Cumulative CVR Revenues to Reach $1.9 Billion by 2020

CVRCumulative revenue through 2020 for volt and var control components that are attributable to conservation voltage reduction deployments will be roughly $1.9 billion between 2013 and 2020, according to a study by Navigant Research.

These figures would place conservation voltage reduction among the most popular energy efficiency and demand response measures before the end of 2020, according to the report titled Conservation Voltage Reduction.

Conservation voltage reduction is a noninvasive approach to demand response and energy efficiency with more controllable, predictable reductions than other popular approaches, Navigant says. Conservation voltage reduction dynamically optimizes voltage levels via sophisticated smart grid technologies to continuously reduce energy consumption and demand during peaks when electricity prices are inflated and demand may exceed the available energy.

Advanced metering infrastructure-integrated conservation voltage reduction in particular is a high-precision voltage reduction strategy that can unleash unprecedented smart grid benefits. The vast majority of North American utilities have yet to take full advantage of this benefit, which often lies latent in the smart meter functionality. As extensive conservation voltage reduction piloting and evaluations pass with flying colors, regulators are likely to be enthusiastic and allow conservation voltage reduction under the same terms as other energy efficiency measures, the report says.

Around 130 distribution utilities at the Tennessee Valley Authority are planning to deploy dynamic conservation voltage reduction over a 5-year period starting in 2013. TVA will be obligated to pay the participating local power companies financial incentives based on their monthly performance, and the local power companies will be obligated to operate and maintain the conservation voltage reduction equipment. This is a 15-year project consisting of 10-year contracts that started in 2013, the report says.

The public utilities commission in Ohio has approved Duke Energy’s systemwide conservation voltage reduction deployment in a rider case, the report says.

The concept of demand response, which aims to achieve stability on the electricity grid by ensuring that demand does not exceed supply of electric power, is far more developed in North America than the rest of the world, with almost 95 percent of such programs located in that region, according to a earlier study by Navigant.

The Demand Response Tracker 2Q13 currently includes 1,342 programs from around the world. Almost 95 percent of these programs are offered in North America. On a worldwide basis, programs identified as addressing capacity and economic market objectives represent a total of 732 and 585 programs, respectively. These two markets represent the majority of the overall market in terms of the number of programs, while the other two markets covered by the report – energy-trading and ancillary services – are very small with a combined total of only 25 programs, accounting for less than 1 percent of the total market.

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