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Energy Efficiency: Meeting the Challenge & Fueling A Better Built Environment


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More than 40 leaders in industry, finance, research, and policy convened at La Costa Resort in Carlsbad, Calif., to discuss critical issues and opportunities for the HVAC&R industry, including climate change, energy efficiency, refrigerants and pending federal legislation.

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Energy Efficiency: Meeting the Challenge & Fueling A Better Built Environment

  1. 1. 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
  2. 2. Overview <ul><li>A Few Words About the Alliance </li></ul><ul><li>Energy Efficiency: America’s Greatest Resource </li></ul><ul><li>Why Deploy Energy Efficiency – Meeting the World’s Energy, Economic and Environmental Challenges </li></ul><ul><li>Policy: Tapping the Full Potential of Energy Efficiency </li></ul><ul><li>Forecast for the Future: Energy Efficiency as the “First Fuel” for America and the World </li></ul>
  3. 3. What is the Alliance to Save Energy? <ul><li>A unique NGO formed and still led by Members of Congress </li></ul><ul><li>Guided by a 37-Member, Elected Board of Directors </li></ul><ul><ul><li>Led by Senator Mark Pryor (D-AR) and Jim Rogers, CEO of Duke Energy </li></ul></ul><ul><ul><li>Includes 9 Members of Congress – Bi-Cameral; Bi-Partisan </li></ul></ul><ul><ul><li>Also includes environmental, consumer, and trade associations heads, state and local policy makers, corporate executives </li></ul></ul>
  4. 4. Forging Alliances: Business, Govt. & Public Interests <ul><li>Sponsorship and participation of more than 150 organizations </li></ul><ul><li>Involvement by businesses in all economic sectors </li></ul><ul><li>Initiatives underway in research, policy advocacy, education, technology </li></ul><ul><li> deployment, and communications </li></ul>
  5. 5. Energy Efficiency: Faithful Friend Energy Efficiency has been powering the U.S. economy for over 30 years!
  6. 6. Enormous Savings <ul><li>Energy Efficiency AVOIDING roughly 2.5 billion tons of CO2 annually </li></ul><ul><li>Saving roughly $400 billion annually </li></ul>
  7. 7. 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
  8. 8. Why Do More? U.S. Growth in Energy Use Poses a National Security Threat
  9. 9. Why Do More? Energy Use is a Pocketbook Issue
  10. 10. Why Do More? Energy Use is a Global Climate Issue Source: Energy Information Administration
  11. 11. 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.
  12. 12. 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
  13. 13. 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”
  14. 14. The Challenge? Market Distortions <ul><li>Principal Agent or “Split Incentives” </li></ul><ul><ul><li>Home builder versus buyer </li></ul></ul><ul><ul><li>Utility versus customer </li></ul></ul><ul><li>Transaction Costs </li></ul><ul><ul><li>Lack of information on life-cycle cost for products and/or paybacks for upgrades </li></ul></ul><ul><li>Lack of Investment in RD&D and EE Programs </li></ul><ul><li>Public Policies Essential </li></ul><ul><li>Investment in EE Programs Essential </li></ul>
