Cracking the Code: gThe Key to Energy ffi i i ildiEfficiency in Buildings

Presentation by Kateri Callahan, President

Concreto LatinoAmerica 2009

“Model Code System” Panel Discussion:Model Code System  Panel Discussion: 

Politics and Actions to Promote Energy Efficiency

August 18, 2009August 18, 2009

OverviewOverview About the Alliance

Why Energy Efficiency?  

Strong Public Policy: A U S Blueprint to Building Strong Public Policy:  A U.S. Blueprint to Building Energy Efficiency

Education/Outreach

Codes/Standards

RD&D

Incentives

RD&D

What is the Alli t S E ?Alliance to Save Energy? 

The Alliance to Save Energy promotes energy efficiency worldwide to achieve a healthier economy a cleaner environment and greater energy securityeconomy, a cleaner environment and greater energy security.

- Non‐profit organization headquartered in U.S.; operations world‐wide

- Led by Senator Mark Pryor (D‐AR) and Jim Rogers, CEO of Duke EnergyLed by Senator Mark Pryor (D AR) and Jim Rogers, CEO of Duke Energy 

- Includes 9 Members of Congress – Bi‐Cameral; Bi‐Partisan

- Also includes environmental, consumer, and trade associations heads, state and local policy makers, corporate executives

Forging AlliancesForging Alliances Business ▪ Government ▪ Public Interests  Sponsorship and participation of more than 160 organizations

Involvement by businesses in all economic sectors

Initiatives underway in research, policy advocacy, education, technology

deployment, and communications

Why Energy Efficiency?i ’America’s Greatest Energy Resource

Reducing Energy Use, Saving Money, and Powering the domestic economy for 

America's Greatest Energy Resource Energy Efficiency and Conservation Improvements Since 1973

Have Reduced Annual Energy Consumption by 50 Quads

over 30 years:

24

40

50

N t l G

Petroleum

Energy Efficiency and Conservation

4

8

23

24

Wood, Waste, Alcohol

Nuclear Electric Power

Coal

Natural Gas

0.8

3

0 10 20 30 40 50 60

Geothermal, Solar and Wind

Conventional Hydroelectric

QuadsQuads

2007 Domestic Production Net Imports

Alliance to Save EnergyAugust 2008

Energy Efficiency: Enormous Potential f S i i ALL S tfor Savings in ALL Sectors…

…and the largest opportunity is in ouris in our buildings!

Source: McKinsey Global InstituteSource: McKinsey Global Institute

Why Buildings?Why Buildings?

ld f Buildings use 39% of energy in U.S., cause 39% of CO2 emissions2

Efficient buildings…

…reduce stress on power grid and natural gas supplies

…improve air quality and public health

avoid global warming…avoid global warming

…save consumers money 

Source: USGBC

The Challenge?  M k t Di t tiMarket Distortions

Principal Agent or “Split Incentives” Principal Agent or  Split Incentives- New versus existing buildings

- Home/Commercial builder versus buyer

- Landlord versus tenant

- Utility versus customer

Transaction Costs- Lack of information on life‐cycle cost for products and/or 

b k f dpaybacks for upgrades

Lack of Investment in RD&D and EE Programs

Deploying EE in the U.S.: A F d ti f P bli P li

Codes/Standards

A Foundation of Public Policy

Education/Outreach

Codes/Standards

To achieve market

To lock in savings for consumers and businesses

Incentives To gain foothold in

To achieve market penetration

RD&D To encourage 

technological

To gain foothold in market

technological innovation

ARRA B ilt S d P bli P liARRA: Built on Sound Public Policy  RD&D

– Smart Grid ($4.5 bill)

– DOE RD&D ($2.25 billion)  

I tiEducation/Outreach

Codes/Standards

Incentives 

– Extension of tax incentives

Education & Outreach RD&D

Incentives

Education & Outreach

– State Energy Star rebate programs ($300 million)

Codes & Standards

– “Conditions”  USD $3.1 Billion to states on strong building codes

Research, Development and Deplo mentDeploymentNet ZEB: Commercial Buildings Initiative (CBI) Goals:

- 2030:  New construction net‐zero- 2050:  Entire stock net‐zero

Comprehensive approach (R&D & deployment) Comprehensive approach (R&D & deployment) Coordinate (initiate) national and local actions

- Measure, benchmark, disclose energy performance- R&D for critical technologies and systems - Demonstrate scalable, replicable system solutions- Transform market:  education/training, finance, appraisal, incentives, 

codes, buyer demand‐pull Funding from Omnibus 2009 Appropriations bill: Funding from Omnibus 2009 Appropriations bill:

