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Cracking the Code: The Key to Energy Efficiency in Buildings


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Alliance President Kateri Callahan briefed policy and business leaders in Mexico on building energy codes in the U.S., and the public policy and multi-sector participation needed to create an effective code system that meets industry, consumer, environmental and governmental needs.

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Cracking the Code: The Key to Energy Efficiency in Buildings

  1. 1. Cracking the Code:  g The Key to Energy  Efficiency in Buildings ffi i i ildi Presentation by Kateri Callahan, President Concreto LatinoAmerica 2009 “Model Code System” Panel Discussion:  Model Code System Panel Discussion: Politics and Actions to Promote Energy Efficiency August 18, 2009 August 18, 2009
  2. 2. Overview  About the Alliance  Why Energy Efficiency?    Strong Public Policy:  A U.S. Blueprint to Building  Strong Public Policy: A U S Blueprint to Building Energy Efficiency Codes/Standards Education/Outreach Incentives RD&D
  3. 3. What is the  Alliance to Save Energy?  Alli t S E ?  The Alliance to Save Energy promotes energy efficiency worldwide to achieve a healthier  economy, a cleaner environment and greater energy security. economy a cleaner environment and greater energy security - Non‐profit organization headquartered in U.S.; operations world‐wide - Led by Senator Mark Pryor (D AR) and Jim Rogers, CEO of Duke Energy  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
  4. 4. Forging Alliances Forging Alliances  Business ▪ Government ▪ Public Interests   Sponsorship and participation of more than 160 organizations  Involvement by businesses in all economic sectors  Initiatives underway in research, policy advocacy, education, technology deployment, and communications
  5. 5. Why Energy Efficiency? America’s Greatest Energy Resource i ’ Reducing Energy Use, Saving Money, and Powering the domestic economy for  over 30 years: America's Greatest Energy Resource Energy Efficiency and Conservation Improvements Since 1973 Have Reduced Annual Energy Consumption by 50 Quads Energy Efficiency and Conservation 50 Petroleum 40 Natural G N t l Gas 24 Coal 23 Nuclear Electric Power 8 Wood, Waste, Alcohol 4 Conventional Hydroelectric 3 Geothermal, Solar and Wind 0.8 0 10 20 30 40 50 60 Quads Alliance to Save Energy August 2008 2007 Domestic Production Net Imports
  6. 6. Energy Efficiency: Enormous Potential for S i f Savings i ALL Sectors… in S t …and the largest opportunity is in our buildings! Source: McKinsey Global Institute
  7. 7. Why Buildings? Why Buildings?  Buildings use 39% of  ld f energy in U.S., cause  39% of CO2 emissions  Efficient buildings… …reduce stress on power grid and  natural gas supplies …improve air quality and public health …avoid global warming avoid global warming …save consumers money  Source: USGBC
  8. 8. The Challenge?   Market Distortions M k t Di t ti  Principal Agent or  Split Incentives Principal Agent or “Split Incentives” - New versus existing buildings - Home/Commercial builder versus buyer - Landlord versus tenant - Utility versus customer  Transaction Costs - Lack of information on life‐cycle cost for products and/or  paybacks for upgrades b k f d  Lack of Investment in RD&D and EE Programs
  9. 9. Deploying EE in the U.S.:  A Foundation of Public Policy AF d ti f P bli P li Codes/Standards  To lock in savings for  Education/Outreach consumers and businesses  To achieve market  To achieve market penetration Incentives  To gain foothold in  To gain foothold in market RD&D  To encourage  technological  technological innovation
  10. 10. ARRA: Built on Sound Public Policy  ARRA B ilt S d P bli P li  RD&D – Smart Grid ($4.5 bill) – DOE RD&D ($2.25 billion)   Codes/Standards Education/Outreach  Incentives  I ti Incentives – Extension of tax incentives  Education & Outreach Education & Outreach RD&D – State Energy Star rebate programs ($300 million)  Codes & Standards – “Conditions”  USD $3.1 Billion to states on strong building  codes
  11. 11. Research, Development and  Deployment Deplo ment Net ZEB: Commercial Buildings Initiative (CBI)  Goals: - 2030:  New construction net‐zero - 2050:  Entire stock net‐zero  Comprehensive approach (R&D & deployment) 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: Funding from Omnibus 2009 Appropriations bill: - $33 million to initiate - Plus about $50 million from ARRA (stimulus) funds
