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Negawatt Leadership in the Pacific Northwest

— November 24, 2015

In the Northwest, one of the most important and influential energy stakeholders is the Northwest Power Conservation Council (NWPCC). The 1980 Northwest Power Act authorized Idaho, Montana, Oregon, and Washington to develop a regional power plan and fish and wildlife program to balance the Northwest’s environment and energy needs. The heart of the NWPCC’s mission is to preserve the benefits of the Columbia River—which is home to more than 40% of total U.S. hydroelectricity—for future generations. The NWPCC develops a plan, updated every 5 years, to ensure the region’s power supply and to acquire cost-effective energy efficiency. The process relies on broad public participation to inform the plan and build consensus on its recommendations. While not statutorily obligated to comply directly with the plan, utilities generally follow its spirit, which is often in the public’s interest financially and is also a key enabler for utilities to meet their renewable portfolio targets.

Excerpts from the Plan

It is frequently pointed out that energy efficiency is almost always the lowest cost option for procuring new power, and the NWPCC upholds this with the release of each power plan. Take, for example, the following two excerpts from the most recently released Draft Seventh Power Plan. The first highlights exactly how cost-effective energy efficiency is in the Northwest and emphasizes why the region has flourishing energy efficiency solutions providers:

 “In more than 90 percent of future conditions, cost-effective efficiency met all electricity load growth through 2035. It’s not only the single largest contributor to meeting the region’s future electricity needs, it’s also the single largest source of new winter peaking capacity.”

The second excerpt illustrates the powerful combination of natural gas displacing coal and energy efficiency:

“A key question for the plan was how the region could lower power system carbon dioxide emissions and at what costs. The Council’s modeling found that without additional carbon control policies, carbon dioxide emissions from the Northwest power system are forecast to decrease from about 55 million metric tons in 2015 to around 34 million metric tons in 2035, the result of retiring the Centralia, Boardman, and North Valmy coal plants by 2026; using existing natural gas-fired generation to replace them; and developing about 4,500 average megawatts of energy efficiency by 2035, which should meet all forecast load growth over that time frame.”

The following chart is from the Draft Seventh Power Plan showing new resource development for Oregon, Washington, Idaho, and Montana.

Seventh Power Plan Resource Portfolio

Dexter Blog(Source: Northwest Power & Conservation Council)

The 5-year plan is not a cure-all, and is not even technically enforceable, but it does highlight the unique attributes of the Pacific Northwest, not only from a natural resource perspective, but also from a cultural perspective. Though maybe not as flashy as its regional counterparts in California, the network of negawatt providers in the region (ranging from the NWPCC down to the actual implementers) have done a remarkable job at realizing the potential of energy efficiency today and at embedding these solutions into the future.


Ecova’s Retroficiency Acquisition Spurs DSM Momentum

— October 30, 2015

Data analytics for energy efficiency and demand-side management (DSM) programs is a relatively new trend in the energy industry. Data analytics can be used in residential DSM programs to teach consumers how their home is using energy (by appliance level in some cases) and in commercial and industrial (C&I) DSM programs to help find opportunities for energy savings in large buildings. Data analytics can even be used in retail, restaurant chains, or in other small and medium businesses in order to make operations more efficient, as has been seen in the work done by PlotWatt.

Many of the companies that have been advocating data analytics for energy efficiency are either startups (working on a handful of small deployments) or pilots or large companies with the resources to dabble in energy management, such as Apple with HomeKit. Because of this, data analytics as a solution for DSM programs is still in the early stages of market adoption

Acquisition Makes for New Player

That is, until October 14, 2015 when Ecova announced its acquisition of Retroficiency. A building efficiency analytics startup founded 6 years ago, Retroficiency initially worked at streamlining onsite audits, which quickly evolved into its current Building Efficiency Intelligence software platform to enable utility-scale customer targeting and engagement. Ecova, a large provider of energy and sustainability management services, has a behind-the-scenes style platform that helps utilities manage DSM programs. In addition to developing joint solutions for utility customers, Ecova will be able to use Retroficiency’s data analytics capabilities to provide its C&I clients—which collectively have more than 700,000 sites in North America—with better information on where they can save energy, where to prioritize efficiency investments, and how to manage energy costs.

Ecova’s acquisition of Retroficiency sends an important message to other players in the energy industry that there is value in data analytics for energy efficiency, which means even more when considering that Ecova has the backing of a larger energy efficiency company. In 2014, Ecova itself was acquired by Cofely USA, a subsidiary of French utility company Engie (GDF Suez). The depth of experience, geographic reach, and expanse of resources that a company like Engie can bring to the data analytics market through subsidiaries like Ecova can mean real growth and development in a very similar way to what the home energy management market saw when Google acquired Nest.

Furthermore, Engie also happens to be an investor in Tendril, a Boulder, Colorado-based startup offering a cloud-based energy services management platform for helping energy providers better engage residential customers. With Ecova’s acquisition of Retroficiency, the company now has the resources to offer a combined residential and C&I platform to utilities that can counter Opower and Firstfuel’s new platform. The newly joined forces of Ecova and Retroficiency not only signal to others the value of data analytics, but also bring to the market a big name in energy and increased competition, which could give the data analytics market the momentum it needs to take off and become a vital part of energy efficiency.


