Energy Efficiency: Meeting the Challenge & Fueling A Better Built Environment Presentation by Kateri Callahan, President to the EnVisioneering Symposium Carlsbad, CA November 14 th , 2008

Overview A Few Words About the Alliance Energy Efficiency: America’s Greatest Resource Why Deploy Energy Efficiency – Meeting the World’s Energy, Economic and Environmental Challenges Policy: Tapping the Full Potential of Energy Efficiency Forecast for the Future: Energy Efficiency as the “First Fuel” for America and the World

A Few Words About the Alliance

Energy Efficiency: America’s Greatest Resource

Why Deploy Energy Efficiency – Meeting the World’s Energy, Economic and Environmental Challenges

Policy: Tapping the Full Potential of Energy Efficiency

Forecast for the Future: Energy Efficiency as the “First Fuel” for America and the World

What is the Alliance to Save Energy? A unique NGO formed and still led by Members of Congress Guided by a 37-Member, Elected Board of Directors Led by Senator Mark Pryor (D-AR) and Jim Rogers, CEO of Duke Energy Includes 9 Members of Congress – Bi-Cameral; Bi-Partisan Also includes environmental, consumer, and trade associations heads, state and local policy makers, corporate executives

A unique NGO formed and still led by Members of Congress

Guided by a 37-Member, Elected Board of Directors

Led by Senator Mark Pryor (D-AR) and Jim Rogers, CEO of Duke Energy

Includes 9 Members of Congress – Bi-Cameral; Bi-Partisan

Also includes environmental, consumer, and trade associations heads, state and local policy makers, corporate executives

Forging Alliances: Business, Govt. & Public Interests Sponsorship and participation of more than 150 organizations Involvement by businesses in all economic sectors Initiatives underway in research, policy advocacy, education, technology deployment, and communications

Sponsorship and participation of more than 150 organizations

Involvement by businesses in all economic sectors

Initiatives underway in research, policy advocacy, education, technology

deployment, and communications

Energy Efficiency: Faithful Friend Energy Efficiency has been powering the U.S. economy for over 30 years!

Enormous Savings Energy Efficiency AVOIDING roughly 2.5 billion tons of CO2 annually Saving roughly $400 billion annually

Energy Efficiency AVOIDING roughly 2.5 billion tons of CO2 annually

Saving roughly $400 billion annually

Why Do More? Growing Energy Demand is Unsustainable Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms 0 2 4 6 8 10 12 14 16 18 1980 1990 2000 2010 2020 2030 billion tonnes of oil equivalent Other renewables Biomass Hydro Nuclear Gas Oil Coal 0 2 4 6 8 10 12 14 16 18 1980 1990 2000 2010 2020 2030 billion tonnes of oil equivalent Other renewables Biomass Hydro Nuclear Gas Oil Coal

Why Do More? U.S. Growth in Energy Use Poses a National Security Threat

Why Do More? Energy Use is a Pocketbook Issue

Why Do More? Energy Use is a Global Climate Issue Source: Energy Information Administration

Two Areas with Big Potential Savings: Buildings and Industry Energy Information Administration (EIA) The Building sector accounts for almost ½ of the energy consumption in the U.S. Buildings account for over 70% of total US electricity consumption and are responsible for over 40% of CO2 emissions. Industry accounts for 32% of total U.S. energy consumption.

We Can Do More & Cost-Effectively! Investing in energy efficiency can cut global energy demand growth from 2.2% to 0.7% Source: McKinsey Global Institute

EE: The No-Cost Way to Reduce GHG Emissions Energy Efficiency should be fully considered in GHG reductions. All items to the left of the arrow represent “negative marginal costs”

The Challenge? Market Distortions Principal Agent or “Split Incentives” Home builder versus buyer Utility versus customer Transaction Costs Lack of information on life-cycle cost for products and/or paybacks for upgrades Lack of Investment in RD&D and EE Programs Public Policies Essential Investment in EE Programs Essential

Principal Agent or “Split Incentives”

