Infrastructure Archives - Energeia https://energeia-usa.com/tag/infrastructure/ Pioneering the future of energy Tue, 01 Jul 2025 18:35:41 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.3 https://energeia-usa.com/wp-content/uploads/2023/08/cropped-Energeia-logo-white-space-added-32x32.png Infrastructure Archives - Energeia https://energeia-usa.com/tag/infrastructure/ 32 32 Moreno Valley Integrated Resource Plan (IRP) https://energeia-usa.com/moreno-valley-irp/ Thu, 22 May 2025 01:11:29 +0000 https://energeia-usa.com/?p=5601 Energeia was engaged by Moreno Valley Utility (MVU) to develop their 2023-25 Integrated Resource Plan (IRP). As part of this process, Energeia will be analyzing current and future load and load modifier profiles as well as generation and BTM resource profiles.

The post Moreno Valley Integrated Resource Plan (IRP) appeared first on Energeia.

]]>

Moreno Valley Integrated Resource Plan (IRP)

Energeia was engaged by Moreno Valley Utility (MVU) to develop their 2023-25 Integrated Resource Plan (IRP). As part of this process, Energeia will be analyzing current and future load and load modifier profiles as well as generation and BTM resource profiles.

Energeia was engaged by Moreno Valley Utility (MVU) to develop their 2023-25 Integrated Resource Plan (IRP). The IRP outlines Moreno Valley Utility’s long-term strategy for delivering reliable, affordable, and sustainable electricity to their community.

It serves as a roadmap for meeting future energy demands while aligning with state mandates, environmental goals, and the needs of this growing city. The 2025 IRP incorporates updated forecasts, technology assessments, and policy considerations to guide resource decisions through a balanced and forward-looking approach.

As part of this plan, MVU is prioritizing the integration of additional renewable energy resources, energy storage, and demand-side programs to reduce greenhouse gas emissions and enhance system resiliency.

Read the complete plan here.

For more information on Energeia’s research and analysis on fleet transport electrification, please contact us at insights@energeia-usa.com

For more information or to discuss your specific needs regarding Integrated Resource Plans, please request a meeting with our team.

For more detailed information regarding key challenges of truly integrated system planning, please see Energeia’s Charge Ahead webinars and associated materials.

You may also like

The post Moreno Valley Integrated Resource Plan (IRP) appeared first on Energeia.

]]>
Kenmore Electric Vehicle Infrastructure Plan (EVIP) https://energeia-usa.com/kenmore-evip/ Wed, 21 May 2025 22:05:32 +0000 https://energeia-usa.com/?p=5507 Energeia was engaged to conduct the technical modeling of electric vehicle (EV) adoption, charging energy needs, charger siting and grid integration for the City of Kenmore’s fleet electrification and EV infrastructure plan.

The post Kenmore Electric Vehicle Infrastructure Plan (EVIP) appeared first on Energeia.

]]>

Kenmore Electric Vehicle Infrastructure Plan (EVIP)

Energeia was engaged to conduct the technical modeling of electric vehicle (EV) adoption, charging energy needs, charger siting and grid integration for the City of Kenmore’s fleet electrification and EV infrastructure plan.

The City of Kenmore engaged Accenture and Energeia to develop the Electric Vehicle Infrastructure Plan (EVIP) to support the City’s transition to clean, sustainable transportation by developing a robust, accessible, and future-ready electric vehicle (EV) charging network. 

This initiative aligns with local and regional climate action goals and aims to reduce greenhouse gas emissions while preparing the city for the projected growth in EV adoption.  conduct the technical modeling of EV adoption, charging energy needs, charger siting and grid integration for the City of Kenmore’s fleet electrification and EV infrastructure plan. This plan aims to strategically place EV chargers across the city, focusing on high-traffic areas and potential partnerships with local businesses. In partnership with Accenture, Energeia developed a Washington-specific transport electrification toolchain to estimate charging needs for the city including optimized, least-cost charging infrastructure recommendations. 

The EVIP outlines a strategic framework to: 

  • Assess the current state of EV charging infrastructure in Kenmore
  • Identify key locations for new charging stations to ensure equitable and convenient access
  • Align with state and regional initiatives, including Washington’s goal for 100% clean-powered new vehicle sales by 2035
  • Support the city’s Climate Action Plan and Comprehensive Plan by targeting a 95% reduction in heavy-duty vehicle emissions and achieving net-zero emissions by 2050
  • Position Kenmore to secure funding and guide both near-term actions and long-term planning for EV infrastructure

The full council meeting minutes can be found here, or read the abridged version of the EVIP presentation.

For more information on Energeia’s research and analysis on fleet transport electrification, please contact us at insights@energeia-usa.com

For more information or to discuss your specific needs regarding EV data forecasting and modeling, please request a meeting with our team.

For more detailed information regarding key challenges facing electric vehicle uptake, please see Energeia’s Charge Ahead webinars and associated materials.

You may also like

The post Kenmore Electric Vehicle Infrastructure Plan (EVIP) appeared first on Energeia.

