12. Emerging Technologies Program
In D.09-09-047, the Commission approved a statewide Emerging Technologies Program budget of $56 million for the 2010-12 portfolio. These funds were used to add five new program elements to address the Strategic Plan goals of achieving Zero Net Energy.
The Strategic Plan identifies two main goals to address the advancement of energy efficient technologies. One goal is to leverage private and public funds for the deployment of new technologies. The second goal is to achieve profound improvements in new building and equipment energy efficiency.
The 2010-2012 Emerging Technologies Program elements are as follows:
· Technology Assessments focused on evaluating energy efficient measures that are new to a market, or new and/or underutilized for a given application. The assessment function supports the transfer of promising measures into the utility portfolio;
· Scaled Field Placements are used to place a number of measures at customer sites as a key step toward gaining market understanding and traction;
· Demonstration Showcases to implement large-scale projects that expose measures to various stakeholders utilizing real-world applications and installations;
· Market and Behavioral Studies focused on identifying potential barriers to program adoption early in the process, and to inform multiple points in technology development, assessment justification, and transfer;
· Business Incubation Support or Technology Resource Incubator Outreach (TRIO) focused on providing training and networking for developers of energy saving technologies; and
· Technology Development Support to search for opportunities to benefit energy efficiency product development.
We believe the Emerging Technologies Programs offer a means to move the newest technologies to market, while helping consumers, through ratepayer subsidies, afford the best available energy efficiency measures before they are ubiquitous. By continually bringing new technology into the energy efficiency portfolio, we will help diffuse emerging technologies into the market, and eventually transform the market. At the same time, as more established technologies achieve market transformation, we will remove them from the subsidized energy efficiency portfolio. This process should help ensure that our energy efficiency programs focus on the best, newest technology, and that measures that no longer require subsidies are removed from the program.
The Emerging Technologies Program requires significant effort to plan projects throughout the technology development continuum. Simultaneously, the time frame for achieving California's market transformation towards Zero Net Energy requires a targeted focus on moving innovative technologies more quickly into the marketplace. This could be accomplished by establishing specific technology and innovative approaches targets, or technology roadmaps, for each market sector and end-use. The Emerging Technologies Program could achieve its targets not only by aligning its program activities with other energy efficiency programs in the IOU portfolio but also by leveraging concurrent efforts in the private and federally funded technology research and investments. The full and successful deployment of emerging technologies into the market can be best realized through deliberate planning and engagement with the full range of private and public entities that are engaged in the research, development and deployment (RD&D) field.
However, statewide IOU Emerging Technology Program efforts in 2010-2012 appear to have experienced several challenges.
1. A primary challenge is that current program expenditures reflect extremely low program activity levels. As we enter the third year of the program cycle, the IOUs have spent just over a third of their authorized budgets.350
2. While not definitive as a measure of program success, we are concerned that expenditures may need to be more robust to achieve the promise of increasing energy savings through technology. The Emerging Technologies Program is supposed to provide successive waves of advanced technologies and innovative approaches into the IOU energy efficiency portfolio and the marketplace in California at large. While the program is well funded to pursue large scale demonstrations and technology advancement activities to meet the Zero Net Energy goals, the IOUs' budget allocations for Emerging Technologies Program activities (compared to their authorized budgets) reflect a dramatic pattern of under-spending on these programs.
3. Although spending levels may not relate directly to program success, the IOUs should in general demonstrate how their program expenditures and other activities generate new energy savings for ratepayers.
4. Another challenge in the current program design is that there is no clear mapping of program activities (as reflected in the PIP) to target specific markets and end-uses, particularly to achieve the Zero Net Energy goals of the Strategic Plan. In other words, program budgets and activities are allocated by program elements and do not necessarily link pre-defined sets of technology development milestones to advance the Strategic Plan goals.
