Kateri Callahan, PresidentAlliance to Save Energy

February 15, 2010

The Century of Energy Efficiency:Taking it to the Cities

Presentation Overview A few words about the Alliance

Why energy efficiency? Why now?

Driving energy efficiency – the public policy imperative

Energy challenges/potential in urban settings

A Quick Tour: Success Stories Taking it to the next level – the challenge for Israel

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.

Organization: Staffed by 60+ professionals32 years of experience$12 million annual budgetRecognized as the premier energy efficiency organization in the world

What is the Alliance to Save Energy?

- Non-profit organization headquartered in U.S.; operations world-wide- Led by Senator Mark Pryor (D-Ark.) and Peter Darbee, President and CEO of

Pacific Gas and Electric- Includes 10 Members of Congress – Bi-Cameral; Bi-Partisan- Also includes environmental, consumer, and trade associations heads, state

and local policy makers, corporate executives

Working with and Across All Sectors of the Economy

170 companies, organizations, and institutions in Associates Program Associates Program membership represents all economic sectors Initiatives underway in research, policy advocacy, education, technology

deployment, market transformation and communications

A Global Reach:22+ International Projects

3 in India 1 in Pakistan 2+ pending in China 5 more in Asia-Pacific region 4 in Africa 3 in Latin America (Mexico, Central America, Caribbean) 1 in Ukraine 1 in Eastern Europe/Eurasia region 2 in North America

Why Energy Efficiency?America’s Greatest Energy Resource

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Geothermal, Solar and Wind

Conventional Hydroelectric

Wood, Waste, Alcohol

Nuclear Electric Power

Coal

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Petroleum

Energy Efficiency and Conservation

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

Have Reduced Annual Energy Consumption by 50 Quads

2007 Domestic Production Net Imports

Alliance to Save EnergyAugust 2008

Reducing Energy Use, Saving Money, and Powering the domestic economy for over 30 years:

WHY EE? WHY NOW?Global “Business as Usual” 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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In sum, energy use has a direct effect on… Global Emissions: Energy use directly linked to GHG emissions..U.S. example:

Energy Security:Unchecked growth in energy demand can:

• Accelerate fossil fuel depletion• Increase our reliance on foreign sources

of energy

The Economy:• According to a McKinsey estimate:

“Business as usual” energy use will waste more than $1.2 trillion between now and 2020 in the U.S. alone – and this does not include transportation energy consumption.

Efficiency: Enormous Potential for Savings in

ALL Sectors…

Source: McKinsey Global Institute

And: A No-Cost Way to Reduce GHG Emissions

Energy efficiency should be fully considered in GHG reductions. All items to the left of the arrow represent “negative marginal costs”

BUT: Many “Non-Price” Barriers

Tackling Market Distortions/BarriersRequires a Foundation of Public Policy

To encourage technological innovation

To gain foothold in market

To achieve market penetration

To lock in savings for consumers and businesses

And Strong EE Policies Do Make a Difference!

The U.S. Example:ARRA: Built on the Pillars of Good Public Policy

RD&D – Smart Grid ($4.5 bill)– DOE RD&D ($2.25 billion)

Incentives– Extension and Increase in consumer EE tax incentives

Codes & Standards– “Conditions” State funding on strong building codes

Education & Outreach– State Energy Star rebate programs ($300 million)

PLUS: Government Leadership by Example– Federal “High-Performance Green Buildings” ($4.5 billion)

Stimulus: $65B Related to Energy Efficiency

Funding in Millions of US Dollars

Core Energy FundingObligation & Spending to date

State Energy Program- Appropriated: $3.1 billion- Obligated: $3.1 billion- Spent: $45 million (2%)

Energy Efficiency and Conservation Block Grants- Appropriated: $3.2 billion- Obligated: $2.3 billion- Spent: $78 million (3%)

Weatherization Assistance Program- Appropriated: $5.0 billion- Obligated: $4.8 billion- Spent: $441 million (9%)

Appliance Rebates- Appropriated: $300 million- Obligated: $300 million- Spent: $276 thousand

Smart Grid Grants and Demonstration- Appropriated: $4.2 billion- Obligated: $2.5 billion- Spent: $4 million (0.1%)

RD&D (EERE and ARPA-E)- Appropriated: $1.2 billion- Obligated: $484 million- Spent: $43 million (4%)

In core EE, $560 million of $11.6 billion spent (5%)

More about the EECBGs...

Obama administration: strong focus on deploying EE at city/state level Funds to units of local and state government, Indian tribes, and territories Develop and implement projects to improve EE, reduce energy use/emissions “Retrofit Ramp-up”:

- 8-20 awards of up to $75 million for comprehensive energy efficiency programs in cities- Total = $454 million- 170 proposal applications (Alliance involved in 5)

“The aim of the ‘Retrofit Ramp-Up’ program is to jump-start an industry that makes energy efficiency savings easy to access and available to everyone. By encouraging partnerships between local governments and effective private enterprises, we hope tune-ups for buildings will become as accepted as tune-ups for cars. These efforts will save Americans millions of dollars, reduce carbon pollution, and create new green jobs,” said Secretary Chu.

