2 VEP BackgroundIn 2006, legislation directed DMME Division of Energy to develop the Virginia Energy Plan and provided funding that was used to hire a consultant. In 2014, staff coordinated development of the VEP with direction and input from the Virginia Energy Council, recommendations and other input from public and private sources, and data from public sources.
3 2014 Virginia Energy Plan Sources: Web portalSix public listening sessionsOther submissionsVirginia Energy Efficiency CouncilVirginia Advanced Energy Industry CoalitionMeade WestvacoVirginia Chamber of CommerceNatural Resources Defense CouncilEnvironment NortheastVAEEC Board members worked with VAEIC to envision and create a VEP.Several members from VAEEC Board contributed, and Harry Godfrey from Opower led the EE group:Andrew Griggsby: residentialLarry Cummings: MUSHDavid Steiner: CommercialDavid Dayton, CESI: IndustrialKen Rosenfeld: Transportation and otherCynthia: overview, general review and edits of content, input on drafts and recommendations through VEC
4 Governor’s Virginia Energy Council The Honorable Maurice Jones, Secretary of Commerce and TradeThe Honorable Molly Ward, Secretary of Natural ResourcesCynthia Adams, E.D., Local Energy Alliance ProgramKristen Hughes Evans, Founder, Sustainable ChesapeakeAlleyn Harned, E.D., Virginia Clean CitiesChelsea Harnish, Policy & Campaigns Manager, Virginia Conservation NetworkFrancis Hodsoll, Founder, Virginia Advanced Energy Industries CoalitionSteven Jumper, Director, Corporate Public Policy, WGL Holdings, Inc.Bernard Lamoureux, Data Center Operations Manager, MicrosoftDavid Lawson, V.P., Coal, Norfolk Southern CorporationRobert Matthias, Chair, Virginia Offshore Wind Development AuthorityAnn Blair Miller, Director, Project Management, Roanoke Regional PartnershipLaurie Moran, President, Danville Pittsylvania Chamber of CommerceDr. Ganapati Myneni, Senior Scientist, Jefferson LabsDr. Kenneth Newbold, Director of Research and Innovation, JMUArchie Pugh, Managing Director, Transmission, Appalachian Power Company
5 Governor’s Virginia Energy Council Irene Kowalczyk, Director, Global Energy Sourcing & Policy, MeadWestvacoVishwa Link, Partner, McGuire WoodsArchie Pugh, Managing Director, Transmission, Appalachian Power CompanyDonald Ratliff, VP States – Government Affairs, Alpha Natural ResourcesJack Reasor, President & CEO, Old Dominion Electric Cooperative (ODEC)Sandy Reisky, CEO, Apex Clean EnergyStephen Walz, Director, Environmental Programs, Metropolitan Washington Council of GovernmentsMike Ward, E.D. Virginia Petroleum CouncilDan Weekley, Vice President, Corporate Affairs, Dominion Resources B. Hayes Framme, Advisor for Infrastructure and Development, Secretary of Commerce and Trade
6 Governor’s Virginia Energy Council Takeaways from Energy Efficiency Section:Residential and commercial energy use increasing both because of absolute number of buildings and because of total floor space/sfIndustrial energy has declined due to the recession but is expected to increaseMUSH energy use is increasing due to new construction and aging buildings
7 VEP Recommendations: Strategic Growth 1. Accelerate the Development of Renewable Energy Sources in the Commonwealth to Ensure a Diverse Fuel Mix and Promote Long-Term Economic HealthWork to ensure the diversity of the Commonwealth’s generation fuel mix. Virginia must not become over-reliant on a select number of fuel sources. Diversity in fuel mix will provide a hedge against volatility and spread the risk among varied sources of generation. This diversity must include an increase in the development of zero-emitting renewable sources, as well as on the largely untapped potential of energy efficiency. This path will lead to economic prosperity through increased jobs and environmental health through lower harmful emissions.
