Alan Meier
Berkeley Lab
University of California
July 1996
Introduction
The concept of Demand Side Management, or DSM, is already familiar
to most utilities around the world and many practice it to some
extent. Indeed, it has become so quickly accepted that many have
skipped a thorough understanding of the demand for energy and
improved energy efficiency. As a result, discussions of DSM's
role and potential for reducing energy use are often incomplete.
The goal of this paper is to step back and examine the demand
for energy, and then propose a framework for understanding energy
saving. In this larger picture, the benefits and limits of DSM
are more clearly defined.
Most Japanese think that DSM consists of utility programs to reduce
peak power demand. Other countries define DSM to include both
energy and peak power conservation. I use a much broader definition,
which includes all programs to reduce energy-related costs. This
includes saving energy and peak power, but also government programs
(such as appliance efficiency standards), local building energy
codes, utility tariffs, etc..
The Demand for Energy
While the sources of energy are well known, most people have a
poor sense of where it goes. For example, most people are familiar
with the technologies used to supply electricity, but they are
surprised to learn that domestic refrigerators alone consume about
8% of the US's electricity [1]. They are shocked to discover that
electric motors consume more than half of the US's electricity
[2, 3]. These examples show two ways of presenting energy demand
data but there are many different ways to describe the demand
for energy. Some of the most important ways to separate energy
demand are:
Each description gives a different insight into how energy is
used and the opportunities for reducing it through improved efficiency
and substitution with renewable energy.
The breakdowns are also important from a DSM perspective. A DSM
program may be aimed at devices, end uses, or specific fuels.
The breakdowns show the most important targets for saving energy
(although not where the most cost-effective savings are).
Energy and Fundamental Needs
People do not consume energy, so it is important to understand
why energy is essential. People have only a few "fundamental
needs," that is, requirements to maintain life. These are:
air, food and water
shelter
thermal comfort
hygiene
contact with others (if only for procreation, but also for social
stimulation)
Many intermediate services and products must be used before one
actually reaches the final services and products that satisfy
fundamental needs. For example, we use a car to go to the store
to buy food which, with the assistance of a stove, lights, and
other devices, we convert into one of the fundamental needs. So
the demand for energy is actually the demand for the intermediate
services. As a result, it is important to understand the relationship
between energy and these intermediate services and products.
In Figure 1 above, the relationship is shown simply as a box labeled
"device", which converts energy and materials into intermediate
services and products. This device can be as simple as a light
bulb or as complex as an oil refinery. In industry, the satisfaction
of fundamental needs is less direct, but the concept still applies.
One approach to understanding the "device" box is described
below.
Nearly all services and outputs can be represented by a "service
plot", shown in Figure 2. The service plot shows how a device
converts energy into a measurable service. For example, a water
heater converts electricity into liters of hot water, an airplane
converts aviation fuel into passenger-km, and a light converts
electricity into a certain number of hours of illumination.
The major features of a service plot are:
For simple services, such as space heating, the "device"
is just a furnace. For more complex services, such as production
of aluminum beverage cans, the "device" is the whole
aluminum can factory. Table 1 lists examples of services/products
and the way that they are measured.
Table 1. Examples of service/output and quantity actually measured.
| Service or Product | Measurable Quantity |
| Space heating | number of hours at specified temperature |
| Refrigeration (1) | kilograms maintained at specified temperature |
| Refrigeration (2) | kilograms of goods cooled per month |
| Hot water | liters of 65°C water supplied per day |
| Lighting | lumen-hours per week in building |
| Cement | tons of cement per month |
| Paper | reams of paper per month |
| Journey to work | kilometers of peak hour transport |
| Coca-Cola production | liters/day |
| Baking | loaves of bread/day |
| Pipeline transport | cubic meters/hour |
| Elevators | passenger-floors/hour |
| Trains | passenger-km |
The service line is shown in the Figure 2 as a straight line, but it can curve. Once the level of service (or level of production) has been identified (such as liters/day of hot water) then the input energy can be calculated.
