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Energy Efficiency and District Heating

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Title: Energy Efficiency and District Heating


1
Energy Efficiency and District Heating
  • Meredydd Evans
  • Baltic Clean and Green Energy Conference
  • October 14, 2009, Tallinn

2
Overview
  • Why is energy efficiency important?
  • How can governments promote energy efficiency?
  • DOEs role and international cooperation
  • How can businesses get value from energy
    efficiency?
  • Spotlight on district heating

3
Why is energy efficiency important?
  • Climate change
  • Economic recovery and competitiveness
  • Energy security

4
Some points of departure
  • Energy accounts for vast majority of greenhouse
    gas emissions
  • Energy efficiency is not captured today to the
    extent that is economically or financially
    optimal
  • Many opportunities for improvement
  • Energy systems have long life-spans, so change
    requires time
  • Countries with
  • fast growth in energy demand
  • new infrastructure long-lasting

5
Reference Emissions Scenarios
But technology alone will not solve the climate
challenge.
Global CO2 Emissions
CO2 Concentrations
Allowing expansion of nuclear reduces emissions
in the reference. The same would be true for
renewable sources.
6
Why is energy efficiency important?
  • Climate change
  • Economic recovery and competitiveness
  • Energy security

7
Energy Efficiency Generates Jobs
  • American Council for an Energy-Efficient Economy
    (2008) finds
  • 20 efficiency gain by 2030 generates an
    estimated 800,000 jobs
  • Berkeley Study (2008) finds
  • Over 1972-2006 period, energy efficiency policies
    in California lead to a reduction in electricity
    per capita requirements of 40 below national
    average allowing households to redirect
    expenditures toward other goods and services and
    creating jobs

Source American Council for an
Energy-Efficiency Economy. 2008. Positive
Returns State Energy-Efficiency Analyses Can
Inform U.S. Energy Policy Assessments. Roland-Hols
t. 2008. Energy Efficiency, Innovation, and Job
Creation in California. Center for Energy,
Resources and Economic Sustainability.
7
8
Energy intensity by GDP per capita (2003)
9
Many missed opportunities for clean energy
  • Vattenfall/McKinsey

10
Policies to Encourage Efficiency Help Mitigate
Impact of PricesExample Difference in
Electricity Investment in the IEA WEO Alternative
vs. Reference Scenario, 2004-2030
1 000
500
0
billion dollars (2000)
- 500
-1 000
-1 500
-2 000
Additional investments on the demand side are
more than offset by lower investment on the
supply side
11
U.S. Building Energy Codes Program
  • Energy savings of nearly 1 billion per year
  • Improved energy efficiency for 280 million m2 of
    new commercial floor space and 4 million new
    households
  • By 2030
  • Annual savings of 5.3 billion in energy costs
    for consumers
  • Annual reduction in carbon emissions of 13.2 MMton

11
12
Why is energy efficiency important?
  • Climate change
  • Economic recovery and competitiveness
  • Energy security

13
Energy Demand and Savings IEA -11Energy
efficiencys role in energy balance
Without energy savings achieved since 1973 energy
demand in 1998 would have been 50 higher
14
Decline in Natural Gas Production A Looming
Supply Gap
bcm
15
Russias Energy Strategy
  • Exports stable
  • Demand grows
  • Production grows
  • But is it realistic? Based on policy goals.
  • Production growth seems challenging
  • Demand growth to date, exceeded projections

Production
Export
Russian demand
Optimistic/baseline scenarios
16
Energy efficiency a bargain in Ukraine
How would energy security be different if Ukraine
had dramatically lowered its energy intensity 10
years ago?
17
How can governments promote energy efficiency?
  • Information
  • Standards
  • Market transformation
  • RD

Policy can help address barriers to
cost-effective energy efficiency technologies,
encourage deployment
18
California Policy can have a measurable impact
19
Policy Comparison Drop in Energy Intensity,
1996-2004

20
Information Impact of refrigerator labels in EU
21
Standards
  • Building energy codes
  • Appliance standards

22
Climate scientists and architects say that no
single policy change could do more to save energy
over the long run and reduce the nations
contribution to global warming than building
codes that make saving energy the law.
Clifford Krauss New York Times July 2009
22
23
New Construction and Building Energy Codes
  • Energy codes increase likelihood of cost and
    energy savings (up to 50 in U.S.)
  • Buildings last 30-50 years.
  • Most cost-effective to install efficiency
    measures at construction

24
Appliance standards force deploymentof
energy-efficient technology
25
Market transformation
  • Demand-side management
  • Bulk procurement

26
What is market transformation?
  • Strategic interventions that attempt to cause
    lasting changes in the structure or function of a
    market or the behavior of market participants,
    resulting in an increase in the adoption of
    energy efficient products, services, or practices
    (American Council for an Energy Efficient
    Economy, ACEEE)
  • Key elements address market barriers,
    opportunities
  • Seek to effect lasting change, building on market
    trends

26
27
Impacts pre-2001 programmes in CA
40,000
14 of Annual Use in California in 2001
35,000
30,000
25,000
Utility Programs at a cost of 1 of Electric
Bill
GWH
20,000
15,000
10,000
Building Standards
5,000
Appliance Standards
0
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Public Interest Energy Strategies CEC 100-03-12F
28
Example US DOE Sub-CFL Procurement
  • 1998-1999
  • No subsidies
  • Addressed two market barriers price and size
  • Two products already in the market met
    specifications
  • Two RFPs issues for two phases
  • Multiple awards were given
  • New products entered the market during both
    phases
  • Winners products advertised through DOE website
  • One year warranty

