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DOE OSTI2021

Methods to Incorporate Energy Efficiency in Electricity System Planning and Markets

Electric utilities, independent system operators and regional transmission operators have acquired significant levels of energy efficiency over several decades. The predominant approach utilities use to consider energy efficiency in electricity system planning and ISO/RTOs use in wholesale electricity markets is to reduce load forecasts to account for estimated impacts of relevant policies and programs. But an increasing number of states and utilities are interested in improved analysis of energy efficiency in electricity system planning and wholesale electricity markets. This report describes how to consider energy efficiency as a potential resource for the future by allowing it to compete with all other electricity system resources. Increasing levels of wind and solar, growth in peak demand, and electrification of transportation and other new loads have increased the need for a more flexible and responsive electricity system. Considering energy efficiency as a resource option can support these and other electricity system objectives, including grid reliability, reduced electricity costs, energy efficiency targets, and lower air pollutant emissions. The October 2019 slides were presented at the American Council for an Energy Efficient Economy Energy Efficiency as a Resource conference and provide an overview of the report. Portions of the report were included in the American Council for an Energy Efficient Economy Energy Efficiency 2020 Summer Study paper, Planning for the Grid of Tomorrow: Energy Efficiency as a Resource in Utility Resource Plans.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

DOE OSTI2020

Determining Utility System Value of Demand Flexibility From Grid-interactive Efficient Buildings

This report focuses on ways current methods and practices that establish the value to electric utility systems of distributed energy resource (DER) investments can be enhanced to determine the value of demand flexibility in grid-interactive efficient buildings that can provide grid services. The report introduces key valuation concepts that are applicable to demand flexibility that these buildings can provide and links to other documents that describe these concepts and their implementation in more detail.The scope of this report is limited to the valuation of economic benefits to the utility system. These are the foundational values on which other benefits (and costs) can be built. Establishing the economic value to the grid of demand flexibility provides the information needed to design programs, market rules, and rates that align the economic interest of utility customers with building owners and occupants. By nature, DERs directly impact customers and provide societal benefits external to the utility system. Jurisdictions can use utility system benefits and costs as the foundation of their economic analysis but align their primary cost-effectiveness metric with all applicable policy objectives, which may include customer and societal (non-utility system) impacts.This report suggests enhancements to current methods and practices that state and local policymakers, public utility commissions, state energy offices, utilities, state utility consumer representatives, and other stakeholders might support. These enhancements can improve the consistency and robustness of economic valuation of demand flexibility for grid services. The report concludes with a discussion of considerations for prioritizing implementation of these improvements.

24 POWER TRANSMISSION AND DISTRIBUTION↗