energy efficiency technical and polic opport nitiesand ...energy efficiency technical and polic...
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Energy Efficiency Technical and Polic Opport nitiesand Policy Opportunities
Steven Nadel, Executive Director,American Council for an Energy-Efficient EconomyJuly 2010July 2010
U.S. Energy Use in Relation to GDP gy1970-2008
250.0
200.0Energy Service Demand
150.0
l Prim
ary
Ener
gy
Energy Service Demand Adjustedfor Imports
100.0
Qua
ds o
f Tot
al
Actual Energy Supply
0 0
50.0 1970 Energy Demand
0.0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Year
McKinsey Global’s Analysis of Carbon Reduction Potential
Levelized Utility Cost of Electricity Resources
14
16W
h)
Note: The green bars represent the lower end while the blue bars reflect the upper end of costs.
10
12
(cen
ts p
er k
W
6
8
veliz
ed C
osts
2
4
Rang
e of
Lev
average = 2.5¢
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0
2
EnergyEfficiency
Wind Biomass Natural GasCombined
PulverizedCoal
Nuclear Coal IGCCEfficiency Combined
CycleCoal
Sources: ACEEE 2009 for EE, Lazard 2008 for others
ACEEE’s 2009 State Energy gyEfficiency Scorecard Results
http://aceee.org/pubs/e097.htm
Utility EE Policies & Programsy gVT
RI
NH
ME
MACT
RI
NJMD
DCDE
VA
Significant EE P 2006 dPrograms 2006 and earlierSignificant EE Programs 2007 and later
Ohio Residential Electric Efficiency Potential in 2025 by End UsePotential in 2025 by End-Use
Electricity Use Feedback, 1,460 GWh, 7%
New Homes Savings, 1,036 GWh, 5%
Plug Loads, 1,060 GWh, 5%
Economic Potential:34% savings
HVAC equipment and load recuction savings
8,259 GWh, 37%
Furnace Fans, 1,945 GWh, 9%
Li hti
Appliances, 139 GWh, 1%
Lighting, 4,774 GWh, 22%Refrigeration,
536 GWh, 2%
Water Heating, 2,864 GWh, 13%
Ohio Commercial Electric Efficiency P t ti l i 2025 b E d UPotential in 2025 by End-Use
New Buildings, 660 GWh 8%
HVAC, 3 900 GWh 23%
660 GWh, 8%
Water Heating,210 GWh 1%3,900 GWh, 23%
Office Equipment, 3,360 GWh, 20% Refrigeration,6
90 GWh, 4%
210 GWh, 1%
Appliances and Other, 20 GWh,
<1%
Lighting,8,300 GWh, 48%
Economic Potential:2 % i27% savings
Ohio Industrial Electric Efficiency Potential in 2025 by End-UsePotential in 2025 by End-Use
Weighted Levelized
MeasuresSavings Potential
in 2025 (GWh)Savings Potential
in 2025 (%)% of Efficiency
Resource PotentialCost of Saved Energy
($/kWh)Sensors & Controls 249 0.4% 2% $0.014 EIS 91 0.1% 1% $0.061 Duct/Pipe insulation 2,029 3.2% 20% $0.052 Electric Supply 1,911 3.0% 19% $0.010 Lighting 732 1.1% 7% $0.020 Advanced Efficient Motors 1,644 2.6% 16% $0.035 Motor Management 282 0.4% 3% $0.018 Lubricants 243 0.4% 2% $0.000 Motor Sys Optimization 183 0.3% 2% $0.009 Compressed Air Manageme 969 1.5% 10% $0.000 Compressed Air - Advance 46 0.1% 0% $0.000 Pumps 1,432 2.2% 14% $0.008 Fans 241 0.4% 2% $0.024 Refrigeration 137 0.2% 1% $0.003 Total 10,191 16% 100% $0.023
Energy Efficiency Policy Recommendations for Ohio
22% savings
Source: ACEEE, 2009
Estimated Reductions in Summer Peak Demand through Energy Efficiency andDemand through Energy Efficiency and Demand Response in Ohio
45,000
35,000
40,000
18%Efficiency
25,000
30,000
man
d (M
W) 11%Demand Response
15,000
20,000
Peak
Dem Adjusted Peak Load`
5,000
10,000
-2007 2011 2015 2019 2023
Net Job Impacts for Ohio (2008-2025)Net Job Impacts for Ohio (2008 2025)35,000
25,000
30,000
15,000
20,000
5,000
10,000
(5 000)
0
2008 2010 2012 2014 2016 2018 2020 2022 2024(5,000)
Summary of Rationales for Investments in Energy Efficiencyin Energy Efficiency
• Save customers moneyy• Often other benefits – comfort, productivity• Lower cost than new power plantsLower cost than new power plants• Spread the risk, reduce uncertainties• Buy time until new emissions rules are set; helpBuy time until new emissions rules are set; help
meet these new rules• Reduce need for energy importsReduce need for energy imports• Help local manufacturers of efficient equipment• EE popular with votersEE popular with voters
Manufacturers of Efficient EquipmentManufacturers of Efficient Equipment
Rheem AC and Trane furnaces, Fort Smith, AR
GE, Louisville; Whirlpool, Fort Smith AR Clyde
Baldor Motors, Fort Smith, AREmerson Motors, St. L. and Mena AR AR Smith, AR, Clyde,
and Ottawa, OH;and Mena, AR
Policy Approaches for EEPolicy Approaches for EE In the Utility Sector
•IRP and include EE in rates(can require utilities to acquire all cost-effective EE)•System benefits charge (e.g. 2 mils/kWh)( g )•Energy efficiency resource standard (savings targets)standard (savings targets)
Summary of 6th Northwest Power yPlan Energy Portfolio Analysis
Source: Tom Eckman, Northwest Power and Conservation Council
Energy Efficiency ResourceEnergy Efficiency Resource Standards Analogous to a Renewable Portfolio StandardElectric and/or gas savings targets for utilitiesElectric and/or gas savings targets for utilities
• Includes end-use efficiency and sometimes combined heat & power (CHP) and ( )codes/standards
• Targets generally start low and increase over timeSavings must be documented in accordance
with evaluation rules established by regulators
Why an EERS?Why an EERS?
