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Duke draft 9 21-10

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  • These slides are animated
  • Annual world-wide investment of $170 billion in energy efficiency through 2020 could:
    cut global growth in energy demand by ½!
    save $900 billion a year in avoided energy costs
    dramatically reduce greenhouse gas emissions
    Source: The McKinsey Global Institute
    “Energy efficiency is the nation’s greatest energy resource—we saved 50 quads in 2007 due to energy efficiency and conservation efforts taken since 1973. This is more energy than we get from any single energy source, including oil.”
     
    “If we tried to run today’s economy without the energy-efficiency improvements that have taken place since 1973, we would need nearly 50% more energy than we use now. This is more than what we get from any single energy source, including oil, natural gas, coal, and nuclear power.”
  • Global – IEA says 300 EJ potential EE in 2050 - -25 GT Co2
    Measures below line are measures that would pay for themselves, even without a carbon price – CCE less than cost of buying energy. Will talk more later about why those negative cost opportunities are there (or might not be there).
    (Larry may have something to say about this later)
    But forgetting whether costs are “negative,” the point remains that EE is often less costly than the other abatement options.
    EE about 1Gt = about one sixth of current emissions
    CO2 price will likely be higher. Once you move into higher carbon price ranges, it is hard to know what technologies come out of the hole.
    2030 EE potential reductions CO2e (1208)
    Buildings                                               743 Mt
    Residential (362)                                                          
    Commercial (381)
    Industrial                                               278 Mt
    Transportation (cars only)          186 Mt
    Non-EE potential                             1,792 Mt
  • That “negative cost” measures are not already implemented suggests some non-price barriers exist.
    But some of these non-price barriers COULD be affected by higher energy prices – underestimated costs, information barrier, lock-in, even split incentives.
    Requires hundreds of billions of “cost-effective” investment
    Constrained budgets (time & money)
    Uncertainty (project performance and energy costs)
    Flowing information
  • Some info. : A report from 2007 says:
    Turkey is a net energy importer and of its total primary energy consumption; the largest fuel type is oil.
     The industrial sector in Turkey accounted for 40% of total final energy consumption and for 54% of electricity consumption in 2000, and industry has been targeted as a priority area for energy conservation programs owing to the projected rapid expansion of industrial energy demand.
    industry in Turkey is energy intensive.
     (http://www.planbleu.org/publications/atelier_energie/TR_Summary.pdf)
     
  • Slide content borrowed from Richard Kidd, FEMP President Obama has set a goal of an 83% reduction in
    carbon emissions by 2050.
    Requires agencies to:
    Set GHG reduction targets
    Develop Strategic Sustainability Plans and provide in concert with budget submissions
    Conduct bottom up Scope 1, 2 and 3 baselines
    Track performance
  • Challenges in terms of the need for EE also present the biggest opportunities for significant improvement. Two of major challenges the Alliance has identified as we have worked with municipalities around the world are:
    Water systems:
    Treatment and supply of drinking water, distribution systems, wastewater treatment
    Energy often highest cost associated with water supply
    Whenever water is lost to leaks, also lost are the energy -- and cost of energy -- embodied in that water, from pumping, treating, and moving the water.
    INFRASTRUCTURE:
    Same challenges are faced in municipalities around the world: - Buildings: inefficient appliances/equipment, poor insulation and windows, inefficient heating systems.
    Often there is no incentive to save energy since there is no metering – of water or energy – to show how much energy is being used or track savings.
    Municipal governments continue to purchase inefficient equipment (efficiency is not taken into account in purchasing decisions)
    In addition to building infrastructure, other energy-using components of the municipal infrastructure present great opportunities for increasing efficiency: One of the key ones is street lighting.
    [Incandescent or Mercury Vapor to: High pressure sodium, Metal Halide, Fluorescent (but poor optical control)[
  • In this arid region in Northeast Brazil, saving water is probably more important than saving energy.
    PROBLEMS:
       Many poor households were not connected to clean, running water.
       The water utility was highly inefficient with both water and energy
    …and it needed to reduce its energy costs and water losses in order to continue to provide service.
    PROJECT:  A multi-disciplinary team was assembled to focus on ways to reduce energy and water waste throughout the distribution system.
