Demand Efficiency M&V
Thoughts ahead of this week's OpenEAC Alliance meeting
If you haven’t been following along with the OpenEAC Alliance, let me catch you up a little bit on this initiative. WattCarbon kicked it off a couple of years ago as a way to start leveraging the wisdom of the M&V community for the next generation of time and locationally specific methodologies. If demand-side energy resources are really going to be part of our energy ecosystem, we have to do better than annual portfolio aggregations, deemed savings, and stipulated values.
Early on this journey, we found ourselves dealing with a bunch of novel situations, where the path to an hourly savings value was unclear and we wanted to make sure that we were doing things in a way that made sense to the rest of the community. Fundamentally, M&V is a trust-based project, and we wanted to be as open as possible about our approach. We recruited a small group of experts from within the community to serve as an advisory board and started writing methodologies that reflected how different organizations were trying to measure their impacts. Some of this work was related to carbon accounting, but mostly it dealt with the question of energy savings. Today, these methods are found at https://methods.openeac.org/ and reflect a mix of different types of interventions, data types, and outputs.
The purpose of the OpenEAC Alliance is not to serve some sort of gatekeeping function, but rather to create a shared space where best practices can be identified, complicated questions can be discussed, and ultimately where the core methodological approaches to valuing demand-side energy resources are hosted.
Demand Efficiency
As I described in an earlier blog post, the basic premise of energy efficiency is being challenged by a new era of load growth paired with renewable energy. Energy (how much) is cheap. Capacity (how fast) is expensive. Energy pays for capacity, but too much energy demanded at the wrong time means that more capacity will be required. This is a delicate balance for utilities to strike, and most don’t have the resources required to do so in an effective way.
Even so, if there is one core tenet of this new era, it’s that “demand efficiency” has superseded “energy efficiency” as the prime directive of demand-side energy policy. The value of demand side energy resources is a function of how well they help manage the balance of supply and demand on the grid. So for a given asset, whether it is a dispatchable battery, a non-dispatchable energy efficiency project, or a heat pump that combines both functions, the fundamental question is not how much energy is being saved volumetrically, but rather what time of day is the energy being saved and how does that line up with what the grid needs?
On Thursday of this week, the OpenEAC Alliance will hold its quarterly meeting. The above linked slides represent a starting place for thinking more specifically about M&V as it relates to Demand Efficiency. I’m sharing them out ahead of the meeting in an effort to engage in a broader dialog with the community. Is this the right way to think about the problem in the first place? How should we go about understanding core concepts like capacity factor as they relate to DERs? How should we proxy what value would be delivered to the grid?
These questions will have to be answered if DERs are going to function as grid assets. We are long past the days where all kilowatts are created equal and it remains to be seen whether utilities or third parties will control most of these devices. In either case, it will have to be transparent to all market participants where the value of their assets comes from, which means that even where the utility is owning and operating DERs, their planning teams will have to answer these same questions.
If this is an interesting topic to you or your colleagues, please feel free to attend the OpenEAC Alliance meeting on Thursday. If timing is challenging, feel free to reach out to us with your thoughts as we continue to drive forward on these questions.