energy efficiency – good for the world’s economy; good for the nation’s economy; good for...
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States awaiting stimulus funds will be pleased to know that when it comes to funding energy efficiency programs, their dollars will go far. Drastically reduced energy consumption and immediate job growth are just some of the benefits that effective policies and programs can bring, particularly to the Appalachian region, which has the highest energy consumption in the country. Kateri Callahan presented these findings to the annual Charlotte Regional Partnership Investors Board in Charlotte, N.C., where already progressive energy efficiency policies and programs are taking root. Callahan also briefed the audience of investors and board members on the climate and energy bills moving through Congress.TRANSCRIPT
Energy Efficiency – Good for the World’s Economy; Good for the Nation’s Economy; Good for Yours!
Presentation byKateri Callahan, President
Charlotte Regional Partnership Investors ForumJuly 29, 2009
Overview
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 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: Business, 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 Friend
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Conventional Hydroelectric
Wood, Waste, Alcohol
Nuclear Electric Power
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Energy Efficiency and Conservation
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America's Greatest Energy Resource Energy Efficiency and Conservation Improvements Since 1973
Have Reduced Annual Energy Consumption by 50 Quads
2007 Domestic Production Net Imports
Alliance to Save EnergyAugust 2008
Energy Efficiency has been powering the U.S. economy for over 30 years!
Enormous Savings Energy Efficiency AVOIDING roughly 2.5
billion tons of CO2 annually
Saving roughly $400 billion annually
Why Now? Energy Use is a Global Climate Issue
Source: Energy Information Administration
Why Now? Growing Energy Demand is
Unsustainable
Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms
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Why Now? U.S. Growth in Energy Use Poses a National Security Threat
Why Now: Energy Efficiency is a Pocketbook Issue
Why Efficiency? Cheapest, Quickest, Cleanest….
Annual world-wide investment of $170 billion in energy efficiency through 2020 could:
- cut global growth in energy demand by ½!
- save $900 billion a year in avoided energy costs
- dramatically reduce greenhouse gas emissions
Source: The McKinsey Global Institute
Why EE? Enormous Potential for Savings in ALL Sectors…
Source: McKinsey Global Institute
Why Efficiency? Local Benefits
EE: Enormous Potential for Regional Job Growth…
The same study reveals that cost-effective energypolicies can positively impact the larger Appalachia economy, creating 77,378 jobs regionally.
The Challenge? Market Distortions
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 upgrades
Lack of Investment in RD&D and EE Programs
How Do We Unlock the Potential of Energy Efficiency?
Five Tenants of Sound EE Public Policy
1)Research, development and deployment (RD&D)
2)Education and outreach
3)Incentives and Financing Mechanisms
4)Standards & Codes
5)Government “Leadership by Example”
A Big Year for Energy Efficiency in Public Policy
Obama’s election platform
American Recovery & Reinvestment Act (ARRA, or Stimulus Bill)
President’s Fiscal Year 2010 budget
NEW! American Clean Energy and Security Act (ACES)
President’s new CAFÉ standards
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July
House PASSES ACES (6/26)
Ongoing appropriations in House and Senate climate & energy bills
DOE: new lighting standards
– Reduce electricity use 15% by 2020– Net-zero energy buildings by 2030– Overhaul federal appliance standards– By 2014, reduce energy use in new
federal buildings 45%; 25% in existing federal buildings
– Flip incentives for utilities– Invest in a “smart grid”– Weatherize 1 million homes/year– Investment incentives for “livable
cities”– Showed early commitment to large
green energy component in the economic recovery bill
President Obama: Energy Efficiency Advocate
American Recovery & Reinvestment Act: $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 and Financing Tools– Extension of 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)
Funding Rollout Energy Funds Slow to
Unroll:- 1% of FY2009 awards- 90% of FY2009 awards go to
health, transportation and education
Funding allotted in segments:- For SEP & WAP:
10% on initial app approval 40% on comprehensive app
approval Remaining 50% contingent
on demonstrated success
Projected timing of all funds made available to states and localities.