]]>
MD/HD Transport Electrification Investment Assessment https://energeia-usa.com/md-hd-transport-electrification-investment-assessment/ Fri, 15 Nov 2024 00:12:48 +0000 https://energeia-usa.com/?p=5138 The Environmental Defense Fund partnered with Black & Veatch and Energeia to identify the impacts of the anticipated increased electrification on the electric grid system.

The post MD/HD Transport Electrification Investment Assessment appeared first on Energeia.

]]>

MD/HD Transport Electrification Investment Assessment

The Environmental Defense Fund partnered with Black & Veatch and Energeia to identify the impacts of the anticipated increased electrification on the electric grid system.

The Environmental Defense Fund (EDF) engaged Black & Veatch (BV) and Energeia to develop a model to support the evaluation of the potential utility costs and cost savings generated from 3+ optimized utility policies, programs, and plans by utilizing data from two major partner utilities (with customer bases of 2-5 million) to analyze proactive investment in grid upgrades and the associated impacts on MHDV transportation fleets and third-party rate payers.

Key highlights:
  • Advanced Clean Trucks (ACT) regulation: Pushing for zero-emission vehicle sales.
  • Proactive grid planning: Anticipating and supporting future load growth.
  • Long-term benefits: Cost savings and reliable infrastructure for EV fleet owners and utilities.

Visit the Project Summary to learn more about the Energeia services and tools utilized by EDF and BV to reach their critical insights, or read the full report here.

For more information on Energeia’s research and analysis on fleet transport electification, please contact us at insights@energeia-usa.com

For more information or to discuss your specific needs regarding EV data forecasting and modeling, please request a meeting with our team.

For more detailed information regarding key challenges facing electric vehicle uptake, please see Energeia’s Charge Ahead webinars and associated materials.

You may also like

The post MD/HD Transport Electrification Investment Assessment appeared first on Energeia.

]]>
Optimizing Behind-The-Meter (BTM) Rates and Incentives https://energeia-usa.com/btm-rates-and-incentives/ Tue, 18 Jun 2024 17:31:47 +0000 https://energeia-usa.com/?p=5036 As rooftop solar PV, battery storage and ultimately, vehicle-to-x technologies, create generation alternatives and the means to store energy, artificial intelligence (AI) has the potential respond to pricing fluctuations. All this indicates none of the above characteristics of price inelasticity will remain true in the very near future.

The post Optimizing Behind-The-Meter (BTM) Rates and Incentives appeared first on Energeia.

]]>

Optimizing Behind-The-Meter (BTM) Rates and Incentives

As rooftop solar PV, battery storage and ultimately, vehicle-to-x technologies, create generation alternatives and the means to store energy, artificial intelligence (AI) has the potential respond to pricing fluctuations. All this indicates none of the above characteristics of price inelasticity will remain true in the very near future.

Electricity has historically exhibited what economists call inelastic price elasticity of demand, in that a change in pricing has not historically led to a change in demand, which has governed how electricity has been priced for around 150 years. Due to advances in technology, this is all changing dramatically, thus emphasizing the need to maxmise efficient consumer energy resource rates and tariffs.

Price Elasticity of Demand

The characteristics of traditional electricity economics are driven by the lack of energy substitutes, the inability to store large volumes of electricity along with the high costs to respond efficiently to high prices.

Figure 1 – Examples of Custimer Responses to Price Changes Source: EconomicsOnline, (20 Jan 2020) Price Elasticity of Demand, economicsonline.co.uk/definitions/ped.html/

As rooftop solar PV, battery storage and ultimately, vehicle-to-x technologies, create generation alternatives and the means to store energy, artificial intelligence (AI) has the potential respond to pricing fluctuations. All this indicates none of the above characteristics of price inelasticity will remain true in the very near future.

As we move towards a future where customer agents, such as AI, can respond in real-time to electricity price signals and control more of our energy demand and supply, it is critical that these price signals are efficient. Otherwise, consumer energy resources (DERs) could be wasted or even operate to increase system costs.

For example, if all DERs respond to the same off-peak price signal, they may all start generating electricity at the same time, creating a new peak. This would be inefficient and would increase costs for everyone.

To avoid this, it is important to have electricity price signals that accurately reflect the real-time cost of generating and delivering electricity. This will help to ensure that DERs are used in the most efficient way possible.

Economic Efficiency in Energy

Economists agree on three complementary measures of economic efficiency: productive, allocative, and dynamic, that account for fluctuations and causal relationships between cost, prices, demand and technological progress. Using Gregory Mankiw, author of Principles of Economics, who defines these measures, we can overlay these principles onto an electricity system.

Productive efficiency is defined as the state of affairs in which the inputs used to produce a given output are minimized and thus operating on its production possibility frontier.

In terms of energy decarbonization, an example of productive efficiency can be represented in any least cost CO2 pathway to net zero emissions. In other words, that will reduce greenhouse gas emissions to a target level at the lowest possible cost.

The figure below shows a range of combinations of centralised (bulk) resources and decentralised resources, each sitting on the efficient frontier. If centralised resources are used more than the ratio described in theory below, the result will be lower system efficiency.

