NorthWestern Energy Group, Inc. · NASDAQ:NWE
NorthWestern Energy — Technical Presentation (November 2016)
39 slides from NorthWestern Energy's technical presentation, Nov 10, 2016
Slide 1: NorthWestern Energy End-Use & Potential Study Findings
NorthWestern Energy End-Use & Potential Study Findings November 10, 2016
Slide 2: Agenda
Agenda • End Use study • Methods • Consumption findings • Willingness to pay • Potential study findings and comparison • Potential study • Sector-level results • 2009 vs 2015 • 2015 vs NWPCC 7th Plan ACEEE Summer Study Confidential 2 2014
Slide 3: End-Use Study
End-Use Study ACEEE Summer Study Confidential 3 2014
Slide 4: End-Use and Load Profile Study Methodology: Objectives
End-Use and Load Profile Study Methodology: Objectives • Characterize NorthWestern Energy’s current sales data by sector and end-use • Evaluate breakdown of existing building types • Calibrate load shapes to historical sales data • Provide pertinent inputs to the demand-side management potential stu
Slide 5: End-Use and Load Profile Study Methodology: Primary Data Collection
End-Use and Load Profile Study Methodology: Primary Data Collection • On-site surveys were used as primary data source • Site visits included rural and urban locations ACEEE Summer Study Confidential 5 2014
Slide 6: End-Use and Load Profile Study Methodology: Secondary Data Collection
End-Use and Load Profile Study Methodology: Secondary Data Collection • Nexant supplemented its primary research with secondary data sources • NorthWestern Energy’s on-site energy audits • Large sample size • Reliable data collection protocol • Regionally accurate ACEEE Summer Study Confidential 6 2
Slide 7: Overall Electric and Natural Gas Consumption by End Use
Overall Electric and Natural Gas Consumption by End Use Electricity Natural Gas Cooking Other Industrial 3.8% Cooling 8.9% 13.5% 6.4% HVAC Auxiliary Water Heat 6.6% 3.6% Heat Pump Space Heat 0.8% Water Heating 4.4% 20.3% Heating Lighting 70.7% 22.6% Refrigeration 12.4% Plug Load Other 17.0% 8.8% ACE
Slide 8: Overall Electric and Natural Gas Load Profile by Sector
Overall Electric and Natural Gas Load Profile by Sector Electricity Consumption (GWh) Commercial Residential Industrial Natural Gas Consumption (dKt) ACEEE Summer Study Confidential 8 Commercial Residential Industrial 2014
Slide 9: Residential Electric Consumption by Segment and End Use
Residential Electric Consumption by Segment and End Use Multi-Family, 11.4% Manufactured, 8.9% LI Single Family, 3.0% LI Multi-Family, 0.5% Single Family, LI Manufactured, 75.8% 0.4% Refrigerator Room Heat 11.8% 7.1% Water Heat 7.8% Plug Load Central Heat 22.4% 1.3% Cooking Other Oven 5.8% 2.5% Heat
Slide 10: Residential Natural Gas Consumption by Segment and End Use
Residential Natural Gas Consumption by Segment and End Use Multi-Family, 5.5% Manufactured, 10.3% LI Single Family, 3.3% LI Multi-Family, 0.2% Single Family, 80.2% LI Manufactured, 0.4% Room Heat Water Heat 10.7% 17.1% Cooking Oven 2.9% Cooking Range 2.9% Dryer, 0.2% Central Heat Other, 2.9% 63.4% A
Slide 11: Commercial Electric Consumption by Segment and End Use
Commercial Electric Consumption by Segment and End Use Warehouse Education Grocery 7.4% 6.9% 5.9% Large Health Small Office 4.7% 16.3% Large Office 7.3% Small Health 4.7% Lodging 6.1% Retail 16.9% Miscellaneous Restaurant 19.4% 4.3% Other, 14.0% Lighting, 30.7% Refrigeration, 12.3% Ext. Lighting, 4.
