Energy Efficiency: The first and most profitable way to delay Climate Change

UCLA Institute of the EnvironmentEnvironmental Science Colloquium

February 25, 2008

Arthur H. Rosenfeld, CommissionerCalifornia Energy Commission

(916) 654-4930ARosenfe@Energy.State.CA.US

http://www.energy.ca.gov/commission/commissioners/rosenfeld.html

or just Google “Art Rosenfeld”

2

California Energy Commission Responsibilities

Both Regulation and R&D

• California Building and Appliance Standards– Started 1977– Updated every few years

• Siting Thermal Power Plants Larger than 50 MW• Forecasting Supply and Demand (electricity and fuels)• Research and Development

– ~ $80 million per year• California is introducing communicating electric meters and

thermostats that are programmable to respond to time-dependent electric tariffs.

3

Energy Intensity (E/GDP) in the United States (1949 - 2005) and France (1980 - 2003)

0.0

5.0

10.0

15.0

20.0

25.0

1949 1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005

tho

usa

nd

Btu

/$ (

in $

200

0)

If intensity dropped at pre-1973 rate of 0.4%/year

Actual (E/GDP drops 2.1%/year)

France

12% of GDP = $1.7 Trillion

7% of GDP =$1.0 Trillion

4

Energy Consumption in the United States 1949 - 2005

0

25

50

75

100

125

150

175

200

1949

1951

1953

1955

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

Qu

ads/

Yea

r

$ 1.7 Trillion

$ 1.0 Trillion

New Physical Supply = 25 Q

Avoided Supply = 70 Quads in 2005

If E/GDP had dropped 0.4% per year

Actual (E/GDP drops 2.1% per year)

70 Quads per year saved or avoided corresponds to 1 Billion cars off the road

5

How Much of The Savings Come from Efficiency

• Some examples of estimated savings in 2006 based on 1974 efficiencies minus 2006 efficiencies

• Beginning in 2007 in California, reduction of “vampire” or stand-by losses– This will save $10 Billion when finally implemented, nation-wide

• Out of a total $700 Billion, a crude summary is that 1/3 is structural, 1/3 is from transportation, and 1/3 from buildings and industry.

Billion $

Space Heating 40Air Conditioning 30Refrigerators 15Fluorescent Tube Lamps 5Compact Floursecent Lamps 5Total 95

Two Energy Agencies in California

• The California Public Utilities Commission (CPUC) was formed in 1890 to regulate natural monopolies, like railroads, and later electric and gas utilities.• The California Energy Commission (CEC) was formed in 1974 to regulate the environmental side of energy production and use. • Now the two agencies work very closely, particularly to delay climate change. • The Investor-Owned Utilities, under the guidance of the CPUC, spend “Public Goods Charge” money (rate-payer money) to do everything they can that is cost effective to beat existing standards. • The Publicly-Owned utilities (20% of the power), under loose supervision by the CEC, do the same.

7

California’s Energy Action Plan

• California’s Energy Agencies first adopted an Energy Action Plan in 2003. Central to this is the State’s preferred “Loading Order” for resource expansion.

• 1. Energy efficiency and Demand Response• 2. Renewable Generation,• 3. Increased development of affordable & reliable conventional

generation• 4. Transmission expansion to support all of California’s energy

goals.

• The Energy Action Plan has been updated since 2003 and provides overall policy direction to the various state agencies involved with the energy sectors

8

Per Capita Electricity Sales (not including self-generation)(kWh/person) (2006 to 2008 are forecast data)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,0001

96

0

19

62

19

64

19

66

19

68

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

United States

California

Per Capita Income in Constant 2000 $1975 2005 % change

US GDP/capita 16,241 31,442 94%Cal GSP/capita 18,760 33,536 79%

2005 Differences = 5,300kWh/yr = $165/capita

9

Annual Energy Savings from Efficiency Programs and Standards

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,0001

97

5

19

76

19

77

19

78

19

79

19

80

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

GW

h/y

ear

Appliance Standards

Building Standards

Utility Efficiency Programs at a cost of

~1% of electric bill

~15% of Annual Electricity Use in California in 2003

10

Impact of Standards on Efficiency of 3 Appliances

Source: S. Nadel, ACEEE,

in ECEEE 2003 Summer Study, www.eceee.org

75%60%

25%20

30

40

50

60

70

80

90

100

110

1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Year

Ind

ex (

1972

= 1

00)

