CVR as an Energy Efficiency 

Resource 

Prepared for: 

IEEE Innovative Smart Grid Technologies 

Conference 

Prepared by: 

Applied Energy Group 

Kelly Warner 

February 19th, 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 

DMS AMI 

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 

savings 
Conservation 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. CVR 

could 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	1st	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