Towards an Energy-Efficient Economy: Market Solutions, Policy and Barriers


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Kateri Callahan
President, Alliance to Save Energy

February 17, 2010
Eilat- Eilot: International Renewable Energy Conference

Why isn’t the market driving cost-effective energy efficiency? Callahan joined a distinguished group of presenters (including Yael Cohen Paran, CEO of Israel Energy Forum) and Darrell Smith (president of the International Window Film Association) in a panel chaired by Ze’ev Gross, Israeli minsiter of National Infrastructures Resource Management to discuss existing barriers and possible solutions towards effectively penetrating the market with energy efficient technologies and practices.

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  • Length: 12 minutes presentation
  • Annual world-wide investment of $170 billion in energy efficiency through 2020 could: cut global growth in energy demand by ½! save $900 billion a year in avoided energy costs dramatically reduce greenhouse gas emissions Source: The McKinsey Global Institute “ Energy efficiency is the nation’s greatest energy resource—we saved 50 quads in 2007 due to energy efficiency and conservation efforts taken since 1973. This is more energy than we get from any single energy source, including oil.”   “ If we tried to run today’s economy without the energy-efficiency improvements that have taken place since 1973, we would need nearly 50% more energy than we use now. This is more than what we get from any single energy source, including oil, natural gas, coal, and nuclear power.”
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  • Towards an Energy-Efficient Economy: Market Solutions, Policy and Barriers

