us experience with incentives for energy- efficient and “fortified” new buildings:-- some...
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US Experience with Incentives for Energy-Efficient and “Fortified” New Buildings:--
Some Possible Lessons for Turkey
GYODer, Istanbul2 May, 2006
Arthur H. Rosenfeld, Commissioner
California Energy Commission
(916) 654-4930
http://www.energy.ca.gov/commission/commissioners/rosenfeld.html
With Dr. Metin Lokmanhekim
Arthur Rosenfeld, 2
California Peak Demand 1965 - 2004
0
20
40
60
80
100
120
140
19
65
19
67
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69
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73
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75
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91
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93
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95
19
97
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99
20
01
20
03
year
GW
at 5% growth rate
Actual (2.2% year)
120
55
65
GW
0
If CA had grown at US rate
$10
bbl
$40
bbl
$15
bbl
Arthur Rosenfeld, 3
Per Capita Electricity ConsumptionkWh/person
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
California
United States
12,000
8,000
Californian’s have a net savings of $1,000 per family
Source: http://www.eia.doe.gov/emeu/states/sep_use/total/csv/use_csv
$10
bbl
$40
bbl
$15
bbl
Arthur Rosenfeld, 4
Per Capita Electricity Consumption
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1960 1965 1970 1975 1980 1985 1990 1995 2000
year
kW
h/p
ers
on
United States
California
New York
Source: http://www.eia.doe.gov/emeu/states/sep_use/total/csv/use_csv
$10
bbl
$40
bbl
$15
bbl
Arthur Rosenfeld, 5
Costs and Pollution Saved by Avoiding a 50% expansion of California Electric System.
In California, passenger cars emit about the same amount of pollution as electricity, so avoiding 50% more electricity is equivalent to avoiding 50% more cars, in fact equivalent to avoiding 10 million cars.
Arthur Rosenfeld, 6
Per Capita Electricity Consumption 1980 - 2003
0
2,000
4,000
6,000
8,000
10,000
12,000
14,00019
80
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
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1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
kWh
/per
son
United States
Turkey
Arthur Rosenfeld, 7
Energy Intensity (Btu per $ at Market Exchange Rate)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,00019
80
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
btu
/$ U
S (
yr
20
00
)
United States
Turkey
Arthur Rosenfeld, 8Source: David Goldstein
United States Refrigerator Use v. Time
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002
Ave
rag
e E
ner
gy
Use
per
Un
it S
old
(kW
h/y
r)
0
5
10
15
20
25
Ref
rig
erat
or
volu
me
(cu
bic
fee
t)
Refrigerator Size (cubic ft)
Energy Use per Unit(KWH/Year)
1st Federal Stds ‘92
75% reduction in 30 yrs = 5%/yr.
Arthur Rosenfeld, 9
Utility Programs $ 250 Million ~18,000 GWHStandards $ 10 Million ~18,000 GWH
Program Costs and Savings in 2004
Annual Energy Savings from Efficiency Programs and Standards
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
19
75
19
76
19
77
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00
20
01
20
02
20
03
GW
h/y
ear
Appliance Standards
Building Standards
Utility Efficiency Programs at a cost of
~1% of electric bill
~15% of Annual Electricity Use in California in 2003
Arthur Rosenfeld, 10
Annual Peak Savings from Efficiency Programs and Standards
0
2,000
4,000
6,000
8,000
10,000
12,000
14,0001
97
5
19
76
19
77
19
78
19
79
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80
19
81
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99
20
00
20
01
20
02
20
03
MW
/yea
r
Appliance Standards
Building Standards
Utility Efficiency Programs at a cost of
~1% of electric bill
~ 22% of Annual Peak in California in 2003
Arthur Rosenfeld, 11
Insurance for “Fortified” Buildings
Led by IBHS, the Institute for Building and Home Safety, supported by 220 insurance companies. www.IBHS.org.
A “Fortified” building is constructed to resist damage from earthquakes, wind, flood, fire, hail, etc.,
– The “Fortified” standard significantly beat existing code The “Fortified” specification of course depends on location – for
example both Turkey and the US West Coast face seismic risk. IBHS writes the standards, and trains and certifies inspectors, but the
marketing and discounts in annual insurance are left to member insurance companies.
For example, Google Florida Windstorms Underwriting Association
Arthur Rosenfeld, 12
Discounts offered by Insurance Companies for Fortified Buildings
The highest discount I found was 60% on the Hurricane PORTION of an insurance policy for a home in Florida. Chuck Vance of IBHS guessed that this might represent a 25% discount on the overall policy.
I Googled “Fortified Housing” and found offerings of discounts of 5-25% off the overall policy.
For Turkey it might be cost-efffective to offer a smaller discount just for inspection by a certified code inspector.
