Evaluating Methodologies of Quantifying Avoided Costs in Energy, Capacity, and Transmission and Distribution Resulting from Energy Efficiency Policies
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2023-05-29
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Abstract
This study embarks on an in-depth exploration of methodologies for quantifying avoided costs in energy, capacity, and transmission and distribution as a result of energy efficiency policies. The research is anchored in a comparative lens, scrutinizing techniques adopted by jurisdictions such as California, New England, and Ontario. Motivated by the escalating electricity demand due to heightened electrification, the study seeks to understand how energy efficiency policies can be a counterforce by quantifying their utility system benefits. While the U.S. showcases a consistent adoption and documentation of energy efficiency policies, Canada's engagement appears fragmented. The prevailing measure for energy efficiency cost-effectiveness remains the total resource cost test, emphasizing avoided costs as energy efficiency's primary benefit. The investigation reveals a dependency on forward electricity price forecasts for avoided cost in energy, and construction costs of new power facilities for avoided cost in capacity. Methodologies for avoided transmission and distribution cost display variance, with some hinging on historical data blended with investment forecasts. Spotlighting Alberta reveals an imminent need for robust data infrastructure and agile adaptation mechanisms in the energy landscape, ensuring precise utility benefits quantification from energy efficiency policies.
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Li, Q. (2023). Evaluating Methodologies of Quantifying Avoided Costs in Energy, Capacity, and Transmission and Distribution Resulting from Energy Efficiency Policies (Unpublished master's project). University of Calgary, Calgary, AB.