The figure below reports on the projected net benefits of implementing NREL’s identified strategies, with space and water heating measures the majority contributors to savings. The data also shows that most of the net benefits will occur in the 2030 to 2050 timeframe.

Figure 3 – Why Marginal Revenue (Price) Should Equal Marginal Cost Source: Energeia Research

Allocative efficiency is defined as the state of affairs in which the quantity of each good or service produced is equal to the amount that consumers are willing to purchase at the prevailing prices.

In terms of efficient Consumer Energy Resources, we need to take the quantity versus price one step further and examine the rate of change between these two variables, better known as marginal cost and marginal demand. Previously, without alternative energy options, energy prices peaked with system peak demand, based on the marginal cost to meet the demand. Now that alternatives and storage systems are available, during peak demand periods/high price periods consumers are able to switch to stored energy, mitigating high prices and lowering the demand on the grid. The goal of efficient rate and incentive design is to balance marginal cost to equal marginal demand.

Figure 4 – Illustration of Ineffiecenty Solar PV Incentives Source: Energeia Analysis

Where this is not the case, due to monopoly power, for example, then we will see under consumption where prices are too high, and under consumption where prices are too low, resulting in what economists term deadweight loss. We can also call this avoidable inefficiency, as shown in the figure above.

Dynamic efficiency is defined as the state of affairs in which technological progress is maximized. The development and deployment of renewable energy technologies is a classic examples of dynamic efficient in the energy industries. Renewable energy technologies, such as solar and wind power, are becoming increasingly cost-competitive with traditional fossil fuel-based energy sources, increasing adoption and revenue, thus perpetuating the next cycle of investment and lowering costs over time.

The future health of the energy economy will rest is the achievement of all three efficiencies.

Accurate costs are a key precedent to achieving productive efficiency, as is consumer level uptake forecasting or demand for allocative efficient, thus informing the price and marginal revenue, which should circle back around to equal to marginal costs.

Current incentives for solar PV for customers without cost-reflective pricing are a topical example of where Marginal Cost (MC) is not being set to Marginal Revenue (MR). The figure below illustrates how the reduction in the electricity bill, which is greater than avoided costs of delivering that electricity, results in a cross-subsidy, and over consumption of solar PV.

Figure 4 – Illustration of Ineffiecenty Solar PV Incentives Source: Energeia Analysis

It is important to note that Marginal Costs varies depending on the time horizon being considered. Short-run-marginal-cost (SRMC) is typically different to long-run-marginal-cost (LRMC). SRMC only includes variable costs in the short term, while LRMC typically assumes[1] a horizon where all costs are variable.

Due to the capital-intensive nature of centralised electricity supply infrastructure, where grid assets can last 50-70 years, and future costs are lower than historical costs due to technology and industry learning improvements, it is possible for LRMC to be less than historical costs.

Regulated utilities are typically allowed to recover their efficient historical costs, and they can without distorting the MC = MR relationship.

Listen or click through at your own pace

Social Implications

Differences in upfront costs for gas vs. electric equipment and appliances are a key barrier for anyone with:  

  • capital constraints; or  
  • where there is a split incentive between the owner and the occupier of a premise; or  
  • where the value of the investment cannot be fully recouped, for example due to only being in the premise a few years compared to a 12-year investment horizon. 

The figure below shows illustrative (actual relativities vary by jurisdiction) expenditure relativities between different options for a 4-year investment horizon, which reflects typical residential and commercial lease tenancies – before any government incentives. Gas is generally the least cost option, though results are highly sensitive to local conditions such as gas and electricity relativities. Heat pumps, which may be more cost effective over a 12-year period, are unlikely to be selected by rational investors, due to their bounded conditions such as tenancy duration and the inability to recover the residual value in the resale value of the premise or via a deal with the landlord.

Figure 5 – Frank Ramsey (1903-1930) Source: Wikipaedia, (19 Sept 2023), Frank Ramsey (mathematician), https://en.wikipedia.org/wiki/Frank_Ramsey_(mathematician)

The State of the Art in Maximising Efficient Consumer Energy Resource Rate and Tarrif Design

Energeia’s review of tariff designs and DER incentives in Australia found that they fell short of efficient for the following main reasons:

  • Peak periods not based on forward looking, weather normalised periods of congestion
  • Peak prices not based on LRMC for centralised or decentralised resources
  • Rate designs not reflective of Ramsey pricing
  • Incentives do not reflect LRMC net of tariff impacts

Detailed information regarding efficient peak period design is contained in the webinar, as is information regarding efficient LRMC for centralised and decentralised resources.

Figure 6 – Testing Rate Design forAllocative Efficiency and Ramsey Pricing Source: Energeia Analysis

Selected DER uptake results, representing a short list of the above combination of options, are shown in the figure below. Solar PV adoption in this jurisdiction was around 19% at the start of the period. By the end of the period, it ranged from around 19% to as high as 59%, due to the rate design.

Figure 7 – 10-Year Solar PV and Storage Penetration Rates Source: Energeia Analysis

Adoption rates are one factor, but the real test of the impact of a rate is on the level of DER adoption in terms of capacity, which is reported in the figure below. It tells a very different story than penetration alone, with a range of DER mixes and absolute levels.