  12. 12. Incentives New Homes Builder tax credit up to $2,000 if 50% more efficient compared to 2004 IECCC  Builder tax credit ‐ up to $2 000 if 50% more efficient compared to 2004 IECCC code; $1,000 for a home that saves 30% or qualifies for the Energy Star Homes  Program. (Through 2009) Existing Homes Homeowner tax credit – 30% of cost of installing building envelope components;  capped at $1,500 (Through 2010) Commercial Buildings Deduction up to $1 80/sq ft for buildings designed to use 50% less energy than up to $1.80/sq.ft. for buildings designed to use 50% less energy than  ASHRAE‐90.1‐2001 (Through 2013) Public Buildings: Assignable deduction!
  13. 13. Use Incentives, Education to Penetrate th M k t P t t the Market… ENERGY STAR Qualified Homes Gaining Market Share (2008) Source:
  14. 14. A “Game Changer”:   Building Energy Codes Building Energy Codes  Makes homes more affordable M k h ff d bl  Overcomes economic barriers  If all states improve codes by 30% over today’s  energy performance, the savings by 2030 equal: - 3 quadrillion Btu in building energy use (5% of current) - $25 billion in annual consumer energy bills - 150 million tons of CO2 (6 billion tons through 2050) 150 million tons of CO (6 billion tons through 2050)
  15. 15. How U.S. Codes are Set How U S Codes are Set  States set codes based on national  models - Independent professional organizations set  national model building codes - DOE determines whether updates save energy - States adopt codes, sometimes with changes States adopt codes sometimes with changes  States required to consider residential  model  States required to adopt commercial  model  can t happen  But codes can’t happen overnight...
  16. 16. Driving to “Net-Zero” Through Building Energ B ilding Energy Codes  National energy codes with aggressive energy savings targets: - 30% savings in 1 year - 50% savings in 2014 (homes), 2015 (comm.) - 5% more savings every 3 years i  ICC and ASHRAE get first chance, with DOE h l h ith help  DOE sets if they don’t
  17. 17. Building Energy Codes: Adoption and Compliance  Direct states to adopt and improve compliance - 1 year to adopt - 90% of building space complies within 5 y g p p years - DOE help: funding to states for code implementation  Backstop: Federal code with federal enforcement
  18. 18. Codes Legislation: Status Codes  : Status  In Waxman‐Markey Climate Bill (“ACES”) y ( )  In Senate Energy Bill (“ACELA”)  A Strong Legislative History in 110th Congress - In energy bills:  Energy bills that passed the House (H.R. 3221, 6899)  Senate Leadership Amendment (S. Amdt. 5135)  Rep. Inslee bill (H.R. 6739) R I l bill (H R 6739) - In climate bills:  Lieberman‐Warner Senate bill (S. 2191, S. 3036, S. Amdt. 4825)  Dingell Boucher House climate bill draft Dingell‐Boucher House climate bill draft  Rep. Markey bill (iCAP—H.R. 6186) - In stand‐alone bills:  Dingell‐Boucher bill (H.R. 6729)  Sen. Schumer bill (S. 2078, S. Amdt. 1604)
  19. 19. Climate & Energy Bill Outlook  Climate & Energy Bill Outlook  Senate  - Has Adopted Energy “Piece” with code provisions  - Will consider climate “Piece” in the Fall  House - Adopted Climate & Energy bill with code provisions  Additional Support for Energy Efficiency in legislation Additional Support for Energy Efficiency in legislation - Significant Funding through CO2 Allowances (House bill) - Building Labeling Programs (both) Building Labeling Programs (both) - Utility Energy Efficiency Resource Standards (both) - Innovative Finance Programs (both) - Appliance Standards (both) - And much more…..
  20. 20. Forecast  Promising legislation for the  expansion of energy efficiency in  buildings and of building codes b ildi d f b ildi d - Advantages of Stimulus - More funds for DOE More funds for DOE - American Clean Energy and Security  Act (ACES)  The Future of Codes:  y Universal and dynamic?
  21. 21. Recognizing the efforts of those working to advance  energy efficiency. Award Winners: Deval Patrick, Governor of Massachusetts Dr. Steven Chu, Secretary of Energy, DOE D S Ch S fE DOE U.S. Department of Housing and Urban Development Aquarium of the Pacific Warren County Public Schools (Kentucky) CONAVI and INFONAVIT 3M Company 3M Company
  22. 22. Thank you! Thank you! For More Information…. Kateri Callahan President Alliance to Save Energy 1850 M Street, NW 1850 M Street NW Washington, D.C.   20036 202.857.0666