Brian T. Castelli, Executive Vice‐President

Alliance to Save Energy

PNAEE 2010 ‐ 2020Santiago, Chile                                             April 27, 2010

Energy Efficiency as

Sustainable Economic Development

Presentation OverviewA few words about the Alliance

Why energy efficiency?  Why Now?

Key Benefits of Energy Efficiency- Security – Economy – Jobs – Business Competitiveness

Policy required  to deploy energy efficiency at scale

EE Visionary Award to PPEE- Award to be made at EEGlobal Forum on May 11, 2010

What is the Alliance to Save Energy?

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

- Led by Senator Mark Pryor (D‐Ark.) and Peter Darbee, President and CEO of Pacific Gas and Electric

- Includes 10 Members of Congress – Bi‐Cameral; Bi‐Partisan

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

Working with and Across All Sectors of the Economy170 companies, organizations, and institutions in Associates Program

Associates  Program membership represents  all economic sectors

Initiatives underway in research, policy advocacy, education, technology  deployment, market transformation and communications

Why EE? Why Now? Global “Business as Usual is Unsustainable

Global energy demand grows by 33 percent over the next 20 years, with coal use rising the most in absolute terms.

Quadrillion btu

Why More EE? Why Now?Energy Use is a Global Climate Issue

China, 19%

Russia, 6%

Japan, 4%

India, 4%Western Europe,

13%

, 0

Others, 32%

US Other Sectors, 13%

US Buildings, 8%

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

Source: Energy Information Administration

Consuming “Beyond Our Means”

Energy Information Administration

Four Key Benefits of Energy Efficiency

Improve energy security by reducing the reliance on foreign energy imports

Improve economic prosperity by reducing the amount of energy used per unit of GDP

Create Jobs by developing strong energy efficiency policies and expanding EE programs

Reduce greenhouse gas emissions by reducing overall energy consumption

In sum, energy use has adirect effect on…Global Emissions:

Energy use directly linked to 

GHG emissions..U.S. example:

Security:Unchecked growth in energy demand can:

• Accelerate fossil fuel depletion

• Increase our reliance on foreign sources of energy

Economy:• According to a McKinsey estimate: 

“Business as usual” energy use will waste more than $1.2 trillion between now and 2020 in the U.S. alone – and this does not include transportation energy consumption.

Energy Efficiency –America’s Greatest Energy Resource

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2010 2015 2020 2025 2030

Gt

Reference Scenario

450 Scenario

End‐useefficiency

Power plants

Renewables

Biofuels

Nuclear

CCS

52% of the required cuts in GHG emissions to achieve the 450 scenario is estimated to come from energy efficiency savings by 2030 (WEO 2009)

World Energy Outlook 2009 450 Scenario

Efficiency: Enormous Potential for Savings in ALL Sectors…

Source:  McKinsey Global Institute

All Buildings = 45 Quads

Huge EE Potential Remains

Energy Efficiency Potential 40%

Adapted from McKinsey Analysis

Energy efficiency should be fully considered in GHG reductions. All items to the left of the arrow represent “negative marginal costs”, i.e. profitable investments

Energy Efficiency: the 1st FuelAverage Utility Cost of New Electric Resources

0

2

4

6

8

10

12

14

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EnergyEfficiency (a)

Wind Biomass Nat. GasCombined

Cycle

PulverizedCoal

Nuclear Coal IGCC

Leve

lized

Cos

t (ce

nts/

kWh)

w/o Carbon W/ $20/Ton Carbon

Source: UCS 2009 except (a) ACEEE 2009

Energy Efficiency: the 1st Fuel

Many “Non-Price” Barriers

Diapositiva 15

A2 ASE; 07/04/2008

Deploying EE at Scale Requires: A Foundation of Public Policy

To encourage technological innovation

To gain foothold in market

To achieve market penetration

To lock in savings for consumers and businesses

Public Policy Helped Deliver EE Into the U.S. Economy

Year Statute Residential Commercial Industrial Transport Electric  Federal/StateGovernment

