Perspectives on Energy Efficiency Opportunities and Strategies: Technology and Policy


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On September 14, Executive Vice President for Programs Brian Castelli keynoted the Riso International Energy Conference 2009 at the Technical University of Denmark, where he addressed the role of energy efficiency in reducing greenhouse gases (GHG).

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Perspectives on Energy Efficiency Opportunities and Strategies: Technology and Policy

  1. 1. Perspectives on Energy Efficiency Opportunities and Strategies: O ii dS i Technology and Policy Risø International Energy Conference 2009 September 14, 2009 14 Brian T. Castelli
  2. 2. Alliance Directors: Bi-Partisan Elected Officials and Industry Leaders  Guided by an elected Board of Directors  Leaders of environmental, consumer, and trade associations; state and local policy makers; corporate executives Senator Mark Jim Rogers, CEO Bi-partisan, bi-cameral Honorary Vice Chairs 2 Pryor (D-Ark.) Duke Energy
  3. 3. About the Alliance (cont’d) b h lli ( d)  NGO coalition of 150 prominent business, government, environmental and 150+ consumer leaders.  Conduct policy, education, research, technology deployment, market transformation and communication initiatives initiatives.  Headquartered in Washington, D.C. with operations in Eastern Europe, South Africa, Mexico, India and several states in the U.S. 3
  4. 4. Energy Efficiency – the Greatest Energy Resource h America's Greatest Energy Resource   Energy Efficiency and Conservation Improvements Since 1973  Have Reduced Annual Energy Consumption by 52 Quads in 2008  Energy Efficiency and Conservation 52 Petroleum 37 Natural Gas 24 Coal 22 Nuclear Electric Power Nuclear Electric Power 8 Biomass 4 Conventional Hydroelectric 2 Geothermal, Solar and Wind 1 0 10 20 30 40 50 60 Quads Energy Efficiency and Conservation 2008 Domestic Production Net Imports 4 Alliance to Save Energy, June 2009
  5. 5. Huge EE Potential Remains Energy Effi i E Efficiency Potential 40% P t ti l Adapted from McKinsey Analysis
  6. 6. Slide 5 A9 ASE, 4/7/2008
  7. 7. Many Barriers
  8. 8. Slide 6 A7 ASE, 4/7/2008
  9. 9. EE potential is uncertain i li i  Depends Note: - Discount rates Supply potential is - Economic growth uncertain too - Energy prices - Capital turnover - Technology development - Market barriers - Policy to overcome market barriers 7
  10. 10. The ‘New Green Economy’ and Green Jobs d b  The Th creation of so-called ‘ ti f ll d ‘green j b ’ h jobs’ has been touted as a major selling point for energy efficiency programs. - Investing $1 million in energy efficiency generates 19 to 25 jobs  Efficiencymore labor intensive than energy labor-intensive production - $1 million in energy production creates only 5 to 10 jobs  (MRG Associates 2004) 8
  11. 11. Energy Efficiency in Practice ffi i i i  Energy efficiency as a resource E ffi i - Energy Efficiency Resource Standards - ‘White tags’ - Carbon market offsets - Efficiency projects substituting for generation in electricity forward capacity markets 9
  12. 12. Energy Efficiency in Practice ffi i i i  Energy Effi i E Efficiency Resource Standards R St d d (EERS) - Efficiency counterpart to renewable portfolio standards - Require a certain percentage of a utility’s load to be met with efficiency measures - Implemented by several US states. Federal states program has been proposed alongside 10 renewable standards. States with Energy Efficiency Resource Standards
  13. 13. Energy Efficiency in Practice ffi i i i  Energy Effi i E Efficiency Resource Standards R St d d (EERS) - In some EERS programs, efficiency credits are tradable, making efficiency itself a , g y tradable commodity 11
  14. 14. Energy Efficiency in Practice ffi i i i  Efficiency in forward capacity markets - When electricity distribution networks hold auctions f generators t bid f contracts, some ti for t to for t t distribution networks now allow entities to propose efficiency programs to meet projected load - The Federal Energy Regulatory Commission recently required that the PJM interconnection (serving much of the mid-Atlantic coast region mid Atlantic and some of the mid-west region) allow providers of efficiency programs to bid in their forward yp g capacity market 12
  15. 15. Energy Efficiency in Practice ffi i i i  Evaluation, Measurement, Evaluation Measurement & Verification - ‘EM&V’ – how to measure the additionality of efficiency programs? ffi i ? - With programs promising or claiming quantifiable energy savings, we must tifi bl i t develop metrics to measure success - Several US states have developed their own protocols, but they vary  The same CFL bulb gets credited with different savings depending on what state it’s in, based on different states’ assumptions states 13  Similar issue across EU
  16. 16. End-Use Technology Example Smart Grid - Potential Benefits  Enhance customer service  Improve operational efficiency E h Enhanced DR and l d control d d load t l  Customer behavior  Support new utility business models I t Integrate intermittent RE and PHEVs t i t itt t d PHEV “The Green Grid; Energy Savings and Carbon Emissions Reductions Enabled by a Smart Grid.” Report, No. 1016905
