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


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Alliance Associate Schneider Electric hosted Alliance President Kateri Callahan at its North America Leadership Forum, where Callahan discussed opportunities and obstacles in the energy efficiency movement in 2010 and beyond.

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  • Speaking role: Guest speaker at Schneider’s annual North American leadership meetingAttendance: +200 Schneider employees (senior-level management) – mainly U.S. but also some Canada and MexicoLength:30minutes (unless Zach Wamp confirms, in which case you will share speaking slot with him; Schneider said Wamp is unlikely) followed by Q&APresentation topic: largely open-ended: Schneider asked that you 1) talk in depth about the Alliance; 2) discuss the “global energy dilemma” and 3) how it has created opportunities for Schneider Electric North America
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  • Looking Ahead: 2010 and Beyond – The Decade of Energy Efficiency

    1. 1. Kateri Callahan, President<br />Alliance to Save Energy<br />Schneider Electric North America Leadership Forum<br />January 27, 2010<br />Looking Ahead: 2010 and Beyond The Decade of Energy Efficiency<br />
    2. 2. Presentation Overview<br />A few words about the Alliance<br />Why energy efficiency? Why Now?<br /> Policy required to deploy energy efficiency at scale<br />Kateri’s “Crystal Ball”: Forecasting future federal policy action on EE<br />
    3. 3. What is the Alliance to Save Energy? <br />Mission: <br /><ul><li>To promote energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security.</li></ul>Organization:<br /><ul><li>Staffed by 60+ professionals
    4. 4. 32 years of experience
    5. 5. $12 million annual budget
    6. 6. Recognized as the premier energy efficiency organization in the world</li></li></ul><li>What is the Alliance to Save Energy? <br /><ul><li>Non-profit organization headquartered in U.S.; operations world-wide
    7. 7. Led by Senator Mark Pryor (D-Ark.) and Peter Darbee, President and CEO of Pacific Gas and Electric
    8. 8. Includes 10 Members of Congress – Bi-Cameral; Bi-Partisan
    9. 9. Also includes environmental, consumer, and trade associations heads, state and local policy makers, corporate executives</li></li></ul><li>Working with and Across All Sectors of the Economy <br /><ul><li> 170 companies, organizations, and institutions in Associates Program
    10. 10. Associates Program membership represents all economic sectors
    11. 11. Initiatives underway in research, policy advocacy, education, technology deployment, market transformation and communications</li></li></ul><li>18<br />18<br />Other renewables<br />Other renewables<br />Biomass<br />Biomass<br />16<br />16<br />Hydro<br />Hydro<br />14<br />14<br />Nuclear<br />Nuclear<br />Gas<br />Gas<br />12<br />12<br />Oil<br />Oil<br />10<br />10<br />Coal<br />Coal<br />billion tonnes of oil equivalent<br />billion tonnes of oil equivalent<br />8<br />8<br />6<br />6<br />4<br />4<br />2<br />2<br />0<br />0<br />1980<br />1990<br />2000<br />2010<br />2020<br />2030<br />1980<br />1990<br />2000<br />2010<br />2020<br />2030<br />WHY EE? WHY NOW?<br />Global “Business as Usual” is Unsustainable <br />Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms<br />
    12. 12. Why More EE? Why Now?Energy Use is a Global Climate Issue<br />Source: Energy Information Administration<br />
    13. 13. Why Now? U.S. Growth in Energy Use Poses a National Security Threat<br />
    14. 14. In sum, energy use has a direct effect on…<br />Global Emissions:<br /> Energy use directly linked to <br /> GHG emissions..U.S. example:<br /><ul><li>Security:Unchecked growth in energy demand can:
    15. 15. Accelerate fossil fuel depletion
    16. 16. Increase our reliance on foreign sources of energy
    17. 17. Economy:
    18. 18. 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.</li></li></ul><li>Why Energy Efficiency?America’s Greatest Energy Resource<br />Reducing Energy Use, Saving Money, and Powering the domestic economy for over 30 years:<br />
    19. 19. Source: McKinsey Global Institute<br />Efficiency: Enormous Potential for Savings in ALL Sectors…<br />
    20. 20. Energy efficiency should be fully considered in GHG reductions. All items to the left of the arrow represent “negative marginal costs”<br />And: A No-Cost Way to Reduce GHG Emissions<br />
    21. 21. Many “Non-Price” Barriers<br />Energy Subsidies<br />Uncertain costs?<br />Externalities<br />Choices<br />SPLIT INCENTIVES<br />Lock-in <br />Small savings<br />Bounded Rationality <br />Information<br />
    22. 22. Deploying EE at Scale Requires: A Foundation of Public Policy<br /><ul><li>To lock in savings for consumers and businesses
    23. 23. To achieve market penetration
    24. 24. To gain foothold in market</li></ul>To encourage technological innovation<br />
    25. 25. Public Policy Helped Deliver EE Into the U.S. Economy<br />
    26. 26. The EE Policy March Quickens<br />
    27. 27. Bending Down the Energy Demand Curve: Policies Matter<br />
    28. 28. <ul><li>Reduce electricity use 15% by 2020
    29. 29. Net-zero energy buildings by 2030
    30. 30. Commitment to building U.S. clean energy economy
    31. 31. Commitment to address climate change
    32. 32.  
