Conservation voltage reduction (CVR) is a proven technology that has been used by utilities on a limited scale for the past two decades. By better managing distribution system voltages, utilities can improve efficiencies, realize significant energy savings, and reduce demand.
With the proliferation of smart grid technologies and continued strong interest in energy efficiency by regulators, utilities and customers, CVR offers a low-risk strategic alternative with enormous potential and many positive attributes -- it’s reliable, controllable, and cost-effective. However, utilities are struggling to develop workable business models with regulatory cost-recovery mechanisms to make CVR a win-win proposition for customers and shareholders alike.
Not Your Grandfather’s CVR Technology
For many years, electric utilities have achieved load reductions during critical peak load periods by reducing the voltage delivered to air conditioners, home appliances and industrial machinery. Historically, utilities have operated at the high end of the 114 volt to 126 volt range permitted by American National Standards Institute (ANSI) Standard C-84.1 due to limitations in technology. CVR was implemented manually by reducing voltages at the substation to achieve a 1 percent energy savings over short periods.
Now, with smart grid technologies and real-time operating systems, utilities are finding they can realize energy savings and demand reductions of 3 percent or more on a continual basis. In fact, the Pacific Northwest National Laboratory (PNNL) estimated total U.S. energy savings from CVR to be as high as 6,500 megawatts, or 56,940,000 megawatt-hours -- the equivalent of the Grand Coulee Dam operating at nameplate capacity for a year.
CVR is accomplished through a variety of techniques, including tap-changing transformers, line drop compensators, generator excitation controls, voltage regulators, line switchable capacitor banks, static VAR compensators, circuit reconfiguration and load control. Technologies can now simultaneously monitor the performance of multiple nodes in near-real time. For substations, regulation is possible through capacitor controls, voltage regulator controls, and transformer controls. Decisions can be local, or signals can be sent to SCADA operators for action. For distribution lines, regulation is possible through voltage regulator controls, capacitor controls, and recloser controls.
The challenge quickly becomes defining control schemes, monitoring points, sensor technologies, communication infrastructure, protocols, triggering mechanisms, etc. Energy is saved by maintaining voltages close to lower thresholds without going below them. If the priority is to regulate end-user voltages, energy consumption is reduced, saving dollars for the end-user. If losses are to be minimized, feeder volts and VARs are regulated, reducing energy, releasing line capacity and saving dollars for the utility company.
Multiple goals can be in play when implementing CVR. Optimizing certain performance metrics is part of any CVR plan; this can include minimizing losses, more fully utilizing equipment ratings, raising power factors (controlling VAR flow), or saving energy for the utility or the end-user. The introduction of microprocessor-based intelligent electronic devices opened the door for advanced CVR control schemes, resulting in huge energy savings potential.
Pilot projects have proven many dollars can be saved through these energy-saving techniques. Findings so far include the following:
- CVR factors between 0.7 and 1.0 are common. (A CVR factor of 1 means that for a 1 percent drop in voltage, a 1 percent drop in energy results. A positive CVRf is good.)
- Line loss reductions of more than 10 percent are common with proper VAR support in the context of a CVR program. (The reference is to reduced percentages of overall line losses. For example, if total line losses are 6 percent, a 10 percent reduction means 10 percent of the original 6 percent, or a 0.6 percent effective drop in total power.)
- Peak demand reductions of 2.5 percent are common, translating into potentially significant deferred generation capacity savings.
- Annual energy reductions of 4 percent are possible, depending on the feeder type and deployment strategy. Savings of 1 percent to 3 percent are more typical.
- The costs of implementing CVR are estimated at less than $500 per kilowatt saved, and approximately $20 per megawatt-hour saved, substantially less than the cost of most other energy sources.
- Energy reductions are heavily dependent on the load type and mix.
- CVR deployment should target heavily loaded, higher voltage feeders. Best candidates will have high concentrations of voltage-dependent loads as in residential neighborhoods.
- Making the most with what you have is the best way to start. Systematic capital investments can follow.
Advancing CVR as an Energy Efficiency Resource
Larger CVR deployments are inhibited in part because of the time it takes to implement new smart grid technologies. But more significantly, it’s due to disconnects between utility distribution business models and regulatory constructs. Because of the unique CVR paradigm where costs are borne by the distribution network while benefits in the form of energy savings accrue to customers, utilities have little or no incentive to invest in CVR. Lost revenues and uncertain cost recovery are the two major factors working against the utility’s financial interest.
But when viewed from a societal perspective, CVR offers one of the most reliable and cost-effective energy efficiency and peak-load reduction resources available. The obvious solution is to utilize the well-established regulatory constructs that exist for traditional energy efficiency programs in 29 states. The National Association of Regulatory Utility Commissioners (NARUC) recently passed a resolution supporting the concept of treating VVO/CVR as an energy efficiency resource. By allowing CVR energy savings to be treated as a certified energy efficiency (EE) resource, utilities can accelerate EE goal attainment and related financial rewards.
Clearly, much has been learned, but much more is needed on how to construct robust business models that are consistent with favorable regulatory constructs. Standardized measurement and verification protocols are needed to record CVR energy savings. We need to capture and build on lessons learned and documented best practices. We need quantifiable feeder and CVR technology screening strategies made possible with the development of better load modeling tools and procedures for data entry, results processing and visualization techniques, allowing robust CVR technology screening strategies. Last and not least, we need studies to identify how greater penetration of renewable and distributed energy resources impact CVR operating schemes. To address these issues, an industry-wide consortium is being launched that is dedicated to advancing CVR technologies and applications.
CVR offers proven methods to conserve energy, defer capital expenditures, and reduce greenhouse gas emissions. However, business and regulatory issues must be resolved before the full potential can be realized.
Kellogg L. Warner is Executive Vice President of Applied Energy Group, and has more than 30 years of experience in energy services for the electric and gas utility industry, as well as 15 years of experience as a chief executive of major energy consulting and service firms. Ronald D. Willoughby is an executive consultant with more than 39 years of experience in electric power systems planning and operation, focusing on reliability, power quality, energy efficiency and automation.