The Cost of Saving Electricity: A Multi-Program Cost Curve for Programs Funded by U.S. Utility Customers

Charles A. Goldman, Ian Hoffman, Sean Murphy, Natalie Mims Frick, Greg Leventis and Lisa Schwartz
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Charles A. Goldman: Electricity Markets and Policy Department, Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA
Ian Hoffman: Electricity Markets and Policy Department, Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA
Sean Murphy: Electricity Markets and Policy Department, Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA
Natalie Mims Frick: Electricity Markets and Policy Department, Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA
Greg Leventis: Electricity Markets and Policy Department, Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA
Lisa Schwartz: Electricity Markets and Policy Department, Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA 94720, USA

Energies, 2020, vol. 13, issue 9, 1-19

Abstract: This study analyzed the cost performance of electricity efficiency programs implemented by 116 investor-owned utilities between 2009 and 2015 in 41 states, representing about three-quarters of the total spending on U.S. efficiency programs. We applied our typology to characterize efficiency programs along several dimensions (market sector, technology, delivery approach, and intervention strategy) and report the costs incurred by utilities and other program administrators to achieve electricity savings as a result of the programs. Such cost performance data can be used to compare relative costs of different types of efficiency programs, evaluate efficiency options alongside other electricity resources, benchmark local efficiency programs against regional and national cost estimates, and assess the costs of meeting state efficiency policies. The savings-weighted average cost of saved electricity for the period was $0.025/kilowatt-hour (kWh). The cost of saved electricity for programs that targeted residential customers was $0.021/kWh, compared to $0.025/kWh for programs for commercial and industrial customers. Ultimately, we developed an aggregate program savings “cost curve” for the actual electricity efficiency resource during the period that provides insights into the relative costs of various types of efficiency programs and the savings contribution of each program type to the efficiency resource at a national level.

Keywords: energy efficiency programs; electricity savings; program costs; cost of saved electricity; demand-side management; efficiency supply curves; utility planning (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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