Slide 12: Commercial Natural Gas Consumption by Segment and End Use
Commercial Natural Gas Consumption by Segment and End Use Education Grocery 6.0% 3.2% Lodging Warehouse 4.4% 4.8% Miscellaneous Small Office 22.9% 35.7% Restaurant 5.5% Small Health Retail 3.5% 14.0% Other, 14.0% Water Heating, 8.6% Heating, 77.4% ACEEE Summer Study Confidential 12 2014
Slide 13: Residential Lighting Technology Saturation Findings
End Use Study: Residential Lighting Technology Saturation Findings Residential Sector Type of Bulb % Sockets - 2009 % Sockets - 2015 Incandescent 65.6% 50.0% CFL 22.9% 33.0% Halogen 3.0% 1.7% LED 0.2% 8.4% Linear 8.3% 6.4% Fluorescent Other N/A 0.5% ACEEE Summer Study Confidential 13 2014
Slide 14: Commercial Lighting Technology Saturation Findings
End Use Study: Commercial Lighting Technology Saturation Findings Commercial Sector % Fluorescent % Fluorescent Lamp Type Fixtures - 2009 Fixtures - 2015 T12 42.9% 6.2% T8 53.2% 86.4% T10 1.4% 0.0% T8 Plus 0.7% 0.0% T5 0.8% 7.4% T5HO 1.0% 0.0% ACEEE Summer Study Confidential 14 2014
Slide 15: Residential Willingness to Pay Findings
End Use Study: Residential Willingness to Pay Findings 10.00 Average Likelyhood to 9.00 Refrigerator (n=84) 8.00 LED (n=79) Purchase CFL (n=69) 7.00 Furnace (n=67) 6.00 Central Air (n=26) 5.00 Insulation (n=73) 4.00 0% 25% 50% 75% 100% Percent of Incremental Cost Incented LEDs CFLs 100% 85% LIkely'
Slide 16: Commercial Willingness to Pay Findings
End Use Study: Commercial Willingness to Pay Findings 10.0 9.0 Average Likelihood of Purchase 8.0 T12 -> T8 (n=6) 7.0 T8 -> HP T8 (n=60) HPS/MH -> T5 (n=12) 6.0 CFL/Incandescent -> CFL (n=12) 5.0 Occupancy Sensor (n=71) 4.0 3.0 0% 25% 50% 75% 100% Percent of Incremental Cost Incented ACEEE Summer St
Slide 17: Commercial Willingness to Pay Findings: Lighting
End Use Study: Commercial Willingness to Pay Findings Commercial Lighting 100% % of customers 'extremely likely' to purchase EE Option 90% T12 -> T8 (n=6) 80% T8 -> HP T8 (n=60) 70% 60% HPS/MH -> T5 (n=12) 50% 40% CFL/Incandescent -> CFL 30% (n=12) 20% Incandescent/CFL -> LED 10% exit sign (n=9) 0%
Slide 18: Electric Potential Study
Electric Potential Study Confidential 18
Slide 19: Potential Assessment Analysis
Potential Assessment Analysis • Technical potential: • savings available if all baseline equipment stock was replaced with the most efficient measures available • Economic potential: Technical • savings available if all baseline equipment stock Potential was replaced with the most efficient measures
Slide 20: Potential Study Summary Findings
Potential Study Summary Findings aMW – 20 yr Percent of Sector Achievable Baseline Sales Potential Residential 14.1 4% Commercial 38.5 10% Industrial 9.1 8% All Sectors 61.7 7% ACEEE Summer Study Confidential 20 2014
Slide 21: 2015 Potential Study Key Parameters
2015 potential study key parameters • Avoided costs: Avoided Energy • $40.70/MWh Costs • TRC:1.0 Cost Effective- • avoided energy costs include non-energy and environmental benefits ness • Naturally occurring savings excluded from quantified potential Codes and Standards • Large population of measur
Slide 22: 2015 Potential Study Impacts: Changes in Lighting Market Characterization
2015 potential study impacts: Changes in lighting market characterization Commercial T8 Residential CFL Reduction in Reduction in saturation saturation commercial residential increased from increased from lighting end-use lighting end-use 53% to 86% and 23% to 33% and consumption of consumption of T
Slide 23: 2015 Potential Study Key Drivers: Residential
2015 potential study key drivers: residential • 60W CFL-equivalent energy savings reduced by 69% • EISA efficiency requirements • Residential lighting hours of use modeled at 2.02 hours • EISA backstop • Study assumes lighting efficiency standard similar to that of a CFL beginning in 2020 • Reduced
Slide 24: 2015 Potential Study Key Drivers: Commercial
2015 potential study key drivers: commercial • Linear lighting baseline changed from T12 to T8. • Linear lighting saturation in 2015 creates opportunity for potential: • ~86% T8 saturation • ~8% T5 or T5HO lighting • Reduced costs of LEDs • Permits several LED technologies to be cost effective • Lar
Slide 25: Potential Models: Overview
Potential Models: Overview Projected Potential by Sector: 2015 – 2034 4,000,000,000 3,500,000,000 3,000,000,000 2,500,000,000 kWh 2,000,000,000 Industrial Commercial 1,500,000,000 Residential 1,000,000,000 500,000,000 0 Tech. Econ. Ach. Ach. Ach. Low Mid High ACEEE Summer Study Confidential 25 2014
