The workshop held on 25 September 2014 brought together a range of organisations and experts to explore energy efficiency as a possible initiative to form part of the solution for the Powering Sydney’s Future Project.

1. Energy Efficiency Workshop: 25 September

2. Workshop Summary
The workshop held on 25 September 2014 brought together a range of organisations and experts to explore
energy efficiency as a possible initiative to form part of the solution for the Powering Sydney’s Future Project.
Approximately 50 representatives and experts gathered to hear about how energy efficiency could form part
of the solution and a possible framework for assessing energy efficiency projects.
Workshop participants included representatives from consumer advocacy groups, academics, government
representatives, regulators, large energy users, solution providers and other electricity networks.
Participants were involved in interactive sessions to provide feedback on the energy efficiency initiative and
the proposed assessment framework.

3. Agenda
 Introduction – Greg Garvin, TransGrid
 Energy efficiency: Recent trends and impacts –
Craig Tupper, Ausgrid
 Current policy and political context for energy
efficiency – Tom Grosskopf
 Morning Tea
 Breakout sessions

4. Introduction
Greg Garvin, General Manager Strategy &
Stakeholder Engagement

5. TransGrid’s network

6. Powering Sydney’s
Future Project need
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PSF Typical max day profile 2006/07 to 2013/14

7. Key initiatives
Supply
Demand
Population
growth

8. Energy Efficiency – Recent Trends and
Impacts
TransGrid Powering Sydney’s Future
Workshop
September 2014

9. Overview
Households are living like it’s the 1970s
How all customer sectors are savings on their bills
The Likely Suspects
What does it mean for peak demand?

10. Average Annual Household Electricity Use is down
Source: Ausgrid network billing data and historical records. All volumes uncorrected for weather or day count or type.

11. And for the Inner Metro Sydney area
Source: Ausgrid network billing data and historical records. All volumes uncorrected for weather or day count or type.

12. Residential Usage – Continuous and controlled load supply
• Both average continuous supply and controlled load usage (primarily hot water) have fallen
by a similar amount since 2005-06 (21% General & 23% Controlled Load)
Source: Ausgrid network billing data. All volumes uncorrected for weather or day count or type.

13. Small Non-Residential Electricity Use (0-160 MWh pa)
• Electricity consumption at small non-residential sites down 19% from 2007-08
Source: Ausgrid network billing data and historical records. All volumes uncorrected for weather or day count or type.

14. Med-Large Non-Residential Electricity Use (>160 MWh pa)
• Electricity consumption at medium to large non-residential sites supplied at low
voltage down 13% from 2007-08
Source: Ausgrid network billing data. All volumes uncorrected for weather or day count or type.

15. Reduction by local government area
• The decline in average electricity usage per customer ranges from -11% to -19%
across the local government areas within the Inner Metro Sydney area
Source: Ausgrid network billing data.

16. The likely suspects
Energy conservation
• Driven largely by customer response to prices but influenced by
availability of better information.
Energy efficiency standards
• Minimum energy performance standards (MEPS) – more efficient
appliances in homes and businesses.
• Improved building standards (BCA) – more efficient buildings.
Energy efficiency programs
• Typically Government initiated programs
• Smaller impact but can be sizeable for selected end uses as it can drive the
transition to efficient solutions more quickly. (e.g. showerheads, light bulbs,
solar hot water)
Embedded Generation
• About 21 MW of rooftop solar from 8600 homes and businesses
• At Ausgrid system peak, that is about 7 MW in peak demand reductions

17. What does peak look like?
17
Source: Ausgrid bulk supply point data for 24 Jan to 13 Feb 2011.

18. Customer contribution to summer peak
18
Source: Ausgrid bulk supply point and network billing data for 3 Feb 2011.

19. Very large non-residential customers
19
Source: Ausgrid network billing data for 3 and 10 Feb 2011. NSW pool price from AEMO.

20. Medium to large non-residential customers
20
Source: Ausgrid network billing data for 3 and 10 Feb 2011.

21. Small non-residential customers
21
Source: Ausgrid network billing data for 3 and 10 Feb 2011.

22. Residential customers
22
Source: Ausgrid network billing data for 3 and 10 Feb 2011.

23. New homes and air conditioners
23
Source: Ausgrid network billing data for 3 and 10 Feb 2011.

24. Average summer day v peak summer day
24
• About 80-90% of the change in peak is due to changes in demand from small
customers

25. MEPS for air conditioners
• No shortage of measures in place to increase air conditioner efficiency, but….
Source: Impacts of the E3 Program, March 2014 (Part Table 1, page 3, )

26. Air conditioner Minimum Energy Performance Standards
• Estimated impact in GWh from higher efficiency standards for air conditioners in Inner
Metro Sydney area.
Source: E3 Program data, March 2014 and network billing data.

