Energy Efficiency Tom Eggert Business Sustainability WI School of Business

The Role of Energy Efficiency Energy efficiency is the fastest, lowest risk, most economical way to create bottom line savings, and address climate and security concerns Energy efficiency creates competitiveness for the U.S. economy Market-ready today at attractive rates of return with enormous unexploited potential Energy efficiency represents investments in energy not consumed, which mitigates risks associated with future price uncertainties. Amory Lovins talks of nega-watts

1980 U.S. electricity demand = 2 trillion kWh Source: Energy Information Administration (EIA) U.S. electricity demand: 1980

U.S. electricity demand: 2030 Source: Energy Information Administration (EIA) 2030 U.S. electricity demand = 4.8 trillion kWh

Sources: Energy Information Administration (EIA), Annual Energy Outlook, Dec U.S. electricity generation by fuel type projection

The Big Picture: Energy Use in the United States The buildings where we work, play, and learn are responsible for nearly 56% of our country’s energy use. Energy Information Administration, 2010

What is Energy Efficiency? Energy Efficiency = Less Waste

Energy Efficiency Has the Technical Potential to Level U.S. Energy Demand Growth Buildings Industry Transportation Super Boilers Nano Mfg Direct Steelmaking Efficient Data Centers CHP EIA (Pre-EISA) Business as Usual Projected Demand Growth Hybrids Advanced Diesels PHEVs Lightweight Materials Source: DOE Scenario Projections 2030 Tech. Potential Savings 18 Quads 2015 Tech. Potential Savings 3 Quads 2020 Tech. Potential Savings 8 Quads EISA Lighting Envelope ZEBs Appliances Codes CAFE RFS Appliance, Bldg, Industrial Motor EE

Opportunities for Energy Efficiency The average building wastes 30% of the energy it consumes because of inefficiencies. If the energy efficiency of U.S. commercial and industrial buildings improved by 10%: –Savings of $20 billion. –Reductions in greenhouse gas emissions equal to about 30 million vehicles. … a year 9

The Role of Energy Efficiency Robust and evolving pipeline of efficiency technologies –McKinsey Global Institute identified energy saving sufficient to cut consumption growth in half using only existing technologies that offer at least a 10% IRR (MGI, Curbing Global Energy Demand Growth, May 2007)

Efficiency: Carbon Abatement with a Positive Return on Investment

Energy Efficient Buildings Builders Challenge Recognizing Leadership in Homebuilding Commercial Buildings Initiative Public-private partnerships working to enable market-ready net-zero energy commercial buildings no later than 2025 in all climate zones  Commercial Building Energy Alliances  EnergySmart Hospitals  EnergySmart Schools 55% of U.S. Natural Gas 72% of U.S. Electricity The combined residential and commercial buildings sector is the largest energy consumer in the U.S.

Opportunities: Electric Motors 60% of building energy use is to run electric motors

Opportunities Control motor speed –Variable speed drives –Pulse width modulation (PWM) circuitry –Inverter controls Potential to save 30 – 60% of electricity currently powering motors

Opportunities: Better Lighting Light emitting diodes (LEDs) Occupancy sensors Light level sensors (Also lowers air conditioning demand in building)

Opportunities: Energy Star Modernizing ENERGY STAR Update and expand the ENERGY STAR program to add new advanced technologies to the ENERGY STAR portfolio. Added or Updated since 2006: Clothes washer Advanced water heaters (5 categories) Dishwashers Solid State Lighting (7 categories) Refrigerators

Opportunities: Standby Loss Appliances –TV/DVD/Audio systems –Computers Other devices that stay plugged in Can save up to 6% on energy bill

Non-market Forces Impede Energy Efficiency Market Penetration Ignorance of opportunities Inconsistent Real Estate Valuation Inconsistent use of Life cycle costing Deficit of Information Lack of demand by Consumers Out of Date Utility regulation Inconsistant policies (e.g., Codes)

What They Are Saying Listed companies with an energy efficiency program outperform their competitors »Innovest

What They Are Saying The economic case for energy productivity improvements has never been stronger »McKinsey

Benefits from Energy Efficiency Company Energy Efficiency Cost reductions through efficient use of energy Reduced exposure to fluctuating energy supply and prices and blackouts Increase in productivity and product quality Improved reputation with customers and society Improved employee motivation, health and safety Compliance with legislation and ISO targets Increased profits and shareholder value

Thank You! Tom Eggert Business Sustainability WI School of Business