To address some of these challenges and to ensure that the Emerging Technologies Program is operating in its full capacity to meet the energy efficiency savings goals and the aggressive goals of the Strategic Plan, the Staff Proposal in the Programmatic Guidance Ruling identified six recommendations for the current Emerging Technologies Program's design and implementation. Five of the six recommendations relate directly to IOU planning and program design of a more balanced Emerging Technologies Program portfolio:
1. Balancing the portfolio of emerging technologies is critical to advancing energy efficient technologies to ensure comprehensive inclusion of different market sectors and end uses;
2. Balancing short-term (1-3 years or within the program cycle) versus long-term (over 3 years) assessments as there is a need to commit program funds and resources to assess emerging technologies over the long-term to target the goals of Big Bold Energy Efficiency of achieving Zero Net Energy by 2020 in the residential sector and by 2030 for the commercial sector as detailed in the Strategic Plan;
3. Balancing new advanced and unproven versus emerging and/or underutilized technologies;
4. Planning is needed to consider transitioning new technologies from other external initiatives like universities, and entrepreneurs; and
5. Designing the Emerging Technologies Program to demonstrate technologies that are upcoming candidates for California Energy Commission Standards programs (including California Energy Commission-identified measures that are in the "pipeline" for inclusion in upcoming cycles of the Standards).
The sixth recommendation is aimed at broadening the IOUs' Emerging Technologies Program collaborative efforts by increasing the breadth and depth of industry expertise and input on the IOU-coordinated Emerging Technologies Coordination Council (ETCC):
6. Expanding the committee members for ETCC to include key research organizations and universities, as well as the building and appliances standards setting bodies (California Energy Commission and U.S. Department of Energy).
12.1. Positions of Parties
In their comments, SDG&E/SoCalGas state that the Emerging Technologies Program does not engage in technology development, but instead serves as a catalyst for new technologies by (1) continuing to contribute to the development and deployment of emerging technologies and (2) verifying energy savings for which IOU programs may offer rebates.351 SDG&E comments, in response to the proposal's recommendation to "balance" Emerging Technologies Program activities, that the Emerging Technologies Program should have the flexibility to judiciously select and evaluate technologies.
Regarding the balanced Emerging Technologies portfolio proposal, SDG&E/SoCalGas state that "requiring the Statewide Emerging Technologies Program efforts to pre-determine the `balance' of program funding according to market segments, long versus short-term projects, and by new versus underutilized, would require knowing ahead of time which new technologies will be available during the two-year cycle."352 SDG&E/SoCalGas advise against establishing prescriptive budget allocations prior to knowledge of technologies that will be available during the program cycle. They claim that pre-committing funding to specific market sectors can potentially hinder their ability to respond to changing market conditions.
PG&E agrees with the Staff Proposal that the Emerging Technologies Program funds and resources must be committed and balanced, but echoes SDG&E/SoCalGas's position that "the IOUs must have flexibility to actively manage their portfolios and to allocate resources and funds to respond to market changes to avoid missing opportunities to investigate innovative Emerging Technologies."353 SCE seeks clarification on the recommendation that new advanced and unproven technologies should be balanced against emerging and/or underutilized technologies as well as long-term versus short-term benefits.354 The California Construction Industry Labor Management Trust supports the general recommendation for a balanced approach in the emerging technologies programs.355
Regarding the recommended expansion of the ETCC membership, the IOUs agree in spirit with the recommendation, but do not agree with the proposal to provide full membership to other entities. As an alternative, the IOUs propose creating a new category of membership (e.g., Collaborating Member) that would provide the same opportunity as intended in this recommendation, while exempting these entities from financial and resource commitments associated with membership.356
LGSEC suggests that the Emerging Technologies Program be more directly linked with local governments, which have capacity and opportunity to develop and deploy new and under-utilized technologies. LGSEC states that many local governments have established demonstration policies and programs by partnering with companies for demonstration and testing opportunities. It proposes that current programs could be expanded to enhance other local government partnerships/regional networks to work with more local governments as test beds for emerging technologies.357
The California Construction Industry Labor Management Trust recommends that the Emerging Technologies Program emphasize workforce preparation by coordinating the market deployment of emerging technologies with the development of appropriate skills standards. The Trust points out that this recommendation is consistent with the Staff's proposal for codes and standards programs. The Trust recommends that the Commission should support the replication of existing programs for early workforce planning, such as the California Advanced Lighting Controls program, to support transitioning emerging technologies to the market.358
12.2. Discussion
The 2010-2012 Emerging Technologies Program budget was approved in anticipation that the program is likely to play a central role in increasing the adoption of advanced energy efficiency measures and approaches (enhancing the market demand), expanding technology supply, and advancing innovative energy efficient measures, tools, and approaches including Zero Net Energy to address the Strategic Plan Big, Bold goals. If implemented successfully, these efforts could contribute not only to meeting the utilities' future energy savings goals, but also to the Strategic Plan's Zero Net Energy and advanced HVAC technologies goals. However, the current slow rate of program activities (and especially the relatively low number of projects targeting scaled field placements and demonstrations) indicates that this program appears to be under performing. In their applications, the IOUs should demonstrate how their program expenditures and other activities generate new energy savings for ratepayers.