27. Does this freight train have a 5th gear?
• The impact from MEPS is sizeable, but slow in delivering change as
customers replace equipment at end of life
• Can we leverage MEPS and bring forward a portion of that change?
• How can customer takeup be increased cost effectively?
• Can rating schemes be used to advance savings?
• Are there other appliances which offer opportunities for reductions?

28. 28
Questions?

29. 29
Powering Sydney's
Future
Meeting Sydney’s
electricity demands

30. 30
The current context
 Sydney will continue to grow for the next 20
years.
 Australia has lost its competitive international
advantage.
 A2SE predicts that Australia needs to double its
energy productivity by 2030.

31. 31

32. The proof: energy efficiency
reduces demand
 Electricity consumption across the National Energy
Market is declining because of a number of
factors, including growth in total energy efficiency
savings
http://www.aemo.com.au/Electricity/Planning/For
ecasting/National-Electricity-Forecasting-Report
32

33. The proof: energy efficiency
reduces demand
 NSW Energy Savings Scheme is a key factor in
declining future demand
Ausgrid, 2014, Transitional Regulatory Proposal: for
1 July 2014 to 30 June 2015, p.25.
33

34. The proof: energy efficiency
reduces demand
 NSW OEH evaluations show that energy efficiency
is key to improving energy use in Sydney and
NSW.
http://www.environment.nsw.gov.au/energyefficiencyi
ndustry/evaluation.htm
34

35. 35

36. NSW OEH Energy Efficiency
Programs – key examples
 NSW Energy Savings Scheme
 NSW Government Resource Efficiency Policy
 Environmental Upgrade Agreements
 National Australian Built Environment Rating
System (NABERS)
 Home Power Saving Program
36

37. 37

38. 38
Questions

39. Presentation feedback
 What did you hear this morning that most concerned
you
 What did you hear that you think provides the most
opportunity for your organisation
 Was there anything that you will take away to use
share with your organisation

40. Morning tea break

41. Assessing Energy Efficiency Opportunities
for Demand Management:
A Proposed Framework
Powering Sydney’s Future
Edward Langham
Research Principal, Institute for Sustainable Futures
25th September 2014

42. Key Questions
1. How can TransGrid assess a diverse
range of EE opportunities to identify
those that will yield the greatest network
benefit at lowest cost?
2. What process would need to underpin the
procurement?
3. What supporting considerations,
protocols or guidelines are needed?

43. Presentation Overview
1. Precedents
2. Foundations:
– Quantifying peak demand reduction
– Calculating costs
– Comparing measures
– Calculating benchmark costs of network supply
3. Challenges: data availability, lead time and
Measurement and Verification
4. A proposed process

44. Precedents of EE for DM Procurement
‘Non-wires
solutions’ (BPA)
‘Geo-targeted
DSM’
(Efficiency
Vermont)
‘T&D
Efficiency
Program’
(Consolidat
ed Edison)
‘Texas’s
Restructuri
ng Act’
(Texas)

45. Evolution of ISF’s Approach

46. Quantifying peak demand reduction
• Linking Annual Energy Savings (MWh/a) and Peak Reduction (MW)
for a given EE MEASURE…
• Conservation Load Factor (CLF)
• CLF will be different for any given constraint time:
– Summer afternoon
– Summer Evening
– Winter Evening

47. Peak period of interest to Powering
Sydney’s Future

48. Quantifying peak demand reduction
11am 6pm
Peak time

49. Quantifying peak demand reduction
Peak time

50. Quantifying peak demand reduction
CLF = 1
CLF > 1
Low CLF
(0.1 – 0.2)
Even, 24-7 Load
Reduction
Poor Peak Match
Strong Peak
Match!

51. Calculating costs
• EE has an inherent business case based on electricity
bill savings (volume based with capacity component for
some commercial/industrial customers)
• Electricity tariff reforms will change this to some extent
• Conceptualising procurement of EE for network support…

52. Calculating costs: An example
• Refrigeration efficiency retrofit portfolio:
– Upfront cost $700,000
– Annual cost: $0
– Energy reduction 7% or 1,695 MWh/year
– Measure lifespan: 5-15 years
– Annual Bill Savings: $190,000
– Simple payback period: 3.7 years
• Payback periods of financially attractive EE measures
strongly concentrate around 3 years.

