The document discusses energy efficiency and the Alliance to Save Energy. It notes that the Alliance is a non-profit organization led by a Senator and utility CEO that includes members of Congress and leaders from various sectors. The Alliance works across all economic sectors on initiatives to advance energy efficiency through research, advocacy, education, technology deployment, and communications. The document summarizes that improving energy efficiency is important given tight global energy supplies, growing demand, and concerns over climate change and the unsustainability of business as usual approaches. Energy efficiency is described as cheaper, quicker, cleaner, and more secure than other energy resources.

1. Center for Energy, Development, and the
Global Environment
DUKE University
October 6, 2010
Durham, NC
Brian T. Castelli
Executive Vice President
Programs and Development
PathwaysPathways
toto
Energy EfficiencyEnergy Efficiency

2. What is the
Alliance to Save Energy?
- Non-profit organization headquartered in U.S.; operations world-wideNon-profit organization headquartered in U.S.; operations world-wide
- Led byLed by Senator Jeanne Shaheen (D-NH)Senator Jeanne Shaheen (D-NH) andand Peter Darbee, President andPeter Darbee, President and
CEO of Pacific Gas and ElectricCEO of Pacific Gas and Electric
- Includes 15 Members of Congress – Bi-Cameral; Bi-PartisanIncludes 15 Members of Congress – Bi-Cameral; Bi-Partisan
- Also includes environmental, consumer, and trade associations heads, stateAlso includes environmental, consumer, and trade associations heads, state
and local policy makers, corporate executivesand local policy makers, corporate executives

3. Working with and Across All
Sectors of the Economy
 170 companies, organizations, and institutions in Associates Program170 companies, organizations, and institutions in Associates Program
 Associates Program membership represents all economic sectorsAssociates Program membership represents all economic sectors
 Initiatives underway in research, policy advocacy, education, technologyInitiatives underway in research, policy advocacy, education, technology
deployment, market transformation and communicationsdeployment, market transformation and communications

4. Features of the
Global Energy Market
 Tight Supplies
 Growing Demand
 Limited Spare Capacity
 Heightened Geopolitical and Investment risk
 Higher Prices
 Climate Concerns
……anan
UNSUSTAINABLEUNSUSTAINABLE
TRACKTRACK
CLIFFCLIFF
AHEADAHEAD
(sorry)(sorry)
Source: Frank Verrastro, CSISSource: Frank Verrastro, CSIS

5. Energy use has a direct effect
on…
 Global Emissions:
Energy use directly linked to
GHG emissions..U.S. example:
 SecuritySecurity:
Unchecked growth in energy demand can:Unchecked growth in energy demand can:
• Accelerate fossil fuel depletionAccelerate fossil fuel depletion
• Increase our reliance on foreign sourcesIncrease our reliance on foreign sources
of energyof energy
 Economy:
• According to a McKinsey estimate:According to a McKinsey estimate:
“Business as usual” energy use will“Business as usual” energy use will
waste more than $1.2 trillion betweenwaste more than $1.2 trillion between
now and 2020 in the U.S. alone – andnow and 2020 in the U.S. alone – and
this does not include transportationthis does not include transportation
energy consumption.energy consumption.

6. Why EE? Why Now? Global
“Business as Usual” is Unsustainable
Global energy demand grows by 33 percent over the next 20 years,Global energy demand grows by 33 percent over the next 20 years,
with coal use rising the most in absolute terms.with coal use rising the most in absolute terms.
QuadrillionQuadrillion
btubtu

7. Why More EE? Why Now?
Energy Use is a Global Climate Issue
China, 19%
Russia, 6%
Japan, 4%
India, 4%
Western
Europe,
13%
, 0
Others, 32%
US Other
Sectors, 13%
US Buildings, 8%
Share of Global Energy-Related CO2 Emissions by Country (2005)
Source: Energy Information AdministrationSource: Energy Information Administration

8. As an energy resource, efficiency is:
 CHEAPER
- Each $1 invested in Energy Star program = $75 in energy
cost savings and $15 of investment in new efficiency
technologies
 QUICKER
- In 2001, California cut peak electricity use by 10% in less
than a year
 CLEANER
- “Negawatts” produce NO ENVIRONMENTAL FOOTPRINT
 MORE SECURE
- A “homegrown” resource!
Why Energy Efficiency?