The Emerging Technologies Program plays a critical cross-cutting role in technology development and deployment that spans all major market sectors and end uses. The Emerging Technologies Program should be designed to strategically balance the selection of projects and execution of program activities through a defined timeline to ultimately meet the Commission's energy efficiency savings goals as well as long-term Strategic Plan goals. This will require careful planning of resources and activities. Key factors that we consider are prioritization of the different combination and distribution of technologies suitable for California's market sectors and end-use applications while considering the technologies' market and technical potential. The IOUs should leverage findings from existing research, as well as findings from current evaluation and the Commission Potential and Goals studies, to obtain robust market potential estimates on targeted technologies and systems. The IOUs should also utilize enhanced market behavioral research to address customer and end-users acceptance and adoption of new technologies, in particular for technologies that are being considered for transfer into the energy efficiency portfolio.
We understand the IOUs' request for the flexibility to manage their portfolios and allocate resources and funds in response to market changes. However, we do not see the Staff Proposal of a "balanced portfolio" contradicting or prohibiting the IOUs from doing this. In fact, without deliberate strategic planning of resources and activities, the program might not be able to realize its full potential and plan its activities efficiently.
The Commission needs to ensure that ratepayer funds are efficiently and appropriately utilized to meet California's energy efficiency savings. Without a transparent process demonstrating that deliberate planning and targeted activities are taking place to maximize the value of ratepayer investments into these program activities, the value of the Emerging Technologies Program could be highly questionable.
We note that the limited current program activities appear to be dominated by technology assessments. While technology assessments are important for assessing performance claims and driving new technologies into the portfolio, the Emerging Technologies Program needs to better utilize the rest of its program elements, including demonstrations, scaled-filed placements, technology development support, Technology Resource Incubator Outreach, and market and behavioral studies, in order to maximize the technology supply and market demand of emerging technologies.
Given the need to expedite the development and adoption of advanced technologies, we direct the IOUs to include in their Emerging Technologies Program implementation plans for the 2013-2014 transition period the following:
1. For each of the three program goals,359 provide a detailed plan (program activities) on how the six program elements will be utilized to meet the goals (including updates to the quantifiable targets (objectives), timeline, and budgets) while addressing the various market sectors and end-uses;
2. Provide a planning budget allocation by market sectors and end-uses: for each program element. Provide a budget for the following key market sectors: Residential, Commercial, Industrial and Agricultural, and for the following key end-uses: HVAC advanced technologies, Plug-Loads and controls, Lighting, Integrated building design and operation, and Other.360
3. For each program element, provide a planning budget allocation for short-term projects (within the program-cycle) versus long-term projects (projects that will exceed three years); for example a demonstration project might span 2-4 years whereas a technology assessment project might require one year of in-situ testing; hence, during the planning stage, the IOUs may want to weigh the duration of the program cycle, program activities and budgets that they want to dedicate to short-term versus long-term projects.
4. For Technology Assessments, provide a planning budget allocation for assessing new advanced and/or unproven361 technologies versus emerging and/or under-utilized362 technologies.