    Approaches included improving data collection and analysis, automating pressure controls, centralizing pump system controls, renegotiating energy supply contracts, installing capacitors and replacing or re-winding motors.
    The RESULTS really illustrate what water efficiency is capable of producing: the utility saved 88 million kWh over the course of 4 years, in spite of the fact that water service was expanded to a remarkable 88,000 households who formally had no access to piped water. The project saves the utility $2.5 million every year, with a payback of only 7 months.
  • Develop sufficient legal and regulatory framework
    Create incentives for promoting energy efficiency
    Opening the energy sector to private participation
    Promoting metering and DSM measures
    Eliminate subsidies and bring energy tariffs to cost-recovery levels
    Modernize energy standards and technical regulations
    Promoting energy efficiency services market
    (The photo is of people getting training in a cold room in Russia; note the coats and hats.)
  • Build institutional capacity and raise awareness
    Strengthen national agencies for setting energy efficiency targets, developing programs and ensuring implementation
    Prepare energy managers and auditors for all bulk energy consumers
    Cultivate partnerships among energy consumers, service providers, financiers.
    Test EE models, document case studies, prepare guidelines, advocate.
    Develop adequate financing mechanisms
    Loan funds, credit guarantees, vendor credits, leasing, carbon finance, etc.
  • Transcript

    • 1. Center for Energy, Development, and the Global Environment DUKE University October 6, 2010 Durham, NC Brian T. Castelli Executive Vice President Programs and Development PathwaysPathways toto Energy EfficiencyEnergy Efficiency
    • 2. What is the Alliance to Save Energy? - Non-profit organization headquartered in U.S.; operations world-wideNon-profit organization headquartered in U.S.; operations world-wide - Led byLed by Senator Jeanne Shaheen (D-NH)Senator Jeanne Shaheen (D-NH) andand Peter Darbee, President andPeter Darbee, President and CEO of Pacific Gas and ElectricCEO of Pacific Gas and Electric - Includes 15 Members of Congress – Bi-Cameral; Bi-PartisanIncludes 15 Members of Congress – Bi-Cameral; Bi-Partisan - Also includes environmental, consumer, and trade associations heads, stateAlso includes environmental, consumer, and trade associations heads, state and local policy makers, corporate executivesand local policy makers, corporate executives
    • 3. Working with and Across All Sectors of the Economy  170 companies, organizations, and institutions in Associates Program170 companies, organizations, and institutions in Associates Program  Associates Program membership represents all economic sectorsAssociates Program membership represents all economic sectors  Initiatives underway in research, policy advocacy, education, technologyInitiatives underway in research, policy advocacy, education, technology deployment, market transformation and communicationsdeployment, market transformation and communications
    • 4. Features of the Global Energy Market  Tight Supplies  Growing Demand  Limited Spare Capacity  Heightened Geopolitical and Investment risk  Higher Prices  Climate Concerns ……anan UNSUSTAINABLEUNSUSTAINABLE TRACKTRACK CLIFFCLIFF AHEADAHEAD (sorry)(sorry) Source: Frank Verrastro, CSISSource: Frank Verrastro, CSIS
    • 5. Energy use has a direct effect on…  Global Emissions: Energy use directly linked to GHG emissions..U.S. example:  SecuritySecurity: Unchecked growth in energy demand can:Unchecked growth in energy demand can: • Accelerate fossil fuel depletionAccelerate fossil fuel depletion • Increase our reliance on foreign sourcesIncrease our reliance on foreign sources of energyof energy  Economy: • According to a McKinsey estimate:According to a McKinsey estimate: “Business as usual” energy use will“Business as usual” energy use will waste more than $1.2 trillion betweenwaste more than $1.2 trillion between now and 2020 in the U.S. alone – andnow and 2020 in the U.S. alone – and this does not include transportationthis does not include transportation energy consumption.energy consumption.
