Realizing the Potential for Energy Efficiency: A New World Energy Order

Presentation,2008 World Energy Engineering Congress

Washington, DC. October 1, 2008

Kateri Callahan, President

Overview A Few Words About the Alliance New Direction Based on “Tried & True”

Resource Potential for Energy Efficiency in a “New

World Energy Order” Realizing the Potential: A Policy Call to

Action Policy Forecast: Cloudy, With a Chance of

Energy Efficiency

What is the Alliance to Save Energy? Mission: To promote energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security.

The Alliance is… –Thirty years in the making

–Fuel neutral

–Staffed by 50+ professionals

–Active in policy, research, education, communications, technology deployment and market transformation

Business Leaders

Academia

Environmental Groups

Policy Leaders

The Alliance to Save Energy

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 150 organizations Involvement by businesses in all economic sectors Initiatives underway in research, policy advocacy, education, technology

deployment, and communications

Energy Efficiency: Powering the U.S. Economy for 30 Years

America's Greatest Energy Resource Energy Efficiency and Conservation Improvements Since 1973

Have Reduced Annual Energy Consumption by 50 Quads

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Energy Efficiency and Conservation

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Alliance to Save EnergyAugust 2008

Why Do More?

Growth in 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 Do More? U.S. Growth in Energy Use Poses a National Security Threat

Why Do More? Answering the Climate Challenge

WHY DO MORE?????Energy Use is a Pocketbook Issue

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Natural Gas Heating Oil Propane Electricity

Alliance to Save Energy 2007

Increased Home Heating Costs in Washington

2006-2007 2007-08 Increase

The Past Versus Present World Energy Order

1990s - EPAct 1992 - Some codes and standards - Labeling- “3 points of light and 997 dim bulbs”

So far in the 21st Century….EPAct 2005

- Appliance standards, tax incentives and a long to-do list

- Reduce CO2 by 3% by 2020 Energy Independence and Security Act of 2007 (EISA)

- CAFÉ Standards; Appliance standards; RD&D

- Reduce energy use by 7%; electricity use by 5%; oil use by 10%

- Reduce CO2 by 9%

EISA 2007: The Details… In:- Vehicle CAFE standards- Appliance standards- Federal energy management- Certain building standards- R&D program authorizations

Out:- Renewable/Efficiency electricity standard- Building energy code targets- Tax incentives

Two Areas with Big Potential Savings: Buildings and Industry

Energy Information Administration (EIA)

The Building sectoraccounts for almost½ of the energy consumption in the U.S.

Buildings account forover 70% of total USelectricity consumptionand are responsible forover 40% of CO2 emissions.

Industry accounts for 32% of total U.S. energy consumption.

Industry: Big Appetite - Big Savings

Source: McKinsey & Company, 2007.

Industry represents 38% of the total global opportunity to reduce energy demand

Source: McKinsey & Company, 2007.

Industry represents 38% of the total global opportunity to reduce energy demand

• U.S. industry consumes 33% of all U.S. energy.

• The largest 4,000 plants use 58% of U.S. industrial energy.

• A large plant uses as much energy as 20,000 typical homes; A medium-sized plant consumes the same energy as 455 homes.

• For every U.S. plant, there are 320 homes and 685 motor vehicles.

Big bang for the “outreach buck:”

Resources to implement energy-saving measures are

available to help:

“Save Energy Now”

www.eere.energy.gov/industry/

Industrial Plants: Big Energy Savings

DOE’s “Save Energy Now”: The Results

So far, 608 assessments completed. As of September 2, 2008, 479 plants

have reported the following:

Identified energy saving costs more than $820 million

Implemented energy savings nearly $118 million

Energy savings measures underway or scheduled:

more than $327 million

Identified natural gas savings 78.1 trillion Btu—the amount of natural gas consumed by more than 1 million single-family homes per year

Total potential carbon dioxide (CO2) emissions reduction:

6.9 million metric tons—the equivalent to taking nearly 1.2 million cars off the road

Codes: Helping to Cut Global Energy Demand Growth

Source: McKinzey Global Institute

Better Building Codes are part of the solution to cutting global energy demand growth from 2.2% to 0.7%

So…What Do We Need? Better Building Codes

Today’s building codes

affect ALL new buildings

By 2010By 2010: • Almost 5 million new housing units

• Over 233 billion sq feet commercial floor space

By 2020By 2020: • 23.4 million new housing units

• Over 1 trillion sq feet commercial floor space

By 2030By 2030: • Over 41 million new housing units

• Over 2 trillion sq feet commercial floor space

Source: EIA, Annual Energy Outlook 2008

Dynamic Building Codes for Residential Homes Federal Legislation to Drive 30% Improvement in Residential

and Commercial EE Codes by 2010; 50% by 2020 “30% Solution Campaign” to Insure 30% Improvement in

2009 IECC Residential Building Code Federal Regulations Requiring New Federal Facilities to

Demonstrate 30% EE Improvement Efforts Supported by: the Alliance to Save Energy and U.S.

