Design to Win. Real-world solutions to global warming. Hal Harvey

Transcription

1 Design to Win Real-world solutions to global warming Hal Harvey American Council for an Energy-Efficient Economy 2008 Summer Study on Energy Efficiency in Buildings August 17, 2008

2 1 If warming exceeds 2 C, negative effects increase and catastrophic changes become more likely Global temperature change (relative to pre-industrial era) 0 C 1 C 2 C 3 C C 5 C Food Crop yields fall Water Glaciers melt Water shortages Rising seas Ecosystems Reefs damaged Species extinction Weather Storms, droughts, fires, heat waves Feedback Abrupt climate change Today

3 To maintain 50/50 chance of staying below 2 C, we must reduce 2030 emissions by at least 30 Gt Possible emission trajectories Global emissions GtCO 2 e GtCO 2 e Business as usual 500 ppm CO 2 e (falling to 50 ppm in 2150) 50 ppm CO 2 e Source: Adapted from Stern Review, 2006; BAU emissions ~WEO A2 scenario; 50 ppm budget range based on Stern and preliminary IPCC analysis 2

4 3 Work in 6 sectors secures 83% of target GtCO 2 e Emissions Mitigation potential ~ BAU emissions Power 3 >30 Industry Buildings Transport Forestry Agriculture/ 2030 waste/ other potential Target Unknown Known ~25

5 No silver bullet multiple options must be deployed across every sector and region 2030 potential at <$100/ton GtCO 2 e Nuclear Renewable EIT Non-OECD Efficiency 6 and fuel switching OECD CCS Non-CO2 EIT CCS Universal technologies (motor systems) Non-OECD Large emitters (cement, steel, etc.) OECD New building design EIT Existing building/appliance Non-OECD operations + efficiency retrofits New appliances/equipment (stds + turnover) OECD Air/train/ship Road Vehicle Miles Traveled Fuel decarbonization Road vehicle efficiency Mitigation options Regions Re/aforestation Avoided deforestation Livestock Soil, fertilizer, tillage, flooding OECD Landfills, wastewater Fugitive methane (energy production) 3 EIT Non-OECD OECD Non-OECD OECD 3 Non-OECD 2 Waste/ other Power Industry Buildings Transport Forestry Agriculture Non- OECD OECD >30 ~5 ~ potential Target Unknown Known Source: IPCC and USEPA, 2006 (2030 potentials); IEA ETP Map and Vattenfall (detailed breakdowns); team analysis (large uncertainties for most estimates)

6 5 hat to do? First filter: act now to avoid lock-in of a higharbon path Source Lifetime Coal power years or longer Industry 20-0 years for many factories Buildings Transportation Deforestation 100 years or longer 15 years for vehicles 100+ years for infrastructure Permanent

7 Second filter: Prioritize nations with most potential Estimated 2030 potential by sector and country (<$100/Gt) GtCO 2 e 6 India Approximate share of known potential in priority nations China Africa 3 EU Brazil US 70% 62% 60% 52% 86% Power Buildings Industry Transport Forestry 6

8 Power sector priorities key interventions No new conventional coal plants Carbon capture and sequestration Renewable portfolio standards Nuclear power? ~60 6 > Target Unknown Known ~ BAU emissions Power Industry Buildings Transport Forestry Agriculture/ 2030 waste/ other potential 7

9 Industry sector priorities 2 key interventions Efficiency standards for motors, pumps, and other industrial systems Sectoral targets for major emitters: steel, cement, petrochemicals, etc. ~60 6 > Target Unknown Known ~ BAU emissions Power Industry Buildings Transport Forestry Agriculture/ 2030 waste/ other potential 8

10 Buildings sector priorities 2 key interventions Strict building codes and appliance standards Reform utilities to encourage efficiency and conservation ~60 6 > Target Unknown Known ~ BAU emissions Power Industry Buildings Transport Forestry Agriculture/ 2030 waste/ other potential 9

11 Transportation sector priorities 3 key interventions Fuel-efficient cars Low-carbon fuels Reduced vehicle-miles traveled through congestion pricing, bus-rapid transit, etc. ~60 6 > Target Unknown Known ~ BAU emissions Power Industry Buildings Transport Forestry Agriculture/ 2030 waste/ other potential 10

12 Forestry sector priorities 1 key intervention 198 Leverage carbon finance to reduce deforestation in Amazon, Congo, and Indonesia ~ > Target Unknown Known ~ BAU emissions Power Industry Buildings Transport Forestry Agriculture/ 2030 waste/ other potential 11

13 12 Key findings 1. Challenge is huge 2. So far, we are losing and changes are irreversible 3. Solutions are known and doable. Only policy change ( price+ ) can make a sufficient difference. 5. Strategies must be ordered to avoid lock-in and prepare for long-term reductions. Don t lose Position to win Win Fight urgent lock-in of emissions and policies Innovate and implement known solutions Deploy complete solutions