8 VEP Recommendations: Strategic Growth 2. Make Virginia a Leader in Energy Efficiency to Reduce Consumption and Spur Economic GrowthA. Establish the Virginia Board on Energy Efficiency. The 2007 Virginia Energy Plan established a voluntary goal of reducing energy consumption at the retail level by 10% by 2022, based on a 2006 baseline. The State Corporation Commission analyzed this goal and determined that it was feasible. While there is anecdotal evidence that work toward achieving this goal is underway, there is a lack of a comprehensive understanding, along with easily identifiable data, as to where the Commonwealth currently stands in meeting the 10% goal.According to SCC website, reaching this goal would postpone the need to build four to five power generation stations. It will also save Virginians a net $200 million to $700 million.”
9 VEP Recommendations: Strategic Growth 2. Make Virginia a Leader in Energy Efficiency to Reduce Consumption and Spur Economic GrowthB. Aggressively implement energy efficiency in state government.Create, within the administration, a Chief Energy Efficiency Officer to oversee the aggressive implementation of energy efficiency measures in state agencies, including Energy Performance Contracting (EPC)Streamline and standardize the EPC process by developing a master packet that agencies can use to guide them through the process and ensure no unnecessary barriers slow down the projectAccomplish the goal of reducing electricity consumption in state facilities by 15% through EPC by 2017Reinstitute a commissioning/re-commissioning pilot program in state facilities
10 VEP Recommendations: Strategic Growth 2. Make Virginia a Leader in Energy Efficiency to Reduce Consumption and Spur Economic GrowthC. Develop a marketing, outreach and preliminary assistance program to engage local municipalities in Energy Performance Contracting (EPC)There are four broad tasks valuable to offer local governments and consistent with the scope of this contract:Education about the pros and cons of energy performance contractingAssistance in prequalifying governments initially interested in the concept Assistance in getting prequalified governments out to bid and in selecting qualified Energy Service Companies (ESCOs)Preliminary owner’s agent assistance, through the investment audit stageThe Commonwealth should develop an initiative to promote increased adoption of EPC in local governments. The Governor could highlight this initiative through an energy efficiency tour to regions of the state that are centers of best practices, as well as localities that would benefit most from EPC.
11 VEP Recommendations: Strategic Growth 2. Make Virginia a Leader in Energy Efficiency to Reduce Consumption and Spur Economic GrowthD. Create a central state facility energy data registry and dashboard to track energy consumption at all state agencies.Energy Management Systems (EMS) and their associated cost savings and sustainability opportunities are increasingly vital to enterprise cost control and competitive strategies. The emergence of relatively inexpensive computing, data storage, and cloud deployment options have already transformed many industries, and are now poised to do the same for enterprise energy management. Applying technological advances to create smart buildings offers the opportunity to utilize data-driven energy management solutions on a cost-effective basis, which will provide predictable and unprecedented energy, operational, and capital expenditure savings.
12 VEP Recommendations: Strategic Growth 2. Make Virginia a Leader in Energy Efficiency to Reduce Consumption and Spur Economic GrowthE. Engage social entrepreneurs in exploring and implementing innovative models, such as pay for performance, in order to test new and innovative ways to cut energy bills and to finance energy efficiency upgrades in existing multi-family residential properties.Social entrepreneurship is uniquely positioned to aid government in addressing energy efficiency in two primary ways:Better leveraging public and private resourcesTesting and developing impact-making solutionsIn partnership with government, social entrepreneurs can augment their ability to generate and implement transformative, cost-effective solutions to the most challenging societal challenges facing the Commonwealth, our nation and the world.
13 VEP Recommendations: Infrastructure 1. Expand, Improve, and Increase the Reliability of Virginia’s Energy InfrastructureC. Create flexible financing mechanisms to help to put in place key additional energy assets and support priority energy programs.Objectives of the funding mechanism would include: provide low-cost financing for energy program delivery and projects to expand or improve energy infrastructure, including renewable energy systems, energy conservation and efficiency and alternative fuels; increase local economic activity and create jobs; and leverage private funding and markets.Use of Virginia’s Qualified Energy Conservation Bond (QECB) allocation and other funding sources could provide low-cost financing options for: energy performance Contracting (EPC) to improve building energy efficiency; deployment of energy efficiency measures and programs, and renewable energy systems; and for alternative transportation refueling infrastructure.