  17. 17. End-Use Technology Example d h l l  Smart grid and consumer d t S t id d data display systems - Allow real-time or near-real-time knowledge of energy usage. g gy g - Pilot program energy use reductions highly variable: 1%-27% (Darby 1% 27% (Darby, 2006) - Design of human interface (viz. data (viz display) very important, also real-time pricing 15
  18. 18. End-Use Technology Example d h l l  Smart grid and consumer d t S t id d data display systems - Could facilitate demand response  Not ot necessarily reducing tota e e gy use d ect y – ecessa y educ g total energy directly peak shaving tends to just move demand to other times of day, though y g it could reduce transmission line loss 16
  19. 19. Supply-Side Technology Example l  Combined Heat d Power C bi d H t and P - Greater fuel use efficiency through the capture of waste heat in electricity generation, or generation of electricity while producing heat - Can be used in a y thermal ge e a o Ca any e a generation system - Popular in Scandinavia - Increasingly available in smaller-scale units 17
  20. 20. Miracles Wanted i l d  American Ph i l Society list (Sept. 2008) A i Physical S i t li t (S t - energy storage -solid-state lighting - thermoelectric devices -lightweight materials - advanced windows -advanced ventilation - ultrathin insulators -thermodynamic cycles - behavioural research  Others - High temperature superconductivity - Clean energy resources
  21. 21. The American Political Perspective i  Energy efficiency is b E ffi i i becoming i i increasingly i l visible in national policy-making - Energy Policy Act of 2005 (EPAct ‘05) - Energy Independence and Security Act of 2007 (EISA) - Stimulus (February 2009) - Energy & Climate bill now in Congress  AmericanClean Energy and Security Act (House of Representatives) and American Clean Energy Leadership Act (Senate) 19
  22. 22. 2005 Federal Energy Legislation  Energy Policy Act of 2005 will by 2020: - Reduce U.S. energy use by 2% - Reduce electricity demand by 4% - Reduce oil use by 0%  Energy savings from - Appliance standards - Tax incentives – lots of incentives for buildings - Federal energy management - New programs authorized (but not funded – some have since been funded in the stimulus bill) 20
  23. 23. 2007 Federal Energy Legislation  Energy Independence and Security Act of 2007 will by 2020 (2030): - Reduce U.S. energy use by 4% (7%) gy y ( ) - Reduce electricity demand by 4% (5%) - Reduce oil use by 5% (10%) - Reduce CO2 emissions by 5% (9%) %  Energy Savings from: - Vehicle CAFE standards - Appliance standards - F d l energy management Federal t - Certain building standards - R&D program authorizations 21
  24. 24. American Recovery and  Reinvestment Act • Major focus: the largest spending and tax bill in the  M j f th l t di d t bill i th nation’s history • Larger than the New Deal • Big time opportunities … • But also big time issues  about implementation about implementation • Major victory for the  Administration, but not without need for $150 billion  $ compromise to secure moderate Rs and get to 60  votes in the Senate.
  25. 25. Stimulus: Potentially $65 Billion related to energy efficiency 23 Funding in Millions of US Dollars
  26. 26. Core Energy EfficiencyFunding ff d  SEP  Smart Grid Investment Grant  Smart Grid Investment Grant - Appropriated: $3.1 billion Program - Appropriated: $4.5 billion  EECBG  C G - Appropriated: $3.2 billion  Smart Grid Demonstration  Projects  WAP - Appropriated: $615 million - Appropriated: $5 billion  HUD s EE Public Housing  HUD’s EE Public Housing  Green Jobs Capital Funds - Appropriated: $500 million - Appropriated: $4 billion  HUD’s Green Retrofit Program - Appropriated $250 million 24
  27. 27.  Cap on carbon: 83% reduction in covered  C b 83% d ti i d emissions by 2050 (85% of emissions are covered)  Building codes, building labels, appliance  standards and labels standards and labels  Renewable electricity standard of 20% by 2020 – a quarter may be met through EE, or 40% if  g governor requests q  Vehicle emissions standards L d Land use planning to reduce VMT l i d VMT 25
  28. 28.  Renewable electricity standard of 15% by 2021 R bl l t i it t d d f 15% b 2021  4% may come from efficiency if governor petitions  Improvements in model building energy codes  30% by 2010  50% by 2016  Energy Efficiency in Manufacturing  Funding for research and implementation of EE technologies, expansion of IACs  Clean energy investment fund Cl i t tf d  Loans, loan guarantees, etc., for commercialization of clean energy  technologies 26
  29. 29.  New energy efficiency standards N ffi i t d d  for portable lighting fixtures, commercial furnaces and reflector  lamps; new appliance test procedures lamps; new appliance test procedures  State building retrofit grant program  Grants for retrofits of residential and commercial buildings G t f t fit f id ti l d i l b ildi  Voluntary building energy performance information  program - To display relative energy performance; raise public awareness  Residential High‐Performance Zero‐Net‐Energy Buildings  Initiative - Goal to enable residential buildings without net emissions to be   27 cost‐effective by 2020
  30. 30. Thank You! h k Brian Castelli Alliance t S Alli to Save E Energy @ bcastelli@ase.orgg 28