Given the cross-cutting role of the Emerging Technologies Program (both internal to the IOUs' energy efficiency portfolio and among external entities363 that are active in the RD&D area), there is a need for the program to implement a robust collaborative approach. This is in order to leverage available information and research and cultivate opportunities (e.g., demonstration of technologies in local jurisdictions, and improvements in technology performance through collaboration with industry leads) to expedite the supply and adoption of advanced technologies and practices into the market.
We observe the need for more coordination between the public and private sector research to apply a "system approach" among different entities to set the research agenda and leverage private and federally funded research and investment.364 Indeed, the Strategic Plan states that, "to stimulate transformation in technology and related market dynamics, rate-payer funded emerging technologies program must be focused on creating demand pull for the emerging technologies that support the goals of the Plan. Key to this effort is a focused effort to leverage Resource and Development resources of both the public and private sectors."365
The Emerging Technologies Program currently is engaged with external entities through the ETCC and Technology Resource Incubator Outreach.366 The key role of the ETCC367 is:
... to smooth the path from the laboratory to the marketplace for promising technologies that help Californians save money and energy. [ETCC] provides a collaborative forum for the five stakeholder organizations to exchange information on opportunities and results from their Emerging Technologies activities." Currently ETCC members include the four IOUs, the Sacramento Utility District (SMUD), the CEC and this Commission.368
To emphasize the importance of expanding the collaboration and alliances with external entities, the Staff Proposal includes recommendations to expand the coordination activities between the Emerging Technologies Program and other key market actors.
We view the Emerging Technologies Program as a major strategy to meeting Zero Net Energy goals and to identify opportunities for advancing future codes and standards, in particular Reach Codes. The Emerging Technologies Program is well suited to take on a leadership role to bring all market actors together in order to increase coordination and to leverage the R&D opportunities, funds, and collaborative prospects.
In addition to its collaborative efforts with the Public Interest Energy Research program, the Emerging Technologies Program should work closely with the California Energy Commission's Codes and Standards program to support the advancement of emerging technologies and approaches into future codes. The Emerging Technologies Program should focus part of its efforts to accomplish reductions in plug loads and advancing integrated building design and operation solutions to achieve Zero Net Energy goals.369 We agree with the Trust recommendations and direct the IOUs to coordinate efforts with the codes and standards program and with the California Energy Commission to identify critical early planning workforce training needs for advanced technologies. Such training prepares various market actors to accept new technologies and ensures quality installation and maintenance of these technologies.
Given the importance of building strong collaborative efforts among the California Energy Commission, Research and Development organizations, and universities (including private and public entities), as well as designers, builders, manufacturers, end-users and customers, we approve the "Collaborative" membership category as proposed by the IOUs. An offer of membership should be made to a variety of stakeholders, including U.S. Department of Energy, NREL, representatives from Local Governments, California Association of Local Building Officials, as well as, key research organizations and universities, such as LBNL, EPRI, UC Davis, and UC Berkeley.
We also encourage expansion of the Technology Resource Incubator Outreach trial solicitation, as SCE proposed in its advice letter 2627-E,370 to become part of the Technology Resource Incubator Outreach program element in the statewide Emerging Technologies Program. The IOUs should include program components to demonstrate technologies that are candidates (as identified by the California Energy Commission and the IOU Codes and Standards program) for adoption in upcoming codes and standards. This program activity will require close coordination with the California Energy Commission and Commission Staff.
We agree with SDG&E's and SCE's proposal to require all IOUs to "include an Appendix to the Emerging Technologies Program PIP that details clear path of approaches and specific projects activities for transitioning new technologies from major external initiatives into the IOU programs." We direct the IOUs to revise and update their Emerging Technologies Program PIP to address the directives included in this Decision.
