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suggesting that utilities and regulators are beginning to focus more on building a network of the future that includes AMI technology and expanded M&V capabilities (FERC 2007). D.3 Summary With the advent of AMI, real-time communication systems, and advanced data-management and control strategies that make up the smart grid, M&V can provide more than verification of the energy savings achieved by energy efficiency programs. The smart grid system of technologies can also provide operational benefits for utilities through real-time observation of system performance, early detection of system problems, analysis of system behavior, and the persistence of energy efficiency measures over time. There is no question that the smart grid system will be capable of replacing short-term M&V efforts with long-term monitoring of energy efficiency programs and measure performance, but there is currently no basis for disaggregating the costs of the smart grid system to make a comparison with traditional M&V costs. However, a smart grid system will not be implemented only for its M&V value. The 3% of an energy efficiency program cost typically allocated for traditional M&V can be used to establish a central analysis function that will operate over the long term, rather than the traditional short-term M&V program that expends significant resources on field measurement and one-time analyses. The savings from M&V is achieved by reducing the risk of certain energy-efficient technologies, programs, and enabling utilities in combination with end users to go beyond the realistically achievable estimate of savings closer to the higher-end potential savings. Although there are no reliable estimates on how much more savings could be achieved with M&V beyond what is realistically achievable, EPRI estimates the range to be 5% to 20% (EPRI 2008). The reductions in electricity and CO2 emissions calculated in Attachment 2 are based on the EPRI estimate and other information in the literature review, and the author’s experience. Direct reductions achievable through implementation of smart grid technologies are estimated to be 7% in residential sectors for heating and cooling electricity, with a range of 5% to 20%, and 7% in small/medium commercial building sectors for HVAC and lighting, with a range of 5% to 20%. In addition, indirect reductions in electricity consumption of 1%, with a range of 0% to 2%, are expected for both the residential and small/medium commercial building sectors. D.4 Recommendations for Additional Work and/or Consideration This report summarizes the findings of recently published reports that document the benefits and costs associated with M&V equipment in a general and unsystematic manner. We recommend that the benefits and costs associated with M&V equipment be explored in a more formal cost-benefit analysis. In completing this analysis, M&V benefits and costs can be explored in a systematic manner over a long time period. Such an analysis would determine the extent to which investment in M&V is cost-beneficial. The costs associated with M&V equipment are estimated by DOE at 3% to 15%. Such a broad range is instructive but not very precise. This lack of precision makes it difficult for utilities to estimate the M&V costs likely to be incurred when embarking on new energy efficiency programs. Thus, we recommend a more advanced process of documenting these costs in a database in a manner that will enable project sponsors to estimate potential costs and/or benefits tied to specific projects and programs. D.4PDF Image | The Smart Grid: An Estimation of the Energy and CO2 Benefits
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