14 13 Global cost curve of GHG abatement opportunities in 2030 Cost of abatement EUR/tCO 2 e Fuel efficient commercial vehicles Insulation improvements Industrial feedstock substitution Coal-togas shift Avoid deforestation CCS; Asia Forestation Soil coal Waste Livestock/ CCS EOR; Wind; 0 retrofit Smart transit soils New coal low Solar 30 Small hydro Nuclear Forestation pen. 20 Industrial non-co 2 Airplane efficiency 10 Stand-by losses Cellulose Industrial Avoided Industrial -30 ethanol deforestation Sugarcane non-co 2 Co-firing CCS; CCS America -0 biofuel biomass new coal Abatement -50 GtCO 2 e/year Fuel efficient vehicles Industrial motor -60 Water heating systems Air Conditioning -90 Energy Lighting systems efficiency ~27 Gt CO 2 e below 0 EUR/ton (-6% vs. BAU) ~7 Gt of negative and zero cost opportunities Fragmentation of opportunities

15 Examples of negative cost abatement opportunities Improved insulation Compact Fluorescent Lamp Opportunity 25% less energy for heating versus BAU 60% lower lifecycle heating cost* Average abatement cost: -130 EUR/t CO 2 e Total abatement opportunity: 1.6 GtCO 2 e 80% reduced energy consumption 0% lower lifecycle cost for consumer Average abatement cost: -90 EUR/t CO 2 e Total abatement opportunity: GtCO 2 e Barriers Misaligned incentives: Builders minimize upfront building costs not life-cycle cost Buyers typically not involved in specifying insulation levels End-user behavior: Lacking awareness of opportunities Savings low compared to total household budget Require very short payback times *Example for typical house in mild region with electrical heating 1

16 BAU development in building sector Energy consumption Emissions Quadrillion Btu GtCO 2 Electricity Oil Gas Coal Renewables District heating % p.a % Electricity Oil Gas Coal % p.a % The buildings sector is expected to grow 50% by 2030 leading to a 69% emissions increase Electricity intensity is increasing, rising from 23% to 32% of total residential energy consumption by 2030, driven largely by increased electric water heating in developing countries, leading to a higher CO 2 intensity This raises the CO 2 intensity of the residential sector due to conversion and transmission losses Note: Traditional biomass is assumed to be sustainable harvested on average and therefore CO2 neutral Source:IEA World Energy Outlook

17 Emissions from building sector and abatement opportunities GtCO 2 e, opportunities below 0 EUR/tCO 2 e Electricity BAU power sector decarbonization and appliance efficiency improvements net of increased usage intensity Primary % 1990 level actual Growth* 2030 Fuel shift BAU decarb 2030 BAU Lighting 2030 incl. abatement Standby Fridges, freezers WashingAC, drying Water heating Building envelop e Other appliances Lighting Water heating AC Building envelopes Constant CO 2 intensity Residential = 2. GtCO 2 Commercial = 1.3 GtCO 2 Appliances The fuel shift increases the electricity consumption relative to consumption of other fuels With aggressive policies, emissions could be reduced by 3.7 GtCO 2 e, meaning that the increase in emissions from the sector could be held below 26% through 2030 at less than 0 EUR/tCO 2 e Note: BAU decarb includes BAU efficiency increase * Driven by floor space growth 16

18 17 Abatement cost curve for the buildings sector 2030 Electricity Primary EUR/tCO 2 e 50 GtCO 2 e/year 0 EUR/ tco Residential new-build insulation Commercial building envelope Commercial building envelope Residential new-build insulation Commercial appliances Residential lighting Other residential appliances Com. A/C Commercial lighting Residential water heating Residential water heating Stand-by losses

19 Building sector abatement opportunities 2030 Residential Description Abatement potential GtCO 2 e Abatement cost EUR/tCO 2 e Lighting Increased use of low energy light bulbs -89 Household appliances Increased unit efficiency of, e.g., freezers and refrigerators Water heating More efficiency water heating systems A/C More efficient A/C systems Heating and ventilation Improved insulation Change to, e.g., three-glass windows Commercial Lighting Fixtures, timers and LFLs Appliances More efficient office appliances Water heating More efficient water heating A/C Improved A/C systems -83 Heating and ventilation Better insulation and improved heating/ventilation Source: EPA; industry experts 18

20 19 Regional split of 2030 abatement opportunities Percent below 0 EUR/tCO 2 e 100% = 3.7 Gt CO 2 e US + Canada China Rest of World Eastern Europe OECD Europe Emission reductions through improved energy efficiency in the building sector are evenly spread across all regions Other industrials

21 20 Challenges (1): Whole-system design What is missing when we focus on device efficiency? Compounding effects: Lighter cars make for smaller engines make for smaller drivelines, make for lighter cars. Cost avoidance: Reducing internal heat loads and making building shells more efficient can eliminate the need for and AC system, creating cash flow for even more efficiency Whole system analysis: Utilities pioneered with avoided cost analysis. What about avoided injury analysis when we make cars lighter and more safe? Avoided climate change analysis? Industrial design: Large pumps and small pipes or small pumps and large pipes? Throttling or electronic flow control? Whole-System Design Conventional Design

