Energy Efficiency in Energy Legislation, Waxman-Markey, and Stimulus:Update and Overview
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  • In addition to codes preemption.Also Senate: deadline for response to petitions, study on compliance and other, Energy Star provisions.
  • In addition to codes preemption.Also Senate: deadline for response to petitions, study on compliance and other, Energy Star provisions.
  • Light duty already accomplished. VMT sets stage for transportation bill. No money for VMT reduction.
  • Ones funded by allowances matter most

Energy Efficiency in Energy Legislation, Waxman-Markey, and Stimulus: Update and Overview Presentation Transcript

  • 1. Joe Loper, Lowell Ungar, Brad Penney
    Alliance to Save Energy
    June 29, 2009
    Energy Efficiency in Energy Legislation, Waxman-Markey, and Stimulus:Update and Overview
  • 2. Federal Energy and Climate Legislation
    Brad Penney
    Director of Government Relations
    June 29, 2009
  • 3. Federal Energy and Climate Legislation - Overview
    In the House
    ACES (The American Clean Energy and Security Act, or Waxman-Markey) reported by E&C on May 21st ;
    Status: Narrowly passed the House on Friday by a vote of 219 to 212.
    In the Senate
    ACELA (The American Clean Energy Leadership Act)
    Scope: Energy
    • EPW working on a climate section, to be integrated
    Status: Approved by ENR on June 27th
  • 4. Ad in Roll Call, The Hill, Politico
    Dear Members of Congress:
    As businesses and organizations that employ thousands of workers in the
    clean energy industry, we urge Congress to move and improve the
    American Clean Energy and Security Act.
    A strong clean energy policy that promotes innovation and deployment in
    energy efficiency and renewable energy can help reduce energy costs for
    consumers and provide the basis for sustained economic growth.
    1.  Energy efficiency generates $3 in economic benefits for each $1
    invested, producing jobs in every Congressional district in America;
    2.  Renewable energy will stabilize energy costs as we reduce our
    dependence on fossil fuels and use sources of energy that have no
    or low cost such as wind, sun, water, geo-thermal and biomass;
    3.  Taken together, energy efficiency and renewable energy can reduce the
    costs of achieving our climate goals by lowering overall energy demand
    and the costs of generating power – saving Americans money on their
    utility bills while cutting greenhouse gas emissions.
    Without a change in direction, the United States economy will
    continue to lose ground to other countries that are more
    aggressively investing in clean energy technology. Strong clean
    energy legislation can provide that framework and restore
    American leadership in job creation and innovation.
    We urge every Member of Congress to vote in favor of the American
    Clean Energy and Security Act of 2009 now!
  • 5. Climate Outlook in Senate
    Senate EPW Chairwoman Boxer hopes to introduce a cap-and-trade measure in July and mark it up before August recess (week of Aug. 3?)
    Other committees have tentatively agreed to be through with their amendments by Sept. 18
    Majority Leader Reid wants to bring comprehensive bill to the floor in the fall; we are hearing October for floor action
    Boxer released climate principles in February
    House bill will be the framework
  • 6. EE Highlights in ACES
    Cap on carbon: 83% reduction in covered emissions by 2050 (85% of emissions are covered)
    Building codes, building labels, appliance standards and labels
    Renewable electricity standard of 20% by 2020 – a quarter may be met through EE, or 40% if governor requests
    Vehicle emissions standards
    Land use planning to reduce VMT
  • 7. EE Highlights in ACELA
    • Renewable electricity standard of 15% by 2021
    • 8. 4% may come from efficiency if governor petitions
    • 9. Improvements in model building energy codes
    • 10. 30% by 2010
    • 11. 50% by 2016
    • 12. Energy Efficiency in Manufacturing
    • 13. Funding for research and implementation of EE technologies, expansion of IACs
    • 14. Clean energy investment fund
    • 15. Loans, loan guarantees, etc., for commercialization of clean energy technologies
  • EE Highlights in ACELA
    • New energy efficiency standards
