Tackling energy challenges through Energy Efficiency Solutions July 2008

Committed to the energy dilemma… we are "Energy Optimists" x2 We provide solutions for energy efficiency energy audits energy efficiency enabling products energy management solutions … for residential, commercial and industrial buildings … for industrial processes The increase in energy consumption by 2050 ÷2 In front of the challenge , we have (on demand usage management and consequent C02 reduction by consumption optimisation) durable solutions provided they are fully implemented ( regulation is a key in massive implementation ) Reaching the targets ( less 20% in 2020) = compulsory implementation of the full range of our proposals on usage optimisation , it is time to implement active EE on top of the historical implementation of passive EE ( even if passive EE has to go on ) Implementation on existing built in environment is key to reach 2020 targets and the beauty of our proposals is that they can be implemented easily and with low investment on existing The CO2 emissions reduction to avoid dramatic climate changes by 2050

The energy dilemma

The energy and CO2 emission challenge World consumption up 45% since 1980, 70% higher by 2030 CO2 up 33% since industrial revolution, rising faster than ever Resource competition & political instability keep prices high Emerging markets > 75% of new demand Coal use continues to grow in emerging markets If this trends are going as historically , we are speeding in front af the wall ! We are in 2005 at 380 ppm CO2 concentration coming from 280 one hundred year ago and we are speeding exponentially at + 30 to 50 ppm extra CO2 per 10 years! We have to know that limiting global warming to 2°C extra average temp ( with 50% chance on 100 ) means stabilizing CO2 at 450 ppm during the next decades … it’s more than time to react ! These trends are here to last unless we act !

We can not stop world population or energy demand growth… But we can change the way we use energy and reduce GHG emissions

Buildings and Industry are the 1st GHG emission contributors… Industrial process reactions & fugitive emissions Land use Change (deforestation) and agriculture ≈ 44% GHG contribution comes from buildings & Industry 3x larger than GHG contribution from transportation In industry &buildings: 70% of electricity is generated via coal or hydrocarbons 90% of heat and process activities burn hydrocarbons 7% Transportation 14% 35% 44% Energy usage = 44% of GHG emissions = 53% of CO2 emissions Half of this = Electricity usage with almost 4% growth per year due to so many advantage in usage Thermal Energy by direct fuel combustion is used mainly in heating ( domestic , building and industrial use ) and can be optimised by automation & control through electrical powered systems Transportation is often on top of agenda ( due to traffic congestions , pollution issues and visibility of measures such as glittering tramways) but overall contribution to GHG emissions (4 times less than Energy usage) and investments actual levels in font of emissions stakes can be questioned !!!  Schneider Electric focus on the most contributive source of Green House Gas emission : energy usage ! Thanks to our solutions we impact ont only electricity consumption but also other energy thanks to automation/regulations ≈ 44% GHG come from non-transportation energy use = Commercial & residential buildings > 15% Industry & associated processes > 27% Electricity T&D losses ≈ 2% GHG from Building & Industry Energy Use Data extracted from WRI: navigating the numbers 2005

…and also the first energy consumers ! Energy use split Main energy consumption is for heating, cooling, motors, lighting, electronics and appliances 31% Industry & Infrastructure >2% Data centres & networks 18% Buildings 21% Residential 28% Transportation I would say Schneider Electric has solutions to cope with 73% of the issue ! Schneider Electric made a strong strategic move by acquisitions bringing capacity to master thermal energy usage in buildings ( Building automation & control systems) as well as in applications such as Critical Power and Cooling solutions in Data Centers Schneider Electric probably means more Schneider Energy than Schneider Electric Sources: EERE Building Energy Databook 2006 EERE Manufacturing Systems Footprint , http://www1.eere.energy.gov/industry/energy_systems/pdfs/mfg_footprint.pdf Source: EERE Building Energy Data book 2006 EERE Manufacturing Systems Footprint , http://www1.eere.energy.gov/industry/energy_systems/pdfs/mfg_footprint.pdf

