Perspectives on Energy Efficiency Opportunities and Strategies:Technology and Policy

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Perspectives on Energy Efficiency O ii dS i Opportunities and Strategies: Technology and Policy Technology and Policy Risø International Energy Conference 2009 September 14 2009 September 14, 2009 Brian T. Castelli

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On September 14, Executive Vice President for Programs Brian Castelli keynoted the Riso International Energy Conference 2009 at the Technical University of Denmark, where he addressed the role of energy efficiency in reducing greenhouse gases (GHG).

Transcript of Perspectives on Energy Efficiency Opportunities and Strategies:Technology and Policy

Page 1: Perspectives on Energy Efficiency Opportunities and Strategies:Technology and Policy

Perspectives on Energy Efficiency O i i d S iOpportunities and Strategies:

Technology and PolicyTechnology and Policy

Risø International Energy Conference 2009September 14 2009September 14, 2009

Brian T. Castelli

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Alliance Directors: Bi-Partisan Elected Officials and Industry Leaders

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

associations; state and local policy makers; corporate executives

Jim Rogers, CEO Duke Energy

Senator Mark Pryor (D-Ark.)

Bi-partisan, bi-cameral Honorary Vice Chairs2

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b h lli ( d)About the Alliance (cont’d)NGO coalition of 150+ prominent business, government, environmental andNGO coalition of 150 prominent business, government, environmental and

consumer leaders.

Conduct policy, education, research, technology deployment, market transformation and communication initiativesand communication initiatives.

Headquartered in Washington, D.C. with operations in Eastern Europe, South Africa, Mexico, India and several states in the U.S.

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Energy Efficiency –hthe Greatest Energy Resource

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

Have Reduced Annual Energy Consumption by 52 Quads in 2008 

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37Petroleum

Energy Efficiency and Conservation

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Nuclear Electric Power

Coal

Natural Gas

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4

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Conventional Hydroelectric

Biomass

Nuclear Electric Power

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0 10 20 30 40 50 60

Geothermal, Solar and Wind

Quads

Energy Efficiency and Conservation 2008 Domestic Production Net Imports

Alliance to Save Energy, June 20094

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Huge EE Potential Remains

E Effi i P t ti l 40%Energy Efficiency Potential 40%

Adapted from McKinsey Analysis

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Slide 5

A9 ASE, 4/7/2008

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Many Barriers

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Slide 6

A7 ASE, 4/7/2008

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i l i iEE potential is uncertain Depends Depends

- Discount ratesNote:

Supply potential is

- Economic growth- Energy prices

uncertain too

Energy prices- Capital turnover

Technology development- Technology development - Market barriers- Policy to overcome market barriers

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The ‘New Green Economy’ d band Green Jobs

Th ti f ll d ‘ j b ’ h The creation of so-called ‘green jobs’ has been touted as a major selling point for energy efficiency programs.- Investing $1 million in energy efficiencyInvesting $1 million in energy efficiency

generates 19 to 25 jobs Efficiency more labor-intensive than energyEfficiency more labor intensive than energy

production - $1 million in energy production creates only 5 to 10 jobs

(MRG Associates 2004)

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ffi i i iEnergy Efficiency in PracticeE ffi i Energy efficiency as a resource- Energy Efficiency Resource Standards- ‘White tags’- Carbon market offsetsCarbon market offsets - Efficiency projects substituting for generation

in electricity forward capacity marketsin electricity forward capacity markets

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ffi i i iEnergy Efficiency in PracticeE Effi i R St d d Energy Efficiency Resource Standards (EERS)- Efficiency counterpart to renewable portfolio

standards- Require a certain percentage of a utility’s load

to be met with efficiency measuresto be met with efficiency measures- Implemented by several

US states FederalUS states. Federal program has been proposed alongsideproposed alongside renewable standards. 10

States with Energy Efficiency Resource Standards

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ffi i i iEnergy Efficiency in PracticeE Effi i R St d d Energy Efficiency Resource Standards (EERS)- In some EERS programs, efficiency credits

are tradable, making efficiency itself a , g ytradable commodity

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ffi i i iEnergy Efficiency in PracticeEfficiency in forward capacity markets Efficiency in forward capacity markets- When electricity distribution networks hold

ti f t t bid f t tauctions for generators to bid for contracts, some distribution networks now allow entities to propose efficiency programs to meet projectedpropose efficiency programs to meet projected load

- The Federal Energy Regulatory CommissionThe Federal Energy Regulatory Commission recently required that the PJM interconnection (serving much of the mid-Atlantic coast region(serving much of the mid Atlantic coast region and some of the mid-west region) allow providers of efficiency programs to bid in their forward y p gcapacity market

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ffi i i iEnergy Efficiency in PracticeEvaluation Measurement & Verification Evaluation, Measurement, & Verification- ‘EM&V’ – how to measure the additionality of

ffi i ?efficiency programs?- With programs promising or claiming

tifi bl i tquantifiable energy savings, we mustdevelop metrics to measure success

- Several US states have developed theirown protocols, but they vary The same CFL bulb gets credited with different

savings depending on what state it’s in, based on different states’ assumptionsdifferent states assumptions

Similar issue across EU 13

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End-Use Technology ExampleEnd-Use Technology Example

Smart Grid Potential BenefitsSmart Grid - Potential Benefits Enhance customer service Improve operational efficiency

E h d DR d l d t l Enhanced DR and load control Customer behavior Support new utility business models

I t t i t itt t RE d PHEV Integrate intermittent RE and PHEVs“The Green Grid; Energy Savings and Carbon Emissions Reductions

