Active Efficiency in Action

The best way to understand the value of Active Efficiency is to see it in action. There are many examples that demonstrate the potential of Active Efficiency. Between the economic, social, and environmental benefits, the hard work that goes into making these examples successful is something to be celebrated.

Demand Management and Decarbonization

Demand management is key to greater decarbonization. Both will require an all-of-the-above approach to energy management, including traditional energy efficiency improvements as well as beneficial electrification and integration of distributed renewable energy sources and storage. Adopting program frameworks that focus on decarbonization can help decision-makers integrate these objectives and reduce complexity for customers. The market frameworks and emissions targets highlighted in this section show how to set the stage for performance-based outcomes.

See the Performance-Based Utility Program’s Guiding Principles

PJM’s “Reliability Pricing Model” capacity market

In the Midwest, PJM’s “Reliability Pricing Model” capacity market is an example of a different kind of pay-for-performance model – related to power procurement – that demonstrates how to value both energy efficiency and demand flexibility as capacity resources within the same platform. The market ensures long-term grid reliability by procuring power supply resources such as demand response and energy efficiency upgrades from participants to “meet predicted energy demand three years in the future.” Capacity market participants, such as utilities or electricity suppliers, receive compensation for delivering on demand during emergencies or must pay for non-performance.

Climate Leadership and Community Protection Act

New York State‘s Climate Leadership and Community Protection Act (CLCPA) establishes targets for decarbonization, including reducing greenhouse gas (GHG) emissions 85% by 2050 and achieving 100% zero-emission electricity by 2040. In addition, New York City’s Local Law 97 complements the CLCPA by setting goals to achieve an 80% reduction in citywide GHG emissions by 2050 and a 40% reduction in aggregate emissions from covered buildings by 2030. These targets are designed to spur a variety of renewable energy, energy efficiency, and demand flexibility approaches to meet the ambitious goals set by the city and state.

Clean Energy Optimization Pilot

Southern California Edison, in partnership with the University of California and California State University, launched a Clean Energy Optimization Pilot in 2019 focused on performance-based carbon reduction. The program depends on measurable avoided carbon emissions instead of measured reductions in energy use to incentivize holistic decarbonization practices within the universities.