Looking Ahead: 2010 and Beyond – The Decade of Energy Efficiency

Kateri Callahan, President
Alliance to Save Energy
Schneider Electric North America Leadership Forum
January 27, 2010
Looking Ahead: 2010 and Beyond The Decade of Energy Efficiency

Presentation Overview
A few words about the Alliance
Why energy efficiency? Why Now?
Policy required to deploy energy efficiency at scale
Kateri’s “Crystal Ball”: Forecasting future federal policy action on EE

What is the Alliance to Save Energy?
Mission:
To promote energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security.
Organization:
Staffed by 60+ professionals
32 years of experience
$12 million annual budget
Recognized as the premier energy efficiency organization in the world

What is the Alliance to Save Energy?
Non-profit organization headquartered in U.S.; operations world-wide
Led by Senator Mark Pryor (D-Ark.) and Peter Darbee, President and CEO of Pacific Gas and Electric
Includes 10 Members of Congress – Bi-Cameral; Bi-Partisan
Also includes environmental, consumer, and trade associations heads, state and local policy makers, corporate executives

Working with and Across All Sectors of the Economy
170 companies, organizations, and institutions in Associates Program
Associates Program membership represents all economic sectors
Initiatives underway in research, policy advocacy, education, technology deployment, market transformation and communications

18
18
Other renewables
Other renewables
Biomass
Biomass
16
16
Hydro
Hydro
14
14
Nuclear
Nuclear
Gas
Gas
12
12
Oil
Oil
10
10
Coal
Coal
billion tonnes of oil equivalent
billion tonnes of oil equivalent
8
8
6
6
4
4
2
2
0
0
1980
1990
2000
2010
2020
2030
1980
1990
2000
2010
2020
2030
WHY EE? WHY NOW?
Global “Business as Usual” is Unsustainable
Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms

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

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

In sum, energy use has a direct effect on…
Global Emissions:
Energy use directly linked to
GHG emissions..U.S. example:
Security:Unchecked growth in energy demand can:
Accelerate fossil fuel depletion
Increase our reliance on foreign sources of energy
Economy:
According to a McKinsey estimate: “Business as usual” energy use will waste more than $1.2 trillion between now and 2020 in the U.S. alone – and this does not include transportation energy consumption.

Why Energy Efficiency?America’s Greatest Energy Resource
Reducing Energy Use, Saving Money, and Powering the domestic economy for over 30 years:

Source: McKinsey Global Institute
Efficiency: Enormous Potential for Savings in ALL Sectors…

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

Many “Non-Price” Barriers
Energy Subsidies
Uncertain costs?
Externalities
Choices
SPLIT INCENTIVES
Lock-in
Small savings
Bounded Rationality
Information

Deploying EE at Scale Requires: A Foundation of Public Policy
To lock in savings for consumers and businesses
To achieve market penetration
To gain foothold in market
To encourage technological innovation

Public Policy Helped Deliver EE Into the U.S. Economy

The EE Policy March Quickens

Bending Down the Energy Demand Curve: Policies Matter

Reduce electricity use 15% by 2020
Net-zero energy buildings by 2030
Commitment to building U.S. clean energy economy
Commitment to address climate change

Investment incentives for “livable cities”
President Obama: EE Advocate in Campaign

12 months later – Opening the Decade of Energy Efficiency
January 2009
October
November
December
October
November
December
June
June
July
May
May
May
Executive Order on federal energy use
House Passes $75 Billion “Jobs for Main Street” bill
Stimulus package
American Clean Energy and Security Act (ACES)
Ongoing approps in House/Senate climate/energy bills
HVAC standards agreement
President’s Fiscal Year 2010 budget
HOUSEPASSES ACES (6/26)
COP15: Secretary Chu announces Climate REDI Program
Outdoor Lighting standards
President’s new CAFÉ standards
DOE: new lighting standards
Bilateral agreement: U.S.-China Energy Efficiency Action Plan

Stimulus: $65B Related to Energy Efficiency
Funding in Millions of US Dollars

ARRA: Built on the Five Pillars of Good Public Policy
RD&D
Smart Grid ($4.5 bill)
DOE RD&D ($2.25 billion)
Incentives
Extension and Increase in consumer EE tax incentives
Codes & Standards
“Conditions” State funding on strong building codes
Education & Outreach
State Energy Star rebate programs ($300 million)
Government Leadership by Example
Federal “High-Performance Green Buildings” ($4.5 billion)

Core Energy FundingObligation & Spending to date
State Energy Program
Appropriated: $3.1 billion
Obligated: $3.1 billion
Spent: $45 million (2%)
Energy Efficiency and Conservation Block Grants
Weatherization Assistance Program
Appliance Rebates
Appropriated: $300 million
Obligated: $300 million
Spent: $276 thousand
Smart Grid Grants and Demonstration
Spent: $4 million (0.1%)
RD&D (EERE and ARPA-E)
Obligated: $484 million
In core EE, $560 million of $11.6 billion spent (5%)

Projected EE Funding, 2006-2012

Leading by example
Agencies to meet all EISA targets, plus:
Achieve 30% reduction in vehicle fleet petroleum use by 2020
Achieve 26% reduction in potable & 20% reduction in industrial, landscaping, & agricultural water consumption by 2020
Comply with new EPA storm water management guidance
Achieve 50% recycling & waste diversion by 2015
Requires that 95% of all applicable procurement contracts will meet sustainability requirements
Requires 15% of buildings meet the Guiding Principles for High Performance and Sustainable Buildings by 2015
Design all new Federal buildings which begin the planning process by 2020 to achieve zero-net energy by 2030
Executive Order 135814:Federal Leadership in Environmental, Energy, and Economic Performance
October 5, 2009: President Obama signs EO 13514
For more information:
www.femp.energy.gov
6

