US efficiency savings to offset load growth by 2025: DOE

Washington (Platts)--17Jan2013/631 pm EST/2331 GMT

Utility spending on electric efficiency programs will double by 2025 and energy savings from these customer-funded programs will offset the majority of predicted load growth for that period, according to a report released Thursday by a Department of Energy national laboratory.

Efficiency programs, driven largely by state laws and regulations, in a "medium case" scenario are expected to increase annual incremental savings for electric-utility customers from 18.4 TWh in 2010, about 0.5% of electric utility retail sales, to 28.8 TWh in 2025, about 0.8% of retail sales, DOE Lawrence Berkeley National Laboratory researchers said.

Under the study's "high case" scenario with more aggressive deployment of efficiency programs for electric utilities, energy savings could hit 41.6 TWh by 2025, yielding an average annual decline for electricity retail sales of 0.18%.

The rise in savings levels "in combination with modest underlying drives for load growth, could potentially lead to flat, or even negative, load growth over the next 10 to 15 years," the LBNL study said.

Savings levels for the "medium case" and the "high case" scenarios could be achieved with existing efficiency technologies, the study said.

The Energy Information Administration's latest forecast projects US retail electricity sales will grow at a compound annual rate of 0.58% for the 2010 to 2025 period.

ICF International Vice President Bill Prindle said the DOE lab study's findings were "on good footing," noting that EIA's outlook on annual load growth has been declining for several years.

A number of factors, including the national economy, real estate development, federal appliance and building codes and the weather, combined with efficiency programs can contribute to driving down load to possibly negative levels, he said.

"We could see some negative load growth in some regions," said Prindle.

Kevin Cooney, a managing director in Navigant's energy practice, also said the lab report was on par with forecasts on the impacts of efficiency measures.

"These numbers look pretty consistent, or even a bit conservative in terms of load growth being limited by ratepayer funded programs," said Cooney. He added that it "will take a while" to get to a national average of negative sales, but he expected a number of states will "already there by 2025."

Utility customers are expected to contribute $9.5 billion -- up from the 2010 baseline of $4.8 billion -- to electric and gas efficiency programs by 2025, on average, according to the study, "The Future of Utility Customer-Funded Energy Efficiency Programs in the United States: Projected Spending and Savings to 2025."

Spending on customer-funded electric utility efficiency programs alone is forecast to rise from $3.9 billion to $8.1 billion by 2025 under the study's "medium case."

Under the study's "high case," electricity customers would spend $12.2 billion on efficiency and $5.5 billion in the "low case," by 2025.

The cost of and savings from the efficiency programs over the next several years, however, depend on various factors, the researchers noted.

"The pathway that customer-funded efficiency programs ultimately take will depend on a series of key challenges and uncertainties associated both with the broader market and policy context and with the implementation and regulatory oversight of the energy efficiency programs themselves," the study said.

--Cathy Cash, cathy_cash@platts.com
--Edited by Keiron Greenhalgh, keiron_greenhalgh@platts.com

 

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