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The Power of Energy Efficiency

Energy Efficiency and Local Economic OpportunityJune 14th, Traverse City, Michigan

Creating Globally Competitive Communities

Peter GarforthPrincipal – Garforth International llc

Insatiable Global Appetite for Energy

Forecast to double by 2030Source: IIASA / BP / EIA / Eurostat

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Growing Energy Uncertainties

Unpredictable energy prices Dependence on imports and supply security Impacts of climate change legislation Under-invested energy infrastructure China and India major new energy customers Blackouts, weather events, water shortages.. Regulation of shale gas and oil Nuclear moratorium? –Energy price impacts? Energy innovation? – Competitive advantage?

Managing Risk and Opportunity

Population GDP / Energy GrowthRedefining our World!

Source BP 2011 Statistical Review of World Energy

Non-OECD Countries driving energy demand

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Extreme Weather Events

More frequent extremes Asian Floods Russian heat storm EU Deep Freeze US floods, tornados, droughts Heat storms / floods

Impacts of rising temperatures Sea rise 8" to 12" in last 50 years Changing crop yields Arctic opening up for exploration Higher intensity hurricanes

Energy use a suspected contributor How will this impact energy costs?

Climate Change Making Headlines again in USA

Energy Cost and Reliability Risks Increasing

Weather events increasing Average 180,000 people /event affected Unforced events also at historic highs

US Transmission Grid Disturbances Insurance Claims

2011 may be costliest on record 2008..09..10 costliest three years $30 Bn Private claims in these years

Importance of Local StrategiesSources: UD DOE-EIA, US GAO

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Energy Productivity DifferencesHow well do we spend our $1.5 Trillion?

*IEA and World Bank – 2009 sources

Key to National Competitiveness

Region Population GDP Energy Energy/Capita

Energy/GDP

USA 4.5% 23.0% 17.8% 100 100Canada 0.5% 2.5% 2.1% 107 108

EU 7.4% 30.3% 13.0% 45 56Japan 1.9% 7.8% 3.9% 53 65China 19.7% 6.8% 16.1% 21 307India 17.1% 2.0% 4.9% 7 319World 100% 100% 100% 22 198

Total US Energy Use ~ $1.5 TrillionMost in Urban Environment

Source: US DoE EIA - 2008

Buildings40.4%

Industry31.4%

Transport28.1%

CoalCoal

GasGas

Domestic OilDomestic Oil

Imported OilImported Oil

UraniumUranium

RenewableRenewable

HomesHomes

CommercialCommercial

IndustryIndustry

TransportationTransportation

Largest User is Buildings

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US Electricity Supply Chain

Largest Cause of Greenhouse GasSource: US DoE EIA 2007

Coal

Gas

Nuclear

Renewable

ConversionLosses

WastedEnergy

70%

SoldElectricity

30%

Benchmark Efficiencies by SectorUSA / EU Energy Example

Homes & Building efficiency opportunity by far the largest

Industrial efficiency potential often overestimated

Sector Share Index USA/EUIndustry 32% 1.2 : 1Homes & Buildings 40% 2.5 : 1Transportation 29% 1.4 : 1

High potential for productivity gains!*Indicative ratio of US average to EU Average

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Dysfunctional Energy Supply ChainFrom fuel to service

Uses 70% of all energy

25%

High-cost low returns High risk High emissions

5%

Pay 100 for fuel - Get less than 10 in services

Why Communities CareNew Energy Realities…

Community Values and Image Investment and Green Jobs Unpredictable energy prices Supply quality and security Environmental legislation Weather events Nuclear and coal uncertainties…

Fundamentally Different From Past

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Successful Community Energy PlanningThree Groups of Balanced Benefits

Breakthroughs are Achievable

Competitiveness Security

Environment

0 10 20 30

Copenhagen, DenmarkMannheim, Germany

Guelph, OntarioArlington, VALoudoun, VA

Holland. MIEU - "Municipal"

EU - TotalUSA - "Municipal"

USA - Total

Wide Range of Energy PerformanceEmissions per Resident

Communities Embracing Challenge

mt CO2 / capita

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0 10 20 30

Copenhagen, DenmarkMannheim, Germany

Guelph, OntarioArlington, VALoudoun, VA

Holland. MIEU - "Municipal"

EU - TotalUSA - "Municipal"

USA - Total

Setting Breakthrough GoalsReduction Targets per Resident

We know how to get there!

mt CO2 / capita

Global and Local BenchmarksExample of Copenhagen

Triggered by 70’s energy crisis 3.0 tons / capita GHG Efficiency

World leading building efficiency Energy Performance Validation

District Energy Widespread across city

Fuel flexibility Multi-fuel cogeneration Coal, oil, gas, biofuel, waste-to-energy Wind and solar generation

