1

Energy Efficiency Opportunities for North

CarolinaLarry Shirley

State Energy OfficeNC Department of Administration

2

State Energy Office

4Advancing energy efficiency in industrial, utility, transportation, government, and residential sectors.

4Developing the state’s abundant renewable energy resources.

4Accelerating use of alternative fuels and vehicles.

4Responding to energy emergencies.

3

Energy Supply - Cost Outlook

Natural Gas Prices - NC

02468

101214

1997

1998

1999

2000

2001

2002

2003

2004

2005

Sep-

05

$/10

00 C

F Natural Gas,Commercial

Natural Gas,Industrial

Source: EIA

4

Energy Supply – Cost Outlook

Fuel Oil and Propane Prices

050

100150

200250

300

Jan-0

3May

-03Sep

-03Ja

n-04

May-04

Sep-04

Jan-0

5May

-05Sep

-05

cent

s/ga

llon

Propane -ResidentialFuel Oil,Residential

Source: EIA

5

Energy Supply - Cost Outlook

NC Electricity Prices

44.5

55.5

66.5

77.5

1997

1998

1999

2000

2001

2002

2003

2004

2005

cent

s/kW

h Electricity,Commercial

Electricity,Industrial

Source: EIA

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Energy efficiency’s contribution to our energy supply

0

20

40

60

80

100

120

140

160

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

Efficiency’s Contribution

Actual Energy Use

Source: Alliance to Save Energy, 2002.

National Energy Supply (TBtus)

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SO247 tons CO2

69 million tons

NOx312 tons

SO2 636 tons

CO257 million

tons

NOx319 tons

Electrical Losses

734 TBtu

Electricity 409 TBtu

ELECTRICPOWER

GENERATION

Nuclear 408 TBtu

Cost of Energy Imports

$10-15 Billion

Petroleum975 TBtu

Natural Gas

236 TBtu

Coal706 TBtu

696 TBtu

969 TBtu226

TBtu

10 TBtu

Wood, Waste, Biomass 96 TBtu

SolarThermal1 TBtu

Hydro33 TBtu

10TBtu 23

TBtu

408 TBtu

6 TBtu

10 TBtu

Energy

Flows

In

North

Carolina

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Impact of Efficiency Measures on Energy Use and Emissions – State Energy Plan

-

500

1,000

1,500

2,000

2,500

3,00019

90

1995

2000

2005

2010

2015

2020

Base Case Energy Use

Transportation Savings

Industrial Savings

Commercial Savings

Residential Savings

Energy Efficient Scenario

• 13% reduction in total forecasted energy use

• reduces CO2 emissions 72 million lbs/year,

• 346,000 lbs of SO2 and

• 115,000 lbs of NOx

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Energy Management ProgramEnergy Workshops & On-Site

Surveys4 Industrial, Large

Commercial & Institutional4 Systems Focus:

» Compressed Air Systems» Boilers » Chillers & Cooling Towers » HVAC Systems & Controls» Lighting» Preventive Maintenance» Steam Traps» Motors

HeatRoof

HVACLighting

Natural GasWater

Waste Water

Power LinesPower Lines

Heat

(to sewer pipe)

Parking Lot

HeatRoof

HVACLighting

Natural GasWater

Waste Water

Power LinesPower Lines

Heat

(to sewer pipe)

Parking Lot

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Energy Management Program Results 1988 to 2005

4800 surveys completed

475.9 MW saved

4$40.4 million annual cost savings

4$38.7 million initial investment

411,466 Workshop Attendees in 511 Workshops$355 million Total Economic Benefit

recommended/$160 million implemented

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Utility Savings Initiative (USI)

4Comprehensive energy management program for all state facilities.

4Goal is to reduce energy consumption by 20% by 2008

4100+ million square feet state-owned property; 4 million square feet leased

4State’s Energy and Water Bill: $275 Million in 2004-05

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USI Programs

4 Rate Reviews/Utility AccountingReview 5,300 accounts with electric utilities

4 Operations and Maintenance Walk-through surveys to identify no and low cost measures in 30% of state-owned property

4 Boiler surveys of 123 steam and hot water boilers4 HVAC Controls Tune-ups: 15-20% savings (300

buildings)4 Comprehensive energy training program attended by

over 3,000 state employees: fiscal, facilities, management, and building occupants

4 Performance contracting $50 Million/12-year guaranteed savings contracts in place by mid-2006

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State Agencies and Universities…

4Prepare a Strategic Energy Plan detailing the institution’s plan to achieve their 20% reduction goal.

