Clean  Energy and
Multiple Benefits of Clean
Energy Initiatives

Reducing energy demand and/
or increasing renewable energy
generation from state and local clean
energy initiatives—such as goals,
standards, codes, funds and programs-
generate many benefits including:
  • Security, diversity, and overall reliability
   improvements for the electric system.
  • Improved environmental quality, human
   health, and quality of life.
  • Positive economic gains through energy
   costs saved, avoided medical costs,
   higher disposable incomes, increased
   labor productivity, and more jobs

This brochure is part of a series and focuses
on direct energy impacts.
 State and local governments
    can analyze their clean
    energy initiatives using
 methods and tools described
        in this brochure.
What's Inside:

O How can state and local governments
  estimate the potential direct energy
  impacts of clean energy policies?
O Steps to estimating energy impacts of
  clean energy.
O Retrospective vs. prospective calculation of
  energy savings.
O Quantitative examples of how clean energy
  programs result in direct energy benefits.

O How to find more information.
&EPA
   United States
   Environmental Protection
   Agency
                                              of State  and  Local

                                  Clean Energy  Initiatives


                    What are the  direct energy impacts of

                    clean energy  initiatives?

                    Clean energy initiatives, including those that advance energy efficiency,
                    renewable energy and clean distributed generation, directly impact energy
                    by:

                     Reducing demand for conventional fossil-fuel-powered electricity,
                     Reducing demand for natural gas used for heating, and/or
                     Increasing the amount of electricity generated with clean, renewable energy
                     sources.

                    How do direct energy impacts from

                    clean energy  benefit states and

                    localities?

                    Reducing fossil fuel-based electricity—and generating more electricity from
                    clean, renewable energy—benefits several state and local priority areas.
                     Environment:
                      - Clean energy initiatives reduce or avoid air pollution and greenhouse gas
                       emissions, improving air quality, protecting peoples health, and lowering
                       contributions to climate change.
                     Economy:
                       Energy efficiency can lower the cost of complying with national air
                       standards by reducing air pollution.
                       Clean energy initiatives can reduce costs for fuel, energy, and new
                       electric power plant construction, and improved air quality helps avoid
                       illnesses which reduces medical costs.
                      - Clean energy can also increase personal disposable income and revenues
                       for business, increase labor productivity and support jobs in the clean
                       technology sector as well as in the businesses that support  it.
                     Electric System:
                       Energy efficiency can reduce the need for additional generation and
                       transmission assets.
                       Clean energy from domestic sources can increase energy security,
                       diversity, and overall reliability in the electricity grid.
                       Diversified utility resource portfolios that include energy efficiency and
                       renewable energy can reduce uncertainty associated with fluctuating fuel
                       prices and reduce dependence on imported fuels and other risk factors.
   Slate and Local
Climate and Energy Program

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Retrospective vs. Prospective
Calculation of Energy Savings
State and local governments can assess energy
impacts from two perspectives: retrospectively,
to evaluate impacts of existing investments,
or prospectively, to plan new or modified
initiatives.
  •  Retrospective approaches are based on
    measurements of actual impacts that
    have already accrued from past clean
    energy actions. Actual energy savings
    from energy-efficiency programs, for
    example, are calculated using measurement
    and verification (M&V) methods, where
    measurements determine actual savings
    from measures implemented in an individual
    facility.
  •  Prospective techniques for estimating
    energy savings or renewable-energy
    generation include methods and models
    that calculate expected energy impacts
    resulting from proposed clean energy
    initiatives. Prospective analyses of energy
    impacts are appropriate, for example, when
    a state or locality is assessing the relative
    costs and benefits of alternative policies to
    select the most cost-effective approach or
    determining the budget level required to
    meet clean energy goals.
              ?fe>
The Texas Emissions Reduction Plan (TERP)
promotes energy-efficiency and renewable-
energy measures to meet federal ambient air
quality standards. Estimated cumulative annual
energy savings from code-compliant residential
and commercial construction in Texas were:
  • 1,440,885 MWh of electricity each
    year from 2001-2007.
  • Approximately 2.9 million MWh by
    2013, accounting for 10 percent of the
    cumulative total electricity savings under
    all energy efficiency and renewable energy
    programs implemented under the TERP
    (2008 and 2013).
Estimated reduction of NOX emissions:
  « 1,014 tons /year in 2007.
  « 2,047 tons/year by 2013.
Analysis of data from the Texas Commission
on Environmental Quality and EPA (including
eGRID) provided an estimate of the energy
savings and NOX reductions from energy code
compliance in new residential construction.
Source: Texas A&M Energy Systems Laboratory (ESL).
2008.
Why  estimate the direct energy
impacts of clean energy initiatives?
Direct energy impact estimates are the foundation for calculating and
communicating the potential cost savings and other benefits to the economy,
energy system, environment, and human health.
By understanding the direct energy impacts of clean energy initiatives, policy
makers can:
1. Evaluate the implications of new goals, targets, or legislative actions.
2. Measure progress toward meeting clean energy- and other related goals.
3. Review the actual and potential effectiveness of technology- or sector-
  specific clean energy initiatives in achieving energy savings.
4. Estimate the actual and potential co-benefits of clean energy policies,
  including benefits to the energy system, economy, environment, and
  human health.
5. Communicate clearly the comprehensive impacts of existing and potential
  clean energy initiatives to their partners and stakeholders.
6. Demonstrate the full value of a clean energy program.
How can  state and local  governments
estimate the potential direct energy
impacts of clean energy  policies?
There are a series of steps state and local governments can take to
estimate the direct energy impacts of clean energy:

STEP 1: Develop a business-as-usual (BAU) energy forecast
State and local governments can compile, adopt, or develop the historical,
current and projected pattern of energy supply and demand using basic or
sophisticated approaches. This creates a baseline against which to measure
the energy impacts of policies.