Perhaps unsurprisingly, the business-as-usual (BaU) rates, being Inclining Block and Seasonal Time-of-Use energy, the two most popular designs in Australia and the US, shows the highest levels of DER adoption, which are almost entirely solar PV, with very little battery storage.

Figure 8 – Cumulative Solar PV and Storage System Capacity Source: Energeia Analysis

Figure 8 delivers the key result in terms of which of the designs achieves the greatest productive efficiency, which also typically minimise cross-subsidies. Lower cross-subsidies also mean better Ramsey Pricing outcomes.  

Interestingly, no single factor seems to deliver the most efficient outcomes. ATF, OPD and ATE are in the lowest cost as well as highest cost designs. Monthly max demand, one of the most popular peak period pricing mechanisms, tends to result in lower efficiency outcomes.

Figure 9 – Community Cost and Cross Subsidy Impacts by Tariff Design Source: Energeia Analysis

Figue 9 delivers the key result in terms of which of the designs achieves the greatest productive efficiency, which also typically minimise cross-subsidies. Lower cross-subsidies also mean better Ramsey Pricing outcomes.  

Interestingly, no single factor seems to deliver the most efficient outcomes. ATF, OPD and ATE are in the lowest cost as well as highest cost designs. Monthly max demand, one of the most popular peak period pricing mechanisms, tends to result in lower efficiency outcomes.

It is important to note that the above example is from 2017, when solar PV and storage costs were much higher. Recent projects have resulted in significant increases in efficient Consumer Energy Resource resources, as their marginal costs fall relative to centralised system marginal costs.

In situations where it is not possible to achieve major tariff reforms, or as a stop gap measure, incentives such as rebates or annual payments can help send efficient price signals.

The figure below shows how efficient DER incentives should be developed, net of tariff impacts. Solar PV savings (incentives) are above utility savings, and the only way to address that is to use more cost reflective tariff designs. Bill impacts from other DER is under the utility savings, and the role of the efficient incentive is to bridge those gaps.

Figure 10 – Illustration of Using Incentives to Achieve MR = MC by Consumer Energy Resource Source: Energeia Analysis

Takeaways and Recommendations

While most in the energy can agree with and apply Einstein’s mass-energy equivalence, E = mc2, and Newton’s second law of thermodynamics, the industry has been slow to apply the economic principle of MR = MC, marginal revenue equals marginal cost, causes inefficiencies that could have costly and environmentally and socially harmful ramifications.

Key Takeaways

  • Rates and incentives are a primary driver of DER adoption and operation
  • Virtually all rates and incentives do not reflect key economic principles, resulting in inefficient adoption and operation
  • Key reforms needed include unbundling, locational, accurate LRMC and period calculation, and fair residual cost allocation
  • Efficient tariff and incentives will deliver 2-3 times more DER, in the right places, at the right times, in the right mix
  • Reform will not increase costs for the disadvantaged or undermine efficient network investment or operation

Key Recommendations

  • A rule change is probably needed to unbundle the transmission and distribution portions of tariffs, to ensure an optional tariff is made available and is designed correctly
  • Real-time pricing is nice to have, but 90% of benefits will come from unbundling, and improved cost and period accuracy

Watch the full webinar playback below and follow along with the complete presentation.

You may also like

The post Optimizing Behind-The-Meter (BTM) Rates and Incentives appeared first on Energeia.

]]>
Removing Building Electrification Barriers https://energeia-usa.com/removing-building-electrification-barriers/ Tue, 23 Apr 2024 16:03:07 +0000 https://energeia-usa.com/?p=4924 Buildings account for a significant portion annual emissions, due to burning of gas for water and space heating, and for cooking.

The post Removing Building Electrification Barriers appeared first on Energeia.

]]>

Removing Building Electrification Barriers

Buildings account for a significant portion annual emissions, due to burning of gas for water and space heating, and for cooking.

Buildings account for a significant portion of the United States’ annual emissions, mainly due to the burning of gas for water and space heating,  as well as other common uses like cooking. Electrification of these end uses alongside power system decarbonization is a key decarbonization strategy being pursued at the Federal, state and local level. The main barriers to implementing this strategy includes: 

  • Higher cost electric appliances 
  • Consumer preferences (i.e. natural gas for cooking) and low awareness of available technology
  • Higher electricity grid costs 
  • Industry labor capacity limitations

The following sections describe best practice approaches to removing each of these barriers, based on more than 10 projects Energeia has completed in the U.S. and Australia.

U.S. Building Emissions and Electrification

U.S. emission reduction targets are driven by the Paris Agreement, which the U.S rejoined in 2021. U.S. targets include a 50-52% reduction in 2005-level (baseline) emissions by 2030, and a net-zero goal for 2050.

Baseline U.S. emission projections from the EIA are relatively flat, which, given economic and population growth, already reflects some savings from the development and adoption of new technology.

Figure 1 – U.S Emissions Projections by Sector, Source: Energeia Research, US EIA (2022)

The above graphic shows that the majority of U.S. emissions come from the transport and industrial sectors, with residential and commercial end uses accounting for 35% of the U.S. emissions total in 2022 (Lawrence Berkeley National Lab (LBNL), 2023). Most emissions are relatively flat other than for electric power, which reduces over time as the share of renewable energy increases.