DOE, Utilities, Businesses, NGOs

Realizing the Potential: Energy Efficient Codes Coalition (EECC)

Potential Savings From EECC-Advocated “30% Solution”

Cumulative impact (2008 to 2020) 4 quads (1015 Btu) saved nationwide ~230 million metric tons of avoided CO2

Electricity savings equal to the annual output of 131 baseload power plants

Natural gas savings could heat 33 million homes for 1 year

Enough fuel oil to heat over 3.5 million homes Save homeowners $33 billion dollars (at today’s

energy prices)

Today’s Federal Forecast: Dreary

Climate legislation “dead” in 110th Congress“Conventional wisdom” predicts passage in 2010:

- Cap and trade framework- Cost containment measures- Combination of auction and allocation- Significant funding for RD&D

Energy legislation “dead” as well- No consensus on domestic drilling plans- No money- “Gang of 20” withholding bill until 2009

Energy efficiency and clean energy tax incentives “Outside Chance” of passage

Energy issues likely to be “front-and-center”- deepening economic woes and a likely crisis

caused by spikes in home heating costs - increasing support for “Green Jobs” and for using

clean energy and efficiency as an “economic engine” to create new jobs and a trained workforce

Forecast for New Congress & Administration

Good likelihood of major energy bill in 2009 with strong EE Provisions:- Renewable and Energy Efficiency Portfolio

Standards

- Building energy codes

- Tax Incentives

- Authorizations for new RD&D programs Climate legislation not likely before 2010 Meanwhile the states march on!

Outlook for the New Congress & Administration - Energy

A Look at the U.S Presidential Candidates’ Energy Platforms

ObamaEmergency energy tax rebatesDrilling for domestic oilDeveloping biofuelsDiversifying energy sourcesInvesting in ‘green’ jobs Promoting energy efficiency

McCainExpanding domestic oil and natural gas Reforming transportation Investing in clean energyInvesting in clean coalInvesting in nuclearPromoting energy efficiency

Forecast for Climate Legislation in New Congress/Administration

The Senate Debate on Climate Legislation (Lieberman-Warner) this past June- Fails cloture 48-36; proponents claim 54 supporters;

opponents claim less than 48 supporters- Calls for a carbon cap-and-trade program- Viewed as a “dress rehearsal” for 111th Congress

House Continues Work- Energy & Commerce Committee Hearings & White Papers- Markey Introduces “iCAP” legislation

Administration agrees to non-binding, international commitment

Energy Efficiency in Climate Legislation

A Look at the U.S Presidential Candidates’ Climate Platforms

Obama“Cap and Trade” to Reduce Carbon 80% below 1990 Level100% Auction of Credits$$$$ For Technology/Fuels DevelopmentEnergy Efficiency TargetsCAFÉ IncreasesRenewable Energy and Fuels Targets

McCainClimate Stewardship Act of 2005“Cap and Trade” to Limit Carbon Emissions to 2000 Level by 2010Credit Allowances to Emitters AND Auction$$$$ for Technology Development

The Challenges Can Be Met: Others are Doing More with Less!

R etail E lec tric ity S ales per C apita

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S ourc e : E IA Interna tiona l Net E nerg y C onsumption T a bles, 1980 - 2005; E IA Interna tiona l P opula tion T a bles, 1980-2005; Wa shing ton S ta te Da ta B ook; U.S . C ensus Da ta ; E IA E nerg y C onsumption E stima tes by E nd-Use S ec tor, 1960-2005, Wa shing ton a nd C a lifornia

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Thank you!

For More Information….

Kateri CallahanPresident

Alliance to Save Energy1850 M Street, NW

Washington, D.C. 20036kcallahan@ase.org

www.ase.org202.857.0666