And remember: a small save at home is a big save at the power plant ! Coal 100 units 35 units 33 units Generation efficiency and clean fuel technology are key but end use avoidance brings big benefits Saving 1 unit of electricity at the end user is more effective than building a power plant that is twice as efficient as today’s plants Saving one unit on demand side = saving 3 units of primary energy ( the oil or the coal necessary to supply that energy unit ) due to overall efficiency of electrical chain !!! ATTENTION!!! BECAREFULL !!! That does not mean we should not use Nuclear electricity for heating ! That does not mean Solar heating or windmill elec heating hot water is worst than gaz heating hot water ! When considering the efficiency of the whole chain from petrol extraction to low efficiency of combustion vehicle motors , it’s not worthy to develop electical vehicles ! We have to mention that any saved Kwh in demand = 3 times saving in primary energy ( pus delaying generation investment ) but we have to be careful not to say that electricity is a bloody non efficient energy ware Some notes on generation and transmission losses : Converting kWh of electricity to Btu is not a trivial issue, because the amount of input energy needed to create a kWh of electricity is far greater than the amount of useful energy in the kWh at its point of use. Site (point-of-use) electricity, at the universal value of 3,412 Btu/kWh. This value is useful to engineers, energy managers, and others trying to evaluate energy efficiency Primary electricity, at a value that reflects the content of the energy inputs used to produce the electricity. This rate is most useful to policymakers and analysts who are considering global resources and environmental issues. For convenience and consistency, a factor is traditionally used to convert point-of-use electricity use to primary electricity - 10,447 Btu/kWh for 1985, 10,324 Btu/kWh for 1988, 10,352 Btu/kWh for 1991and 10,280 Btu/kWh for 1994 in US The true conversion values for the range of electricity estimates are unknown For some type of utility energy inputs--hydroelectric, wood/waste, wind, and solar (thermal or photovoltaic), there is no generally accepted conversion rate. The fossil-fueled, nuclear, and geothermal generation processes have known but different conversion rates, so the overall conversion rate for these energy sources is a function of their mix. 1 unit saved at home 3 units saved at the power plant

30% global energy saving ! 1 year of electricity from 20,000 coal-fired power plants 12 Gigatons CO2e/year

Take the Energy challenge Meet energy demand of a growing global population Ensure stable and secure energy access for all nations Bring electricity to the 1.6 billion people without access Stabilize climate impact from energy emissions Establish sensible legislation allowing business to grow in an effective and socially responsible manner Energy Challenge > Ensuring energy availability while preserving the environment

Energy challenges & opportunities are everywhere Supply Side More Efficient and Cleaner Supply Demand Side More Efficient Use Conservation & Management There are opportunities everywhere : supply side, demand side and in the interaction of the two. On the supply side - the objectives are more efficient generation, cleaner generation, and more efficient distribution. Moving generation closer to the user (distributed generation) eliminates losses making production more efficient. This includes may green alternative such as solar, wind, and CHP. Clean fuel technologies and carbon sequestration or necessary but the investments are long term On the demand side - the objectives are more efficient use and conservation There are opportunities to save energy in every segment of end use. The technology to do this is available today and it is economically feasible In the middle you have programs that automatically meter and monitor to shed and manage loads based on utility needs and customer costs. The key to implementation here is the understanding and analysis of information.

Energy challenges & opportunities are everywhere Supply Side More Efficient and Cleaner Supply Demand Side More Efficient Use Conservation & Management Cleaner supplies will take time to implement Current technologies allow us to target 30% savings There are opportunities everywhere : supply side, demand side and in the interaction of the two. On the supply side - the objectives are more efficient generation, cleaner generation, and more efficient distribution. Moving generation closer to the user (distributed generation) eliminates losses making production more efficient. This includes may green alternative such as solar, wind, and CHP. Clean fuel technologies and carbon sequestration or necessary but the investments are long term On the demand side - the objectives are more efficient use and conservation There are opportunities to save energy in every segment of end use. The technology to do this is available today and it is economically feasible In the middle you have programs that automatically meter and monitor to shed and manage loads based on utility needs and customer costs. The key to implementation here is the understanding and analysis of information.