A 2024 LBNL study of demand-side pathways for building sector emission reductions found that up to a 91% reduction in building sector CO2 emissions from 2005 levels by 2050 was possible with aggressive implementation of electrification, energy efficiency, and demand flexibility measures. The figure below reports on building sector emissions over time, demonstrating the sequencing of potential CO2 emissions reductions by measure type (HVAC, water heating, etc.)

Figure 2 – Total Building Sector Emissions (MT CO2) Source: LBNL (08/13/23), Demand-side solutions in the US building sector, https://doi.org/10.1016/j.oneear.2023.07.008

The figure below reports on the projected net benefits of implementing NREL’s identified strategies, with space and water heating measures the majority contributors to savings. The data also shows that most of the net benefits will occur in the 2030 to 2050 timeframe.

Figure 3 – Benefits by End Use in an aggressive implementation scenario Source: LBNL (08/13/23), Demand-side solutions in the US building sector, https://doi.org/10.1016/j.oneear.2023.07.008

LBNL’s modeling suggests a total of $107 billion in annual power system cost savings could be achieved by 2050. LBNL’s scenario assumes the majority of these savings, and therefore the uptake of these strategies, occurs between 2030 and 2050, with the majority coming from electrification in the residential sector, as shown in the figure below.

Figure 4 – Benefits by Sector and Measure in an aggressive implementation scenario Note: EL = Electrification, EE = Energy Efficiency, DF = Demand Flexibility Source: LBNL (08/13/23), Demand-side solutions in the US building sector, https://doi.org/10.1016/j.oneear.2023.07.008

While the above national analysis helps point the way, state and local jurisdictions will need to develop their own estimate of the optimal pathway to decarbonizing buildings. The following sections summarize a best practice approach to identifying it.

U.S. Building Electrification Potential

The pace of transition building emissions from the current state to a zero carbon, fully electrified future state, is governed by the rate of premise and equipment turnover, the regulations and incentives in place, and the underlying technology and fuel costs: 

  • Rate of new premises – New buildings are an important market segment for targeting regulations, standards, programs, and incentives. 
  • Rate of building remodeling – This usually triggers new regulations such as no new gas appliances, etc.;  
  • Rate of appliance turnover – Appliance bans can be at point of sale, but incentives can be used encourage voluntary electrification as well; and 
  • Retrofit programs– Almost never used due to their relatively high costs, they will become essential for the orderly decommissioning of the natural gas system. 

The rate of new buildings and premises is largely a function of economic activity and can be relatively easily gleaned from utility growth forecasts. New buildings are subject to prevailing building standards but can also be influenced by programs and incentives.  The figure below is taken from recent work we did on the commercial sector.

Figure 5 – Existing Commercial Premise Replacement Rate, Source: Energeia Research

The rate of appliance turnover outside of major remodels is driven by appliance lifetimes, as most are replaced at end of life. The figure below for water heating technology shows there is not much difference between appliance lifetimes. However, another key insight from this data is that once installed, there will not be another chance to electrify them for over a decade.

Listen or click through at your own pace

Figure 6 – Water Heating Lifetimes, Source: Energeia Analysis

Turning the above drivers of potential electrification into actual electrification depends on overcoming the key barriers foreshadowed earlier.  

Addressing Appliance Cost Barriers 

Differences in upfront costs for gas vs. electric equipment and appliances are a key barrier for anyone with:  

  • capital constraints; or  
  • where there is a split incentive between the owner and the occupier of a premise; or  
  • where the value of the investment cannot be fully recouped, for example due to only being in the premise a few years compared to a 12-year investment horizon. 

The figure below shows illustrative (actual relativities vary by jurisdiction) expenditure relativities between different options for a 4-year investment horizon, which reflects typical residential and commercial lease tenancies – before any government incentives. Gas is generally the least cost option, though results are highly sensitive to local conditions such as gas and electricity relativities. Heat pumps, which may be more cost effective over a 12-year period, are unlikely to be selected by rational investors, due to their bounded conditions such as tenancy duration and the inability to recover the residual value in the resale value of the premise or via a deal with the landlord. 

Figure 7 - 4-Year Capex and Opex Costs by End Use, Source: Energeia Analysis (2019)

Best practice building electrification programs often ban options that are known to be a bad investment, e.g. resistive ducted or water heating systems, or that would otherwise lock in future costs due to gas network decommissioning. However, this can unfairly force costs on to current premise owners (who may only be there for 4 years),or provide financing or other incentives to better align the costs and benefits over time.  

The Inflation Reduction Act (IRA) enacted in 2022 ,provides tax credits and funds to states, however, it only partially addresses the upfront cost barriers for consumers as shown in the figure . Additional financial strategies at the state and local level are still required to promote equitable and expansive electrification.