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 date SEP
- Appropriated: $3.1 billion- Obligated: $301.6 million- Spent: $9.4 million
EECBG - Appropriated: $3.2 billion- Obligated: $0
WAP- Appropriated: $5 billion- Obligated: $553.4 million- Spent: $8.3 million
Green Jobs- Appropriated: $500 million- Obligated: $0
Smart Grid Investment Grant Program- Appropriated: $4.5 billion- Obligated: $0
Smart Grid Demonstration Projects- Appropriated: $615 million- Awarded: $4.7 million- Spent: $0
HUD’s EE Public Housing Capital Funds- Appropriated: $4 billion- Awarded: $0
HUD’s Green Retrofit Program- Appropriated $250 million- Obligated: $0
$890 million of $18 billion awarded (.5%)
ARRA Funding for EENorth Carolina: State Energy Program (SEP)
- Appropriated: $76 million- Awarded: $30.4 million (June
25) Weatherization Assistance
- Appropriated: $132 million- Obligated: $53 million (June
18th)- Weatherization goal: 23,500
homes Energy Efficiency and
Conservation Block Grants*- Appropriated: $ 58 million
South Carolina State Energy Program (SEP)
- Appropriated: $51 million- Awarded: $20.2 million (June 25)
Weatherization Assistance - Appropriated: $59 million- Obligated: $24 million (June 18th)- Weatherization Goal: 6,500
homes Energy Efficiency and
Conservation Block Grants*- Appropriated: $ 31 million
State Energy Efficient Buildings Financing Mechanisms
Building Code
Compli- ance
Green Jobs
Training
Education and
OutreachTransport-
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 x
New York x North Carolina x x x x x xSouth Carolina x x x x x x xWest Virginia x x x x
State Energy Program Plans
Updated regularly on our stimulus resources page: www.ase.org/stimulusresources
Uses of Funds:State Energy Programs Plans
North Carolina:- 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)- 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 Advocacy Immense problems of implementation
- size and complexity; - challenge of administration within limited
time frame; - political appointees not in place; - demands on career appointees
Credibility of future energy efficiency initiatives depends on competent and effective implementation
Problem of EM & V: How do we measure savings?
Continuity of Programs: What happens when the funding goes away?
A Word on Federal Tax Incentives
New Homes Builder 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 HomesHomeowner tax credit – 30% of cost of installing building envelope components; capped at $1,500 (Through 2010)
Commercial Buildings Deduction 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)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)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? Energy and Climate Legislation
In the House
- ACES (The American Clean Energy and Security Act, or Waxman-Markey)
Status: Narrowly passed the House on June 26th by a vote of 219 to 212.
In the Senate
- ACELA (The American Clean Energy Leadership Act)
Scope: Energy Only Status: Approved by
Energy Committee on June 27th
ACES:Cap is the crown jewel
85% of US GHG emissions covered- Could be higher
Covered emissions reduced 83% in 2050 Defend and protect the cap!
ACES: Goals for Energy Efficiency
Policies will no longer save more energy. Instead they will—
Reduce cost of meeting carbon cap by
Addressing market barriers, especially among energy end-users
ACES: EE Programs 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 to $167b over 2012-2050
- 12.5% of allowance value could get Allowance prices 10% lower Electric, nat gas and petrol prices 1-3% lower Electric and natural gas demand 3-7% lower
according to EPA analysis April 20
Climate Outlook in Senate Senate EPW to release draft in September At least six other committees have jurisdiction
over climate legislation; Senator Reid has asked these Committees to conclude deliberations by Sept. 18
Majority Leader Reid wants to bring comprehensive bill to the floor in the fall; we are hearing October for floor action
Opponents/Proponents in “Pitched Battle”
ACES: Where the Votes Are
States with majority of votes in the delegation for the Waxman-Markey bill are in green; states with majority opposing W/M are in red
The Challenges Can Be Overcome: Unleashing NC and SC’s Potential!
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Unleashing the Power of Public Policy: A “Prescription for Success”
Western Governors “CDEAC” Recommendations Migrate “Best Practices” to ALL western states
- Institute 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- Feasible to reduce electricity use 20% in 2020
Leadership in the StatesCalifornia Cut Energy Use and Peak Demand
“Flex Your Power Campaign” - Retail promotions- TV, Print & Radio Advertising
20/20 Utility Rebate Program - Automatic Enrollment Simple Requirement- 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: Suggestions for Success
National Action Plan for Energy Efficiency- EEI, NARUC,
EPA, DOE…
EPA Clean Energy-Environment Guide to Action
Western Governors Association Energy Efficiency Task Force Report
- DOE, NARUC, NASEO, ASE, RAP
State Energy Efficiency Policies: a Series of Briefs, pub. by the Alliance
EE Global 2010Monday, May 10 to Wednesday, May 12, 2010Washington DC Convention Center, Washington DC
EE 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 management-level, participation in EE Global will provide access to energy efficiency’s most notable leaders and decision makers.
Final Words…
“Our greatest national energy resource is the energy we currently
waste.”
Former Energy Secretary Spence Abraham
Thank you!
For More Information….
Kateri CallahanPresident
Alliance to Save Energy1850 M Street, NW
Washington, D.C. [email protected]
www.ase.org202.857.0666