Alliance's Brian Castelli at EXPO INCYTAM 2008 in Mexico City


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Executive VP of Programs and Development Brian Castelli traveled to Mexico City to present at EXPO INCYTAM 2008, where he offered energy efficiency solutions for Latin American cities burdened by the effects of pollution and global climate change.

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Alliance's Brian Castelli at EXPO INCYTAM 2008 in Mexico City

  1. 1. Why Energy Efficiency Matters Brian T. Castelli Executive Vice President Programs & Development INCYTAM 2008 Mexico City, DF November 19, 2008
  2. 2. What is the Alliance to Save Energy? <ul><li>Mission: To promote energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security </li></ul><ul><li>Co-Chaired by Senator Mark Pryor (D-AR) and James Rogers (CEO, Duke Energy) </li></ul><ul><li>Guided by a 37-Member, Elected Board of Directors </li></ul><ul><ul><li>9 Members of Congress – Bi-Cameral; Bi-Partisan </li></ul></ul><ul><ul><li>Environmental, consumer, and trade associations heads, state and local policy makers, corporate executives </li></ul></ul>
  3. 3. Forging Alliances: Business, Govt. & Public Interests <ul><li>Sponsorship and participation of more than 150 organizations </li></ul><ul><li>Involvement by businesses in all economic sectors </li></ul><ul><li>Initiatives underway in research, policy advocacy, education, technology </li></ul><ul><li> deployment, and communications </li></ul>
  4. 4. What is the Alliance to Save Energy? <ul><li>Mission: </li></ul><ul><li>To promote energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security. </li></ul><ul><li>The Alliance is… </li></ul><ul><li>Thirty years in the making </li></ul><ul><li>Fuel neutral </li></ul><ul><li>Staffed by 50+ professionals </li></ul><ul><li>Active in policy, research, education, communications, technology deployment and market transformation </li></ul><ul><li>Headquartered in Washington, D.C. with operations in Eastern Europe, South Africa, Mexico, India and several states in the U.S. </li></ul>
  5. 5. <ul><li>All REGIONS of the World: </li></ul><ul><li> Asia  Latin American  Africa  Eastern Europe </li></ul><ul><li>TOPICS: </li></ul><ul><li>Survey of Efficient Transportation for APEC </li></ul><ul><li>Watergy : EE in water supply & wastewater treatment </li></ul><ul><li>EE Financing through </li></ul><ul><li>Performance Contracting </li></ul><ul><li>Municipal EE </li></ul><ul><li>Improving EE in </li></ul><ul><li>Private Enterprises </li></ul><ul><li>Strengthening the </li></ul><ul><li>EE Industry </li></ul>Alliance Outside the US: an Overview
  6. 6. MUNICIPAL EE Internationally Watergy • Efficiency in bulk supply and end use • Our largest municipal program Building EE - building local capacity in… • energy codes • e nergy audits • monitoring techniques Street Lighting • Simple & cost-effective Transportation • Survey of effective approaches for APEC • Includes succinct summaries of ~50 examples
  7. 7. Connecting to the Private Sector Around the World <ul><li>Financing through Performance Contracting </li></ul><ul><li>Strengthening Local EE Industries </li></ul><ul><li>• Create local EE Associations </li></ul><ul><li>• Strengthen ESCOs </li></ul><ul><li>Improving EE in Private </li></ul><ul><li>Enterprises , e.g…. </li></ul><ul><li> Hotels </li></ul><ul><li> Hospitals </li></ul><ul><li> Manufacturing </li></ul>
  8. 8. U.S. Energy Situation: Energy Use Continues to Rise
  9. 9. Growing Gap between Energy Supply and Demand
  10. 10. Climate Change !
  11. 11. <ul><li>As an energy resource, efficiency is: </li></ul><ul><li>CHEAPER </li></ul><ul><ul><li>Each $1 invested in Energy Star program = $75 in energy cost savings and $15 of investment in new efficiency technologies </li></ul></ul><ul><li>QUICKER </li></ul><ul><ul><li>In 2001, California cut peak electricity use by 10% in less than a year </li></ul></ul><ul><li>CLEANER </li></ul><ul><ul><li>“ Negawatts” produce NO ENVIRONMENTAL FOOTPRINT </li></ul></ul><ul><li>MORE SECURE </li></ul><ul><ul><li>A “homegrown” resource! </li></ul></ul>Why Energy Efficiency?