Effective Dates of National Standards

=

Effective Dates of State Standards

=

Refrigerators

Central A/C

Gas Furnaces

SEER = 13

11Source: David Goldstein

New United States Refrigerator Use v. Time and Retail Prices

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002

Av

era

ge

En

erg

y U

se

or

Pri

ce

0

5

10

15

20

25

Re

frig

era

tor

vo

lum

e (

cu

bic

fe

et)

Energy Use per Unit(kWh/Year)

Refrigerator Size (cubic ft)

Refrigerator Price in 1983 $

$ 1,270

$ 462

12

Annual Energy Saved vs. Several Sources of Supply

Energy Saved Refrigerator Stds

renewables

100 Million 1 KW PV systems

conventional hydro

nuclear energy

0

100

200

300

400

500

600

700

800

Bil

lio

n k

Wh

/yea

r

= 80 power plants of 500 MW each

In the United States

13

Value of Energy to be Saved (at 8.5 cents/kWh, retail price) vs. Several Sources of Supply in 2005 (at 3 cents/kWh, wholesale price)

Energy Saved Refrigerator Stds

renewables

100 Million 1 KW PV systems

conventional hydro

nuclear energy

0

5

10

15

20

25

Bill

ion

$ (

US

)/ye

ar

in 2

00

5In the United States

14

Air Conditioning Energy Use in Single Family Homes in PG&E The effect of AC Standards (SEER) and Title 24 standards

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1975 1980 1985 1990 1995 2000 2005 2010 2015

An

nu

al

kW

h p

er n

ew

ho

me

fo

r ce

ntr

al

AC

If only increases in house size -- no efficiency gains

Change due to SEER improvements

SEER plus Title 24

15

0

20

40

60

80

100

120

3 Gorges三峡

Refrigerators冰箱

Air Conditioners 空调

TWh

2000 Stds

2000 Stds

2005 Stds

2005 Stds

If Energy Star

If Energy Star

TW

H/Y

ear

1.5

4.5

6.0

3.0

7.5

Val

ue

(bil

lio

n $

/yea

r)

Comparison of 3 Gorges to Refrigerator and AC Efficiency Improvements

Savings calculated 10 years after standard takes effect. Calculations provided by David Fridley, LBNL

Value of TWh

3 Gorges三峡

Refrigerators 冰箱

Air Conditioners

空调

Wholesale (3 Gorges) at 3.6 c/kWh

Retail (AC + Ref) at 7.2 c/kWh

三峡电量与电冰箱、空调能效对比

标准生效后， 10年节约电量

16

Annual Electricity Use and Volume of a New Refrigerator Sold in China and the US

0

100

200

300

400

500

600

700

800

900

100019

90

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Sources: DGFridley@LBL.gov and DGoldstein@NRDC.org

elec

tric

ity

use

(kW

h/y

ear)

0

100

200

300

400

500

600

700

aver

age

volu

me

(lit

ers)

US

China

Volume (right scale)

use (left scale)

Volume (right )

use (left scale)

2000 Std2005 Std

2008 Std

17

United States Refrigerator Use, repeated, to compare with

Estimated Household Standby Use v. Time

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1947

1949

1951

1953

1955

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Ave

rage

En

ergy

Use

per

Un

it S

old

(k

Wh

per

yea

r)

Refrigerator Use per Unit

1978 Cal Standard

1990 Federal Standard

1987 Cal Standard

1980 Cal Standard

1993 Federal Standard 2001 Federal

Standard

Estimated Standby Power (per house)

2007 STD.

180

5

10

15

20

25

30

35

40

45

0 500 1000 1500 2000 2500 3000

Lumens

Lu

me

ns

/Wa

tt

Improving and Phasing-Out Incandescent Lamps

CFLs (and LEDs ?) – Federal (Harmon) Tier 2 [2020], allows Cal [2018]

Nevada [2008]

Federal (Harmon) Tier 1 [2012 - 2014]

California Tier 2 [Jan 2008]