- $33 million to initiate- Plus about $50 million from ARRA (stimulus) funds

IncentivesIncentivesNew Homes

Builder tax credit up to $2 000 if 50% more efficient compared to 2004 IECCCBuilder tax credit ‐ up to $2,000 if 50% more efficient compared to 2004 IECCC code; $1,000 for a home that saves 30% or qualifies for the Energy Star Homes Program. (Through 2009)

Existing HomesHomeowner tax credit – 30% of cost of installing building envelope components; capped at $1,500 (Through 2010)

Commercial BuildingsDeduction up to $1 80/sq ft for buildings designed to use 50% less energy thanDeduction up to $1.80/sq.ft. for buildings designed to use 50% less energy than ASHRAE‐90.1‐2001 (Through 2013)

Public Buildings: Assignable deduction!

Use Incentives, Education to P t t th M k tPenetrate the Market…

ENERGY STAR Qualified Homes Gaining Market Share (2008)

Source: www.energystar.gov

A “Game Changer”:  Building Energy CodesBuilding Energy Codes

M k h ff d bl Makes homes more affordable

Overcomes economic barriers If all states improve codes by 30% over today’s energy performance, the savings by 2030 equal:- 3 quadrillion Btu in building energy use (5% of current)

- $25 billion in annual consumer energy bills

- 150 million tons of CO (6 billion tons through 2050)- 150 million tons of CO2 (6 billion tons through 2050)

How U S Codes are SetHow U.S. Codes are Set States set codes based on national models- Independent professional organizations set 

national model building codes

- DOE determines whether updates save energy

- States adopt codes sometimes with changes- States adopt codes, sometimes with changes

States required to consider residential model

States required to adopt commercial model

But codes can’t happen But...codes can t happen overnight...

Driving to “Net-Zero” Through B ilding Energ CodesBuilding Energy Codes

National energy codes with aggressive National energy codes with aggressive energy savings targets:- 30% savings in 1 year- 30% savings in 1 year- 50% savings in 2014 (homes), 2015 (comm.)

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

h ith DOE h lchance, with DOE help DOE sets if they don’t

Building Energy Codes: Adoption and ComplianceAdoption and Compliance

Direct states to adopt and improve compliance- 1 year to adopt- 90% of building space complies within 5 yearsg p p y- DOE help: funding to states for code

implementation Backstop: Federal code with federal

enforcement

Codes Legislation: StatusCodes Legislation: Status In Waxman‐Markey Climate Bill (“ACES”)y ( ) In Senate Energy Bill (“ACELA”) A Strong Legislative History in 110th Congress

- In energy bills: Energy bills that passed the House (H.R. 3221, 6899) Senate Leadership Amendment (S. Amdt. 5135)

R I l bill (H R 6739) Rep. Inslee bill (H.R. 6739)

- In climate bills: Lieberman‐Warner Senate bill (S. 2191, S. 3036, S. Amdt. 4825) Dingell‐Boucher House climate bill draft Dingell Boucher House climate bill draft Rep. Markey bill (iCAP—H.R. 6186)

- In stand‐alone bills: Dingell‐Boucher bill (H.R. 6729) Sen. Schumer bill (S. 2078, S. Amdt. 1604)

Climate & Energy Bill OutlookClimate & Energy Bill Outlook  Senate 

- Has Adopted Energy “Piece” with code provisions 

- Will consider climate “Piece” in the Fall

House

- Adopted Climate & Energy bill with code provisions

Additional Support for Energy Efficiency in legislation Additional Support for Energy Efficiency in legislation

- Significant Funding through CO2 Allowances (House bill)

- Building Labeling Programs (both)Building Labeling Programs (both)

- Utility Energy Efficiency Resource Standards (both)

- Innovative Finance Programs (both)

- Appliance Standards (both)

- And much more…..

ForecastForecast

Promising legislation for the expansion of energy efficiency in b ildi d f b ildi dbuildings and of building codes- Advantages of Stimulus

- More funds for DOE- More funds for DOE

- American Clean Energy and Security Act (ACES)

The Future of Codes: 

Universal and dynamic?y

Recognizing the efforts of those working to advance energy efficiency.

Award Winners:Deval Patrick, Governor of MassachusettsD S Ch S f E DOEDr. Steven Chu, Secretary of Energy, DOE

U.S. Department of Housing and Urban DevelopmentAquarium of the Pacific

Warren County Public Schools (Kentucky)CONAVI and INFONAVIT

3M Company3M Company

Thank you!Thank you!

For More Information….

Kateri CallahanPresident

Alliance to Save Energy1850 M Street NW1850 M Street, NW

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

www.ase.org202.857.0666