22 21 Challenges (2): Getting the Policy Right 1. Let the market choose winners and losers. 2. When public support of a new technology is required, let the market set the cost of subsidy. 3. Reward performance, not capital investment.. Make regulations dynamic with respect to technology. Seek continuous improvement. 5. Go for 100 percent of market. 6. Use ratchet and pawl strategy, with some policies designed to break new technology ground, and others to lock in that progress for the full market. 7. Recycle some fraction of energy or carbon revenues into R&D. Keep technology dynamic strong. 8. Allow users to choose between prescription or performance-based compliance. 9. Conform other policies to principal goal, e.g. permitting, taxes, etc. 10. Go upstream. 11. Beware of unintended consequences.

23 22 Challenges (3): Get the Implementation Right 1. Align incentives (e.g. builders, utilities). 2. Build sufficiently powerful institutions. 3. Develop sound training programs, for builders, architects, and developers.. Ensure legal powers are sufficient. 5. Socialize the benefits.

24 23 Conclusion: The Future is in Your Hands Efficiency potential is vast; indeed, it is the most important weapon we have against climate change, by far. Capturing it, thoroughly and quickly, is crucial. Focus first on large-scale changes, building booms, long-lived assets. Takes us to the challenges of innovation, policy and practice. All have to be right. The latter especially needs attention.

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26 Commercial Sector in Depth 25

27 Energy consumption in the commercial sector by % = 1 TBtu Electricity Primary Energy consumption Percent Commercial 100% = 166 TBtu 2 Lighting Water heating Water heating AC Residential Other appliances Space heating Space heating By 2030, 25% of building powers demand is consumed in the commercial sector, of which 36% is used for space heating Source: IEA World Energy Outlook 26

28 Commercial sector baseline breakdown 2030 Assumptions USA Detailed breakdown from EIA into electricity, natural gas and distillate Coal, renewables and heating assumed to have same split as distillate across end-uses EIA others category in direct fuel split between Water heating and HV based on their relative size. 100% = Lighting qbtu EU Relative size of Water Heating and HV in electricity applied to other fuel types Water heating Cooling China Detailed overall split obtained from MGI Lighting, Cooling and Other assumed to be only electricity The remainder split according to relative size Other Other industrials Average of US and Europe HV EIT Average of Other Industrials and China US + CanadaOECD Europe China EIT Other industrials Rest of World Rest of World Same split as China If we use, bump up font Source: IEA; MGI 27

29 Abatement potential for the commercial sector GtCO 2 e, opportunities below 0 EUR/tCO 2 e BAU power sector decarbonization and appliance efficiency improvements net of increased usage intensity Electricity Primary % IEA 2002 Actual Growth Constant CO 2 intensity 2030 Fuel shift BAU decarb BAU 2030 Lighting Water heating AC Appliances Building envelopes, heating and ventilation Net emissions Source: IEA World Energy Outlook If we use, bump up font 28

30 Summary table: Commercial sector Year 2030 BAU Energy demand TWh cons. Potential abatement % of BAU TWh Potential abatement Gt CO 2 Technical cost EUR/MWh cons. Benchmark EUR/MWh cons. Abatement cost EUR/t CO 2 Lighting 2,711 12% Water Heating 1,922 28% A/C 1,312 37% 7-82 Appliances 1,83 38% Heating & Ventilation,30 59% Total/Average 12,128 38% Source: IEA Personal Communications 29

31 Residential Sector in Depth 30

32 Source: IEA World Energy Outlook 200 ; EIA Energy consumption in the residential sector by 2030 TBtu Electricity 100% Lighting Stand-by losses 12 TBtu Primary Energy consumption Percent 100% = 166 TBtu Refrigerators/Freezers Washing/Drying Traditional Cooking Water heating Water heating 1.0 Commercial 2 AC Other appliances Space heating Residential Space heating.0 By 2030, 75% of energy consumed in the buildings sector is consumed in the residential subsector Half of this energy is used for space heating

33 * Including traditional biomass Source: IEA World Energy Outlook 200 ; EIA Distribution of power consumption in Residential BAU Electricity Coal Gas BACKUP Oil Renewables* District heating Residential, 2002 Residential, US and Canada OECD Europe China EIT Other industrials Rest of world US and Canada OECD Europe China EIT Other industrials Rest of world

34 * Driven by residential floor space growth Emissions from residential buildings sector GtCO 2 e, opportunities below 0 EUR/tCO 2 e Electricity Primary BAU power sector decarbonization and appliance efficiency improvements net of increased usage intensity % IEA 2002 actual Growth* 2030 Fuel shift BAU decarb BAU 2030 Lighting Stand-by losses Refrigerators / freezers Washing / drying Water heating AC Other appliances Building envelopes /Heating & Ventilation Net emissions Constant CO 2 intensity