    1. 1. Towards an Energy-Efficient Economy Market Solutions, Policy & Barriers Kateri Callahan, President Alliance to Save Energy February 17, 2010 Eilat- Eilot: International Renewable Energy Conference
    2. 2. Presentation Overview <ul><li>A few words about the Alliance to Save Energy </li></ul><ul><li>Why energy efficiency? Our greatest energy resource </li></ul><ul><li>Why isn’t market driving cost-effective energy efficiency? </li></ul><ul><li>What are the solutions to market distortions? </li></ul>
    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>Organization: </li></ul><ul><li>Staffed by 60+ professionals </li></ul><ul><li>32 years of experience </li></ul><ul><li>$12 million annual budget </li></ul><ul><li>Recognized as premier EE organization in the world </li></ul>
    4. 4. Working with and Across All Sectors of the Economy - 170 companies, organizations, and institution in Associates Program - Associates Program membership represents all economic sectors - Initiatives underway in research, policy advocacy, education, technology deployment, market transformation and communications
    5. 5. <ul><li>3 in India </li></ul><ul><li>1 in Pakistan </li></ul><ul><li>2+ pending in China </li></ul><ul><li>5 more in Asia-Pacific region </li></ul><ul><li>4 in Africa </li></ul><ul><li>3 in Latin America (Mexico, Central America, Caribbean) </li></ul><ul><li>1 in Ukraine </li></ul><ul><li>1 in Eastern Europe/Eurasia region </li></ul><ul><li>2 in North America </li></ul>Global Reach: 22+ International Projects
    6. 6. Why? +30 years of savings… 4
    7. 7. Creates Enormous Savings <ul><li>AVOIDING roughly 2.5 billion tons of CO2 annually </li></ul><ul><li>Saving roughly $400 billion annually </li></ul>
    8. 8. The Challenge? Market Distortions <ul><li>Principal Agent or “Split Incentives” </li></ul><ul><ul><li>New versus existing buildings </li></ul></ul><ul><ul><li>Home/Commercial builder versus buyer </li></ul></ul><ul><ul><li>Landlord versus tenant </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 </li></ul></ul><ul><ul><li>paybacks for upgrades </li></ul></ul><ul><li>Lack of Information/Eudcation </li></ul><ul><li>Lack of Investment in RD&D and EE Programs </li></ul>
    9. 9. A Solution: Public Policy <ul><li>To encourage technological innovation </li></ul>To gain foothold in market To achieve market penetration To lock in savings for consumers and businesses
    10. 10. The U.S. Example: ARRA: Built on the 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 and Increase in consumer EE 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>PLUS: Government Leadership by Example </li></ul><ul><ul><li>Federal “High-Performance Green Buildings” ($4.5 billion) </li></ul></ul>
    11. 11. A Solution: Education <ul><li>Green Schools and Green Campus </li></ul><ul><li>Educate students providing hands-on, real-world learning opportunities that empower them to make a real difference </li></ul><ul><ul><li>Save energy at school </li></ul></ul><ul><ul><li>Carry the message home </li></ul></ul><ul><ul><li>Educate the next generation </li></ul></ul><ul><ul><li>of energy professionals & consumers </li></ul></ul>
    12. 12. <ul><li>- Sponsored by the Industrial Technologies Program in DOE’S EERE Office </li></ul><ul><li>- National initiative/voluntary pledge program to drive 25% reduction in industrial energy intensity in ten years </li></ul><ul><li>- Resources to companies to boost EE </li></ul><ul><li>- Collaboration amongst federal agencies, companies, associations, suppliers, states, utilities, universities </li></ul>A Solution: Education
    13. 13. A Solution: Leadership by Example <ul><li>Sustainability Goals: </li></ul><ul><li>- Reduce GHG emissions at existing stores 20% by 2012 </li></ul><ul><li>- Long-term: 100% powered by renewable energy </li></ul><ul><li>- Zero-waste operations </li></ul><ul><li>- Sustainable product selection </li></ul><ul><li>Sustainability/efficiency criteria for supplies and vendors around the world </li></ul><ul><li>EE technologies are helping Walmart get there NOW : </li></ul><ul><li>- Daylighting </li></ul><ul><li>- Efficient HVAC </li></ul><ul><li>- White Roofs - Lighting Retrofits </li></ul><ul><li>- Fuel efficient vehicles…and more! </li></ul>
    14. 14. A Solution: Leadership by Example <ul><li>Since 1994: </li></ul><ul><li>Energy intensity reduced by 22% (Btu/pound of product) </li></ul><ul><li>1,600 trillion Btu saved  </li></ul><ul><li>Prevented 86 million metric tons of CO2 from entering atmosphere </li></ul><ul><li>$5 billions in energy savings achieved </li></ul>Equivalent to the electricity needed to power all the residential homes in California for one year!
    15. 15. A Solution: Consumer Campaigns <ul><li>Super Powers </li></ul><ul><li>EPA, NYSERDA, Alliance </li></ul><ul><li>Nationwide TV & Radio </li></ul><ul><li>(ABC, CBS, CNN) </li></ul><ul><li>Consumer Website </li></ul><ul><li>Powerful $avings </li></ul><ul><li>DOE & Alliance Partnership </li></ul><ul><li>All Media Outlets </li></ul><ul><li>The Power is In Your Hands </li></ul><ul><li>Industry, DOE, EPA, Alliance </li></ul><ul><li>All Media Outlets, Web & Collateral </li></ul>Energy Hog DOE, Ad Council, Alliance, States All Media Outlets Web, Collateral Materials P&G ColdWater Campaign P&G, Alliance All Media Outlets & Web Eureka $mart House Energy-Efficiency Challenge NBC Universal, Industry, DOE, Alliance On Air, Web–Home Makeover Contest
    16. 16. <ul><li>EE Global 2010: Ideas, Intersections, Solutions to Power an Energy-Efficient Economy </li></ul><ul><li>May 10-12, 2010 : Washington D.C. Convention Center </li></ul><ul><li>Established in 2007; held annually, rotating among 5 regions of the world </li></ul><ul><ul><li>Africa, Asia/Pacific, Europe, Latin America, North America </li></ul></ul><ul><li>Organized by an International Steering Committee </li></ul><ul><li>Draws 700+ stakeholders </li></ul><ul><ul><li>High-level – 40% of 2009 attendees self-identified as executives, and another 50% as managers </li></ul></ul><ul><ul><li>International –40 countries represented in 2009 </li></ul></ul><ul><ul><li>Representative of all sectors – buildings, industrial, utilities, transportation, finance </li></ul></ul><ul><ul><li>Even split of government (28%), business (37%) and non-profit (28%) in 2007 & 2009 </li></ul></ul>
    17. 17. Thank you! <ul><li>Contact information: </li></ul><ul><li>Kateri Callahan </li></ul><ul><li>[email_address] </li></ul><ul><li>+1-202-530-2219 </li></ul>