An entirely different incentive for Turkey might be a reduction in annual taxes on buildings.
Arthur Rosenfeld, 13
Utility Programs $ 250 Million ~18,000 GWHStandards $ 10 Million ~18,000 GWH
Program Costs and Savings in 2004
Annual Energy Savings from Efficiency Programs and Standards
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
19
75
19
76
19
77
19
78
19
79
19
80
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81
19
82
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19
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19
99
20
00
20
01
20
02
20
03
GW
h/y
ear
Appliance Standards
Building Standards
Utility Efficiency Programs at a cost of
~1% of electric bill
~15% of Annual Electricity Use in California in 2003
Arthur Rosenfeld, 14
Discounts vs. Up-front “Rebates.”
In California we spend 1-2% of all electric revenues on incentives to beat existing building and appliance standards. This works because people respond to up-front “rebates” rather than to distant bill savings.
Implication. Take some of the discount on insurance rates for fortified homes and offer FREE insurance for the first year
Arthur Rosenfeld, 15
Combatting Summer Heat Islands
White flat roofs save 10-20% of air conditioning load Cool colored sloping roofs save 5-10% of a/c Cool roofs also cool urban heat islands, for example for Los Angeles
– The heat island is about 4 deg. C, of which roofs cause 1deg.
Visit EETD.LBL.gov/HeatIsland
Arthur Rosenfeld, 16
Temperature Trends in Downtown Los Angeles
Arthur Rosenfeld, 17
Cool Communities The most lucrative way to:
– Save air conditioning– Cool cities– Reduce Urban Ozone
Involves 3 strategies:– White roofs (5,000 yr old idea) and cool colored roofs ( a new
idea)– Cooler pavements (concrete colored to avoid glare)– Shade trees (shade buildings and cool by evapo-transpiration)
CEC spent $10 Million for white “re-roofs” and offers credits for cool roofs in meeting new building standards
Benefits can be substantial:– In LA Basin, 3 strategies can save 1,500 MW and $ 200 million
per year in A/C; Cool LA by 3-4 degrees Celsius; and reduce ozone by 4 – 8 %, worth another $ 250 million per year in reduced sickness and sick leave
Arthur Rosenfeld, 18
California Cool Roof Policies Annual Public Goods-funded Utility programs of $2 to $3
M/year, offer rebates of ~10 cents/sqft. 2005 Building Standards for flat roofs: White is required. 2008 Building Standards for sloped roofs: Cool required (any
color). Most buses have white roofs White cars should be bought for public and private fleets R&D
– Cool Colored Roofs, including cars (recommended in Pavley Report) to reduce emissions by 30%
– Service Life of Cooler Roofs Adding Cool communities to State Implementation Plans is
frustratingly slow
Arthur Rosenfeld, 19
Source: Hashem Akbari, LBNL
Arthur Rosenfeld, 20
Cool and Standard Color-Matched Coatings for Concrete Tiles
Can increase solar reflectance by 0.3 or more Gain greatest for dark colors
Courtesy: American Rooftile Coatings
cool
standard
∆R=0.37 ∆R=0.29∆R=0.15∆R=0.23∆R=0.26 ∆R=0.29
Arthur Rosenfeld, 21
Source: Hashem Akbari, LBNL
Arthur Rosenfeld, 22
Source: Hashem Akbari, LBNL
Arthur Rosenfeld, 23
The following backup slides on Calif. EnergyPolicy will are not part of my talk, but mightbe useful during discussions.
Arthur Rosenfeld, 24
http://www.energy.ca.gov/2005publications/CEC-400-2005-042/CEC-400-2005-042-REV.PDF
Arthur Rosenfeld, 25
Table 1 2004 FIRST YEAR Savings (GWh) for PG&E, SCE and SDG&E,
and 2004 Funding
GWh % of Total GWh
MW % of Total MW
Funding ($000)
% of Total Revenue
PG&E 623 0.8% 141 0.6% $132,752 1.3%
SCE 984 1.2% 185 0.9% $146,763 1.5%
SDG&E 236 1.4% 51 1.4% $37,828 1.5%
Total 1,843 1.0% 377 0.8% $317,343 1.4%
http://www.energy.ca.gov/2005publications/CEC-400-2005-042/CEC-400-2005-042-REV.PDF
Arthur Rosenfeld, 26
Figure 8Comparison of EE Program Costs to Supply Generation Costs
0.029
0.058
0.118
0.167
0.000
0.020
0.040
0.060
0.080
0.100
0.120
0.140
0.160
0.180
Average Cost of EE Programsfor 2000-2004
Base Load Generation Shoulder Generation Peak Generation
$/kW
h
Demand
Supply Options
Arthur Rosenfeld, 27
California IOU’s Investment in Energy Efficiency
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,00019
76
1978
1980
1982
1984
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1998
2000
2002
2004
2006
2008
2010
2012
Mill
ions
of
$200
2 pe
r Y
ear
Forecast
Profits decoupled from sales
Performance Incentives
Market Restructuring
Crisis
IRP2% of 2004
IOU Electric Revenues
Public Goods Charges
Arthur Rosenfeld, 28
EE Procurement by the IOUs
In September 2004 The CPUC adopted aggressive goals for new energy efficiency savings, covering the next decade of IOU procurement:
1. $6 billion in investment over ten years.2. 5,000 MW of avoided traditional generation, equivalent to approximately
1% of load per year.