Home builder versus buyer

Utility versus customer

Transaction Costs

Lack of information on life-cycle cost for products and/or paybacks for upgrades

Lack of Investment in RD&D and EE Programs

Public Policies Essential

Investment in EE Programs Essential

Work is Being Done to Overcome Challenges… At the Federal Level Tax Incentives Federal Energy Management Appliance and Equipment Standards Weatherization Assistance Program At the National Level Model Building Energy Codes At the Regional Level Climate Initiatives (e.g.,RGGI) State/Local Level Code Adoption & Enforcement Utility Portfolio Standards & Efficiency Programs Financial Incentives Public Education and Outreachtopbuild(regional & state initiatives; code adoption; local adoption & enforcement policy, with enforcement in some states; education) Indirectly Federal Programs aimed at emissions reductions e

At the Federal Level

Tax Incentives

Federal Energy Management

Appliance and Equipment Standards

Weatherization Assistance Program

At the National Level

Model Building Energy Codes

At the Regional Level

Climate Initiatives (e.g.,RGGI)

State/Local Level

Code Adoption & Enforcement

Utility Portfolio Standards & Efficiency Programs

Financial Incentives

Public Education and Outreachtopbuild(regional & state initiatives; code adoption; local adoption & enforcement policy, with enforcement in some states; education)

Indirectly

Federal Programs aimed at emissions reductions

And the Government Responds…. Energy Policy Act of 2005 will by 2020: Reduce U.S. energy use by 2% Reduce electricity demand by 4% Reduce oil use by 0% Reduce CO 2 emissions by 3% Energy Independence and Security Act of 2007 will by 2020 (2030) : Reduce U.S. energy use by 4% (7%) Reduce electricity demand by 4% (5%) Reduce oil use by 5% (10%) Reduce CO 2 emissions by 5% (9%) Estimates from ACEEE, ASE

Energy Policy Act of 2005 will by 2020:

Reduce U.S. energy use by 2%

Reduce electricity demand by 4%

Reduce oil use by 0%

Reduce CO 2 emissions by 3%

Energy Independence and Security Act of 2007 will by 2020 (2030) :

Reduce U.S. energy use by 4% (7%)

Reduce electricity demand by 4% (5%)

Reduce oil use by 5% (10%)

Reduce CO 2 emissions by 5% (9%)

Estimates from ACEEE, ASE

At the Federal Level….Leadership by Example Energy savings goals + report cards Public buildings Public procurement Federal building energy/sq.ft. down 30% in 20 years

Energy savings goals + report cards

Public buildings

Public procurement

The largest 4,000 plants use 58% of U.S. industrial energy. A large plant uses as much energy as 20,000 typical homes; A medium-sized plant consumes the same energy as 455 homes. For every U.S. plant, there are 320 homes and 685 motor vehicles. Big bang for the “outreach buck:” Resources to implement energy-saving measures are available to help: “ Save Energy Now” www.eere.energy.gov/industry / Federal Programs: A Leg Up for Industry

The largest 4,000 plants use 58% of U.S. industrial energy.

A large plant uses as much energy as 20,000 typical homes; A medium-sized plant consumes the same energy as 455 homes.

For every U.S. plant, there are 320 homes and 685 motor vehicles.

DOE’s “Save Energy Now”: The Results So far, 653 assessments completed. As of November 13, 2008, 527 plants have reported the following: Identified energy saving costs more than $852 million Implemented energy savings nearly $121 million Energy savings measures underway or scheduled: more than $357 million Identified natural gas savings 81 trillion Btu —the amount of natural gas consumed by more than 1 million single-family homes per year Total potential carbon dioxide (CO2) emissions reduction: 7.2 million metric tons —the equivalent to taking nearly 1.2 million cars off the road

So far, 653 assessments completed.

As of November 13, 2008, 527 plants have reported the following:

Our Government at Work: Extension of Tax Incentives New Homes Builder tax credit - up to $2,000 if 50% more efficient compared to 2004 IECCC code; $1,000 for an Energy Star manufactured home. (Through 2009) Existing Homes Homeowner tax credit – 10% of cost of installing building envelope components consistent with IECC 2000; capped at $500; $200 can apply to windows. (Through 2009) Commercial Buildings Deduction up to $1.80/sq.ft. for buildings designed to use 50% less energy than ASHRAE-90.1 (Through 2013) Public Buildings : Assignable deduction!

