solar panels on rooftops, and higher utility rates, said Kavalec. Due to the nascent nature of the CPUC energy efficiency program, the Energy Commission did not account for it in its 2009 forecast, deciding instead to come back to it with this week’s analysis. CEC staff noted that to achieve the energy efficiency goals, California will have to devote sufficient resources and keep up with decaying equipment and building components.

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CEC Posits Efficiency Blunts Demand

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