Energy challenges & opportunities are everywhere Supply Side More Efficient and Cleaner Supply Demand Side More Efficient Use Conservation & Management Demand Supply Management + Metering & Analysis Cleaner supplies will take time to implement Current technologies allow us to target 30% savings There are opportunities everywhere : supply side, demand side and in the interaction of the two. On the supply side - the objectives are more efficient generation, cleaner generation, and more efficient distribution. Moving generation closer to the user (distributed generation) eliminates losses making production more efficient. This includes may green alternative such as solar, wind, and CHP. Clean fuel technologies and carbon sequestration or necessary but the investments are long term On the demand side - the objectives are more efficient use and conservation There are opportunities to save energy in every segment of end use. The technology to do this is available today and it is economically feasible In the middle you have programs that automatically meter and monitor to shed and manage loads based on utility needs and customer costs. The key to implementation here is the understanding and analysis of information. We must develop technologies and business models to increase renewable energies penetration Mid term approach We must focus on Energy Efficiency to solve our energy dilemma Short term action

Because action is required now, Energy Efficiency is a Must Cheaper Each kWh saved avoids about 3x the generation production Demand response programs cost about half of typical electricity costs Quicker Technology is available today with short term results Cleaner “Negawatt” produces no environmental footprint Enhanced Security EE is homegrown, it reduces dependence on imports

30% Savings are available today… Up to 40% of the potential savings for a motor system are realized by the Drive & Automation Up to 30% of the potential for savings in a building lighting system can be realized via the lighting control system

30% savings are available today… … thanks to a combination of 100% Up to 8% per year is lost without monitoring and maintenance program Up to 12% per year is lost without regulation and control systems 70% Efficient devices and installation (10 to 15%) Up to 40% of the potential savings for a motor system are realized by the Drive & Automation Up to 30% of the potential for savings in a building lighting system can be realized via the lighting control system Efficient devices and efficient installation (10 to 15 %) Low consumption devices, insulated building… Optimized usage of installation and devices (5 to 15%) Turn off devices when not needed, regulate motors or heating at the optimized level… Permanent monitoring and improvement program (2 to 8%) Rigorous maintenance program, measure and react in case of deviation Optimized usage via automation (5 to 15%) Energy Consumption Monitoring & Maintenance (2 to 8 %) Time

… but savings can be lost quickly… Unplanned, unmanaged shutdowns of equipment and processes Lack of automation and regulation (motors, heating) No continuity of behaviours 100% Up to 8% per year is lost without monitoring and maintenance program Up to 12% per year is lost without regulation and control systems 70% Efficient devices and installation Optimized usage via automation Energy Consumption Monitoring & Maintenance Time

1 Measure 2 Fix the basics 3 Automate 4 Monitor and Improve Sustaining Energy savings is easy, just follow the 4 Energy Efficiency steps 1 Measure 2 Fix the basics 3 Automate 4 Monitor and Improve

Sustaining Energy savings is easy, just follow the 4 Energy Efficiency steps 1 Measure Energy meters Power quality meters 2 Fix the basics 3 Automate 4 Monitor and Improve

Sustaining Energy savings is easy, just follow the 4 Energy Efficiency steps 1 Measure 2 Fix the basics Low consumption devices Insulation material Power quality Power reliability 3 Automate 4 Monitor and Improve

Sustaining Energy savings is easy, just follow the 4 Energy Efficiency steps 1 Measure 2 Fix the basics 3 Automate Building Management Systems Lighting Control Systems Motor control systems Home control systems Variable speed drive 4 Monitor and Improve

Sustaining Energy savings is easy, just follow the 4 Energy Efficiency steps 1 Measure 2 Fix the basics 3 Automate 4 Monitor and Improve Energy management software Remote monitoring systems

Lifecycle solutions for Energy Efficiency Energy Efficiency needs a structured and persistent approach Diagnosis ( very much on top of some agendas ) is not enough , what costs is getting the results , only companies having the means to be active in the whole process steps can be with there clients up to the real savings and results Energy Efficeincy is an issue where a risk sharing and a win win relation shall be established to reach the goal ( as in performance contracting or Energy Edge ) As targets are fixed over long timeframe ( less 20% in 2020 , less 50% in 2050 ) for clients EE programs are not one shot and permanent improvement over the time is key , so frame services contracts should be the way to deal with key clients