Sources of data include: Utilities; consumer energy profiles; state energy
offices; public utility commissions; independent system operators, North
American Electric Reliability Corporation; US DOE's Energy Information
Administration; National Renewable Energy Laboratory; and US EPA.
STEP 2: Quantify implications of targets and goals

Targets and goals are often presented in percentages that don't necessarily
specify the quantities of energy reductions or generation desired, such as:
• Achieve a rate of zero load growth by 2020.
 Reduce electricity demand by 2 percent per year by 2015, and 2 percent
 every year thereafter, with reductions to be based on prior three years of
 actual sales.
 Meet 20 percent of generation requirements or sales through renewable
 energy sources by some date in the future.

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  It can be helpful to estimate the potential implications of a target or goal and
  determine how much energy must be saved or generated before evaluating
  specific clean energy programs and implementation options.
   STEP 3: Estimate potential direct energy impacts

   There are a range of basic to sophisticated approaches available for estimating
   the potential direct energy impacts of clean energy, including:
    Extrapolation of energy efficiency or renewable energy potential studies,
    Adapting the results of similar programs in other states or localities to local
    conditions, and
    Understanding the amount of clean energy equipment in the market to
    determine the feasible amount of investment a new initiative could induce.
  Resources available to facilitate estimation include: Market Assessment and
  Program Evaluation (MAPE) Clearinghouse, Lawrence Berkeley National
  Laboratory (LBL), Renewable Energy Policy Project (REPA), American Council
  on Energy Efficient Economy (ACEEE), Tellus Institute, National Renewable
  Energy Laboratory (NREL), California Database of Energy Efficiency Resources
  (DEER), Regional Technical Forum (RTF) deemed savings database, and
  Entergy Texas Deemed Savings.


  Tools available include: ENERGY STAR* Savings Calculators, ENERGY
  STAR Roofing Comparison Calculator, ENERGY STAR Target Finder, and
  ENERGY STAR Portfolio Manager.
  Key assumptions to consider include:  Program period, program target,
  anticipated compliance or penetration rate, annual degradation factor of the
  measure, transmission & distribution loss, non-program effects, funding, and
  administration.
New York's Energy SmartSM Public Benefits
Program was implemented in 1998 to
improve the state's energy reliability, reduce
energy costs, mitigate environmental and
public health effects related to energy use,
and enhance the state economy. Between
1998 and 2007, the overall program had:
  « Achieved more than 3,000 GWh of
    electricity savings;
  • Created and retained 4,700 jobs;
  • Reduced nearly 2,600 and 4,700
    tons of NOx and SOx, respectively;
  • Decreased annual CO2 emissions
    by 2 million tons; and
  • Reduced annual energy bills
    by $570 million for participating
    customers.
By 2027, the program is expected to:
  • Create more than 7,200 jobs.
  • Increase labor income more than
    $300 million each year.
  « Increase total annual output in the
    state by $503 million

Each year, the New York State Energy
Research and Development Authority
(NYSERDA) collects data on progress toward
meeting the program's energy savings  goals.

Source: New York State Energy Research and
Development Authority. 2008.
   STEP 4: Create an alternative policy forecast


   Once the direct energy impacts are estimated, an alternative policy forecast is
   created to reflect the new energy supply or demand conditions expected after
   the implementation of a new clean energy initiative. All BAU forecasts and
   energy savings projections should be reevaluated periodically (every one to
   two years) and it is important to document all sources and assumptions.
  For more information about these steps, please see the next page.
References:
  •  New York Energy SMARTSMProgram Evaluation and Status Report for the Year Ending December
    2007 New York Public Service Commission and New York State Energy Research and Development
    Authority. March. 2008.
Vermont's Department of Public Service
(DPS) forecasts energy demand and energy
efficiency program savings as part of its
state energy policy and planning process.
The 2008 forecast showed growing energy
demand and a potentially large supply gap
if major power contracts were not replaced.
As a result, Vermont committed to pursuing
aggressive energy efficiency measures.

The forecast projected that without new
DSM measures, electricity demand would
grow an average of 0.93 percent on an
average annual basis until 2028.

When new DSM measures are implemented,
the DPS anticipates that energy demand will
    Texas Engineering Experiment Station. Texas A&M University System. Volume I—Summary Report:
    Annual Report to the Texas Commission on Environmental Quality. January 2007-December 2007.
    August 2008. Revised December 2008. Energy Systems Laboratory.

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Where can state and local governments and policy makers
go for more information about  tools, methods, and resources
available to estimate the benefits of clean energy initiatives?
Assessing the Multiple Benefits of Clean Energy: A Resource for States, an essential manual to help estimate and
communicate the benefits of clean energy, provides tools and approaches for state and local governments.
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