  12. 12. Past Successes – But Much More is Needed Source: Art Rosenfeld, CEC
  13. 13. Energy Efficiency is Already Our FIRST Energy Resource
  14. 14. Huge EE Potential Remains 40% Energy Efficiency Adapted from McKinsey Analysis
  15. 15. Globally, EE is One Possible Means to Contain Demand
  16. 16. And the U.S. Can Clearly Do Better! Per Capita Electricity Consumption - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 1960 1965 1970 1975 1980 1985 1990 1995 2000 KWh US CA Western Europe
  17. 17. The Challenge? Overcoming Market Barriers <ul><li>Principal Agent or “Split Incentives” </li></ul><ul><ul><li>Home builder versus buyer </li></ul></ul><ul><ul><li>Utility versus customer </li></ul></ul><ul><li>Transaction Costs </li></ul><ul><ul><li>Lack of information on life-cycle cost for products and/or paybacks for upgrades </li></ul></ul><ul><li>Lack of Investment in RD&D and EE Programs </li></ul><ul><li>Public Policies Essential </li></ul><ul><li>Investment in EE Programs Essential </li></ul>
  18. 18. Policy Drivers: A “Perfect Storm” <ul><li>Rising Gasoline Prices </li></ul><ul><ul><li>(and electricity, natural gas!) </li></ul></ul><ul><li>Global Climate change </li></ul><ul><ul><li>GHG emissions increasing faster than projected </li></ul></ul><ul><li>Energy Security </li></ul><ul><ul><li>World markets for oil and gas </li></ul></ul><ul><ul><li>Electricity generating capacity & grid reliability </li></ul></ul>
  19. 19. Energy Efficiency: Tools for Success <ul><li>Research and Development – Create new technology </li></ul><ul><ul><li>RD&D Partnerships with Industry </li></ul></ul><ul><li>Incentives & voluntary programs – Create buyer demand </li></ul><ul><ul><li>Tax incentives, rebates, loan guarantees, etc. </li></ul></ul><ul><ul><li>Utility programs (DSM, Demand Response) </li></ul></ul><ul><li>Public Education – Build market share </li></ul><ul><ul><li>Consumer education and awareness campaigns </li></ul></ul><ul><ul><li>Labeling (ENERGY STAR, LEED, GreenGlobes, etc.) </li></ul></ul><ul><li>Standards – Set a floor & trigger innovation </li></ul><ul><ul><li>Buildings, equipment, vehicles </li></ul></ul><ul><ul><li>Utility Energy Efficiency Resource Standards (EERS) </li></ul></ul><ul><li>Public sector leadership – Reduce market risk </li></ul>
  20. 20. Comparing the 2005 and 2007 Energy Legislation <ul><li>Energy Policy Act of 2005 will by 2020: </li></ul><ul><ul><li>Reduce U.S. energy use by 2% </li></ul></ul><ul><ul><li>Reduce electricity demand by 4% </li></ul></ul><ul><ul><li>Reduce CO2 by 3% </li></ul></ul><ul><ul><li>Reduce oil use by 0% </li></ul></ul><ul><ul><li>Includes All Five Policy Tools </li></ul></ul><ul><li>Energy Independence and Security Act of 2007 will by 2030 </li></ul><ul><ul><li>Reduce U.S. energy use by 7% </li></ul></ul><ul><ul><li>Reduce electricity demand by 5% </li></ul></ul><ul><ul><li>Reduce CO2 by 9% </li></ul></ul><ul><ul><li>Reduce oil use by 10% </li></ul></ul><ul><ul><li>Missing: Incentives </li></ul></ul>
  21. 21. Light Bulb Standards <ul><li>U.S. set performance standards for general service light bulbs, starting in 2012-2014 </li></ul><ul><li>25-30% savings: will phase out traditional incandescent bulbs </li></ul><ul><li>Second standard in 2020 must achieve roughly 65% savings </li></ul><ul><li>If fully implemented, these light bulb standards </li></ul><ul><li>could save consumers </li></ul><ul><li>$18 billion annually on their electricity bills </li></ul><ul><li>Avoid 158 million tons of CO2 and 5700 lbs . of airborne </li></ul><ul><li>mercury emissions </li></ul><ul><li>Reduce the need for 30 baseload power plants </li></ul>