Best Fit to Existing Lamps

19

California IOU’s Investment in Energy Efficiency

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,00019

76

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Mill

ions

of

$200

2 pe

r Y

ear

Forecast

Profits decoupled from sales

Performance Incentives

Market Restructuring

Crisis

IRP2% of 2004

IOU Electric Revenues

Public Goods Charges

20

Cool Urban Surfaces and Global Warming

Hashem AkbariHeat Island Group

Lawrence Berkeley National Laboratory

Tel: 510-486-4287Email: H_Akbari@LBL.gov

http:HeatIsland.LBL.gov

International Workshop on Countermeasures to Urban Heat Islands August 3 - 4, 2006; Tokyo, Japan

21

Temperature Rise of Various Materials in Sunlight

0.0 0.2 0.4 0.6 0.8 1.0

50

40

30

20

10

0

Tem

pera

ture

Ris

e (

°C)Galvanized

Steel

IR-Refl. Black

Bla

ck P

ain

t

Gre

en

Asp

halt

S

hin

gle

Red

Cla

y

Tile

Lt.

Red

P

ain

t

Lt.

Gre

en

P

ain

t

Wh

ite A

sp

halt

Sh

ing

leW

hit

e A

sp

halt

Sh

ing

le

Al R

oof

Coat.

Op

tical W

hit

eO

pti

cal W

hit

e

Wh

ite P

ain

tW

hit

e P

ain

t

Wh

ite C

em

en

t C

oat.

Wh

ite C

em

en

t C

oat.

Solar Absorptance

22

Direct and Indirect Effects of Light-Colored Surfaces

•Direct Effect- Light-colored roofs reflect solar radiation, reduce air-

conditioning use

•Indirect Effect- Light-colored surfaces in a neighborhood alter surface

energy balance; result in lower ambient temperature

23

and in Santorini, Greece

24

Cool Roof Technologies

flat, white

pitched, white

pitched, cool & colored

Old New

25

Cool Colors Reflect Invisible Near-Infrared Sunlight

26

Cool and Standard Color-Matched Concrete Tiles

• Can increase solar reflectance by up to 0.5

• Gain greatest for dark colors

cool

standard

∆R=0.37 ∆R=0.29∆R=0.15∆R=0.23∆R=0.26 ∆R=0.29

CourtesyAmericanRooftile

Coatings

27

Cool Roofs Standards

• Building standards for reflective roofs

- American Society of Heating and Air-conditioning Engineers (ASHRAE): New commercial and residential buildings

- Many states: California, Georgia, Florida, Hawaii, …• Air quality standards (qualitative but not quantitative credit)

- South Coast AQMD

- S.F. Bay Area AQMD

- EPA’s SIP (State Implementation Plans)

28

From Cool Color Roofs to Cool Color Cars

• Toyota experiment (surface temperature 18F cooler)

• Ford, BMW, and Fiat are also working on the technology

29

Cool Surfaces also Cool the Globe

• Cool roof standards are designed to reduce a/c demand, save money, and save emissions. In Los Angeles they will eventually save ~$100,000 per hour.

• But higher albedo surfaces (roofs and pavements) directly cool the world (0.01 K) quite independent of avoided CO2. So we

discuss the effect of cool surfaces for tropical, and temperate cities, and show that

• Each 25m2 (250 square feet) of cooler roof offsets 1 ton of CO2

each 35 m2 (350 square feet) of cooler pavement offsets another ton.

30

100 Largest Cities have 670 M People

0

1000

2000

3000

4000

5000

0 10 20 30 40

Population (M)

Are

a D

ensi

ty (m

2 /per

son)

Mean = 560 m2/p

Med = 430 m2/p

Tokyo

Mexico CityNew York CityMumbaiSão Paulo

31

Dense Urban Areas are 1% of Land

• Area of the Earth = 511x1012 m2

• Land Area (29%) = 148x1012 m2 [1]• Area of the 100 largest cities = 0.38x1012 m2 = 0.26% of Land

Area for 670 M people• Assuming 3B live in urban area, urban areas = [3000/670] x

0.26% = 1.2% of land• But smaller cities have lower population density, hence, urban

areas = 2% of land• Dense, developed urban areas only 1% of land [2]• 1% of land is 1.5 x 10^12 m2 = area of a square of side s = 1200 km or 750 miles on a side. Roughly the area of the

remaining Greenland Ice Cap (see next slide)

32

33

Cooler cities as a mirror

• Mirror Area = 1.5x1012 m2 [5] *(0.1/0.7)[δ albedo of cities/ δ albedo of mirror]= 0.2x1012 m2 = 200,000 km2 {This is equivalent to an square of 460 km on the side}= 10% of Greenland = 50% of California

34

Equivalent Value of Avoided CO2

• CO2 currently trade at ~$25/ton

• 10Gt worth $250 billion, for changing albedo of roofs and paved surface

• Cooler roofs alone worth $125B

• Cooler roofs also save air conditioning (and provide comfort) worth ten times more

• Let developed countries offer $1 million per large city in a developing country, to trigger a cool roof/pavement program in that city

35

California cool urban surfaces and AB32

Reducing U.S. Greenhouse Gas Emissions:

How Much at What Cost?