Business, Buildings, and Tackling Climate Change

— October 23, 2015

On October 19, the White House announced expansive commitments from corporate America to continue the battle against climate change. This announcement underscores the hope for effective global policy development at the United Nations Climate Convention in Paris, or COP21, at the end of November. The signatories represent 81 companies operating in all 50 states, employing over 9 million people, and generating more than $3 trillion in annual revenue. These companies also span industries, representing a spectrum from heavy industry to high tech, as well as service businesses. An independent consortium of long-term investors has also announced a commitment to invest $1.2 billion in clean energy development.

The growing corporate commitments reflect an understanding of customer demand. Alex Gorsky, chief executive of Johnson & Johnson, explained to the Financial Times, “Just as the opinion of customers, and in our case patients, around the world are more sensitized to this issue … they are demanding more from the companies from which they purchase their products.”

The Role of Buildings

There is an opportunity to focus major efforts for climate change adaptation and mitigation in buildings. From siting renewables and clean energy to major improvements in energy efficiency (EE), better operations and use of commercial and industrial facilities can have a major impact on countries’ greenhouse gas (GHG) emissions profiles. In fact, in preparation for COP21, the UN has prioritized EE as a major mechanism to reach GHG emissions reductions goals: “According to the International Energy Agency, increasing EE accounts globally for 49% of the measures needed to achieve the emission peak and meet the +2 degrees target. EE is also relevant for sustainable economic development and offers multiple benefits including local job creation, increased productivity and competitiveness for companies, reduction of pollution, improvements in health, energy access and energy security. A significant scaling up of global investment in EE is urgently needed.”

Intelligent building solutions could be the cornerstone of EE strategy for tackling climate change. In a recent report, Navigant Research detailed how building energy management systems can provide the analytics and software tools for measuring efficiency improvements, tracking return on investment (ROI), and ensuring ongoing performance. Intelligent lighting and advanced heating, ventilation, and air conditioning (HVAC) solutions can optimize system performance and at the same time improve the occupant experience in buildings while improving EE. The list goes on and on when the benefits of IT-enabled building solutions are considered. These innovations in building technologies hold the promise of EE, cost savings, tenant satisfaction, and even climate resiliency. Navigant Research will be watching the events that unfold at COP21 and tracking developments on even broader commitments to intelligent buildings and EE for tackling climate change.


Massachusetts Energy Policy: “We Are Not Cape Wind”

— October 12, 2015

It’s exciting times for Massachusetts energy policy and legislation. On September 25, the state’s investor-owned utilities (IOUs) publicly presented their Grid Modernization Plans (GMPs) for the first time. On September 29, the state legislature held a public hearing on a series of energy bills, with hopes to combine them into a single piece of legislation. These developments stand up to the breadth and depth of industry transformation that any other state is undertaking, but might be more realistic and achievable than some of the visionary ideas flowing from its neighbor, New York.

The three IOUs (Eversource, National Grid, and Unitil) proposed GMPs that attack similar issues (reliability, cost, customer engagement, and distributed energy resources) but take different approaches. Unitil is the smallest of the group and has the most straight-forward metering and infrastructure plan to meet the needs of its targeted customer base. Eversource compiled the most-comprehensive single plan, heavily focused on reliability upgrades mixed with customer engagement offerings. National Grid took a menu approach and developed four options with varying levels of investment at different price points for the Massachusetts Department of Public Utilities (DPU) to choose from. It will be interesting to see how the DPU compares the different plans and tries to achieve uniformity versus customization.

The legislative arena tends to be more colorful than its regulatory partner, leading either to more getting accomplished or little substance amidst the bombast. The auditorium that held the hearing was standing-room only, with union members, anti-gas pipeline and anti-nuclear activists, solar and wind proponents, traditional generators, and everyone in-between standing shoulder to shoulder.

Massachusetts Governor Charlie Baker hobbled into the hearing on crutches, but did not stumble while delivering his message. Energy market forces alone are not enough to meet the commonwealth’s goals regarding energy costs, carbon reductions, and climate change mitigation. ISO-New England and the utilities are focused on reliability, and generators want to sell more power. Governor Baker is taking an all-of-the-above approach including gas pipeline expansion, large-scale hydropower (with the potential to combine with wind), increasing solar limits, continuing the state’s leadership in energy efficiency, and encouraging progress in the state’s home-grown intellectual capital leadership in energy storage.

The offshore wind industry took to the stand to promote its cause as well. The topline message from the industry executives was that they are not Cape Wind. That phrase was echoed several times, as if Cape Wind was a dirty word. It was clear that everyone wanted to separate themselves from the negative sentiments hanging from that unfinished project. The executives all promoted competitive solicitations to obtain the lowest cost resources.

Now that the opening bell has been rung, it is time for the regulators and legislators to sharpen their pencils, listen to their stakeholders and constituents, and figure out the best path forward to keep Massachusetts on the leading edge of energy sector transformation.


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