53. Calculating costs: An example
• BUT…Measures can offer network peak reduction and
hence cost savings to the NSP
• CLF ~ 0.65 = peak reduction of 300kW
• At 200/kVA/yr, network support payment = $66,000 p.a.
for each year of successful deferral.
– 2 years of deferral = $122,000.
– Brings costs down to $578,000 = payback period of 3 yrs
• Proponent could ‘bid in’ at $200/kVA/yr to reduce
measure payback to 3 yrs to catalyse investment.

54. Network supply cost benchmark
• Cost to supply constraint through network
solutions should be annualised for comparison
with non-network options in $/kVA/yr.
• This benchmark is the maximum value NSP
should be willing to pay for the EE measure

55. DANCE Model

56. Comparing diverse measures
• To compare measures with different:
– Balance of upfront capital & annual costs
– Effective lifespans
• We can “levelise” and “annualise” costs to create
common units of $/kVA/yr (and c/kWh)
• Data inputs required:
IMPACT COSTS
Peak savings (if known) OR Upfront costs (capital, admin)
Energy savings (MWh/a) AND
CLF for relevant peak period
Annual costs (e.g. maintenance,
tuning)
Lifespan of measure

57. Comparing diverse measures
Peak Load Reduction (kVA)

58. Challenge: Lack of consistent data by
measure
The Problem
• Energy saving case studies rarely report peak reductions
• When costs and peak reductions are recorded:
– generally no clarity or consistency = difficult to compare
– Only reported relative to a portfolio of measures, as measures tend to
be implemented this way. Every case study of efficiency upgrades will
be a different portfolio of measures.
The Implication
• Proponents won’t be able to firmly predict peak impact from their
unique portfolio of proposed measures
• TransGrid in early years unlikely to be able to rely on proponent
estimates.

59. Challenge: Lack of consistent data by
measure
The Proposal
• Learn by doing: ‘Best estimate of savings’ (CLFs) then ‘implement
and revise’!
• Collaborative effort on CLFs required between TransGrid, other
NSPs, proponents, researchers & practitioners (precedent:
http://www.energy.ca.gov/deer/)
• Guarantee agreed $/kVA/yr
• Only pay for peak savings achieved

60. Challenge: Lead time
The Problem
• Getting insufficient quantity of viable opportunities back
to enable NSP investment in non-network option. Why?
– Sector immaturity
– Insufficient lead time
– Regulatory barriers
The Proposal:
• Invest early to build capacity & confidence
• ‘Discount’ TransGrid’s willingness-to-pay further out from
the constraint.

61. Challenge: M&V of peak savings
The Problem
• No defined method currently exists.
• BUT we already have established methods of
Measurement and Verification (M&V) for kWh savings:
– Metered Baseline Methods (MBM)
– Project Impact AssessmentMethod
– NABERs baseline method

62. Challenge: M&V of peak savings
The Proposal:
• Establish equivalent accredited M&V
process to quantify peak savings by
establishing historical peak baseline
across affected building portfolio.
• NB: customers would need to be
interval metered.
• May need to consider:
– Climate adjustment for temp. sensitive
measures
– Adjustment for other business
fluctuations (but the simpler the better)

63. Other Considerations
• TransGrid’s risk around reliability of savings:
– TransGrid could ‘over contract’ assuming some non-delivery
(e.g. Need 45 MVA? Contract 50 MVA)
• Double counting:
– Can only count EE that Ausgrid has not already
included in its ‘baseline forecast’

64. A proposed process
1. TransGrid to collaboratively develop:
– Agreed CLFs for a range of measures
– Cost calculation methodology
– M&V process
2. TransGrid to calculate $/kVA/yr network cost benchmark and
call for EOIs
3. Proponents respond to EOI with estimation of impact (kVA) and
cost ($/kVA/yr) using published TransGrid CLFs & methodology
4. TransGrid enters contract with proponent for agreed $/kVA/yr
value for any peak savings delivered
5. At end of peak season, proponent verifies demand reduction
through M&V process
6. TransGrid approves & pays agreed $/kVA/yr X savings achieved
7. TransGrid revises published CLFs based on learning outcomes.

65. Questions?
Edward Langham
Research Principal
edward.langham@uts.edu.au
(02) 9514-4971

66. Treat EE as a resource…
• Where it comes from and who ‘digs it up’
shouldn’t matter – as long as it's available
cheaper than the alternative, invest and
deliver it.

67. Framework feedback
1. What else does TransGrid need to consider in
designing its framework? What have we missed
in outlining a process that will work for both
TransGrid and proponents?
2. What elements of this draft framework do you see
as problematic for proponents? (e.g. participation,
decision making, data collection, etc.)
3. What strategies do you think could be used to
overcome these issues, problems or barriers?

68. Wrap up

69. Next steps

70. Thank you
Stay informed and
involved through the
project web page
www.yoursaytransgrid
.com.au/psf