    • 16. for portable lighting fixtures, commercial furnaces and reflector lamps; new appliance test procedures
    • 17. State building retrofit grant program
    • 18. Grants for retrofits of residential and commercial buildings
    Voluntary building energy performance information program
    To display relative energy performance; raise public awareness
    Residential High-Performance Zero-Net-Energy Buildings Initiative
    Goal to enable residential buildings without net emissions to be cost-effective by 2020
  • 19. The Waxman-Markey Bill: A Giant Leap Forward (or Sideways)
    Joe Loper
    Alliance to Save Energy
    June 29, 2009
  • 20. Overview
    Meaningful cap
    Significant and reasonable cost control measures
    Substantial energy efficiency program funding
    At least two major concerns
  • 21. Cap is the crown jewel
    85% of GHG emissions covered by cap
    Other emissions TBD
    Covered emissions reduced 83% in 2050
    Cap will need defending
  • 22. Cap creates a carbon price
    Allowance price
    $10/ton/CO2e rising to $62/ton in 2050
    Energy price increases vary widely
    Across fuels and regions
    Source: Alliance analysis based on HR 2454 and EPA Preliminary Analysis of the Waxman-Markey Discussion Draft, April 20, 2009
  • 23. Impact on Energy Demand
    Flattens overall demand thru 2050
    2050 demand 12% below BAU
    Nuclear a big winner
    Source: EPA Analysis of the Waxman-Markey Discussion Draft, June 23, 2009
  • 24. Controlling Cost
    Different types of hurt
    all -- minimize overall cost
    some – ease transition
    for a while -- avoid price shocks
    Note trade-offs
    Many measures to control cost
    We like -- EE policies/programs
    Of great concern in WM -- offsets, muting prices
  • 25. Allowance allocations
    Allocations do not undermine the cap
    Major concern about allocations is fairness (not emissions levels)
    Allocations can reduce cost of abatement
    If purchasing least cost abatement resource
    Justified by market barriers
    Including program cost
    But can also raise overall abatement cost/price
    If not purchasing the least cost abatement resource
    If allowed to mute price signal – e.g., utility allowances
  • 26. Complementary EE Funding
    3-6% of allowance value
    $85 to $174b over 2012-2050
  • 27. Impact on Electric Demand
    More than 1/3 of 2030 demand reduction from policy/program
    EE policy/program impact small in 2050
    EE policy/program do not affect overall NG demand
    Unclear impact on NG generation
    Source: EPA Analysis of the Waxman-Markey Discussion Draft, June 23, 2009
  • 28. Allowance Allocations by Program
  • 29. State & Local Governments
    • DOE to establish “State Energy & Environmental Development” (SEED) Accounts for EE/RE programs
    • 30. 5.2% of total allowance value SEED
    • 31. Annual funding for EE = $0.8b to $3b
    • 32. Largest source of EE funding
  • Natural Gas Utilities
    Natural gas utilities receive 7.7% of total allowance value from 2016 --2029
    Must use one-third for energy efficiency
    $1.9 billion per year for 2016 -- 2029;
    Alliance recommends same for electric utilities
  • 33. Building Code Incentives
    0.5% of allowance value states for code development and enforcement
    $380 million annually
    $14.8 billion over the life of the bill
  • 34. Home Heating Oil, Propane and Kerosene
    To states based on residential/commercial consumption of home heating oil
    1.4% of total allowance value 2012 -- 2029
    One-half for energy efficiency
    $465 million annually for EE
  • 35. Renewable Electricity Standard
    $25/MWh in lieu charge
    For states to promote EE and RE
    Perhaps hundreds of millions for EE annually
  • 36. Clean Energy Innovation Centers
    DOE to 8 Clean Energy Innovation Centers
    one will likely focus on energy-efficient building systems and designs, per FY 2010 budget request
    Centers to receive 0.45% of emission allowances, distributed on a competitive basis (1/8 to EE?)
    1.05% of emissions allowances go to ARPA-E( 1/8 to EE?)
    $142 million annually for EE R&D (?)
  • 37. Other
    (allocations and authorizations)
    Electric and plug-in hybrid vehicles;
    Smart Grid;
    Transportation Planning;
    Industrial energy efficiency and waste heat recovery;
    Low-income energy efficiency
  • 38. That’s a lot of offsets!
