By ecoRI News staff
Coming out of two tough winters, the cost of energy is a top concern for many consumers. A recent study by Acadia Center shows that energy efficiency may be one of the best solutions for keeping those costs under control. Thanks to existing investment in efficiency programs, Northeast customers saved about $1.5 billion from January to March 2014.
“We know that saving energy is cheaper than paying for additional supply,” Acadia Center President Daniel Sosland said. “But this analysis shows how valuable electric efficiency is, especially during the periods when we need greatest relief from high prices.”
Lower demand reduces the prices that consumer pay for power, and provides significant relief during periods of peak demand when prices are highest, according to the eight-page report. To help quantify the value, Acadia Center estimated what electricity demand, wholesale prices and consumer costs would have been in that three-month stretch without electric efficiency programs, and found that:
Demand would have been 14 percent higher.
The price of wholesale electricity would have been 24 percent higher.
Overall costs for electricity would have been $1.5 billion higher.
Since 2000, efficiency programs have reduced electricity demand in New England by almost 2.2 gigawatts, according to the report, equivalent to the combined capacity of the coal-fired Brayton Point and nuclear-powered Pilgrim power plants.
Electricity prices in January-March 2014 were unusually high due to a variety of reasons, including the region’s over-reliance on natural gas and below-average temperatures, according to the report. Electricity market reforms and lower prices for liquefied natural gas (LNG) helped keep costs lower during the same three months this year, despite colder temperatures. Efficiency investments also significantly contributed to keeping energy more affordable during this time, according to Acadia Center.
“Without efficiency, winter costs would have been much higher. Saving electricity through efficiency costs about 4 cents per kilowatt hour, while the regional average wholesale price of electricity was about 4 times that in winter of 2014,” said Jamie Howland, director of the organization’s Climate and Energy Analysis Center. “When weather and market forces cause electric prices to rise, efficiency becomes even more valuable.”
The analysis comes as states consider making long-term investments in natural-gas pipelines and electric transmission lines.
“Energy efficiency will always generate savings, regardless of volatile fuel prices,” Howland said. “As the states in the region determine the appropriate mix of resources to address winter electric prices, the policy of all cost-effective efficiency should be a prerequisite to any proposals that ask ratepayers to bear the risk of infrastructure investments.”
Benefits of solar energy
Acadia Center also recently released a study that quantifies the societal benefits of solar photovoltaic (PV) systems in Massachusetts. Establishing the value of distributed resources is increasingly important as states explore ways to meet energy needs and deploy renewable-energy resources, according to the nonprofit.
Acadia Center assessed the value of six hypothetical solar PV system configurations to better understand the overall value that solar PV provides to the power grid. By evaluating an array of configurations, this analysis determined that the value of solar to the grid — and ratepayers connected to the grid — ranges from 22-28 cents per kilowatt-hour, with additional societal values of 6.7 cents per kilowatt-hour.
“Solar generation is a valuable local energy resource that provides significant benefits to ratepayers,” Howland said. “Solar PV provides unique value to the electric grid by producing clean energy and avoiding generation and related emissions from conventional power plants. The overall grid value of solar is the sum total of these different benefits.”
The benefits vary based on the time and location of output from solar panels. Acadia Center examined these variations in the study, including the impacts of orientation — i.e., west- or south-facing arrays — on the value of solar PV. One key finding is that under traditional net metering, west-facing arrays, which maximize output during periods of peak demand, would receive about 20 percent less credit than a comparable south-facing system, despite the fact that they produce about the same overall value to the grid.
In addition to value to the grid, the study found that solar PV provides broader societal advantages, such as environmental benefits from avoided greenhouse-gas emissions and other pollutants.
“Societal benefits should be used when assessing the overall costs and benefits of solar PV and determining additional incentives,” said Leslie Malone, Acadia Center senior analyst and an author of the report.
Acadia Center also recently released a similar study for Connecticut.