  22. 22. Appliance Standards Are Among the Most Effective EE Policies <ul><li>Total savings from existing standards in 2000: </li></ul><ul><ul><li>2.5% of U.S. electricity use </li></ul></ul><ul><ul><li>21,000 MW of peak power demand </li></ul></ul><ul><ul><li>$50 billion in net consumer savings </li></ul></ul><ul><li>Total savings from existing standards by 2020: </li></ul><ul><ul><li>7.8% of projected U.S. electricity use </li></ul></ul><ul><ul><li>120,000 MW of peak power demand </li></ul></ul><ul><ul><li>$186 billion in net consumer savings </li></ul></ul>
  23. 23. Track Record of Appliance Efficiency Standards <ul><li>Today’s new refrigerators use 75% less energy than in 1973 </li></ul><ul><li>From 1972 to 2003: </li></ul><ul><ul><li>Energy Use down 74 % </li></ul></ul><ul><ul><li>Capacity up 29% </li></ul></ul><ul><ul><li>Price down 64 % </li></ul></ul>Source: Graphic -- Collaborative Labeling and Appliance Standards Program Statistics – Art Rosenfeld (CEC) and David Goldstein (NRDC)
  24. 24. Energy Star Labeling Program <ul><li>Joint program: EPA and DOE </li></ul><ul><li>Label energy efficient products: </li></ul><ul><ul><li>Appliances </li></ul></ul><ul><ul><li>Lighting products </li></ul></ul><ul><ul><li>Furnaces and Air-Conditioners </li></ul></ul><ul><ul><li>Computers and electronics </li></ul></ul><ul><li>Energy Star Homes </li></ul><ul><li>Commercial Building Label </li></ul>
  25. 25. Building Energy Efficiency Codes <ul><li>Minimum requirements for residential and commercial building energy efficiency design </li></ul><ul><li>Energy codes primarily regulate: </li></ul><ul><ul><li>Wall and roof insulation (R-value) </li></ul></ul><ul><ul><li>Windows, doors and skylights (U-factor, SHGC) </li></ul></ul><ul><ul><li>HVAC equipment installed in new buildings </li></ul></ul><ul><ul><li>Control systems (SEER, EER, COP, etc.) </li></ul></ul><ul><li>Model energy codes developed by national organizations </li></ul><ul><ul><li>International Energy Conservation Code by ICC (residential) </li></ul></ul><ul><ul><li>ASHRAE Standard 90.1 (commercial) </li></ul></ul><ul><li>Codes adopted and enforced by state and local governments </li></ul>
  26. 26. Codes: Helping to Cut Global Energy Demand Growth Better Building Codes are part of the solution to cutting global energy demand growth from 2.2% to 0.7% Source: McKinsey Global Institute
  27. 27. <ul><li>Dynamic Building Codes for Residential Homes </li></ul><ul><li>Federal Legislation to Drive 30% Improvement in Residential and Commercial EE Codes by 2010; 50% by 2020 </li></ul><ul><li>“ 30% Solution Campaign” to Insure 30% Improvement in 2009 IECC Residential Building Code </li></ul><ul><li>New Federal Regulations Requiring New Federal Facilities to Demonstrate 30% EE Improvement </li></ul><ul><li>Efforts Supported by: the Alliance to Save Energy and U.S. DOE, Utilities, Businesses, NGOs </li></ul>Realizing the Potential: Energy Efficient Codes Coalition (EECC)
  28. 28. Public Sector Leadership: Federal Buildings Example <ul><li>A credible energy/climate policy requires government to do more (sooner) than it asks of private businesses and the public! </li></ul>FISCAL YEAR 10% Goal - 1995 (NECPA ) 20% Goal - 2000 (EPACT) 30% Goal - 2005 Actual Energy Use 35% Goal - 2010 Actual site energy use 1985 1990 1995 2000 2005 2010 110 100 90 120 130 140 Site Energy, 1000 Btu/sq.ft. 29.6% Reduction, 2005