In addition, we direct the IOUs to develop Residential and Commercial roadmaps that encompass existing building retrofit and new construction. The IOUs should include in their 2013-2014 PIPs a scope of work, budget, and process for including input key stakeholders, including Commission Staff and the California Energy Commission, in the development of these roadmaps. The roadmaps should include detailed strategies, activities (such as assessments, pilots, demonstrations, etc.) and timelines that the IOUs propose to implement to expedite the assessment and deployment of advanced technologies. Within their scope, the roadmaps should identify:
1. Key stakeholders in Research, Development, Demonstration, and Deployment (RDD&D) that could be engaged in the process of developing and implementing the roadmaps;
2. Current gaps in technologies throughout the lifecycle of technology development and deployment;
3. Linkages of activities among the six Emerging Technologies Program elements, and with the IOUs' core energy efficiency programs and targeted external initiatives; and
4. Targeted steps to advance the deployment of Emerging Technologies, such as scaled-filed placement, demonstrations, and technology development support projects.
The roadmaps should be completed and submitted for Commission Staff's review by the end of the fourth quarter of 2013, in preparation for their inclusion in the IOUs' 2015+ energy efficiency portfolios.
350 Collectively, the IOUs have spent $19 million out of the $56 million budgeted. PG&E has spent only a fifth of its budget. Data per February 2012 monthly reports on EEGA.
351 SDG&E and SoCalGas Comments on Program Guidance for the 2013-2014 Energy Efficiency Portfolio at 13.
352 SDG&E and SoCalGas Comments on Program Guidance for the 2013-2014 Energy Efficiency Portfolio at 14.
353 PG&E Comments on Program Guidance for the 2013-2014 Energy Efficiency Portfolio at 14.
354 SCE Comments on Program Guidance for the 2013-2014 Energy Efficiency Portfolio at 12.
355 The California Construction Industry Labor Management Trust Comments on Program Guidance for the 2013-2014 Energy Efficiency Portfolio at 12.
356 SDG&E and SoCalGas Comments on Program Guidance for the 2013-2014 Energy Efficiency Portfolio at 15.
357 LGSEC Comments on Program Guidance for the 2013-2014 Energy Efficiency Portfolio at 13-14.
358 The California Construction Industry Labor Management Trust Comments on Program Guidance for the 2013-2014 Energy Efficiency Portfolio at 12.
359 Goal (1) Increased adoption of energy efficient measures (increased market demand); Goal (2) increased energy efficient technology supply; and Goal (3) Support of the Strategic Plan and related solutions, including Zero Net Energy (2010-2012 PG&E Emerging Technologies Program Statewide PIP at 3 http://eega.cpuc.ca.gov/Main2010PIPs.aspx).
360 For any "other" end-use category, identify the type and application, e.g., refrigeration-industrial, processes-agricultural. etc.
361 New advanced technologies are technologies and approaches that have not undergone technology assessments and/or for which no reliable existing performance characteristics are available. "Unproven" technologies are technologies that require rigorous assessment to prove their technically viability.
362 Emerging technologies are new energy efficiency technologies, systems, or practices that have significant energy savings potential but have not yet achieved sufficient market share (for a variety of reasons) to be considered self-sustaining or commercially viable. Emerging technologies include early prototypes of hardware, software, energy design tools, or services (D.09-09-047 at 243). "Under-utilized" technologies are technologies with verified and documented low market penetration rates.
363 D.09-09-047 at 246 directed the utilities "to work with other entities, particularly those in the Pacific Northwest, which have similar emerging technology efforts to leverage funding and expedite driving new measures, technologies, systems and practices into the market."
364 Strategic Plan at 82.
365 Strategic Plan at 83.
366 SCE in its Advice Letter 2627-E proposed to expand TRIO to include sub-components that find, fund, and foster innovative technologies through a competitive solicitation process. ( http://www.sce.com/NR/sc3/tm2/pdf/2627-E.pdf).
367 http://www.etcc-ca.com/about/11?task=view.
368 The Commission finances ETCC operations out of Public Goods Charge funds, and provides regulatory guidance.
369 Specific program budgets and technology development targets related to plug loads and integrated building design and operation technologies program activities should be included in the transition period program applications.
370 Trial Program submitted by SCE in Advice Letter 2627-E ( http://www.sce.com/NR/sc3/tm2/pdf/2627-E.pdf).