    • 6. Why EE? Why Now? Global “Business as Usual” is Unsustainable Global energy demand grows by 33 percent over the next 20 years,Global energy demand grows by 33 percent over the next 20 years, with coal use rising the most in absolute terms.with coal use rising the most in absolute terms. QuadrillionQuadrillion btubtu
    • 7. Why More EE? Why Now? Energy Use is a Global Climate Issue China, 19% Russia, 6% Japan, 4% India, 4% Western Europe, 13% , 0 Others, 32% US Other Sectors, 13% US Buildings, 8% Share of Global Energy-Related CO2 Emissions by Country (2005) Source: Energy Information AdministrationSource: Energy Information Administration
    • 8. As an energy resource, efficiency is:  CHEAPER - Each $1 invested in Energy Star program = $75 in energy cost savings and $15 of investment in new efficiency technologies  QUICKER - In 2001, California cut peak electricity use by 10% in less than a year  CLEANER - “Negawatts” produce NO ENVIRONMENTAL FOOTPRINT  MORE SECURE - A “homegrown” resource! Why Energy Efficiency?
    • 9. 2626 2828 3030 3232 3434 3636 3838 4040 4242 20102010 20152015 20202020 20252025 20302030 GtGt Reference ScenarioReference Scenario 450 Scenario450 Scenario End-useEnd-use efficiencyefficiency Power plantsPower plants RenewablesRenewables BiofuelsBiofuels NuclearNuclear CCSCCS 52% of the required cuts in GHG emissions to achieve the 450 scenario is52% of the required cuts in GHG emissions to achieve the 450 scenario is estimated to come from energy efficiency savings by 2030 (WEO 2009)estimated to come from energy efficiency savings by 2030 (WEO 2009) World Energy Outlook 2009 450 Scenario
    • 10. Energy Efficiency – America’s Greatest Energy Resource 44
    • 11. Plenty of Opportunity for Improving Energy Intensity Source: Frank Verrastro, CSISSource: Frank Verrastro, CSIS
    • 12. Potential Demand Reduction with Industrial EE Source: McKinsey & Company, 2007.Source: McKinsey & Company, 2007. Energy efficiency is the most cost-effective carbon reduction optionEnergy efficiency is the most cost-effective carbon reduction option • Stated in an Independent Study by McKinsey & CompanyStated in an Independent Study by McKinsey & Company
    • 13. Huge EE Potential RemainsHuge EE Potential Remains Energy Efficiency Potential 40%Energy Efficiency Potential 40% Adapted from McKinsey AnalysisAdapted from McKinsey Analysis Energy efficiency should be fully considered inEnergy efficiency should be fully considered in GHG reductions. All items to the left of theGHG reductions. All items to the left of the arrow represent “negative marginal costs”, i.e.arrow represent “negative marginal costs”, i.e. profitable investmentsprofitable investments
    • 14. Energy Efficiency: the 1st Fuel Average Utility Cost of New Electric Resources 0 2 4 6 8 10 12 14 16 Energy Efficiency (a) Wind Biomass Nat. Gas Combined Cycle Pulverized Coal Nuclear Coal IGCC LevelizedCost(cents/kWh) w/o Carbon W/ $20/Ton Carbon Source: UCS 2009 except (a) ACEEE 2009Source: UCS 2009 except (a) ACEEE 2009 Energy Efficiency: the 1Energy Efficiency: the 1stst FuelFuel
    • 15. Many “Non-Price” BarriersMany “Non-Price” Barriers
    • 16. Industrial Systems Energy Efficiency  Industrial firms tend to invest in process changes for EE and productivity – long term and high cost  Cross-cutting energy systems (motors-driven, steam, process heating) offer 20-50% savings potential - Inefficient systems found in nearly every plant - Near-term, lower-cost savings are from optimizing systems not components (only 2-5% savings)  Customize system energy efficiency for each site  US DOE strategy since 1992 (BestPractices): - Educate plant engineers – training, software, technical publications - Industry partnerships - Cost-shared plant energy assessments
    • 17. U.S.: Save Energy Now ““25 in 10”25 in 10” Drive a 25% reduction inDrive a 25% reduction in industrial energy intensityindustrial energy intensity by 2017by 2017 Saving 8.4 quads each yearSaving 8.4 quads each year —— an amount of energyan amount of energy equal to that consumed byequal to that consumed by CaliforniaCalifornia
    • 18. How About Buildings? 66 •• Buildings consume 39% of all energy in the U.S.,Buildings consume 39% of all energy in the U.S., including 72% of electricity, and account for 38% ofincluding 72% of electricity, and account for 38% of carbon emissions.carbon emissions. •• EIA projects that buildings-related CO2 emissions willEIA projects that buildings-related CO2 emissions will increase by 270 million tons by 2030, and 82% of theincrease by 270 million tons by 2030, and 82% of the total projected electric load growth is from buildings.total projected electric load growth is from buildings. •• Massive improvements in both existing and newMassive improvements in both existing and new buildings are needed at large scale & quickly.buildings are needed at large scale & quickly.