1975 Energy Policy and Conservation Act

§340 Industrial Equipment Efficiency

§321 CAFE for cars and light trucks

§381 Federal Conservation Programs; 

1976 Energy Conservation  and Production Act

Low‐income home weather‐ization; appl. eff stds

EPCA §361 State Energy Programs

1978 National Energy Act (NECPA, PURPA, PIFUA)

Energy efficiency tax credits

Energy efficiency tax credits

PIFUA PURPA §210, PIFUA

NECPA; EPCA §381, 382 Fed’l efficiency standards

1989 National Energy Conservation Policy Act

EPCA §321 Consumer Appliance Efficiency

EPCA §400 Alt fuel use in light duty vehicles

§210 Utility conservation program

EPCA §400 Federal fleet requirements; state program update; ESCOs

1992 Energy Policy Act of 1992

Model energy eff. building codes; appl and window stds 

Comm office equipmt eff stds

§131 indust. efficiency grants

Utility energy efficiency grants

§157 Fedl energy training, audits, procurement

The EE Policy March Quickens

Year Statute Residential Commercial Industrial Transport Electric  Federal/StateGovernment

2005 Energy Policy Act of 2005

§135 Appliance stds, 124 eff appliance rebates

Eff standards for commercial equipment

Fuel efficiency studies

Net‐metering,Interconnect standards, PURPA relief

§101 Energy saving measures in Federal buildings

2007 Energy Independence and Security Act of 2007

Light bulb and consumer appliance standards

Institutional Grants and Loan; Zero‐energy Comm Bldgs

EPCA  §371 Industrial Waste Energy Recovery

§101, new CAFE Stds;

Title XIII, Smart Grid policy

§141 Fed fleet reqs; §431,521 high perf Fed bldgs; §541 EECGB

2009 ARRA (Stimulus Bill) Weatherization funding for low‐income homes

Electric vehicle and battery funding

Smart grid funding; transmission study funding

State Energy Office Funding; EECGB Funding

Bending Down the Energy Demand Curve: Policies Matter

The Outlook Should Waxman-Markey Become U.S. Law

President Obama Leadership First 12 months – Opening the Decade

of Energy Efficiency

Stimulus package

President’s Fiscal Year 2010 budget

American Clean Energy and Security Act (ACES) 

President’s new CAFÉstandards

May

May

May

January 2009

June Ju

ly 

HOUSEPASSES ACES (6/26)

Ongoing approps in House/Senate climate/energy bills 

DOE: new lighting standards

October

October

November

Executive Order on federal energy use

Outdoor Lighting standards

HVAC standards agreement

December

House Passes $75 Billion “Jobs for Main Street” bill

November

Bilateral agreement: U.S.‐China Energy Efficiency Action Plan

December

COP15: Secretary Chu announces Climate REDI Program

June

Stimulus: $65B Related to Energy Efficiency

Funding in Millions of US Dollars

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 and Increase in consumer EE 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)

Energy Efficiency Funding 1990-2013

What can EE do for the economy?

JOBS!- NYSERDA: for every giga‐Watt hour saved, the agency’s programs create or retain 1.5 jobs

- American Solar Energy society: estimates 3.7 million jobs created in the U.S. energy efficiency industry in 2006 alone

- Apollo Alliance: 11 direct jobs per $1 million invested in high‐performance buildings

Security of energy supply!

Stability in energy prices!

