Conservation Voltage Reduction

Distribution Management Systems, Switched Capacitor Banks, Voltage Regulators, Load Tap Changers, Advanced Controllers, End-of-Line Sensors, and Communication Nodes in North America

Conservation voltage reduction (CVR) is a noninvasive approach to demand response (DR) and energy efficiency (EE) with more controllable, predictable reductions than other popular DR/EE approaches. CVR dynamically optimizes voltage levels via sophisticated smart grid technologies to continuously reduce energy consumption and demand during peaks when electricity prices are inflated and demand may exceed the available energy. Due to the excellent results of recent CVR pilots, the technology is a strong candidate to be among the most popular EE and DR measures before the end of 2020.

Advanced metering infrastructure (AMI)-integrated CVR in particular is a high-precision voltage reduction strategy that can unleash unprecedented smart grid benefits. The vast majority of North American utilities have yet to take full advantage of this benefit, which often lies latent in the smart meter functionality. As extensive CVR piloting and evaluations pass with flying colors, regulators are likely to be enthusiastic and allow CVR under the same terms as other EE measures. Navigant Research forecasts that cumulative CVR revenue will amount to nearly $1.9 billion between 2013 and 2020.

This Navigant Research report analyzes the market for CVR in North America. The study provides an analysis of the significant factors and drivers that will contribute to market growth for CVR. Market forecasts for unit shipments and revenue for each component type in an integrated CVR solution in North America extend through 2020. The report also examines the building blocks for CVR – telecommunications technologies, primary and secondary equipment, and distribution management systems (DMSs) – and profiles the key industry players active in this emerging field.

Key Questions Addressed:
  • How does CVR improve voltage quality and how is it used for distribution efficiency and demand regulation?
  • How can AMI be leveraged with CVR to achieve aggressive energy efficiency and demand reduction targets?
  • What are the current and projected unit shipments in North America for each component type in an integrated CVR solution?
  • What is the current and projected revenue per substation for CVR components in North America?
  • Who are the key players in the emerging CVR arena?
Who needs this report?
  • Vendors, developers, and manufacturers of CVR-related software and hardware
  • Substation design firms and IT/OT systems integration consulting firms
  • Smart inverter equipment and service providers
  • Smart distribution transformer providers
  • Utilities
  • Government agencies and regulators
  • Investor community

