Energy Efficiency in Energy Legislation, Waxman-Markey, and Stimulus:Update and Overview
1. Joe Loper, Lowell Ungar, Brad Penney Alliance to Save Energy June 29, 2009 Energy Efficiency in Energy Legislation, Waxman-Markey, and Stimulus:Update and Overview
2. Federal Energy and Climate Legislation Brad Penney Director of Government Relations June 29, 2009
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4. Ad in Roll Call, The Hill, Politico Dear Members of Congress: As businesses and organizations that employ thousands of workers in the clean energy industry, we urge Congress to move and improve the American Clean Energy and Security Act. A strong clean energy policy that promotes innovation and deployment in energy efficiency and renewable energy can help reduce energy costs for consumers and provide the basis for sustained economic growth. 1. Energy efficiency generates $3 in economic benefits for each $1 invested, producing jobs in every Congressional district in America; 2. Renewable energy will stabilize energy costs as we reduce our dependence on fossil fuels and use sources of energy that have no or low cost such as wind, sun, water, geo-thermal and biomass; 3. Taken together, energy efficiency and renewable energy can reduce the costs of achieving our climate goals by lowering overall energy demand and the costs of generating power – saving Americans money on their utility bills while cutting greenhouse gas emissions. Without a change in direction, the United States economy will continue to lose ground to other countries that are more aggressively investing in clean energy technology. Strong clean energy legislation can provide that framework and restore American leadership in job creation and innovation. We urge every Member of Congress to vote in favor of the American Clean Energy and Security Act of 2009 now!
5. Climate Outlook in Senate Senate EPW Chairwoman Boxer hopes to introduce a cap-and-trade measure in July and mark it up before August recess (week of Aug. 3?) Other committees have tentatively agreed to be through with their amendments by Sept. 18 Majority Leader Reid wants to bring comprehensive bill to the floor in the fall; we are hearing October for floor action Boxer released climate principles in February House bill will be the framework
6. EE Highlights in ACES Cap on carbon: 83% reduction in covered emissions by 2050 (85% of emissions are covered) Building codes, building labels, appliance standards and labels Renewable electricity standard of 20% by 2020 – a quarter may be met through EE, or 40% if governor requests Vehicle emissions standards Land use planning to reduce VMT
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8. 4% may come from efficiency if governor petitions
18. Grants for retrofits of residential and commercial buildingsVoluntary building energy performance information program To display relative energy performance; raise public awareness Residential High-Performance Zero-Net-Energy Buildings Initiative Goal to enable residential buildings without net emissions to be cost-effective by 2020
19. The Waxman-Markey Bill: A Giant Leap Forward (or Sideways) Joe Loper Alliance to Save Energy June 29, 2009
20. Overview Meaningful cap Significant and reasonable cost control measures Substantial energy efficiency program funding At least two major concerns
21. Cap is the crown jewel 85% of GHG emissions covered by cap Other emissions TBD Covered emissions reduced 83% in 2050 Cap will need defending
22. Cap creates a carbon price Allowance price $10/ton/CO2e rising to $62/ton in 2050 Energy price increases vary widely Across fuels and regions Source: Alliance analysis based on HR 2454 and EPA Preliminary Analysis of the Waxman-Markey Discussion Draft, April 20, 2009
23. Impact on Energy Demand Flattens overall demand thru 2050 2050 demand 12% below BAU Nuclear a big winner Source: EPA Analysis of the Waxman-Markey Discussion Draft, June 23, 2009
24. Controlling Cost Different types of hurt all -- minimize overall cost some – ease transition for a while -- avoid price shocks Note trade-offs Many measures to control cost We like -- EE policies/programs Of great concern in WM -- offsets, muting prices
25. Allowance allocations Allocations do not undermine the cap Major concern about allocations is fairness (not emissions levels) Allocations can reduce cost of abatement If purchasing least cost abatement resource Justified by market barriers Including program cost But can also raise overall abatement cost/price If not purchasing the least cost abatement resource If allowed to mute price signal – e.g., utility allowances
27. Impact on Electric Demand More than 1/3 of 2030 demand reduction from policy/program EE policy/program impact small in 2050 EE policy/program do not affect overall NG demand Unclear impact on NG generation Source: EPA Analysis of the Waxman-Markey Discussion Draft, June 23, 2009
33. Building Code Incentives 0.5% of allowance value states for code development and enforcement $380 million annually $14.8 billion over the life of the bill
34. Home Heating Oil, Propane and Kerosene To states based on residential/commercial consumption of home heating oil 1.4% of total allowance value 2012 -- 2029 One-half for energy efficiency $465 million annually for EE
35. Renewable Electricity Standard $25/MWh in lieu charge For states to promote EE and RE Perhaps hundreds of millions for EE annually
36. Clean Energy Innovation Centers DOE to 8 Clean Energy Innovation Centers one will likely focus on energy-efficient building systems and designs, per FY 2010 budget request Centers to receive 0.45% of emission allowances, distributed on a competitive basis (1/8 to EE?) 1.05% of emissions allowances go to ARPA-E( 1/8 to EE?) $142 million annually for EE R&D (?)
