Conservation Voltage Regulation: An Energy Efficiency Resource

By Kellogg L. Warner and Ron Willoughby

With the adoption of smart grid technologies, Conservation Voltage Reduction (CVR) promises greater efficiencies than ever before. But because its benefits accrue mainly to customers and its costs to utilities, CVR is not being adopted as widely as it could be. Allowing CVR energy savings to be treated as a certified energy efficiency resource can change that picture for the better.

For many years, electric utilities have achieved load reductions by reducing the voltage delivered to air conditioners, home appliances and industrial machinery – a technique known as Conservation Voltage Reduction (CVR) – especially during critical peak load periods. Historically, utilities have operated at the high end of the 114-126 voltage range permitted by American National Standards Institute (ANSI) Standard C-84.1 due to limitations in technology. CVR was implemented manually by reducing voltages at the substation to achieve a 1 percent energy savings over short periods.

Now, with smart grid technologies and real-time operating systems, utilities are finding they can realize energy savings and demand reductions of 3% or more on a continual basis. In fact, the Pacific Northwest National Laboratory (PNNL) estimated total U.S. energy savings from CVR to be as high as 6,500 MWyears or 56,940,000 MWhours—the equivalent of the Grand Coulee Dam operating at nameplate capacity for a year.

An appreciation of these benefits coupled with a continued strong interest in energy efficiency on the part of regulators, utilities and end-users, is driving interest in CVR as an alternative low-risk energy resource with enormous potential. Yet CVR adoption has been slow as utilities struggle to develop workable business models that include cost-recovery and lost-revenue mechanisms acceptable to regulators.

More widespread use of CVR is inhibited in part because of the time it takes to implement new smart grid technologies. But more significantly, CVR is constrained by disconnects between utility distribution business models and regulatory constructs. Since costs are born by distribution network operators and benefits (energy savings) accrue mainly for end-users, the utilities have little incentive to invest in CVR, making lost revenues and uncertain cost recovery the two biggest inhibiting factors. When viewed from a societal perspective, CVR offers one of the most reliable and cost-effective energy efficiency and peak-load reduction resources available. The obvious solution then becomes connecting well-established regulatory constructs for traditional energy efficiency programs (already in 29 states) to CVR energy savings. This would make CVR a certified energy efficiency resource and enable utilities to receive efficiency and associated financial rewards.

Why go to that trouble?

CVR can be accomplished through a variety of well-known technologies, including tap-changing transformers, line drop compensators, generator excitation controls, voltage regulators, line switchable capacitor banks, static VAR compensators, circuit reconfiguration and load control.

The introduction of microprocessor-based technologies makes advanced CVR control schemes possible by simultaneously monitoring multiple nodes in near real-time. For substations, CVR is typically done using capacitor, regulator and transformer controls. For distribution lines, CVR is typically done using voltage regulator, capacitor and recloser controls. Technologies exist for CVR controls at the end user. In all cases, decisions can be made locally, or information can be sent to SCADA operators for action.

The technical challenge is in defining control schemes, monitoring points, sensor technologies, communication infrastructure, protocols, triggering mechanisms and so on. Energy is saved by maintaining voltages as close to lower ANSI thresholds as possible without going below them. If the priority is to regulate end-user energy consumption, dollars are saved for the end-user. If losses are minimized, line capacities are released, saving dollars for the utility.

Multiple goals can be in play when implementing CVR. Optimizing specific performance metrics will be part of any plan: for example, minimizing losses, more fully utilizing equipment ratings, raising power factors (controlling VAR flow), or saving energy for the utility or end-user.

As can be seen by the following pilot project results, significant energy savings are possible.

  • CVR factors between 0.7 and 1.0 are common.
  • (A CVR factor of 1 means that for a 1 percent drop in voltage, a 1% drop in energy results. A positive CVRf is good.)
  • Line loss reductions of more than 10 percent are common with proper VAR support in the context of a CVR program. (Remember: The reference is to reduced percentages of overall line losses. For example, if total line losses are 6 percent, a 10 percent reduction means 10% of the original 6%, or a 0.6% effective drop in total power.)
  • Peak demand reductions of 2.5 percent are common, translating into potentially significant deferred generation capacity savings.
  • Annual energy reductions of 4 percent are possible, depending on the feeder type and deployment strategy.
  • The costs of implementing CVR are estimated at less than $500/kW saved, and less than $20/MWhour saved, substantially less than the cost of most other energy sources.
  • Energy reductions are heavily dependent on the load type and mix.
  • CVR deployment should target heavily loaded, higher voltage feeders. Best candidates will have high concentrations of voltage-dependent loads as in residential neighborhoods.
  • Making the most with what you have is the best way to start. Systematic capital investments can follow.

Clearly, much has been learned, but much more is needed on how to construct robust business models consistent with favorable regulatory constructs. Standardized measurement and verification protocols are needed to record CVR energy savings. We need to capture and build on lessons-learned and documented best practices. We need quantifiable feeder and CVR technology screening strategies made possible with the development of better load-modeling tools and procedures for data entry, results processing and visualization techniques, allowing robust CVR technology screening strategies. Last and not least, we need studies to identify how greater penetration of renewable and distributed energy resources impact CVR operating schemes.




Kellogg L. Warner, an IEEE member, is Executive Vice President, Applied Energy Group, and has more than 30 years’ experience in energy services for the electric and gas utility industry, and 15 years as chief executive of major energy consulting and service firms. As CEO of Deerpath Energy, Inc., XENERGY and KEMA Inc., he led or participated in numerous policy, strategy and business development initiatives that span the value chain of energy services. He is a recognized expert in utility industry restructuring, having participated in numerous regulatory proceedings. He earned his bachelor’s degree at Williams College in 1978 and an MSCE in resource planning at Stanford University in 1985.



Ron Willoughby, a senior member of IEEE, is an executive consultant with more than 39 years' experience in electric power systems planning and operation, focusing on reliability, power quality, energy efficiency and automation. He was a vice president and market issue principal at KEMA, director of technical services at Cooper Power Systems, including the Thomas A. Edison Technical Center, and Manager for Westinghouse’s Advanced Systems Technology Group. He earned a bachelor’s in electrical engineering at the University of Missouri-Rolla in 1973, a master’s in EE at Carnegie-Mellon in 1977, and an honorary professional degree of electrical engineering from the University of Missouri-Rolla in 2003.