# CVR as an Energy Efficiency Resource Prepared for: IEEE Innovative Smart Grid Technologies Conference Prepared by: 

### Applied Energy Group Kelly Warner 

## February 19 th 

## , 2014

# American Recovery and Reinvestment Act of 2009

• Smart Grid Investment Grant Program

• Smart Grid Demonstration Program For further information go to www.smargrid.gov . The information in this presentation is based on the results of a DOE funded project under:


# or the

# CVR - A Technology Whose Time has Come

– Proven technology used on a limited scale by utilities over the past 3 decades.

– Lowering voltages improves the efficiency of many end-use appliance • Most customers receive voltage at the high-end of the ANSI range.

– The intersection of interest in Smart Grid and Energy Efficiency are increasing awareness of CVR. • Low-cost, scalable, controllable

1. CVR is also referred to as Conservation Voltage Regulation, Conservation Voltage Optimization (CVO), or Volt/VAR Optimization (VVO). 

### Utility business case and regulatory constructs are holding back CVR’s potential

• Utilities incur the cost while customers receive the benefit When viewed as an EE resource, CVR has huge potential.

# Standard Voltage Regulation Using Substation LTC

Source: Application of Automated Controls for Voltage and Reactive Power Management – Initial Results. DOE – Smart Grid Investment Grant Program, December 2012

# Enhanced Voltage Regulation Using Downstream Voltage Regulators

Source: Application of Automated Controls for Voltage and Reactive Power Management – Initial Results. DOE – Smart Grid Investment Grant Program, December 2012

# Voltage Regulation Using V- Regs and Capacitors

Source: Application of Automated Controls for Voltage and Reactive Power Management – Initial Results. DOE – Smart Grid Investment Grant Program, December 2012

## Load Types

Reference : IEEE Brown Book, ANSI/IEEE Std 399-1980 

# Understanding how CVR affects customer loads is a critical step to using CVR as an EE resource

# CVR Market Taxonomy

DA AMI Core CVR Components TRANSFORMERS

SENSORS

PLC/PLS VOLTAGE REGULATORS CAPACITORS

METERS

AMI DMS

D- SCADA CVR CONTROLS

RADIO CELLULAR RELAYS/ RECLOSERS

POINTS N TIME NEAR REAL-TIME POINTS N TIME NEAR REAL-TIME Communication

Infrastructure Software and Control Systems

Devices

COMMERCIAL OPEN - Planning Tools - OpenDSS OMF

# CVR Operating Models
CVR	Strategy Opera3ng	Model Benefits Emergency	Load	Relief Short-term	event-specific voltage	reduc;on Substa;on	Voltage Reduc;on Con;nuous	substa;on voltage	op;miza;on Peak	Load	Management Economic	dispatch	model during	high	avoided-cost periods Customer	End-use Efficiency Con;nuous	dynamic voltage	control	across	an en;re	feeder System protection during emergency events Distribution systems energy savings at the sub-station Avoided high margin supply costs during peak periods Customer energy and demand savingsConservation Voltage Reduction 

## CVR adds significantly to cost-effective EE resource potential, with a potential to save 750 Trillion BTU’s at $4.40/MMBTU***.

*** extracted from Pacific Northwest National Labs “Evaluation of CVR on a National Level” July 2010

# While low cost CVR options exist, deeper CVR deployments have the potential to generate significant savings at very reasonable costs

$0.00 $0.01 $0.02 $0.03 $0.04 $0.05 $0.06

0.5% - 1% 1% - 2% 1.5% - 2.5% 2% - 3%Costs$0.01/kWh 

## Potential Savings and costs

Voltage Reg. LDC V-Reg. LDC w/ Minor System

Improvements V-Reg. LDC w/ Major System

Improvements V-Reg. EOL w/ Major System

Improvements Source: Northwest Energy Efficiency Alliance, Distribution Efficiency Initiative Project Final Report. December 2007

### CVR/VVO	Project	Database

Business Models Regulatory Strategy Opera3ng Models Tools	/ Methods Project	Data

Business Case Driver Benefit-Cost Metrics

Project Costs Lost Revenues Cost Recovery EE / Env Credits Enabling Regs / Laws Communications Static vs Dynamic Planning Tools Planning Methods Benefit-Cost Metrics Financial Metrics M&V Protocols Categorized Data