9. 2626
2828
3030
3232
3434
3636
3838
4040
4242
20102010 20152015 20202020 20252025 20302030
GtGt
Reference ScenarioReference Scenario
450 Scenario450 Scenario
End-useEnd-use
efficiencyefficiency
Power plantsPower plants
RenewablesRenewables
BiofuelsBiofuels
NuclearNuclear
CCSCCS
52% of the required cuts in GHG emissions to achieve the 450 scenario is52% of the required cuts in GHG emissions to achieve the 450 scenario is
estimated to come from energy efficiency savings by 2030 (WEO 2009)estimated to come from energy efficiency savings by 2030 (WEO 2009)
World Energy Outlook 2009
450 Scenario

10. Energy Efficiency –
America’s Greatest Energy Resource
44

11. Plenty of Opportunity for
Improving Energy Intensity
Source: Frank Verrastro, CSISSource: Frank Verrastro, CSIS

12. Potential Demand Reduction
with Industrial EE
Source: McKinsey & Company, 2007.Source: McKinsey & Company, 2007.
Energy efficiency is the most cost-effective carbon reduction optionEnergy efficiency is the most cost-effective carbon reduction option
• Stated in an Independent Study by McKinsey & CompanyStated in an Independent Study by McKinsey & Company

13. Huge EE Potential RemainsHuge EE Potential Remains
Energy Efficiency Potential 40%Energy Efficiency Potential 40%
Adapted from McKinsey AnalysisAdapted from McKinsey Analysis
Energy efficiency should be fully considered inEnergy efficiency should be fully considered in
GHG reductions. All items to the left of theGHG reductions. All items to the left of the
arrow represent “negative marginal costs”, i.e.arrow represent “negative marginal costs”, i.e.
profitable investmentsprofitable investments

14. Energy Efficiency: the 1st
Fuel
Average Utility Cost of New Electric Resources
0
2
4
6
8
10
12
14
16
Energy
Efficiency (a)
Wind Biomass Nat. Gas
Combined
Cycle
Pulverized
Coal
Nuclear Coal IGCC
LevelizedCost(cents/kWh)
w/o Carbon W/ $20/Ton Carbon
Source: UCS 2009 except (a) ACEEE 2009Source: UCS 2009 except (a) ACEEE 2009
Energy Efficiency: the 1Energy Efficiency: the 1stst
FuelFuel

15. Many “Non-Price” BarriersMany “Non-Price” Barriers

16. Industrial Systems Energy
Efficiency
 Industrial firms tend to invest in process changes for EE and
productivity – long term and high cost
 Cross-cutting energy systems (motors-driven, steam, process
heating) offer 20-50% savings potential
- Inefficient systems found in nearly every plant
- Near-term, lower-cost savings are from optimizing systems not
components (only 2-5% savings)
 Customize system energy efficiency for each site
 US DOE strategy since 1992 (BestPractices):
- Educate plant engineers – training, software, technical publications
- Industry partnerships
- Cost-shared plant energy assessments

17. U.S.: Save Energy Now
““25 in 10”25 in 10”
Drive a 25% reduction inDrive a 25% reduction in
industrial energy intensityindustrial energy intensity
by 2017by 2017
Saving 8.4 quads each yearSaving 8.4 quads each year
—— an amount of energyan amount of energy
equal to that consumed byequal to that consumed by
CaliforniaCalifornia

18. How About Buildings?
66
•• Buildings consume 39% of all energy in the U.S.,Buildings consume 39% of all energy in the U.S.,
including 72% of electricity, and account for 38% ofincluding 72% of electricity, and account for 38% of
carbon emissions.carbon emissions.
•• EIA projects that buildings-related CO2 emissions willEIA projects that buildings-related CO2 emissions will
increase by 270 million tons by 2030, and 82% of theincrease by 270 million tons by 2030, and 82% of the
total projected electric load growth is from buildings.total projected electric load growth is from buildings.
•• Massive improvements in both existing and newMassive improvements in both existing and new
buildings are needed at large scale & quickly.buildings are needed at large scale & quickly.