Note that the service line crosses the vertical axis above zero
input energy. This is because most devices consume energy even
when providing no service or products. This is called the "standby
loss." Standby losses are often dismissed as an insignificant
part of total energy use; in fact, standby losses are pervasive.
Table 2 lists examples of standby losses.
Table 2. Standby losses from various activities.
| Device or System | How Standby Loss Occurs |
| Refrigerator | heat gain through walls regardless of items in refrigerator |
| Television | instant-on feature and remote control sensor |
| Radios and small electronic devices | low voltage power supply losses due to switch location on low-voltage side of transformer |
| Autos, trucks, buses, etc. | Idling losses for internal combustion engines |
| Power plants | spinning reserve |
| Industrial cooling systems | pumping losses due to constant flow, regardless of cooling load |
| Uninterruptable power supplies | battery topping-off losses |
| Power supply for Supercomputer | AC--> AC (60 Hz --> 400Hz) frequency conversion losses |
| Building and industrial ventilation | constant, regardless of load |
| All electrical transformers | no-load losses |
| Office lighting | exit lights |
| Elevators | AC-DC conversion losses |
| Incandescent lights | none |
| Traffic lights | operating when nobody is driving past |
Standby losses are not limited to older, mechanical systems;
indeed, many electronic devices have high proportions of energy
consumed as standby loss. About half of a car's energy use is
standby loss, that is, energy lost through idling, operating fans,
and other components. [4].
The slope of the service line indicates the device's efficiency
at converting energy into a service or product. A flatter line
corresponds to a higher conversion efficiency. Table 3 is a list
of conversion efficiencies. The concept applies even to very
complex devices, such as oil refineries. Indeed, operating managers
of oil refineries and cement mills closely monitor this parameter
(and it is often a company secret).
Table 3. Conversion efficiencies for some devices.
| Device or System | Conversion Efficiency |
| Furnace | steady-state efficiency |
| Heat pump | COP |
| Vehicle | MJ/passenger km |
| Factory production | GJ/product |
| Steel mill | GJ/tonne of steel produced |
| Laser printer | kWh/page |
Service Plots for Various Devices
This framework for describing the relationship between input energy
and services is simple yet surprisingly powerful in describing
how devices function. Service plots for some typical devices
are shown below to illustrate the diversity of situations.
Incandescent lights have the simplest service plots. However,
one must be careful about defining the service. If the service
is the number of hours of light per week (using the same light),
then the service plot looks like Figure 3 (below).
Higher levels of service correspond to more hours per week, that
is, moving to the right on the horizontal axis. There is no standby
loss with incandescent lights. In contrast, low-voltage halogen
lights often have standby losses.
Refrigerators have a different behavior because total energy use is dominated by the standby component (see Figure 4). Most of the compressor work is to remove conduction heat gains through the walls. A much smaller amount goes to offsetting door-openings and cooling warm foods [1]. If we define the service as storing food in a refrigerator, then the service line is nearly flat.
Even an empty refrigerator consumes a lot of energy. The modest
increase in energy use at higher levels of service is due to door
openings and cool-down. Other devices, such as mass transit
systems, laser printers, pumps for cooling towers, and escalators
also behave like the refrigerator.
Some devices have service plots where the standby loss and the
variable component are almost equal. American homes typically
heat water and then store it in a 150 - 200 liter tank. These
tanks are poorly insulated so that standby losses represent about
half of the total energy used for water heating. The service
plot looks like Figure 5.
In this case, the conversion efficiency reflects the efficiency
of the water heater and the distribution system. Devices with
service plots like this are typically the most interesting to
understand and then evaluate for energy saving opportunities.
Automobiles are another important example [4].
Types of Direct Energy-Saving Actions
Relatively simple service plots can describe the majority of the
energy-using activities in the economy. They are also valuable
for understanding the direct impacts of energy saving actions.
Most energy saving can be classified as one of the following
types:
reduction in standby loss
improvement in conversion efficiency
reduction in output or in level of service
Service plots show the differences in the three categories of
energy savings. Service plots for the three types are described
below.
Reduction in Standby Losses
A reduction in standby loss corresponds to a downward shift in the service line (see Figure 6). This happens when, for example, the walls of a refrigerator are better insulated. The energy savings can be traced on the vertical axis.
