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Revenue from conservation voltage reduction (CVR) components in North America will grow from $8.4 million in 2013 to $776 million by 2022, according to a new report by Navigant Research.

Navigant says that by dynamically optimizing voltage levels using sophisticated smart grid technologies, CVR can continuously reduce energy consumption and demand during peak periods, when electricity prices are inflated and demand may exceed the available supply.

North American electric power transmission and distribution systems typically have aggregate annual energy losses ranging between 7% and 10%, the research firm notes, with around two-thirds of these losses incurred at the distribution voltage level. Navigant adds that 1.5% to 4% of electricity is lost due to above-optimal voltage levels delivered at the meter to homes and businesses. Approximately 40 million MWh could be saved annually in the U.S. if voltage levels were improved on the 25th percentile of least efficient circuits.

The research firm reports that recent CVR pilot projects have delivered excellent results, and the technology is likely to become one of the most popular energy efficiency and demand response measures among North American utilities before the end of 2020.

According to Navigant, two recent large-scale CVR deployments support this belief. Around 130 distribution utilities at the Tennessee Valley Authority are planning to deploy dynamic CVR over a five-year period. This is a 15-year project consisting of 10-year contracts that started last year. In addition, the public utilities commission in Ohio has approved Duke Energy's system-wide CVR deployment in a rider case.

The key elements of a CVR system, Navigant says, include primary components (automation equipment installed at the substation); secondary components (field equipment installed beyond the substation and at the edge of the grid); telecommunications nodes, such as modems, radios, routers and repeaters; and CVR software. Several other enabling or enhancing components help form the overall CVR cost and benefit structure, Navigant adds, including smart meters, backbone communications, grid analytics and load scheduling analysis.

"A high-precision voltage reduction strategy that can unleash unprecedented smart grid benefits, CVR is likely to be next on the smart grid deployment schedule," comments Kristoffer Torvik, senior research analyst with Navigant. "North American utilities have yet to take full advantage of the benefits of CVR, which often lies latent in the smart meter functionality."

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