New federal equipment standards create big Northwest energy savings

In the past five years, the U.S. Department of Energy (DOE) has cranked out federal appliance and equipment standards that by 2029 will produce almost 800 average megawatts of Northwest energy savings that will greatly help the region achieve the savings goals of current regional power plan, according to preliminary analyses by the Bonneville Power Administration and Northwest Power and Conservation Council.

DOE has been setting national energy efficiency standards for appliances and equipment for decades, though the pace and stringency of the standards has varied dramatically from administration to administration. Current U.S. Secretary of Energy Ernest Moniz has committed to steady development of new product standards and DOE, in fact, has released 26 new standards since 2009, with eight more due this year.

These standards have tremendous success in creating significant energy savings at the lowest possible costs.

New minimum efficiency standards for five residential appliances — heat pumps, water heaters, freezers, refrigerators and dishwashers – that take effect next year could save 350 aMW (equal to the output of a fairly large power plant) by 2029, according to BPA and the Council. Standards for commercial/industrial products total 280 aMW, most of which come from better distribution transformers. Federal standards for lighting equipment add another 160 aMW over 20 years. Overall near-term savings (through 2019) should total about 365 aMW.

The savings comprise a significant fraction of the Sixth Northwest Power and Conservation Plan’s energy efficiency targets. Absent these federal standards, the savings would have to be acquired by utility or other regional programs. That plan, adopted in 2010, calls for achieving about 5,900 aMW of efficiency over the next 20 years, enough energy efficiency to meet 85% of projected new regional power needs. Specifically the Sixth Plan aims for on average 240 aMW per year for the first five years, and even more over the following 10 years.

A high percentage of the savings from the federal standards falls into the lost-opportunity savings category – efficiencies available at first installation or purchase that would be “lost” otherwise. Efficiency gains in the product replacement market are critical to long-term success because many of the covered products live and consume electricity for many years.

Bonneville and the Council will continue to refine their analysis, which does not yet incorporate new state-level product efficiency standards adopted in Oregon and Washington. They must watch for potential double counting of savings from federal standards and state building codes. And they must keep checking their assumptions about product demand, product lifetimes and turnover, and development of even higher efficiency products.

Utilities will likely face some uncertainty about how much of their systemwide savings they can claim as the result of their own programs rather than from the federal standards. That will have to be addressed, since many utilities must meet energy efficiency targets. But regional savings will continue to grow, regardless of whom gets credit.

While the new federal standards – and forthcoming standards for walk-in commercial refrigerators and freezers and electric motors – are great news for residential and business consumers throughout the region, it’s important to note that goals and standards constitute merely a savings floor – not a ceiling. Utilities and their customers will have ample opportunity to secure additional cost-effective savings.