The ‘New Green Economy’and Green Jobs

The creation of so-called ‘green jobs’ has been touted as a major selling point for energy efficiency programs.- Investing $1 million in energy efficiency

generates 19 to 25 jobs Efficiency more labor-intensive than energy production - $1 million in energy production creates only 5 to 10 jobs(MRG Associates 2004)

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Energy Efficiency JOBSin New Legislation

Home Star Legislation- Residential Energy Efficiency retrofits

Rebates up to $3,000 for prescriptive measuresRebates up to $8,000 for 45% improvement$6 Billion available for 3 million homes

Estimated Job Creation- 2010 126,000 jobs- 2011 36,000 jobs

Energy Efficiency JOBSin New Legislation

Building Star Legislation- Commercial Building Energy Efficiency retrofits

for specific improvements to lighting, insulation, and heating, cooling and energy management systems

Estimated Job Creation- 2010 130,000 jobs- 2011 57,000 jobs

Energy Efficiency JOBSin New Legislation

Manufacturers Legislation (proposed)- Manufacturing Energy Efficiency retrofits

$4 billion in grants

Estimated Job Creation- 2010 77,000 jobs- 2011 91,000 jobs

JOBS – Clean Energy 2030Google’s Version 2.0

Deploying aggressive end-use electrical energy efficiencyReplacing all coal and oil electricity generation, and about half of that from natural gas, with renewable electricity:Increasing plug-in vehicles to 90% of new car sales in 2030Increasing new vehicle fuel efficiency from 31 to 45 mpg in 2030

Bottom Line:

Net savings of $820 billion over the 22-year life of the plan AND Net New Jobs of 8,750,000

Thanks to Doug Gatlin, USGBC at National Association of Realtors May 13, 2008

The Business Benefits

The Business BenefitsOperating Costs

Average Expected Decrease = 8%-9%Main motivator for green in all sectors

Energy UseAverage Expected Decrease = 30%

Building ValueAverage Expected Increase = 7.5%

Operating IncomeAverage Expected Increase = 6.6%

Occupancy and Rent RatiosIncreased Occupancy = 3.5%Rent Ratio Increase = 3%

Thanks to Doug Gatlin, USGBC at National Association of Realtors May 13, 2008

Example Green Building Savings

Thanks to Doug Gatlin, USGBC at National Association of Realtors May 13, 2008

Why is all this important?We only have one World…

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EE Visionary AwardThe EE Visionary Awards - selected by the EE Global International Steering Committee (ISC), and bestowed upon

recipients from different regions of the world (the Americas, Africa, Asia-Pacific and Europe) in recognition of their outstanding contributions to the advancement of energy efficiency.

The prestigious inaugural award was given in 2009 at EE Global in Paris2009 Winners : - Americas: Hon. Dian M. Grueneich, Commissioner, California Public Utilities

Commission - Asia-Pacific/Africa: National Development and Reform Commission (NDRC), People’s

Republic of China- Europe: Hon. Andris Piebalgs, Commissioner for Energy, European Commission

2010 Winners:- Americas: Hon. Jimena Bronfman, Vice Minister of Energy, Ministry of Energy, Chile- Africa: Hon. Joseph Oteng-Adjei, Minister for Energy, Ministry of Energy, Ghana- Asia-Pacific: Dr. Ajay Mathur, Director General, Bureau of Energy Efficiency, India - Europe: Hon. Jonas Hafström, Swedish Ambassador to the United States, Embassy of

Sweden (invited)

EE Visionary Award-Americas2010 - Recipient: PPEE

The country of Chile is the Americas 2010 EE Visionary recipient :- Chile’s commitment and outstanding contributions to the advancement of energy

efficiency- The establishment of an energy efficiency information labeling program, - The institution of South America's first residential energy efficiency building code,- The development of the National Action Plan for Energy Efficiency, and- The development of an autonomous energy efficiency agency to guide implementation

efforts in the country.

PPEE led the conservation efforts during Chile’s 2008 energy crisis (due to drought) when it instituted an intense public information campaign combined with the distribution of tens of thousands of CFLs.- This resulted in electricity use staying flat in 2008, while the economy grew

at 3.2%.- Growth in electricity use as recently as 2005 typically exceeded the rates of

GDP growth.

Questions?

Thank you!

Contact information:

Brian T. Castelli

bcastelli@ase.org

202‐857‐0666