    Up to 2 billion tons annually (One-third to two-thirds of total allowances)
    EE may not fare so well
    1/5 of CDM credits is EE
    But 90% is power generation
    Source: Alliance to Save Energy analysis based on HR 2454
  • 39. Make them real
    If offsets are not real
    Cap is undermined
    Cost/ton reduction is higher, not lower
    EMV critical
    WM addresses – EPA, advisory board, random audits
    Hard decisions deferred
    Discourage other countries’ policies?
    BAU policies reduce “additional” potential
    WM addresses -- int’l clean energy fund, sectoral offsets, int’l reserve allowances
  • 40. Muting the End-use Price Signal
    Transfers burdens to others
    Increases overall cost of abatement
    Utility free allowances
    Allocation formula only partially linked to emissions and…
    rebates cannot be “solely based” on electric consumption, but……
    if utilities simply surrender free allowances, could be perfect muting of price signal
  • 41. EE Policy and Program Challenges
    Address real market barriers
    Imperfect information, externality costs, split incentives
    Inelastic demand is not a market barrier
    Deploying EE at large scale
    No more CFLs!
    EMV
    RES, programs
  • 42. Joe Loper
    Senior VP, Policy and Research
    Alliance to Save Energy
    202-530-2223
    jloper@ase.org
  • 43. Strategic reserve
    Reduces effective stringency
    Pressure relief varies
    $28/ton plus for first 3 years
    60% above rolling 3-year average most other years
    Limits
    10% of total allowances
    20% of a single entity’s allowances
    Not a problem
  • 44. Energy Efficiency Policies as a Carbon Cap Complement
    June 29, 2009
    Lowell Ungar
    Director of Policy
  • 45. Goals
    Policies will no longer save more energy. Instead they will—
    Reduce cost of meeting carbon cap by
    Addressing market barriers, especially among energy end-users
  • 46. Efficiency Policies
    Buildings:
    • Building codes
    • 47. Building labels
    • 48. Appliance standards + labels
    • 49. Federal energy use + ESPCs
    Utilities:
    • Efficiency + renewable standard
    • 50. Smart grid + transmission
    Industry
    Transportation
    • Vehicle emissions standards
    • 51. Reducing driving through land use planning + transit
  • Codes and Standards
    Address major market barriers
    Split incentives
    Decision/transaction costs
    Higher levels may be justified by carbon price
  • 52. Building Energy Codes: Development
    Senate + House:
    • Energy savings targets:
    • 53. 30%, 50%, and beyond
    • 54. ICC and ASHRAE get first chance, with DOE help
    • 55. DOE sets if they don’t
  • Building Energy Codes: Targets
  • 56. Building Energy Codes: Adoption
  • 57. Building Energy Codes: Compliance
  • 58. Appliances and Lighting: New Standards
  • 59. Appliances and Lighting: Standards Process
  • 60. Efficiency Information
    Make price signal more effective by addressing information barriers
    Building efficiency labels
    Improvements to Energy Star
  • 61. Building Efficiency Labels
    House and Senate:
    EPA to establish model ratings and labels
    • Actual performance and designed performance ratings
    • 62. Build up EIA surveys (CBECS, RECS) as basis
    Implementation:
    • EPA to work with states andlocal governments
    House: lists disclosure methods, limited to new construction
  • 63. Appliances and Lighting: Energy Star Label
  • 64. Utilities: Efficiency Programs
    Standard for savings from programs
    Efficiency as resource in combined standard
    Allowance value to fund programs
    Use of allowances to utilities
    Use of allowances to states, local govt’s
  • 65. Utilities: Efficiency and Renewable Electricity Standard
    Efficiency without bill likely to reach 5%
  • 66. Transportation
    House only:
    Light duty vehicle emission standards
    Emission standards for trucks, trains, ships, and airplanes
    Require states to set emissions reduction goals and large MPOs to set plans that meet them.
  • 67. Authorizations
    Building energy code implementation
    Building retrofits
    Building labeling programs
    Manufactured home replacement
    “Best-in-class” appliance program
    Motor rebates
    Waste heat recovery grants
    Vehicle electrification and plug-in vehicle programs
    SmartWay heavy duty vehicle program
    ARPA-E and Clean Energy Innovation Centers
    Low Income energy efficiency program
  • 68. Savings Estimates
    Potential energy and carbon savings (toward meeting cap) from key policies in 2030 (ACEEE):
  • 69. Thank You!
