Energy Efficiency –Good for the World’s Economy; Good for the Nation’s Economy;Good for the Nation s Economy; Good for Yours!

Presentation byKateri Callahan PresidentKateri Callahan, President

Charlotte Regional Partnership Investors ForumJuly 29 2009July 29, 2009

OverviewOverview

A F W d Ab t th Alli A Few Words About the Alliance Why Energy Efficiency? Why Now? Policy: Tapping the Full Potential of Energy

Efficiency Regional/State Leadership: Building Green

Economies One by One Forecast for the Future: Energy Efficiency as

the Foundation of a New, Green Economy

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

A unique NGO formed and still led by Members of Congress

Guided by a 37-Member, Elected Board of Directors- Led 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 Alliances: i bliBusiness, Govt. & 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

Energy Efficiency: Faithful FriendEnergy Efficiency: Faithful Friend

50Energy Efficiency and Conservation

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

Have Reduced Annual Energy Consumption by 50 Quads Energy Efficiency

8

23

24

40

Nuclear Electric Power

Coal

Natural Gas

Petroleum has been powering the U S

0.8

3

4

0 10 20 30 40 50 60

Geothermal, Solar and Wind

Conventional Hydroelectric

Wood, Waste, Alcohol the U.S. economy for over0 10 20 30 40 50 60

Quads

2007 Domestic Production Net Imports

Alliance to Save EnergyAugust 2008

for over 30 years!

Enormous SavingsEnormous Savings Energy Efficiency AVOIDING roughly 2.5Energy Efficiency AVOIDING roughly 2.5

billion tons of CO2 annually

Saving roughly $400 billion annually

Why Now? Energy Use is a Global liClimate Issue

Source: Energy Information Administration

Why Now? Growing Energy Demand is UnsustainableUnsustainable

18 Oth bl18 Oth bl

14

16

18

valen

t

Other renewablesBiomassHydroNuclear14

16

18

valen

t

Other renewablesBiomassHydroNuclear

8

10

12

esof

oil eq

uiv GasOilCoal

8

10

12

es of

oil e

quiv Gas

OilCoal

4

6

8

billio

n ton

ne

4

6

8

billio

n ton

ne

0

2

1980 1990 2000 2010 2020 20300

2

1980 1990 2000 2010 2020 2030Global demand grows by more than half over the next quarter of a

century, with coal use rising most in absolute terms

Why Now? U.S. Growth in Energy Use i l i hPoses a National Security Threat

Why Now: Energy Efficiency is a P k tb k IPocketbook Issue

Why Efficiency? Cheapest, Q i k t Cl tQuickest, Cleanest…. Annual world-wide investment of $170 billion Annual world wide investment of $170 billion

in energy efficiency through 2020 could:

- cut global growth in energy demand by ½!$900 billi i id d t- save $900 billion a year in avoided energy costs

- dramatically reduce greenhouse gas emissions

Source: The McKinsey Global InstituteSource: The McKinsey Global Institute

Why EE? Enormous Potential for S i i ALL S tSavings in ALL Sectors…

Source: McKinsey Global InstituteSource: McKinsey Global Institute

Why Efficiency? Local BenefitsBenefits

EE: Enormous Potential for Regional Job GrowthRegional Job Growth…

The same study reveals that cost-effective energygypolicies can positively impact the larger Appalachia economy, creating 77 378 jobscreating 77,378 jobs regionally.

The Challenge? M k t Di t tiMarket Distortions Principal Agent or “Split Incentives” Principal Agent or Split Incentives

- Home/Commercial builder versus buyer- Landlord versus tenant- Utility versus customer

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

and/or paybacks for upgradesL k f I t t i RD&D d EE P Lack of Investment in RD&D and EE Programs

How Do We Unlock the Potential f E Effi i ?of Energy Efficiency?