Energy use in cities The Challenge: Cities are resource-hungry, and they’re growing

+50% of the global population lives in cities; 60% by 2030 (U.N. estimate) Cities emit disproportionate amount– 80% global GHGs (U.N. Habitat) Drastically reducing growth in emissions requires wide-scale changes, involving:

Infrastructural changes, Behavioral changes The developing world:

75 percent of the world's billion poorest humans live in urban areas Dilemma: who finances sustainable urban development?)

The Potential: Efficiency First• With optimal EE investments:

• Developed countries (G-8 + 5) can avoid $3 trillion worth of new generation (UN Foundation)• Developing world can reduce energy demand by 25% by 2020 (McKinsey Global Inst.)

• Most of these improvements need to happen at regional/municipal level• 70 % of technologies required are available or on the horizon (McKinsey)• Energy savings can pave way for investments in wide-scale renewable, clean energy, climate

improvements

(over 11 trillion Israeli

shekel)

Cities Responding to Challenge

www.iclei.org

http://www.c40cities.org/

www.eumayors.eu/

http://www.rockefellerfoundation.org/what-we-do/current-work/developing-climate-change-resilience/asian-cities-climate-change-resilience

Answering the Climate Challenge in the U.S.

Success story: Charlottesville, Virginia

Winner of SEEA’s regional cities competition $500,000 award Creation of community-based EE program: The Local Energy

Alliance Program (LEAP) Residential : Home Performance w. ENERGYSTAR Keys to success:

- Public Private Partnership- Mobilization of local stakeholders in

community, government, business, academia

Cambridge, Massachusetts

Comprehensive energy audits for Cambridge buildings (generally for free)

Up to 30% reductions in energy bills Energy efficiency upgrades with no up front cash required Sponsored by the City of Cambridge and NSTAR GOAL: reduce energy use in Cambridge by an average of 10% [and

about 15% (50 MW) of peak use] in next few years by promoting the adoption of energy efficiency technologies and behaviors

Collaboration with lenders, ESCOs, local businesses, citizens Involvement from Alliance Associate

Conservation Services Group

Municipal Heating Reform: Ukraine

3-year project launched Feb. 2009 No upgrade to municipal heat

generation/ transportation facilities in +10 years 60% waste

Raise awareness, cooperation, understanding among government, heat providers and consumers of communal services

First large-scale heating energy saving campaign conducted in the Ukraine

Soviet poster promoting electric power conservation: “Conserve Electric Power! One percent of the electric power saved by an industrial plant is equal to the consumption of 2000 apartments.”

What is the potential and challenge for Israel?

According to a November 2009 McKinsey analysis:- BAU: GHG emissions will double by 2030- Potential to Reduce Growth by 2/3 with Technical Abatement

Measures No impact on consumers quality of life Total net cost of measures = ZERO (many are net positive

- Abatement potential via energy efficiency: Improved fuel efficiency of motor vehicles Increased efficiency in new buildings Efficient lighting and lighting control systems Residential retrofits with improved insulation measures

What can be done here?Israeli government must take four key steps to realize the

described potential:

Establish ambitious national GHG abatement goals

Formulate a national Low Carbon Growth Plan (LCGP) - that defines the levers, the mechanism and the timing of implementation

Translate the national abatement plan into detailed operational measures including ways to incentivize financing of the upfront investment

Establish a central body to monitor progress in implementation and provide a fact base for ongoing political and technical decisions

EE: A Trend Not a Fad“To control our own destiny, America must develop

new forms of energy and new ways of using it. This is not a challenge for government alone…it is a challenge for all of us.” President Barack Obama

EE Global 2010: Ideas, Intersections, Solutions to Power an Energy-Efficient EconomyMay 10-12, 2010 : Washington D.C. Convention Center

Established in 2007; held annually, rotating among 5 regions of the world Africa, Asia/Pacific, Europe, Latin America, North America

Organized by an International Steering Committee Honorary Government Co-Chairs Industry Chair Vice Chairs

Draws 700+ stakeholders High-level – 40% of 2009 attendees self-identified as executives, and another 50% as managers International –40 countries represented in 2009 Representative of all sectors – buildings, industrial, utilities, transportation, finance Even split of government (28%), business (37%) and non-profit (28%) in 2007 & 2009

Rep. Edward Markey James E. RogersChairman, President & CEO, Duke Energy

Christopher B. Curtis President & CEO, N.A. Operating Div.& Buildings Business, Schneider Electric

Robert J. DixonSr. VP & Global Head Efficiency & Sustainability, Building Automation, Siemens Building Technologies Inc.

David SzczupakEVP, Global Product Organizations, Whirlpool Corporation

Nobuo TanakaExecutive Director, IEA

Sen. Mark Pryor

Questions?

Thank you!

Contact information:Kateri Callahan

kcallahan@ase.org+1-202-530-2219