ENERGY EFFICIENCY INVESTMENTS AT SCALE
A SUSTAINABLE ENERGY UTILITY MODEL
Senator Harris B. McDowell III
Delaware Senate
September 22, 2012
90
80
$1.2 Trillion (or $180 Billion)
E-E Savings Opportunity
…at Risk?
70
$Billions
60
50
40
30
20
10
0
MUSH
Residential
Investment Potential
Commercial
Industrial
Ratepayer funded programs
Source: McKinsey Global Institute. The Case for Investing in Productivity. 2008.
Consortium for Energy Efficiency. The State of the Efficiency Program Industry: Budgets, Expenditures and Impacts. 2009. Available at:
http://www.cee1.org/files/StateofEEIndustry2009.pdf
© 2012 Foundation for Renewable Energy & Environment
– not consuming
The cost of saving energy is significantly less than electricity rates throughout the U.S.
Source: Erhardt-Martinez & Laitner (2008) The Size of the U.S. Energy Efficiency Market. ACEEE.
Addressing Investor Risk
35%
Energy
Efficiency
30%
25%
Small
Company
Stocks
20%
Average Return Index
15%
10%
US T-Bills
Corporate
Bonds
Common
Stocks
5%
0%
0%
5%
10%
15%
20%
Risk Index
25%
30%
35%
Source: ACEEE, 2008 . The Size of U.S. Energy Efficiency Market.
© 2012 Foundation for Renewable Energy & Environment
GREEN JOBS: THE SUSTAINABLE ENERGY ADVANTAGE
Permanent Jobs Created per Million US$ Invested
COAL PLANTS
ENERGY EFFICIENCY & CONSERVATION
Smart/Green Buildings
Air Sealing / Insulation
RENEWABLE ENERGY
Solar Thermal
Solar Electric (PV)
Wind
Geothermal
INFORMATION & COMMUNICATION TECHNOLOGY
High-Speed Broadband
Smart Grid
Intelligent Transport
^
4
12-15
14.7
12.0
10-19
19.0
15.7
11.9
10.5
18-26
26.4
21.7
17.7
Sources: Erhardt-Martinez & Laitner, The Size of the U.S. Energy Efficiency Market. ACEEE. 2008. American Solar Energy
Society (ASES). Renewable Energy and Energy Efficiency: Economic Drivers for the 21st Century. 2007.Singh & Fehrs, The
Work that Goes into Renewable Energy. REPP. 2001. London School of Economics (LSE) and the information Technology and
Innovation Foundation (ITIF). The UK’s Digital Road to Recovery. 2009. ICT job creation does not include ‘network effects.’
© 2012 Foundation for Renewable Energy & Environment
The Sustainable Energy Utility
http://www.energizedelaware.org/
The SEU is a new utility serving the interests of sustainability. It partners with existing utilities
while building and investing in a sustainable energy infrastructure.
•
The SEU was fist established by the State of Delaware on June 28, 2007 to:
- Promote, provide and invest in energy efficiency services – Legislated Target: 30% Reduction in energy use by 2020
- Promote, provide and invest in increased deployment of Distributed Renewable Generation – Legislated Target: 10-20%
of Electricity Sales from Distributed Renewables by 2020
•
The SEU exists as a public/private partnership combining the best of both worlds
- SEU is organized as a non-profit tax-exempt 501(c)(3) organization
- Day to day operations are conducted by for-profit companies, non-profits & others specializing in the energy sector
- Eliminates silos and provides solutions throughout the energy spectrum
Old Model
New Model
Affordable
Energy
Distributed
Renewables
Electricity
Electricity
Natural
Natural
Gas
Gas
Transport
Transport
Water
Water
Gasoline/
Gasoline/
Diesel
Diesel
Less Electricity
Education
Education
Green
Buildings/
Green
Neighborhoods
Water/
Materials
Conservation
6
SEU
Less
Transportation
Energy
Less Heating Fuel
Education
SHIFTING THE ENERGY PARADIGM:
THE SUSTAINABLE ENERGY UTILITY MODEL
Developed at the Center for
Energy & Environmental Policy,
the Sustainable Energy Utility
(SEU) is an innovative publicprivate partnership exclusively
delivering renewable energy
and conservation services
Implemented in:
− Delaware
− Vermont
− Washington, DC
− Sonoma County, CA
In development:
−
−
−
−
−
Philadelphia
Maryland
United Kingdom
Seoul, South Korea
Cities in China
SNAPSHOT OF THE
DELAWARE SEU ENERGY EFFICIENCY BOND SERIES
FOCUS:
PUBLIC & NON-PROFIT FACILITIES
TRANSACTION: TAX-EXEMPT BOND FINANCING
SOLD ON AUGUST 1, 2011
RATED AA+ BY STANDARD & POOR’S
PAR VALUE OF THE BOND = $67.45 MIILION;
WITH PREMIUMS, TOTAL INVESTMENT = $72.55 MILLION
BORROWING:
EFFECTIVE BORROWING RATE = 3.67%
SERIAL BONDS ranged in maturity from 1 year (borrowing
rate = 0.65%) to 20 years (borrowing rate = 4.37%)
BORROWING RATE FOR AVERAGE CONSERVATION
MEASURE PAYBACK (~14 YEARS) = 3.77%
SNAPSHOT OF THE
DELAWARE SEU ENERGY EFFICIENCY BOND SERIES
SIX STATE PARTICIPANTS
BOND PROCEEDS (incl.
Premium)
Department of Children, Youth and Their Families
$ 1.667 million
Department of Correction
$39.699 million
Department of Natural Resources and
Environmental Control & Carvel State Office Building
$ 6.205 million
Legislative Hall, State of Delaware
$ 5.199 million
The State Courthouse in Sussex County)
$ 1.012 million
TWO HIGHER EDUCATION INSTITUTION PARTICIPANTS
Delaware State University
$12.108 million
Delaware Technical and Community College (3 campuses)$ 6.661 million
SNAPSHOT OF THE
DELAWARE SEU ENERGY EFFICIENCY BOND SERIES
SIX ESCOs
Ameresco
Noresco
Honeywell
Pepco Energy Services
MAJOR INSTITUTIONAL BUYERS
Definitive Capital
Lord Abbott
Gannett
First New York Securities
Merrill Lynch
Johnson Controls
Seiberlich Trane
SCALING UP NEGAWATT INVESTMENTS
A Sustainable Energy Infrastructure Bond
SCALING UP NEGAWATT INVESTMENTS
The Delaware SEU Bond Results
160
Debt Service /Savings ($Million )
140
$148m
120
$38 Million
100
$110m
80
60
40
20
0
Aggregate Guaranteed Savings
~ 1,000 Jobs
Aggregate Payments
S&P AA+ Rating
© 2012 Foundation for Renewable Energy & Environment
Energy Efficiency Bonds, Series 2011
Aggregated Projects
The White House
Office of the Press Secretary
For Immediate Release
December 02, 2011
We Can't Wait: President Obama Announces Nearly $4 Billion Investment in
Energy Upgrades to Public and Private Buildings
In the White House press release on the President’s Better Buildings Challenge, the
Delaware & Washington DC SEUs were recognized for accomplishments meriting
national attention.
.
At the 6th Clean Energy Summit in Manila (2011), the Asian Development Bank
recommended the SEU Model to the region’s policy-makers.
http://freefutures.org
http://freefutures.org/seu-initiative/freesustainable-energy-financing-advisory-service
Dr. John Byrne
Ken Becker
jb@freefutures.org
kbecker@beckercf.com