Five Tenants of Sound EE P bli P liEE Public Policy

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

2)Education and outreach

3)I ti d Fi i M h i3)Incentives and Financing Mechanisms

4)Standards & Codes4)Standards & Codes

5)Government “Leadership by Example” ) p y p

A Big Year for Energy Efficiency i P bli P liin Public Policy

Obama’s election platform

American Recovery & Reinvestment

President’s Fiscal Year 2010 budget

NEW! American Clean Energy and Security

Ongoing appropriations in House andplatform Reinvestment

Act (ARRA, or Stimulus Bill)

2010 budget and Security Act (ACES)

President’s House

in House and Senate climate & energy bills

DOE: new)

new CAFÉ standards

House PASSES ACES (6/26)

DOE: new lighting standards

President Obama: Energy Efficiency Advocate

– Reduce electricity use 15% by 2020

Energy Efficiency Advocatey y

– Net-zero energy buildings by 2030– Overhaul federal appliance standards– By 2014 reduce energy use in newBy 2014, reduce energy use in new

federal buildings 45%; 25% in existing federal buildingsFlip incentives for utilities– Flip incentives for utilities

– Invest in a “smart grid”– Weatherize 1 million homes/year

I t t i ti f “li bl– Investment incentives for “livable cities”

– Showed early commitment to large green energy component in the economic recovery bill

American Recovery & Reinvestment Act: $65B Related to Energ Efficienc$65B Related to Energy Efficiency

Funding in Millions of US Dollars

ARRA: Built on the Five Pillars of G d P bli P liGood Public Policy RD&D

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

I ti d Fi i T l Incentives and Financing Tools– Extension of tax incentives

Codes & Standards 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)

Funding RolloutFunding Rollout Energy Funds Slow to  Projected timing of 

ll f d dUnroll:- 1% of FY2009 awards- 90% of FY2009 awards go to

all funds made available to states and localities. 

90% of FY2009 awards go to health, transportation and education

Funding allotted in Funding allotted in segments:- For SEP & WAP:

10% i i i l l 10% on initial app approval 40% on comprehensive app approval 

Remaining 50% contingent on Remaining 50% contingent on demonstrated success

http://www.recovery.gov/sites/default/files/GAO-09-580+Recovery+Act.pdf

FY09 and FY12 funding for states and localities

Core Energy FundingObligation & Spending to dateObligation & Spending to date SEP

Appropriated $3 1 billion Smart Grid Investment Grant 

Program- Appropriated: $3.1 billion- Obligated: $301.6 million- Spent: $9.4 million

EECBG

Program- Appropriated: $4.5 billion- Obligated: $0

Smart Grid Demonstration EECBG - Appropriated: $3.2 billion- Obligated: $0

WAP

Smart Grid Demonstration Projects- Appropriated: $615 million- Awarded: $4.7 million

- Appropriated: $5 billion- Obligated: $553.4 million- Spent: $8.3 million

- Spent: $0 HUD’s EE Public Housing Capital 

Funds- Appropriated: $4 billion Green Jobs

- Appropriated: $500 million- Obligated: $0

- Appropriated: $4 billion- Awarded: $0

HUD’s Green Retrofit Program- Appropriated $250 millionAppropriated $250 million- Obligated: $0

$890 million of $18 billion awarded (.5%)

ARRA F nding for EEARRA Funding for EENorth Carolina: South Carolina State Energy Program (SEP)

- Appropriated: $76 million- Awarded: $30.4 million (June 

State Energy Program (SEP)- Appropriated: $51 million- Awarded: $20.2 million (June 25)$ (

25)

Weatherization Assistance - Appropriated: $132 million

$ ( )

Weatherization Assistance - Appropriated: $59 millionAppropriated: $132 million

- Obligated: $53 million (June 18th)

- Weatherization goal: 23,500 

- Appropriated: $59 million- Obligated: $24 million (June 

18th)- Weatherization Goal: 6 500g ,

homes

Energy Efficiency and Conservation Block Grants*

Weatherization Goal: 6,500 homes

Energy Efficiency and Conservation Block Grants*Conservation Block Grants

- Appropriated: $ 58 millionConservation Block Grants- Appropriated: $ 31 million

