EU Workshop: A Shared Vision for Energy & Climate


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In her panel, 'Energy Efficiency: Greatest New Resource", Callahan looks at the chief forcing mechanisms - regulations and financial incentives - that have effectively accelerated the deployment of energy efficieny in the U.S. Her presentation covers the recent history of energy efficiency in U.S. policy, marked by President Obama's energy platform and FY2010 budget, as well as his recent overhaul of corporate average fuel economy standards. Callahan also examines the wealth of energy efficiency funding included in the American Recovery and Reinvestment Act of 2009, and the potential for carbon emissions reductions in the House of Representative's American Clean Energy and Security Act of 2009.

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  • EU Workshop: A Shared Vision for Energy & Climate

    1. 1. Mining America’s “Greatest Energy Resource” for Tomorrow’s Green Economy EU Workshop: A Shared Vision for Energy & Climate Brussels, Belgium, May 28, 2009 Kateri Callahan, President
    2. 2. <ul><li>A Few Words About the Alliance </li></ul><ul><li>Energy Efficiency: America’s Greatest Energy Resource </li></ul><ul><li>Mining Energy Efficiency through Public Policy </li></ul><ul><li>The Ramp-up to America’s Green Energy Future </li></ul><ul><ul><li>Stimulus Funding for EE </li></ul></ul><ul><ul><li>Increasing Federal Appropriations for EE </li></ul></ul><ul><ul><li>Driving EE as Part of Climate Legislation </li></ul></ul>Overview
    3. 3. What is the Alliance to Save Energy? <ul><li>Mission: </li></ul><ul><li>To promote energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security. </li></ul><ul><li>The Alliance is… </li></ul><ul><li>Staffed by 50+ professionals </li></ul><ul><li>32 years of experience in policy, research, education, communications, technology deployment and market transformation </li></ul>
    4. 4. Alliance Directors: Bi-Partisan Elected Officials and Industry Leaders Jim Rogers, CEO Duke Energy Senator Mark Pryor (D-Ark.) <ul><li>Guided by an elected Board of Directors </li></ul><ul><li>Leaders of environmental, consumer, and trade associations; state and local policy makers; corporate executives </li></ul>Bi-partisan, bi-cameral Honorary Vice Chairs
    5. 5. Forging Alliances: Business, Government & 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>Headquartered in Washington, D.C. with operations in several US states, Eastern Europe, South Africa, Mexico, and India </li></ul>
    6. 6. Proof that Energy Efficiency Works
    7. 7. Imperative for More Energy Efficiency Source: Energy Information Administration
    8. 8. EE: Enormous Potential for Savings in ALL Sectors… Source: McKinsey Global Institute
    9. 9. EE: The No-Cost Way to Reduce GHG Emissions
    10. 10. <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>The Challenge? Market Distortions
    11. 11. Five Tenants of Sound EE Public Policy <ul><li>Research, development and deployment (RD&D) </li></ul><ul><li>Education and outreach </li></ul><ul><li>Incentives </li></ul><ul><li>Standards & Codes </li></ul><ul><li>Government “Leadership by Example” </li></ul>
    12. 12. A Big Year for Energy Efficiency in Public Policy American Recovery & Reinvestment Act (ARRA, or Stimulus Bill) President’s Fiscal Year 2010 budget American Clean Energy and Security Act (ACES) President’s new CAFÉ standards 2008/2009 October 08 May 09 May 09 May 09 January 09 Obama’s election platform
    13. 13. President Obama: Energy Efficiency Advocate <ul><ul><ul><li>Reduce electricity use 15% by 2020 </li></ul></ul></ul><ul><ul><ul><li>Net-zero energy buildings by 2030 </li></ul></ul></ul><ul><ul><ul><li>Overhaul federal appliance standards </li></ul></ul></ul><ul><ul><ul><li>By 2014, reduce energy use in new federal buildings 45%; 25% in existing federal buildings </li></ul></ul></ul><ul><ul><ul><li>Flip incentives for utilities </li></ul></ul></ul><ul><ul><ul><li>Invest in a “smart grid” </li></ul></ul></ul><ul><ul><ul><li>Weatherize 1 million homes/year </li></ul></ul></ul><ul><ul><ul><li>Investment incentives for “livable cities” </li></ul></ul></ul><ul><ul><ul><li>Showed early commitment to large green energy component in the economic recovery bill </li></ul></ul></ul>