New Homes

Builder tax credit - up to $2,000 if 50% more efficient compared to 2004 IECCC code; $1,000 for an Energy Star manufactured home. (Through 2009)

Existing Homes

Homeowner tax credit – 10% of cost of installing building envelope components consistent with IECC 2000; capped at $500; $200 can apply to windows. (Through 2009)

Commercial Buildings

Deduction up to $1.80/sq.ft. for buildings designed to use 50% less energy than ASHRAE-90.1 (Through 2013)

Public Buildings : Assignable deduction!

So…What Else Do We Need? Better Building Codes Today’s building codes affect ALL new buildings By 2010 : Almost 5 million new housing units Over 233 billion sq feet commercial floor space By 2020 : 23.4 million new housing units Over 1 trillion sq feet commercial floor space By 2030 : Over 41 million new housing units Over 2 trillion sq feet commercial floor space Source: EIA, Annual Energy Outlook 2008

Today’s building codes

affect ALL new buildings

By 2010 :

Almost 5 million new housing units

Over 233 billion sq feet commercial floor space

By 2020 :

23.4 million new housing units

Over 1 trillion sq feet commercial floor space

By 2030 :

Over 41 million new housing units

Over 2 trillion sq feet commercial floor space

Source: EIA, Annual Energy Outlook 2008

At the State Level….A Slog???

Federal Legislation Pending Would Drive 30% Improvement in Residential and Commercial EE Codes by 2010; 50% by 2020 2009 Model Energy Code (IECC) Improves New Home Efficiency by approximately 13% over 2006 IECC EECC Sought 30% Improvement ASHRAE Goal (Commercial) is a 30% Improvement in Efficiency in the 2010 Code Cycle Regulations Boost EE for New Federal Facilities by 30% EECC Building on Broad Support Base: the Alliance to Save Energy and U.S. DOE, Utilities, Businesses, NGOs At the National Level…..Improving Model Codes

Federal Legislation Pending

Would Drive 30% Improvement in Residential and Commercial EE Codes by 2010; 50% by 2020

2009 Model Energy Code (IECC) Improves New Home Efficiency by approximately 13% over 2006 IECC

EECC Sought 30% Improvement

ASHRAE Goal (Commercial) is a 30% Improvement in Efficiency in the 2010 Code Cycle

Regulations Boost EE for New Federal Facilities by 30%

EECC Building on Broad Support Base: the Alliance to Save Energy and U.S. DOE, Utilities, Businesses, NGOs

What Else Can We Do? Improve Existing Stock Appliance standards and labeling Weatherization Building labeling Consumer education (e.g. ENERGY STAR)

Appliance standards and labeling

Weatherization

Building labeling

Consumer education (e.g. ENERGY STAR)

What Else Can We Do?... INVEST in the Future Low investment in efficiency R&D Little R&D in energy sector Fragmented buildings sector

Low investment in efficiency R&D

Little R&D in energy sector

Fragmented buildings sector

What Else Can We DO? INVEST Source: CRS Report: RS22858

What Else Can We Do? Fund Programs Authorized in EISA and EPACT Zero Net-Energy Commercial Building Initiative $450 Million Public Information & Outrech Program Enact a Federal Energy Efficiency Resource Standard Price Carbon (Cap’n’Trade or Tax)

Fund Programs Authorized in EISA and EPACT

Zero Net-Energy Commercial Building Initiative

$450 Million Public Information & Outrech Program

Enact a Federal Energy Efficiency Resource Standard

Price Carbon (Cap’n’Trade or Tax)

Energy issues likely to be “front-and-center” Deepening economic woes Continuing increases in home and business energy costs Growing concern about national security Urgent need to tackle climate change Increasing support for “Green Jobs” and for using clean energy and efficiency as an “economic engine” Another Energy (and/or Stimulus) Bill BEFORE Climate Legislation Federal Forecast: ACTION

Energy issues likely to be “front-and-center”