  29. 29. Utility Energy Efficiency Programs <ul><li>Help customers save electricity or natural gas </li></ul><ul><li>Many kinds of programs </li></ul><ul><ul><li>Consumer education </li></ul></ul><ul><ul><li>Technical training </li></ul></ul><ul><ul><li>Energy audits </li></ul></ul><ul><ul><li>Appliance rebates </li></ul></ul><ul><ul><li>Financing </li></ul></ul>
  30. 30. Why Should Utilities Fund Energy Efficiency? <ul><li>Cheaper, quicker, and cleaner than conventional new energy supply </li></ul><ul><li>Demand-Side Management (DSM) avoided 24 GW of peak load in 2004—about 80 power plants </li></ul><ul><li>Reported costs of about 2-4 cents/kWh </li></ul><ul><li>Can be targeted and closely managed </li></ul><ul><li>Can be added in small or large increments </li></ul>
  31. 31. States Lead the way in Energy Efficiency <ul><li>Energy Efficiency Resource (Performance) Standards </li></ul><ul><ul><li>States establish energy efficiency as a resource through energy savings targets (TX, IL, CA, CT, HI, NJ, PA) </li></ul></ul><ul><li>Priority Loading Orders </li></ul><ul><ul><li>For California and the Pacific Northwest, efficiency is the first priority (lowest cost) energy resource </li></ul></ul><ul><ul><li>Next: Renewables, CHP, conventional fuels </li></ul></ul><ul><li>“ Decoupling” Utility Revenues/Profits from Sales </li></ul><ul><li>Regional greenhouse gas initiatives (NE, W Coast) </li></ul><ul><li>State Tax Incentives </li></ul><ul><li>Next: Rail/Transit Infrastructure & “Smart Growth” </li></ul>
  32. 32. Why Do More? Answering the Climate Challenge
  33. 33. In Summary: Need a Balanced Approach to Energy Efficiency <ul><li>Building Energy Codes & Appliance Standards </li></ul><ul><ul><li>New construction and renovation </li></ul></ul><ul><ul><li>Appliances & equipment efficiency standards </li></ul></ul><ul><li>Voluntary market transformation (Energy Star) </li></ul><ul><ul><li>Appliance labeling </li></ul></ul><ul><ul><li>Building performance rating/disclosure </li></ul></ul><ul><ul><li>Incentives </li></ul></ul><ul><ul><li>Public sector leadership </li></ul></ul><ul><li>Targeted portfolio of utility DSM </li></ul><ul><li>RD&D Partnerships </li></ul>
  34. 34. Watergy on the Border Alliance Watergy program now spans entire border: • Baja California (Tijuana) • Sonora (Guyamas) [still in discussion stage] • Chihuahua (Hidalgo de Parral) • Coahuila (Monclova-Frontera) • Nuevo Leon (Monterrey) • Tamaulipas (Matamoros, Tampico)
  35. 35. WHAT IS WATERGY? A Quick Snapshot Watergy makes the best use of two valuable, limited resources: water & energy WHY IS THIS IMPORTANT?  Every liter of water that passes through a system has a significant energy cost .  Water sector efficiency leaves more funds for crucial and often underfunded public services .  In Mexico, the water supplied that is lost : 1/3 AND IT’S COST EFFECTIVE…  Rapid Payback : generally from a few months to 3 years  Huge Savings : at least 20% in energy costs; much higher possible  Makes the most of existing infrastructure ; reduces the need for new
  36. 36. T he Most Cost-Effective Interventions  Pumps  Leak Management  Automated Controls  Metering & Monitoring
