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North America Paving the Way for Industrial Energy Efficiency Programs

The United States and Canada are leading the world with innovative programs that deliver industrial energy efficiency services to customers, says a new report by the Institute for http://www.iipnetwork.org (IIP) and the American Council for an Energy-Efficient Economy (ACEEE).
 
The report, “Energy Efficiency Resource Acquisition Program Models in North America,” looks at eight industrial energy-efficiency programs across the United States and Canada. The programs were chosen because of their success at securing energy efficiency as a resource to meet current and future regional energy needs. Each program has a different model for acquiring energy savings, but all manage a series of initiatives that influence industrial customers to implement best practices and invest in efficient technologies.
 
“In the U.S. and Canada, the delivery of energy efficiency as a resource to meet existing and future demand is now being relied upon with the same certainty as electricity or gas from new generation,” said Robert Taylor, the lead author of the report and principal at Energy Pathways LLC. “These initiatives, called energy efficiency acquisition programs, have become a fixture of North American electricity and natural gas markets. They have been single-handedly responsible for postponing or eliminating the need for many expensive investments in new generation and transmission systems, and have become the model for other international programs to follow.”

There are many different models currently in use to acquire energy efficiency as a resource, each with its strengths and weaknesses. The report says, “It cannot be overstated that the structure of each of these programs was highly influenced by the organizations involved.” Initiatives of this significance usually involve the legislative and executive branches of government, regulatory and administrative agencies, and of course the utilities that provide electricity and natural gas. In any assembly of such interests, compromises must be made and less than ideal results accepted. The comparison of models explains and highlights the different choices made regarding key program elements and explains the implications of those choices.

The report also introduces some of the innovative approaches recently undertaken for industrial energy users, where energy efficiency program investments have been increasing sharply in recent years.

“The research shows the importance of tailoring the programs to the needs of different regions or industries,” said Dr. R. Neal Elliott, associate director for research at ACEEE. “What is novel about these programs is the variety of institutional structures that have been created. There isn't a single model that will be ideal for all situations. But the report describes the necessary ingredients of a successful program that will bring real savings through energy efficiency.”
 
The report is presented in two parts. Part I gives an overview of resource acquisition programs, a brief history of energy efficiency programs in North America, and a comparative analysis of eight different North American energy efficiency resource acquisition programs. Part I addresses the questions:

  • Why pursue energy efficiency resource acquisition?
  • What are the delivery options?
  • What delivery institution to use.
  • How funds should be sourced and managed.
  • What energy-saving targets will be set, and through what process.
  • What type of contractual arrangements should be used.
  • How energy savings results should be verified.

Part II contains detailed case studies of eight programs: BC Hydro, Northwest Programs, Energy Trust of Oregon, Wisconsin Focus on Energy, Detroit Edison, Enbridge, NYSERDA and Efficiency Vermont.

“This report will assist both government and industry across the world when they develop their own energy acquisition programs,” said Julia Reinaud, co-author and Policy and Program Director for IIP. “The report demonstrates how the North American utility structure works and how it can be adapted and tailored to other countries' specificities. The benefits of this model are significant and could contribute towards huge energy savings by industry. Energy efficiency can be provided at a fraction of the cost of traditional energy resources.”
 
The report was commissioned by IIP as part of its global efforts to promote program best practices. As part of the work, IIP will soon launch a new database on global energy efficiency programs at www.iipnetwork.org.
 
To download the report, visit http://www.aceee.org/research-report/ie126.

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