    33. 33. Investment incentives for “livable cities”</li></ul>President Obama: EE Advocate in Campaign<br />
    34. 34. 12 months later – Opening the Decade of Energy Efficiency<br />January 2009<br />October<br />November<br />December<br />October<br />November<br />December<br />June<br />June<br />July <br />May<br />May<br />May<br />Executive Order on federal energy use<br />House Passes $75 Billion “Jobs for Main Street” bill<br />Stimulus package<br />American Clean Energy and Security Act (ACES) <br />Ongoing approps in House/Senate climate/energy bills <br />HVAC standards agreement<br />President’s Fiscal Year 2010 budget<br />HOUSEPASSES ACES (6/26)<br />COP15: Secretary Chu announces Climate REDI Program<br />Outdoor Lighting standards<br />President’s new CAFÉ standards<br />DOE: new lighting standards<br />Bilateral agreement: U.S.-China Energy Efficiency Action Plan<br />
    35. 35. Stimulus: $65B Related to Energy Efficiency<br />Funding in Millions of US Dollars<br />
    36. 36. ARRA: Built on the Five Pillars of Good Public Policy <br /><ul><li>RD&D
    37. 37. Smart Grid ($4.5 bill)
    38. 38. DOE RD&D ($2.25 billion)
    39. 39. Incentives
    40. 40. Extension and Increase in consumer EE tax incentives
    41. 41. Codes & Standards
    42. 42. “Conditions” State funding on strong building codes
    43. 43. Education & Outreach
    44. 44. State Energy Star rebate programs ($300 million)
    45. 45. Government Leadership by Example
    46. 46. Federal “High-Performance Green Buildings” ($4.5 billion)</li></li></ul><li>Core Energy FundingObligation & Spending to date<br />State Energy Program<br />Appropriated: $3.1 billion<br />Obligated: $3.1 billion<br />Spent: $45 million (2%)<br />Energy Efficiency and Conservation Block Grants<br />Appropriated: $3.2 billion<br />Obligated: $2.3 billion<br />Spent: $78 million (3%)<br />Weatherization Assistance Program<br />Appropriated: $5.0 billion<br />Obligated: $4.8 billion<br />Spent: $441 million (9%)<br />Appliance Rebates<br />Appropriated: $300 million<br />Obligated: $300 million<br />Spent: $276 thousand<br />Smart Grid Grants and Demonstration<br />Appropriated: $4.2 billion<br />Obligated: $2.5 billion<br />Spent: $4 million (0.1%)<br />RD&D (EERE and ARPA-E)<br />Appropriated: $1.2 billion<br />Obligated: $484 million<br />Spent: $43 million (4%)<br />In core EE, $560 million of $11.6 billion spent (5%)<br />
    47. 47. Projected EE Funding, 2006-2012<br />
    48. 48. Leading by example<br /><ul><li>Agencies to meet all EISA targets, plus:
    49. 49. Achieve 30% reduction in vehicle fleet petroleum use by 2020
    50. 50. Achieve 26% reduction in potable & 20% reduction in industrial, landscaping, & agricultural water consumption by 2020
    51. 51. Comply with new EPA storm water management guidance
    52. 52. Achieve 50% recycling & waste diversion by 2015
    53. 53. Requires that 95% of all applicable procurement contracts will meet sustainability requirements
    54. 54. Requires 15% of buildings meet the Guiding Principles for High Performance and Sustainable Buildings by 2015
    55. 55. Design all new Federal buildings which begin the planning process by 2020 to achieve zero-net energy by 2030 </li></ul>Executive Order 135814:Federal Leadership in Environmental, Energy, and Economic Performance<br />October 5, 2009: President Obama signs EO 13514 <br />For more information:<br />www.femp.energy.gov<br />6<br />
    56. 56. NZE: Commercial Buildings Consortium (CBC)<br />Goals:<br />2030: New construction net-zero energy (NZE)<br />2050: Entire stock NZE<br />Comprehensive approach (R&D & deployment)<br />Coordinate (initiate) national and local actions<br />Measure, benchmark, disclose energy performance<br />R&D for critical technologies and systems <br />Demonstrate scalable, replicable system solutions<br />Transform market: education/training, finance, appraisal, incentives, codes, buyer demand-pull<br />Funding from Omnibus 2009 Appropriations bill:<br />$33 million to initiate<br />Plus about $50 million from ARRA (stimulus) funds<br />
    57. 57. Up Next???Climate & Clean Energy Bill<br />Senate <br />Has Adopted Energy “Piece” <br />Will consider climate “Piece” in early 2010??<br />House<br />Adopted Climate & Energy bill in June<br />Additional Support for Energy Efficiency in legislation<br />Significant Funding through CO2 Allowances (House bill)<br />Building Labeling Programs (both)<br />Utility Energy Efficiency Resource Standards (both)<br />Innovative Finance Programs (both)<br />Appliance Standards (both)<br />And much more…..<br />