    14. 14. 2009 American Recovery & Reinvestment Act (Stimulus Bill) ~ $75 Billion Potential for EE
    15. 15. ARRA: Built on the Five Pillars of Good Public Policy <ul><li>RD&D </li></ul><ul><ul><li>Smart Grid ($4.5 bill) </li></ul></ul><ul><ul><li>DOE RD&D ($2.25 billion) </li></ul></ul><ul><li>Incentives </li></ul><ul><ul><li>Extension of tax incentives </li></ul></ul><ul><li>Codes & Standards </li></ul><ul><ul><li>“ Conditions” State funding on strong building codes </li></ul></ul><ul><li>Education & Outreach </li></ul><ul><ul><li>State Energy Star rebate programs ($300 million) </li></ul></ul><ul><li>Government Leadership by Example </li></ul><ul><ul><li>Federal “High-Performance Green Buildings” ($4.5 billion) </li></ul></ul>
    16. 16. President Obama’s FY 2010 Budget: A+ in EE <ul><li>108% Increase Over FY 2009 Request, including: </li></ul><ul><li>$10 million increase for the industrial sector </li></ul><ul><li>$98 million increase in the Department of Energy’s (DOE) Building Technologies Program </li></ul><ul><ul><li>includes $10 million for building energy codes.  </li></ul></ul><ul><li>$10 million for the Federal Energy Management Program </li></ul><ul><li>$25 million increase for the State Energy Program </li></ul><ul><li>increases for DOE’s ENERGY STAR program, commercial buildings, residential buildings, R&D, and equipment standards.  </li></ul>
    17. 17. A New Era for U.S. Fuel Economy Standards <ul><li>Obama Administration National Fuel Efficiency Program </li></ul><ul><li>Requires 35.5 mpg fleet-wide average fuel economy by 2016 </li></ul><ul><ul><li>5% improvement annually (2012 – 2016) </li></ul></ul><ul><ul><li>Projected to save1.8 billion barrels of oil </li></ul></ul><ul><ul><li>Projected to reduce carbon emissions equivalent to taking 177 million cars off the road for a year </li></ul></ul>
    18. 18. Next Up – Federal Climate and/or Energy Legislation? <ul><li>House Energy and Commerce Reports “American Clean Energy and Security Act” (ACES) </li></ul><ul><ul><li>Partisan vote – Signals Potential House Passage </li></ul></ul><ul><ul><li>Two More House Committees to Consider </li></ul></ul><ul><li>Senate EPW Committee Waits on House Action </li></ul><ul><li>Senate Energy Committee Working on Energy Legislation </li></ul><ul><li>Copenhagen December “Deadline” Looms </li></ul>
    19. 19. ACES: Cap is the crown jewel <ul><li>85% of US GHG emissions covered </li></ul><ul><ul><li>Could be higher </li></ul></ul><ul><li>Covered emissions reduced 83% in 2050 </li></ul><ul><li>Defend and protect the cap! </li></ul>
    20. 20. ACES: Goals for Energy Efficiency <ul><li>Policies will no longer save more energy. Instead they will— </li></ul><ul><li>Reduce cost of meeting carbon cap by </li></ul><ul><li>Addressing market barriers, especially among energy end-users </li></ul>
    21. 21. ACES: EE Programs <ul><li>Complementary EE policies </li></ul><ul><ul><ul><li>Codes, standards, building labeling, electric efficiency resource standards </li></ul></ul></ul><ul><li>Complementary Programs </li></ul><ul><ul><li>EE in WM is 3-6% of allowance value </li></ul></ul><ul><ul><ul><li>$81 to $167b over 2012-2050 </li></ul></ul></ul><ul><ul><li>12.5% of allowance value could get </li></ul></ul><ul><ul><ul><li>Allowance prices 10% lower </li></ul></ul></ul><ul><ul><ul><li>Electric, nat gas and petrol prices 1-3% lower </li></ul></ul></ul><ul><ul><ul><li>Electric and natural gas demand 3-7% lower </li></ul></ul></ul><ul><ul><ul><li>according to EPA analysis April 20 </li></ul></ul></ul>
    22. 22. EE Funding through Allowance Allocations <ul><li>Calculations based on allocations in the Waxman-Markey substitute amendment & total allowance values from EPA’s Preliminary Analysis of the Waxman-Markey discussion draft. </li></ul><ul><li>Includes SEED accounts, building codes, natural gas utilities, heating oil and propane consumers, and one eighth of Clean Energy Innovation Centers funding </li></ul><ul><li>Does not include noncompulsory utility funding for energy efficiency, revenues from the renewable electricity standard or separate authorizations. </li></ul>
