Energy Efficiency

Tom EggertBusiness SustainabilityWI School of Business

The Role of Energy Efficiency

• Energy efficiency is the fastest, lowest risk, most economical way to create bottom line savings, and address climate and security concerns

• Energy efficiency creates competitiveness for the U.S. economy

• Market-ready today at attractive rates of return with enormous unexploited potential

• Energy efficiency represents investments in energy not consumed, which mitigates risks associated with future price uncertainties.

• Amory Lovins talks of nega-watts

1980U.S. electricity demand = 2 trillion kWh

Source: Energy Information Administration (EIA)

U.S. electricity demand: 1980

U.S. electricity demand: 2030

Source: Energy Information Administration (EIA)

2030U.S. electricity demand = 4.8 trillion kWh

Sources: Energy Information Administration (EIA), Annual Energy Outlook, Dec. 2009

U.S. electricity generation by fuel type projection 2010-2030

The Big Picture: Energy Use in the United States

The buildings where we work, play, and learn are responsible for nearly 56% of our country’s energy use.

Energy Information Administration, 2010

Residential22%

Transportation28%Commercial

18%

Industrial32%

What is Energy Efficiency?

Energy Efficiency = Less Waste

90

95

100

105

110

115

120

125

130

2005

2015

2025

En

erg

y C

on

sum

pti

on

(Q

uad

s)Energy Efficiency Has the Technical Potential to Level U.S. Energy Demand Growth

Buildings

Industry

Transportation

• Super Boilers• Nano Mfg• Direct

Steelmaking• Efficient Data

Centers• CHP

EIA (Pre-EISA) Business as Usual Projected Demand

Growth

EIA (Pre-EISA) Business as Usual Projected Demand

Growth

• Hybrids• Advanced

Diesels• PHEVs• Lightweight

Materials

Source: DOE Scenario Projections

2030 Tech.

Potential Savings

18 Quads

2030 Tech.

Potential Savings

18 Quads

2015 Tech.

Potential Savings 3 Quads

2015 Tech.

Potential Savings 3 Quads

2020 Tech.

Potential Savings 8 Quads

2020 Tech.

Potential Savings 8 Quads

EISA • Lighting• Envelope• ZEBs• Appliances• Codes

• CAFE• RFS• Appliance, Bldg, Industrial Motor EE

201

0

202

0

203

0

Opportunities for Energy Efficiency

• The average building wastes 30% of the energy it consumes because of inefficiencies.

• If the energy efficiency of U.S. commercial and industrial buildings improved by 10%:– Savings of $20 billion.– Reductions in greenhouse gas emissions

equal to about 30 million vehicles.

… a year

9

The Role of Energy Efficiency

• Robust and evolving pipeline of efficiency technologies– McKinsey Global Institute identified energy saving

sufficient to cut consumption growth in half using only existing technologies that offer at least a 10% IRR (MGI, Curbing Global Energy Demand Growth, May 2007)

Efficiency: Carbon Abatement with a Positive Return on Investment

Energy Efficient Buildings

• Builders Challenge

Recognizing Leadership in Homebuilding

• Commercial Buildings Initiative

Public-private partnerships working to enable market-ready net-zero energy commercial buildings no later than 2025 in all climate zones

Commercial Building Energy Alliances EnergySmart Hospitals EnergySmart Schools

55% of U.S. Natural Gas55% of U.S. Natural Gas

72% of U.S. Electricity72% of U.S. Electricity

The combined residential and commercial buildings sector is the largest energy consumer in the U.S.

Opportunities: Electric Motors

60% of building energy use is to run electric motors

Opportunities

Control motor speed– Variable speed drives– Pulse width modulation (PWM) circuitry– Inverter controls

• Potential to save 30 – 60% of electricity currently powering motors

Opportunities: Better Lighting

• Light emitting diodes (LEDs)

• Occupancy sensors

• Light level sensors

(Also lowers air conditioning demand in building)

Opportunities: Energy Star

Modernizing ENERGY STAR

• Update and expand the ENERGY STAR program to add new advanced technologies to the ENERGY STAR portfolio.

Added or Updated since 2006:

Clothes washer

Advanced water heaters (5 categories)

Dishwashers

Solid State Lighting (7 categories)Refrigerators

Opportunities: Standby Loss

• Appliances– TV/DVD/Audio systems– Computers

• Other devices that stay plugged in

• Can save up to 6% on energy bill

Non-market Forces Impede Energy Efficiency Market Penetration

• Ignorance of opportunities

• Inconsistent Real Estate Valuation

• Inconsistent use of Life cycle costing

• Deficit of Information

• Lack of demand by Consumers

• Out of Date Utility regulation

• Inconsistant policies (e.g., Codes)

What They Are Saying

• Listed companies with an energy efficiency program outperform their competitors

»Innovest

What They Are Saying

• The economic case for energy productivity improvements has never been stronger

»McKinsey

Benefits from Energy EfficiencyBenefits from Energy Efficiency

Co

mp

any E

ner g

y E

f fi ciency

• Cost reductions through efficient use of energy• Reduced exposure to fluctuating energy supply

and prices and blackouts• Increase in productivity and product quality• Improved reputation with customers and society• Improved employee motivation, health and

safety• Compliance with legislation and ISO 14001

targets

Increased profits and shareholder value

Thank You!

Tom EggertBusiness SustainabilityWI School of Business