Time-Sensitive Value of Efficiency: Use Cases in Electricity Sector Planning and Programs

Most energy efficiency measures produce energy savings that vary over the course of a year. The value of the hourly electricity savings also varies over the course of a year because the cost of generating, transmitting and distributing electricity during peak demand periods may be significantly higher than during off-peak, or lower load, hours. But many planning and program activities across the United States are missing this important element.

A variety of trends are changing the electricity system, including increased adoption of other distributed energy resources, electrification of buildings and vehicles, and relative costs for natural gas-fired and renewable energy generation. Knowing when energy efficiency occurs and the value of the energy or demand savings to the electricity system—the time-sensitive value of efficiency—provides public utility commissions, utilities and other decision makers with key information needed to procure the optimal amount of energy efficiency for their system. 

The report begins with a discussion of our approach to determining use cases and examples, and then examines the need for time-sensitive efficiency data. Next, it examines five use cases in which states, independent system operators/regional transmission operators (ISOs/RTOs), utilities, and efficiency program administrators consider the TSV-EE: (1) energy efficiency program planning and evaluation, (2) distribution system planning, (3) electricity resource planning (4) electricity rate design, and (5) state and local government activities. The report concludes with areas for future research on the time-sensitive value of efficiency.