19. Commercial Buildings Sector –
Where Are We Today?
““Net-Net-
Zero”Zero”
Source: R. Anderson, NRELSource: R. Anderson, NREL

20. Thanks to Doug Gatlin, USGBC atThanks to Doug Gatlin, USGBC at National Association of Realtors May 13, 2008National Association of Realtors May 13, 2008
The BusinessThe Business BenefitsBenefits

21. The Business Benefits
Operating CostsOperating Costs
 Average Expected Decrease =Average Expected Decrease = 8%-9%8%-9%
 Main motivator for green in all sectorsMain motivator for green in all sectors
Energy UseEnergy Use
 Average Expected Decrease =Average Expected Decrease = 30%30%
Building ValueBuilding Value
 Average Expected Increase =Average Expected Increase = 7.5%7.5%
Operating IncomeOperating Income
 Average Expected Increase =Average Expected Increase = 6.6%6.6%
Occupancy and Rent RatiosOccupancy and Rent Ratios
 Increased Occupancy =Increased Occupancy = 3.5%3.5%
 Rent Ratio Increase =Rent Ratio Increase = 3%3%
Thanks to Doug Gatlin, USGBC atThanks to Doug Gatlin, USGBC at National Association of Realtors May 13, 2008National Association of Realtors May 13, 2008

22. Example
Green Building Savings
Thanks to Doug Gatlin, USGBC atThanks to Doug Gatlin, USGBC at National Association of Realtors May 13, 2008National Association of Realtors May 13, 2008

23. Municipal EE Challenges
and Opportunities
 Water systems
- Aging infrastructure Leaky distribution systems
- System inefficiencies (pumps, motors)
 Municipal infrastructure and operations
- Inefficient buildings (housing, government offices, schools)
- Lack of energy/water metering
- Institutionalized purchasing of energy-inefficient equipment
- Inefficient street-lighting

24. CASE STUDY: Fortaleza,
in Brazil’s Arid NE
PROBLEMS
•• Many households not connected to service
•• Many inefficiencies: pumps, O&M, system management
•• Utility couldn’t afford energy costs
PROJECT:  automated controls on pressure & pumping
 improved data collection & analysis
 improved motor efficiency (replaced or re-wound them)
RESULTS
•• 88 million kWh saved over 4 years
•• …while adding 88,000 new connections using same amount of water
•• $2.5 M saved every year w/investment of only $1.1 M
•• Payback: 7 months

25. Deploying EE at Scale Requires:
A Foundation of Public Policy
 To encourage
technological
innovation
 To gain foothold inTo gain foothold in
marketmarket
 To achieve marketTo achieve market
penetrationpenetration
 To lock in savings forTo lock in savings for
consumers and businessesconsumers and businesses

26. Key Strategies
for EE Deployment
1) POLICY
Improve Legal & regulatory frameworks…
 Create incentives for
promoting energy efficiency
 Open the energy sector to private participation
 Promote metering and DSM measures
 Eliminate subsidies
~ Energy tariffs should recover costs ~
 Modernize energy standards & technical regulations
 Promote energy efficiency services market

27. Key Strategies
for EE Deployment
2) CAPACITY and AWARENESS
• Strengthen national agencies for:
 setting energy efficiency targets
 developing programs
 ensuring implementation
• Train energy managers and auditors
• Cultivate partnerships among:
energy consumers, service providers, financiers
• Provide Information: test EE models, document case
studies, prepare guidelines, advocate.
3) FINANCING - Initiate mechanisms, such as…
 loan funds  vendor credits  leasing
 credit guarantees carbon finance

28. Why is all this important?
We only have one World…
2828

29. Thank you!Thank you!
Brian T. CastelliBrian T. Castelli
Executive Vice PresidentExecutive Vice President
bcastelli@ase.orgbcastelli@ase.org
202-857-0666202-857-0666
www.ase.orgwww.ase.org