Energy Policy and Energy Efficiency - · PDF fileEnergy Policy and Energy Efficiency James...
Transcript of Energy Policy and Energy Efficiency - · PDF fileEnergy Policy and Energy Efficiency James...
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Energy Policy and Energy Efficiency
James SweeneyStanford University
Director, Precourt Energy Efficiency CenterProfessor, Management Science and Engineering
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• Environmental Protection• Global Climate Change
• Security• Oil/International vulnerability• Vulnerability of infrastructure to terrorism, natural
disaster, or human error
• Economics (Public policy and private sector issues)• Prices of electricity, gasoline, natural gas• Price volatility: oil, natural gas, wholesale electricity• Management for energy efficiency can be very
profitable
Three Public Policy Drivers for Energy Policy in U.S.
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• Environmental Protection• Global Climate Change ?? Annex I country
• Security• Oil/International vulnerability ?• Vulnerability to natural gas supply disruptions ?• Electric market vulnerability ?
• Economics (Public policy and private sector issues)• Prices of electricity, gasoline, natural gas• Price volatility: oil, natural gas, wholesale electricity• Management for energy efficiency can be profitable
Three Public Policy Drivers for Energy Policy in Singapore
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Environmental
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U.S. CO2 Emissions 2007
Source: http://www.eia.doe.gov/environment.html
0
500
1000
1500
2000
2500
3000
Residential Commerical Industrial Transportation Electric Generation
Million Metric Tons of C
arbo
n Dioxide
Natural Gas
Petroleum
Coal
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Most: Buildings
Some:Buildings
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U.S. CO2 Emissions 2007
Source: http://www.eia.doe.gov/environment.html6
0
500
1,000
1,500
2,000
2,500
Residential Commerical Industrial Transportation
Million Metric
Tons of C
arbo
n Dioxide
Through ElectricityNatural GasPetroleumCoal
Most: Buildings
Some:Buildings
US Energy Consumption By Fuel
40
23 23
8.1
2.7 3.2
0.3 0.06 0.18
40
22 22
8.2
2.9 3.4
0.3 0.07 0.26
40
23 24
8.4
2.53.6
0.3 0.08 0.320
5
10
15
20
25
30
35
40
45
Petroleum
CoalNatur
al Gas
Nuclear
Hydroele
ctric
Biomass
Geotherm
al
Solar/P
V
Wind
Fuel
200520062007
Con
sum
ptio
n (Q
uads
)
Source: Energy Information Agency, US DOE, Annual Energy Review
0
20
40
60
80
100
120
140
160
180
200
Petroleum Dry Natural Gas Coal Hydroelectric Power
Net Nuclear Electric Power
Net Geothermal, Solar, Wind,
Wood and Waste Electric Power
Qua
drillion Btu of Produ
ction an
d Use 2004
20052006
World Energy Production and Use
Source: Energy Information Agency, US DOE, Annual Energy Review
2008 Singapore Energy Use
Totals Source: BP Statistical Review of World Energy, 2009; Bunkering Estimate
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
Oil Natural Gas Coal Hydropower Nuclear Renewables
Qua
drillion Btu
For:Bunkering, Petrochemicals,motor fuel,town gas, electric generation, other industrial
For:Electric Generation
For:Bunkering
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Increased EconomicEfficiency
Decreased Energy Use
Reduced EconomicEfficiency
Increased Energy Use
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Economically Efficient Energy Intensification
Energy Efficiency Improvement
Inefficient Energy Saving
Waste
Increased EconomicEfficiency
Decreased Energy Use
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Increased commercial space
Gasoline Price Controls
Compact Fluorescent Penetration
LED Traffic Lights
Energy Cost Labeling
Gasoline Rationing
Incan-descent Lighting
Congestion Pricing
Personal Computer Penetration
Optimized Building Construction
Overly Strict Building Standards
Pigouvian Energy Tax
Increased EconomicEfficiency
Decreased Energy Use“Smart”Regional Land Development
Reformed CAFE Standards
Some Rapid Transit Systems
Improved Building Materials
Halt SUV Sales
Airline Deregulation
Energy Audits
Hybrid Gas-Electric Vehicles
High Definition TV
Plug-In Hybrids (Now in US)
Plug-In Hybrids (Future)
LED General Lighting (Now)
LED General Lighting (Future)
Internet Growth (??)
“Smart Buildings”Controls
Economic development
LED Task Lighting (Now)
Accessible Business Travel
Old appliance replacement
Behavioral Change:Program ThermostatLights, Tire
pressure,Driving Patterns
Appliance Efficiency Standards
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Source: McKinsey & Co.
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Buildings Energy Use in the US
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2006 Commercial Building Energy Uses: Operations Only
Source: 2008 Buildings Energy Data Book
Lighting25%
Space Cooling13%
Space Heating12%
Ventilation7%
Water Heating6%
Refrigeration4%
Cooking2%
Electronics7%
Computers4%
Other13%
Unknown7%
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2006 Residential Building Energy Uses: Operations Only
Source: 2008 Buildings Energy Data Book
Lighting12%
Space Cooling13%
Space Heating26%
Water Heating12%
Wet Clean6%
Refrigeration7%
Cooking5%
Electronics8%
Computers1%
Other4%
Unknown6%
Singapore Residential Building Energy Uses: Operations Only
Source: Energy Efficient Singapore. http://www.e2singapore.gov.sg/households.html
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Lighting is 21% of U.S. Electricity
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From “U.S. Lighting Market Characterization”, prepared for DOE EERE by Navigant Consulting, 2002
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From “U.S. Lighting Market Characterization”, prepared for DOE EERE by Navigant Consulting, 2002
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Energy Implications of 100% LEDs @ 120 Lm/wt System Efficacy
0
50
100
150
200
250
300
350
400
450
Commercial Residential Industrial Outdoor
TWhr
/yr
Current MixAll LED @ 120 lm/wt
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Why Do Negative Cost Options Continue ?