Enabled by a Smart Grid.” Report, No. 1016905

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d h l lEnd-Use Technology ExampleS t id d d t Smart grid and consumer datadisplay systems- Allow real-time or near-real-time

knowledge of energy usage.g gy g- Pilot program energy use reductions

highly variable: 1%-27% (Darbyhighly variable: 1% 27% (Darby, 2006)

- Design of human interface (viz data- Design of human interface (viz. data display) very important, also real-timepricingpricing

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d h l lEnd-Use Technology ExampleS t id d d t Smart grid and consumer datadisplay systems- Could facilitate demand response

Not necessarily reducing total energy use directly –ot ecessa y educ g tota e e gy use d ect ypeak shaving tends to just movedemand to other times of day, thoughy git could reduce transmission line loss

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Supply-Side Technology lExample

C bi d H t d P Combined Heat and Power- Greater fuel use efficiency through the

capture of waste heat in electricity generation, or generation of electricity while producing heat

- Can be used in any thermal generation Ca be used a y e a ge e a osystem

- Popular in ScandinaviaPopular in Scandinavia- Increasingly available in smaller-scale units

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i l dMiracles WantedA i Ph i l S i t li t (S t 2008) American Physical Society list (Sept. 2008) - energy storage -solid-state lighting- thermoelectric devices -lightweight materials- advanced windows -advanced ventilation- ultrathin insulators -thermodynamic cycles- behavioural research

Others- High temperature superconductivity- Clean energy resources

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The American Political iPerspective

E ffi i i b i i i l Energy efficiency is becoming increasingly visible in national policy-making- Energy Policy Act of 2005 (EPAct ‘05)- Energy Independence and Security Act ofEnergy Independence and Security Act of

2007 (EISA)- Stimulus (February 2009)- Stimulus (February 2009)- Energy & Climate bill now in Congress

American Clean Energy and Security Act (House of Representatives) and American Clean Energy Leadership Act (Senate)Leadership Act (Senate)

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2005 Federal Energy LegislationEnergy Policy Act of 2005 will by 2020: Energy Policy Act of 2005 will by 2020:- Reduce U.S. energy use by 2%- Reduce electricity demand by 4%- Reduce oil use by 0%

Energy savings from - Appliance standardsAppliance standards- Tax incentives – lots of incentives for buildings- Federal energy management- Federal energy management- New programs authorized (but not funded –

some have since been funded in the stimulussome have since been funded in the stimulus bill) 20

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2007 Federal Energy Legislation Energy Independence and Security Act of 2007 will Energy Independence and Security Act of 2007 will

by 2020 (2030):- Reduce U.S. energy use by 4% (7%)gy y ( )- Reduce electricity demand by 4% (5%)- Reduce oil use by 5% (10%)

CO % (9%)- Reduce CO2 emissions by 5% (9%) Energy Savings from:

- Vehicle CAFE standards- Appliance standards

F d l t- Federal energy management- Certain building standards- R&D program authorizations- R&D program authorizations

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American Recovery and Reinvestment ActM j f th l t di d t bill i th• Major focus: the largest spending and tax bill in the nation’s history

• Larger than the New Deal

• Big time opportunities …

• But also big time issues 

about implementationabout implementation

• Major victory for the 

$Administration, but not without need for $150 billion compromise to secure moderate Rs and get to 60 votes in the Senate.

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Stimulus: Potentially $65 Billion related to energy efficiency

Funding in Millions of US Dollars23

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ff dCore Energy EfficiencyFunding SEP Smart Grid Investment Grant SEP

- Appropriated: $3.1 billion

C G

Smart Grid Investment Grant Program- Appropriated: $4.5 billion

EECBG - Appropriated: $3.2 billion Smart Grid Demonstration 

Projects WAP

- Appropriated: $5 billion

- Appropriated: $615 million

HUD’s EE Public Housing Green Jobs

- Appropriated: $500 million

HUD s EE Public Housing Capital Funds- Appropriated: $4 billion

HUD’s Green Retrofit Program- Appropriated $250 million

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C b 83% d ti i d Cap on carbon: 83% reduction in covered emissions by 2050 (85% of emissions are covered)

Building codes, building labels, appliance standards and labelsstandards and labels

Renewable electricity standard of 20% by 2020 –a quarter may be met through EE, or 40% if governor requestsg q

Vehicle emissions standards

L d l i d VMT Land use planning to reduce VMT25

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R bl l t i it t d d f 15% b 2021 Renewable electricity standard of 15% by 2021 4% may come from efficiency if governor petitions

Improvements in model building energy codes 30% by 2010

50% by 2016

Energy Efficiency in Manufacturing Funding for research and implementation of EE technologies,

expansion of IACs

Cl i t t f d Clean energy investment fund Loans, loan guarantees, etc., for commercialization of clean energy 

technologiestechnologies26

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N ffi i t d d New energy efficiency standards for portable lighting fixtures, commercial furnaces and reflector 

lamps; new appliance test procedureslamps; new appliance test procedures

State building retrofit grant programG t f t fit f id ti l d i l b ildi Grants for retrofits of residential and commercial buildings

Voluntary building energy performance information program- To display relative energy performance; raise public awareness

Residential High‐Performance Zero‐Net‐Energy Buildings Initiative- Goal to enable residential buildings without net emissions to be  cost‐effective by 2020

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h kThank You!

Brian Castelli Alli t S EAlliance to Save Energy

[email protected]@ gwww.ase.org

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