3. With these goals established, the CPUC is now considering the first three-year plans, with associated funding levels, to reach the desired targets:
4. $2.7 billion in investment for 2006-2008, including customer out-of-pocket costs.
5. Investment Increases from $400 million to $800 million annually.6. IOU efficiency procurement will defer 1500 MW of traditional generation
development, with a life cycle effect equivalent to removing 1 Million cars from the road.
Arthur Rosenfeld, 29
Energy Action Plan
The Energy Action Plan is driven by the Loading Order contained in the multi-agency Energy Action Plan. Since its enactment in 2003, the Loading Order has been integrated into the major CPUC decisions governing energy policy and procurement. Energy resources are prioritized as follows:
1. Energy Efficiency/Demand Response 2. Renewable Generation, including renewable DG 3. Increased development of affordable & reliable conventional
generation 4. Transmission expansion to support all of California’s energy
goals.
Arthur Rosenfeld, 30
Electricity Efficiency and Renewables in CaliforniaGoals of California Energy Action Plan 2003
California kWh per capita is already flat compared to U.S. climbing 2%/yr. New California goal is to reduce kWh per capita by 1/2% to 1% each year Renewable Portfolio Standard: add 1% of renewables per year Additional peak reduction of 1% per year by Demand Response when
power is expensive or reliability is a problem Some recent initiatives:
– Green (commercial) Buildings Initiative: to accelerate building efficiency gain by 1% per year
– Million Solar Homes Initiative (mainly for new homes): to couple super-efficient homes with photovoltaics (PVs)
In total, goals aim to reduce electricity growth, increase renewables, and grow demand response
Arthur Rosenfeld, 31
Critical Peak Pricing (CPP)with additional curtailment option
0
10
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Pri
ce (
cen
ts/k
Wh
)
Standard TOUCritical Peak PriceStandard Rate
Sunday Monday Tuesday Wednesday Thursday Friday Saturday
Extraordinary Curtailment Signal, < once per year
CPP Price Signal
10x per year
?
Potential Annual Customer Savings:
10 afternoons x 4 hours x 1kw = 40 kWh at 70 cents/kWh = ~$30/year
Arthur Rosenfeld, 32
Tariffs being Tested in California Pilot
0.00
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Hour Ending
$ (U
.S.)
/ K
WH
FLAT RATE
TOU RATE
CPP-F RATE (NON CRITICAL DAY)
CPP-F RATE (CRITICAL DAY)
Arthur Rosenfeld, 33
Climate Zone 4 (Very Hot Areas) on CPP Days
0
0.5
1
1.5
2
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
hour ending
kW
Control
CPP - F
TOU
Arthur Rosenfeld, 34
Demand Response and Retail Pricing Pilot
CPUC and CEC have been testing the impact of CPP on demand
– Two summers of tests Results for residential customers
– 12% reduction when faced with critical peak prices and no technology
– 30% to 40% reduction for customers with air conditioning, technology, and a critical peak price.
Arthur Rosenfeld, 35
Demand Response and Interval Electricity Meters
Large Commercial Customers Currently large customers have interval meters, mandatory time-of-use
pricing, and limited voluntary participation in interruptible programs Starting Summer 2007, these customers may be put on default Critical
Peak Pricing (CPP) tariffs in Investor Owner Utility (IOU) areasAdvanced Metering Infrastructure In late 2006, PG&E and SDG&E expect to begin installation of
interval meters for ALL electricity customers and will relay gas use and will offer CPP to customers as they get their meters
Installation to take several years during which time SCE plans to follow suit. By 2011or 2012 all IOU customers will have access to CPP.
CEC will specify communicating thermostats which can be programmed to response to CPP and for grid protection– http://www.title24dr.com/
Arthur Rosenfeld, 36Source: Webster, et. al, Science Vol. 309
Arthur Rosenfeld, 37Source: Stabilization Wedges: Pacala and Socolow, Science Vol 305, page 968
Growth = 1.5%/yr