Lifecycle solutions for Energy Efficiency Energy Audit & Measure Energy Efficiency needs a structured and persistent approach Diagnosis ( very much on top of some agendas ) is not enough , what costs is getting the results , only companies having the means to be active in the whole process steps can be with there clients up to the real savings and results Energy Efficeincy is an issue where a risk sharing and a win win relation shall be established to reach the goal ( as in performance contracting or Energy Edge ) As targets are fixed over long timeframe ( less 20% in 2020 , less 50% in 2050 ) for clients EE programs are not one shot and permanent improvement over the time is key , so frame services contracts should be the way to deal with key clients

Lifecycle solutions for Energy Efficiency Energy Audit & Measure Passive Energy Efficiency Fix the basics Energy Efficiency needs a structured and persistent approach Diagnosis ( very much on top of some agendas ) is not enough , what costs is getting the results , only companies having the means to be active in the whole process steps can be with there clients up to the real savings and results Energy Efficeincy is an issue where a risk sharing and a win win relation shall be established to reach the goal ( as in performance contracting or Energy Edge ) As targets are fixed over long timeframe ( less 20% in 2020 , less 50% in 2050 ) for clients EE programs are not one shot and permanent improvement over the time is key , so frame services contracts should be the way to deal with key clients Low consumption devices, insulation material, power factor correction

Lifecycle solutions for Energy Efficiency Energy Audit & Measure Passive Energy Efficiency Fix the basics Optimise through automation & regulation Energy Efficiency needs a structured and persistent approach Diagnosis ( very much on top of some agendas ) is not enough , what costs is getting the results , only companies having the means to be active in the whole process steps can be with there clients up to the real savings and results Energy Efficeincy is an issue where a risk sharing and a win win relation shall be established to reach the goal ( as in performance contracting or Energy Edge ) As targets are fixed over long timeframe ( less 20% in 2020 , less 50% in 2050 ) for clients EE programs are not one shot and permanent improvement over the time is key , so frame services contracts should be the way to deal with key clients Low consumption devices, insulation material, power factor correction HVAC control, lighting control, variable speed drives…

Lifecycle solutions for Energy Efficiency Energy Audit & Measure Passive Energy Efficiency Active Energy Efficiency Fix the basics Optimise through automation & regulation Monitor, maintain, improve Energy Efficiency needs a structured and persistent approach Diagnosis ( very much on top of some agendas ) is not enough , what costs is getting the results , only companies having the means to be active in the whole process steps can be with there clients up to the real savings and results Energy Efficeincy is an issue where a risk sharing and a win win relation shall be established to reach the goal ( as in performance contracting or Energy Edge ) As targets are fixed over long timeframe ( less 20% in 2020 , less 50% in 2050 ) for clients EE programs are not one shot and permanent improvement over the time is key , so frame services contracts should be the way to deal with key clients Low consumption devices, insulation material, power factor correction HVAC control, lighting control, variable speed drives… Meters installation, monitoring services, EE analysis software

What we can do for you?

Schneider Electric is involved in 72% of end user energy consumption Schneider Electric is involved in 72% of end user energy consumption We can help you make savings! I would say Schneider Electric has solutions to cope with 73% of the issue ! Schneider Electric made a strong strategic move by acquisitions bringing capacity to master thermal energy usage in buildings ( Building automation & control systems) as well as in applications such as Critical Power and Cooling solutions in Data Centers Schneider Electric probably means more Schneider Energy than Schneider Electric Sources: EERE Building Energy Databook 2006 EERE Manufacturing Systems Footprint , http://www1.eere.energy.gov/industry/energy_systems/pdfs/mfg_footprint.pdf