37. Other (allocations and authorizations) Electric and plug-in hybrid vehicles; Smart Grid; Transportation Planning; Industrial energy efficiency and waste heat recovery; Low-income energy efficiency
38. That’s a lot of offsets! Up to 2 billion tons annually (One-third to two-thirds of total allowances) EE may not fare so well 1/5 of CDM credits is EE But 90% is power generation Source: Alliance to Save Energy analysis based on HR 2454
39. Make them real If offsets are not real Cap is undermined Cost/ton reduction is higher, not lower EMV critical WM addresses – EPA, advisory board, random audits Hard decisions deferred Discourage other countries’ policies? BAU policies reduce “additional” potential WM addresses -- int’l clean energy fund, sectoral offsets, int’l reserve allowances
40. Muting the End-use Price Signal Transfers burdens to others Increases overall cost of abatement Utility free allowances Allocation formula only partially linked to emissions and… rebates cannot be “solely based” on electric consumption, but…… if utilities simply surrender free allowances, could be perfect muting of price signal
41. EE Policy and Program Challenges Address real market barriers Imperfect information, externality costs, split incentives Inelastic demand is not a market barrier Deploying EE at large scale No more CFLs! EMV RES, programs
42. Joe Loper Senior VP, Policy and Research Alliance to Save Energy 202-530-2223 jloper@ase.org
43. Strategic reserve Reduces effective stringency Pressure relief varies $28/ton plus for first 3 years 60% above rolling 3-year average most other years Limits 10% of total allowances 20% of a single entity’s allowances Not a problem
45. Goals Policies will no longer save more energy. Instead they will— Reduce cost of meeting carbon cap by Addressing market barriers, especially among energy end-users
64. Utilities: Efficiency Programs Standard for savings from programs Efficiency as resource in combined standard Allowance value to fund programs Use of allowances to utilities Use of allowances to states, local govt’s
66. Transportation House only: Light duty vehicle emission standards Emission standards for trucks, trains, ships, and airplanes Require states to set emissions reduction goals and large MPOs to set plans that meet them.
67. Authorizations Building energy code implementation Building retrofits Building labeling programs Manufactured home replacement “Best-in-class” appliance program Motor rebates Waste heat recovery grants Vehicle electrification and plug-in vehicle programs SmartWay heavy duty vehicle program ARPA-E and Clean Energy Innovation Centers Low Income energy efficiency program
68. Savings Estimates Potential energy and carbon savings (toward meeting cap) from key policies in 2030 (ACEEE):
69. Thank You! Lowell Ungar Alliance to Save Energy Phone: (202) 857-0666 Email: lungar@ase.org Website: www.ase.org
70. Stimulus Overview and Update June 29, 2009 Brad Penney Director of Government Relations
72. Funding Rollout Energy Funds Slow to Unroll: 1% of FY2009 awards 90% of FY2009 awards go to health, transportation and education Funding allotted in segments: For SEP & WAP: 10% on initial app approval 40% on comprehensive app approval Remaining 50% contingent on demonstrated success Projected timing of all funds made available to states and localities. FY09 and FY12 funding for states and localities http://www.recovery.gov/sites/default/files/GAO-09-580+Recovery+Act.pdf
73. Program Timeline Sept. 30: All funds to be obligated March 31: All funds to be spent Initial Apps Due – 10% of funding Progress reports quarterly through- out stimulus period Estimated time for DOE Approval Comp Apps Due – 40% of funding 18 months after award: Funds to be obligated State Apps due 36 months after award: Funds to be Spent Estimated time for DOE Approval Local Apps due Sept. 30: All funds to be obligated March 31: All funds to be spent Progress reports quarterly through- out stimulus period Estimated time for DOE Approval Initial Apps Due – 10% of funding Comp Apps Due - 40% of funding Administration Application Review www.ase.org/stimulusresources
74. Core Energy FundingObligation & Spending to date SEP Appropriated: $3.1 billion Obligated: $301.6 million Spent: $9.4 million EECBG Appropriated: $3.2 billion Obligated: $0 WAP Appropriated: $5 billion Obligated: $553.4 million Spent: $8.3 million Green Jobs Appropriated: $500 million Obligated: $0 Smart Grid Investment Grant Program Appropriated: $4.5 billion Obligated: $0 Smart Grid Demonstration Projects Appropriated: $615 million Awarded: $4.7 million Spent: $0 HUD’s EE Public Housing Capital Funds Appropriated: $4 billion Awarded: $0 HUD’s Green Retrofit Program Appropriated $250 million Obligated: $0 $890 million of $18 billion awarded (.5%)
75. Uses of Funds:State Energy Programs Plans Plans Due May 12: ~15 SEP Plans Released Available through ASE Stimulus Resources Page, NAESCO Recovery.gov when they are approved by DOE Some more complete than others Trends: Building Energy Efficiency Programs State, industrial, residential, performance contracting Energy Efficiency Financing Mechanisms Revolving Loans, Grants, Rebates Green Job Training Programs Technical installation, auditing, energy assessments Transportation Hybrid vehicles, Smart Traffic Management systems
76. State Energy Programs (cont.) Updated on our stimulus resources page: www.ase.org/stimulusresources
77. Oversight and Advocacy Immense problems of implementation size and complexity; challenge of administration within limited time frame; political appointees not in place; demands on career appointees Credibility of future energy efficiency initiatives depends on competent and effective implementation Problem of EM & V: How do we measure savings? Continuity of Programs: What happens when the funding goes away?
78. Energy Efficiency Coalition 100+ energy efficiency, environmental, public interest organizations and corporations Focus on ARRA formation, passage, implementation. Now also works on other legislation Coalition Activities: SEP – Utility Rate Reform SEP - Disclosure of Plans WAP – Davis Bacon Issues State-level Collaboration needed SEP, WAP, & EECBG Best practices, knowledge sharing
79. For More Information… Brad Penney Director of Government Relations The Alliance to Save Energy bpenney@ase.org (202) 530-3348
Notas do Editor
In addition to codes preemption.Also Senate: deadline for response to petitions, study on compliance and other, Energy Star provisions.
In addition to codes preemption.Also Senate: deadline for response to petitions, study on compliance and other, Energy Star provisions.
Light duty already accomplished. VMT sets stage for transportation bill. No money for VMT reduction.