Reducing U.S. Greenhouse Gas Emissions:

How Much at What Cost?

US Greenhouse Gas Abatement Mapping Initiative

December 12, 2007

37

38

McKinsey CO2 Abatement Curves

• McKinsey provides the first graph we’ve seen that offers a balanced graphical comparison of– Efficiency as a negative cost or profitable investment– Renewables as costing > 0

• Two properties of these Supply Curves

1. The shaded areas are proportional to annualized savings or costs -- the graph shows that efficiency (area below x-axis) saves about $50 Billion per year and nearly pays for the renewables (area above x-axis)

The ratio is about 40:60

2. The Simple Payback Time (SPT) can be estimated directly from the graph, if we know the service life of the investment

39

Electricity Conservation Supply Curve 220 MeasuresCalifornia in 2011 -- Levelized Cost and kWh saved

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

0 10,000 20,000 30,000 40,000 50,000GWh saved per year (and % of 2011 California Load)

Source: California’s Secret Energy Surplus: The Potential For Energy Efficiency, Rufo and Coito, 9/2002

$ p

er k

Wh

(le

veliz

ed in

201

1 $)

Area = Net Benefit ( $3.4 Billion/year)

Area = Cost ( $1.7 Billion/year)(14%)(7%)

SPT (years)

0

2

4

6

8

10

40

Electricity Conservation Supply Curve 220 Mesurestranslated to Carbon Dioxide Reduction curve

California in 2011 -- (1 kwh reduction saves 1 pound of CO2)

-$300

-$200

-$100

$0

$100

$200

$300

0 5 10 15 20 25

Million Metric Tonnes Saved per year

cost

of

con

serv

ed C

O2

$ p

er t

on

ne

Area = Net Benefit ( $3.4 Billion/year)

Area = Cost ( $1.7 Billion/year)

SPT (years)

0

2

4

6

8

10

41

42

“Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost?” McKinsey&Company, 2007

$90/t

-$90/t

Roughly speaking, the curve can be divided into Savings and Costs triangles each with areas that are ~1/2 x $90/t x 1 Gt.

Therefore each represent ~$45 B/year

Savings/yr

Costs/yr

43

U.S. GHG emissions in 2030 are projected to exceed proposed targets being considered in Congress by a wide margin

•2005 emissions

•Expected growth

•Reference case

*Based on bills introduced in Congress that address climate change and/or GHG emissions on an economy-wide basis and have quantifiable targets

Source:U.S. EIA Annual Energy Outlook (2007) “Reference case," U.S. EPA; Pew Center On Global Climate Change; McKinsey analysis

Projected GHG emissions

Gigatons CO2e

•2.5

Range of proposed reductions*

•1990 level •1990 level•-27%

•2030

•-3.5

•-5.2

4.5

6.2

9.7

7.2

44Source: http://www.climatechange.ca.gov/events/2007-09-14_workshop/final_report/2007-10-15_MACROECONOMIC_ANALYSIS.PDF

California Climate Strategy Supply Curve

-250

-200

-150

-100

-50

0

50

100

150

200

250

Tons of Reductions of CO2 in 2020 from a Baseline of 600 MtCO2 eq.

Do

llar

s p

er t

on

of

CO

2 eq

.

Appliance Efficiency Stds. Standards

Pavely (motor vehicles)

EE Programs

2020 Emissions Reduction Target

40 80 120 160 174

HFC Reductions

Simple Payback in years

1

2

8

Coal Reduction Policy

4

6

(As of October, 2007)

45

http://www.mckinseyquarterly.com/Energy_Resources_Materials/A_cost_curve_for_greenhouse_gas_reduction_abstract

McKinsey Quarterly

With a Worldwide Perspective

46

8% 17% 25% 33% 42% 50% 58%