    23. 23. Building Energy Codes: Development <ul><li>National energy codes with aggressive energy savings targets: </li></ul><ul><ul><li>30% savings in 1 year </li></ul></ul><ul><ul><li>50% savings in 2014 (homes), 2015 (comm.) </li></ul></ul><ul><ul><li>5% more savings every 3 years </li></ul></ul><ul><li>ICC and ASHRAE get first chance, with DOE help </li></ul><ul><li>DOE sets if they don’t </li></ul>
    24. 24. Building Efficiency Labels <ul><li>EPA to establish model ratings and labels </li></ul><ul><ul><li>Actual performance and designed performance ratings </li></ul></ul><ul><ul><li>Build up EIA surveys (CBECS, RECS) as basis </li></ul></ul><ul><li>Implementation: </li></ul><ul><ul><li>EPA to work with states and local governments </li></ul></ul>
    25. 25. Appliances and Lighting: New Standards <ul><li>Lighting </li></ul><ul><ul><li>Outdoor lighting </li></ul></ul><ul><ul><li>Portable light fixtures, GU-24, BR lamps </li></ul></ul><ul><li>Other </li></ul><ul><ul><li>Commercial furnaces </li></ul></ul><ul><ul><li>Hot food holding cabinets </li></ul></ul><ul><ul><li>Water coolers + dispensers </li></ul></ul><ul><ul><li>Electric spas + hot tubs </li></ul></ul><ul><li>TV test procedure </li></ul>
    26. 26. Standards + Labels Process <ul><li>Standards process: </li></ul><ul><ul><li>Multiple metrics </li></ul></ul><ul><ul><li>Criteria for setting the standard level </li></ul></ul><ul><ul><li>Manufacturer sales reporting </li></ul></ul><ul><ul><li>Petitions for test procedures </li></ul></ul><ul><ul><li>Enforcement by states, state waiver criteria, preemption of state codes </li></ul></ul><ul><li>Labels </li></ul><ul><ul><li>Carbon on Energy Guide label </li></ul></ul><ul><ul><li>Smart grid in Energy Star and Energy Guide </li></ul></ul><ul><ul><li>Reforms of Energy Star: rating system </li></ul></ul>
    27. 27. Utilities: Efficiency and Renewable Electricity Standard <ul><li>Utilities meet 20% of electric demand by 2020 from efficiency and renewables </li></ul><ul><ul><li>Efficiency up to 5%, or up to 8% on request of governor. </li></ul></ul><ul><ul><li>Additional savings likely around 3% </li></ul></ul><ul><li>Estimated savings from efficiency programs, not a sales limit. </li></ul><ul><li>In-state trading through bilateral contracts </li></ul><ul><li>Also to set peak demand reduction goals </li></ul>
    28. 28. Transportation <ul><li>Light duty vehicle emission standards </li></ul><ul><li>Emission standards for trucks, trains, ships, and airplanes </li></ul><ul><li>Require states to set emissions reduction goals and large MPOs to set transportation plans that meet them. </li></ul>
    29. 29. Authorizations <ul><li>Building energy code implementation </li></ul><ul><li>REEP building retrofits </li></ul><ul><li>Building labeling programs </li></ul><ul><li>Manufactured home replacement </li></ul><ul><li>“ Best-in-class” appliance program </li></ul><ul><li>Waste heat recovery grants </li></ul><ul><li>Vehicle electrification and plug-in vehicle programs </li></ul><ul><li>SmartWay heavy duty vehicle program </li></ul><ul><li>Clean Energy Innovation Centers </li></ul><ul><li>Low Income energy efficiency program </li></ul>
    30. 30. Savings Estimates <ul><li>Potential energy and carbon savings from key policies: </li></ul>Year Energy Savings CO 2 Savings Building Codes 2030 3 Quads 200 MMT Appliance Standards 2020 0.2 Quads 12 MMT Electricity Standard 2020 1 Quad 58 MMT
    31. 31. And Moving Beyond…. <ul><li>Requirements for Deploying Energy Efficiency Fully: </li></ul><ul><ul><li>Wise Investment </li></ul></ul><ul><ul><li>Effective Implementation of Public Policies </li></ul></ul><ul><ul><li>Sound Evaluation, Measurement & Verification </li></ul></ul><ul><ul><li>Rapid and Global Migration of Best Practices and Best Policies </li></ul></ul><ul><li>The Results? </li></ul><ul><ul><li>Improved Economies Around the World </li></ul></ul><ul><ul><li>Enhanced Global Energy Security </li></ul></ul><ul><ul><li>A Better Environment </li></ul></ul>
    32. 32. Thank you! <ul><li>For More Information…. </li></ul><ul><li>Kateri Callahan </li></ul><ul><li>President </li></ul><ul><li>Alliance to Save Energy </li></ul><ul><li>1850 M Street, NW </li></ul><ul><li>Washington, D.C. 20036 </li></ul><ul><li>[email_address] </li></ul><ul><li> </li></ul><ul><li>202.857.0666 </li></ul>