  15. 15. Work is Being Done to Overcome Challenges… <ul><li>At the Federal Level </li></ul><ul><ul><li>Tax Incentives </li></ul></ul><ul><ul><li>Federal Energy Management </li></ul></ul><ul><ul><li>Appliance and Equipment Standards </li></ul></ul><ul><ul><li>Weatherization Assistance Program </li></ul></ul><ul><li>At the National Level </li></ul><ul><ul><li>Model Building Energy Codes </li></ul></ul><ul><li>At the Regional Level </li></ul><ul><ul><li>Climate Initiatives (e.g.,RGGI) </li></ul></ul><ul><li>State/Local Level </li></ul><ul><ul><li>Code Adoption & Enforcement </li></ul></ul><ul><ul><li>Utility Portfolio Standards & Efficiency Programs </li></ul></ul><ul><ul><li>Financial Incentives </li></ul></ul><ul><ul><li>Public Education and Outreachtopbuild(regional & state initiatives; code adoption; local adoption & enforcement policy, with enforcement in some states; education) </li></ul></ul><ul><li>Indirectly </li></ul><ul><ul><li>Federal Programs aimed at emissions reductions </li></ul></ul>e
  16. 16. And the Government Responds…. <ul><li>Energy Policy Act of 2005 will by 2020: </li></ul><ul><ul><li>Reduce U.S. energy use by 2% </li></ul></ul><ul><ul><li>Reduce electricity demand by 4% </li></ul></ul><ul><ul><li>Reduce oil use by 0% </li></ul></ul><ul><ul><li>Reduce CO 2 emissions by 3% </li></ul></ul><ul><li>Energy Independence and Security Act of 2007 will by 2020 (2030) : </li></ul><ul><ul><li>Reduce U.S. energy use by 4% (7%) </li></ul></ul><ul><ul><li>Reduce electricity demand by 4% (5%) </li></ul></ul><ul><ul><li>Reduce oil use by 5% (10%) </li></ul></ul><ul><ul><li>Reduce CO 2 emissions by 5% (9%) </li></ul></ul><ul><li>Estimates from ACEEE, ASE </li></ul>
  17. 17. At the Federal Level….Leadership by Example <ul><li>Energy savings goals + report cards </li></ul><ul><li>Public buildings </li></ul><ul><li>Public procurement </li></ul>Federal building energy/sq.ft. down 30% in 20 years
  18. 18. <ul><li>The largest 4,000 plants use 58% of U.S. industrial energy. </li></ul><ul><li>A large plant uses as much energy as 20,000 typical homes; A medium-sized plant consumes the same energy as 455 homes. </li></ul><ul><li>For every U.S. plant, there are 320 homes and 685 motor vehicles. </li></ul>Big bang for the “outreach buck:” Resources to implement energy-saving measures are available to help: “ Save Energy Now” / Federal Programs: A Leg Up for Industry
  19. 19. DOE’s “Save Energy Now”: The Results <ul><li>So far, 653 assessments completed. </li></ul><ul><li>As of November 13, 2008, 527 plants have reported the following: </li></ul>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
  20. 20. Our Government at Work: Extension of Tax Incentives <ul><li>New Homes </li></ul><ul><ul><li>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) </li></ul></ul><ul><li>Existing Homes </li></ul><ul><ul><li>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) </li></ul></ul><ul><li>Commercial Buildings </li></ul><ul><ul><li>Deduction up to $1.80/sq.ft. for buildings designed to use 50% less energy than ASHRAE-90.1 (Through 2013) </li></ul></ul><ul><li>Public Buildings : Assignable deduction! </li></ul>
  21. 21. So…What Else Do We Need? Better Building Codes <ul><li>Today’s building codes </li></ul><ul><li>affect ALL new buildings </li></ul><ul><ul><li>By 2010 : </li></ul></ul><ul><ul><li>Almost 5 million new housing units </li></ul></ul><ul><ul><li>Over 233 billion sq feet commercial floor space </li></ul></ul><ul><ul><li>By 2020 : </li></ul></ul><ul><ul><li>23.4 million new housing units </li></ul></ul><ul><ul><li>Over 1 trillion sq feet commercial floor space </li></ul></ul><ul><ul><li>By 2030 : </li></ul></ul><ul><ul><li>Over 41 million new housing units </li></ul></ul><ul><ul><li>Over 2 trillion sq feet commercial floor space </li></ul></ul><ul><ul><li>Source: EIA, Annual Energy Outlook 2008 </li></ul></ul>
  22. 22. At the State Level….A Slog???
