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How Important is Energy  Efficiency? Coalition for Green Capital Kenneth Berlin, General Counsel (202) 371-7350 Kenneth.Berlin@Skadden.com) www.coalitionforgreencapital.com Presented at:  PACE Energy Conference  -  Promoting Energy Efficiency in Commercial Buildings New York – June 1, 2011
Introduction ,[object Object],[object Object],[object Object]
The Coalition for Green Capital ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Outline of Presentation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
The Context – CO2 Emissions by Sector and Source
Step 1 - Reducing Electric Power Sector Emissions - Closing Coal Plants ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Information from Deutsche Bank report: http://bit.ly/lKCMzK
Reducing Electric Power Sector  Emissions - Impact ,[object Object],[object Object],[object Object]
Step 2 – Replacing Coal Plants ,[object Object],[object Object],[object Object],[object Object],[object Object]
Step 3 – Increasing Energy Efficiency   ,[object Object],[object Object],[object Object],[object Object]
Energy Efficiency – C02 Emissions in the Residential Sector
Energy Efficiency – Commercial Sector CO2 Reductions
Energy Efficiency Predictions ,[object Object],[object Object],[object Object],[object Object]
Energy Efficiency Barriers *Financial transaction barriers and actual quality trade-offs are factored into the initial NPV-positive potential calculation as real costs. Source: McKinsey analysis
The High up Front Cost of  Energy Efficiency ,[object Object],[object Object],[object Object],[object Object]
Consumer and Business Choice  Limits Energy Efficiency Spending ,[object Object],[object Object],[object Object],[object Object]
Other Barriers to Energy Efficiency  Reaching Scale ,[object Object],[object Object],[object Object],[object Object]
Other Barriers to Energy Efficiency  Reaching Scale  (continued) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Overcoming the Barriers – the  Need for Financing ,[object Object],[object Object],[object Object],[object Object]
The Role of Green Banks ,[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],What is the Green Bank?:  A hybrid for-profit, or not-for- profit low-risk institution designed to safely leverage public dollars into massive private investment Funding of $10B GREEN BANK Support up to $100B in loans over 20 years  Combined with equity, can support up to $200B in investment in clean energy $ $ $ Loan, loan guarantees Loans, loan guarantees Supports up to 100 GW of renewable projects-replacing more than 20% of carbon-based capacity
The Green Bank could create incentives for willing consumers or utilities to pay for retrofits….without up-front capital from the borrower 1. The Green Bank loans 100% of the cost of an energy efficiency project to a utility or other source at a low rate. 2. The utility disperses the funds to install energy efficiency measures in homes and small businesses, creating jobs in the local community. Residential property/ Small business Utility/Co-op Green Bank Energy Bill 5. After the loan is repaid, the consumer sees the full benefit of the efficiency measures, the utility has saved money and created local jobs, and the taxpayer has been repaid in full. 4. Through on-bill financing, a portion of the savings shows up on the consumer’s bill, and the rest is transferred to the utility, which uses the money to repay the initial loan from the Green Bank over an extended tenor. (For example, if there is a savings of $100/month, the consumer receives a $25 discount on the bill and the utility charges $75 for electricity that is not being provided in order to re-pay the loan). The utility will also have the right to place a lien on the property in order to obtain payment.  3. The owner of the residence/small business pays no up-front cost to have their building retrofitted, and sees a reduced energy bill.
Building Political Support ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Example - Benefits from Increased Efficiency Investments in New England ,[object Object],[object Object],[object Object],[object Object]
Summary of New England Economic Impacts   (Environment  Northeast, Energy Efficiency: Engine of Economic Growth, Exec. Summary Oct. 2009)

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How important is energy efficiency?

  • 1. How Important is Energy Efficiency? Coalition for Green Capital Kenneth Berlin, General Counsel (202) 371-7350 Kenneth.Berlin@Skadden.com) www.coalitionforgreencapital.com Presented at: PACE Energy Conference - Promoting Energy Efficiency in Commercial Buildings New York – June 1, 2011
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  • 5. The Context – CO2 Emissions by Sector and Source
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  • 10. Energy Efficiency – C02 Emissions in the Residential Sector
  • 11. Energy Efficiency – Commercial Sector CO2 Reductions
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  • 13. Energy Efficiency Barriers *Financial transaction barriers and actual quality trade-offs are factored into the initial NPV-positive potential calculation as real costs. Source: McKinsey analysis
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  • 21. The Green Bank could create incentives for willing consumers or utilities to pay for retrofits….without up-front capital from the borrower 1. The Green Bank loans 100% of the cost of an energy efficiency project to a utility or other source at a low rate. 2. The utility disperses the funds to install energy efficiency measures in homes and small businesses, creating jobs in the local community. Residential property/ Small business Utility/Co-op Green Bank Energy Bill 5. After the loan is repaid, the consumer sees the full benefit of the efficiency measures, the utility has saved money and created local jobs, and the taxpayer has been repaid in full. 4. Through on-bill financing, a portion of the savings shows up on the consumer’s bill, and the rest is transferred to the utility, which uses the money to repay the initial loan from the Green Bank over an extended tenor. (For example, if there is a savings of $100/month, the consumer receives a $25 discount on the bill and the utility charges $75 for electricity that is not being provided in order to re-pay the loan). The utility will also have the right to place a lien on the property in order to obtain payment. 3. The owner of the residence/small business pays no up-front cost to have their building retrofitted, and sees a reduced energy bill.
  • 22.
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  • 24. Summary of New England Economic Impacts (Environment Northeast, Energy Efficiency: Engine of Economic Growth, Exec. Summary Oct. 2009)

Editor's Notes

  1. DCO-AAA123-20081211- WCO-ZZD238-20081022-01