14 VEP Recommendations: Workforce 1. Expand and Foster an Educational Environment to Prepare the Next Generation of Virginia’s Energy WorkforceExpand and accelerate participation in the Troops to Energy program, training veterans to work in the energy industry.Collaborate with community colleges and four year institutions to train the next generation of STEM workers in the energy sector.Establish annual goals and identify opportunities to increase statewide attainment rates of credentials that align with employer needs.Align energy workforce supply to current and anticipated employer demands by constructing career pathways and training solutions for future workers.
15 Appendix A: 111(d)President’s Directive to EPA: develop carbon pollution standards, regulations or guidelines, as appropriate, for:New power plants - Proposed January 8, 2014Modified and reconstructed power plants - Proposal: June Final: June 2015Existing power plants - Proposed Guidelines: June Final Guidelines: June State Plans due: June 2016EPA assumes that states will be able to achieve an annual incrementalsavings rate of 1.5% of electricity demand by or before 2030, ramping up at 0.2% each year beginning in 2017.
16 Appendix A: 111(d) VA Timeline Implementation led by DEQJuly - Sept 2014 –EPA provides 120-day public review and comment period (extended by 45 days) June 2015 – Final rule promulgated by EPAJune 2016 – States submit compliance plans to EPA, or request a one or two year extension to fully develop a stand-alone compliance plan or multi-state compliance plan June 2017 – States submit final stand-alone compliance plans to EPA June 2018 – States working with other states on multi-state compliance plans must submit final multi-state plans to EPA 2020 to 2029 – State plans, subject to EPA approval, become effective with the interim intensity goal in place averaged over the entire ten year period 2030 – States must comply with the final intensity goal averaged over three years
17 Appendix A: 111(d) Compliance Building BlockStrategy EPA Used to Calculate the State GoalMaximum Flexibility:Examples of StateCompliance MeasuresMake fossil fuel-fired power plants more efficientEfficiency ImprovementsEfficiency improvementsCo-firing or switching to natural gasCoal retirementsRetrofit CCSUse lower-emitting power sources moreDispatch changes to existing natural gas combined cycle (CC)Dispatch changes to existing natural gas CC3. Build more zero/low emitting energy sourcesRenewable EnergyCertain NuclearNew NGCCRenewablesNuclear (new and up-rates)New coal with CCSUse electricity more efficientlyDemand-side energy efficiency programsTransmission efficiency improvementsEnergy storage
18 Appendix A: 111(d) Target Emissions Applying EPA’s “Best System of Emission Reduction” (BSER) strategy, the following assumptions for Virginia are made:6% improvement in generating efficiency can be achieved at coal fired power plants “inside the fence line” of the facilityRedistribution of about 10% of the state’s coal generation to combined cycle units in VirginiaExpansion of renewable generation to an interim level of 12% and a final level of 16% by 2030Expansion of Virginia’s energy efficiency and demand side management programs so that they offset 9% of total generation by 2030
19 111(d) Impact ReportsThe Virginia Center for Coal and Energy Research, Virginia Tech 111(d) Impact Study:“For example, a study in Washington State, citing data from American Council for an Energy Efficient Economy (ACEEE), indicated that the investment-to-job ratio in the energy efficiency industry was $184,049 per job in 2004 (WSU, 2009). Inflating that figure to 2012 dollars, it is estimated that additional energy efficiency jobs could range from 116 to 466 under different scenarios in Virginia.”ACEEE’s 2012 Energy Efficiency and the Economic Opportunity Fact Sheet: for every $1M spent in building efficiency improvements, 20 jobs are supported. For every $1M in avoided consumer energy costs, another 17 jobs are supported.5 jobs vs. 37 jobs – depending on your source
20 111(d) Impact ReportsSouthern Environmental Law Center’s ICF Report 111(d) Impact Analysis:“We note that the implementation of the CPP leads to lower wholesalemarket costs, owing primarily to the fact that fewer new builds are required. However, accounting for EE costs shows that there is a net positive compliance costs associated with the implementation of CPP for the state of Virginia.”