Industry & infrastructure Data centres & networks Where are the savings ? Industry & infrastructure Average facility can reduce consumption by 10 to 20% Data centres & networks Power & cooling can reduce power consumption by 20 to 30% Buildings Renovation can yield up to 30% of energy savings Residential EE products may save 10% to 40% in electricity 30% energy saving is achievable with today technologies and 30% energy saving is what we need to do if we want to reach Kyoto objectives 25% savings would save 7% of the world’s electricity Motors, account for over 60% of electricity usage Power & cooling systems is 50% of electricity usage Saving energy improves DC infrastructure efficiency Consume 20% of total energy 3 key areas: HVAC, lighting & integrated building solutions 20% to 25 % of consumed energy (EU & US) Lighting & appliances over 40%

Energy saving ROI improves as energy prices rise 2000 2001 2002 2003 2004 2005 2006 2,0 2,5 3,0 3,5 4,0 4,5 5,0 0,065 0,075 0,085 0, 095 0,105 0,06 0,07 0,08 0,09 0,1 0,11 Energy price Years paybacks* Cents/KWh Years Based on an actual commercial building. Project Cost $1M, Electricity saving 3500MWh Project cost and energy savings fixed. Payback time has decreased 30% over 5 years due to increase in energy prices Example based on a US commercial building project DOE -US Average Retail Cost of Electricity 1993 thru 2007

We contribute through our solutions ! Energy Audits Consulting services Building Management Solutions Power management solutions Motor control solutions Lighting control solutions Home control solutions Monitoring services Energy Efficiency needs a structured and persistent approach Diagnosis ( very much on top of some agendas ) is not enough , what costs is getting the results , only companies having the means to be active in the whole process steps can be with there clients up to the real savings and results Energy Efficeincy is an issue where a risk sharing and a win win relation shall be established to reach the goal ( as in performance contracting or Energy Edge ) As targets are fixed over long timeframe ( less 20% in 2020 , less 50% in 2050 ) for clients EE programs are not one shot and permanent improvement over the time is key , so frame services contracts should be the way to deal with key clients

Solutions for residential & small buildings Enabling products Dimmers, timers, movement & presence detectors, specific switches, light sensitive switches Programmable time switch for HVAC & Motors Variable speed drive for motors Management systems Shutter control systems Lighting Control systems Home control systems Added value services Remote control Multimedia control Alarm handling

Solutions for medium & large buildings Enabling products Dimmers, timers, movement & presence detectors, switches Thermostat, floor heating control Variable speed drives for HVAC, pumps, motors Power compensation and filtering products Management systems Building management systems Power monitoring and analysis Added value services Site audits Data Collection and Analysis Financial Analysis & ROI Validation, Planning of Improvement plan Remote monitoring and optimization

Solutions for industry and infrastructure Enabling products Variable speed drives for motors PLC for production throughput optimization and machine "mute" mode management Power compensation and filtering products Management systems Power monitoring and analysis Process supervisory systems Added value services Site audits Data Collection and Analysis Financial Analysis & ROI Validation, Planning of Improvement plan Remote monitoring and optimization

Solutions for data centers & networks Enabling products Ultra-high efficiency UPS, HV AC power distribution Scalable, Modular Power and Cooling Systems Close-coupled cooling, Thermal Containment Electrical distribution and industrial control products Management systems Capacity & Change Management software InfraStruXure Central DC Management software Building & Room surveillance & Security Added value services Plan - Assessment and site audits Build - Project Management, Installation, Testing, Integration Operate - Cleaning, Inspection, Corrective maintenance

More than 50 EE standard solutions and 300 EE enabling products are available Our EE labels help you make the right choice:

Customer references US National Carwash company : 33% energy savings thanks to motion, drives and electrical distribution solution Amiens, France, reduces its lighting bill by 30% thanks to Lubio™ optimised lighting solution Delhi, India cut its power consumption by 40% thanks to equivalent systems Eco-building Technopolis : 30% energy savings thanks to T.A.C Vista® through continuous monitoring of water treatment, HVAC, lifts and key functions of the building

Schneider Electric: your energy specialist for significant and sustainable savings Your energy manager… improving business via metering, monitoring, control solutions and cost optimization services Your energy expert… improving business via consultative services, technical and behavioral energy action plans and implementation services Your green partner improving business via environmentally friendly and energy reducing products

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