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The final four columns show the corresponding potential to reduce the energy consumption and the CO2 emissions of the entire electricity sector. Columns eight and ten provide the absolute reductions and columns seven and nine provide the reductions as percentages for energy and CO2 emissions, respectively. That is, the absolute potential reduction divided by U.S. electricity sector total generation and CO2 emissions in 2030. This facilitates direct comparison of the magnitude of the reductions with the RPS that require certain fractions of electricity to be supplied by renewable generation (and, in some states, energy efficiency) in a decade or two. The estimates assume deployment of smart grid technologies in 100% of utility service territories in the United States. To a first order, the estimates provided can be scaled downward linearly to reflect estimate impacts for less than 100% deployment, in proportion to the percentage of the U.S. population served by a smart grid. Each mechanism is generally described with its estimated reduction in energy consumption and CO2 emissions in the discussion that follows. The full results of the literature review and analysis of each of the nine mechanisms is contained in Attachment 1, and the details of the calculation of the estimated reductions are contained in Attachment 2. As might be expected, there is considerable variation in the potential of the mechanisms to reduce energy consumption and CO2 emissions. A primary purpose of this investigation is to provide some guidance as to which mechanisms are most important. Some mechanisms were estimated to have a negligible effect; in one case, no firm evidence could be identified to justify an estimate greater than zero. While none of the direct mechanisms is more than 3% individually, they combine to form a significant contribution toward the nation’s carbon management goals for its electricity sector. The total direct reduction of 12% includes an estimated reduction of 3% from eventually supplying an additional 9% of vehicle-miles traveled (VMTs) with electricity. The indirect reductions provide an additional 6%, primarily from reinvesting savings from the operational costs of integrating a portfolio of 25% renewable generation. This is based on the cost of capacity to meet the intermittency characteristic of wind resources. The combined potential of the mechanisms (18%) is substantial. It must be noted that the range of uncertainties is high, often 50% or more of any given estimate. This is not unexpected given the exploratory nature of this analysis and the early stage of development of a smart grid. Narrowing the range of this uncertainty and refining the estimates is the focus of many of the recommendations for follow-on analysis, and is particularly important for the mechanisms that offer the most significant potential. While any given mechanism has some likelihood of providing little or no savings, the probability that this would be true for all the mechanisms is much less, in light of the wide variety of how the savings are achieved. A smart grid, although not the central means of providing the savings that energy efficiency and renewables represent, nevertheless appears to have a significant role in enhancing those savings and achieving them at less cost. 3.1 The Smart Grid and Energy Efficiency Utilities increasingly consider energy efficiency as a “fifth fuel” because of concern about the implications of a carbon-constrained world for their business and their obligation to serve customer demand. One driver is that many utilities are having difficulty gaining approval for new base-load generation (generally coal-fired power plants) from state regulators because of projected carbon 3.5PDF Image | The Smart Grid: An Estimation of the Energy and CO2 Benefits
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