Slide 26: Potential Models: Residential Overview
Potential Models: Residential Overview Potential Savings as a Percentage of Sales by Scenario (annual incremental savings) 2.50% 2.00% Percent of Baseline Sales 1.50% Tech Econ AchBase AchMod 1.00% AchHigh 0.50% 0.00% ACEEE Summer Study Confidential 26 2014
Slide 27: Residential Economic Potential Savings by Segment
Potential Models: Residential Overview Economic Potential Savings by Segment Multifamily 6.8% Manufactured 12.5% Low Income Single Family, 3.9% Low Income Single Family Multifamily, 0.4% 75.8% Low Income Manufactured, 0.7% Confidential 27
Slide 28: Residential Economic Potential Savings by End Use
Potential Models: Residential Overview Economic Potential Savings by End Use Plug Load 12.4% Exterior Lighting Interior Lighting 9.4% 27.3% Central Heat 2.3% Water Heat 2.0% Other, 0.2% HVAC Aux Clothes 32.1% 14.3% ACEEE Summer Study Confidential 28 2014
Slide 29: Behavioral Program Cost Effectiveness Testing
Behavioral program cost effectiveness testing • Key assumptions: • 20-year levelized avoided cost of energy: $0.0407/kWh • Cost: $15.00/report • Upfront programming cost: $0.00 • Decay rate: 20% • Annual forecast consumption: 1.2% • Annual customer consumption: 10,994 kWh • Average of 75% quartile •
Slide 30: Potential Models: Commercial Overview
Potential Models: Commercial Overview Potential Savings as a Percentage of Sales by Scenario (annual incremental savings) 5.00% 4.50% 4.00% 3.50% Percent of Baseline Sales 3.00% Tech Econ 2.50% AchBase 2.00% AchMod AchHigh 1.50% 1.00% 0.50% 0.00% Confidential 30
Slide 31: Commercial Economic Potential Savings by Segment
Potential Models: Commercial Overview Economic Potential Savings by Segment Restaurant Retail 8.6% 13.9% Warehouse Small Office 10.2% 8.1% Small Health 4.0% Miscellaneous 6.3% Lodging 5.7% Large Office 2.8% Large Health 5.9% Education Street Lighting 7.3% 0.3% Grocery 26.9% Confidential 31
Slide 32: Commercial Economic Potential Savings by End Use
Potential Models: Commercial Overview Economic Potential Savings by End Use Refrigeration 31.7% Plug Load Miscellaneous 4.7% 2.0% Exterior Lighting, 0.3% Space Heat, 0.1% Water Heat, 0.3% Cooling Chillers, 0.4% Heat Pump, 1.1% Linear Lighting 28.5% HVAC Aux Cooking Lighting 11.6% 2.9% 16.4% Confiden
Slide 33: Potential Models: Industrial Overview
Potential Models: Industrial Overview Potential Savings as a Percentage of Sales by Scenario (annual incremental savings) 1.60% 1.40% 1.20% Percent of Baseline Sales 1.00% Tech Econ 0.80% AchBase 0.60% AchMod AchHigh 0.40% 0.20% 0.00% Confidential 33
Slide 34: Industrial Economic Potential Savings by End Use
Potential Models: Industrial Overview Economic Potential Savings by End Use HVAC 23.6% Other 2.4% Compressed Air 0.8% Motors Pumps 1.1% Lighting 51.4% Process Specific 1.1% Process Cooling 2.5% Motors Other 17.1% Confidential 34
Slide 35: 2009 Achievable Potential versus 2015 Achievable Potential
2009 Achievable Potential versus 2015 Achievable Potential 2009 - 2028 2015 - 2034 (Percent of (Percent of Sector (aMW) Baseline (aMW) Baseline Sales) Sales) Residential 42.5 12% 14.1 4% Commercial 33.1 8% 38.5 10% Industrial 8.7 12% 9.1 8% All Sectors 84.3 10% 61.7 7% Confidential 35
Slide 36: 2009 vs 2015 Potential Study Key Differences: Codes & Standards
2009 vs 2015 potential study key differences: codes & standards Montana Building Energy Independence Energy Code and Security Act (EISA) Computers • Modeled 2012 IECC • Modeled impact of • Minimal incremental • Previous study EISA 2020 lighting costs modeled 2009 IECC “backstop” provision • Reduced
Slide 37: 2015 Achievable Potential vs NWPCC 7th Plan Achievable Potential
2015 Achievable Potential vs NWPCC 7th Plan Achievable Potential NWPPC 7th Plan NorthWestern Energy Percentage of Sales Percentage of Sales Sector @ $40/MWh – @ $40/MWh – Technical Achievable Achievable Potential - Estimated Residential 13% 4% Non-Residential 18% 10% Utility Distribution 1% n/a Tota
Slide 38: Questions?
Questions? Confidential 38
Slide 39: Glossary of Terms
NorthWestern Energy Potential Study ETAC Presentation Glossary of Terms: NWPCC – Northwest Power & Conservation Council Regional organization that develops and maintains a regional power plan and a fish and wildlife program to balance the Northwest’s environment and energy needs. RBSA – Residential
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