Improved Conversion Efficiency
An improvement in conversion efficiency corresponds to a rotation of the service line. Figure 7 shows a service plot for improved efficiencies of a motor or a light.
Again, the energy savings (that is, input energy) from an improvement
in conversion efficiency can be traced on the vertical axis.
Reducing the Level of Service
The service plots show how much energy is required to deliver
a specific level of service or output, but they do not indicate
how much of the service is actually needed. For example, a service
plot for space heating, where the service is defined as the amount
of warm air delivered to the building, accepts the building's
heating load as fixed. However, less heat may be needed if the
building is insulated or air infiltration is reduced. A car engine
consumes fuel and delivers a certain amount of mechanical power.
Fuel use can be cut if the car's wind resistance is reduced.
Reductions in a building's heating load and a car's wind resistance correspond to lower levels of service on the service plots. These appear as a leftward shift on the service/output axis as shown in Figure 8.
There is a wide range of demand reduction actions for almost every
service. For example, here are three ways to reduce hot air for
space heating:
None of these actions affect the fundamental need, that is, thermal
comfort, but they do reduce the energy requirement. Reductions
in demand are sometimes counterbalanced by increases in energy
use due to the desire for a higher level of service. An important
problem in Japan is that the desired level of thermal comfort
is still increasing. People want to have warmer buildings in
the winter and cooler buildings in the summer. Some of the gains
achieved by reducing heat requirements will be offset by people's
desire to be warmer in the winter and cooler in the summer.
The three types of direct energy savings shown on the service
plots describe a surprisingly wide range of measures. Of course,
many measures are actually combinations of these three types.
For example, refrigerators use less energy because manufacturers
inserted more insulation (reducing standby loss) and substituted
more efficient compressors (improved conversion efficiency).
The three types of energy savings are also the traditional targets
of DSM in the United States, Japan, Europe, and Canada. It is
easy to map utility DSM programs into these categories. For example,
insulation programs reduce the heat load, programs to upgrade
lighting in office buildings increase the conversion efficiency,
etc. Government DSM programs (such as appliance efficiency standards)
are often more complicated because they are combinations of all
types, but they still try to reduce standby loss, increase conversion
efficiency, and reduce the level of service.
Secondary Energy Savings
The three categories of energy savings described above are direct
results of specific actions. In many cases, there are also indirect,
or "secondary, " energy savings from an action. For
example, the typical refrigerator has at least four "heaters"
inside it (fan motors, automatic defrost, lights, anti-condensation
heaters). When a new, more efficient fan motor is installed,
it saves electricity directly (improvement in conversion efficiency).
However, the new motor creates less waste heat for the compressor
to remove. The additional savings due to the reduced waste heat
are secondary savings. Airplane and automobile manufacturers have
long known about secondary savings, and continually re-optimize
designs to exploit the benefits [5]. In contrast, buildings and
industrial equipment often have opportunities for secondary savings.
Here are other examples, with the secondary energy savings in
italics .
higher efficiency lighting in commercial buildings reduces air conditioning energy and permits smaller chiller
reduced weight in airplanes allows smaller engines (and allows further mass reductions in air frame)
increased insulation saves space heat also reduces air conditioning energy and smaller furnace and chiller
low-emissivity windows in office buildings reduce solar gain and also allow daylight to be used instead of electric lights
any energy saving action inside a refrigerated or cooled space saves an additional E/COP
hot water conservation in home reduces muncipal energy
use for water pumping
The secondary savings will not always appear on a service plot
because they often occur in a different end use and fuel. The
secondary energy savings are generally smaller than the direct
savings but allow critical equipment (such as engines and air
conditioners) to be downsized which, when combined with the energy
saving action, reduces the overall first cost.
Traditionally, people assumed that reducing energy use required
an investment (even though it may save money over the investment's
life cycle) [6]. Recent studies have demonstrated that the secondary
savings made it possible for energy-efficient alternatives to
be cheaper -- both with respect to life cycle and first
cost [7, 8]. For example, the increased cost of high-efficiency
lighting in office buildings can be offset by the reduced cost
of a smaller air conditioning system. The energy savings are
also greater because of the cooling savings.