    58. 58. The role of energy efficiency in climate legislation<br /><ul><li>Efficiency is the quickest, cheapest way to reduce energy consumption and lower greenhouse gas emissions
    59. 59. In ACES, energy efficiency provisions alone would:
    60. 60. Save American households about $154 per year in 2025. (EPA)
    61. 61. Reduce carbon allowance price by 1.5 percent between 2015-2050. (EPA)
    62. 62. On the whole, ACES would create on average 120,000 new energy efficiency jobs nationwide each year between 2012-2020.(Center for American Progress)</li></li></ul><li>The Outlook Should Waxman-Markey Become U.S. Law<br />
    63. 63. Jobs Bill Overview<br />Narrowly passed in House (Dec. 2009)<br />Of $75 billion:<br />$27.5B towards highway infrastructure<br />$8.4B for public transportation ($.8B Amtrak)<br />$2B for DOE Loan Guarantees – EE Included<br />$750M – job training for high growth fields<br />Also includes:<br />Small business loans<br />Moving targets: 2 key proposals<br />HOME STAR<br />Building STAR<br />
    64. 64. HOME STAR (“Cash for Caulkers”)<br />Recommended by PERAB<br />$7 -10 billion for residential retrofits<br />Two types of consumer incentives:<br />SILVER STAR Prescriptive Path: $5.5 billion<br />Rebates for specific energy saving investments <br />50% of project cost, up to $3,000 per home<br />Covered measures: air & duct sealing; insulation; window and door replacement; HVAC, water heater, and appliance upgrades<br />GOLD STAR Performance Path: $2.3 – 3 billion<br />Rebates for demonstrated energy savings<br />$3,000 for 20% savings, plus $1,500 for each additional 5%<br />Up to 50% of project cost and $12,000<br />Proposal likely to include a financing component<br />
    65. 65. Building STAR<br />Commercial Buildings counterpart to HOME STAR<br />~$8 billion for commercial, industrial and multi-family building retrofits<br />Two types of consumer incentives:<br />Rebates<br />Like SILVER STAR, for specific energy saving investments <br />Covered measures: SILVER STAR measures plus low-slope roofing, variable speed motors, lighting, water efficiency, energy management and training<br />Tax Incentive Expansions<br />Prescriptive and performance pathways in existing code<br />Increase incentives for buildings demonstrating energy savings 50% above code for lighting, envelope, HVAC <br />Expand other tax incentives: refundable tax credits to certain entities, technology specific incentives (variable speed drives, mechanical insulation)<br />
    66. 66. Kateri’s Crystal Ball:U.S. Energy Efficiency Policy in 2010<br />Clean Energy Legislation w/ Strong EE <br />Building Codes<br />Appliance Standards<br />Innovative Financing Mechanisms<br />Significant Funding from Allowances <br />New Jobs Bill<br />Loan Guarantees<br />Workforce Training<br />Federal Transit & Fixed Guideways<br />Home Star??? Residential Retrofit<br />Building Star??? Residential Retrofit<br />Stagnant FY 2011 Appropriations <br />International Accords & Binding International Climate Treaties???<br />
    67. 67. EE Global 2010: Ideas, Intersections, Solutions to Power an Energy-Efficient Economy<br />May 10-12, 2010 : Washington D.C. Convention Center <br /><ul><li>Established in 2007; held annually, rotating among 5 regions of the world
    68. 68. Africa, Asia/Pacific, Europe, Latin America, North America
    69. 69. Organized by an International Steering Committee </li></ul> Honorary Government Co-Chairs Industry Chair Vice Chairs<br /><ul><li>Draws 700+ stakeholders
    70. 70. High-level – 40% of 2009 attendees self-identified as executives, and another 50% as managers
    71. 71. International –40 countries represented in 2009
    72. 72. Representative of all sectors – buildings, industrial, utilities, transportation, finance
    73. 73. Even split of government (28%), business (37%) and non-profit (28%) in 2007 & 2009</li></ul>Rep. Edward Markey <br />James E. RogersChairman, President & CEO, <br />Duke Energy<br />Robert J. DixonSr. VP & Global Head <br />Efficiency & Sustainability, <br />Building Automation, <br />Siemens Building Technologies Inc.<br />David SzczupakEVP, Global Product Organizations, <br />Whirlpool Corporation<br />Nobuo TanakaExecutive Director,<br />IEA<br />Sen. Mark Pryor<br />Christopher B. Curtis President & CEO, <br />N.A. Operating Div.<br />& Buildings Business, <br />Schneider Electric<br />
    74. 74. Questions?Thank you!<br />Contact information:<br />Kateri Callahan<br />kcallahan@ase.org<br />+1-202-530-2219<br />