28
29
Spotlight on DOE EERE Technology Portfolio
  • Geothermal
  • Solar
  • Wind
  • Hydropower Advanced Water Power
  • Biomass
  • Fuel Cells
  • Advanced Vehicles
  • Buildings
  • Industrial
  • Federal Energy Management
  • Weatherization and Intergovernmental

Mission Statement
To develop cost competitive technology,
facilitate commercialization and deployment to
the marketplace
29
30
Building Technologies Goal
  • Net-Zero Energy Buildings by 2025
  • Net-Zero Energy Homes by 2020
  • Low incremental cost

30
31
Capacity from Buildings for Transportation
  • Energy efficient appliances and lighting save
    electricity and natural gas to free up capacity
    for bridging fuels.

31
32
EU - USA Collaboration
  • US bilateral work with EU countries and joint
    collaboration through the IEA
  • Areas of mutual interest retrofit opportunities
  • Financial mechanisms to accelerate implementation
  • Building systems designed for the retrofit market
  • Possible collaboration on test procedures,
    standard development, policy formulation and
    management
  • Solid state lighting
  • Building integration - appliance and plug loads
  • Smart grid and interaction with hybrid plug-in
    (transportation)
  • Building envelope systems

32
33
International Partnership for Energy Efficiency
Cooperation (IPEEC)
  • A high-level forum for discussion, consultation
    and information exchange with other countries
    regarding energy efficiency measures
  • Secretariat hosted at IEA, launched in 2009
  • Countries join on a voluntary basis and
    participate in specific annexes that reflect each
    countrys greatest interests
  • Selected examples of planned activities (or
    annexes)
  • Sustainable Buildings Network (SBN)
  • Improving public and private sector methods for
    Measuring and Verifying Energy Efficiency
    Improvements

33
33
34
How can businesses get value from energy
efficiency?
  • Improve competitiveness through lower costs
  • New business creation
  • Energy efficiency equipment
  • ESCOs
  • Financing

35
Examples
  • Dow Chemical 1.9 million annual savings through
    steam system repairs in single plant
  • Gostomel Glass Plant Energy Alliance
  • New businesses to audit and retrofit buildings

36
Steps toward energy efficiency
  • Conduct energy audit
  • Develop financing plan
  • Implement project
  • Track results and tell customers
  • Replicate results corporate energy or
    sustainability team

37
National Account Partnerships
  • DOE national labs teamed with 23 companies to
  • Build one new building at 50 less energy than
    ASHRAE Standard 90.1.
  • Retrofit at least one existing building at 30
    less energy.
  • Labs provide technical assistance to biggest
    names in retail, commercial real estate, and
    financial sectors.

38
Some resources for companies
  • DOEs Industrial Technologies Program
  • www1.eere.energy.gov/industry/technologies/index.h
    tml
  • EBRDs industrial energy efficiency financing
  • www.ebrd.com/industrialenergyefficiency
  • Whole Building Design Guide www.wbdg.org/design/b
    uildingtypes.php
  • DOEs Building Technologies Program
  • www1.eere.energy.gov/buildings/

39
District heating
  • The importance
  • Some challenges
  • Improving and growing district heating

40
DHs Share in Space Heat Market ()
41
District Heating as of Total Energy
Use(without distribution losses)
42
District Heat Consumption Trends
43
District Heat Consumption Trends OECD
44
District heating in Eastern Europe A few facts
  • DH supplies up to 70 of residential heating in
    transition economies
  • Over 1/3 of energy use is for heat in some
    countries
  • Improving generation efficiency to Western levels
    can save equivalent of over 80 bcm gas per year
    (Germany uses 90 bcm/year)

45
Challenges
Source CENEf
46
Estonian district heating distribution losses
Source Hlebnikov and Siirde, 2008
47
District heating as a clean energy
integrator CHP share 68, renewable share 14
Sources Werner and Ecoheatcool
48
Combined heat and power production reduces
emissions
49
Key Challenges with District Heating
50
Promoting District Heating Importance of
Customer focus
  • Key to improving business, finances
  • In many cases, customers do not even know they
    have DH hard to make it a premium service
    without recognition
  • DH companies tend toward technical customers
    just want convenient, reliable and inexpensive
    service
  • Companies can do more to boost customer awareness
    and appreciation, and improve customer relations

51
Policy and Heat Markets
  • Countries with competition for heat have seen
    strongest growth in DH (i.e., FI, S)
  • Countries with clear, well-defined heat policies
    also show growth (Nordic, Baltic countries,
    Korea)
  • Where district heating successful, it is usually
    integrated into larger energy policy

52
DH Policy Recommendations
  • Policy balance re. supply and demand
  • Encourage demand-driven business practices
  • District heating tariffs should cover ALL costs
  • Independent regulator, least-cost planning and
    full cost coverage key if regulate
  • If have competition, make sure it is fair
  • Competition between heating methods can bring
    down prices and boost efficiency

53
Conclusions
  • Energy efficiency can help stabilize climate,
    promote economic growth and energy security
  • Success with clean energy often depends on how
    energy decisions are made (not just cost or
    technology) policy can help promote energy
    efficiency
  • Businesses can also gain from focusing on energy
    efficiency
  • District heating presents unique opportunities
    for low-carbon heating
  • Policy framework and company focus on customers
  • E-mail m.evans at pnl.gov
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