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Table B.1. Key Distinctions Between Energy Efficiency and Demand Response Primary Focus Overall Energy Consumption Peak Power load When? Key Societal Benefits Measured in Avoided Units Source: Nemtzow (2006). Energy Efficiency Permanent and usually “always on” Avoid supply-side costs; avoid environmental impacts; and lower customer costs MWh, money, and power plants Demand Response Dispatchable at peak load (or as needed) for hours at a time Avoid on-peak-load supply-side costs; reliability; and lower price volatility Advance Notice Months to indefinite Minutes to months In 2008, the Federal Energy Regulatory Commission (FERC) estimated that 8% of U.S. customers were enrolled in some form of demand response program and that the contribution of all demand response programs totaled 41,000 MW or 5.8% of U.S. peak load demand. This level of penetration represented a 9% increase over 2006 levels. Demand response programs, as defined by FERC, included incentive- based programs (e.g., direct load control, demand bidding/buyback programs, interruptible/curtailable rates) and time-based rates (e.g., time-of-use, critical-peak-load pricing, real-time pricing) (FERC 2008). To the extent that peak load demand reduction is the target, energy efficiency and demand response programs are complementary. In 2003, energy efficiency and demand response programs were estimated to have made peak load demand reductions of 13,581 MW and 4,000 MW, respectively (Nadel et al. 2005). The contribution of energy efficiency and demand response has grown in recent years and is expected to expand significantly in the future. The Electric Power Research Institute (EPRI) recently completed a study that estimates energy efficiency programs in the United States have the potential to reduce electricity consumption by 398 to 544 B kWh in 2030 (EPRI 2009). The realistic achievable potential case estimates energy efficiency gains realized by energy efficiency programs at 20.6 B kWh in 2010, 206 B kWh in 2020, and 398 B kWh in 2030. The EPRI study also found that the combination of energy efficiency and demand response programs could reduce summer peak load demand by 157 GW to 218 GW, or 14% to 20% by 2030 (EPRI 2009). Table B.2 summarizes the potential reductions in summer peak load demand, as estimated in EPRI 2009, for 2010, 2020, and 2030. Estimates are presented for a realistic achievable and a maximum achievable scenario. B.2 MW, money, and reliability concernsPDF Image | The Smart Grid: An Estimation of the Energy and CO2 Benefits
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