4Provide annual energy and water costs and usage; building square footage.

4Provide annual progress updates.

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Total USI Cost Savings to Date

$16+ Million = $2.6 documented + $13.6 estimated

FY 02-03 FY 03-04Billing errors 0.23 0.14Rate Savings 2.2Est. Reduced Electric 6.4 3.0 Est. Reduced Water 2.4 1.8

9.03 + 7.14 = Total: $16.17 Million

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Reported Results TrendsIncreasing

Costs: $/kWh $/therm 2 oil $/gal 6 oil $/gal

2002 State composite $0.055 $0.55 $1.04 0.64

2003 State composite $0.056 $0.64 $1.08 0.88

2004 State composite $0.057 $0.77 $0.90 0.86

Reducing Usage: btu/gsf kWh/gsf kWh

2002 State composite 151,498 21.56 1,189,409,513

2003 State composite 148,130 19.25 1,282,719,408

2004 State composite 142,793 18.31 1,453,511,763

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Bucking the Trend

$100.0$105.0$110.0$115.0$120.0$125.0$130.0$135.0$140.0$145.0$150.0

98-99 99-00 00-01 01-02 02-03 03-04 04-05

Annual Electric Expenditures in millions

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Pending Legislation

4S402/H454 Water and Utilities Savings in Government Facilities» Includes conservation measures for water

and other utilities in performance contracts» Raises debt ceiling from $50 Million to $75

Million for state agencies and universities» Passed Senate; Now in House

Appropriations

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Status of Performance Contractingat State Facilities

4Museum of Art ($4.9 million)*4Downtown Complex ($18.8 million)*4UNC-Greensboro ($5.2 million)4Department of Correction ($7-12 million)4NC A&T State University ($5 million)4UNC-Wilmington ($6 million)

*contracts in place

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SEO assistsLocal Government Facilities

4Alleghany County Schools4City of Kings Mountain4Durham Tech4Scotland County Schools4A-B Tech

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What We Know4 Energy will cost much more in the future

4 Traditional energy sources

» Have to be imported into NC ($10-15 billion drain on the economy)

» Create air pollution problems (32 counties out of compliance)

» Cause public health problems (asthma and respiratory ailments)

» Leave the state vulnerable to supply disruptions and price spikes

4 More efficient buildings

» Are cost effective for their owners and reduce utility bills

» Earn extra income for builders, contractors, realtors and bankers

» Are more comfortable, durable and resist moisture problems

» Reduce dependence on fossil fuels & imports

» Reduce emissions

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Projected Residential Energy Use

Global Insight Report on Energy Use in North Carolina, 2003

NC Residential Energy Use (BBtu)

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

SolarWoodCoalLPGKeroseneNaturalGasElectricity

What can we do about this?

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Upgrade and Save Program for Manufactured Housing

4Upgrade from electric furnace to high efficiency heat pump

417-county region in Eastern NC4Managed by East Carolina University4Energy Costs can be $400/month/winter4Savings of $350-700/winter4Cost of $500/home4Payback is 1-2 years

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Map of Upgrade and Save

Region

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Pending Legislation -Residential

4 S190/H445 Income Tax Credit–Energy Efficient Homes» For Energy Star Home standard

› Builders and taxpayers--$500 credit each for new home

› Taxpayer--$1000 credit for updating existing home

» For NC HealthyBuilt Home standard› Builders and taxpayers--$1500 credit each for

new home› Taxpayer--$2,000 credit for existing home

» Independent home rater inspection/certification

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Recommendations4Carefully consider the pending legislation4Commercial and Industrial Firms need tax

credits for energy efficiency improvements4Expand Upgrade and Save Program to all

counties in state4Lead by Example: Accelerate USI as a

model for state4Establish an Energy Efficiency Goal for

NC (e.g. 10-15% reduction by 2015)4Establish a Public Benefits Fund

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Energy Saver WorkshopsSponsored by State Energy Office and DENR

4 Jan. 10: Wilmington & Boone

4 Jan. 11: Fayetteville & Cullowhee

4 Jan. 12: Tarboro & Asheville

4 Jan. 17: Greenville & Hickory

4 Jan. 18: Raleigh & Wilkesboro

4 Jan. 19: Elizabeth City, Gastonia & Charlotte

4 Jan. 20: Halifax & High Point

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For More Information

4State Energy Office41830A Tillery Place4Raleigh, NC 276044919-733-22304800-662-7131 (NC only)4919-733-2953 (fax)4www.energync.net4Larry.Shirley@ncmail.net