21 Establish an Energy Efficiency Board 2. Make Virginia a Leader in Energy Efficiency to Reduce Consumption and Spur Economic GrowthA. Establish the Virginia Board on Energy Efficiency. The 2007 Virginia Energy Plan established a voluntary goal of reducing energy consumption at the retail level by 10% by 2022, based on a 2006 baseline. The State Corporation Commission analyzed this goal and determined that it was feasible*. While there is anecdotal evidence that work toward achieving this goal is underway, there is a lack of a comprehensive understanding, along with easily identifiable data, as to where the Commonwealth currently stands in meeting the 10% goal.*According to SCC website, reaching this goal would postpone the need to build four to five power generation stations. It will also save Virginians a net $200 million to $700 million.”
22 VAEEC Census/VEP Recommendations Convene a stakeholder session on increasing the breadth and depth of energy efficiency programs to help the state meet its voluntary energy efficiency goal.There are no prescribed milestones for tracking the state’s success in meeting this goal. As stated earlier, while the state’s largest utility Dominion Virginia Power is projecting a 5.1% reduction if they fulfill all of their Integrated Resource Plan programs, that still leaves 4.9% unaccounted for, and DVP is responsible for almost 70% of electric sales statewide. A coordinated strategy between stakeholders is necessary to ensure effectiveness of messaging, rebate programs, financing, and other market drivers. In short, some market transformation will be needed to meet the state goal, and it will require more than utility rebate programs to do it. The Council notes that cooperative and municipal utilities do not have the same resources available them as do investor-owned utilities, making it more difficult to create energy efficiency programs for their members/customers. Local governments, environmental organizations, and the real estate community have a vested interest in the outcomes of energy efficiency efforts as well, but they often are not part of the larger energy efficiency conversation taking place among industry businesses.
23 Establish an Energy Efficiency Board Voluntary EE goal is accelerated by 2 years – VEP seeks to achieve this goal by 2020EE Board appointed by Governor and convened 90 days from Oct 1 VEP releaseEE Board will:oversee the implementation of the strategic planprovide guidance to accomplish plan goalspublish progress reports on implementation on a bi- annual basiscreate a grant response team from its members to work with private and public sector entities to develop grant proposals
24 Energy Efficiency Board Duties Develop, within 12 months, an M&V method to compile and track energy consumption at the retail, residential, and commercial levelsDetermine where VA currently sits in achieving the 10% voluntary goalIdentify market, regulatory and policy barriers and opportunities to help both the private sector and regulated utilities work together to meet the 10% goalProvide recommendations to address market, regulatory and policy barriers and opportunitiesReview best practices in cost recovery and shared-savings mechanisms that may help accelerate utility adoption of energy efficiency
25 Energy Efficiency Board Duties Develop a plan to coordinate outreach efforts throughout all regions of the state and with all necessary stakeholders to ensure a consistent communications and messaging strategy focused on increasing energy efficiency education and participationIdentify creative financing tools that can be used at both the generation and demand side levels and make recommendations for their implementationRecommend any new programs or policy changes that would support energy efficiency building upgrades for low income Virginians – particularly in Southside and Southwest VirginiaReview existing Virginia-specific energy efficiency studies to determine if a comprehensive report on Virginia efficiency potential is necessary
26 About the Virginia Energy Efficiency Council: Al Christopher, Director Division of Energy, DMMENext Steps for VEPNewly awarded SEP awardAbout the Virginia Energy Efficiency Council:Founded in 2012, the Virginia Energy Efficiency Council seeks to assess and support programs, innovation, best practices and policies which grow Virginia’s energy efficiency industry and to provide a forum for stakeholder interaction.