Future plans 

### Technology Applica3ons

Monitoring Systems Control Systems Organizational issues Operational Driver

Project Benefits Contact Info Project Type Project Name Utility

VAR Regulation Control Model Voltage Regulation

Financial Metrics 

# DOE National CVR Study Data Requirements

# CVR Drivers and Barriers Drivers
• Low cost EE resource w/ large potential • Controllable • Scalable • Leverages existing SG assets like AMI • Multiple benefit streams • Aligns with key utility initiatives such as

– EE goal attainment,

– emission reductions,

– DER integration, and

– power quality enhancement 

# Barriers
• Lost revenues and margins • New technology risk • Reliability concerns • Organizational silo’s

– Split benefits and costs

– Multi-dimensional planning 

## • Perceived threats by EE community • Lack of regulatory incentives • Lack of awareness

# CVR Business Case is Complicated by Numerous Exogenous Factors



# CVR Business Case Financial Opera;onal Regulatory Customer

Environmental

# Regulatory	/	Cost-recovery	Issues	and	Technology	Risk	Factors Need	to	be	Addressed	to	Create	a	Profitable	Business	Case 

# Benefits Costs

Technology	risk Uncertain	Capital cost	recovery

Lost	revenues and	margins Opera;onal savings Reduced	supply costs

# Prototype SmartGrid Business Case

($700) ($600) ($500) ($400) ($300) ($200) ($100) $0 $100 $200 $300

Meter Costs Distribution upgrades Other Sytem Costs Operating Costs Distribution System benefits Avoided Energy Costs Avoided Capacity

Costs Lost Margins 

## Impact of Lost Margins on CVR Cost-Effectiveness

# Energy Efficiency Resource Standards and Regulatory Incentive Mechanisms are driving the market for EE. CVR has the potential to benefit from these activities.

• The EE industry has developed a wide range of performance incentives and cost recover mechanisms that reward utilities for achieving EE goals. • Ohio SB221 specifically defines grid activities such as CVR as EE measures that count towards a utilities EE goals. • NARUC recently passed a resolution to allow CVR to be included in EERS. • Over half of the States have EERS or EE resource goals. • In States with long-established EE programs, escalating goals and the impact of codes and standards are creating a need for new, innovative sources of cost-effective EE. CVRcould be a very attractive option for highlysaturated EE markets. Energy Efficiency Resource Standards 

# . www.dsireusa.org / October 2012 ..

Source: Aligning Utility Incentives with Investment in Energy Efficiency. November 2007. National Action Plan for Energy Efficiency

# Utility Early Adopters of CVR as an Energy Efficiency Resource

PECO First	u;lity	to	receive	regulatory	approval	to	use	CVR	to	achieve	EE	targets. 320,000 MWh 1 st year	savings	achieved	through	CVR-lite	(1/3	of	4yr	goal). Deeper	deployment	in	planning	stages. 

### BPA Extensive	CVR	R&D.		Currently	offering	$0.025/kWh	saved	over	10	years. Extensive	M&V 

### AEP 35	feeder	pilot	of	advanced	CVR.		Mo;vated	my	Ohio	SB	221	allowing distribu;on	efficiencies	to	count	towards	EE	goals 

### TVA Commitment	to	spend	$60M	over	the	next	5	years	for	CVR	EE	incen;ves	for member	u;li;es. 

### SMUD Large	scale	deployment	of	automa;on	equipment	targe;ng	improved	power factor,	peak	demand	reduc;ons,	and	EE 

### DOE	-	SGIG 26	u;lity	CVR	projects;	7	using	CVR	for	EE 

## Utility Program Attributes

NARUC November	resolu;on	suppor;ng	Volt/VAR	as	an	EE	resource 

### OHIO SB221	mandates	EE;	includes	distribu;on	efficiencies 

## Regulatory

# The Path Forward for CVR as an EE Resource

• Positioning CVR as a preferred EE resource will require:

– Better / more cost-effective planning tools

– Standardized M&V protocols

– More operational data on emerging technologies

– Regulatory incentive mechanisms to capture maximum savings potential • Deep penetration per circuit • Persistence of savings.

– Better understanding of the interaction with DG • Voltage regulation on high penetration DG circuits

# Thank-you! Applied Energy Group 1377 Motor Parkway, #401 Islandia, NY 11749 www.AppliedEnergyGroup.com Contact: Kelly Warner kwarner@appliedenergygroup.com