Wednesday, June 30, 2010

Post # 27 - ACEEE Study: Smart Meters are not the Only (or Maybe Even the Best) Answer

The American Council for an Energy-Efficient Economy, a non-profit organization promoting energy efficiency, this week released a study analyzing the results of residential feedback programs spanning over 30 years. Entitled “Advanced Meter Initiatives and Residential Feedback Programs," the study concludes that smart meters, in and of themselves, cannot be expected to significantly reduce either residential power use or consumer electric bills.

At the same time, ACEEE finds that if U.S. utilities go beyond simple smart meter initiatives to include a wide range of energy-use consumer feedback tools (and depending on the "breath and effectiveness of program design"), consumers could cut their household electricity use from 4 to 12 percent range -- and save from $2 billion to $35 billion over the next 20 years.

The study also delineates the different energy savings strategies of high and low income households, while questioning programs designed simply to shift energy consumption away from peak periods.

The study’s findings are based on a review of 57 different residential sector feedback programs in United States, Canada, Europe, Australia, and Japan between 1974 and 2010. By “making energy resources visible to residential consumers,” ACEEE states that such initiatives are “opening the door” to potential energy savings. The study finds that “[i]f broadly implemented throughout the United States using well-designed programs, residential sector feedback programs could provide the equivalent of 100 billion kilowatt-hours of electricity savings annually by 2030.”

But how to get there? On the one hand, ACEEE believes that smart meter initiatives are likely to play an important and positive role in meeting the data demands of feedback programs – although ACEEE cautions that how feedback is provided to consumers, and whether consumers truly understand the information, will be critical.

At the same time, the study emphasizes “the substantially lower investment costs associated with enhanced billing programs” when compared to smart meter technologies and displays. ACEEE finds that enhanced billing strategies “are currently one of the most effective and affordable means of providing residential consumers with meaningful feedback about their energy consumption patterns.”

ACEEE recognizes, however, that utilities are likely move forward with smart meter initiatives. Thus, ACEEE emphasizes that real-time and "real-time plus" feedback mechanisms could well become an increasingly viable and cost-effective approach to providing households with useful feedback. “These new technologies, and the feedback mechanisms that they empower, can be used to complement the feedback from enhanced billing.”

Beyond the issue of providing feedback to customers, ACEEE finds that programs focused on peak load savings, while generally successful in shifting energy use from peak periods to off-peak periods, are much less successful in generating energy savings throughout the billing cycle. In other words, “programs focused on reducing energy consumption during specific time periods save considerably less energy than programs focus on promoting energy conservation and efficiency at all times.”

ACEEE also concludes that energy saving strategies vary by income level. Higher income households are more likely to purchase new energy-efficient appliances, windows, and devices, while lower income households are more likely to engage in energy stocktaking behaviors or change their energy use habits and routines. Significantly, investments in new equipment and appliances are often undertaken in conjunction with a change of residence or a remodel. ACEEE thus believes that narrowly defined energy efficiency programs aimed at the installation of new, more energy-efficient technologies alone – “the practice of traditional utility programs” -- are likely to realize “only a small fraction of potential behavior-related residential energy savings.”

Given the wide range of both currently available and new potential feedback technologies, ACEEE doesn't believe it can determine “what future feedback initiatives are likely to look like or which devices and approaches are likely to generate the most savings.” Under those circumstances, ACEEE argues that today’s programs should maintain as much flexibility as possible and be designed with change in mind – and that existing approaches should be used to the maximum extent possible.

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