Figure 8 – IRA Impacts on Upfront Cost Differentials for CA Single Family Households, Note: SH = Space Heating, WH = Water Heating, LI = Low Income, MI = Middle Income, Source: Energeia Analysis (2024), TECH Clean CA (2024), BEI (2022)

The most appropriate policy and regulatory framework depends on the situation, with the presence of government owned gas and electric utilities leading to a very different optimal policy and regulatory solution than where they are privately held, for example. 

Addressing Grid Impact Barriers

Beyond the owner and occupier barriers, the impact of electrification on the electricity system can be a significant barrier, particularly where tariffs are not cost reflective, and higher electricity system costs fall on existing rather than transitioning demand.  

The figure below provides an illustrative example of average electrification impact by end use. It shows that space heating could lead to a higher peak in the morning, where most electricity peaks are driven by summer air-conditioning load after solar PV output declines. 

As long as the new load is not creating a new peak demand, and prices are cost reflective, it will lead to a general fall in electricity prices, as new demand is able to share the cost of existing infrastructure. However, once the capacity of existing infrastructure is exhausted, electrification could become the key driver of capacity expansion costs. 

Figure 9 – Example Winter Electricity Peak Day Load Profile, Source: Energeia, Analysis (2019)

A key assumption in the above estimate is the mix of resistive vs. heat pump technology and the mix of instant rather than storage water heating technology. Resistive technology uses 2-3 times more electricity for space and water heating, and will drive a much higher morning peak, as does instant compared to storage water heating technology.

Best practice approaches to addressing the above barriers include regulations and incentives that encourage more heat pumps (which are storage based in nature), a reduction in heat pump costs (e.g. via R&D incentives) and discourage electric boosters in them.  

Other best practice approaches focus on driving greater overall electric load flexibility via adoption and operation of the devices shown in the figure below, i.e. rooftop solar PV, batteries, and controllable loads such as at premise electric vehicle chargers and heat pumps.

Figure 10 - Key Technology Options for Reducing Customer Costs, Source: Energeia Research

Implementing the above best practices will have a major impact on the overall cost effectiveness of electrification.

Addressing Industry Capacity Barriers

Another key issue facing policies and regulations that ban appliances that are currently a major portion of the market is the impact on the installation industry and the associated workforce. figure below illustrates this effect on the demand for different trades when implemented all at once in the first few years. It is unlikely that the industry can respond so quickly to the change in demand, leading to labor shortages, unemployment and higher consumer costs.

Figure 11 – Impact on Industry Capacity under Banned Gas Appliance Scenarios, Note: FTE = Full Time Equivalent Assumes new builds are all-electric, gas appliance sales ban, and elec. appliance incentives, Source: Energeia Analysis

Of course, any significant changes to market conditions need to be communicated to the industry in a timely fashion. We have worked with clients to identify and engage with the workforce training elements of the economy to ensure sufficient retraining capacity is available.  

Best practice approaches we have previously developed with clients including starting with incentives to encourage a more gradual increase in electrification, with any future bans on targeted technologies staggered across end of life, new / remodeling and customer segment.  

Addressing Program Funding Barriers

The combined effect of implementing best practice approaches to barrier removal has a dramatic effect on a given community’s costs and benefits from building electrification, as illustrated by the example outcomes across a range of base and optimized policy scenarios shown below.

The whole-of-system and stakeholder impact analysis Energeia conducted showed that 2 out of the 3 base policies resulted in a significant net cost increase. However, implementing best practice mitigation strategies resulted in the lowest overall cost, which was a significant savings compared to the ‘Do Nothing’ scenario (against which other scenarios were compared). 

Figure 12 – 15 year NPV ($M, 2021) by Cost Category, Source: Energeia Analysis

Takeaways and Recommendations

The cost impacts of electrification largely occur upfront, while the benefits occur over a longer period, up to 10-years or more. Costs can also impact on the owner and occupier differently, due to differences in tenancy duration and ownership. Addressing these barriers requires access to financing in a manner that accommodates changes in tenancy.

Best practice, self-funding strategies we have worked with clients to identify and implement include: 

  • Providing rebates or financing that address upfront cost differences, and recovering these costs via higher electricity rates or other techniques to better allocate costs 
  • Accessing CO2 credits or energy efficiency credits (which also translates into CO2 savings once the wholesale market is decarbonized)

We have also seen policymakers look to the tax base, including bonds, to provide financing. However, we have found that this has not been necessary to date, due to the availability of longer-term operating cost savings, and the ability to use energy pricing mechanisms for funding.  

That being said, a key cost that has only been tested in very limited cases in the US is the cost of gas network decommissioning. The gas commissioning process is likely to entail rollout of electric appliances, which will be relatively high cost, and likely need to be compensated.

Energeia encourages careful analysis of net benefits from electrification and the consideration of policies that better capture excess benefits (i.e. windfall gains to certain stakeholder groups) so that any excess benefits may at least partially be used to fund the cost electrification, including gas system decommissioning as appropriate.

While beneficial overall in every jurisdiction that Energeia has analyzed, impacts from building electrification vary widely across premise types, consumer tenancy types, and time.  Best practice policymaking and regulation focuses on mitigating the downsides, in part via capturing a portion of the potential upside. 

