What’s Driving Energy
Efficiency in 2010?
Thomas Content
First, a disclaimer
How We Got Here…
1990s: The Big Energy Drivers
•
1990s: It’s all about CHOICE:
“Let’s
deregulate.”
Utilities scaled back investment in energy efficiency.
•
1990s: It’s all about RELIABILITY:
“Let’s keep the lights on.”
Projects launched to build more power plants
and power lines.
FOCUS ON EXPANDING SUPPLY,
not CUTTING DEMAND
Efficiency funds help balance Wis. budget
How We Got Here…
2000s: The Big Energy Drivers
•
2000-2006: It’s all about PRICE:
-- Natural gas prices soar
-- Oil prices top $100/B (vs. $14 in ’98)
-- Electric rates surge
How We Got Here…
2000s: The Big Energy Drivers
• More and More, the mantra became…
It’s All About
CARBON
Coal powers our economy,
creates carbon challenge
McKinsey/Conference Board
Report
Reducing U.S. Greenhouse Gas Emissions:
How Much At What Cost?
Key findings:
40% of strategies that reduce emissions actually result in
cost savings, not higher costs
“In simple terms, the savings outweigh the costs and significant
GHG abatement can be achieved.”
The report:www.mckinsey.com/clientservice/ccsi/greenhousegas.asp
Cutting-Up-The-Carbon Pie into Wedges: www.princeton.edu/wedges
Buildings, Energy and Carbon
Source: Needham & Co., IBM
How We Got Here…
2000s: The Big Energy Drivers
Times change fast: Enter….
THE GREAT
RECESSION
Enter the Stimulus/ ARRA
2009:
Stimulus Stalls Efficiency?
• Businesses apply for funds, delay
purchases while finding out if they qualify
• Example: JCI -- Expecting a multi-billiondollar pie to be divvied up among it and
its competitors
“Show me the money”
All of 2009: $109 million
• JCI, continued
But now the stimulus dollars are coming,
First 1/2 2010: $321 million
vs. $109M in 2009
Also Stalling Efficiency
Efficiency Hurdles Remain:
-- ROI: Payback Periods Too Long
-- Banks Aren’t Lending
-- Other Priorities For Investment
-- Political Gridlock
The Political Climate Was
Bipartisan
November 2007:
Midwestern Governors
sign energy and climate
accords
December 2007:
Congress passes first
increase in fuel economy
standards for vehicles in
decades
December 2007:
Bush administration
announces pledge to
support post-Kyoto global
treaty to limit emissions
Energy/GHG Legislation:
From Bipartisan to Partisan
2008:
McCain and Obama supported cap-and-trade,
slashing GHG emissions by +70% by 2050
2006:
Wis. Legislature nearly unanimous in passing 10% renewable
mandate by 2015 – and preventing budget diversions of energy
efficiency $$$$
2010:
Energy and Climate are now Very Partisan
House passes cap-and-trade (barely). Senate No.
State Legislature Adjourns without a Vote on Renewable
Energy/Energy Efficiency bill (Clean Energy Jobs Act)
Gridlock hits business
2010 and Beyond:
What’s Driving Energy Efficiency
• Energy Prices: A return to $100 oil as China’s
Economy Rebounds and amid long-term
concerns about global oil supplies
• Market Demand: Customers Want to Buy Green,
Employees Want to Work for Green Firms
• OEM Sustainability Mandates Hitting Suppliers
(Wal-Mart, Kohl’s re carbon/energy/water
“Follow the Money”
-- $55 million State Energy Program is now the
Green to Gold Fund (low interest loans for
energy efficiency/renewables etc)
-- $15 million in industrial energy efficiency
projects (9 firms get DOE money with pledge to
their industrial energy intensity by 25% over the
next decade)
-- $20 million for Milwaukee/Madison/Racine for
PACE program… but apparently that’s now in
limbo (JS story soon…)
Preparing for Changes Ahead
• “Let me tell you, this train is coming. It’s not just
regulators any more. Your customers are going
to be asking you these tough questions.” Greg
Bell, Partnerships for Sustainability.
• Targeting suppliers to Wal-Mart, launched in
Waukesha County, now expanding to region
• Eligible: Companies with up to 300 employees
• Conference/rebranding: Oct. 20 in Waukesha
• Plan to launch online sustainability tool
• Details: www.partnershipsforsustainability.org
Everyone wants to save money,
many want to be greener
“You make probably hundreds
of energy decisions every day
that you don’t know you’re
making. You haven’t thought of
them in that way, but they are.
If we start thinking of them as
energy decisions, we might
change how we make them."
Kitty Welch,
co-founder
The Atkinson Diet
Some links
• Plugged In Energy & Clean-Tech blog:
• www.jsonline.com/blogs/pluggedin
Our series on Global Warming and Wisconsin
• www.jsonline.com/globalwarming
• Our Green Guide, tips for businesses and homeowners
• www.jsonline.com/yourgreenguide
• Questions? Story ideas? Suggestions:
– tcontent@journalsentinel.com
– (414) 224-2098