Mining America’s “Greatest Energy Resource” for Tomorrow’s Green Economy

EU Workshop: A Shared Vision for Energy & Climate

Brussels, Belgium, May 28, 2009Kateri Callahan, President

A Few Words About the Alliance Energy Efficiency: America’s Greatest Energy

Resource Mining Energy Efficiency through Public Policy The Ramp-up to America’s Green Energy Future

- Stimulus Funding for EE

- Increasing Federal Appropriations for EE

- Driving EE as Part of Climate Legislation

Overview

What is the Alliance to Save Energy? Mission: To promote energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security.

The Alliance is… Staffed by 50+ professionals32 years of experience in policy, research, education, communications, technology deployment and market transformation

Alliance Directors: Bi-Partisan Elected Officials and Industry Leaders

Jim Rogers, CEO Duke Energy

Senator Mark Pryor (D-Ark.)

Guided by an elected Board of Directors Leaders of environmental, consumer, and trade

associations; state and local policy makers; corporate executives

Bi-partisan, bi-cameral Honorary Vice Chairs

Forging Alliances: Business, Government & Public Interests

Sponsorship and participation of more than 150 organizations Involvement by businesses in all economic sectors Headquartered in Washington, D.C. with operations in several US

states, Eastern Europe, South Africa, Mexico, and India

Proof that Energy Efficiency Works

Imperative for More Energy Efficiency

Share of Global Energy-Related CO2 Emissions by Country (2005)

China, 19%

Russia, 6%

Japan, 4%

India, 4%

Western Europe, 13%

,

Others, 32%

US Other Sectors, 13%

US Buildings, 8%

Source: Energy Information Administration

EE: Enormous Potential for Savings in ALL Sectors…

Source: McKinsey Global Institute

EE: The No-Cost Way to Reduce GHG Emissions

Principal Agent or “Split Incentives”- Home builder versus buyer

- Utility versus customer

Transaction Costs- Lack of information on life-cycle cost for products

and/or paybacks for upgrades

Lack of Investment in RD&D and EE Programs Public Policies Essential

The Challenge? Market Distortions

Five Tenants of Sound EE Public Policy

1)Research, development and deployment (RD&D)

2)Education and outreach

3)Incentives

4)Standards & Codes

5)Government “Leadership by Example”

A Big Year for Energy Efficiency in Public Policy

Obama’s election platform

American Recovery & Reinvestment Act (ARRA, or Stimulus Bill)

President’s Fiscal Year 2010 budget

American Clean Energy and Security Act (ACES)

President’s new CAFÉ standards

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– Reduce electricity use 15% by 2020– Net-zero energy buildings by 2030– Overhaul federal appliance standards– By 2014, reduce energy use in new

federal buildings 45%; 25% in existing federal buildings

– Flip incentives for utilities– Invest in a “smart grid”– Weatherize 1 million homes/year– Investment incentives for “livable

cities”– Showed early commitment to large

green energy component in the economic recovery bill

President Obama: Energy Efficiency Advocate

2009 American Recovery & Reinvestment Act (Stimulus Bill)

~ $75

Billion

Potential

for EE

ARRA: Built on the Five Pillars of Good Public Policy

RD&D – Smart Grid ($4.5 bill)– DOE RD&D ($2.25 billion)

Incentives– Extension of tax incentives

Codes & Standards– “Conditions” State funding on strong building codes

Education & Outreach– State Energy Star rebate programs ($300 million)

Government Leadership by Example– Federal “High-Performance Green Buildings” ($4.5 billion)

President Obama’s FY 2010 Budget: A+ in EE

108% Increase Over FY 2009 Request, including:

$10 million increase for the industrial sector $98 million increase in the Department of Energy’s (DOE) Building Technologies Program

–includes $10 million for building energy codes.  $10 million for the Federal Energy Management Program$25 million increase for the State Energy Programincreases for DOE’s ENERGY STAR program, commercial buildings, residential buildings, R&D, and equipment standards. 