Key Takeaways 

  • Building electrification is an essential part of the United State’s decarbonization pathway
  • There are four main electrification triggers: new build, replacement, end-of-life, and retrofit
  • Building electrification impacts different consumers differently
  • Key barriers to electrification are higher upfront costs, higher grid costs, industry capacity constraints, and program funding
    Electrification can impact on electricity sector costs, but these impacts can often be mitigated
  • Bans on appliances in new construction or at end of life can create step changes in workforce requirements

Key Recommendations 

  • Use bottom-up modeling of premises at the sub-load level to provide granularity needed to identify and size the key barriers and solutions 
  • Overcome cost barriers via financing or rebates, recovering these costs from imposts on electricity usage aligned with expected benefits 
  • Overcome electricity grid cost barriers by ensuring cost reflective pricing avoids cost shifting and cross-subsidies, and encouragement of load flexibility and management 
  • A largely unknown key risk is the cost of gas network decommissioning, which Energeia believes could be at least in part funded by repurposing electrification benefits 
  • Address potential industry labor constraints by giving industry plenty of notice, staggering any bans to minimize step changes in demand and ensure retraining capacity 

You may also like

The post Removing Building Electrification Barriers appeared first on Energeia.

]]>
FCRTA Electrical Grid Analysis Study https://energeia-usa.com/fcrta-electrical-grid-analysis-study/ Tue, 15 Feb 2022 01:34:09 +0000 https://energeia-usa.com/?p=4723 Fresno County to identify the impacts of the anticipated increased electrification on the electric grid system.

The post FCRTA Electrical Grid Analysis Study appeared first on Energeia.

]]>

FCRTA Electrical Grid Analysis Study

Fresno County to identify the impacts of the anticipated increased electrification on the electric grid system.

The Fresno County Rural Transit Agency (FCRTA) has prepared this Electrical Grid Analysis Study (Study) to identify the impacts of the anticipated increased electrification on the electric grid system and the unique challenges faced by rural communities serviced by FCRTA. Electrification is the transition from fossil fuels to electricity to power multiple sectors such as the transportation, residential and commercial buildings, industrial, and agriculture sectors.

Read the full report here.

For more information on Energeia’s research and analysis in DER enablement, please contact us at insights@energeia-usa.com

For more information or to discuss your specific needs regarding EV data forcasting and modelling, please request a meeting with our team.

For more detailed information regarding key challenges facing electric vehicle uptake, please see Energeia’s Charge Ahead webinars and associated materials.

You may also like

The post FCRTA Electrical Grid Analysis Study appeared first on Energeia.

]]>
Zero-Carbon Portfolio Study for Valley Clean Energy https://energeia-usa.com/valley-clean-energy-zero-carbon-portfolio/ Mon, 07 Feb 2022 01:58:42 +0000 https://energeia-usa.com/?p=4740 Valley Clean Energy’s 2021-2023 Strategic Plan which contains goals related to VCE’s power resource portfolio as well as decarbonization

The post Zero-Carbon Portfolio Study for Valley Clean Energy appeared first on Energeia.

]]>

Zero-Carbon Portfolio Study for Valley Clean Energy

Valley Clean Energy’s 2021-2023 Strategic Plan which contains goals related to VCE’s power resource portfolio as well as decarbonization

In response to California’s ambitious climate goals—Executive Order B-55-18 and Senate Bill 100 mandating carbon neutrality by 2045—Valley Clean Energy (VCE) is evaluating pathways to achieve zero carbon electricity by 2030. This effort aligns with more aggressive targets set by utilities like Sacramento Municipal Utility District (SMUD) (2030) and Los Angeles Department of Water and Power (LADWP) (2035). 

Four optimized resource portfolios were modeled under two carbon balancing approaches—hour-by-hour (HBH) and annual carbon neutrality (CN)—and two resource constraints: carbon-free (including large hydro) and renewable-only (excluding large hydro). Solar PV and 4-hour lithium-ion batteries emerged as the most cost-effective core technologies, supplemented by other dispatchable resources.

The analysis revealed that achieving HBH neutrality would cost approximately $42.6 million annually—250% more than the $17 million required for annual CN. Sensitivity analysis showed that excluding green hydrogen and limiting energy sales to CAISO could further increase costs by $13 million annually. These findings will inform VCE’s strategic and resource planning as it considers practical pathways to a zero-carbon future.

Read the full report here.

For more information on Energeia’s research and analysis in reduced carbon emission portfolios, please contact us at insights@energeia-usa.com

For more information or to discuss your specific needs regarding EV data forcasting and modelling, please request a meeting with our team.

For more detailed information regarding key challenges facing electric vehicle uptake, please see Energeia’s Charge Ahead webinars and associated materials.

You may also like

The post Zero-Carbon Portfolio Study for Valley Clean Energy appeared first on Energeia.

]]>
Kings County Electric Vehicle Readiness Plan https://energeia-usa.com/kings-county-electric-vehicle-readiness-plan/ Thu, 21 Oct 2021 02:51:23 +0000 https://energeia-usa.com/?p=4115 Kings County was developed to support increased adoption of Plug-In Electric Vehicles (PEVs) within the county.

