Energy Efficiency & Climate Change:Planning for Results

January 8, 2008

University of North Carolina

Richard W. Steeves, ChairmanConnecticut Energy Efficiency Fund

c/o Office of Consumer Counsel10 Franklin Square New Britain, CT 06051

(860) 827-2912CTSavesEnergy.org

What Is the OCC?

• Office of Consumer Counsel• Mary J. Healey, Consumer Counsel• 10 Franklin Square• New Britain, CT 06051• (860)827-2900• http://www.ct.gov/occ/site/default.asp• OCC: Member of ECMB, CEAB, NEPOOL,

CEAC, CERC

THE OCC MISSION

• OCC is an independent state agency with statutory responsibility to represent customers of Connecticut’s five regulated utilities – electric, gas, water, telephone, and cable television, primarily in matters before the Department of Public Utility Control (DPUC) (and also at FERC).

OCC Employees

• 1 Consumer Counsel

• 5 Lawyers

• 5 Finance and Accounting

• 4 Administrative Support

• 0 Obstructionists

The Mission of the Energy Conservation Management Board is to advise and assist the utility distribution companies in the development and implementation of comprehensive and cost-effective energy conservation and market transformation plans. (as per Sec 33(d),

PA 98-28, An Act Concerning Utility Restructuring)

Climate Change is

No Longer

An Environmental Threat

.

UN Secretary General Ban Ki-moon

In coming decades, changes in our environment and the resulting upheavals from droughts to inundated coastal areas to loss of arable land are likely to become a major driver of war and conflict…

March 1, 2007

Climate change has profound implications for virtually all aspects of human well-being, from jobs and health to food security and peace within and among nations. ...Until we acknowledge the all-encompassing nature of the threat, our response will fall short.

November 8, 2006

UN Secretary General Kofi Annan

.

“...widespread accelerations of the catastrophic effects already associated with “normal” climate change …could lead to military confrontations between states over access to scarce food, water and energy supplies, or what the authors describe as a ‘world of warring states.’” Prof. Greg FosterNational Defense UniversityA New Security ParadigmWorldwatch Jan/Feb 2005. p. 40.

Discussion on a Pentagon Report on Abrupt Climate Change

We Have Many State & Regional Studies, Reports & Plans

2001 NEG/ECP Climate Change Action Plan & Related Resolutions

Regional Goals of Climate Change Action PlanShort-term: Reduce regional GHG emissions to 1990 levels by 2010.Mid-term: Reduce regional GHG emissions to at least 10% below 1990 levels by 2020.Long-term: Reduce regional GHG emissions sufficiently to eliminate any dangerous threat to the climate (current science suggests thatthis level is 75% - 85% below 2001 levels)Action Item 1 – Establishment of a Regional Standardized GHG Emissions InventoryGoal: Establish a standardized inventory beginning with 1999 GHG emissions levels, reported every three years.Action Item 2 – Establishment of a Plan for Reducing GHG Emissions and Conserving EnergyGoal: Creation of a plan by each jurisdiction articulating measures to achieve GHG reductions in view of the regional short and mid-termtargets.Action Item 3 – Promotion of Public AwarenessGoal: By 2005, make the public aware of the problems and the impacts of climate change and what actions they can take at home and atwork to reduce the release of GHGs. The public should also be cognizant of adaptive measures they can undertake.Action Item 4 - State and Provincial Governments to Lead by ExampleGoal: Reduce end-use emissions of GHGs through improved energy efficiency and lower carbon fuels within the public sector by 25% by2012 (as measured from an established baseline).Action Item 5 - Reduction of GHGs from the Electricity SectorGoal: Reduce the amount of CO2 emitted per MWh of electricity use within the region by 20% (of current emission rate) by 2025.Action Item 6 - Reduction of the Total Energy Demand Through ConservationGoal: By 2025, increase the amount of energy saved through conservation programs (as measured in tons of GHG emissions) within theregion by 20% using programs designed to encourage residential, commercial and industrial energy conservation.Action Item 7 - Reduction and/or Adaptation of Negative Social, Economic and Environmental Impacts of Climate ChangeGoal: Broaden the understanding of forecast climate impacts and plan the adaptation to these changes, where possible. In addition, seekclimate adaptation options that do not increase GHG emissions further.Action Item 8 - Decrease in the Transportation Sector’s Growth in GHG EmissionsGoal: To slow the growth rate of transportation emissions in the near future, to better understand the impacts of transportation programsand projects on overall emissions, and to seek ways to reduce these emissions. Work with federal officials to improve the energyefficiency of vehicles for sale to the public.Action Item 9 - Creation of a Regional Emissions Registry and the Exploration of a Trading MechanismGoal: To create a uniform, coordinated basis for emissions banking and trading.

Resolution 27-7 (August 2002)Encourage and promote climate change proposals centered on LED traffic lights, partnerships with colleges and universities within theregion on emissions reductions programs, purchase of high efficiency / low emission office equipment, and use of clean, energy efficientvehicles in state/provincial fleets.Resolution 28-7 (September 2003)Evaluate “smart growth” approaches to land-use and development and seek recommendations for implementation. Continue to developthe administration, tracking and reporting framework for a voluntary regional greenhouse gas registry. Work to develop voluntarypartnerships with cities, towns, and businesses to increase the efficacy of NEC/ECP’s climate change work.

A strategy in response to the threat of climate change which argues that energy-saving measures should be undertaken immediately to help reduce global warming and climate change. Even if the threat of climate change is not as pronounced as we now fear, the supporters of this strategy say would not need to be any regrets because we would have benefited from saving the energy. (This differs from the word “co-benefits” in its accent and is a strategy, not a result.)

