Jeff HarrisDirector, Emerging

Technologies

Market Transformation in Energy Efficiency: A

Northwest Perspective

Presentation to the 2010 mid-year NASUCA Conference

June 14, 2010

San Francisco, CA

2

About NEEA

Non-profit corporation; est. 1996 in Portland, OR Funded by electric utilities in MT, ID, OR & WA Governed by representative Board; public and

private utilities, state governments, public interest groups; oversight by State utility Commissions

Five-year funding commitment from 14 direct funders

Total funding 2010 ~ $30 million 50 employees

3

Vision and Mission

Vision: Energy efficiency is a

cornerstone of a vibrant sustainable Northwest.

Mission: Mobilize the Northwest to become increasingly energy efficient

for a sustainable future.

4

NW Power Future:

Bottom line: All new load growth met with efficiency and renewables

5

Annual Northwest Energy Efficiency Investment

Bonneville Power

Administration

PublicUtilities

InvestorOwnedUtilities

Northwest Powerand Conservation

Council

StateRegulatory

Commissions Northwest EnergyEfficiencyAlliance

Energy TrustEnergy Trustofof

OregonOregon

RegionalTechnical

Forum

End Use ConsumersEnd Use Consumers

Markets, Markets, Codes & Codes & StandardsStandards

= = Policy Policy RecommendationsRecommendations

= Technical= TechnicalRecommendationsRecommendations

= Program= ProgramFundingFunding

= Conservation= ConservationProgramsPrograms

= Market TransformationPrograms/Projects

The “Plan”The “Plan”

= = Policy Policy

= Rate= Rate RevenuesRevenues

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NEEA Definition of Market Transformation

“Market Transformation is the strategic process of intervening in a market to create lasting change in market behavior by removing identified barriers or exploiting opportunities to accelerate the adoption of all cost-effective energy efficiency as a matter of standard practice.”

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MT is a Process....

Market Assessment MT Hypothesis

(Logic Model)MT Intervention

StrategyTactics

Implementation

Exit? Evaluate

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Market Transformation: Strategy Development

The Logic Model:

For each market barrier or opportunity:

Barrier BIntervention A Outcome C ENERGY SAVINGS

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Common Market Barriers

Misalignment with consumer needs

Lack of Awareness

Lack of information

Price

Poor Availability

Consumer Experience

Poor channel access to market

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Market Transformation Strategies

Create strategic partnerships

Build market knowledge and experience

Develop relationships that help influence energy codes

and standards

Provide credible information

Align EE with Consumer Needs

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Market Transformation in CFLs

From this: To this:

12

Diffusion of innovation Theory

13

Diffusion Curve

% M

ark

et

Sh

are

Time

14

Diffusion Curve

EmergingTech

Early Adopters

Baseline (WhatOccurs Naturally)

NEEA NEEA NEEAUtility Local Programs

Primary Role

% M

ark

et

Sh

are

Time

15

Diffusion Curve

EmergingTech

Early Adopters

Baseline (WhatOccurs Naturally)

NEEA NEEA NEEAUtility Local Programs

Primary Role

Transformation

Ma

rke

t

Pulp & Paper

DHP Pilot

Consumer Electronics

Commercial Real Estate

Homes

Building Ops

Food Processing

Healthcare

Building Design and Construction

Energy Savings /

Net Market Effect

% M

ark

et

Sh

are

Time

16

Diffusion Curve

EmergingTech

Early Adopters

Baseline (WhatOccurs Naturally)

NEEA NEEA NEEAUtility Local Programs

Cost MWh

Primary Role

Transformation

Ma

rke

t

Energy Savings /

Net Market Effect

% M

ark

et

Sh

are

TimePulp & Paper

DHP Pilot

Consumer Electronics

Commercial Real Estate

Homes

Building Ops

Food Processing

Healthcare

Building Design and Construction

17

Diffusion Curve

EmergingTech

Early Adopters

Codes and Standards

Baseline (WhatOccurs Naturally)

NEEA NEEA NEEAUtility Local Programs

Cost MWh

Primary Role

Transformation

Ma

rke

t

Energy Savings /

Net Market Effect

% M

ark

et

Sh

are

TimePulp & Paper

DHP Pilot

Consumer Electronics

Commercial Real Estate

Homes

Building Ops

Food Processing

Healthcare

Building Design and Construction

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Market Transformation Success: CFLs

Source: NEEA

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Market Transformation Success: Clothes Washers

Source: NEEA

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Market Transformation Success: Windows

Source: NEEA

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Market Transformation Results: Overall Significant Savings

0.0

100.0

200.0

300.0

400.0

500.0

600.0

aM

W

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

Net

Local

Baseline

556 aMW saved through 2008 (of which 264 are net market effects)

Enough to power 182,574 homes each year, or one coal-fired power plant

Prior investments continue to achieve cost effective savings (at < 1 cent/kWh)

556 aMW

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Market Transformation Support Structures%

Ma

rke

t P

en

etr

atio

n

Time

Goals Supporting

Market Penetration

Local energy efficiency program

implementation

Codes & Standards(G1)

Codes & Standards(G1)

Market Adoption (G1)Market Adoption (G1)

Emerging Technologies

(G4)

Emerging Technologies

(G4)

Help EE Orgs Achieve Their Goals (G2)Help EE Orgs Achieve Their Goals (G2)

Build Knowledge Through Education and Training (G3)Build Knowledge Through Education and Training (G3)

Support Region’s Efforts to Promote EE (G5)Support Region’s Efforts to Promote EE (G5)

Regional EE Planning/Implementation (G6)Regional EE Planning/Implementation (G6)

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Why you should care: Why is market transformation important for the future?