Achieve substantial energy and emissionsAchieve substantial energy and emissions savings
Performance based – emphasizes savings,Performance based emphasizes savings, not spending
Can be easier to legislate savings targetsCan be easier to legislate savings targets than spending amounts
Can start programs quickly, without manyCan start programs quickly, without many years of study (but targets should be based on cost-effective opportunities)pp )
Energy Efficiency Resource Standards24 States – May 201024 States May 2010
StandardVoluntary GoalPending StandardCombined RES/EERSCombined RES/EERS
State EERS AdoptionState EERS AdoptionPA NY
7PA, NYMD, OHNM, MICO, MN,
VA, IL, NCIA, DE,
IN, AZ, HI5
6
ERS
3
4
Stat
es w
ith E
E
WA
CT, NVCA, HI
VTTX
MA, FL
1
2# of
S
01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2020 Cumulative Electricity ySavings Targets by StateVermont 30% Indiana 14%Vermont 30%New York 26%Massachusetts 26%
Indiana 14%Rhode Island 14%Hawaii 14%
Maryland 25%Delaware 25%
California 13%Ohio 12%
Illinois 18%Connecticut 18%Minnesota 17%
Colorado 12%Utah 11%Michigan 11%Minnesota 17%
Iowa 16%Arizona 15%
Michigan 11%Pennsylvania 10%Washington ~10%
Includes extensions to 2020 at savings rates that have been established
TexasTexas
•First state to establish an EERSFirst state to establish an EERS•Initially 10% of load growth but increased by legislature to 20% of load growthg % g•Utilities have not had difficultly meeting and exceeding targetsg g•In June 2010, PUCT staff proposed to increase to 30% of load growth initially, 50% in 2014
Vermont – Raising EfficiencyVermont Raising Efficiencyto a New Level
9% cumulative savings 2000-2008% g
Source: Efficiency Vermont and VT Dept of Public Service
What Markets Do We Work In?
Existing Homes
Existing Businesses
Efficient Products
Equipment Replacement
Business New Construction
New Homes
Target Sub-Markets:• Colleges and Universities• Municipal Waste and Water• K-12 Schools
Low-Income
• Industrial Process• State Buildings• Farms• Hospitals• Ski Areas• Ski Areas
Gas Savings in Leading StatesGas Savings in Leading States•1.5%/yr Minnesota target; averaged ~0.9% in
t thpast three years•NYS target very similar (14.7% cumulative
i b 2020)savings by 2020)•Vermont Gas saved ~1.2% in 2007I d 0 8% i i t 3•Iowa averaged ~0.8% savings in past 3 years
Consider EE from a Utility PerspectiveConsider EE from a Utility Perspective
Need to make the business case:1. Cost recoveryy2. Address lost revenues
needed to cover fixed costsneeded to cover fixed costs3. Some form of return on
investmentinvestment
Energy Efficiency Program AreasEnergy Efficiency Program Areas for States and Municipalities
•Lead by example (e.g. retrofit programs or LEED for new construction)•Residential and commercial retrofit and new construction programs•Industrial technical assistance and training programs (e.g. IAC, FlexTech)•Job training•Building codes
Major State-Based Energy Efficiency Programs in Federal Stimulus Bill
$• $5 billion for low-income weatherization• $3.1 billion for State Energy Program + gy g
$300 million for appliance rebates• $3.2 billion for EE&C Block Grants to$3.2 billion for EE&C Block Grants to
municipalities• Includes “Retrofit Ramp-up”Includes Retrofit Ramp up
• $500 million for job training
Building Codes forBuilding Codes for New Construction•It is much less expensive to build new buildings to be efficient than to build i ffi i tl d h t i l tinefficiently and have to improve later•Building codes can mandate that efficiency features be incorporatedfeatures be incorporated•Both residential and commercial•Can require:Can require:
• Insulation, efficient windows• Efficient lighting, heating, cooling, water
heating and ventilation
Commercial Building Codes in U SCommercial Building Codes in U.S.(~% savings relative to prior code)
25%
30%
15%
20%
5%
10%
15%
0%
5%
1989 1999 2004 2010 Long-term
Key Policies Supporting Chinese Goal t R d E I t it 20%to Reduce Energy Intensity 20%
Source: Levine et al., LBL
Conclusions• Large cost-effective savings available –
20%+20%+• U.S. needs these savings to stay competitive
• Largest savings generally available from utility programs• Need programs to specifically address key
segments such as industry and agriculture• Utility business case for EE important
• Other complementary approaches also critical – state/local programs, codes, CHP
ACEEE State Energy Policy WebsiteACEEE State Energy Policy Website
http://aceee.org/energy/state/index.htm