    Lowell Ungar
    Alliance to Save Energy
    Phone: (202) 857-0666
    Email: lungar@ase.org
    Website: www.ase.org
  • 70. Stimulus Overview and Update
    June 29, 2009
    Brad Penney
    Director of Government Relations
  • 71. $65B Related to Energy Efficiency
    (Millions of US Dollars)
  • 72. Funding Rollout
    Energy Funds Slow to Unroll:
    1% of FY2009 awards
    90% of FY2009 awards go to health, transportation and education
    Funding allotted in segments:
    For SEP & WAP:
    10% on initial app approval
    40% on comprehensive app approval
    Remaining 50% contingent on demonstrated success
    Projected timing of all funds made available to states and localities.
    FY09 and FY12 funding for states and localities
    http://www.recovery.gov/sites/default/files/GAO-09-580+Recovery+Act.pdf
  • 73. Program Timeline
    Sept. 30: All funds to be obligated
    March 31: All funds to be spent
    Initial Apps Due – 10% of funding
    Progress reports quarterly through-
    out stimulus period
    Estimated time for DOE Approval
    Comp Apps Due – 40% of funding
    18 months after award: Funds to be obligated
    State Apps due
    36 months after award: Funds to be Spent
    Estimated time for DOE Approval
    Local Apps due
    Sept. 30: All funds to be obligated
    March 31: All funds to be spent
    Progress reports quarterly through-
    out stimulus period
    Estimated time for DOE Approval
    Initial Apps Due – 10% of funding
    Comp Apps Due - 40% of funding
    Administration Application Review
    www.ase.org/stimulusresources
  • 74. Core Energy FundingObligation & Spending to date
    SEP
    Appropriated: $3.1 billion
    Obligated: $301.6 million
    Spent: $9.4 million
    EECBG
    Appropriated: $3.2 billion
    Obligated: $0
    WAP
    Appropriated: $5 billion
    Obligated: $553.4 million
    Spent: $8.3 million
    Green Jobs
    Appropriated: $500 million
    Obligated: $0
    Smart Grid Investment Grant Program
    Appropriated: $4.5 billion
    Obligated: $0
    Smart Grid Demonstration Projects
    Appropriated: $615 million
    Awarded: $4.7 million
    Spent: $0
    HUD’s EE Public Housing Capital Funds
    Appropriated: $4 billion
    Awarded: $0
    HUD’s Green Retrofit Program
    Appropriated $250 million
    Obligated: $0
    $890 million of $18 billion awarded (.5%)
  • 75. Uses of Funds:State Energy Programs Plans
    Plans Due May 12: ~15 SEP Plans Released
    Available through ASE Stimulus Resources Page, NAESCO Recovery.gov when they are approved by DOE
    Some more complete than others
    Trends:
    Building Energy Efficiency Programs
    State, industrial, residential, performance contracting
    Energy Efficiency Financing Mechanisms
    Revolving Loans, Grants, Rebates
    Green Job Training Programs
    Technical installation, auditing, energy assessments
    Transportation
    Hybrid vehicles, Smart Traffic Management systems
  • 76. State Energy Programs (cont.)
    Updated on our stimulus resources page: www.ase.org/stimulusresources
  • 77. Oversight and Advocacy
    Immense problems of implementation
    size and complexity;
    challenge of administration within limited time frame;
    political appointees not in place;
    demands on career appointees
    Credibility of future energy efficiency initiatives depends on competent and effective implementation
    Problem of EM & V: How do we measure savings?
    Continuity of Programs: What happens when the funding goes away?
  • 78. Energy Efficiency Coalition
    100+ energy efficiency, environmental, public interest organizations and corporations
    Focus on ARRA formation, passage, implementation. Now also works on other legislation
    Coalition Activities:
    SEP – Utility Rate Reform
    SEP - Disclosure of Plans
    WAP – Davis Bacon Issues
    State-level Collaboration needed
    SEP, WAP, & EECBG Best practices, knowledge sharing
  • 79. For More Information…
    Brad Penney
    Director of Government Relations
    The Alliance to Save Energy
    bpenney@ase.org
    (202) 530-3348