NZE: Commercial Buildings Consortium (CBC)
Goals:
2030: New construction net-zero energy (NZE)
2050: Entire stock NZE
Comprehensive approach (R&D & deployment)
Coordinate (initiate) national and local actions
Measure, benchmark, disclose energy performance
R&D for critical technologies and systems
Demonstrate scalable, replicable system solutions
Transform market: education/training, finance, appraisal, incentives, codes, buyer demand-pull
Funding from Omnibus 2009 Appropriations bill:
$33 million to initiate
Plus about $50 million from ARRA (stimulus) funds

Up Next???Climate & Clean Energy Bill
Senate
Has Adopted Energy “Piece”
Will consider climate “Piece” in early 2010??
House
Adopted Climate & Energy bill in June
Additional Support for Energy Efficiency in legislation
Significant Funding through CO2 Allowances (House bill)
Building Labeling Programs (both)
Utility Energy Efficiency Resource Standards (both)
Innovative Finance Programs (both)
Appliance Standards (both)
And much more…..

The role of energy efficiency in climate legislation
Efficiency is the quickest, cheapest way to reduce energy consumption and lower greenhouse gas emissions
In ACES, energy efficiency provisions alone would:
Save American households about $154 per year in 2025. (EPA)
Reduce carbon allowance price by 1.5 percent between 2015-2050. (EPA)
On the whole, ACES would create on average 120,000 new energy efficiency jobs nationwide each year between 2012-2020.(Center for American Progress)

The Outlook Should Waxman-Markey Become U.S. Law

Jobs Bill Overview
Narrowly passed in House (Dec. 2009)
Of $75 billion:
$27.5B towards highway infrastructure
$8.4B for public transportation ($.8B Amtrak)
$2B for DOE Loan Guarantees – EE Included
$750M – job training for high growth fields
Also includes:
Small business loans
Moving targets: 2 key proposals
HOME STAR
Building STAR

HOME STAR (“Cash for Caulkers”)
Recommended by PERAB
$7 -10 billion for residential retrofits
Two types of consumer incentives:
SILVER STAR Prescriptive Path: $5.5 billion
Rebates for specific energy saving investments
50% of project cost, up to $3,000 per home
Covered measures: air & duct sealing; insulation; window and door replacement; HVAC, water heater, and appliance upgrades
GOLD STAR Performance Path: $2.3 – 3 billion
Rebates for demonstrated energy savings
$3,000 for 20% savings, plus $1,500 for each additional 5%
Up to 50% of project cost and $12,000
Proposal likely to include a financing component

Building STAR
Commercial Buildings counterpart to HOME STAR
~$8 billion for commercial, industrial and multi-family building retrofits
Two types of consumer incentives:
Rebates
Like SILVER STAR, for specific energy saving investments
Covered measures: SILVER STAR measures plus low-slope roofing, variable speed motors, lighting, water efficiency, energy management and training
Tax Incentive Expansions
Prescriptive and performance pathways in existing code
Increase incentives for buildings demonstrating energy savings 50% above code for lighting, envelope, HVAC
Expand other tax incentives: refundable tax credits to certain entities, technology specific incentives (variable speed drives, mechanical insulation)

Kateri’s Crystal Ball:U.S. Energy Efficiency Policy in 2010
Clean Energy Legislation w/ Strong EE
Building Codes
Appliance Standards
Innovative Financing Mechanisms
Significant Funding from Allowances
New Jobs Bill
Loan Guarantees
Workforce Training
Federal Transit & Fixed Guideways
Home Star??? Residential Retrofit
Building Star??? Residential Retrofit
Stagnant FY 2011 Appropriations
International Accords & Binding International Climate Treaties???

EE Global 2010: Ideas, Intersections, Solutions to Power an Energy-Efficient Economy
May 10-12, 2010 : Washington D.C. Convention Center
Established in 2007; held annually, rotating among 5 regions of the world
Africa, Asia/Pacific, Europe, Latin America, North America
Organized by an International Steering Committee
Honorary Government Co-Chairs Industry Chair Vice Chairs
Draws 700+ stakeholders
High-level – 40% of 2009 attendees self-identified as executives, and another 50% as managers
International –40 countries represented in 2009
Representative of all sectors – buildings, industrial, utilities, transportation, finance
Even split of government (28%), business (37%) and non-profit (28%) in 2007 & 2009
Rep. Edward Markey
James E. RogersChairman, President & CEO,
Duke Energy
Robert J. DixonSr. VP & Global Head
Efficiency & Sustainability,
Building Automation,
Siemens Building Technologies Inc.
David SzczupakEVP, Global Product Organizations,
Whirlpool Corporation
Nobuo TanakaExecutive Director,
IEA
Sen. Mark Pryor
Christopher B. Curtis President & CEO,
N.A. Operating Div.
& Buildings Business,
Schneider Electric

Questions?Thank you!
Contact information:
Kateri Callahan
kcallahan@ase.org
+1-202-530-2219

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Looking Ahead: 2010 and Beyond – The Decade of Energy Efficiency

by Alliance To Save Energy

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