The Energy Efficiency Lifestyle: Four Major Ingredients

Kateri Callahan, President, Alliance to Save EnergyHitachi Climate Change Forum

Washington, D.C. Thursday, March 5, 2009

Overview

A Few Words About the Alliance Energy Efficiency: The World’s Greatest ResourceDriving Energy Efficiency: Four Pillars- Prices Matter: High Energy Costs = Savings- Building Energy Efficiency Codes and Standards: Moving

inefficient construction and products out of the market- Consumer and Student Education & Awareness:

Transforming Markets, Green Collar Training- Good Public Policies: The Cornerstone of an Energy-

Efficient SocietyOur Energy Future

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…Staffed by 50+ professionals31 years of experience in

policy, research, education, communications, technology deployment and market transformation

Alliance Directors: Bi-Partisan Elected Officials & Industry Leaders

Jim Rogers, CEO Duke Energy

Senator Mark Pryor (D-Ark.)

Guided by a 37-Member, elected Board of DirectorsLeaders of environmental, consumer, and trade associations; state and local policy makers; corporate executives

Bi-partisan, bi-cameral Honorary Vice Chairs

Forging Alliances: Business, Government & Public InterestsSponsorship and participation of more than 150 organizationsInvolvement by businesses in all economic sectorsHeadquartered in Washington, D.C. with operations in several US states, Eastern Europe, South Africa, Mexico, and India

Why Energy Efficiency? Powering the U.S. Economy for 30 Years

Prices Matter: Global Economic Impacts of Energy Use

Source: McKinsey Global Institute

Prices Matter: EE = Cheap, Quick “First Response” to Climate

The Challenge? Market DistortionsPrincipal Agent or “Split Incentives”- Home builder versus buyer- Utility versus customer

Transaction Costs- Lack of information on life-cycle cost for products and/or

paybacks for upgradesLack of Investment in RD&D and EE ProgramsPublic Policies EssentialConsumer Education & Outreach Essential

Energy Prices Matter: Consumer Behavior

Prices Matter: High Costs = Behavior Modification

Building Energy Codes &Appliance & Equipment Standards

Transform Markets- Eliminates availability of inefficient products and

construction- Makes energy efficiency part of the package –

consumers don’t have to think about it- Building Codes “Lock In” Savings for Decades

Federal Legislation Pending- Would Drive 30% Improvement in Residential and

Commercial EE Codes by 2010; 50% by 20202009 Model Energy Code for Homes: IECC Improves Efficiency by approximately 13% over 2006- EECC Sought 30% Improvement

ASHRAE Goal (Commercial) is a 30% Improvement in Efficiency in the 2010 Code Cycle

Driving Efficiency through Codes and Standards…..

Light Bulb StandardU.S. set performance standards for general service light bulbs, starting in 2012-201425-30% savings: will phase out traditional incandescent bulbsSecond standard in 2020 must achieve roughly 65% savingsMost significant appliance standard ever adopted- Will reduce CO2 by 100 Mt/yr. by 2020- Will save $13 billion annually

Mobilizing Our Best “Weapon”: ConsumersThe foundation is there:

– According to EnergyPulse 2008, 88.2% of surveyed consumers report a positive association with the term ‘energy efficiency’Consumer Education & Outreach is the way forward:– Innovative campaigns emphasizing energy-efficient

lifestyles– Focus on “pocketbook” and personal/family benefits

Consumer Campaigns at the Alliance

Super PowersEPA, NYSERDA, AllianceNationwide TV & Radio (ABC, CBS, CNN)Consumer Website

Powerful $avingsDOE & Alliance PartnershipAll Media Outlets

The Power is In Your HandsIndustry, DOE, EPA, AllianceAll Media Outlets, Web & Collateral

Energy HogDOE, Ad Council, Alliance, StatesAll Media Outlets Web, Collateral Materials

P&G ColdWater CampaignP&G, AllianceAll Media Outlets & Web

Eureka $mart House Energy-Efficiency ChallengeNBC Universal, Industry, DOE, AllianceOn Air, Web–Home Makeover Contest

The Drive $marter Challenge(www.drivesmarterchallenge.org)

Billboard advertising

Extensive media coverage

Interactive Website

Celebrity support Government support Corporate support Driving & Car Maintenance Tip cards

Driving Energy Efficiency Through Education: Green Schools Program

Creating powerful advocates for energy efficiency

Tomorrow: Students are the energy users, citizens of tomorrow -- they can gain deep understanding of energy/environment link

Today: Students can advocate for energy efficiency to their parents, schools and communities, and conduct credible research

But Citizens Want Help…

“Who Are You Going to Call…?.....The Government!”