The existence of secondary savings has important implications for DSM because the economics of energy efficiency become much more favorable. Unfortunately, secondary savings are more difficult to capture because they require better education, close contact with those making energy-related decisions, and good timing. They are more easily identified and exploited in carefully integrated systems, such as airplanes or cars. One of the greatest challenges of DSM is to help customers recognize the secondary savings and include those benefits in their investment decisions. Note also that many of the conservation measures that save LNG or oil will have secondary electricity savings. In some cases, the value of the electricity savings will be as great as the value of the fuel savings.
Changing the Rules of the Game
So far, we have covered two major categories of energy savings,
direct and secondary energy savings. Within the direct savings
category, there are three types: reduced demand and standby losses,
and increased conversion efficiency. There remains a third category
of energy savings called "changing the rules of the game."
This category includes actions that eliminate one of the intermediate
services. This is a kind of "leapfrogging" of intermediate
services. Energy savings through rule-changing typically involves
a technological transformation (rather than incremental changes
found with direct savings).
The energy savings through changing the rules of the game are
often dramatic. The most familiar example is the microwave oven.
Here, the goal is heating food. A conventional oven heats the
air which, through conduction, gradually heats the food. During
the slow process, heat escapes through the walls and from door
opening. A microwave oven changes the rules of the game because
it heats the food directly, skipping the intermediate steps of
heating air, etc. Even though the efficiency of generating microwaves
is only about 50%, the savings due to greatly improved precision
of application result in a net energy savings (for some foods).
Many examples of energy saving by rule-changing involve reducing
the use of materials. For example, both Japan and the United States
will soon have efficiency standards for photocopy machines. These
standards will improve the efficiency of these machines. However,
the energy needed to produce a piece of paper (at the paper plant)
is several times greater than that needed to make the photocopy
[9, 10]. As a result, the greatest energy savings occur when
the machines make 2-sided copies. Curiously, none of the efficiency
standards cover this feature, but governments in both countries
are encouraging their employees to make 2-sided copies wherever
possible.
Recycling is another kind of rule-changing. In the United States,
about 25% of total virgin aluminum production goes to make beverage
cans. In the past twenty years, gradual improvements have reduced
the weight of each aluminum can about 20%, which translates into
about 20% less energy per can. Further weight reductions are
unlikely [11]. However, increasing the rate of recycling from
the 65% rate in California (and Japan) to the 95% rate in Michigan,
will cut the virgin aluminum requirements by over 50%. Changing
the rules here means changing society rather than adding a new
technology.
DSM programs cannot easily address the opportunities to save energy
by changing the rules. Usually the external forces cause the
situation to change. People bought microwave ovens in the United
States because they make excellent popcorn, not because they save
energy. Michigan has a high recycling rate because it gives ten
cents for each can and bottle returned. Michigan wanted to reduce
costs of cleaning the highways; the energy savings were not a
major consideration.
Conclusions
A framework for understanding the use of energy and the opportunities
for saving energy was presented. Three different categories of
energy savings -- direct, secondary, and rule-changing -- were
defined. This simple framework captures nearly all of the key
aspects of energy use and savings. It also gives new insights,
such as the large fraction of energy consumed as standby loss.
Until now, DSM has concentrated on the direct energy savings because
there is a clear relationship between the action and the energy
benefits. But this strategy ignores the great energy savings
available through measures that have secondary energy savings.
These are especially important because other benefits may make
the investments more attractive. Secondary savings do not happen
automatically because they require an integrated approach and
the ability to modify designs. Secondary savings are difficult
to encourage because they require careful coordination of investments,
and highly sophisticated incentives. Some of the most attractive
opportunities for secondary savings involve electricity and another
fuel. It is hard to imagine competing utilities collaborating
on DSM.
Finally, there exists tremendous potential savings from rule-changing.
Can DSM encourage rule-changing that saves energy? Perhaps,
but the benefits are so dispersed that no utility will have an
incentive to try.
References
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