MAKING MODERN LIVING POSSIBLE
Energy Efficiency 20-20-20. Development opportunities for everyone Julie Kjestrup Head of Public & Industry Affairs Danfoss Heating Solutions
Riga, 1 March 2013
Introducing Danfoss Danfoss is a global leader within
energy-efficient solutions – Well-proven technologies with
enormous energy-saving potential We have built up our
competencies over the past 80 years
– our products and our knowledge are our key strengths
Global competence center for
energy efficiency – rooted in Southern Denmark - 110 sales offices and 79
factories worldwide
Climate and Energy– Danfoss’ World
Refrigeration & Air Conditioning Controls
Power Electronics Heating Solutions
District Energy Sauer-Danfoss Commercial Compressors
Sustainable results
Systematic Social Responsibility Global Compact & Global Reporting
Initiative Responsibility in Supply Chain Ethics policy & Ethics line set-up Anti-discrimination
Environmental Engagement 3×25 objective: 25% less CO2 & 25%
more renewable energy by 2025 Negative list of chemicals
Danfoss Business System World-class value chain with focus on
value creation and customer focus
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Sponsorship of Council Presidency
Resource Scarcity
A Campaign of EuroACE
What Was That Bump?
Financial Crisis
Unemployment
Enter Energy Efficiency Monica Frassoni, former President EU-ASE: ‘If we were in the US, the Energy Efficiency
Directive would be called the jobs and recovery act’
Energy Efficiency & Renewables enable jobs, growth, energy security, climate protection – in short, a sustainable future on all accounts
Europe has agreed on an Energy Efficiency Directive, now Member States need to make the most of it by ensuring ambitious implementation
The Role of Energy Efficiency Energy efficiency can significantly aid in overcoming the crisis Growth/job creation
the ’green economy’ has the potential to create up to 2 million jobs, according to the European Commission
the majority of these are local, and in small and medium
sized enterprises
Economy/growth/public financing many energy efficiency measures have fairly short pay-back
times – and once in place, the savings continue – creating better indoor environments and freeing up money for other causes
Energy/climate
we can continue to lower CO2 emissions whilst improving our energy security: the less energy we use, the less we need to secure
Multiple benefits of energy efficient renovation of buildings: impact on public finances
Energy efficient buildings: why right now?
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Unemployment high and rising, financing costs all time low
Note: Unemployment rate: Unemployed persons as a share of the total active population
Source: AMECO, Eurostat
Substantial evidence that energy efficiency of building is a no-regret option: Costs of investments lower than
value of benefits This is true globally also in the EU
This not a new finding in this study, it is old news.
The real news are: Energy efficiency can also bring
substantial health benefits… …and improve public finances
Now is the time to do it Unemployment is (too) high, so the
capacity is there Borrowing costs for investments at
record low levels
Multiple benefits of energy efficient renovation of buildings: impact on public finances
The multiple benefits of energy renovation in buildings
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The benefits of energy renovation
Energy savings provide Direct and indirect benefits to society at large
Net benefits as value of energy savings exceed investment costs
Reduced air pollution and better indoor climate leads to better health outcomes and higher productivity and welfare
Improve public finances Direct impact of energy savings leads to
loss of tax revenues This is however more than offset by:
Reduced costs of energy in government run and owned buildings
Lower costs of expanding renewable energy which could help fund needed increases in government RD in low carbon technologies
Higher taxes and lower social expenditure from higher activity: a temporary but important additional contribution in coming years
Source: Copenhagen Economics
Multiple benefits of energy efficient renovation of buildings: impact on public finances
Measuring the benefits by 2020
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Quantified benefits to society 2020
Note: These results include the rebound effect, and can therefore not be compared with the sub-results derived in Chapter 1. We have applied a rebound effect of 20 per cent.
The total does not equal the sum of each element due to
rounding. Source: Copenhagen Economics
The study looks at two scenarios for energy savings based on analysis done for EU Commission: Conservative assessment of cost-
effective emissions fully paying for themselves without any co-benefits (“Low EE”)
More optimistic scenario(“high EE”)
Scenario results Low EE:
Net benefits from energy saving around € 50 billion, other benefits adds up to a total plus € 100 billion
High EE Up to € 175 billion.
Multiple benefits of energy efficient renovation of buildings: impact on public finances
Public finance benefits 2020
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Low EE Reduced energy bill in public
buildings, lower public spending on health care expenditure and less need to subsidise renewable energy may in total save nearly € 34 billion
This dwarfs the loss of revenues from lower energy use
So that the total revenue gain is close to € 30 billion
High EE The net effect may reach € 40 billion
Note: These estimated gains to public finances are already included in in Figure 1, and should not be considered additional to these.
The total does not equal the sum of each element due to
rounding. Source: Copenhagen Economics
Multiple benefits of energy efficient renovation of buildings: impact on public finances
Conclusions
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Energy efficient renovation of existing buildings: very attractive economic benefits in their own right
Climate change and energy security The “low hanging fruit” in wide range of studies
Sizeable co-benefits to society improved health and productivity
Now is a perfect time to push for change and realise potential: Low economic activity calls for government action to
spur growth Here is an option that can deliver and also boost
public finances in a time of budget consolidation Identified barriers require structural reform but why
not do it: tenants, landlords, tax payers and consumers will all benefit
Some countries have already started (examples in report), others recommended to follow
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A Campaign of EuroACE
Increased Innovation • EU Industry is World Leader • Opportunity to Remain in the Lead Increased Competitiveness • EU Industry Ahead of the Curve • New Markets will Open in the Future • Boost to International Trade
Energy Performance of Buildings Directive implementation
Renewables Directive
Energy Package 2030
Multi-annual Financing Framework/Structural Funds
Energy Efficiency Directive implementation
You have the keys to unlocking the energy efficiency future
Our: contribution Danfoss has technologies at hand If all radiators would be fitted with thermostats, this
could already save a substantial part of the EU’s proposed energy efficiency gains. In Germany alone, an annual energy saving of 18 billion kWh could be achieved.
517 million tons of CO2 could be saved per year if Europe doubled its use of district heating to 18-20% combined with increased reliance on renewable energy sources.
Heat pumps can help save 50-75% energy per household and uses nature’s free resources to do so – saving money and increasing energy security
Only 8% of the current electricity capacity globally is combined heat and power (CHP). An increase to 14 % would generate energy savings equivalent to one year’s production by all the world’s windmills
A Danish perspective Yes, we can! Energy/climate The world could cut its energy usage and CO2
emissions by 40 per cent, if it had the same energy efficiency as in Denmark (DONG Energy)
Economy/growth Each GDP unit in Denmark now requires
27.8% less energy than in 1990 (Energistatistik 2010)
Energy security In 2010, Denmark was the only EU country
which completely covered its own energy needs (121% in 2010) (Energistatistik 2010)
Questions? More info needed?
Julie Kjestrup Head of Public & Industry Affairs Danfoss Heating Solutions [email protected] ++32 475 95 12 75