by Rebecca Craft, Con Edison, and Bennett Fisher, Retroficiency
Buildings consume 40 percent of all U.S. energy, and up to half of the energy that buildings use is routinely wasted, according to data from the Energy Information Administration and IBM.
All that waste is bad for the environment.
“Commercial buildings account for the majority of harmful (CO2) emissions in U.S. cities,” according to the Environmental Protection Agency, and in New York alone, “80 percent of carbon emissions come from commercial buildings.”
It’s no wonder building efficiency is garnering so much attention. North American utilities, according to the Consortium of Energy Efficiency, budget more than $9 billion annually for demand-side management (DSM) programs, including energy efficiency and demand response initiatives, to reduce consumption and demand. Most of this spending targets buildings.
These ratepayer-funded programs have increasingly aggressive consumption-reduction goals that utilities such as Con Edison must meet.
But DSM mandates are not the only drivers for energy efficiency and demand management efforts. DSM also can target specific areas of the grid to manage demand growth, supply constraints and ongoing network maintenance more effectively.
The American Association of Civil Engineers calculates that an additional $107 billion of investment beyond the currently anticipated investment of $566 billion is needed by 2020 just to keep the power grid functioning. Nearly 90 percent of this incremental need is for electric grid investments required to maintain current levels of safety and reliability.
Today’s utilities face the need to build additional infrastructure to meet increasing customer demand for electricity. In areas such as New York City, however, the density and cost of system upgrades can present capital expenditure and timing challenges.
DSM is a cost-effective way to address electric demand growth via customer-sided energy management and can alleviate strains on the existing power grid while deferring or avoiding new infrastructure needs. According to the National Academy of Sciences, the United States could cost-effectively reduce its 2020 energy consumption by 17 to 20 percent through expanded use of energy efficiency technologies. Likewise, Retroficiency’s data indicates that buildings, on average, can cost-effectively save 18 percent through efficiency upgrades such as LED lighting, high-efficiency air conditioning and streamlined building operations.
Despite the significant opportunities, scalability of the nation’s energy efficiency opportunity is not being realized largely because of the significant time and expense involved in understanding how a building uses and loses energy. For decades, utility programs and building owners have relied on manual and expensive in-person audits to try to identify specific energy-saving opportunities.
Retroficiency estimates that relying on those traditional methods, it would cost some $25 billion to $50 billion to conduct an energy audit of every commercial building in the United States, and when completed, not a single kilowatt-hour would have been saved.
Often when dealing with infrastructure constraints and program goal mandates, time is not a luxury utilities and building owners can afford.
During the past decade, Con Edison has taken a leadership role in using DSM to target areas of its electric grid in New York City and Westchester County. The Con Edison Targeted Demand Side Management (TDSM) program focuses on mitigating peak demand and growth to optimize the use of existing assets in the company’s electric networks. With more than $300 million in net benefits-total benefits minus costs-to ratepayers, Con Edison’s TDSM is an important example of how customer demand-side reductions can be used to meet utility supply-side needs. To date, the program has proved DSM is a viable solution to address utility infrastructure constraints. Continued projected increases in customer demand for electricity make it clear to Con Edison that geo-targeted DSM will continue to play an important role.
To accelerate and enhance its demand management initiatives, Con Edison is using Retroficiency’s energy analytics to identify and evaluate energy efficiency opportunities at scale. Retroficiency’s solution uses meter data to understand the energy-savings potential and opportunities for each building.
Retroficiency has analyzed nearly 900 commercial and multifamily buildings (buildings with more than 100 kW billed high demand) in nine of Con Edison’s electric networks. These buildings accounted for a total annual consumption of 1.4 TWh. In total, Retroficiency identified 176.4 GWh of cost-effective savings, a 13 percent potential kWh energy savings for the analyzed portfolio. The buildings with highest potential have an average kilowatt-hour energy-saving opportunity of 25 percent. There are a host of operational and retrofit measure possibilities in these buildings. The analysis identified 23 MW of permanent demand reduction potential during network peak times, or some 6 percent of the total peak load, with the highest potential buildings’ averaging 11 percent in demand reduction potential during the relevant network peak. These results demonstrate that even with Con Edison’s successes to date, energy efficiency and demand management remain a highly viable resource to manage network load growth.