Table of Contents

1. Executive Summary

1.1  Overview

1.2  CVR System Components

1.3  Market Trends and Forecast

2. Market Issues

2.1  The Smart Utility: Brilliant and Efficient Smart Grids

2.1.1   Smart Grid Drivers

2.2  CVR in the Smart Grid

2.3  CVR Market Drivers

2.3.1   Decommissioning of Coal (and Possibly Nuclear) Power Plants

2.3.2   Electricity Demand Growth

2.3.3   Demand, Energy Efficiency, and Demand Response

2.3.3.1  Achievable, Near-Term EE Measures

2.4  CVR Business Case

2.4.1   CVR Benefits

2.4.1.1  Customer Energy Reductions

2.4.2   Operational Benefits

2.4.2.1  Avoided or Deferred CAPEX

2.4.2.2  Technical O&M Reductions

2.5  CVR Challenges

2.5.1   Revenue and Margin Erosion

2.5.2   Slow Regulatory Cadence

2.5.3   Participating Customers Also Benefit

2.5.4   Confusing Number of Acronyms

3. Technology Issues

3.1  Distribution Topologies

3.2  A High-Level Description of the CVR Algorithm

3.2.1   CVR Retrofits

3.2.2   CVR with AMI

3.2.3   Lessons from Government-Backed CVR Projects

3.2.3.1  Target High-Value Feeders

3.3  CVR Building Blocks

3.3.1   Telecommunications Technologies

3.3.1.1  Protocols and Data Standards

3.3.1.2  Distribution SCADA

3.3.1.3  Field Area Network Communications

3.3.1.4  Integration of AMI Communications

3.3.1.5  Communications Security

3.3.2   Primary CVR Equipment

3.3.2.1  Substation Voltage Regulation

3.3.2.1.1.   Mode of Operation

3.3.2.2  Substation SCADA Equipment

3.3.3   Secondary CVR Equipment

3.3.3.1  Automated/Switched Secondary Capacitor Banks

3.3.3.2  Line Sensors, Volt Metering Sets

3.3.3.3  Automated Line Regulators

3.3.4   Distribution Management Systems

3.3.4.1  DMS and the VVO/CVR Function

3.3.4.2  DMSs and the Common Information Model

3.4  How It All Ties Together: CVR Strategy

3.4.1   Basic CVR Use Case: PECO

3.4.2   Dynamic, Aggressive CVR Use Case: Dominion

3.4.3   Demand Response and CVR: TVA and Progress Energy

3.4.4   24/7 Energy Efficiency CVR: DOE

3.4.5   CVR Game Plan

3.4.5.1  Plan

3.4.5.2  Manage

3.4.5.3  Measure and Verify (M&V)

3.5  Technology Challenges

3.5.1   Data Management

3.5.2   Cyber Security

4. Key Industry Players

4.1  Introduction

4.2  Power System Vendors

4.2.1   ABB

4.2.2   Alstom

4.2.3   Beckwith Electric

4.2.4   Cooper Power Systems

4.2.5   Dominion Voltage, Inc.

4.2.6   Efacec Advanced Control Systems

4.2.7   GE Energy

4.2.8   GRIDiant

4.2.9   IUS Technologies

4.2.10  Open Systems International, Inc. (OSI)

4.2.11  S&C Electric Company

4.2.12  Schneider Electric

4.2.13  Schweitzer Engineering Laboratories

4.2.14  Siemens

4.2.15  Silver Spring Networks

4.2.16  Tollgrade Communications, Inc.

4.2.17  Varentec

4.3  Power Companies

4.3.1   AEP

4.3.2   Dominion Virginia Power

4.3.3   Duke Energy/Progress Energy

4.3.4   Exelon/PECO

4.3.5   Portland General Electric (PGE)

4.3.6   San Diego Gas & Electric (SDG&E)

4.3.7   Southern California Edison (SCE)

4.3.8   Tennessee Valley Authority

5. Market Forecasts

5.1  Introduction

5.2  Forecasting Approach

5.3  Market Forecast

5.3.1   Revenue per Substation

5.3.2   Forecast by System Components

5.3.2.1  Primary Components

5.3.2.2  Secondary Components

5.3.2.3  Communication Nodes

5.3.2.4  DMS/CVR Software

5.3.2.5  Revenue

5.4  Conclusions and Recommendations

5.4.1   Recommendations for Vendors

5.4.2   Recommendation for Utilities

5.4.3   Regional Conclusions

5.4.4   The Next CVR Hot Spots

6. Company Directory
7. Acronym and Abbreviation List
8. Table of Contents
9. Table of Charts and Figures
10. Scope of Study, Sources and Methodology, Notes

List of Charts and Figures

  • Cumulative CVR Revenue, North America: 2013-2020
  • Annual CVR Revenue, North America: 2013-2020
  • Revenue per Substation for CVR with AMI by Component Segment, North America: 2013-2020
  • Revenue per Substation for CVR without AMI by Component Segment, North America: 2013-2020
  • Shipments of Primary Components for CVR by Component Type, North America: 2013-2020
  • Shipments of Secondary Components for CVR by Component Type, North America: 2013-2020
  • Shipments of Communications Nodes for CVR , North America: 2013-2020
  • Shipments of DMS Components for CVR by Component Type, North America: 2013-2020
  • Primary Component Revenue by Component Type, North America: 2013-2020
  • Secondary Component Revenue by Component Type, North America: 2013-2020
  • Communications Component Revenue, North America: 2013-2020
  • DMS Component Revenue by Component Type, North America: 2013-2020
  • Simplified Grid Transmission and Distribution System, North America
  • Actual and Announced Coal-Fired Retirements, United States: 2011-2020
  • Retail Sales by Customer Class, United States: 1950-2011
  • Estimated Total Benefits and Cost for Regional CVR Deployment, Present Value
  • Assessment of Duke Energy Ohio CVR Benefit
  • Simplified Distribution Topologies for Substations and Feeder Circuits
  • CVR Benefit as a Function of Percent of Circuits Upgraded
  • Illustration of a Typical SCADA Architecture
  • Smart Grid Networking Approach
  • Example Distribution Substation
  • Example Load Tap Changers
  • Example LTC/VR Controllers
  • Communication Node
  • Example Pole-Mounted Capacitor Bank and Controller Package
  • Example of Devices in Metering Sets
  • Sensor Installation by Hotstick
  • Example of Pole-Mounted Line Regulators
  • Illustration of CVR Configuration
  • Feeder Voltage Profile with LTC, VR, and Capacitor Bank
  • PECO CVR Strategy

List of Tables

  • Cumulative CVR Revenue by Component Type, North America: 2013-2020
  • Typical Benefit-Cost Ratio (TRC-Based) for Energy Efficiency by Category, North America: 2013
  • Estimated Load and Spending in States with EE Programs by Category, United States: 2009-2012
  • Utility Spending and Returns on EE Programs by Category, United States: 1991-2010
  • Typical Load Reduction and Energy Savings using CVR by Category and Scenario, North America: 2012
  •  Cost of CVR per Sub by Category and Scenario, North America: 2013
  • Net Benefits to Customers by Category and Scenario, North America: 2013
  • Annual CVR Revenue by Component Type, North America: 2013-2020
  • Revenue per Substation for CVR with AMI by Component Segment, North America: 2013-2020
  • Shipments of Primary Components for CVR by Component Type, North America: 2013-2020
  • Shipments of Secondary Components for CVR by Component Type, North America: 2013-2020
  • Shipments of Communications Components for CVR by Component Type, North America: 2013-2020
  • Shipments of DMS Components for CVR by Component Type, North America: 2013-2020
  • Primary Component Revenue by Component Type, North America: 2013-2020
  • Secondary Component Revenue by Component Type, North America: 2013-2020
  • Communications Component Revenue, North America: 2013-2020
  • DMS Component Revenue by Component Type, North America: 2013-2020
  •  Voltage Level Definitions

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