Strategic Planning for a Decarbonized Future

Posted June 10, 2010 By Jes Rivas

ILLUME assists clients by offering strategic planning support to identify research, program designs, and technologies that align with utility and policy goals. Our focus is on developing equitable and scalable electrification plans within energy program portfolios.

The Challenge

The multitude of building types, climates, and rapidly evolving technology has made creating a clear and scalable decarbonization strategy difficult. Many utilities and program administrators’ recent approaches to decarbonization are marked by reactive decisions to policies, emerging technology trends, and Federal funding opportunities. This reactive process often leads to one-off projects, resulting in inflated costs and failure to adequately evaluate interventions, assess opportunities, or build market traction and support. Moreover, project teams working quickly can structure and launch initiatives that do not build from lessons learned and instead encounter similar sets of barriers previously identified and yet unaddressed. Bridging the gap between a successful initiative and designing a sustainable year-over-year program presents a significant challenge.

The Approach

ILLUME is supporting our clients with electrification strategic planning to identify the technologies, specifications, pathways, and program design considerations for current and future program cycles. ILLUME harnesses multidisciplinary research methods to support strategic research and planning for our clients. Some examples of our approaches include:

  • Engineering and technology assessment
  • Data analysis and scenario modeling
  • Policy research
  • Secondary research and literature reviews
  • Strategy and road-mapping
  • Evaluability and metric framework design
  • Market research and characterization

The Results

ILLUME has helped clients assess building decarbonization options, potential, and considerations for residential and commercial customer segments, including priority populations. This includes exploring impacts on customer bills, integration with solar, effects on indoor air quality, and the dynamic relationship between electrification, reliability, and resiliency.

We have learned that the path toward decarbonization needs to be intentional and tailored.

Some high-level programmatic considerations ILLUME’s identified include:

Costs are substantial and variable. Program designs that will successfully create decarbonization at scale will need to understand costs and cost drivers with accuracy and reliability. Designs need to identify and consider cost drivers that improve performance—such as system features—and differentiate them from those that increase initial costs. This approach can help create program designs that meet cost-effectiveness and positive customer bill impact requirements.

Customer bill impacts are difficult to predict and need to be better understood. Understanding customer bill impacts from residential decarbonization efforts is critical for programs working in this space, notably when guided by policy. This is of particular importance for priority populations, a customer segment that is often the focus of ongoing efforts to reduce carbon emissions, as they tend to face disproportionately high energy burdens compared to other segments of the population. Bill impacts can vary drastically, due to a variety of factors, such as volatility in rates and service charges, customer segment-specific and specialty rates, equipment performance, whether landlords or tenants pay the energy bills, and customer behavior, notably regarding thermal comfort.

Customer targeting for decarbonization offerings is still unproven. While there is in-field evidence and theoretical reasoning that programs can identify the customers who are most likely to benefit from decarbonization program offerings, ILLUME has seen pilots either end or move away from leveraging targeting in their design. This has been done to avoid refusing customers who do not pass screening requirements, often those that establish minimum energy and/or bill savings thresholds. The pivot away from targeting also is done to manage costs by partnering with other energy efficiency program outreach, which can allow decarbonization program designs that share some of the fixed cost burdens of outreach and offer other meaningful measures when the pilot offerings alone are not cost-effective.

Application and installation matter. Even within a product family, performance can vary for electrification systems and appliances; differences of 50% are common. Further creating complexity, default heat pump settings may not be optimized to achieve energy savings, and improper settings are not always obvious. Program designs need to carefully identify and create qualified product lists, as well as contractor training guidelines and installation specifications.

The Takeaway

To achieve decarbonization goals and enhance resiliency, it is critical to apply many-pronged approaches and solutions across end uses, program designs, markets, and sectors. ILLUME partners with clients to revolutionize their approach to pilot and program development. By leveraging our expertise in strategic planning and program implementation with engineering expertise, we assist clients in breaking free from the cycle of reactive decision-making and redundant projects. Through an initiative-taking and data-driven approach, we help clients identify and address barriers, optimize resource allocation, and establish decarbonization pathways for innovation and growth.

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