All of these insights were uncovered with limited information. Con Edison provided monthly or 15-minute interval meter data and a building address to Retroficiency. Retroficiency combined its own data sources with publicly available data- including New York City-specific data sets such as tax records and building information-and then churned that information through its analytical engine, which assessed each building in minutes.
Energy data analytics make it possible for Con Edison to assess its customer portfolio at a rate and scale that would be impossible through traditional in-person audit approaches and that would have been unheard of a few years ago.
Specifically, Con Edison is leveraging analytics to help improve two key areas of the energy efficiency and demand management delivery process:
1) Targeting the right buildings. Retroficiency is helping Con Edison determine the energy and demand savings potential of buildings in load-constrained areas to help Con Edison focus resources on the buildings with the highest savings potential. Retroficiency data shows that 30 percent of the buildings in a segment can account for 70 percent of the savings opportunity. Analytics can help pinpoint buildings with opportunities for various measures, including those that support peak reduction, which is critical when applying energy efficiency and demand management to alleviate grid constraints.
2) Engaging customers with specific opportunities. Advanced energy analytics also can identify areas of building energy usage that can benefit most from efficiency measures. With interval meter data, for example, Retroficiency’s platform makes detailed, building-specific capital and operational recommendations to investigate further, all before ever going on-site. These recommendations, combined with Con Edison’s market, customer and building technology insights, will allow Con Edison to deliver a personalized energy management message to each customer. To maximize effectiveness of each customer touch point, analytics-based insights can be delivered through multiple delivery channels, including print, email, the Web and customer account managers.
Improving the targeting and engagement process has the potential to convert more and deeper energy savings projects, which is the primary goal.
Improved customer engagement has several other benefits. Multiple studies have shown that customers who participate in energy efficiency programs are more satisfied with their utilities. In addition, delivering detailed, meaningful information to customers positions the utility as a trusted provider of energy management solutions. As the utility business model evolves in the face of new competitive dynamics and regulatory shifts, utilities will need to reframe their customer relationships. Analytic-enabled engagement is a step toward that end.
When and where should utilities consider deploying energy analytic solutions? Analytics also can determine when cost-effective energy savings changes are possible, such as during peak-demand periods. This means that analytics solutions can be leveraged for either:
1. Ratepayer-funded energy efficiency or demand reduction programs, or
2. When utilities are seeking to employ DSM as a mechanism to manage demand on its system.
When it comes to commercial efficiency programs, energy analytics can help achieve deeper savings as utilities and regulators seek additional energy efficiency and demand management opportunities. Analytics help utilities go beyond traditional reliance on lighting projects (which account only for 25 to 30 percent of a building’s overall energy-savings potential, on average) to drive projects from a variety of measures, according to Retroficiency data.
In addition, analytics can help tap new customer segments. Many of the largest customers participate in energy efficiency programs, but small to midsize customers also have significant savings potential. The small to midsize buildings and small portfolios sector “contain(s) a whopping 95 percent of all commercial buildings by number and represents almost half of energy consumption in commercial buildings,” according to the Preservation Green Lab in partnership with the New Buildings Institute. As such, this group’s energy savings potential provides significant opportunities for energy savings and demand reductions. Energy analytics are enabling utilities to evaluate their entire commercial building portfolios.
Energy analytics enable DSM insights and associated solutions to become scalable. Policy increasingly favors building fewer new power plants and closing old, polluting coal plants while providing a steady, safe power supply to customers. Four U.S. nuclear power plants were retired in 2013, and there is potential for more plants to shut down. One such plant is the Indian Point Energy Center in Westchester County. Indian Point supplies electricity for Con Edison customers in New York City and Westchester.
From a network management perspective, the loss of supply resources must be planned for appropriately. Efficiency, demand response, storage and other load management solutions, such as those being deployed by the joint Con Edison and New York State Research and Development Authority (NYSERDA) Demand Management Program, as well as clean generation technologies such as solar, wind and geothermal, will combine to play a key role in the energy landscape.
As the grid gets smarter and data more accessible, utilities such as Con Edison are looking to energy analytics to help identify and grow their DSM opportunities. This will help utilities focus on keeping the power flowing safely and efficiently.
Rebecca Craft is a director at Con Edison who is responsible for the development, implementation and management of the utility’s energy efficiency and demand-side management programs.
Bennett Fisher is CEO of Retroficiency, which he co-founded in 2009. He has spent more than a decade building and leading companies around data analytics.