  23. 23. <ul><li>Federal Legislation Pending </li></ul><ul><ul><li>Would Drive 30% Improvement in Residential and Commercial EE Codes by 2010; 50% by 2020 </li></ul></ul><ul><li>2009 Model Energy Code (IECC) Improves New Home Efficiency by approximately 13% over 2006 IECC </li></ul><ul><ul><li>EECC Sought 30% Improvement </li></ul></ul><ul><li>ASHRAE Goal (Commercial) is a 30% Improvement in Efficiency in the 2010 Code Cycle </li></ul><ul><li>Regulations Boost EE for New Federal Facilities by 30% </li></ul><ul><li>EECC Building on Broad Support Base: the Alliance to Save Energy and U.S. DOE, Utilities, Businesses, NGOs </li></ul>At the National Level…..Improving Model Codes
  24. 24. What Else Can We Do? Improve Existing Stock <ul><li>Appliance standards and labeling </li></ul><ul><li>Weatherization </li></ul><ul><li>Building labeling </li></ul><ul><li>Consumer education (e.g. ENERGY STAR) </li></ul>
  25. 25. What Else Can We Do?... INVEST in the Future <ul><li>Low investment in efficiency R&D </li></ul><ul><ul><li>Little R&D in energy sector </li></ul></ul><ul><ul><li>Fragmented buildings sector </li></ul></ul>
  26. 26. What Else Can We DO? INVEST Source: CRS Report: RS22858
  27. 27. What Else Can We Do? <ul><li>Fund Programs Authorized in EISA and EPACT </li></ul><ul><ul><li>Zero Net-Energy Commercial Building Initiative </li></ul></ul><ul><ul><li>$450 Million Public Information & Outrech Program </li></ul></ul><ul><li>Enact a Federal Energy Efficiency Resource Standard </li></ul><ul><li>Price Carbon (Cap’n’Trade or Tax) </li></ul>
  28. 28. <ul><li>Energy issues likely to be “front-and-center” </li></ul><ul><ul><li>Deepening economic woes </li></ul></ul><ul><ul><li>Continuing increases in home and business energy costs </li></ul></ul><ul><ul><li>Growing concern about national security </li></ul></ul><ul><ul><li>Urgent need to tackle climate change </li></ul></ul><ul><ul><li>Increasing support for “Green Jobs” and for using clean energy and efficiency as an “economic engine” </li></ul></ul><ul><li>Another Energy (and/or Stimulus) Bill BEFORE Climate Legislation </li></ul>Federal Forecast: ACTION
  29. 29. Federal Forecast: ACTION <ul><li>The Senate Debate on Climate Legislation (Lieberman-Warner) this past June </li></ul><ul><ul><li>Fails cloture 48-36; proponents claim 54 supporters; opponents claim less than 48 supporters </li></ul></ul><ul><ul><li>Calls for a carbon cap-and-trade program </li></ul></ul><ul><ul><li>Viewed as a “dress rehearsal” for 111 th Congress </li></ul></ul><ul><li>House Continues Work </li></ul><ul><ul><li>Energy & Commerce Committee Issues Discussion Draft </li></ul></ul><ul><ul><li>Markey Introduces “iCAP” legislation </li></ul></ul><ul><li>New President Supports Climate Legislation </li></ul><ul><li>Global Negotiations – Copenhagen, 2009 </li></ul>
  30. 30. Energy Efficiency in Climate Legislation
  31. 31. A Look at President-Elect Obama’s Platform… <ul><li>On Energy Efficiency </li></ul><ul><ul><ul><ul><li>Reduce Electricity Demand 15% by 2020 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Net-Zero Energy Buildings by 2030 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Overhaul Federal Appliance Standards </li></ul></ul></ul></ul><ul><ul><ul><ul><li>45% Improvement in New Federal Building Energy Use by 2014 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>25% Improvement in Existing Federal Building Energy Use by 2014 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>15% Overall Reduction in Federal Energy Use by 2015 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Flip Incentives for Utilities </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Invest in a “Smart Grid” </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Weatherize 1 Million Homes Annually </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Invest and Incent “Liveable Cities” </li></ul></ul></ul></ul>
  32. 32. The Challenges Can Be Overcome: Others are Doing More with Less!
  33. 33. An Invitation…….. <ul><li>Join the Alliance to Save Energy in Paris April 27 through 29 for EE Global </li></ul><ul><ul><li>Learn more about what other states, other countries, other businesses are doing to deploy energy efficiency; </li></ul></ul><ul><ul><li>See the latest technologies, products and services; </li></ul></ul><ul><ul><li>Build partnerships for success; </li></ul></ul><ul><ul><li>Share best practices; and, </li></ul></ul><ul><ul><li>Meet the leaders in energy efficiency from every corner of the globe and every sector of the global economy! </li></ul></ul>
  34. 34. EE GLOBAL 2009 <ul><li>April 27 -29, 2009 </li></ul><ul><li>Paris, France at Palais des Congres de Paris </li></ul><ul><li>Hosted by the Alliance to Save Energy </li></ul><ul><li>Organized by an International Steering Committee </li></ul><ul><ul><li>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 </li></ul></ul><ul><li>Program created by an International Program Committee </li></ul><ul><ul><li>Chaired by Paolo Bertoldi, I.E.S. – Renewable Energies Unit, Directorate General JRC, European Commission </li></ul></ul>