US Energy Efficiency Policy. Steven Nadel American Council for an Energy- Efficient Economy (ACEEE) May 2017

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1 US Energy Efficiency Policy Steven Nadel American Council for an Energy- Efficient Economy (ACEEE) May 2017

2 American Council for an Energy-Efficient Economy Non-profit research organization Founded in 1980 Now have 55 staff and $8.5 million/year budget Funding comes from foundations, government agencies, contracts, conferences and corporate memberships

3 U.S. Energy Use Since EE savings ~$2500/capita Source: ACEEE, EE in US, 2015

4 Index, 1980 = 100 Electricity Use Flat Recently TWh Bil $ Source: ACEEE analysis of data in EIA Monthly Energy Review (2016 from other EIA and BEA sources and is preliminary) 4

5 International Scorecard

6 In the electricity sector, efficiency is now US s 3 rd largest resource Source: ACEEE Greatest Energy Story You Haven t 6 Heard.

7 and could become US s largest resource by 2030 Source: ACEEE Greatest Energy Story You Haven t 7 Heard.

8 Source: ACEEE Greatest Energy Story You Haven t Heard. 8

9 Building Code Revisions in the U.S. Source: ACEEE using DOE data.

10 National Electricity Savings from Standards Source: ACEEE & ASAP, Energy Boom.

11 Products Covered by Federal Equipment Efficiency Standards NAECA 1987/1988 EPAct 1992 EPAct 2005 EISA 2007 Refrigerator-freezers Fluorescent lamps Ceiling fans & light kits Incandescent lamps Freezers Incandescent reflector lamps Dehumidifiers Additional motors (e.g., large) Room (& portable) AC Electric motors (1-200 hp) Compact fluorescent lamps Walk-in coolers & freezers Central AC & heat pumps Comm'l air-source AC & HP Torchiere lighting fixtures Metal halide lighting fixtures Furnaces & boilers Water source heat pumps Large commercial AC & HP External power supplies Water heaters Packaged terminal AC & HP Commercial clothes washers Furnace fans Clothes washers Commercial furnaces/boilers Distribution transformers Clothes dryers Commercial water heaters Exit signs Dishwashers Showerheads Commercial ice makers DOE Initiated Ranges & ovens Faucets Comm'l refrigerators/freezers Microwave ovens Toilets & urinals Mercury vapor lamp ballasts Comm'l & industrial pumps Direct-fired space heaters Small electric motors Traffic signals Pool pumps* Pool heaters Pre-rinse spray valves Air compressors* Fluorescent lamp ballasts Commercial unit heaters Battery chargers (& UPS*) * Not yet completed Large comm'l refrigeration Vending machines

12 Billion kwh Savings from Utility-Sector Energy Efficiency Programs % of sales in Incremental Annual Savings 100 Total Annual Savings % in 2015 Source: ACEEE using EIA Form 861 data.

13 Levelized Electricity Resource Costs

14 Total Savings in 2006 from Utility Efficiency Programs Source: ACEEE

15 Total Savings in 2015 from Utility Efficiency Programs Source: ACEEE

16 Results by State Electric Average Percent 2015 Estim ated State Target Covered Achieved 2020 Rhode Island 2.6% 99% 2.91% 21.3% Massachusetts 2.9% 86% 2.74% 21.9% Vermont 2.1% 100% 2.01% 19.6% California 1.2% 78% 1.95% 12.6% Maine 2.4% 100% 1.53% 15.9% Haw aii 1.4% 100% 1.52% 13.4% Connecticut 1.5% 93% 1.48% 13.2% Arizona 2.5% 56% 1.19% 17.4% Source: ACEEE analysis for forthcoming ECEEE paper Michigan 1.0% 100% 1.16% 8.9% Minnesota 1.5% 100% 1.15% 12.2% Illinois 0.7% 89% 1.13% 11.2% Oregon 1.3% 69% 1.09% 11.1% Washington 1.5% 81% 1.06% 11.8% New York 0.7% 100% 1.05% 6.9% Maryland 2.0% 100% 1.01% 12.5% Iow a 1.2% 74% 1.00% 10.6%

17 Electric Energy Efficiency Targets (26 states) As of January 2017

18 Impact of EERS (2015 data) Policy No EERS Yes EERS Average EE No. of states investments as % of revenues* Average EE savings as % of sales* Source: ACEEE.

19 Gas Energy Efficiency Targets 17 states

20

21 Business Model for Electric Utilities Total of 32 states Source: ACEEE

22 Average Cost of Saved Energy and Energy Savings as a % of Retail Sales for Major Utility Programs Source: ACEEE, Big Savers,

23 EERS in the U.S. Obligation generally placed on distribution companies Targets are most commonly for net annual incremental savings as a % of retail sales Generally substantial evaluation to verify savings and guide deemed savings values

24 Cost per kwh Saved of U.S. Demand-Side Bidding and Standard Performance Contracting Programs Source: LBL

25 Key Lessons About Utility EE Pay attention to the business case for utilities cost recovery, lost revenues/decoupling, return on investment/shareholder incentives Savings targets very helpful set by legislators or regulators Consult with stakeholders and build support Have programs for all major customer classes everyone can participate Show how programs save all ratepayers money Set eligibility levels that keep free riders to modest levels Start gradually (e.g. quick-start programs ) and ramp up over time

26 Other Key US Efficiency Policies Energy Star including Home Performance Weatherization Assistance Program State Energy Program Strategic energy management efforts PACE and on-bill financing Federal tax credits new construction, residential retrofit measures Energy Saving Performance Contracts Federal RD&D Local benchmarking & disclosure

27 Regional Energy Efficiency Organizations

28 Electricity Scenarios for New England Source: ACEEE, Electricity Scenarios for New England

29 Strategies to Cut Energy Use in Half (all fuels) Reducing power plant heat rates, 3.3% Reducing freight transport energy use, 4.5% Reducing passenger vehicle miles traveled, 5.5% Behavior change in buildings, 2.7% Improving aviation efficiency, 3.0% CVR & reducing T&D losses, 2.4% Combined heat and power systems, 1.2% Industrial efficiency improvements, 20.8% Intelligent buildings and homes, 7.6% Zero net energy buildings and homes, 12.9% Home and building retrofits, 11.1% Appliance and equipment efficiency, 12.4% Light & heavy duty vehicle fuel economy, 12.6% Source: ACEEE, Cutting Energy Use in Half, 2016.

30 Contact Information Steven Nadel

The U.S. Appliance Standards Program. Building Technologies Office Energy Efficiency and Renewable Energy United States Department of Energy

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