    • 19. Commercial Buildings Sector – Where Are We Today? ““Net-Net- Zero”Zero” Source: R. Anderson, NRELSource: R. Anderson, NREL
    • 20. Thanks to Doug Gatlin, USGBC atThanks to Doug Gatlin, USGBC at National Association of Realtors May 13, 2008National Association of Realtors May 13, 2008 The BusinessThe Business BenefitsBenefits
    • 21. The Business Benefits Operating CostsOperating Costs  Average Expected Decrease =Average Expected Decrease = 8%-9%8%-9%  Main motivator for green in all sectorsMain motivator for green in all sectors Energy UseEnergy Use  Average Expected Decrease =Average Expected Decrease = 30%30% Building ValueBuilding Value  Average Expected Increase =Average Expected Increase = 7.5%7.5% Operating IncomeOperating Income  Average Expected Increase =Average Expected Increase = 6.6%6.6% Occupancy and Rent RatiosOccupancy and Rent Ratios  Increased Occupancy =Increased Occupancy = 3.5%3.5%  Rent Ratio Increase =Rent Ratio Increase = 3%3% Thanks to Doug Gatlin, USGBC atThanks to Doug Gatlin, USGBC at National Association of Realtors May 13, 2008National Association of Realtors May 13, 2008
    • 22. Example Green Building Savings Thanks to Doug Gatlin, USGBC atThanks to Doug Gatlin, USGBC at National Association of Realtors May 13, 2008National Association of Realtors May 13, 2008
    • 23. Municipal EE Challenges and Opportunities  Water systems - Aging infrastructure Leaky distribution systems - System inefficiencies (pumps, motors)  Municipal infrastructure and operations - Inefficient buildings (housing, government offices, schools) - Lack of energy/water metering - Institutionalized purchasing of energy-inefficient equipment - Inefficient street-lighting
    • 24. CASE STUDY: Fortaleza, in Brazil’s Arid NE PROBLEMS •• Many households not connected to service •• Many inefficiencies: pumps, O&M, system management •• Utility couldn’t afford energy costs PROJECT:  automated controls on pressure & pumping  improved data collection & analysis  improved motor efficiency (replaced or re-wound them) RESULTS •• 88 million kWh saved over 4 years •• …while adding 88,000 new connections using same amount of water •• $2.5 M saved every year w/investment of only $1.1 M •• Payback: 7 months
    • 25. Deploying EE at Scale Requires: A Foundation of Public Policy  To encourage technological innovation  To gain foothold inTo gain foothold in marketmarket  To achieve marketTo achieve market penetrationpenetration  To lock in savings forTo lock in savings for consumers and businessesconsumers and businesses
    • 26. Key Strategies for EE Deployment 1) POLICY Improve Legal & regulatory frameworks…  Create incentives for promoting energy efficiency  Open the energy sector to private participation  Promote metering and DSM measures  Eliminate subsidies ~ Energy tariffs should recover costs ~  Modernize energy standards & technical regulations  Promote energy efficiency services market
    • 27. Key Strategies for EE Deployment 2) CAPACITY and AWARENESS • Strengthen national agencies for:  setting energy efficiency targets  developing programs  ensuring implementation • Train energy managers and auditors • Cultivate partnerships among: energy consumers, service providers, financiers • Provide Information: test EE models, document case studies, prepare guidelines, advocate. 3) FINANCING - Initiate mechanisms, such as…  loan funds  vendor credits  leasing  credit guarantees carbon finance
    • 28. Why is all this important? We only have one World… 2828
    • 29. Thank you!Thank you! Brian T. CastelliBrian T. Castelli Executive Vice PresidentExecutive Vice President bcastelli@ase.orgbcastelli@ase.org 202-857-0666202-857-0666 www.ase.orgwww.ase.org