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Net-zero buildings will require highly integrated energy efficiency systems and coordination between market actors to deliver buildings that actually perform at a level that is unprecedented; to do otherwise will be very expensive.....

Why you should care (continued).

25

Thank You

26

0

200

400

600

5 Yr Regional Savings 10 Yr Regional Savings

2010-2014 aMW Savings Targets

0

100

200

5 Yr Regional Savings 10 Yr Regional Savings

Estimated 5 and 10 Year

Total Regional Savings

Estimated 5 and 10 Year

Net Market Effects

Total Resources Costs 2.5 - 3.5 cents / kWH 2.5 - 3.5 cents / kWH

NEEA onlyLevelized Costs 2 - 2.5 cents / kWH 2 - 2.5 cents / kWH

100 aMW is enough to power 69,000

homes each year

550

200

100

200

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NEEA’s Unique Value

Fill pipeline of emerging technologies Deliver regional leverage with “upstream”

market actors Realize economies of scale “Lock in” savings through codes and standards Expand regional market capability Avoid resource duplication Mitigate risk

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How NEEA Works

PARTNER SERVICES

COMMERCIAL

INDUSTRIAL

RESIDENTIAL

EMERGING TECH

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Estimated Budget Allocation: 2010-2014

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Support and maintain a regional upstream delivery

platforms for energy-efficient products and services

Residential

Key Initiatives: New Construction – reduce market barriers, influence voluntary

programs/labels and set the stage for code upgrades Consumer Electronics – initial focus on flat-screen TVs Ductless Heat Pumps – pilot demonstrating energy savings potential Lighting – Continued focus on CFL purchase research TopTen USA – highlighting the most energy-efficient products

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Simultaneously build demand for and supply of energy

efficient products and services in select markets.

Commercial

Key Initiatives: Hospitals/Healthcare & Real Estate – Helping organizations use

Strategic Energy Management to become more energy efficient Building Market Skills/Capacity – provide resources, training and tools

to design and building operations communities 80 PLUS – encourage and track growth of energy-efficient power

supplies for computers

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Industrial

Work to set industry-wide goals, encourage individual

organizations to adopt Strategic Energy Management and

coordinate regionally.

Key Initiatives: Collaborative Energy Strategies -- working on an industry-wide approach with the

food processing industry to setting goals and increasing efficiency Strategic Energy Management – Support companies in integrating energy

management into their company cultures Regional Coordination – partnerships with stakeholders that help develop market

ready offerings

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Codes and Standards

Locking in regional savings

through codes and standards Codes &

Standards

Voluntary energy

efficiency programs

Time

Mar

ket P

enet

ratio

n

34

Emerging Technologies

Upcoming Initiatives: Residential Heat Pump Water Heaters Regional Advisory Committee Net Market Effect: 0 aMW by 2014; 5aMW by 2019 Portfolio Target: 300 aMW Total Regional by 2030

Provide a mechanism for the region to invest in emerging technologies in a way that minimizes risks to any one

funder and maximizes potential benefits.

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Upcoming Initiatives: Develop a website/ information services portal Create promote online forum/collaboration tools Hire and deploy a circuit rider Coordinate regional conference/ events Coordinate training/ workshops

Partner Services

Support the region’s efforts to promote energy efficiency through

market research, collaboration and information sharing.

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1995

Deregulation

2005-2009

Codes and standards accelerate

Climate change awareness

Northwest

$60M

Northwest

$250-300M

NEEA

$20M

2010-2014

Economic Challenge

Climate Change

Increased EE Investment and Awareness

Northwest

Ramp to $1-$2B

NEEA

$25M

NEEA

~$40M

Annual Northwest Energy Efficiency Investment

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Market Transformation Accomplishments

1990 Today

2007:

CFL sales top 18

million

2001: Market share for

ENERGY STAR

windows hits 75%.

2000: VFD

cold storage

fans reduce

energy use by

61-86%.

1997: Efficient washers.

50% market share today -

highest in the nation.

2002: 80 PLUS.

computer power supplies

could save NW 8.5

million kWh annually.

1998: BacGen

reduces

wastewater

treatment energy

use by up to 50%.

1996: NEEA

Launched

2004:

Northwest

ENERGY

STAR new

homes spec –

15% more

efficient than

code.

2008:

NW Food

processing

industry commits

to 50% reduction

goal

2009:

Ductless heat

pump pilot

begins

2005: BetterBricks

healthcare focus –

today 30% of region’s

beds have adopted a

SEMP.

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About NEEA

Funding ~$192M from 2010-2014 (doubling) Bonneville Power Administration (on behalf

of ~130 publics) Public (Direct Publics): 6 IOUs: 5 Energy Trust of Oregon Board Oversight and Supporters State governments Energy industry representatives Public interest groupsTeam: Deep bench of expertise 42 full-time staff National and local partners Extensive contractor baseResults 1997-2008 – 264 aMW netted Enough to power cities of Spokane and

Tacoma each yearMission Mobilize the Northwest to become

increasingly energy efficient for a sustainable future