St t E P PlBuilding Code  Green  Education 

State Energy Program Plans

State Energy Efficient Buildings Financing MechanismsCompli‐ance

Jobs Training

and Outreach

Transport‐ation

Performance Contracting Residential Industrial Commercial State 

Revolving Loans Grants Credits

Arizona x x x

California x x x x x x

Colorado x x x x x x x

Georgia x x x x x x

Iowa x x x x

Maine x x x

Massachusetts x x

Minnesota x x

Montana x

New Hampshire x x x x xNew Hampshire x x x x x

New York xNorth Carolina x x x x x xSouth Carolina x x x x x x xWest Virginia x x x x

Updated regularly on our stimulus resources page: www.ase.org/stimulusresources

Uses of Funds:St t E P PlState Energy Programs Plans North Carolina:

- Support small business and industry through energy savings ($11 5 million)- Support small business and industry through energy savings ($11.5 million)- Grow North Carolina’s green workforce‐ ($8.85 million)- Foster renewable energy technology and resource innovation ($13.5 million)- Improve energy efficiency in local and state government ($9 5 million)Improve energy efficiency in local and state government ($9.5 million)- Promote residential energy efficiency and renewable energy ($10 million)- Create an Energy Investment Revolving Loan Fund ($18 million)

South Carolina:- Improve energy efficiency in Public Institutions ($40 million)- Create South Carolina Energy Efficiency Training Center Collaborative ($.9 

million)/- Establish Small Business/Utility Partnership for Energy Efficiency Equipment 

($50 thousand)- Improve energy efficiency in Low‐Income Manufactured Housing ($3 

million))- Establish Carolina Clean Green Investment Incentives ($3 million)- Establish Competitive Renewable Energy Grants Program ($3 million)

Oversight and AdvocacyOversight and Advocacy Immense problems of implementation

- size and complexity; 

- challenge of administration within limited time frame; ;

- political appointees not in place; 

- demands on career appointees

C dibilit f f t ffi i Credibility of future energy efficiency initiatives depends on competent and effective implementation

Problem of EM & V: How do we measure savings? 

C ti it f P Wh t h Continuity of Programs: What happens when the funding goes away? 

A Word on Federal Tax IncentivesIncentives

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

Commercial BuildingsD d ti t $1 80/ ft f b ildi d i d t 50% lDeduction up to $1.80/sq.ft. for buildings designed to use 50% less energy than ASHRAE-90.1-2001 (Through 2013)Combined Heat and Power property – 10% investment tax credit, applicable to only the first 15MW of CHP property (Through 2016)pp y p p y ( g )Solar Energy Systems- 30% tax credit of the cost of the system (Through 2016)Small Wind Systems- 30% of total cost for owners of small wind systems with 100 (kW) of capacity and less (Through 2016)with 100 (kW) of capacity and less (Through 2016)Geothermal Heat Pumps- Investment tax credit of 10% of installed cost or a grant in lieu of the credit worth 10% (Through 2010)

Public Buildings: Assignable deduction!

Next Up?E d Cli t L i l tiEnergy and Climate Legislation

In the House In the Senate In the House- ACES (The American

Clean Energy and

In the Senate- ACELA (The

American CleanClean Energy and Security Act, or Waxman-Markey)

American Clean Energy Leadership Act)

Status: Narrowly passed the House on

Scope: Energy Only Status: Approved by

June 26th by a vote of 219 to 212.

pp yEnergy Committee on June 27th

ACES:C i th j lCap is the crown jewel 85% of US GHG emissions covered 85% of US GHG emissions covered

- Could be higher

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

ACES:G l f E Effi iGoals for Energy Efficiency

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

Reduce cost of meeting carbon cap by

Addressing market barriers, especially g , p yamong energy end-users

ACES: EE ProgramsACES: EE Programs Complementary EE policies Complementary EE policies