  37. 37. <ul><ul><ul><li>1. Lack of Awareness </li></ul></ul></ul><ul><ul><ul><li>Especially true applying energy efficiency to water sector </li></ul></ul></ul><ul><ul><ul><li>2. Aversion to Risk </li></ul></ul></ul><ul><ul><ul><li>Fear of change. Must convey that benefits outweigh any risks. </li></ul></ul></ul><ul><ul><ul><li>3. Change May Imply a Problem with the Status Quo </li></ul></ul></ul><ul><ul><ul><li>Suggestions for change may imply criticism of performance, </li></ul></ul></ul><ul><ul><ul><li>ability. </li></ul></ul></ul><ul><ul><ul><li>4. Subsidies </li></ul></ul></ul><ul><li>Water should be priced to recover costs . </li></ul><ul><li>Can be politically sensitive. </li></ul><ul><li>5. Financing Efficiency </li></ul><ul><li>“ Performance” (savings)-based financing in cases where </li></ul><ul><li>capital outlays required. </li></ul>COMMON BARRIERS to Energy & Water Efficiency
  38. 38. A Look at Two Projects
  39. 39. TIJUANA (Baja California) <ul><li>SUCCESS: Needs of Rapidly Growing City Met with Same </li></ul><ul><li>Amount of Water </li></ul><ul><li>ISSUES </li></ul><ul><ul><ul><li> Rapid population growth: >20,000 households per year </li></ul></ul></ul><ul><ul><ul><li>(~80,000 people) </li></ul></ul></ul><ul><ul><ul><li> Water moved at great cost from Colorado River over </li></ul></ul></ul><ul><ul><ul><li>mountains </li></ul></ul></ul><ul><li>APPROACH </li></ul><ul><ul><ul><li>Automation </li></ul></ul></ul><ul><ul><ul><li>Peak demand </li></ul></ul></ul><ul><ul><ul><li>management </li></ul></ul></ul><ul><ul><ul><li>Shifted sources so </li></ul></ul></ul><ul><ul><ul><li>much less coming </li></ul></ul></ul><ul><ul><ul><li>over mountains </li></ul></ul></ul>
  40. 40. Tijuana, continued <ul><li>RESULTS </li></ul><ul><ul><ul><li> 4.1 million kWh </li></ul></ul></ul><ul><ul><ul><li>saved per year </li></ul></ul></ul><ul><ul><ul><li> >$400,000 saved </li></ul></ul></ul><ul><ul><ul><li>per year </li></ul></ul></ul><ul><ul><ul><li> Water losses one of </li></ul></ul></ul><ul><ul><ul><li>lowest in Mexico (19%) </li></ul></ul></ul><ul><ul><ul><li> Water provided to </li></ul></ul></ul><ul><ul><ul><li>46,000 new households </li></ul></ul></ul><ul><ul><ul><li>with only slightly higher water production </li></ul></ul></ul><ul><ul><ul><li>Need for large investment into an aqueduct deferred </li></ul></ul></ul><ul><ul><ul><li>for 6 years </li></ul></ul></ul>
  41. 41. MONCLOVA (Coahuila) <ul><ul><ul><li>SUCCESS: Once Sporadic Service Now 24/7 </li></ul></ul></ul><ul><ul><ul><li>ISSUES </li></ul></ul></ul><ul><ul><ul><li> 48% losses from system </li></ul></ul></ul><ul><ul><ul><li> Water provided only </li></ul></ul></ul><ul><ul><ul><li>6 hours every 3 days </li></ul></ul></ul><ul><ul><ul><li>APPROACH </li></ul></ul></ul><ul><ul><ul><li> Leak detection </li></ul></ul></ul><ul><ul><ul><li> Variable speed drives </li></ul></ul></ul><ul><ul><ul><li> Electromechanical efficiency improvements </li></ul></ul></ul><ul><ul><ul><li> Managerial & operational improvements </li></ul></ul></ul>
  42. 42. Monclova, continued <ul><ul><ul><li>RESULTS </li></ul></ul></ul><ul><ul><ul><li> 20% reduction in water losses </li></ul></ul></ul><ul><ul><ul><li> Service now 24/7 </li></ul></ul></ul><ul><ul><ul><li> Water Saved per year: </li></ul></ul></ul><ul><ul><ul><li>10 million m 3 </li></ul></ul></ul><ul><ul><ul><li> Energy Saved per year: </li></ul></ul></ul><ul><ul><ul><li>6.1 million kWh ( 36% ) </li></ul></ul></ul><ul><ul><ul><li> Cost Saved per year: </li></ul></ul></ul><ul><ul><ul><li>$727,000 </li></ul></ul></ul>
  43. 43. 1850 M Street, NW Suite 600 Washington, D.C. 20036 Phone: 202.857.0666 Website: Alliance to Save Energy THANK YOU!