NewEnergyNews: TODAY’S STUDY: The State OF The U.S. Energy Transition, Part 2


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    Monday, January 16, 2017

    TODAY’S STUDY: The State OF The U.S. Energy Transition, Part 2

    Transforming the Nation’s Electricity System: The Second Installment of the Quadrennial Energy Review

    January 2017 (U.S. Department of Energy)

    Summary for Policymakers: The Electricity Sector: Maximizing Economic Value and Consumer Equity

    This chapter discusses the role of the electricity sector in creating economic value. The electricity sector has been an economic engine for the United States for over a century, providing reliable and competitively priced electricity that is critical for the United States’ productivity. The vast majority of American consumers—encompassing households, businesses, and institutions—enjoy reliable and affordable electricity that enables a modern economy and a high standard of living. Consumers can now both produce and consume power and increase efficiency through advanced distribution infrastructure, and increasingly can provide energy, capacity, and ancillary services. This changing relationship between consumers and the grid is further driving the convergence of systems, business models, services, policies, and new technologies in a development feedback loop.

    Key Findings

    • Advanced metering infrastructure has had a significant impact on the nature of interactions between the electricity consumer and the electric system, allowing two-way flow of both electricity and information and enabling the integration of assets behind the meter into the larger electric grid.

    • Interconnection standards and interoperability are critical requirements for seamless integration of gridconnected devices, appliances, and building energy management systems, without which grid modernization and further energy efficiency gains may be hindered.

    • Evolving consumer preferences for electricity services are creating new opportunities.

    • The convergence of the electric grid with information and communications technology creates a platform for value creation and the provision of new services beyond energy.

    • There is enormous potential for electric end-use efficiency improvement based on (1) technical analyses, and (2) the differences in energy efficiency performance between states and utilities with and without ambitious electric end-use efficiency policies and programs.

    • Tribal lands and American territories have the highest rates of un-electrified homes—more than half of a million homes. The extreme rurality of some tribal communities coupled with high levels of poverty present an economic challenge for the electric utilities trying to serve them.

    • Optimization of behind-the-meter assets will require the design of coordination, communication, and control frameworks that can manage the dispatch of these devices in a way that is both economical and secure, while maintaining system reliability.

    • Mobile, internet-connected devices foster new ways of consumer engagement, as well as enable consumers to have more efficient and real-time management of their behind-the-meter assets.

    • Consumers and third party merchants that produce electricity can provide economic, environmental, and operational benefits.

    • New grid services, modern technologies, and evolving system topologies and requirements are straining traditional methods of valuation. Appropriate valuation of the grid services by various technologies is technically and administratively challenging and may depend on spatial and temporal variables unique to different utilities, states, and regions.

    • Currently, about 90 percent of the residential electricity consumption, 60 percent of commercial, and 30 percent of industrial is used in appliances and equipment that are subject to Federal minimum efficiency standards implemented, and periodically updated by, the Department of Energy. Between 2009 and 2030, these cost-effective standards are projected to save consumers more than $545 billion in utility costs, reduce energy consumption by 40.8 quads, and reduce carbon dioxide emissions by over 2.26 billion metric tons.

    • Miscellaneous electric loads (MELs), devices that are often inadequately addressed by minimum standards, labeling and other initiatives, are expected to represent an increasing share of total electricity demand, particularly for the residential and commercial sectors.

    • Connected devices and energy management control systems are decreasing in cost and improving in functionality, although their market penetration is still low, particularly in residences and small–tomedium-sized commercial buildings. These new technologies and systems, and the broader ‘Internet of Things’ provide a wide range of options for consumers to manage their energy use, either passively using automated controls, or through active monitoring and adjustment of key systems.

    • Energy management control systems with communication capabilities are increasing opportunities for demand response services in support of grid operations. Third-party aggregators and other business models are facilitating the expanded use of demand response, but the regulatory environment remains unsettled in many states.

    • Lower-income households use less energy, but pay a considerably higher fraction of their after-tax income for electricity services.

    • Insufficient broadband access in rural areas could inhibit the deployment of grid modernization technologies and the economic value these technologies can create.

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