Energy Efficiency: First Line of Defense. Monday, May 2, :50 PM - 5:00 PM

Transcription

1 Energy Efficiency: First Line of Defense Monday, May 2, :50 PM - 5:00 PM

2 Energy efficiency savings far outweigh costs US$ billions 600 Initial costs 500 Present value of energy savings ( ) 400 $395 B $442 B $229 B $290 B $125 B $113 B 0 Residential Commercial Industrial Source: McKinsey & Company.

3 Energy efficiency is needed to meet our goals What if we cut U.S. emissions in half? 3.0 In billions of tons of carbon Reducing electric use through efficiency Reducing non-electrical energy through efficiency Increasing passenger vehicle efficiency Enhancing efficiency in heavy trucks and airplanes Expanding renewable energy use Capturing and storing energy Source: NRDC, adapted from Pacala and Socolow, 2004, and Kuuskraa et al., 2004.

4 Cost of delivered electricity, 2009 $/delivered MWh Sources: Energy Information Administration, American Council for an Energy-Efficient Economy

5 Insulation is sexy stuff. -- President Obama Source: Los Angeles Times (12/15/2009).

6 U.S. energy consumption by sector Quadrillion Btu Industrial Transportation Commercial Source: EIA Annual Energy Outlook Residential

7 Electric vehicle adoption Vehicle electrification impact* Electricity load increase (TWh) Penetration (% of fleet) Percentage of 2010 U.S. electricity use 1% 8 0.2% 5% % 10% % 15% % 20% % 100% % * Estimated impact to load based on 12,000 annual miles per vehicle, 280 million vehicle miles, and 4 miles traveled per kwh. Sources: Chart: McKinsey and Co., Milken Institute. Map: Ford Motor Co. Ltd. Energy Information Administration,

8 Where water and energy intersect U.S. water-related energy use, 2005 Total energy use: 3,660,969 million KWh Water supply and treatment 3.8% Non-water-related 85.8% Water heating 10.5% Residential 79.4% Commercial 20.6% Sources: Energy Information Administration, River Network.

9 Water usage in the United States Power production (49%) was the biggest use of water in 2005, followed by irrigation (31%). 19% of California s electricity production is water-related. Coal plants use 25 gallons of water per 1 kwh generated. U.S. population increase between was concentrated in waterdeficient states in the South (48.5%) and the West (32.6%). Sources: Sandia National Laboratories, River Network, U.S. Census Bureau, U.S. Geological Survey.

10 The benefits of a solar lease Source:

11 Each sector s share of potential energy savings Industrial 40% Residential 35% Commercial 25% Source: Energy Information Administration.

12 California emissions reduction goals for 2020 Source: California Energy Commission.

13 Oligopoly: The Western cooling challenge

14 Market uncertainty: Negotiating codes and standards

15 Bridging markets: This is not a pool

16 SolarLease Save money from day one with zero upfront cost OLD ELECTRIC BILL SOLARLEASE PAYMENT SolarLease is the most significant residential financing innovation the industry has ever seen NEW ELECTRIC BILL Rhone Resch, SEIA President

17 Impact of providing financing SolarLease Launch April 2008 Data Source: California Solar Initiative Database, May 2010.

18 Wind and solar growth and size Source: US PREF.

19 Availability of tax equity drives adoption Extended thru 2011 but uncertain future Source: US PREF.

20 Source: US PREF. Fallout in tax equity players Tax equity investors in 2007 Tax equity investors in 2008 Tax equity investors in 2009 JP Morgan Union Bank of California Wells Fargo New York Life Bank of America GE Capital Morgan Stanley HSH Nordbank Key Northern Trust John Hancock Prudential Northwestern Mutual Citi ABN Amro* Fortis* Lehmann Brothers* Wachovia* AIG* Merrill Lynch* Renewables tax equity market: $6.1 Billion JP Morgan Union Bank of California Wells Fargo New York Life Bank of America GE Capital Morgan Stanley HSH Nordbank Key Sun Trust Northern Trust Sempra Energy US Bank Departed tax equity base during due to insufficient taxable income or bankruptcy. *Permanent departure JP Morgan Union Bank of California Wells Fargo New York Life Bank of America GE Capital Morgan Stanley Credit Suisse Key Northern Trust Citi US Bank $3.4 Billion $1.2 Billion

21 Energy efficiency potential is large but complex and difficult to realize Barrels of oil equivalent consumed per $1,000 of gross domestic product China U.S. EU 15 Japan Source: IEA Statistical Data

22 Wood Mackenzie theoretical construct for energy efficiency estimation Wood Mackenzie Theoretical Construct for Energy Efficiency Estimation Source: Wood Mackenzie.

23 Breakdown of where non-transport energy is consumed today 30 U.S. energy consumption by sector Quadrillion BTU (Quads) % 75% 50% 25% Total Primary Energy Residential Commercial Industrial 100% 100% Other Washing Cooking Electronics Lighting Cooling Heating Delivery Loss Delivered Energy 75% 50% 25% Total Primary Energy Other Cooking Office Equipment Ventilation Cooling Lighting Heating Delivered Energy 75% 50% 25% Total Primary Energy Durables Food Mining, Metals Paper Chem., Plastics Refining Delivered Energy Misc. Electronics Textiles Metals 0% End-use 0% End-use 0% End-use Source: US Energy Information Agency, Annual Energy Outlook (AEO) 2011; US EIA - Annual Energy Review (AER) 2009/2010.

24 Chevron s alternative energy focus Invest in renewable energy technologies Capture profitable positions Tomorrow Today EMERGING DEMONSTRATION COMMERCIAL CTV: Ocean Energy CTV: Non - Conv Geothermal CTV: Solar -to - Steam CES: Fuel Cells Global Power & IBU: Geothermal CES: LED Lighting CTV: Biofuels CES: Solar PV Global Power: Wind CTV: Waste Heat Recovery CTV: Hydrogen

25 Chevron Energy Solutions: Efficiency, reliability, renewable power Lighting & HVAC Energy Controls Solar Fuel Cells Biomass Cogeneration FACT: Energy efficiency and conservation are the most affordable and readily available sources of new energy

26 Residential energy efficiency requires a guide Cost ($) No brainers Great investments Long-term thinking 0 0% 10% 20% 30% 40% 50% 60% % Savings achieved

27 Mass Save HEAT Loan: 0%, up to 7 years Why it is effective No upfront payment Monthly savings can exceed monthly payment Once per home rule encourages going deeper to take advantage of it Why it is not used Hawaii calling No more debt! If I have to finance it, that s too much energy efficiency

28 Energy efficiency barriers and solutions Type of barrier Barrier Solution Difficulty Structural Behavorial Availability Sources: McKinsey; Next Step Living, Inc. Landlord/tenant split POL Make it FREE High Home tenure < Payback period MKT New products High Costs uncertain MKT Market package Low Distorted incentives POL High Benefits risky and uncertain BOTH Financing; rebates Medium Lack of awareness MKT Outreach; reporting Medium Habits MKT Outreach Medium High threshold until action POL Subsidies Medium Bad productizing MKT Attractive packages Low Lack of financing BOTH Programs High Product availability MKT Outreach Low Installation and use MKT Outreach; reporting Medium

29 Show the sexy stuff create desire for change Insulation and basic measures are prep for cool stuff

30 Energy efficiency goes beyond $ and CO 2 : The other very big motivators For our community For our children For our country JOBS SHIFT SPENDING STRONGER ECONOMY DEATHS LESS POLLUTION NATIONAL SECURITY TOXIC WASTE NEXT GENERATION GREENER U.S.

31 What connects energy efficiency with pride, identity, and sexy?