The post Kings County Electric Vehicle Readiness Plan appeared first on Energeia.

]]>

Kings County Electric Vehicle Readiness Plan

Kings County was developed to support increased adoption of Plug-In Electric Vehicles (PEVs) within the county.

The Kings County Association of Governments’ (KCAG) Electric Vehicle Readiness Plan (EVRP) for
Kings County was developed to support increased adoption of Plug-In Electric Vehicles (PEVs) within the
county. The document is the result of efforts led by the Kings County Association of Governments (KCAG) to develop a plan that coordinates implementation and siting of appropriate PEV charging infrastructure. Beyond siting, the EVRP is also intended to inform agencies, government agencies, and other partners in PEV infrastructure of relevant best practices, funding opportunities, and technical analysis to meet the electric vehicle needs of the area and its anticipated growth.

Read the full report here.

For more information on Energeia’s research and analysis in DER enablement, please contact us at insights@energeia-usa.com

For more information or to discuss your specific needs regarding EV data forcasting and modelling, please request a meeting with our team.

For more detailed information regarding key challenges facing electric vehicle uptake, please see Energeia’s Charge Ahead webinars and associated materials.

You may also like

The post Kings County Electric Vehicle Readiness Plan appeared first on Energeia.

]]>
Study of Consequential Issues Materially Affecting Kansas Electricity Rates https://energeia-usa.com/kansas-electricity-rates/ Mon, 05 Jul 2021 01:45:34 +0000 https://energeia-usa.com/?p=4730 Kansas Legislature passed the Substitute for Senate Bill 69, calling for a study of retail electricity rates of KS electric public utilities.

The post Study of Consequential Issues Materially Affecting Kansas Electricity Rates appeared first on Energeia.

]]>

Study of Consequential Issues Materially Affecting Kansas Electricity Rates

Kansas Legislature passed the Substitute for Senate Bill 69, calling for a study of retail electricity rates of KS electric public utilities.

Kansas Legislature passed the Substitute for Senate Bill 69, calling for a study of retail electricity rates of Kansas electric public utilities. To address this task, a two-part Study will inform future legislative and regulatory efforts to establish policies that support regionally competitive electric rates and reliable service. Part 1 of the Study, which was completed by London Economics International, LLC in January of 2020, assessed the effectiveness of current Kansas ratemaking practices and explored possible approaches for the Kansas Legislature and Kansas Corporation Commission to make retail electricity prices regionally competitive. Part 2 of Study, addressed in this document, addresses 13 matters with topics including the regional economy, regional planning processes, regional electricity market, transmission investments, impacts of advanced energy solutions, and physical and cyber security processes. Kansas public utilities included in the Study include investor owned utilities, three municipally owned utilities, and 26 electric cooperatives.

Read the full report here.

For more information on Energeia’s research and analysis in DER enablement, please contact us at insights@energeia-usa.com

For more information or to discuss your specific needs regarding EV data forcasting and modelling, please request a meeting with our team.

For more detailed information regarding key challenges facing electric vehicle uptake, please see Energeia’s Charge Ahead webinars and associated materials.

You may also like

The post Study of Consequential Issues Materially Affecting Kansas Electricity Rates appeared first on Energeia.

]]>
Fresno Council of Governments: Electric Vehicle Readiness Plan https://energeia-usa.com/fresno-council-of-governments-electric-vehicle-readiness-plan/ Fri, 01 Jan 2021 01:24:49 +0000 https://energeia-usa.com/?p=4713 Kings County was developed to support increased adoption of Plug-In Electric Vehicles (PEVs) within the county.

The post Fresno Council of Governments: Electric Vehicle Readiness Plan appeared first on Energeia.

]]>

Fresno Council of Governments: Electric Vehicle Readiness Plan

Kings County was developed to support increased adoption of Plug-In Electric Vehicles (PEVs) within the county.

The Fresno Council of Governments’ (FCOG) Electric Vehicle Readiness Plan (EVRP) was developed
to identify locations for electric vehicle charging infrastructure and ultimately contribute to increased
local electric vehicle adoption. The EVRP development was led by FCOG in partnership with the Fresno
County Rural Transit Agency (FCRTA) and funding from Caltrans. To inform siting recommendations,
the document includes the results of technical analysis driven by electrification trends and forecast.
The analysis included an assessment of barriers to electrification, an evaluation of expected electric
vehicle adoption, expected emissions reductions, types of chargers recommended for specific sites,
and magnitude of cost for implementation of a robust charging network within Fresno County. The EVRP
was developed with active stakeholder participation and reflects FCOG’s commitment to community
engagement to ensure that recommendations appropriately capture local priorities.

Read the full report here.

For more information on Energeia’s research and analysis in DER enablement, please contact us at insights@energeia-usa.com

For more information or to discuss your specific needs regarding EV data forcasting and modelling, please request a meeting with our team.

For more detailed information regarding key challenges facing electric vehicle uptake, please see Energeia’s Charge Ahead webinars and associated materials.

You may also like

The post Fresno Council of Governments: Electric Vehicle Readiness Plan appeared first on Energeia.

]]>