The age of designing programs to get all kWh savings possible is coming to an end. The culprit is the rising percentage of renewable generation capacity over time. A typical breakdown of generation capacity for a utility can be seen to the right. As this renewable percentage grows, there is more variation in generation costs for a utility. At midday, solar and wind cause a decrease in generation and environmental costs. At night, wind picks up and can cover a utility’s entire generation requirement.
This means the environmental and fuel generation costs are low during the middle of the day and at night. Conversely, the most expensive times are typical during early afternoon when solar is waning and wind hasn’t picked up.
A utility’s capacity breakdown does not reflect where the energy it generates comes from. The same utility that has the capacity above may have an energy generation breakdown as that shown to the left. In this example, solar and wind account for approximately 45% of the generation capacity. Which demand-side program offers the most benefit per kWh to this utility – an exterior LED lighting rebate or an efficient chiller rebate?
By understanding and quantifying the effects of more renewable generation connected to the grid, a more in-depth level analysis is beneficial. In this case, the chiller savings rebate provides greater benefit to the grid. Chillers provide consistent energy savings during periods of high-generation costs. Exterior LED lighting on the other hand, generates savings at low/no cost generation periods. This decreases the cost-effectiveness of exterior LED lighting programs.
Future programs need to target the most cost-effective techniques to benefit the utility. Additionally, it means shifting the focus of controls-based programs from nighttime savings to times with high generation costs.
This also includes revisiting programs that have been previously off the table, like load shifting. Looking at generation and environmental impacts, an energy neutral load shift can provide substantial financial benefit to utilities. And in turn, new programs may incentivize customers to do this. If not through programs, this can be driven by implementing new time-of-day or demand rates to reflect utility peak generation costs.
Keeping an eye on generation costs over time can help prepare for successful and cost-effective demand-side management techniques going forward.