A New Era for U.S. Fuel Economy Standards Obama Administration National Fuel Efficiency Program

Requires 35.5 mpg fleet-wide average fuel economy by 2016

•5% improvement annually (2012 – 2016)•Projected to save1.8 billion barrels of oil•Projected to reduce carbon emissions

equivalent to taking 177 million cars off the road for a year

Next Up – Federal Climate and/or Energy Legislation? House Energy and Commerce Reports “American

Clean Energy and Security Act” (ACES)

•Partisan vote – Signals Potential House Passage

•Two More House Committees to Consider

Senate EPW Committee Waits on House Action

Senate Energy Committee Working on Energy Legislation

Copenhagen December “Deadline” Looms

ACES:Cap is the crown jewel

85% of US GHG emissions covered- Could be higher

Covered emissions reduced 83% in 2050 Defend and protect the cap!

ACES: Goals for Energy Efficiency

Policies will no longer save more energy. Instead they will—

Reduce cost of meeting carbon cap by

Addressing market barriers, especially among energy end-users

ACES: EE Programs

Complementary EE policies Codes, standards, building labeling, electric efficiency

resource standards

Complementary Programs- EE in WM is 3-6% of allowance value

$81 to $167b over 2012-2050

- 12.5% of allowance value could get Allowance prices 10% lower Electric, nat gas and petrol prices 1-3% lower Electric and natural gas demand 3-7% lower

according to EPA analysis April 20

EE Funding through Allowance Allocations

Calculations based on allocations in the Waxman-Markey substitute amendment & total allowance values from EPA’s Preliminary Analysis of the Waxman-Markey discussion draft.

Includes SEED accounts, building codes, natural gas utilities, heating oil and propane consumers, and one eighth of Clean Energy Innovation Centers funding

Does not include noncompulsory utility funding for energy efficiency, revenues from the renewable electricity standard or separate authorizations.

Building Energy Codes: Development

National energy codes with aggressive energy savings targets:- 30% savings in 1 year

- 50% savings in 2014 (homes), 2015 (comm.)

- 5% more savings every 3 years ICC and ASHRAE get first

chance, with DOE help DOE sets if they don’t

24

Building Efficiency Labels EPA to establish model ratings and

labels- Actual performance and designed

performance ratings- Build up EIA surveys (CBECS, RECS) as

basis Implementation:

- EPA to work with states andlocal governments

Appliances and Lighting: New Standards

Lighting- Outdoor lighting- Portable light fixtures, GU-24, BR lamps

Other- Commercial furnaces- Hot food holding cabinets- Water coolers + dispensers- Electric spas + hot tubs

TV test procedure

Standards + Labels Process Standards process:

- Multiple metrics- Criteria for setting the standard level- Manufacturer sales reporting- Petitions for test procedures- Enforcement by states, state waiver criteria,

preemption of state codes

Labels- Carbon on Energy Guide label- Smart grid in Energy Star and Energy Guide- Reforms of Energy Star: rating system

Utilities: Efficiency and Renewable Electricity Standard

Utilities meet 20% of electric demand by 2020 from efficiency and renewables- Efficiency up to 5%, or up to 8% on request of

governor.

- Additional savings likely around 3% Estimated savings from efficiency

programs, not a sales limit. In-state trading through bilateral contracts Also to set peak demand reduction goals

Transportation Light duty vehicle emission standards Emission standards for trucks, trains,

ships, and airplanes

Require states to set emissions reduction goals and large MPOs to set transportation plans that meet them.

Authorizations Building energy code implementation REEP building retrofits Building labeling programs Manufactured home replacement “Best-in-class” appliance program Waste heat recovery grants Vehicle electrification and plug-in vehicle

programs SmartWay heavy duty vehicle program Clean Energy Innovation Centers Low Income energy efficiency program

Savings Estimates

Potential energy and carbon savings from key policies:

Year Energy Savings CO2 Savings

Building Codes 2030 3 Quads 200 MMT

Appliance Standards 2020 0.2 Quads 12 MMT

Electricity Standard 2020 1 Quad 58 MMT

And Moving Beyond…. Requirements for Deploying Energy Efficiency

Fully:

- Wise Investment- Effective Implementation of Public Policies- Sound Evaluation, Measurement & Verification- Rapid and Global Migration of Best Practices and

Best Policies

The Results?- Improved Economies Around the World- Enhanced Global Energy Security- A Better Environment

Thank you!

For More Information….

Kateri CallahanPresident

Alliance to Save Energy1850 M Street, NW

Washington, D.C. 20036kcallahan@ase.org

www.ase.org202.857.0666