Energy Efficiency is the Workhorse It Is What Has Been Termed a “No Regrets”

or “Tie-in” Strategy for Climate Change

http://www.babylon.com/definition/No_Regrets_Strategy/English

The Order IS ImportantEfficiency Should Come First!

1) It Is Usually the Most Cost-effective Option

2) Reduces the Required Size of HVAC/Renewable Systems Required to Meet the Loads Lowering Total Capital Costs

3) Can Begin With Relatively Modest Amounts of Investment. For the Owner Portion of a 1kW PV System (~$4,500) You Could Relamp, Buy Energy Star Appliances and Fuel Switch an Electric Stove and Dryer.

4) Provides a Quick Income Stream

Using the Positive Cash Flow Savings Provided by Energy Efficiency Measures That Are Cost Effective Today to Pay for Other Commodities Such As:

1) Additional Energy Efficiency

2) Green Tags

3) A Solar Hot Water or a Photovoltaic (PV) System

4) Even a Retirement Nest Egg (Found Money).

It’s Drives “Electrofinance”

Energy Efficiency Takes Many Forms

It Employs Better Technologies to Provide Equal or Better Services with Less Energy

•Efficient Lighting Such As Compact Fluorescent Bulbs

• Buy New Energy Star Appliances As Old Ones Wear Out.

•At Least 12" of Attic Insulation

•Sealing Air Leaks and Supply Ducts

•Motors, HVAC

•Possibly New Heating Unit and a Demand Water Heater

•Other Measures on a Case-by-case Basis (Sidewall Insulation, New Low-e Windows, Fuel Switching, Etc.)

•Reduction of Criteria Pollutants (SOx, NOx)•Reduction of Peak Loads•Reduction of Energy Cost•Reduction of Foreign Sources of Energy•Enhanced Grid Resilience•Greater Employment Opportunities•A Competitive Edge Via Productivity Gains

Efficiency “Co-Benefits” Include

ECMB 2006 Annual Legislative ReportP connotes projected figures.

SOx and NOx Lifetime Energy Efficiency Reductions

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2000 2001 2002 2003 2004 2005 2006 2007-P

Year

To

ns

of

Po

lluta

nt

Re

du

cti

on

SOx NOx

ECMB 2006 Annual Legislative ReportP connotes projected figures.

CO2 Lifetime Energy Efficiency Reductions

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

2000 2001 2002 2003 2004 2005 2006 2007-P

Year

To

ns

of

CO

2 R

ed

uc

tio

ns

Cumulative Energy Efficiency Summer Peak Demand ReductionsPeak Demand Reductions for C&LM Energy Efficiency Measures

65 6652

29

52

68

41

65

131

183

212

264

333

374

0

50

100

150

200

250

300

350

400

2000 2001 2002 2003 2004 2005 2006

Su

mm

er

Pe

ak

De

ma

nd

Re

du

cti

on

s (

MW

)

Annual Energy Efficiency Cumulative Energy Efficiency

374 MW in 2006 (cumulative 2000-2006) is equivalent to a 460 MW generation plant (accounting for losses and reserves) distributed across customers, with no risk of major outage and no risk of fuel price escalation/volatility.

Courtesy of ECMB

Develop[s] a Comprehensive Plan for Procurement of Energy Resources for 3, 5 & 10 Years Out by Jan. 08

Including, but Not Limited To, Conventional and Renewable Generating Facilities, Energy Efficiency, Load Management, Demand Response….

Resource Needs Shall First Be Met Through All Available Energy Efficiency and Demand Reduction Resources That Are Cost-effective, Reliable and Feasible...

So, Where Do we Go From Here?Passage this Year of PA 07-242, AAC Electricity and Energy Efficiency, Section 51 Mandates a Procurement Plan that:

What Have We Learned?• Not enough to reduce load growth or even get to

zero load growth• Must bend the line down (must reduce

consumption from current levels)• Need multi-year planning and a line in the sand

(2020 reductions, and 80% by 2050)• Early, aggressive action is essential (ramp up)• EE may have to do even more than sector

proportional to help achieve overall goals

What Will It Take?

• Annual energy savings of about 2.5 % to 3%• Triple (or more) the current level of effort• Leading EE states (0.75-1.5% annual savings)

will need to triple efforts• States ramping up (~0.5% annual savings) will

need to increase efforts by 5 to 6 times• Laggard states need to get going ASAP

Program Designs ThatWe Know Will Work

?

EE Programs for the Future• Deeper and broader, more comprehensive• Save 30-70% in customer facilities, instead of 5-

25% (as in many current programs)• Zero (net zero) energy buildings for all new construction• Voluntary programs unlikely to be enough; will need increased codes, standards, & mandates

MIT 2007 Zero Net Energy Solar Decathlon Home

Key Challenges

• Vision• Inertia (stuck in what we have been doing)• Political Will• Resource Allocation• EE Infrastructure

• It can and must be done (it won’t be easy)

Conclusions

• The line must bend down (there must be a reduction, not just a reduction in growth)

• The electricity sector is crucial and is one of the “easiest” sectors in which to get GHG reductions (perception of policy makers)

• EE is the “best” way to get GHG reductions in the electricity sector (easiest and cheaper, and EE provides net economic benefits)

“We’re From the Government;We’re Here to Help You.”

• Office of Consumer Counsel• Mary J. Healey, Consumer Counsel• 10 Franklin Square• New Britain, CT 06051• (860)827-2900• http://www.ct.gov/occ/site/default.asp