Transport Urban design for bike/walking Efficient trams/trains City-wide EV plans

High Value Employment

2009 – Voted “Second Most Livable City”

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City of Holland Energy Use$135 M Annual Cost of Energy

Major Building Efficiency Opportunity

by type

Primary Energy / Fuel 20109,898,000 MMBtue / 2,900,000 MWhe

by sector

City of Holland Emissions24 mt per Resident

Major Fuel Efficiency Opportunity

2010 Energy Related Emissions792,500 metric tons / 873,600 short tons CO2e

by type by sector

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Lower cost energy than neighbouring communities Highly reliable electricity supply from local sources Industrial Energy Service tailored to investors’ needs Flexibility to meet changing technologies, legislation,

fuel costs and other market conditions Meet commitment to the U.S. Conference of Mayors

Climate Protection Agreement Be a leader in developing regional energy

productivity strategy

Holland Community Energy Plan2011 to 2050 Goals

Energy MissionEnhance City attractiveness to investors, businesses and residents

through cost effective, reliable clean energy supply

Energy MissionEnhance City attractiveness to investors, businesses and residents

through cost effective, reliable clean energy supply

Comprehensive Plan with Year on Year Targets

1. Energy efficiency - If you don’t need it don’t use it

2. Heat Recovery – It it’s already there – use it

3. Renewable energy – If it makes sense, go carbon free

4. Energy distribution – Invest where it makes sense

Efficiency always comes First!Loading Order / Trias Energetica

Integrated Approach – Tailored for Community

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Home & Building Efficiency in Nutshell

Benefits Energy not used is always the cheapest Energy not used is always the cleanest Major reduction of energy costs Economically viable efficiencies of 30% to 60% Create good local jobs Sets the stage for deeper community wide energy

efficiencies Challenges

Rapidly achieving large enough scale Readily available and affordable financing Lifetime Performance validation

Energy Performance LabelingHomes and Buildings

Low-cost performance validation tool

Available when sold or rented

Display in public buildings Independent certification Discount financing Voluntary approaches work

fine!

Basis for Market Driven Improvement

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Impact of EfficiencyExample from Arlington County

Base Case

Crucial First Step

High Quality EmploymentClean Economy- Ohio

Clean Jobs 105,306 6th in USA

Growth since 2003 16,793 jobs / 2.5% per

year 12th / 38th in USA

Share of Total Jobs 2.0% 27th in USA

Median Wage $39,275 10% higher than average

Quality Jobs with Modest Education

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High Quality EmploymentClean Economy- Michigan

Clean Jobs 76,941 12th in USA

Growth since 2003 -1,596 jobs / -0.3% per

year Last / Last in USA

Share of Total Jobs 1.9% 27th in USA

Median Wage $40,558 7% higher than average

New Opportunity?

Guelph boasts lowest jobless rate in countryThursday, September, 15, 2011 - 10:10:02 AM

It may not be an all-time low, but Guelph’s unemployment rate for August came close at 4.7 per cent – the lowest in the country.“…Initiatives such as Guelph’s Community Energy Initiative contribute to the long-term prosperity of the city and make it more appealing to business investment …”

Guelph boasts lowest jobless rate in countryThursday, September, 15, 2011 - 10:10:02 AM

It may not be an all-time low, but Guelph’s unemployment rate for August came close at 4.7 per cent – the lowest in the country.“…Initiatives such as Guelph’s Community Energy Initiative contribute to the long-term prosperity of the city and make it more appealing to business investment …”

Four years down the Road….From City of Guelph , Ontario

Passed Energy Plan in 2007 by unanimous council vote National Role Model Over 2,000 Green jobs City major influence on regional and national policy

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A Little City with Big DreamsVäxjö, Sweden

Population: 60,800 Mixed Urban / Rural Efficiency targets from1980’s Fossil-free target set in 1996 50% achieved Integrated Approach

Efficient Homes and Buildings Community engagement Flexible District Heating Cogeneration Biomass fuel focus

Global-EU-National role model Tourism and Investment Global Media and Policy focus

Voted Greenest City In Europe in 2007

Växjö Energy EmissionsResults to date

Current Focus - Transport

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Grand Traverse CountyNorth American Role Model?

Mixed Urban / Rural Mixed High and Low-Densities Pursue breakthrough energy concepts North American role model for smaller

mixed urban/rural communities Potential for Integrated Approaches

Efficient Homes and Buildings Community engagement District Energy Clean and Renewable supplies Low-impact Transport

Tourism and Investment Local value-added and jobs Magnet for policy focus and support

Could GTC have a Big Energy Goal?

Thank You

Peter GarforthGarforth International llcpeter@garforthint.com

+1 (419) 578 9613 - Office+1 (419) 320 0664 - Mobile