Energy Efficiency: The first and most profitable way to delay Climate Change

Law Seminars InternationalENERGY IN CALIFORNIA

Sept. 22, 2008

Arthur H. Rosenfeld, CommissionerCalifornia Energy Commission

(916) 654-4930ARosenfe@Energy.State.CA.US

http://www.energy.ca.gov/commissioners/rosenfeld.html

or just Google “Art Rosenfeld”

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California Energy Commission Responsibilities

Both Regulation and R&D

• California Building and Appliance Standards– Started 1977– Updated every few years

• Siting Thermal Power Plants Larger than 50 MW• Forecasting Supply and Demand (electricity and fuels)• Research and Development

– ~ $80 million per year• CPUC & CEC are collaborating to introduce communicating electric

meters and thermostats that are programmable to respond to time-dependent electric tariffs.

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Energy Intensity (E/GDP) in the United States (1949 - 2005) and France (1980 - 2003)

0.0

5.0

10.0

15.0

20.0

25.0

1949 1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005

tho

usa

nd

Btu

/$ (

in $

200

0)

If intensity dropped at pre-1973 rate of 0.4%/year

Actual (E/GDP drops 2.1%/year)

France

12% of GDP = $1.7 Trillion in 2005

7% of GDP =$1.0 TrillionIn 2005

4

Energy Consumption in the United States 1949 - 2005

0

25

50

75

100

125

150

175

200

19491951195319551957195919611963196519671969197119731975197719791981198319851987198919911993199519971999200120032005

Quads/Year

$ 1.7 Trillion

$ 1.0 Trillion

New Physical Supply = 25 Q

Avoided Supply = 70 Quads in 2005

If E/GDP had dropped 0.4% per year

Actual (E/GDP drops 2.1% per year)

70 Quads per year saved or avoided corresponds to 1 Billion cars off the road

In 2005

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How Much of The Savings Come from Efficiency

• Some examples of estimated savings in 2006 based on 1974 efficiencies minus 2006 efficiencies

• Beginning in 2007 in California, reduction of “vampire” or stand-by losses– This will save $10 Billion when finally implemented, nation-

wide

• Out of a total $700 Billion, a crude summary is that 1/3 is structural, 1/3 is from transportation, and 1/3 from buildings and industry.

Billion $

Space Heating 40Air Conditioning 30Refrigerators 15Fluorescent Tube Lamps 5Compact Floursecent Lamps 5Total 95

Two Energy Agencies in California

• The California Public Utilities Commission (CPUC) was formed in 1890 to regulate natural monopolies, like railroads, and later electric and gas utilities.• The California Energy Commission (CEC) was formed in 1974 to regulate the environmental side of energy production and use. • Now the two agencies work very closely, particularly to delay climate change. • The Investor-Owned Utilities, under the guidance of the CPUC, spend “Public Goods Charge” money (rate-payer money) to do everything they can that is cost effective to beat existing standards. • The Publicly-Owned utilities (20% of the power), under loose supervision by the CEC, do the same.

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7

California’s Energy Action Plan

• California’s Energy Agencies first adopted an Energy Action Plan in 2003. Central to this is the State’s preferred “Loading Order” for resource expansion.

• 1. Energy efficiency and Demand Response• 2. Renewable Generation,• 3. Increased development of affordable & reliable conventional

generation• 4. Transmission expansion to support all of California’s energy

goals.

• The Energy Action Plan has been updated since 2003 and provides overall policy direction to the various state agencies involved with the energy sectors

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Per Capita Electricity Sales (not including self-generation)(kWh/person) (2006 to 2008 are forecast data)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1960196219641966196819701972197419761978198019821984198619881990199219941996199820002002200420062008

United States

California

Per Capita Income in Constant 2000 $1975 2005 % change

US GDP/capita 16,241 31,442 94%Cal GSP/capita 18,760 33,536 79%

2005 Differences = 5,300kWh/yr = $165/capita

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Annual Energy Savings from Efficiency Programs and Standards

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

19751976197719781979198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003

GWh/year

Appliance Standards

Building Standards

Utility Efficiency Programs at a cost of

~1% of electric bill

~15% of Annual Electricity Use in California in 2003

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Impact of Standards on Efficiency of 3 Appliances

Source: S. Nadel, ACEEE,

in ECEEE 2003 Summer Study, www.eceee.org

75%60%

25%20

30

40

50

60

70

80

90

100

110

1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Year

Ind

ex (

1972

= 1

00)

Effective Dates of National Standards

=

Effective Dates of State Standards

=

Refrigerators

Central A/C

Gas Furnaces

SEER = 13

11Source: David Goldstein

New United States Refrigerator Use v. Time

and Retail Prices

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002

Ave

rag

e A

nn

ual

En

erg

y U

se(k

wh

) o

r P

rice

($)

0

5

10

15

20

25

Ref

rig

erat

or

volu

me

(cu

bic

fee

t)

Energy Use per Refrigerator(kWh/Year)

Refrigerator Size (cubic ft)

Refrigerator Price in 1983 $

$ 1,270

$ 462

~ 1 Ton CO2/year~ 100 gallons Gasoline/year

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Annual Energy Saved vs. Several Sources of Supply

Energy Saved Refrigerator Stds

renewables

100 Million 1 KW PV systems

conventional hydro

nuclear energy

0

100

200

300

400

500

600

700

800

Billion kWh/year

= 80 power plants of 500 MW each

In the United States

13

Value of Energy to be Saved (at 8.5 cents/kWh, retail price) vs. Several Sources of Supply in 2005 (at 3 cents/kWh, wholesale price)