Deepening economic woes

Continuing increases in home and business energy costs

Growing concern about national security

Urgent need to tackle climate change

Increasing support for “Green Jobs” and for using clean energy and efficiency as an “economic engine”

Another Energy (and/or Stimulus) Bill BEFORE Climate Legislation

Federal Forecast: ACTION The Senate Debate on Climate Legislation (Lieberman-Warner) this past June Fails cloture 48-36; proponents claim 54 supporters; opponents claim less than 48 supporters Calls for a carbon cap-and-trade program Viewed as a “dress rehearsal” for 111 th Congress House Continues Work Energy & Commerce Committee Issues Discussion Draft Markey Introduces “iCAP” legislation New President Supports Climate Legislation Global Negotiations – Copenhagen, 2009

The Senate Debate on Climate Legislation (Lieberman-Warner) this past June

Fails cloture 48-36; proponents claim 54 supporters; opponents claim less than 48 supporters

Calls for a carbon cap-and-trade program

Viewed as a “dress rehearsal” for 111 th Congress

House Continues Work

Energy & Commerce Committee Issues Discussion Draft

Markey Introduces “iCAP” legislation

New President Supports Climate Legislation

Global Negotiations – Copenhagen, 2009

Energy Efficiency in Climate Legislation

A Look at President-Elect Obama’s Platform… On Energy Efficiency Reduce Electricity Demand 15% by 2020 Net-Zero Energy Buildings by 2030 Overhaul Federal Appliance Standards 45% Improvement in New Federal Building Energy Use by 2014 25% Improvement in Existing Federal Building Energy Use by 2014 15% Overall Reduction in Federal Energy Use by 2015 Flip Incentives for Utilities Invest in a “Smart Grid” Weatherize 1 Million Homes Annually Invest and Incent “Liveable Cities”

On Energy Efficiency

Reduce Electricity Demand 15% by 2020

Net-Zero Energy Buildings by 2030

Overhaul Federal Appliance Standards

45% Improvement in New Federal Building Energy Use by 2014

25% Improvement in Existing Federal Building Energy Use by 2014

15% Overall Reduction in Federal Energy Use by 2015

Flip Incentives for Utilities

Invest in a “Smart Grid”

Weatherize 1 Million Homes Annually

Invest and Incent “Liveable Cities”

The Challenges Can Be Overcome: Others are Doing More with Less!

An Invitation…….. Join the Alliance to Save Energy in Paris April 27 through 29 for EE Global Learn more about what other states, other countries, other businesses are doing to deploy energy efficiency; See the latest technologies, products and services; Build partnerships for success; Share best practices; and, Meet the leaders in energy efficiency from every corner of the globe and every sector of the global economy!

Join the Alliance to Save Energy in Paris April 27 through 29 for EE Global

Learn more about what other states, other countries, other businesses are doing to deploy energy efficiency;

See the latest technologies, products and services;

Build partnerships for success;

Share best practices; and,

Meet the leaders in energy efficiency from every corner of the globe and every sector of the global economy!

EE GLOBAL 2009 April 27 -29, 2009 Paris, France at Palais des Congres de Paris Hosted by the Alliance to Save Energy Organized by an International Steering Committee Chaired by Marc Bitzer, President, Whirlpool Europe; Jean-Pascal Tricoire, President and CEO, Schneider Electric; Nobuo Tanaka, Executive Director, International Energy Agency; Lena Ek, MEP; & Claude Turmes, MEP Program created by an International Program Committee Chaired by Paolo Bertoldi, I.E.S. – Renewable Energies Unit, Directorate General JRC, European Commission

April 27 -29, 2009

Paris, France at Palais des Congres de Paris

Hosted by the Alliance to Save Energy

Organized by an International Steering Committee

Chaired by Marc Bitzer, President, Whirlpool Europe; Jean-Pascal Tricoire, President and CEO, Schneider Electric; Nobuo Tanaka, Executive Director, International Energy Agency; Lena Ek, MEP; & Claude Turmes, MEP

Program created by an International Program Committee

Chaired by Paolo Bertoldi, I.E.S. – Renewable Energies Unit, Directorate General JRC, European Commission