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Market Failures and Market Barriers
Market failures Market barriers Externalities Low salience of energy
issuesPrincipal/Agent Problems Incomplete markets for
energy efficiency
Distortionary regulatory and fiscal policies
Cognitive Skills
Insufficient and inaccurate information
Systems Issues
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Policy Priorities• Energy Supply
– Get Prices Right (carbon tax or cap and trade)– Incentives for innovation: R&D
• Including learning by doing– Regulations: Safety, Pollutants
• Energy Use– Get Prices Right (carbon tax or cap and trade)– Incentives for innovation: R&D
• Including learning by doing– Regulations: Safety, Pollutants– Interventions to address barriers, market failures
• Cognitive/information• Agency problems• Systems problems (including chicken & egg)
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INSTANT(Infosys – Stanford Traffic Project)
Research by Balaji Prabhakarat Infosys in Bangalore, India
Funded by PEEC
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• The INSTANT project uses the framework of incentive mechanisms to reduce road traffic congestion.
• Infosys employees were given chances for one month extra salary for each time they took bus to arrive before 8 am
• The goal of our work is to incentivize Infosys commuters to travel at uncongested times.
• INSTANT serves as a pilot project to demonstrate the applicability of incentive compatible congestion pricing to combat congestion.
About INSTANT
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Commuter arrivalsCommuter arrivals Bus commuter arrivals
Other commuter arrivalsAverage morning bus commute time and total person-hrs saved
2000 person‐hrs
1400 person‐hrs
2300 person‐hrs
100 person‐hrs 500
person‐hrs600
person‐hrs
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• The INSTANT project advances a strong argument in favor of "charging congestors and rewarding decongestors".
• This contrasts with current congestion charging schemes which are viewed as "yet another tax", and makes it possible to consider congestion pricing via a "market approach".
Impact of INSTANT
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California Analysis
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Source: Art Rosenfeld, California Energy Commission
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AB 32 ChallengeAB 32 Challenge
0
100
200
300
400
500
600
700
1990 2000 2010 2020
Mill
ion
Met
ric T
ons
per Y
ear
(CO
2E
quiv
alen
t) Reduction Required
(175 MMT)Business As Usual2020 AB32
Target
00 50 100
150
Diesel anti‐idling
Fuel efficient tires for LDV
Fuel econo
my ‐m
edium/heavy trucks
Petroleu
m & Gas Produ
ction
Fuel econo
my standards ‐Fed
eral Ene
rgy Bill
Solar P
V (CA Solar Initiative)
Utility
Based
Ene
rgy Efficiency
Huffm
an Bill (P
rimarily lightin
g)Fede
ral Stand
ards and
Title 24
Revisions
Cemen
t Produ
ction Fuel Switching
Fuel econo
my standards ‐P
avley Bill
Cemen
t Produ
ction Efficiency
Petroleu
m Refining
Fly Ash Sub
stitu
tionfor Cem
ent
Smart G
rowth plann
ing and othe
rs
Redu
ced venting/leaks in oil and gas system
Conservatio
n forest managem
ent
Light duty plug
‐in hybrids
Conservatio
n tillage
CHP Re
side
ntial and
Com
mercial: Aggressive
Indu
strial CHP (aggressive grow
th)
High‐GWP gases: statio
nary sou
rce
Afforestatio
n/ Reforestatio
nBiod
iesel
Recycling‐Co
mpo
sting
CHP Re
side
ntial and
Com
mercial
Indu
strial CHP (price
incentives and
PTC)
Forest con
servation
Land
fill M
ethane
Capture
Biogas Electricity
High‐GWP gases: mob
ile sou
rce
Port electrification
Med
ium/heavy truck hybridization
Ethano
l (Low Carbo
n Fuels)
Small hydro
Geo
thermal pow
erOther Materials Produ
ction
Wind Electric
Solar The
rmal
Aggressive IOU EE
Biom
ass Electricity
Coal Plants with
CCS
‐400
‐300
‐200
‐100
0
100
200
300US$
per Ton
CO2e
Total CO2 Reductions (Million Metric Tons CO2 Equivalent)
CO2 Marginal Abatement Cost Curve
Smaller than 0.5 MM Tonnne ReductionVery Responsive to CO2 PricesPartially Responsive to CO2 PricesMinimally responsive to CO2 PricesExisting Regulation
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Scoping Plan Incentives
Not Covered by Cap and Trade
(High GWP Gases)
Complementary Measures
(Light Duty Vehicle Standards,
Electricity/Gas Energy Efficiency, Renewables, Low
carbon fuel standard, regional targets, others)
Cap and Trade
Cap and Trade
0
20
40
60
80
100
120
140
160
180
200
CO2e Reductions (MMTonne)
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Precourt Energy Efficiency Center
http://peec.stanford.edu