A History of Policy Progress (Slowly but Surely!)Energy Policy Act of 2005 will by 2020:- Reduce U.S. energy use by 2%- Reduce electricity demand by 4%- Reduce oil use by 0%- Reduce CO2 emissions by 3%

Energy Independence and Security Act of 2007 will by 2020 (2030):- Reduce U.S. energy use by 4% (7%)- Reduce electricity demand by 4% (5%)- Reduce oil use by 5% (10%)- Reduce CO2 emissions by 5% (9%)

Estimates from ACEEE, ASE

On the Horizon…

…More Energy Efficiency?

– Reduce electricity use 15% by 2020– Net-zero energy buildings by 2030– Overhaul federal appliance

standards– By 2014, reduce energy use in new

federal buildings 45%; 25% in existing federal buildings

– Flip incentives for utilities– Invest in a “smart grid”– Weatherize 1 million homes/year– Investment incentives for “livable

cities”

President Obama: Energy Efficiency Advocate

The First Step: American Recovery & Reinvestment Act 2009

~ $75

Billion

Potential

for EE

ARRA: Big on EE$20 billion for EE : •$5 billion for the Weatherization Assistance Program, which will go a long way in meeting President Obama’s goal of weatherizing one million homes per year while creating an estimated 32,000 jobs in the auditing and retrofitting industries;•$4.5 billion to make 75 percent of federal buildings more energy efficient;•$3.1 billion for the State Energy Program (SEP), which delivers important energy efficiency services and innovations in every state; the language contains incentives for states to adopt utility regulatory reform and stronger building energy codes; this program has the needed infrastructure to quickly absorb the new funding and create new jobs;•$300 million for state matching grants for rebates to consumers who purchase higher-tier energy-efficient appliances;•$3.2 billion for Energy Efficiency and Conservation Block Grants (EECBG) that will allow state and local governments to aggressively implement energy efficiency programs;•$400 million of the EECBG funds to be awarded on a competitive basis; and •More than $8 billion for state and local government investments in public transportation.

Market Transformation:Federal Tax IncentivesNew Homes

Builder tax credit - up to $2,000 if 50% more efficient compared to 2003 IECC code; $1,000 for an Energy Star manufactured home. (Through December 31, 2009)

Existing HomesHomeowner tax credit – 30% of cost of installing building envelope components consistent with IECC 2000; capped at $1500. (Through December 31, 2010)

Commercial BuildingsDeduction up to $1.80/sq.ft. for buildings designed to use 50% less energy than ASHRAE-90.1 (Through 2013)

Public Buildings: Assignable deduction!

RE & EE: Key Ingredients to Climate Change Legislation

The Future is Ours to Invent!Near-Term Promise:- The U.S. Economy is Re-built on Development

and Deployment of Clean Energy and Technologies

Mid-Term Promise:- Energy Efficiency is the “First Tool” in the Arsenal

for Fighting Climate ChangeLong-term Reality?:- U.S. Becomes the Most Energy Efficient Economy

in the World

Event Format:

Exposition Hall: Business, Government and Other Exhibits from around the world

4 Plenary Sessions: Top business and environmental leaders engage with all conference attendees

24 Executive Dialogue Sessions: 90-minute concurrent sessions organized into 4 end use tracks featuring leading global voices selected by an international committee of experts and peers

Networking Events: Many exciting events where business and pleasure are mixed

Sponsors:

Planning Committee:Organized by an International Steering Committee

Marc BitzerEVP, Whirlpool Corp.President, Whirlpool Europe

Lena EkMEP (Sweden)

Nobuo TanakaExecutive Director, International Energy Agency

Jean-Pascal TricoirePresident and CEO, Schneider Electric

Claude TurmesMEP (Luxembourg)

Andreas SchierenbeckCEO, Building Automation, Siemens

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