Codes, standards, building labeling, electric efficiency resource standards; authorizations; financing mechanisms

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

$81 t $167b 2012 2050 $81 to $167b over 2012-2050

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

according to EPA analysis April 20according to EPA analysis April 20

Climate Outlook in SenateClimate Outlook in Senate Senate EPW to release draft in SeptemberSenate EPW to release draft in September At least six other committees have jurisdiction

over climate legislation; Senator Reid hasover climate legislation; Senator Reid has asked these Committees to conclude deliberations by Sept 18deliberations by Sept. 18

Majority Leader Reid wants to bring comprehensive bill to the floor in the fall; wecomprehensive bill to the floor in the fall; we are hearing October for floor actionO /P i “Pi h d B l ” Opponents/Proponents in “Pitched Battle”

ACES Wh th V t AACES: Where the Votes Are

States with majority of votes in the delegation for the Waxman Markey bill are in green;for the Waxman-Markey bill are in green; states with majority opposing W/M are in red

The Challenges Can Be Overcome:  U l hi NC d SC’ P i l!Unleashing NC and SC’s Potential! 

Retail Electricity Consumption per Capita

14 0000

16.0000

18.0000

10 0000

12.0000

14.0000

urs pe

r Pe

rson

NC

6 0000

8.0000

10.0000

usan

d Kilowatt H

ou NY

VT

USA

EU

JAPAN

2.0000

4.0000

6.0000

Thou

JAPAN

0.0000

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Unleashing the Power of Public Policy: A “Prescription for Success”

Western Governors “CDEAC” RecommendationsWestern Governors CDEAC RecommendationsMigrate “Best Practices” to ALL western states

- Institute Electric & Natural Gas DSM ProgramsInstitute Electric & Natural Gas DSM Programs- Update & Enforce New Building Codes- Government Leadership in Facilities/Practices- Financial Incentives- Pricing Policies (Pay more for the more you use)- Education & Outreach- Technology R&D and Transfer

Form Regional Initiatives- Form Regional Initiatives- Feasible to reduce electricity use 20% in 2020

L d hi i th St tLeadership in the StatesCalifornia Cut Energy Use and Peak Demand

“Flex Your Power Campaign” - Retail promotions- TV, Print & Radio AdvertisingTV, Print & Radio Advertising

20/20 Utility Rebate Program - Automatic Enrollment Simple Requirement

Executive Order All Investor owned Utilities- Executive Order All Investor-owned Utilities

Results

Reduced energy consumption at peak by 14% 32% of residents & businesses cut energy use by at least 20% Per capita energy use lower than any industrialized nation Cost of savings lower than contract or spot market power purchases

Unleashing the Power of Charlotte: S i f SSuggestions for Success

National EPA Clean Action Plan for Energy Efficiency

Energy-Environment Guide to ActionEfficiency

- EEI, NARUC, EPA, DOE…

Guide to Action

Western

- DOE, NARUC, NASEO, ASE, RAP

State Energy Western Governors Association

State Energy Efficiency Policies: aSeries of Briefs,

Energy Efficiency Task Force Report

pub. by the Alliance

Force Report

EE Global 2010Monday, May 10 to Wednesday, May 12, 2010Washington DC Convention Center, Washington DCEE Global 2010, will serve as the “Davos” of the energy efficiency community, drawing over 600 leaders from government, industry, NGOs, and media from 40+ countries together to share best practices and policies for global implementation of energy efficiency.

With over 80% of 2009 participants self-identifying as executive or t l l ti i ti i EE Gl b l ill id tmanagement-level, participation in EE Global will provide access to

energy efficiency’s most notable leaders and decision makers.

Final WordsFinal Words…

“Our greatest national energyOur greatest national energy resource is the energy we currently

waste ”waste.”

Former Energy Secretary Spence Abraham

Thank you!Thank you!

F M I f tiFor 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