Energy Saved Refrigerator Stds

renewables

100 Million 1 KW PV systems

conventional hydro

nuclear energy

0

5

10

15

20

25

Billion $ (US)/year in 2005

In the United States

14

Air Conditioning Energy Use in Single Family Homes in PG&E The effect of AC Standards (SEER) and Title 24 standards

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1975 1980 1985 1990 1995 2000 2005 2010 2015

Annual kWh per new home for central AC

If only increases in house size -- no efficiency gains

Change due to SEER improvements

SEER plus Title 24

15

0

20

40

60

80

100

120

3 Gorges三峡

Refrigerators冰箱

Air Conditioners 空调

TWh

2000 Stds

2000 Stds

2005 Stds

2005 Stds

If Energy Star

If Energy Star

TW

H/Y

ear

1.5

4.5

6.0

3.0

7.5

Val

ue

(bil

lio

n $

/yea

r)

Comparison of 3 Gorges to Refrigerator and AC Efficiency Improvements

Savings calculated 10 years after standard takes effect. Calculations provided by David Fridley, LBNL

Value of TWh

3 Gorges三峡

Refrigerators 冰箱

Air Conditioners

空调

Wholesale (3 Gorges) at 3.6 c/kWh

Retail (AC + Ref) at 7.2 c/kWh

三峡电量与电冰箱、空调能效对比

标准生效后， 10年节约电量

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Annual Energy Savings from Efficiency Programs and Standards

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

19751976197719781979198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003

GWh/year

Appliance Standards

Building Standards

Utility Efficiency Programs at a cost of

~1% of electric bill

~15% of Annual Electricity Use in California in 2003

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California IOU’s Investment in Energy Efficiency

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

1976197819801982198419861988199019921994199619982000200220042006200820102012

Millions of $2002 per Year

Forecast

Profits decoupled from sales

Performance Incentives

Market Restructuring

Crisis

IRP2% of 2004

IOU Electric Revenues

Public Goods Charges

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Source: NRDC; Chang and Wang, 9/26/2007

1000 ft2 of a white roof, replacing a dark roof, offset the emission of

10 tonnes of CO2

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CO2 Equivalency of Cool Roofs and Pavements

• 44 GT CO2 is over one year of the world 2025 emission of 37 GT CO2

• At a growth rate of 1.5% in the world’s CO2 -equivalent emission rate, 44 GT CO2 would offset the effect of the growth in CO2-equivalent emissions for 11 years

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Equivalent Value of Avoided CO2

• CO2 emissions currently trade at ~$25/tonne

• 44 GT worth $1100, for changing albedo of roofs and paved surface

• Cooler roofs alone worth $600B

• Cooler roofs also save air conditioning (and provide comfort) worth several times $600B

Reducing U.S. Greenhouse

Gas Emissions: How Much at What Cost?

Reducing U.S. Greenhouse

Gas Emissions: How Much at What Cost?

US Greenhouse Gas Abatement Mapping Initiative

December 12, 2007

Abatement cost <$50/ton

U.S. mid-range abatement curve – 2030

Source:McKinsey analysis

0

30

60

90

-120

-220

-30

-60

-90

3.20

CostReal 2005 dollars per ton CO2e

1.0 1.2 1.4 1.8 2.00.2 2.2 2.4 2.6 2.8 3.01.60.4 0.6 0.8

-230

Residential electronics

Commercial electronics

Residential buildings – Lighting

Commercial buildings – LED lighting

Fuel economy packages – Cars

Commercial buildings – CFL lighting

Cellulosicbiofuels

Industry – Combined

heat and power

Existing power plant conversion efficiency improvements

Conservation tillage

Fuel economy packages – Light trucks

Commercial buildings – Combined heat and power

Coal mining – Methane mgmt

Commercial buildings – Control systems

Distributed solar PV

Residential buildings – Shell retrofits

Nuclear new-build

Natural gas and petroleum systems management

Active forest management

Afforestation of pastureland

Reforestation

Winter cover crops

Onshore wind – Medium penetration

Coal power plants – CCS new builds with EOR

Biomass power – Cofiring

Onshore wind –High penetration

Industry – CCS new builds on carbon-intensive processes

Coal power plants – CCS new builds

Coal power plants – CCS rebuilds

Coal-to-gas shift – dispatch of existing plants

Car hybridi-zation

Commercial buildings – HVAC equipment efficiency

Solar CSP

Residential buildings – HVAC equipment efficiency

Industrial process improve-ments

Residential water heaters

Manufacturing – HFCs mgmt

Residential buildings – New shell improvements

Coal power plants– CCS rebuilds with EOR

PotentialGigatons/year

Commercial buildings – New shell improvements

Afforestation of cropland

Onshore wind –Low penetration

23

24

8% 17% 25% 33% 42% 50% 58%

24

25

Source: Pat McAuliffe, pmcaulif@energy.state.ca.us

Possible Strategies to Reduce Electricity Sector Carbon Emissions in California, ignoring ramp up times and other implementation issues -- The ELECTRICITY Perspective

240,000

260,000

280,000

300,000

320,000

340,000

360,000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

GWH

Triple EE Programs

Doubling Standards

20% Renewables

More Efficient Combustion

Less or Cleaner Coal

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Source: Pat McAuliffe, pmcaulif@energy.state.ca.us

75

85

95

105

115

125

135

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Million Metric Tons of CO2 eq.

Triple EE Programs

Doubling Standards

20% Renewables

More Efficient Combustion

Less or Cleaner Coal

Possible Strategies to Reduce Electricity Sector Carbon Emissions in California, ignoring ramp up times and other implementation issues -- The CARBON Perspective

The End

For More Information:

http://www.energy.ca.gov/commission/commissioners/rosenfeld.html

or just Google “Art Rosenfeld”

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