Targeting Electric Reliability: Energy Efficiency As a Peak Demand Resource

February 28, 2007

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Wendy Koch, 202-507-4753, Senior Director, Marketing & Communications

Washington, D.C. — Energy efficiency programs can be effective resources for reducing peak demand as well as overall load, according to a new report from the American Council for an Energy-Efficient Economy. The report, Examining the Peak Demand Impacts of Energy Efficiency: A Review of Program Experience and Industry Practices, documents how energy efficiency programs can deliver savings during peak demand periods when the power grid is most stressed. Energy efficiency savings can also reduce the high costs of power during peak demands, which typically occur during hot summer conditions.

“Energy efficiency programs typically are valued mostly for the long-term electricity savings they achieve—savings that occur throughout the year or over the heating or cooling seasons,” noted lead author Dan York, Ph.D., Senior Research Associate for ACEEE’s Utilities Program. “However, our analysis of these programs shows that they also deliver critical savings during peak periods when power costs are high and supplies are constrained.”

Moderating peak electric demand has become a major concern in recent years as peak loads have grown faster than electric system capacity, either from new generation plants or transmission lines. Such options are typically high-cost and require long times to construct. As a result, there has been a marked increase over the past few years in efforts to rely on energy efficiency and other “demand-side” measures as lower-cost alternatives that also can be brought into service much more rapidly.  

“Using energy efficiency to reduce peak demands is especially attractive because such savings get built into our energy systems; the savings occur every time an energy-efficient device is used, whether that’s a high-efficiency commercial lighting system, a more efficient air-conditioner, or a high efficiency motor,” observed co-author Martin Kushler, Ph.D., Utilities Program Director. “With energy efficiency, we not only get peak demand savings, but also year-round or seasonal savings that yield lower power plant emissions, including greenhouse gases, and lower overall customer and utility costs.”

With this increased reliance comes a corresponding need for accurate data on both energy and peak demand impacts associated with efficiency resources. Program evaluations have tended to focus on energy savings (measured in kilowatt-hours). Corresponding peak demand savings (measured in kilowatts) generally have been less well-measured. The researchers observe that with an increasing emphasis on peak demand savings, the need for greater understanding and accurate quantification of the peak demand impacts of energy efficiency will increase. The report notes that there are solid foundations in place for establishing a firmer, broader knowledge base of the peak demand impacts of energy efficiency.

The report concludes that there could be an advantageous convergence of need, capabilities, and costs emerging for estimating peak demand impacts. Rapid increases in the capabilities of metering and communications technologies can yield lower costs for data gathering and analysis. “The energy efficiency industry is well-poised to advance the capability to quantify the peak demand impacts of energy-efficient technologies.  This is a positive development given the increasing interest in having utilities and power system operators expand the use of energy efficiency to meet growing customer demand,” concluded Kushler.

The report, Examining the Peak Demand Impacts of Energy Efficiency: A Review of Program Experience and Industry Practices, is available for free download at http://www.aceee.org/research-report/u071.  A comparative database of energy and demand impacts of selected energy efficiency measures, “Appendix F: Comparative Database of Energy and Demand Impacts of Selected Energy Efficiency Measures” is available at www.aceee.org/pubs/u071.htm .  Hard copies of the full report with appendices (including “Appendix F”) can be purchased for $75. The full report plus appendices, but excluding “Appendix F” is available for $50. “Appendix F” is available for $25. A $5 postage and handling fee is charged for all hard copy orders from ACEEE Publications, 529 14th Street, N.W., Suite 600, Washington, D.C. 20045, phone: 202-507-4000, fax: 202-429-2248, e-mail: aceee_publications@aceee.org.